First Niagara's Profit Rises as CEO Search Continues

First Niagara Financial Group (FNFG) in Buffalo, N.Y., generated higher earnings in its first quarter since the ouster of its chief executive.

The $36 billion-asset company's first-quarter earnings rose 12% from a year earlier, to $59.7 million, or 17 cents a share.

Noninterest income rose 28% from a year earlier, to $89.3 million, because of higher service charges and fees. Deposit-related charges rose 46% from a year earlier, to $24.8 million.

First Niagara's net interest income rose 10% from the first quarter of 2012, to $266 million, as borrowing costs fell 55%, to $15.2 million. Its net interest margin expanded by 5 basis points from a year earlier, to 3.39%. Its loan-loss provision was relatively flat from a year earlier, at $20.2 million, and net chargeoffs fell 22%, to $10.3 million.

Higher expenses cut into the bottom line. Noninterest expenses rose 19% from a year earlier, to $237.6 million, including a $6.3 million charge related to the departures of former CEO John Koelmel and Oliver Sommer, who had been vice president of corporate development.

The company also said Monday that a committee chaired by Nathaniel Woodson and assisted by the search firm Korn/Ferry is progressing on a search for a permanent replacement for Koelmel.