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BUFFALO, N.Y. (AP) — First Niagara Financial Group Inc.'s shares sank Friday after the bank took an $800 million charge that caused a quarterly loss and said it was dealing with a "process issue" with its deposit accounts.
The Buffalo, New York-based bank posted a loss after preferred dividends of $665 million, or $1.90 per share, for its third quarter. A year ago it posted a profit of $79.1 million, or 20 cents per share.
On a call with investors, First Niagara pinned the $800 million goodwill impairment charge on a drop in its share price and the expectation of continued low interest rates. A goodwill charge is an accounting measure to write down the value of an asset.
The company also said Friday that it is setting aside $45 million to address a process issue related to some customer deposit accounts. First Niagara did not spell out the problem but told investors that it was not a cybersecurity issue or a breach, and it does not affect the account balance information or the amount of funds on deposit. It said it is investigating whether customers were affected and if so, will develop a plan that provides a fix for them.
After excluding these items, First Niagra earned $63.3 million, or 18 cents per share, helped by loan growth. Analysts polled by FactSet were anticipating earnings of 18 cents per share for the quarter.
"I am disappointed that two items that impacted our reported results distracted from such solid business fundamentals in the third quarter," First Niagara CEO Gary Crosby said in a statement.
Shares lost 13.5 percent to close at $7.30 Friday in high volume trading. Its shares fell to a 52-week low of $7.23 earlier in the day.
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