KeyCorp in Cleveland posted lower quarterly profit as merger-related expenses cut into the bottom line.
The $101 billion-asset company said in a press release Tuesday that its second-quarter earnings fell 16% from a year earlier to $196 million, though the results included $45 million in expenses tied to its pending acquisition of First Niagara Financial Group in Buffalo, N.Y. The merger-related costs included about $35 million in personnel expenses tied to developing technology for systems conversions and overseeing other integration efforts.
Revenue fell less than 1%, to $1.1 billion.
Net interest income increased by more than 2%, to $605 million, because of higher earning asset balances and yields. Average total loans increased more than 5%, to $61 billion, mainly due to a 12% increase in Key's commercial, financial and agricultural portfolio.
Noninterest income fell about 3%, to $473 million, largely because of a more than 30% decline in investment banking and debt placement fees, which fell to $98 million. Operating lease income and other leasing gains dropped 25%, to $18 million.
Excluding merger-related expenses, noninterest costs fell by almost 1%, to $706 million.