Bottom line growing at First Niagara

January 27, 2012 Updated Jan 27, 2012 at 8:25 AM EDT

By WKBW News
By Business First by Allissa Kline, Buffalo Business First Reporter

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January 27, 2012 Updated Jan 27, 2012 at 8:25 AM EDT

Officials at First Niagara Financial Group Inc. plan to "hit the pause button" on mergers and acquisitions for the next 12 to 24 months to focus on building out the financial company's current - and soon-to-exist - operations.

That was the message delivered Thursday by bank president and CEO John Koelmel to investors during the financial company's fourth-quarter conference call. He said the bank wants to be able to deliver a "consistent, high-end approach" for all of its constituents, which means it must pull back on its recent aggressive-growth mindset.

"It's all about running the business we will have effectively and efficiently," Koelmel said. "It's time for us to hit the pause button on (mergers and acquisitions) and deliver on our promise."

Koelmel's announcement came as the company said net income at rose 27.5 percent during the final quarter of 2011, while earnings per share declined 13.6 percent.

The parent of First Niagara Bank, which last week completed its divestiture process related to its ongoing purchase of 195 HSBC Bank USA N.A. branches, reported net income of $58.5 million, or 19 cents per share, for the period ending Dec. 31, 2011. Net income for the same quarter in 2010 totaled $45.9 million, or 22 cents per share.

Bank officials said the most recently completed quarter was impacted by employee severance and branch closure restructuring costs, along with merger integration costs.

First Niagara has completed three acquisitions since the fall of 2009, pushing it into three new states, and expects to wrap its $1 billion HSBC acquisition in April. The purchase will increase its branch network to approximately 430 offices in four states.

For the full year of 2011, First Niagara's net income totaled $173.9 million, or 64 cents per share. The year before, net income amounted to $140.4 million, or 70 cents per share.

Net interest income for the fourth quarter was $242.5 million, compared to $167.5 million for the same quarter in 2010. Noninterest expenses rose to $202 million as of Dec. 31 from $139.3 million a year ago.

The provision for loan losses remain nearly unchanged, dropping from $13.5 million to $13.4 million. Total nonperforming loan were also nearly the same, to $89.8 million from $89.3 million .

Deposits grew to $19.4 billion from $13.1 billion, while assets improved to $32.8 billion from $21.1 billion. First Niagara is headquartered in Buffalo and operates in New York, Pennsylvania, Connecticut and Massachusetts.

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