First Niagara Financial Group in Buffalo, N.Y., earned a profit in the fourth quarter, will lay off more employees and is taking steps to tackle its many problems. But....

Overshadowing all that may be the big mystery that executives keep prolonging: what's so secret about the customer problem that has caused the bank to set aside tens of millions of dollars?

Described by the $39 billion-asset First Niagara as a "process issue on certain customer deposit accounts," the company initially said it would establish a reserve of $45 million to deal with it. On Friday, the reserve figure was lowered to $22 million.

What still wasn't said is what exactly happened.

"I can't share all of it with you at this point, but know that we are a lot more certain around that issue today than we were 90 days ago," Chief Executive Gary Crosby said in a response to an analyst's question about when, or if, First Niagara would offer a full explanation.

First Niagara has said what the issue isn't. Crosby previously said it's not related to cybersecurity, a data breach, fraud or First Niagara's prior acquisitions, and he reiterated those comments on Friday.

Crosby also said First Niagara submitted a remediation plan to regulators, but he declined to say when regulators might approve it. Greg Norwood, the chief financial officer, declined to speculate if the reserve could be cut lower than $22 million. "I don't want to get ahead of our skis, but the confidence we have [in that figure] is very high," Norwood said in an interview.

Separate from the process issue, First Niagara said fourth-quarter net income fell 0.2% to $70 million, or 20 cents per share, from a year earlier. That met the average estimate of analysts polled by Bloomberg.

Net interest income fell 2.7% to $302 million, largely because of lower one-time income accretion from prepayments of certain collateralized loan obligations. The net interest margin fell 30 basis points to 3.11%.

First Niagara echoed comments earlier this week from Fifth Third Bancorp in Cincinnati, as Norwood said it has turned away potential commercial loans because competitors are too loose on pricing and terms. Even with that strategy, First Niagara's total commercial loans, including commercial real estate and commercial-and-industrial credits, rose 7% to $14 billion.

Fee income fell 14%, to $77 million, on lower deposit service charges and a decline in the value of bank-owned life insurance.

To show that the company is trying to get a handle on its expenses, Crosby estimated that full-year salary and benefit expenses will be lower this year than in either 2014 or 2013. Some of the savings will come through the elimination of 240 jobs, up from a previous estimate of 200 job cuts, which will produce about $27 million in yearly savings. First Niagara recorded fourth-quarter restructuring charges of $9 million for the job cuts.

Additionally, Crosby realigned the bank's management structure, eliminating retail deposit and consumer lending product divisions, and combining all consumer businesses under a single executive. Those moves will also lower expenses, Crosby said.

First Niagara also may have put another issue behind it. In the third quarter, it booked a $1.1 billion goodwill impairment charge to account for an estimated decline in the value of its assets, largely tied to its 2012 acquisition of more than 100 HSBC branches. Crosby was asked about the goodwill impairment charge during Friday's conference call and said that there was no update to that figure.

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