First Niagara Financial Group on Thursday said first-quarter profits for common shareholders fell 12 percent from a year ago, as higher expenses from its technology investments and branch closings overwhelmed flat revenues.
The Buffalo-based banking company reported net income of $59.4 million, or 15 cents per share, down from $67.3 million, or 17 cents per share, in the first quarter of 2013.
However, that included $10.4 million in restructuring expenses – $8.3 million after taxes – that stemmed from severance pay for a departed executive, branch consolidations that were completed in the quarter and the previously announced elimination of certain branch positions throughout the bank’s four-state franchise.
Not including those special charges, operating net income was flat at $67.8 million, or 17 cents per share, compared to $67.3 million, or 17 cents per share, a year ago.
“Our first-quarter results demonstrate that the organization continues to be focused on acquiring and deepening customer relationships and delivering on our objectives,” said Gary M. Crosby, president and chief executive officer, in a statement. “Our customers and their preferences will remain at the center of all we do as we execute on our strategic investment plan.”
Total revenues also were flat, as the bank earned less fee income from originating and selling mortgages and providing capital markets services to customers. Non-interest income fell 14 percent to $76.7 million.
Gregory Norwood, chief financial officer, said First Niagara “continues to produce very, very strong loan origination growth.”
“We’re on track, on budget, in the early planning stages of our strategic investment plan, so we feel good about being able to both plan and build for the future as well put some very positive loan growth numbers,” Norwood said.
Historic tax credits have also proven to be a growth avenue, he said.
“We’ve had a pretty significant opportunity there over the last six months to partner with builders, both in the lending relationships as well as the investment in historic tax credits.”
Net interest income from taking deposits and making loans rose 2 percent to $270.7 million because of growth in commercial and indirect auto loans. The bank’s profit margin on lending held steady.
The bank set aside $24.8 million for loan losses, up from $20.2 million a year ago, as credit quality improved. Operating expenses, without the one-time charges, were flat at $238.4 million.
“The main focus of those investments will be dedicated to expanding and enhancing our products and services and improving our operating efficiency,” Crosby said.
News Business Reporter Matt Glynn contributed to this report.