Published: February 01, 2008 01:54 am            

BANKING: First Niagara posts fourth-quarter increase

First Niagara is ending 2007 with an increase in profits from the fourth quarter, but total profits for the year are less than that of 2006.

The company announced Thursday a fourth quarter earning of $27.8 million, a 33 percent increase from the $21.1 million profit of the third quarter of 2007. That includes a $21.6 million sale of company branches to Elmira Savings Bank and Legacy Bancorp, a $5.6 million loss in restructuring its investments and a $2.3 million loss in a branch deposit. Without the sale and losses, First Niagara’s fourth-quarter earnings would have been down to $19.6 million, a 7 percent decrease.

First Niagara Financial Group provided an income total that excluded the sale and losses in a press release in order to “perform a more effective evaluation and comparison of the company’s results and assess performance in relation to the company’s ongoing operations.” Executives said trimming some of the excess from its operations contributed to the earnings and will help in any future success the company has.

“From a franchise point of view, we exited 2007 in far better shape than we entered. We are leaner, much better focused around our competitive strengths and better positioned for long-term success,” said John Koelmel, president and CEO of First Niagara.

Koelmel said the pending Greater Buffalo Savings Bank acquisition by First Niagara in September 2007 will “bring us critical market share growth in Western New York, and we eagerly anticipate its integration and expected financial benefits.”

For the year, First Niagara reported an income of $84.1 million, less than the $91.9 million it gained in 2006. Koelmel said the past year has the company in the right direction, but it had to manage its finances to have any success in the future.

“We have accomplished much in as challenging an operating environment as the industry has experienced in recent years,” Koelmel said. “We are managing our resources in a disciplined manner, especially regarding credit, and our conviction to long-term success has never been stronger as we are poised to capitalize on all the steps we’ve taken over the past year.”

The fourth-quarter results reflected “the constrained revenue environment impacting our industry” said Michael Harrington chief financial officer at First Niagara. But the earnings did show signs of some growth in what Harrington called “areas of emphasis for us.”

“Commercial services continued generating excellent loan and deposit growth, and our vigilance towards credit continues to keep us in good stead as non-performing assets declined this quarter and net charge-offs remained well within historical levels,” he said.

Harrington said the branch sales and the reconstructing of the company’s investments will all help “to improve operating efficiency.”

Based in Lockport, First Niagara Financial Group has 110 First Niagara Bank locations throughout Western New York.

Contact reporter Joe Olenickat 439-9222, ext. 6241.

        

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