First Niagara Financial Group (NASDAQ:FNFG) just made a large restructuring announcement. The regional bank has announced that they will combine all of its consumer-facing businesses in order to more effectively serve its customers. Taking effect immediately, all of the company's retail banking and consumer finance groups will be merged into one larger consumer financial services team. The new team will be head up by Executive Vice President Mark Rendulic. What groups are affected exactly? Well, the newly combined Consumer Financial Services group will be comprised of the company's retail, wealth management, consumer direct lending and residential mortgage businesses. Because of this restructuring, some staff will be let go, saving money. Most notably, Andrew Fornarola, executive vice president of consumer finance, will be leaving the company.
When I opined on this strong regional bank back in the fall of 2013, I highlighted the operational efficiencies as one of the reasons I like this company and its stock, in conjunction with the strong growth in both commercial and consumer loans. While the stock is actually down about 10% since I highlighted it, I remain bullish long-term.
The present news demonstrates FNFG's commitment to maximizing the efficiency of its operations, strengthening a portion of my original thesis. Keeping customers AND shareholders in mind, management continues to make good decisions. This move is the latest in a series of strategic investments the company has made in it products, services and delivery channels to become one of the best performing regional banks in the United States and create long-term shareholder value. The restructuring will allow for all of the services for consumers to be housed under one group managed by one team. Joining these consumer teams together into one group should significantly improve customer service, and hopefully increase business on the consumer end. I think it is a sound move and reiterate my long-term buy recommendation.
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