Fueled by its recent acquisition of a North Carolina bank, F.N.B. Corp. in Pittsburgh reported higher second-quarter profit, though costs related to branch closings slightly offset those gains.
The $32 billion-asset company said Tuesday that it earned $83.2 million in the quarter that ended June 30, up 15% from the same quarter last year. Earnings per share of 26 cents fell a penny short of the mean estimate of analysts compiled by FactSet Research Systems.
The results included some one-time expenses; F.N.B. recorded $5.2 million in after-tax costs to close branches, and $700,000 in discretionary 401(k) plan contributions that were made after Congress passed a federal tax overhaul that slashed corporate tax rates.
Net interest income increased 9.6% to $239 million. The average yield on interest-earning assets rose 38 basis points to 4.3%.
Total loans and leases increased 5.5% to $21.7 billion. Commercial real estate, the largest loan category at F.N.B., was flat on a yearly basis at $8.8 billion. But commercial and industrial loans rose 10% to $4.3 billion. Consumer loans climbed 8% to $8.1 billion.
Noninterest income dropped 2% to $64.9 million, as the reduced value of fixed assets from branch closures offset increases in fees from trust services, securities commissions and capital markets income.
F.N.B.’s March 2017 acquisition of Yadkin Financial in Raleigh, N.C., for $1.4 billion, was a big driver behind those improvements in fee-based businesses, Chairman and CEO Vince Delie said in a news release.
“Capital markets, mortgage banking, insurance, brokerage and wealth management all benefited from increased contributions from our Carolina markets, which have experienced significant growth compared to the prior year,” Delie said.
Noninterest expense rose 12% to $183 million on higher salaries and employee benefits, as well as costs for branch closures.