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First Niagara Financial Group leaders Wednesday urged shareholders to be patient with the investments the bank is making in its operations, saying the spending is critical to the bank’s long-term success.

“We are making these investments now because we want to be in the best possible position to take full advantage of a healthy economy and an improved interest rate environment,” said Gary M. Crosby, the bank’s president and CEO, at the annual shareholders meeting in Buffalo.

First Niagara in January unveiled plans to invest $200 million to $250 million over three to four years on investments designed to maximize profitability. Crosby said the strategy marked a shift from 2013, when the bank pared back investments and made short-term earnings its top priority amid a “weak revenue environment.”

Late last year, he said, bank leaders decided the best plan for growth was to accelerate First Niagara’s long-term strategic investment plan in areas like new products and services and technology integration. Crosby told shareholders “the burden is on us to execute and show you our progress over the next few years.”

First Niagara has been under investor pressure to get more out of the various acquisitions it made in recent years that dramatically expanded the size and reach of the bank. The stock price, which closed at $8.92 per share Wednesday, has not closed above $10 per share since Jan. 23, after the bank announced the investments.

While First Niagara is taking a long-term view, Wall Street’s short-term, quarterly expectations do not go away. Crosby, in comments after the annual meeting, said: “That’s where you have to have the courage of your convictions.”

“I know what the Street wants to hear is we’ll have this over and done with in two years and we’ll see all the benefits,” he said. “I would love to tell them what they want to hear, but it would be irresponsible. I really think it will take three to four years to begin to see the real benefits from all this investment. We’ll get through a lot of it over the next two years, but to see the benefits start to kick in, that’s year three and year four.”

This was Crosby’s first annual meeting as the bank’s permanent CEO. A year ago, he addressed the shareholders as interim CEO, following the removal of John R. Koelmel from the position.

First Niagara employs about 5,800 people, including about 2,200 in Western New York, and is headquartered in Larkinville. First Niagara has about $37 billion in assets and recorded net income of $295 million on revenues of $1.5 billion last year.

During the portion of the meeting set aside for shareholders’ questions, shareholder Peter Ninos, of the Town of Tonawanda, criticized the bank for not restoring the stock dividend at a time when its top executives are receiving high pay packages. “The stockholders, all we hear is, we’re building for the future,” Ninos said. “Well, for me the future is now. I would like to see the dividend returned to what it was before we got so big.” The bank cut its dividend from 16 cents per share to 8 cents in December 2011.

Crosby told Ninos that there are no plans to increase the dividend for now, but he hoped to see it raised down the road. Ninos questioned why the executives “bear part of the burden the stockholders do” by reducing their salaries, saying shareholders are “getting nothing” and that First Niagara’s top executives were part of the HSBC upstate branch acquisition that he called “a big flop.”

G. Thomas Bowers, the outgoing board chairman, said that when First Niagara makes decisions about executive compensation, it targets the midpoint of its peer group of banks. The executives receive a combination of base salary, as well as performance-based short-term and long-term incentives. “There’s no doubt that our executives have not received full compensation as we have gone through some of these tough periods.”

Bowers also said top executives at the bank, as well as members of the board of directors, are also shareholders. “We’re all in this together, we all want to see an improved share price,” he said.

Another shareholder asked whether First Niagara is incurring high regulatory and compliance costs akin to M&T Bank’s.

“We’re in a very good place relative to our regulatory compliance, particularly with respect to the anti-money laundering/Bank Security Act,” Crosby said. “That’s what M&T is struggling with right now. We’re fortunate in that we’ve been making the investments we needed to make right along as the bank grew. And that’s enabled us to stay out of the regulatory timeout chair – not a good place to be.”

Crosby recalled that when he joined the bank about 4ø years ago, the bank had about 15 people focused on regulatory compliance. Today, that number is more than 170, he said.

In comments after the meeting, Crosby said he did not expect First Niagara to close more branches this year, beyond the 10 closings announced earlier in the year.

Bowers told shareholders he was stepping down as chairman after seven years but will remain on the board. He said the bank’s goal is to “transform our company into one of the best-performing regional banks in the nation. We firmly believe that the best way to do that to reward shareholders is by delivering on this strategy as a strong and independent company led by a highly talented management team.”

Nathaniel Woodson was elected the new chairman. He joined the board in 2011, after First Niagara completed its acquisition of Connecticut-based NewAlliance Bancshares. Woodson had been a member of NewAlliance’s board prior to the deal.

email: mglynn@buffnews.com