Second Quarter Highlights:
- Profitable organic growth continues with EPS of $0.18 per share
- Operating revenues increase 3% QOQ primarily driven by a 7% increase in fee income
- Strong customer activity drove QOQ increases in most fee income categories
- Stable net interest margin of 3.36%
- Organic loan growth continues with average total loans up 8% QOQ
- Average commercial loans increase 10% QOQ, the bank's 14th consecutive quarter of double-digit commercial loan growth
- Interest-bearing checking balances increase 11% QOQ
- Transactional deposits averaged 34% of deposits, up from 30% a year-ago
- Mobile banking exceeds 100,000 registered customers
- Strong credit quality maintained
- NCOs equaled 0.33% of average originated loans, compared to 0.35% in 2012
BUFFALO, N.Y., July 19, 2013 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today reported net income available to common shareholders of $63.6 million or $0.18 per diluted share for the second quarter of 2013 highlighted by organic expansion of commercial and indirect auto lending, continued growth in transactional deposit balances, strong fee income generation and positive operating leverage.
"We continue to drive profitable organic growth across our entire footprint by diversifying and enhancing revenue sources while managing expenses to achieve real operating leverage," said Gary Crosby, Interim President and Chief Executive Officer. "First Niagara's strong business fundamentals are translating into strong financial performance. As we continue our search for a permanent CEO, the entire First Niagara team has not missed a beat and we are all focused on achieving our overall performance goals by expanding and broadening customer relationships for profitable organic growth."
Second Quarter Results
In the second quarter of 2013, First Niagara reported net income available to common shareholders of $63.6 million, or $0.18 per diluted share. In the second quarter of 2012, First Niagara reported a net loss available to common shareholders of $18.5 million, or $0.05 per diluted share, that included $135.2 million in pre-tax acquisition and restructuring expenses incurred primarily in connection with the closing of the HSBC branch acquisition in May 2012. For the first three months of the year, net income to common shareholders was $59.7 million, or $0.17 per diluted share.
Balance sheet growth remained strong as average loans increased 8% annualized compared to the prior quarter. Average commercial loans increased 10% annualized over the prior quarter, the 14th consecutive quarter of double-digit growth. Average consumer loans increased 5% annualized driven by continued growth in indirect auto loan balances, partially offset by a decline in residential mortgage loans. Average interest-bearing checking deposits increased 11% annualized from the prior quarter driven by greater account acquisition activity particularly in the company's New York and New England markets as well as increases in balances held by customers.
Net interest income was up modestly in the second quarter compared to the prior quarter. Net interest margin was 3.36%, as compared to 3.39% in the first quarter of 2013. Noninterest income increased $6.2 million or 7% from the prior quarter primarily due to sequential strength in wealth management fees, deposit service charges, insurance commissions, and merchant and card fees.
The provision for loan losses on originated loans totaled $23.9 million in the second quarter of 2013, including $11.7 million to support loan growth and $12.2 million to cover net charge-offs during the quarter. At June 30, 2013, nonperforming originated loans comprised 1.02% of originated loans, essentially flat to prior quarter. Net charge-offs equaled 33 basis points of average originated loans, compared to 35 basis points in 2012.
Second quarter 2013 expenses of $235.2 million reflected higher incentive and variable compensation tied to strong fee income growth as well as costs related to selective investments in key initiatives and branch consolidations, partially offset by lower amortization of core deposit intangibles.
| Reported Results (GAAP) | Q2 2013 | Q1 2013 | Q2 2012 |
| Net interest income | $ 269.4 | $ 266.1 | $ 259.0 |
| Provision for credit losses | 25.2 | 20.2 | 28.1 |
| Noninterest income | 95.5 | 89.3 | 95.6 |
| Noninterest expense | 235.2 | 237.7 | 345.6 |
| Net income (loss) | 71.1 | 67.3 | (10.9) |
| Preferred stock dividend | 7.5 | 7.5 | 7.5 |
| Net income (loss) available to common shareholders | 63.6 | 59.7 | (18.5) |
| Weighted average diluted shares outstanding | 350.4 | 350.0 | 348.9 |
| Earnings (loss) per diluted share | $ 0.18 | $ 0.17 | $ (0.05) |
| All amounts in millions except earnings per diluted share. | |||
"During the second quarter, we continued to generate positive operating leverage driven by stronger than expected fee income growth and our continued focus on managing our expense base to meet our previously disclosed year-end targets," said Gregory W. Norwood, Chief Financial Officer. "During the quarter, we continued to generate loan growth across all our geographies through market share gains and concerted efforts to earn more of our customers' business and used a portion of the cash flows from our investment securities portfolio to partially fund this loan growth."
Loans
Average total loans increased 8% annualized from the linked quarter boosted by a double-digit increase in commercial lending (business and real estate) as well as sustained momentum in the company's indirect auto business. For the 14th consecutive quarter, average commercial loans, which includes commercial business (C&I) and commercial real estate (CRE) loans, increased at a double-digit pace organically, up $310 million, or 10% annualized over the prior quarter.
Average CRE loans increased 11% annualized to $7.4 billion. C&I loans averaged $5.1 billion, representing a 9% annualized increase over the prior quarter. Average commercial loans in the company's Western Pennsylvania, Eastern Pennsylvania and New England markets increased at double-digit annualized growth rates of 25%, 10%, and 13%, respectively. Average commercial loans in the company's New York footprint increased 7% annualized from the prior quarter. Since the acquisition of HSBC branches in May 2012, commercial loans in the company's New York market have increased at a 9% annualized growth rate. The commercial loan pipeline at quarter-end remains strong and consistent with prior quarters.
Average indirect auto loan balances increased $215 million to $927 million. During the second quarter, indirect auto originations totaled $296 million at an average customer FICO score of 745 and yielded 3.2%, net of dealer reserve. During the quarter, the company added an additional 51 dealers to its network. Average residential real estate loans declined by $121 million, or 13% annualized reflecting elevated prepayment levels.
Deposits
The company continued to focus its efforts to grow its core customer base, re-position its account mix and lower deposit costs. Average transaction deposit balances, which include interest-bearing and noninterest bearing checking accounts, increased an annualized 17% over the prior quarter and currently represent 34% of the company's deposit balances, up from 30% a year ago.
The average cost of interest-bearing deposits declined two basis points to 0.23% from 0.25% in the prior quarter. Pricing actions on non-transactional deposit accounts together with a favorable shift in mix of deposits drove the decline in overall cost of interest-bearing deposits.
Average interest-bearing checking deposit balances increased 11% annualized compared to the prior quarter driven by the continued acquisitions of new checking accounts, particularly in the mass affluent household segment as well as higher balances held by customers. Noninterest bearing deposit balances averaged $4.7 billion and increased an annualized 22% over the prior quarter.
Since 2011, the company has consolidated over 60 branches across its regional footprint, while investing in alternative delivery platforms such as online and mobile banking. More than 100,000 customers have registered for mobile banking since its launch in January 2013. In the first half of 2013, the company consolidated nine branches, including five branches in the second quarter. As customers migrate to other banking platforms, First Niagara will continue to optimize its physical branch network.
Net Interest Income
Second quarter 2013 net interest income of $269.4 million increased 1% from the prior quarter. Compared to the prior quarter, the benefits of a 4% annualized increase in average interest-earning assets were partially offset by a 3 basis point decline in the net interest margin. Average loans increased an annualized 8% driven by strong commercial and indirect auto loan growth. Average other interest earning assets declined 3% annualized from the linked quarter.
In the second quarter of 2013, premium amortization on the residential mortgage backed securities portfolio was $11.6 million compared to $12.7 million in the prior quarter. During the quarter, cash flows from the CMO were below the company's expectations from last year due to the increase in mortgage rates. Compared to the first quarter of 2013, the modest benefits from commercial loan prepayments together with a 2 basis point decline in cost of interest bearing deposits were offset by continued compression of loan yields from elevated prepayments and reinvestments at lower spreads.
Credit Quality
At June 30, 2013, the allowance for loan losses was $183.7 million, compared to $172.0 million at March 31, 2013. At June 30, 2013, nonperforming assets to total assets were 0.51%, largely unchanged from the prior quarter. Information for both the originated and acquired portfolios follows.
| Q2 2013 | Q1 2013 | ||||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total | |
| Provision for loan losses* | $ 23.9 | $ 0.9 | $ 24.8 | $ 18.9 | $ 0.9 | $ 19.8 | |
| Net charge-offs | 12.2 | 0.9 | 13.1 | 9.1 | 1.2 | 10.3 | |
| NCOs/ Avg Loans | 0.33 % | 0.06 % | 0.26 % | 0.27 % | 0.08 % | 0.21 % | |
| Total loans** | $ 15,102 | $ 5,581 | $ 20,543 | $ 14,100 | $ 6,084 | $ 20,035 | |
| (*) Excludes provision for unfunded commitments of $0.4 million each in 2Q13 and 1Q13 | |||||||
|
(**) Acquired loans before associated credit discount; see accompanying tables for further information |
|||||||
Originated loans
The provision for loan losses on originated loans totaled $23.9 million, compared to $18.9 million in the prior quarter. This provision included $11.7 million to support sequential originated loan growth of $1.0 billion, compared to $9.8 million in the prior quarter that supported $0.7 billion of originated loan growth. Net charge-offs equaled $12.2 million or 33 basis points of average originated loans in the second quarter of 2013, compared to 35 basis points in 2012.
At June 30, 2013, nonperforming originated loans comprised 1.02% of originated loans and were essentially flat to the prior quarter.
At June 30, 2013, the allowance for loan losses on originated loans totaled $182.5 million or 1.21% of such loans, compared to $170.7 million or 1.21% of loans at March 31, 2013.
Acquired loans
The provision for losses on acquired loans totaled $0.9 million, unchanged from the prior quarter. Net charge-offs on those portfolios totaled $0.9 million during the quarter, compared to $1.2 million in the prior period. At June 30, 2013, the allowance for loan losses on acquired loans totaled $1.3 million and was consistent with March 31, 2013. Acquired nonperforming loans totaled $27.5 million, compared to $27.7 million at the end of the prior quarter. At June 30, 2013, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $141 million.
Fee Income
Second quarter 2013 noninterest income of $95.5 million increased 7% or $6.2 million compared to the prior quarter driven by strong customer activity and sales productivity primarily in the company's wealth management and insurance businesses.
Wealth management revenue increased $2.1 million, or 16% from the first quarter driven by strong annuity sales, increased sales productivity as well as a 7% increase in assets under management. Insurance commissions increased $1.3 million or 8% from the first quarter due to higher renewal premiums. Deposit service charges increased 7% from the prior quarter and were driven by an increase in NSF incidence and collection rates. Merchant and card fees increased 10% driven by higher debit card interchange from strong customer usage. Mortgage banking revenues increased 7% to $6.9 million from $6.4 million in the prior quarter.
Offsetting these increases, capital markets income declined 17% or $1.0 million primarily due to lower derivative product demand during the quarter.
Noninterest Expense
Operating expenses in the second quarter reflected higher than expected incentives and variable compensation expenses related to strong fee income generation as well as additional costs related to branch consolidations.
Second quarter noninterest expenses were $235.2 million, compared to $237.7 million in the prior quarter which included $6.3 million in charges related to executive departures. Compared to the first quarter of 2013, a $4.2 million increase in incentives and variable compensation expenses tied to strong fee income growth was partially offset by a sequential decline in costs associated with employee headcount and benefits. The amortization of intangibles decreased $3.3 million from the prior quarter primarily reflecting the decline in amortization of the HSBC transaction-related core deposit intangible.
The efficiency ratio improved to 64.4% in the second quarter from 65.1% in the prior quarter adjusted to exclude the $6.3 million charge related to executive departures.
Capital
At June 30, 2013, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.3% and 7.7% respectively. The company remains well above current regulatory guidelines for well-capitalized institutions.
About First Niagara
First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank with approximately 420 branches, approximately $37 billion in assets, $27 billion in deposits, and approximately 6,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.
Investor Call
A conference call will be held at 10:00 a.m. Eastern Time on Friday, July 19, 2013 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-664-9857 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and is available under the investor relations tab of our website at www.firstniagara.com. A replay of the call will be available until August 2, 2013 by dialing 1-800-677-4914, passcode: 5269.
Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.
Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real estate and business loans and non-performing loans.
| First Niagara Financial Group, Inc. | ||||||||
| Income Statement Highlights -- Reported Basis | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2012 | Six months ended | |||||||
| Second | First | Fourth | Third | Second | First | June 30, | June 30, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | |
| Interest income: | ||||||||
| Loans and leases | $ 209,970 | $ 206,640 | $ 212,035 | $ 211,767 | $ 200,725 | $ 189,385 | $ 416,610 | $ 390,110 |
| Investment securities and other | 88,110 | 88,961 | 71,564 | 90,101 | 99,116 | 101,395 | 177,071 | 200,511 |
| Total interest income | 298,080 | 295,601 | 283,599 | 301,868 | 299,841 | 290,780 | 593,681 | 590,621 |
| Interest expense: | ||||||||
| Deposits | 12,967 | 14,277 | 16,902 | 18,358 | 16,391 | 14,998 | 27,244 | 31,389 |
| Borrowings | 15,670 | 15,194 | 14,411 | 13,905 | 24,437 | 33,411 | 30,864 | 57,848 |
| Total interest expense | 28,637 | 29,471 | 31,313 | 32,263 | 40,828 | 48,409 | 58,108 | 89,237 |
| Net interest income | 269,443 | 266,130 | 252,286 | 269,605 | 259,013 | 242,371 | 535,573 | 501,384 |
| Provision for credit losses | 25,200 | 20,200 | 22,000 | 22,200 | 28,100 | 20,000 | 45,400 | 48,100 |
| Net interest income after provision | 244,243 | 245,930 | 230,286 | 247,405 | 230,913 | 222,371 | 490,173 | 453,284 |
| Noninterest income: | ||||||||
| Deposit service charges | 26,482 | 24,800 | 26,345 | 26,422 | 21,433 | 17,037 | 51,282 | 38,470 |
| Insurance commissions | 17,692 | 16,355 | 15,497 | 18,764 | 17,072 | 16,833 | 34,047 | 33,905 |
| Merchant and card fees | 12,380 | 11,298 | 11,945 | 12,014 | 9,271 | 5,528 | 23,678 | 14,799 |
| Wealth management services | 14,945 | 12,845 | 12,000 | 11,069 | 9,207 | 9,039 | 27,790 | 18,246 |
| Mortgage banking | 6,882 | 6,424 | 8,060 | 10,974 | 7,174 | 5,649 | 13,306 | 12,823 |
| Capital markets income | 5,002 | 6,031 | 7,098 | 6,381 | 6,831 | 6,539 | 11,033 | 13,370 |
| Lending and leasing | 4,534 | 3,906 | 3,739 | 3,730 | 4,245 | 3,123 | 8,440 | 7,368 |
| Bank owned life insurance | 3,321 | 3,467 | 3,021 | 3,449 | 3,848 | 3,387 | 6,788 | 7,235 |
| Other income | 4,308 | 4,186 | 4,116 | 9,400 | 16,517 | 2,773 | 8,494 | 19,290 |
| Total noninterest income | 95,546 | 89,312 | 91,821 | 102,203 | 95,598 | 69,908 | 184,858 | 165,506 |
| Noninterest expense: | ||||||||
| Salaries and benefits | 116,305 | 115,790 | 111,026 | 115,484 | 104,507 | 96,477 | 232,095 | 200,984 |
| Occupancy and equipment | 28,506 | 28,045 | 27,609 | 25,694 | 24,089 | 22,017 | 56,551 | 46,106 |
| Technology and communications | 29,603 | 27,113 | 28,257 | 28,110 | 24,434 | 19,713 | 56,716 | 44,147 |
| Marketing and advertising | 5,450 | 4,346 | 9,292 | 8,954 | 6,676 | 6,763 | 9,796 | 13,439 |
| Professional services | 9,782 | 9,603 | 11,163 | 11,193 | 9,263 | 8,895 | 19,385 | 18,158 |
| Amortization of intangibles | 10,850 | 14,119 | 14,224 | 14,506 | 9,839 | 6,466 | 24,969 | 16,305 |
| FDIC premiums | 9,348 | 8,901 | 9,158 | 8,850 | 10,552 | 6,133 | 18,249 | 16,685 |
| Merger and acquisition integration expenses | -- | -- | 3,678 | 29,404 | 131,460 | 12,970 | -- | 144,430 |
| Restructuring charges | -- | -- | -- | -- | 3,750 | 2,703 | -- | 6,453 |
| Other expense | 25,326 | 29,749 | 24,377 | 24,347 | 21,069 | 18,041 | 55,075 | 39,110 |
| Total noninterest expense | 235,170 | 237,666 | 238,784 | 266,542 | 345,639 | 200,178 | 472,836 | 545,817 |
| Income (loss) before income tax | 104,619 | 97,576 | 83,323 | 83,066 | (19,128) | 92,101 | 202,195 | 72,973 |
| Income tax expense (benefit) | 33,485 | 30,291 | 22,226 | 24,682 | (8,204) | 32,236 | 63,776 | 24,032 |
| Net income (loss) | 71,134 | 67,285 | 61,097 | 58,384 | (10,924) | 59,865 | 138,419 | 48,941 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 5,115 | 15,094 | 12,662 |
| Net income (loss) available to common stockholders | $ 63,587 | $ 59,738 | $ 53,550 | $ 50,837 | $ (18,471) | $ 54,750 | $ 123,325 | $ 36,279 |
| Financial Ratios: | ||||||||
| Earnings (loss) per basic share | $ 0.18 | $ 0.17 | $ 0.15 | $ 0.15 | $ (0.05) | $ 0.16 | $ 0.35 | $ 0.10 |
| Earnings (loss) per diluted share | 0.18 | 0.17 | 0.15 | 0.14 | (0.05) | 0.16 | 0.35 | 0.10 |
| Weighted average shares outstanding - basic(1) | 349,542 | 349,278 | 349,071 | 349,001 | 348,941 | 348,823 | 349,411 | 348,882 |
| Weighted average shares outstanding - diluted(1) | 350,384 | 349,999 | 349,663 | 349,371 | 348,941 | 349,069 | 350,150 | 349,147 |
| Net revenue(2) | $ 364,989 | $ 355,442 | $ 344,107 | $ 371,808 | $ 354,611 | $ 312,279 | $ 720,431 | $ 666,890 |
| Noninterest income as a percentage of net revenue(2) | 26.18% | 25.13% | 26.68% | 27.49% | 26.96% | 22.39% | 25.66% | 24.82% |
| Pre-tax, pre-provision income(3) | $ 129,819 | $ 117,776 | $ 105,323 | $ 105,266 | $ 8,972 | $ 112,101 | $ 247,595 | $ 121,073 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.37 | $ 0.34 | $ 0.30 | $ 0.30 | $ 0.03 | $ 0.32 | $ 0.71 | $ 0.35 |
| Pre-tax, pre-provision return on average assets(3) | 1.41% | 1.30% | 1.15% | 1.19% | 0.10% | 1.36% | 1.35% | 0.70% |
| Net interest margin(4) | 3.36% | 3.39% | 3.22% | 3.54% | 3.26% | 3.34% | 3.38% | 3.30% |
| Interest yield on average loans(4) | 4.19% | 4.25% | 4.39% | 4.47% | 4.59% | 4.62% | 4.21% | 4.60% |
| Rate paid on interest-bearing liabilities | 0.43% | 0.44% | 0.48% | 0.51% | 0.61% | 0.79% | 0.44% | 0.69% |
| Efficiency ratio | 64.43% | 66.86% | 69.39% | 71.69% | 97.47% | 64.10% | 65.63% | 81.85% |
| Effective tax rate | 32.0% | 31.0% | 26.7% | 29.7% | 42.9% | 35.0% | 31.5% | 32.9% |
| Return on average assets(5) | 0.77 % | 0.74 % | 0.67% | 0.66% | (0.12)% | 0.73% | 0.76% | 0.28% |
| Return on average equity(5) | 5.72 % | 5.50 % | 4.92% | 4.77% | (0.90)% | 4.96% | 5.61% | 2.02% |
| Return on average tangible equity(3)(5) | 11.75 % | 11.62 % | 10.45% | 10.34% | (1.64)% | 7.90% | 11.69% | 3.44% |
| Return on average common equity | 5.48 % | 5.24 % | 4.62% | 4.46% | (1.64)% | 4.88% | 5.36% | 1.61% |
| Return on average tangible common equity(3) | 12.21 % | 12.05 % | 10.72% | 10.60% | (3.18)% | 8.12% | 12.13% | 2.89% |
| (1) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | ||||||||
| (2) Net revenue is comprised of net interest income and noninterest income. | ||||||||
| (3) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||||
| (4) Yields and rates calculated on a tax equivalent basis. | ||||||||
| (5) Return used to calculate ratio excludes preferred stock dividend. | ||||||||
| First Niagara Financial Group, Inc. | ||||||||||
| Period End Balance Sheet | ||||||||||
| (in thousands) | ||||||||||
| 2012 | ||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | |||||
| Cash and cash equivalents | $ 552,210 | $ 424,176 | $ 430,862 | $ 447,087 | $ 488,227 | $ 370,380 | ||||
| Investment securities: | ||||||||||
| Available for sale | 7,916,353 | 7,876,160 | 10,993,605 | 10,579,970 | 9,937,271 | 12,248,058 | ||||
| Held to maturity | 3,856,960 | 4,218,687 | 1,299,806 | 1,387,763 | 1,463,872 | 2,503,156 | ||||
| FHLB and FRB common stock | 429,740 | 401,373 | 420,277 | 373,311 | 329,555 | 499,328 | ||||
| Total investment securities | 12,203,053 | 12,496,220 | 12,713,688 | 12,341,044 | 11,730,698 | 15,250,542 | ||||
| Loans held for sale | 118,104 | 126,389 | 154,745 | 117,375 | 101,596 | 102,513 | ||||
| Loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Real estate | 7,482,375 | 7,295,544 | 7,093,193 | 6,835,971 | 6,710,009 | 6,369,098 | ||||
| Business | 5,165,606 | 5,044,738 | 4,953,323 | 4,682,154 | 4,514,537 | 4,108,363 | ||||
| Total commercial loans | 12,647,981 | 12,340,282 | 12,046,516 | 11,518,125 | 11,224,546 | 10,477,461 | ||||
| Consumer: | ||||||||||
| Residential real estate | 3,558,274 | 3,614,912 | 3,761,567 | 3,870,756 | 4,037,045 | 3,881,003 | ||||
| Home equity | 2,670,672 | 2,646,645 | 2,651,891 | 2,661,429 | 2,683,236 | 2,149,135 | ||||
| Indirect auto | 1,049,763 | 818,401 | 601,456 | 419,258 | 185,774 | -- | ||||
| Credit cards | 303,455 | 298,310 | 314,973 | 308,387 | 304,368 | -- | ||||
| Other consumer | 313,037 | 316,669 | 333,609 | 328,571 | 328,547 | 283,320 | ||||
| Total consumer loans | 7,895,201 | 7,694,937 | 7,663,496 | 7,588,401 | 7,538,970 | 6,313,458 | ||||
| Total loans and leases | 20,543,182 | 20,035,219 | 19,710,012 | 19,106,526 | 18,763,516 | 16,790,919 | ||||
| Allowance for loan losses | 183,708 | 172,002 | 162,522 | 149,933 | 138,516 | 126,746 | ||||
| Loans and leases, net | 20,359,474 | 19,863,217 | 19,547,490 | 18,956,593 | 18,625,000 | 16,664,173 | ||||
| Bank owned life insurance | 410,182 | 407,419 | 404,321 | 401,211 | 397,739 | 395,944 | ||||
| Goodwill and other intangibles | 2,557,560 | 2,567,681 | 2,617,810 | 2,626,625 | 2,631,605 | 1,796,394 | ||||
| Other assets | 949,144 | 959,459 | 937,316 | 983,999 | 1,130,891 | 937,859 | ||||
| Total assets | $ 37,149,727 | $ 36,844,561 | $ 36,806,232 | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | ||||
| Deposits: | ||||||||||
| Savings accounts | $ 3,878,053 | $ 3,915,836 | $ 3,887,587 | $ 3,941,528 | $ 4,103,773 | $ 2,554,720 | ||||
| Interest-bearing checking | 4,499,963 | 4,534,444 | 4,450,970 | 4,090,322 | 3,887,568 | 2,431,672 | ||||
| Money market deposits | 10,013,996 | 10,493,243 | 10,581,137 | 10,801,280 | 10,919,766 | 7,100,646 | ||||
| Noninterest-bearing deposits | 4,845,835 | 4,803,835 | 4,643,580 | 4,658,374 | 4,774,764 | 3,200,824 | ||||
| Certificates of deposit | 3,911,989 | 3,985,702 | 4,113,257 | 4,206,192 | 4,211,116 | 3,741,525 | ||||
| Total deposits | 27,149,836 | 27,733,060 | 27,676,531 | 27,697,696 | 27,896,987 | 19,029,387 | ||||
| Short-term borrowings | 3,698,279 | 2,928,929 | 2,983,718 | 1,995,610 | 958,044 | 6,353,189 | ||||
| Long-term borrowings | 732,598 | 732,510 | 732,425 | 732,339 | 732,263 | 4,688,251 | ||||
| Other liabilities | 666,270 | 503,389 | 487,000 | 532,868 | 700,249 | 571,532 | ||||
| Total liabilities | 32,246,983 | 31,897,888 | 31,879,674 | 30,958,513 | 30,287,543 | 30,642,359 | ||||
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | ||||
| Common stockholders' equity | 4,564,742 | 4,608,671 | 4,588,556 | 4,577,419 | 4,480,211 | 4,537,444 | ||||
| Total stockholders' equity | 4,902,744 | 4,946,673 | 4,926,558 | 4,915,421 | 4,818,213 | 4,875,446 | ||||
| Total liabilities and stockholders' equity | $ 37,149,727 | $ 36,844,561 | $ 36,806,232 | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | ||||
| Selected balance sheet information: | ||||||||||
| Total interest-earning assets(1) | $ 32,906,363 | $ 32,524,313 | $ 32,321,964 | $ 31,316,470 | $ 30,403,035 | $ 31,959,556 | ||||
| Total interest-bearing liabilities | 26,734,878 | 26,590,664 | 26,749,094 | 25,767,271 | 24,812,530 | 26,870,002 | ||||
| Net interest-earning assets | $ 6,171,485 | $ 5,933,649 | $ 5,572,870 | $ 5,549,199 | $ 5,590,505 | $ 5,089,554 | ||||
| Tangible common equity(2) | $ 2,007,182 | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | 1,848,606 | 2,741,050 | ||||
| Unrealized gain on securities, net of tax(3) | 83,898 | 160,942 | 206,733 | 204,347 | 133,430 | 152,408 | ||||
| Total core deposits | $ 23,237,847 | $ 23,747,358 | $ 23,563,274 | $ 23,491,504 | $ 23,685,871 | $ 15,287,862 | ||||
| Originated loans(4) | $ 15,102,336 | $ 14,100,190 | $ 13,372,357 | $ 12,232,568 | $ 11,392,158 | $ 10,517,021 | ||||
| Acquired loans(5) | 5,581,651 | 6,083,912 | 6,513,636 | 7,085,839 | 7,600,213 | 6,459,798 | ||||
| Credit related discount on acquired loans(6) | (140,805) | (148,883) | (175,981) | (211,881) | (228,855) | (185,900) | ||||
| Total Loans | $ 20,543,182 | $ 20,035,219 | $ 19,710,012 | $ 19,106,526 | $ 18,763,516 | $ 16,790,919 | ||||
| (1) Includes interest bearing cash and cash equivalents, investment securities at amortized cost, loans held for sale, and total loans and leases. | ||||||||||
| (2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||||||
| (3) Unrealized gain at March 31, 2013 excludes $54 million of net pre-tax unrealized gains recorded in accumulated other comprehensive income related to available for sale securities transferred to held to maturity classification as of March 31, 2013. | ||||||||||
| (4) Originated loans represent total loans excluding acquired loans. | ||||||||||
| (5) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||||||
| (6) Represent principal on acquired loans not expected to be collected. | ||||||||||
| First Niagara Financial Group, Inc. | ||||||||||||||||||||||||||||
| Average Balance Sheet and Related Tax Equivalent Yields & Rates | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||
| For the three months ended | Six months ended | |||||||||||||||||||||||||||
| June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||||||||||||||
| Average | Interest(1) | Yields | Average | Interest(1) | Yields | Average | Interest(1) | Yields | Average | Interest(1) | Yields | Average | Interest(1) | Yields | ||||||||||||||
| Balances | and Rates(1) | Balances | and Rates(1) | Balances | and Rates(1)(2) | Balances | and Rates(1) | Balances | and Rates(1)(2) | |||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||
| Loans and leases(3) | ||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||
| Real estate | $ 7,376 | $ 79 | 4.22% | $ 7,179 | $ 76 | 4.25% | $ 6,501 | $ 80 | 4.88% | $ 7,278 | $ 155 | 4.23% | $ 6,400 | $ 159 | 4.93% | |||||||||||||
| Business | 5,112 | 47 | 3.66 | 4,999 | 47 | 3.74 | 4,293 | 44 | 4.03 | 5,056 | 94 | 3.70 | 4,104 | 84 | 4.05 | |||||||||||||
| Total commercial loans | 12,488 | 126 | 3.99 | 12,178 | 123 | 4.04 | 10,794 | 124 | 4.54 | 12,334 | 249 | 4.02 | 10,505 | 244 | 4.59 | |||||||||||||
| Consumer: | ||||||||||||||||||||||||||||
| Residential real estate | 3,570 | 35 | 3.94 | 3,691 | 37 | 4.01 | 3,964 | 40 | 4.07 | 3,631 | 72 | 3.98 | 3,955 | 83 | 4.18 | |||||||||||||
| Home equity | 2,661 | 28 | 4.25 | 2,648 | 28 | 4.29 | 2,412 | 27 | 4.42 | 2,654 | 56 | 4.27 | 2,284 | 50 | 4.41 | |||||||||||||
| Indirect auto | 927 | 7 | 3.18 | 712 | 6 | 3.29 | 84 | 1 | 4.16 | 820 | 13 | 3.23 | 46 | 1 | 4.58 | |||||||||||||
| Credit cards | 302 | 8 | 10.96 | 304 | 8 | 10.40 | 160 | 5 | 11.58 | 303 | 16 | 10.68 | 93 | 5 | 11.32 | |||||||||||||
| Other consumer | 313 | 7 | 8.42 | 328 | 7 | 8.17 | 283 | 6 | 8.12 | 320 | 13 | 8.29 | 263 | 10 | 7.61 | |||||||||||||
| Total consumer loans | 7,773 | 86 | 4.41 | 7,683 | 85 | 4.50 | 6,903 | 78 | 4.55 | 7,728 | 171 | 4.45 | 6,641 | 149 | 4.51 | |||||||||||||
| Total loans and leases | 20,261 | 212 | 4.19 | 19,861 | 208 | 4.25 | 17,697 | 202 | 4.59 | 20,062 | 419 | 4.21 | 17,146 | 393 | 4.60 | |||||||||||||
| Residential MBS(2) | 5,496 | 33 | 2.40 | 5,488 | 34 | 2.50 | 8,982 | 61 | 2.72 | 5,492 | 67 | 2.45 | 8,766 | 126 | 2.87 | |||||||||||||
| Commercial MBS | 1,881 | 16 | 3.44 | 1,914 | 18 | 3.78 | 1,867 | 18 | 3.94 | 1,898 | 34 | 3.61 | 1,785 | 35 | 3.96 | |||||||||||||
| Other investment securities (4) | 4,833 | 41 | 3.37 | 4,822 | 38 | 3.19 | 3,652 | 31 | 3.43 | 4,827 | 79 | 3.28 | 3,165 | 54 | 3.41 | |||||||||||||
| Total securities, at cost(2) | 12,210 | 90 | 2.94 | 12,224 | 91 | 2.97 | 14,501 | 110 | 3.05 | 12,217 | 181 | 2.96 | 13,716 | 215 | 3.14 | |||||||||||||
| Money market and other investments | 171 | 1 | 1.85 | 241 | 1 | 1.31 | 349 | 1 | 0.94 | 206 | 2 | 1.53 | 311 | 1 | 0.94 | |||||||||||||
| Total interest-earning assets(2) | 32,642 | $ 302 | 3.71% | 32,326 | $ 300 | 3.76% | 32,547 | $ 313 | 3.87% | 32,485 | $ 602 | 3.74% | 31,173 | $ 609 | 3.93% | |||||||||||||
| Goodwill and other intangibles | 2,561 | 2,609 | 2,207 | 2,585 | 2,004 | |||||||||||||||||||||||
| Other noninterest-earning assets | 1,780 | 1,872 | 1,746 | 1,826 | 1,635 | |||||||||||||||||||||||
| Total assets | $ 36,983 | $ 36,807 | $ 36,500 | $ 36,896 | $ 34,812 | |||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||
| Savings accounts | $ 3,897 | $ 1 | 0.11% | $ 3,894 | $ 1 | 0.11% | $ 3,302 | $ 1 | 0.14% | $ 3,896 | $ 2 | 0.11% | $ 2,934 | $ 1 | 0.09% | |||||||||||||
| Interest-bearing checking | 4,504 | -- | 0.04 | 4,379 | 1 | 0.05 | 3,095 | 1 | 0.08 | 4,442 | 1 | 0.05 | 2,660 | 1 | 0.09 | |||||||||||||
| Money market deposits | 10,178 | 5 | 0.20 | 10,643 | 6 | 0.23 | 9,125 | 6 | 0.28 | 10,409 | 11 | 0.21 | 8,147 | 11 | 0.28 | |||||||||||||
| Certificates of deposit | 3,902 | 6 | 0.66 | 4,081 | 7 | 0.67 | 4,019 | 8 | 0.83 | 3,991 | 13 | 0.66 | 3,923 | 18 | 0.90 | |||||||||||||
| Total interest bearing deposits | 22,481 | 13 | 0.23% | 22,997 | 14 | 0.25% | 19,541 | 16 | 0.34% | 22,738 | 27 | 0.24% | 17,662 | 31 | 0.36% | |||||||||||||
| Borrowings | ||||||||||||||||||||||||||||
| Short-term borrowings | 3,536 | 4 | 0.41% | 3,152 | 3 | 0.40% | 5,046 | 7 | 0.55% | 3,345 | 7 | 0.40% | 4,339 | 13 | 0.59% | |||||||||||||
| Long-term borrowings | 733 | 12 | 6.62 | 730 | 12 | 6.71 | 2,433 | 18 | 2.91 | 731 | 24 | 6.67 | 3,884 | 45 | 2.34 | |||||||||||||
| Total borrowings | 4,269 | 16 | 1.47 | 3,882 | 15 | 1.59 | 7,479 | 24 | 1.31 | 4,076 | 31 | 1.53 | 8,223 | 58 | 1.41 | |||||||||||||
| Total interest-bearing liabilities | 26,750 | $ 29 | 0.43% | 26,879 | $ 29 | 0.44% | 27,020 | $ 41 | 0.61% | 26,814 | $ 58 | 0.44% | 25,885 | $ 89 | 0.69% | |||||||||||||
| Noninterest-bearing deposits | 4,711 | 4,468 | 3,835 | 4,591 | 3,444 | |||||||||||||||||||||||
| Other noninterest-bearing liabilities | 533 | 502 | 765 | 517 | 618 | |||||||||||||||||||||||
| Total liabilities | 31,994 | 31,849 | 31,620 | 31,922 | 29,947 | |||||||||||||||||||||||
| Total stockholders' equity | 4,989 | 4,958 | 4,880 | 4,974 | 4,865 | |||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ 36,983 | $ 36,807 | $ 36,500 | $ 36,896 | $ 34,812 | |||||||||||||||||||||||
| Net interest income (FTE) | $ 274 | $ 270 | $ 272 | $ 544 | $ 520 | |||||||||||||||||||||||
| Taxable Equivalent Adjustment(1) | 5 | 4 | 5 | 8 | 11 | |||||||||||||||||||||||
| Total core deposits | $ 23,290 | $ 6 | 0.11% | $ 23,384 | $ 8 | 0.13% | $ 19,357 | $ 8 | 0.17% | $ 23,338 | $ 14 | 0.12% | $ 17,183 | $ 13 | 0.16% | |||||||||||||
| Total deposits | 27,192 | 13 | 0.19% | 27,465 | 14 | 0.21% | 23,376 | 16 | 0.28% | 27,329 | 27 | 0.20% | 21,106 | 31 | 0.30% | |||||||||||||
| Tax equivalent net interest rate spread(2) | 3.28% | 3.32% | 3.26% | 3.30% | 3.24% | |||||||||||||||||||||||
| Tax equivalent net interest rate margin(2) | 3.36% | 3.39% | 3.37% | 3.38% | 3.36% | |||||||||||||||||||||||
| (1) Tax equivalent interest income is calculated using a 35% tax rate. | ||||||||||||||||||||||||||||
| (2) Amounts for both the three months and six months ended June 30, 2012 exclude accelerated CMO adjustments of $8 million. The yields, including these adjustments, are: | ||||||||||||||||||||||||||||
| Three months ended June 30, 2012 | Six months ended June 30, 2012 | |||||||||||||||||||||||||||
| Residential MBS | 2.35% | 2.68% | ||||||||||||||||||||||||||
| Total securities, at cost | 2.81% | 3.02% | ||||||||||||||||||||||||||
| Total interest earning assets | 3.77% | 3.88% | ||||||||||||||||||||||||||
| Tax equivalent net interest rate spread | 3.16% | 3.19% | ||||||||||||||||||||||||||
| Tax equivalent net interest rate margin | 3.26% | 3.30% | ||||||||||||||||||||||||||
| (3) Includes nonaccrual loans. | ||||||||||||||||||||||||||||
| (4) Includes debt securities, collateralized loan obligations, asset-backed securities, FHLB and FRB common stock, and other investment securities. | ||||||||||||||||||||||||||||
| First Niagara Financial Group, Inc. | |||||||||||||
| Allowance for Loans and Lease Losses & Asset Quality | |||||||||||||
| (in thousands) | |||||||||||||
| 2012 | Six months ended | ||||||||||||
| Second | First | Fourth | Third | Second | First | June 30, | June 30, | ||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | ||||||
| Beginning balance | $ 172,002 | $ 162,522 | $ 149,933 | $ 138,516 | $ 126,746 | $ 120,100 | $ 162,522 | $ 120,100 | |||||
| Net loan (charge-offs) recoveries: | |||||||||||||
| Commercial real estate | $ (2,817) | $ (2,121) | $ (1,935) | $ (1,791) | $ (2,384) | $ (5,994) | $ (4,938) | $ (8,378) | |||||
| Commercial business | (7,175) | (4,902) | (3,385) | (6,077) | (10,958) | (4,143) | (12,077) | (15,101) | |||||
| Residential real estate | (291) | (427) | (658) | (396) | (155) | (1,120) | (718) | (1,275) | |||||
| Home equity | (905) | (613) | (673) | (401) | (1,536) | (1,161) | (1,518) | (2,697) | |||||
| Other consumer | (1,906) | (2,257) | (2,285) | (1,406) | (805) | (836) | (4,163) | (1,641) | |||||
| Total net loan charge-offs | $ (13,094) | $ (10,320) | $ (8,936) | $ (10,071) | $ (15,838) | $ (13,254) | $ (23,414) | $ (29,092) | |||||
| Provision for loan losses | 24,800 | 19,800 | 21,525 | 21,800 | 27,803 | 19,900 | 44,600 | 47,703 | |||||
| Allowance related to loans sold | -- | -- | -- | (312) | (195) | -- | -- | (195) | |||||
| Ending balance | $ 183,708 | $ 172,002 | $ 162,522 | $ 149,933 | $ 138,516 | $ 126,746 | $ 183,708 | $ 138,516 | |||||
| Supplemental information | |||||||||||||
| Allowance to loans | 0.89% | 0.86% | 0.82% | 0.78% | 0.74% | 0.75% | 0.89% | 0.74% | |||||
| Allowance for originated loans to originated loans(1) | 1.21% | 1.21% | 1.20% | 1.20% | 1.19% | 1.19% | 1.21% | 1.19% | |||||
| Net charge-offs to average loans (annualized) | |||||||||||||
| Commercial real estate | 0.15% | 0.12% | 0.11% | 0.11% | 0.15% | 0.38% | 0.14% | 0.26% | |||||
| Commercial business | 0.56% | 0.39% | 0.28% | 0.53% | 1.02% | 0.42% | 0.48% | 0.74% | |||||
| Total commercial loans | 0.32% | 0.23% | 0.18% | 0.28% | 0.49% | 0.40% | 0.28% | 0.45% | |||||
| Residential real estate | 0.03% | 0.05% | 0.07% | 0.04% | 0.02% | 0.11% | 0.04% | 0.06% | |||||
| Home equity | 0.14% | 0.09% | 0.10% | 0.06% | 0.25% | 0.22% | 0.11% | 0.24% | |||||
| Other consumer | 0.49% | 0.67% | 0.79% | 0.60% | 0.61% | 1.20% | 0.58% | 1.25% | |||||
| Total consumer loans | 0.16% | 0.17% | 0.19% | 0.12% | 0.15% | 0.20% | 0.17% | 0.17% | |||||
| Total loans | 0.26% | 0.21% | 0.18% | 0.21% | 0.36% | 0.32% | 0.23% | 0.34% | |||||
| Net charge-offs of originated loans to average originated loans (annualized)(1) | |||||||||||||
| Commercial real estate | 0.14% | 0.10% | 0.07% | 0.12% | 0.18% | 0.16% | 0.12% | 0.17% | |||||
| Commercial business | 0.64% | 0.45% | 0.33% | 0.64% | 1.25% | 0.54% | 0.54% | 0.98% | |||||
| Total commercial loans | 0.36% | 0.26% | 0.19% | 0.36% | 0.66% | 0.32% | 0.31% | 0.52% | |||||
| Residential real estate | 0.07% | 0.10% | 0.15% | 0.09% | 0.04% | 0.27% | 0.08% | 0.15% | |||||
| Home equity | 0.26% | 0.19% | 0.21% | 0.13% | 0.51% | 0.40% | 0.22% | 0.47% | |||||
| Other consumer | 0.51% | 0.64% | 0.94% | 0.59% | 0.81% | 1.25% | 0.57% | 1.24% | |||||
| Total consumer loans | 0.27% | 0.28% | 0.35% | 0.18% | 0.28% | 0.38% | 0.27% | 0.34% | |||||
| Total loans | 0.33% | 0.27% | 0.24% | 0.30% | 0.55% | 0.34% | 0.30% | 0.46% | |||||
| Nonperforming loans: | |||||||||||||
| Originated(1): | |||||||||||||
| Commercial real estate | $ 59,624 | $ 49,953 | $ 50,848 | $ 46,413 | $ 46,881 | $ 44,749 | $ 59,624 | $ 46,881 | |||||
| Commercial business | 44,658 | 47,523 | 47,066 | 37,375 | 30,714 | 39,682 | 44,658 | 30,714 | |||||
| Residential real estate | 29,667 | 28,455 | 27,192 | 21,377 | 23,058 | 22,021 | 29,666 | 23,058 | |||||
| Home equity | 14,601 | 14,270 | 14,233 | 8,084 | 8,119 | 7,071 | 14,601 | 8,119 | |||||
| Other consumer | 6,094 | 5,444 | 3,737 | 938 | 926 | 697 | 6,094 | 926 | |||||
| Total originated nonperforming loans | 154,644 | 145,645 | 143,076 | 114,187 | 109,698 | 114,220 | 154,643 | 109,698 | |||||
| Total acquired nonperforming loans(2) | 27,556 | 27,678 | 29,648 | 28,193 | 19,374 | 19,041 | 27,556 | 19,374 | |||||
| Total nonperforming loans | 182,200 | 173,323 | 172,724 | 142,380 | 129,072 | 133,261 | 182,199 | 129,072 | |||||
| Real estate owned | 8,144 | 10,816 | 10,114 | 9,669 | 10,632 | 7,202 | 8,144 | 10,632 | |||||
| Total nonperforming assets | $ 190,344 | $ 184,139 | $ 182,838 | $ 152,049 | $ 139,704 | $ 140,463 | $ 190,343 | $ 139,704 | |||||
| Accruing troubled debt restructurings (TDR) | $ 69,892 | $ 64,311 | $ 46,280 | $ 55,732 | $ 42,140 | $ 42,358 | $ 69,892 | $ 42,140 | |||||
| Loans 90 days past due still accruing(3) | 167,560 | 172,062 | 171,568 | 145,323 | 125,668 | 116,810 | 167,560 | 125,668 | |||||
| Total classified loans(4) | 701,104 | 720,197 | 708,468 | 693,006 | 732,762 | 753,536 | 701,104 | 732,762 | |||||
| Total criticized loans(5) | $ 1,012,305 | $ 1,044,874 | $ 1,002,659 | $ 990,670 | $ 1,030,471 | $ 1,044,731 | $ 1,012,305 | $ 1,030,471 | |||||
| Total nonperforming loans to loans | 0.89% | 0.87% | 0.88% | 0.75% | 0.69% | 0.79% | 0.89% | 0.69% | |||||
| Total nonperforming originated loans to originated loans(1) | 1.02% | 1.03% | 1.07% | 0.93% | 0.96% | 1.09% | 1.02% | 0.96% | |||||
| Total nonperforming assets to loans and real estate owned | 0.93% | 0.92% | 0.93% | 0.80% | 0.74% | 0.84% | 0.93% | 0.74% | |||||
| Total nonperforming assets to assets | 0.51% | 0.50% | 0.50% | 0.42% | 0.40% | 0.34% | 0.51% | 0.40% | |||||
| Allowance to nonperforming loans | 100.8% | 99.2% | 94.1% | 105.3% | 107.3% | 95.1% | 100.8% | 107.3% | |||||
| Texas ratio(6) | 16.34% | 16.10% | 16.61% | 14.16% | 13.35% | 8.97% | 16.34% | 13.35% | |||||
| Originated loans(1) | $ 15,102,336 | $ 14,100,190 | $ 13,372,357 | $ 12,232,568 | $ 11,392,158 | $ 10,517,021 | $ 15,102,336 | $ 11,392,158 | |||||
| Acquired loans(7) | 5,581,651 | 6,083,912 | 6,513,636 | 7,085,839 | 7,600,213 | 6,459,798 | 5,581,651 | 7,600,213 | |||||
| Credit related discount on acquired loans(8) | (140,805) | (148,883) | (175,981) | (211,881) | (228,855) | (185,900) | (140,805) | (228,855) | |||||
| Total Loans | $ 20,543,182 | $ 20,035,219 | $ 19,710,012 | $ 19,106,526 | $ 18,763,516 | $ 16,790,919 | $ 20,543,182 | $ 18,763,516 | |||||
| (1) Originated loans represent total loans excluding acquired loans. | |||||||||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. The remaining credit discount, recorded at acquisition, is adequate to cover losses on these balances. | |||||||||||||
| (3) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection. | |||||||||||||
| (4) Includes consumer loans, which are considered classified when they are 90 days or more past due. Classified loans include substandard, doubtful, and loss, which are consistent with regulatory definitions, and as described in Item 1, "Business", under the heading "Asset Quality Review" in our Annual Report on 10-K for the year ended December 31, 2012. | |||||||||||||
| (5) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss. | |||||||||||||
| (6) Represents ratio computed using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | |||||||||||||
| (7) Represents the carrying value of acquired loans plus the principal not expected to be collected. | |||||||||||||
| (8) Represent principal on acquired loans not expected to be collected. | |||||||||||||
| First Niagara Financial Group, Inc. | |||||||||||
| Key Statistics | |||||||||||
| (Share counts in thousands) | |||||||||||
| 2012 | |||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||
| First Niagara Financial Group, Inc. capital ratios: | |||||||||||
| Tier 1 risk based capital | 9.41% | 9.45% | 9.29% | 9.51% | 9.40% | 14.66% | (1) | ||||
| Tier 1 common capital(2) | 7.65% | 7.64% | 7.45% | 7.59% | 7.41% | 12.47% | (1) | ||||
| Total risk based capital | 11.34% | 11.38% | 11.23% | 11.48% | 11.37% | 16.75% | (1) | ||||
| Leverage | 7.01% | 6.92% | 6.75% | 6.83% | 6.32% | 9.67% | (1) | ||||
| Equity to assets | 13.20% | 13.43% | 13.39% | 13.70% | 13.72% | 13.73% | (1) | ||||
| Tangible common equity to tangible assets(2) | 5.80% | 5.95% | 5.77% | 5.87% | 5.69% | 8.13% | (1) | ||||
| First Niagara Bank, N.A capital ratios: | |||||||||||
| Tier 1 risk based capital | 10.08% | 10.15% | 9.94% | 10.19% | 9.63% | 14.69% | (1) | ||||
| Total risk based capital | 10.85% | 10.89% | 10.66% | 10.88% | 10.57% | 15.66% | (1) | ||||
| Leverage | 7.50% | 7.43% | 7.23% | 7.32% | 6.48% | 9.69% | (1) | ||||
| Number of branches | 422 | 427 | 430 | 432 | 452 | 334 | |||||
| Full time equivalent employees | 5,779 | 5,875 | 5,927 | 6,036 | 6,103 | 4,753 | |||||
| Share information and per share metrics: | |||||||||||
| Common shares outstanding | 353,932 | 353,008 | 352,621 | 352,632 | 352,665 | 351,936 | |||||
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | |||||
| Treasury shares | 12,070 | 12,994 | 13,381 | 13,370 | 13,337 | 14,066 | |||||
| Market price (NASDAQ: FNFG): | $ 10.07 | $ 8.86 | $ 7.93 | $ 8.07 | $ 7.65 | $ 9.84 | |||||
| Book value per share(3) | 13.06 | 13.19 | 13.15 | 13.11 | 12.84 | 13.00 | |||||
| Tangible book value per share(2)(3) | 5.74 | 5.84 | 5.65 | 5.59 | 5.30 | 7.86 | |||||
| Price/Book | 77.11% | 67.17% | 60.30% | 61.56% | 59.58% | 75.69% | |||||
| Price/Tangible book(2) | 175.44% | 151.71% | 140.35% | 144.36% | 144.34% | 125.19% | |||||
| Common stock dividends | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | |||||
| Preferred stock dividends | 0.54 | 0.54 | 0.54 | 0.54 | 0.54 | 0.37 | |||||
| Dividend payout ratio | 44.44% | 47.06% | 53.33% | 53.33% | N/M | 50.00% | |||||
| Dividend yield (annualized) | 3.19% | 3.66% | 4.01% | 3.94% | 4.21% | 3.27% | |||||
| N/M Not meaningful | |||||||||||
| (1) Ratios reflect the impact of our capital raise completed in December 2011, the proceeds of which were used to consummate the acquisition of branches from HSBC Bank USA, National Association in May 2012. | |||||||||||
| (2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | |||||||||||
| (3) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | |||||||||||
| First Niagara Financial Group, Inc. | ||||||||
| Appendix A - Non-GAAP Reconciliation | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2012 | Six months ended | |||||||
| Second | First | Fourth | Third | Second | First | June 30, | June 30, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | |
| Financial ratios computed on an operating basis(1): | ||||||||
| Earnings per basic share | $ 0.18 | $ 0.17 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.35 | $ 0.37 |
| Earnings per diluted share | 0.18 | 0.17 | 0.19 | 0.19 | 0.19 | 0.19 | 0.35 | 0.37 |
| Weighted average shares outstanding - basic(2) | 349,542 | 349,278 | 349,071 | 349,001 | 348,941 | 348,823 | 349,411 | 348,882 |
| Weighted average shares outstanding - diluted(2) | 350,384 | 349,999 | 349,663 | 349,371 | 348,941 | 349,069 | 350,150 | 349,147 |
| Noninterest income as a percentage of net revenue(4) | 26.18% | 25.13% | 25.48% | 26.43% | 22.96% | 22.39% | 25.66% | 22.69% |
| Pre-tax, pre-provision income | 129,819 | 117,776 | 125,281 | 129,333 | 136,645 | 127,774 | 247,595 | 264,419 |
| Pre-tax, pre-provision income per diluted share | 0.37 | 0.34 | 0.36 | 0.37 | 0.39 | 0.37 | 0.71 | 0.76 |
| Pre-tax, pre-provision return on average assets | 1.41% | 1.30% | 1.37% | 1.46% | 1.51% | 1.55% | 1.35% | 1.53% |
| Net interest margin(3) | 3.36% | 3.39% | 3.42% | 3.54% | 3.37% | 3.34% | 3.38% | 3.36% |
| Interest yield on average loans(3) | 4.19% | 4.25% | 4.39% | 4.47% | 4.59% | 4.62% | 4.21% | 4.60% |
| Rate paid on interest-bearing liabilities(3) | 0.43% | 0.44% | 0.48% | 0.51% | 0.61% | 0.79% | 0.44% | 0.69% |
| Efficiency ratio | 64.43% | 66.86% | 65.24% | 64.71% | 60.63% | 59.08% | 65.63% | 59.90% |
| Effective tax rate | 32.0% | 31.0% | 27.0% | 30.9% | 33.5% | 35.0% | 31.5% | 34.2% |
| Return on average assets | 0.77% | 0.74% | 0.83% | 0.83% | 0.80% | 0.85% | 0.76% | 0.82% |
| Return on average equity | 5.72% | 5.50% | 6.06% | 6.04% | 5.95% | 5.81% | 5.61% | 5.88% |
| Return on average tangible equity(5) | 11.75% | 11.62% | 12.89% | 13.11% | 10.86% | 9.24% | 11.69% | 10.00% |
| Return on average common equity | 5.48% | 5.24% | 5.86% | 5.83% | 5.72% | 5.79% | 5.36% | 5.76% |
| Return on average tangible common equity(6) | 12.21% | 12.05% | 13.57% | 13.86% | 11.13% | 9.63% | 12.13% | 10.33% |
| Reconciliation of net interest income on operating basis to reported net interest income(1): | ||||||||
| Total net interest income on operating basis (Non-GAAP) | $ 269,443 | $ 266,130 | $ 268,566 | $ 269,605 | $ 267,371 | $ 242,371 | $ 535,573 | $ 509,742 |
| Additional premium amortization on securities portfolio | -- | -- | (16,280) | -- | (8,358) | -- | -- | (8,358) |
| Total reported net interest income (GAAP) | 269,443 | 266,130 | 252,286 | 269,605 | 259,013 | 242,371 | 535,573 | 501,384 |
| Reconciliation of noninterest income on operating basis to reported noninterest income(1): | ||||||||
| Total noninterest income on operating basis (Non-GAAP) | $ 95,546 | $ 89,312 | $ 91,821 | $ 96,866 | $ 79,703 | $ 69,908 | $ 184,858 | $ 149,611 |
| Gain on securities portfolio repositioning | -- | -- | -- | 5,337 | 15,895 | -- | -- | 15,895 |
| Total reported noninterest income (GAAP) | 95,546 | 89,312 | 91,821 | 102,203 | 95,598 | 69,908 | 184,858 | 165,506 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | ||||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 235,170 | $ 237,666 | $ 235,106 | $ 237,138 | $ 210,429 | $ 184,505 | $ 472,836 | $ 394,934 |
| Merger and acquisition integration expenses | -- | -- | 3,678 | 29,404 | 131,460 | 12,970 | -- | 144,430 |
| Restructuring charges | -- | -- | -- | -- | 3,750 | 2,703 | -- | 6,453 |
| Total reported noninterest expense (GAAP) | $ 235,170 | $ 237,666 | $ 238,784 | $ 266,542 | $ 345,639 | $ 200,178 | $ 472,836 | $ 545,817 |
| Reconciliation of net operating income to net income(1): | ||||||||
| Net operating income (Non-GAAP) | $ 71,134 | $ 67,285 | $ 75,358 | $ 74,027 | $ 72,188 | $ 70,053 | $ 138,419 | $ 142,241 |
| Nonoperating income and expenses, net of tax: | ||||||||
| Additional premium amortization on securities portfolio | -- | -- | 11,633 | -- | 5,558 | -- | -- | 5,558 |
| Gain on securities portfolio repositioning | -- | -- | -- | (3,469) | (10,331) | -- | -- | (10,331) |
| Merger and acquisition integration expenses | -- | -- | 2,628 | 19,112 | 85,448 | 8,431 | -- | 93,879 |
| Restructuring charges | -- | -- | -- | -- | 2,437 | 1,757 | -- | 4,194 |
| Total nonoperating expenses, net of tax | -- | -- | 14,261 | 15,643 | 83,112 | 10,188 | -- | 93,300 |
| Net income (GAAP) | $ 71,134 | $ 67,285 | $ 61,097 | $ 58,384 | $ (10,924) | $ 59,865 | $ 138,419 | $ 48,941 |
| Reconciliation of net operating income available to common stockholders to net income available to common stockholders(1): | ||||||||
| Net operating income available to common stockholders (Non-GAAP) | $ 63,587 | $ 59,738 | $ 67,811 | $ 66,480 | $ 64,641 | $ 64,938 | $ 123,325 | $ 129,579 |
| Nonoperating income and expenses, net of tax: | ||||||||
| Additional premium amortization on securities portfolio | -- | -- | 11,633 | -- | 5,558 | -- | -- | 5,558 |
| Gain on securities portfolio repositioning | -- | -- | -- | (3,469) | (10,331) | -- | -- | (10,331) |
| Merger and acquisition integration expenses | -- | -- | 2,628 | 19,112 | 85,448 | 8,431 | -- | 93,879 |
| Restructuring charges | -- | -- | -- | -- | 2,437 | 1,757 | -- | 4,194 |
| Total nonoperating income and expenses, net of tax | -- | -- | 14,261 | 15,643 | 83,112 | 10,188 | -- | 93,300 |
| Net income available to common stockholders (GAAP) | $ 63,587 | $ 59,738 | $ 53,550 | $ 50,837 | $ (18,471) | $ 54,750 | $ 123,325 | $ 36,279 |
| Computation of pre-tax, pre-provision income: | ||||||||
| Net interest income | $ 269,443 | $ 266,130 | $ 252,286 | $ 269,605 | $ 259,013 | $ 242,371 | $ 535,573 | $ 501,384 |
| Noninterest income | 95,546 | 89,312 | 91,821 | 102,203 | 95,598 | 69,908 | 184,858 | 165,506 |
| Noninterest expense | (235,170) | (237,666) | (238,784) | (266,542) | (345,639) | (200,178) | (472,836) | (545,817) |
| Pre-tax, pre-provision income (GAAP) | 129,819 | 117,776 | 105,323 | 105,266 | 8,972 | 112,101 | 247,595 | 121,073 |
| Add back: non-operating premium amortization | -- | -- | 16,280 | -- | 8,358 | -- | -- | 8,358 |
| Add back: non-operating noninterest expenses (1) | -- | -- | 3,678 | 29,404 | 135,210 | 15,673 | -- | 150,883 |
| Less: non-operating noninterest income (1) | -- | -- | -- | (5,337) | (15,895) | -- | -- | (15,895) |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 129,819 | $ 117,776 | $ 125,281 | $ 129,333 | $ 136,645 | $ 127,774 | $ 247,595 | $ 264,419 |
| (1) Net interest income, noninterest income and expense on an operating basis, net operating income, and pre-tax, pre-provision income on an operating basis are non-GAAP measures that we believe provide meaningful comparisons of our underlying operational performance and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, we believe exclusion of these nonoperating items enables management to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations. | ||||||||
| (2) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | ||||||||
| (3) Yields and rates calculated on a tax equivalent basis. | ||||||||
| (4) Net revenue is comprised of net interest income and noninterest income. | ||||||||
| (5) Tangible equity is a non-GAAP measure and excludes goodwill and other intangibles. | ||||||||
| (6) Tangible common equity is a non-GAAP measure and excludes goodwill and other intangibles as well as preferred stock. | ||||||||
| First Niagara Financial Group, Inc. | ||||||||
| Appendix A - Non-GAAP Reconciliation (Cont.) | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2012 | Six months ended | |||||||
| Second | First | Fourth | Third | Second | First | June 30, | June 30, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | |
| Computation of Ending Tangible Common Equity: | ||||||||
| Total stockholders' equity | $ 4,902,744 | $ 4,946,673 | $ 4,926,558 | $ 4,915,421 | $ 4,818,213 | $ 4,875,446 | $ 4,902,744 | $ 4,928,097 |
| Less: Goodwill and other intangibles | (2,557,560) | (2,567,681) | (2,617,810) | (2,626,625) | (2,631,605) | (1,796,394) | (2,557,560) | (2,617,809) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,007,182 | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,007,182 | $ 1,972,286 |
| Computation of Average Tangible Equity: | ||||||||
| Total stockholders' equity | $ 4,989,006 | $ 4,958,402 | $ 4,945,132 | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,973,789 | $ 4,887,071 |
| Less: Goodwill and other intangibles | (2,561,507) | (2,609,409) | (2,619,322) | (2,626,666) | (2,206,682) | (1,800,613) | (2,585,326) | (2,315,013) |
| Tangible equity | $ 2,427,499 | $ 2,348,993 | $ 2,325,810 | $ 2,245,939 | $ 2,673,109 | $ 3,049,663 | $ 2,388,463 | $ 2,572,058 |
| Computation of Average Tangible Common Equity: | ||||||||
| Total stockholders' equity | $ 4,989,006 | $ 4,958,402 | $ 4,945,132 | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,973,789 | $ 4,887,071 |
| Less: Goodwill and other intangibles | (2,561,507) | (2,609,409) | (2,619,322) | (2,626,666) | (2,206,682) | (1,800,613) | (2,585,326) | (2,315,013) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,089,497 | $ 2,010,991 | $ 1,987,808 | $ 1,907,937 | $ 2,335,107 | $ 2,711,661 | $ 2,050,461 | $ 2,234,056 |
| Computation of Texas Ratio: | ||||||||
| Nonperforming Assets | $ 190,343 | $ 184,139 | $ 182,838 | $ 152,049 | $ 139,704 | $ 140,463 | $ 190,343 | $ 182,838 |
| Loans 90 days past due still accruing(1) | 167,560 | 172,062 | 171,548 | 145,323 | 125,668 | 116,810 | 167,560 | 171,548 |
| Sum of nonperforming assets and loans 90 days past due still accruing | $ 357,903 | $ 356,201 | $ 354,386 | $ 297,372 | $ 265,372 | $ 257,273 | $ 357,903 | $ 354,386 |
| Tangible common equity | $ 2,007,182 | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,007,182 | $ 1,972,286 |
| Allowance for loan losses | 183,708 | 172,002 | 162,522 | 149,933 | 138,516 | 126,746 | 183,708 | 162,522 |
| Sum of tangible common equity and allowance for loan losses | $ 2,190,890 | $ 2,212,992 | $ 2,133,268 | $ 2,100,727 | $ 1,987,122 | $ 2,867,796 | $ 2,190,890 | $ 2,134,808 |
| Sum of nonperforming assets and acquired loans 90 days past due still accruing/Sum of tangible common equity and allowance for loan losses | 16.34% | 16.10% | 16.61% | 14.16% | 13.35% | 8.97% | 16.34% | 16.60% |
| Computation of Tier 1 Common Capital: | ||||||||
| Tier 1 capital | $ 2,406,473 | $ 2,356,763 | $ 2,264,679 | $ 2,225,121 | $ 2,128,702 | $ 3,009,727 | $ 2,406,473 | $ 2,264,679 |
| Less: Qualifying restricted core capital elements | (112,449) | (112,236) | (112,025) | (111,820) | (111,630) | (111,453) | (112,449) | (112,025) |
| Less: Perpetual non-cumulative preferred stock | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tier 1 common capital (Non-GAAP) | $ 1,956,022 | $ 1,906,525 | $ 1,814,652 | $ 1,775,299 | $ 1,679,070 | $ 2,560,272 | $ 1,956,022 | $ 1,814,652 |
| (1) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection. | ||||||||