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While a quick drive-by may cause some to misconstrue the story, given the impacts of the carrying costs of financing the branch transaction as well as some loan loss provision lumpiness due to the vagaries of accounting for acquired portfolios, we’ve started the year by once again delivering very consistent high-quality operating earnings, results that reflect the cumulative outcomes of our steady and strong organic growth enhanced by the accretive benefit of expanding our footprint across the northeast region. More specifically, the commercial team continues to outperform in a really differentiating way. The retail business has created very positive momentum. Core credit trends remain solid and continue to distinguish us; and the entire organization is actively managing expenses in consideration of the revenue challenges facing the industry. Some of that is a very solid execution on the fundamentals, creating not only real earnings momentum but also increased franchise value.Obviously many in our organization are working round the clock to ready us for completing the HSBC branch conversion beginning four weeks from tomorrow. We’re looking forward to delivering a terrific outcome for the more than 500,000 new households we’ll be serving, and with the addition of more than 1,200 new teammates, we’ll be even better equipped to empower all of our customers to thrive each and every day. While the near term plate is very full, we’re also focused on what it takes to win over the longer term. That starts with optimizing our execution over the next 18 to 24 months to minimize the downside exposure from the continuing headwinds and then more fully engaging the team around our longer term business strategy. As we’ve said multiple times now over the past few months, we’re fully committed to efficiently and effectively running the business that we’ve already built and accumulating the capital we need to further move forward in the years that follow.
Briefly back to today and what we’ve delivered this quarter – our retail business has sharpened the focus on acquiring new consumer and small business relationships, and the results speak for themselves. Checking sales are at record levels across all markets, and that is translating to low-cost deposit growth as well as improved fee income. That’s being accomplished while at the same time the team and delivery system are being better positioned to more optimally execute on our strategic priorities. And just as with the continuing commercial success, it’s all about a best-in-class team committed to further strengthening our sales, service, product and marketing capabilities.Obviously we’ll have an increasingly stronger position with the benefit of the HSBC branch deal. That transaction clearly deepens the upstate New York footprint that’s been the foundation of our success and it further affirms our confidence in not only the stability of our home geography but also the growth opportunities our legacy markets continue to provide. Just as importantly, the transaction further accelerates our overall retail implementation, enabling us to more fully leverage our core banking business with improved products and services, wealth management, credit cards, other consumer lending, and more. As for the commercial team, they continue to knock it out of the park by delivering differentiating results, now nine consecutive quarters of double-digit growth. And it’s not just the rate of growth that continues to stand out but also how the team is making it happen. Whether it’s our ability to lead larger deals or further deepen relationships with additional products and services, fee income enhancements are increasingly beneficial as well. It’s a team that continues to strengthen as we add more talent to ensure we outperform and win an even greater share of the right opportunities in each of our markets in the years ahead.
And with the HSBC transaction only a month away, I have to conclude by further acknowledging our entire team that will again deliver on the promise for our new customers and communities. They’re incredibly energized and very engaged, and definitely some of the best in the business – a team committed to leveraging unparalleled teamwork and their shared passion for the benefit of the customers and communities we serve. That’s what defines a culture that will not only make our execution on this transaction the best yet but is also what makes First Niagara a special place to work. As this quarter’s outcomes again demonstrate, we have a team that’s definitely all-in and one that will continue to make good things happen across our markets for both the near and longer term.With that, let me flip it to Greg who will take you through the results for the quarter. Greg Norwood Thanks John. Good morning. Thank you for joining us today. Again this quarter, we delivered on the fundamentals that differentiate our franchise - continued strong commercial loan growth and strong retail checking account acquisition. As we continue to drive our value proposition across our footprint, we have and will continue to invest judiciously in the franchise to deliver long-term value. To be clear, though, we are scratching and clawing to manage expenses at the same time. Read the rest of this transcript for free on seekingalpha.com