Share this article

print logo

First Niagara’s income slipped 22% last quarter

First Niagara Financial Group reported a 22 percent drop in its second quarter net income from a year ago, to $53.5 million.

“The lion’s share of that is the interest rate environment that has continued to remain low or move lower, and the impact of that on competitiveness and people willing to do loans at lower yields,” said Gregory Norwood, the Buffalo-based bank’s chief financial officer.

The Buffalo-based bank recorded diluted earnings per share of 15 cents, compared to 19 cents a year ago. That slightly topped the 14 cents average estimate of analysts surveyed by Zacks Investment Research.

Norwood said the health care sector continues to be a strong source of lending activity. “We’ve built that business from, call it $100 million four or five years ago to well over $1 billion in (outstanding loans).”

Norwood said lending activity in upstate New York has moderated a bit from last year, but “continues to be a strong geography for us.”

Gary Crosby, the bank’s president and CEO, said First Niagara’s strategic investment plan “remains on-time and on-budget,” 18 months into the plan.

The bank’s net interest income from making loans and taking deposits declined 3.2 percent from a year ago, to $263.1 million. Meanwhile, its non-interest income from sources such as fees rose 7 percent from last year, to $86.6 million.

First Niagara previously set aside $23 million to deal with a “process issue” related to certain deposit accounts, but has not provided details of that issue. Asked about it on Friday, “The review continues by the regulators, and we are unaware of any issues that have been raised from their perspective.”

email: mglynn@buffnews.com