First Niagara Financial Group Inc. in Lockport, N.Y., said Friday that its second-quarter profit slipped 10% from a year earlier, to $20.8 million.
Interest income jumped 20%, to $79.9 million, but the gain was offset by a $3.3 million special assessment levied by the Federal Deposit Insurance Corp. and a $1.4 million expense related to the acquisition of 57 former National City branches in Pennsylvania from PNC Financial Services Group Inc.
The $11.6 billion-asset First Niagara said its interest income benefitted from an improvement in the funding mix.
Core deposits rose 7 percentage points, to 72% of total deposits, as the company gathered $341 million from new retail, commercial and municipal customers.
The loan-loss provision climbed 81% from a year earlier, to $8.9 million.
Nonperforming loans increased 52% from a year earlier, to $52.3 million, or 0.81% of total loans, on June 30, though they were little changed from the end of the first quarter.
The company reported a tangible common equity ratio of 10.5%, up from 8.9% at the end of the first quarter and 7.6% a year earlier, after a $360 million capital raise in April.
Of those proceeds, $184 million went toward redeeming the preferred stock First Niagara had issued to the federal government under the Treasury Department's Troubled Asset Relief Program.