First Niagara Financial Group in Buffalo, N.Y., said its first-quarter profit declined because of costs tied to its technology upgrade and lower spread income.

The $39 billion-asset company said net income fell 17% from a year earlier, to $44 million, or 12 cents a share. Excluding restructuring items, net income fell 10%, to $55 million, or 15 cents a share.

Net interest income fell 3%, to $263 million, on two less days in the quarter, lower prepayment fees for commercial real estate and reinvestment and repricings into lower-yielding securities. The net interest margin compressed by 26 basis points, to 3.07%.

Fee income rose 7%, to $82 million, though the largest category, service charges on deposit accounts, fell 13%, to $20 million.

Noninterest expense rose 5%, to $261 million, due to First Niagara's ongoing technology upgrades and higher deposit-insurance premiums.

First Niagara's efficiency ratio worsened to 75.6% in the first quarter from 71.6% a year earlier.