First Niagara Financial Group CEO Gary Crosby says the bank’s strategic investment plan is moving in the right direction, but needs more time to bear fruit.
“I can’t immediately turn things around, but they are turning around, but it’s going to take longer,” Crosby said. “Many of the shareholders who have been in the stock for a long time have been patient a long time. I understand that they’d rather see (the share price) go up now rather than waiting for it to go up later.”
Crosby commented on the bank’s outlook in an interview and in comments at the annual shareholders meeting held Wednesday at the bank’s Larkinville headquarters. His stance was similar to his message a year ago: a call for patience while the bank spends $200 million to $250 million on a strategic plan that centers on technology upgrades. Crosby said the plan is on time and on budget. The bank recently rolled out a new online account system for making deposits that he said has been well received. In the fourth quarter, First Niagara plans to introduce the first of a series of cash management products aimed at commercial customers. “That won’t start to bear fruit until well into 2016 and 2017,”
First Niagara’s past year tested the patience of shareholders who have waited for the bank to generate better results from acquisitions made prior to Crosby’s tenure.
But Crosby said his fellow board members remain committed to the strategic plan that was announced in early 2014 and called for investments over a three- to four-year period. Meanwhile, the bank still faces Wall Street’s quarterly pressures and has coped with a lagging stock price that was trading about $9.11 per share on Wednesday. Does Crosby feel institutional shareholders, who own about 73 percent of First Niagara’s shares, are satisfied with the pace of the investment plan’s progress?
“My sense is yes, our major institutional investors are satisfied, but like everyone else, including me, they are anxious to see the fruit of the labor,” Crosby said.
First Niagara is dealing with economic conditions such as persistently low interest rates, he said, that affect all banks.
First Niagara leaders recognize it will be “a tough environment and we’ve got to stay the course on the strategic plan we have in place, and not let this challenging environment deter us from making the investments we need to make,” he said. “So that when things we can’t control do improve, we will be well positioned to take full advantage of a better economy and a better operating environment.”
First Niagara recently finished cutting 240 management positions, generating about $27 million in annualized savings as it sought to simplify its organizational structure. Crosby said First Niagara has no additional job cuts planned: “We need every person we have in place right now.”