FNB United Corp. in Asheboro, N.C., said Tuesday that it had sold its $4 million credit card portfolio to Elan Financial Services, a division of U.S. Bancorp in Minneapolis.
The $1.9 billion-asset FNB said it would recognize a $1.3 million gain in the third quarter, $1 million of which would be the gain on sale of the portfolio and $300,000 of which would be recapture of the loan-loss reserve associated with the portfolio. It also has recognized a $250,000 expense to cover the buyout of two unexpired contracts with Visa.
FNB will continue to offer credit cards to its customers through Elan, deriving fee income through a revenue-sharing pact on current and new cards.
The North Carolina company obtained the card portfolio in the purchases, in 2005, of $151 million-asset United Financial Inc. in Graham, N.C., and, in 2006, of the $668 million-asset Integrity Financial Corp. in Hickory, N.C.
