Oneida Financial profit rises 12 percent, led by rising non-banking revenue

ONEIDA — Net income rose 12 percent in the second quarter at Oneida Financial Corp. (NASDAQ: ONFC), driven primarily by rising fee and commission income in its non-banking businesses.

Oneida Financial, parent company of the Oneida Savings Bank, reported net income of $1.9 million, or 28 cents per diluted share, up from $1.7 million, or 24 cents a share, a year earlier. Company officials attributed the improved earnings to an increase in non-interest income and net investment gains, coupled with a decrease in the provision for loan losses.

 “The success of our insurance and financial-services subsidiaries — Bailey & Haskell Associates, Inc. and Benefit Consulting Group, Inc. — continue to position Oneida Financial Corp. as a diversified banking and financial-services company,” Oneida Financial President and CEO Michael R. Kallet said in the earnings report. “The result is a strong and vital financial institution fully prepared to meet the economic challenges of the future.”

Second-quarter net-interest income decreased from $5 million a year ago to $4.9 million this quarter, due to a decrease in the yield of interest-earning assets.

Oneida Financial’s non-interest income rose from $6.3 million a year ago to $6.5 million this quarter. Commissions and fees on sales of non-banking products jumped from under $5.1 million in 2011’s second quarter to more than $5.4 million in this year’s second quarter.

Non-interest expenses increased from $8.8 million a year ago to $9 million in the latest quarter on an increase in operating costs from the rise in sales of insurance and other non-banking products.

Oneida Financial reported a $150,000 provision for loan losses this quarter, down from a $550,000 provision it took during the second quarter of 2011. The company charged off $651,000 during the latest quarter, primarily from the charge-off of a specifically reserved impaired commercial real-estate loan relationship with a principal balance of $836,000, Oneida Financial said.

The banking and financial-services firm generated net investment gains of $60,000 in the second quarter, up from $16,000 in the year-ago period.

For the first six months of 2012, Oneida Financial reported net income of $3.9 million, or 57 cents per share, up from $3.1 million, or 44 cents, in 2011.

Headquartered in Oneida, Oneida Financial Corp. (www.oneidafinancial.com) is the parent company of Oneida Savings Bank, which has 12 branches in Madison, Oneida, and Onondaga counties; State Bank of Chittenango; Bailey & Haskell Associates; Benefit Consulting Group, an employee-benefits consulting and retirement-plan administration firm; and Workplace Health Solutions, a risk-management company specializing in workplace-injury claims management.

Oneida Savings Bank ranked 10th in deposit market share in the Utica–Rome metro area, with $102 million in deposits and a 2.79 percent share of total deposits through its four area branch offices, according to June 30, 2011 FDIC data, the latest available.