ONEIDA — Oneida Financial Corp. (NASDAQ: ONFC) reported that its net income fell 21 percent to $1.5 million in the second quarter from $1.9 million in the year-ago period on higher non-interest expenses from investing in its insurance and other non-banking subsidiaries.
Earnings per share fell 25 percent to 21 cents from 28 cents a year earlier.
Oneida Financial, parent of Oneida Savings Bank, said its net interest income was essentially unchanged at $4.9 million in the second quarter. Its net interest margin dipped to 3.21 percent from 3.32 percent from a year ago.
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Non-interest income rose to $7.2 million in the second quarter from $6.5 million in the year-earlier period, led by revenue in Oneida Financial’s insurance and other non-banking operations jumping to $6 million from $5.4 million in the comparable 2012 period.
Oneida Financial’s non-interest expense increased to $10.6 million in this year’s second quarter from $9 million a year prior. That stemmed from an increase in compensation and employee benefits, combined with selling and operating expenses associated with the increase in sales of insurance and other non-banking products through its subsidiaries. The increase in non-interest expense at its insurance and financial-services units primarily resulted from the acquisition of a Schenectady–based insurance agency and organizational expenses incurred in the second quarter for the creation of a broker-dealer subsidiary expected to be operational in the fourth quarter, Oneida Financial said in the earnings report.
“Oneida Savings Bank completed the acquisition of the Schenectady Insuring Agency located in Schenectady, New York on December 31, 2012 representing the eighth insurance agency acquisition since entering the business in October 2000,” Michael R. Kallet, president and CEO of Oneida Financial, said. “Our insurance and financial services subsidiaries continue to post impressive results with revenue growth of 9.6 percent.” He added that the banking company’s investment advisory, trust, and pension services units will begin operating cohesively as Oneida Wealth Management later this year.
Oneida Financial set aside less money in the second quarter to cover loan losses as its credit-quality measures improved. The banking company made a provision for loan losses of $100,000 in the quarter, down from a $150,000 provision in the year-ago period. Net charge-offs during the current quarter totaled $19,000, down sharply from net charge-offs of $651,000 in the same period last year. Net loan charge-offs as a percentage of average loans were 0.01 percent for the second quarter, compared with 0.22 percent in the same quarter in 2012.
Oneida Financial has total assets of nearly $700 million. The company’s wholly owned subsidiaries include Oneida Savings Bank, a state-chartered stock savings bank; State Bank of Chittenango, a state chartered limited-purpose commercial bank; Bailey Haskell & LaLonde Agency, an insurance and risk-management firm; Benefit Consulting Group, an employee-benefits consulting and retirement-plan administration firm; Workplace Health Solutions, a risk-management firm specializing in workplace-injury claims management; and Oneida Wealth Management, a newly formed investment-services firm. Oneida Savings Bank was started in 1866 and operates 11 full-service banking offices in Madison and Oneida counties.
Contact Rombel at arombel@cnybj.com
