First Niagara Reports 2Q Loss on HSBC Acquisition Costs

First Niagara Financial Group (FNFG) swung to a loss in the second quarter on costs tied to its acquisition of retail branches from HSBC Bank.

The loss was $18.5 million. Excluding $135.2 million in HSBC-related costs, plus other special expenses, the Buffalo, N.Y., company earned $59.1 million, or 17 cents, a penny less than analysts' expectations, according to Thomson Reuters.

A year earlier, First Niagara earned of $13.6 million. Those results also included merger-related costs, associated with its purchase of NewAlliance Bancshares.

First Niagara in May acquired 195 HSBC branches in upstate New York and Connecticut. It later cut deals to sell 64 of those branches to rival banks, in order to gain regulatory approval for the HSBC transaction. The $135.2 million in HSBC costs, which included restructuring expenses, was "in line with expectations," the $35 billion-asset company said.

First Niagara shares were down 11 cents to $7.26 a share in Friday morning trading.

First Niagara will "continue to take an aggressive look" at potential expense cuts, but likely will avoid closing branches, John Koelmel, the company's chief executive, said in a conference call with analysts. That contrasts with other regional banks, including KeyCorp (KEY) in Cleveland and Iberiabank (IBKC) in Lafayette, La., said earlier this month that they plan to close branches to cut costs.