First Niagara job cuts mostly spare Central New York

Job cuts announced in October at First Niagara Financial Group, Inc. (NASDAQ: FNFG) eliminated just a few positions in Central New York.

The Buffalo–based banking company cut 180 positions across its four-state footprint, but just five of the jobs were located in Central New York, according to an email from David Lanzillo, a First Niagara spokesman. First Niagara Bank has 430 branches, $36 billion in assets, and 6,000 employees in upstate New York, Pennsylvania, Connecticut, and Massachusetts.

The positions eliminated didn’t directly support running the business First Niagara has today or its plans in the next few years, Lanzillo said in the email. About 30 of the jobs were in facilities and building maintenance, which First Niagara outsourced to another company.

First Niagara is currently recruiting to fill more than 250 open positions across the company. The net loss of jobs from the recent cuts is expected to be about 100 positions after planned new hiring takes place, Lanzillo said.

“The work-force realignments we made earlier this month were designed to ensure that we have the right people in the right positions to best support our growth strategy,” he said.

First Niagara Bank is number four in the Syracuse metro area deposit market with 21 branches, more than $808 million in deposits, and a deposit market share of more than 7.5 percent, according to the latest statistics from the Federal Deposit Insurance Corp. First Niagara is also number four in the Utica–Rome market with nine branches, $405.9 million in deposits, and a market share of about 11 percent.

The bank is number two in the Binghamton market with 10 branches, $342.5 million in deposits, and a market share of 12.8 percent.

First Niagara President and CEO John Koelmel said the company must be more efficient in all it does going forward.

“It’s not about slashing expenses or taking costs out,” he said during a conference call Oct. 19, discussing the bank’s latest financial results. “It’s about doing things more efficiently across the organization.”

As for the third quarter, First Niagara earned $50.8 million in the third quarter, down from $57 million a year earlier.

Earnings per share in the period totaled 14 cents, down from 19 cents a share in the third quarter of 2011. The third quarter’s results were improved from a loss of $18.5 million, or 5 cents a share, in the second quarter.

The net income total also includes a preferred stock dividend of $7.5 million. Excluding that item, the Buffalo–based banking company earned $58.4 million.

Operating income for the third quarter, which excludes items such as gains on securities and merger costs, was $74 million, up from $73.6 million a year earlier and $66.6 million in the second quarter this year.

Total loans and leases increased to $19.1 billion as of Sept. 30, up from $16.4 billion a year earlier. Deposits at the end of the third quarter totaled $27.7 billion, up from $19.6 billion at the end of the third quarter in 2011.

Net interest income for the period was $269.6 million, up from $235.4 million a year earlier. Noninterest income totaled $102.2 million, up from $68.7 million.

Noninterest expenses totaled $266.5 million, up from $203.9 million a year earlier. The most recent quarter’s expenses included more than $29 million in acquisition and restructuring costs associated with First Niagara’s deal for 195 HSBC branches in upstate New York and Connecticut.

The provision for loan losses during the third quarter was $21.8 million, up from $13.8 million last year as First Niagara’s balance sheet has grown. Net charge-offs for the period totaled $10.1 million, up from $8.1 million

Nonperforming loans totaled $142.4 million at the end of the third quarter, up from $81.9 million a year earlier.       

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