Fourth Quarter and 2013 Highlights:
- GAAP earnings of $0.20 per diluted share, consistent with the prior quarter
- Full-Year 2013 earnings of $0.75 per diluted share compared to $0.40 per diluted share in 2012
- Pre-Tax Pre-Provision income increased 3% QOQ
- Operating expenses declined to $225 million excluding certain nonrecurring items
- Net interest margin increased 1 basis point QOQ to 3.41%
- Fee income declined 2% driven by seasonally lower insurance commissions revenues
- Organic loan growth continues, with average loans up 9% annualized QOQ
- Average commercial business and real estate loans increased 7% QOQ
- Continued momentum in indirect auto loans, which increased by $246 million QOQ
- Noninterest-bearing checking balances increased 8% annualized QOQ
- Average core deposits increased 3% QOQ driven by higher customer balances
- Transactional deposits averaged 36% of deposits, up from 32% a year-ago
- Strong credit quality maintained
- NCOs averaged 0.34% of originated loans in 2013, consistent with prior year
- Nonperforming loans equaled 93 basis points of originated loans at year-end
BUFFALO, N.Y., Jan. 24, 2014 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today reported net income available to common shareholders of $70.1 million or $0.20 per diluted share for the fourth quarter of 2013, highlighted by stable net interest margin, balance sheet growth and positive operating leverage.
"I am proud of all that we accomplished in 2013 despite the industry challenges. We achieved strong organic loan growth and positive operating leverage through disciplined cost management and by leveraging our proven ability to acquire and deepen profitable customer relationships," said Gary M. Crosby, First Niagara President and Chief Executive Officer. "I am thrilled to lead First Niagara through our next phase of evolution as a commercial bank and I firmly believe we can create long-term shareholder value by efficiently attracting, retaining and growing profitable customer relationships. The decisions we make and the actions we take will be, and must be, driven by what is best for our customers, and ultimately, our shareholders."
Fourth Quarter Results
In the fourth quarter of 2013, First Niagara reported net income available to common shareholders of $70.1 million, or $0.20 per diluted share. In the fourth quarter of 2012, First Niagara reported net income available to common shareholders of $53.6 million, or $0.15 per diluted share, which included a $16 million pre-tax accelerated premium amortization charge on the company's Collateralized Mortgage Obligations (CMO) portfolio and $3.7 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 third quarter of 2013, net income available to common shareholders was $71.6 million, or $0.20 per diluted share.
Balance sheet growth remained strong as average loans increased 9% annualized compared to the prior quarter. Average commercial business and real estate loans increased 7% annualized over the prior quarter driven by strong activity in the company's Western Pennsylvania and New England markets. Average consumer loans increased 12% annualized driven by continued growth in indirect auto loan balances, partially offset by a decline in residential mortgage loans. Average transactional deposit balances, which include interest-bearing and noninterest-bearing checking accounts, increased an annualized 14% over the prior quarter and currently represent 36% of the company's deposit balances, up from 32% a year ago.
For the fourth quarter of 2013, the company generated sequential positive operating leverage driven by a $4 million decline in operating expenses. Fourth quarter revenues of $370 million were consistent with the prior quarter. Net interest income increased 1% compared to the prior quarter. Net interest margin was stable at 3.41%. Noninterest income declined $2.1 million or 2% from the prior quarter primarily due to seasonally lower insurance commissions.
The provision for loan losses on originated loans totaled $28.2 million in the fourth quarter of 2013, well in excess of net charge-offs of $17.8 million in the quarter. At December 31, 2013, nonperforming originated loans comprised 0.93% of originated loans, or a 4 basis point increase from the prior quarter. Net charge-offs in 2013 equaled 34 basis points of average originated loans, consistent with 2012.
| Reported Results (GAAP) | Q4 2013 | Q3 2013 | Q4 2012 |
| Net interest income | $280.3 | $277.5 | $252.3 |
| Provision for credit losses | 32.0 | 27.6 | 22.0 |
| Noninterest income | 89.3 | 91.4 | 91.8 |
| Noninterest expense | 227.1 | 231.2 | 238.8 |
| Net income | 77.7 | 79.1 | 61.1 |
| Preferred stock dividend | 7.5 | 7.5 | 7.5 |
| Net income available to common shareholders | $70.1 | $71.6 | $53.6 |
| Weighted average diluted shares outstanding | 350.7 | 350.9 | 349.7 |
| Earnings per diluted share | $0.20 | $0.20 | $0.15 |
| All amounts in millions except earnings per diluted share. | |||
"During the fourth quarter, the continued momentum in our commercial loan and indirect auto businesses was moderated by elevated prepayment activity in our commercial real estate portfolio," said Gregory W. Norwood, Chief Financial Officer. "Excluding $2 million in non-recurring charges in the fourth quarter of 2013, we managed our operating expense base and achieved our expense objective through a deliberate focus on reducing inefficiencies."
Full Year 2013 Results
For the full year ended December 31, 2013, the company reported GAAP earnings to common shareholders of $265.1 million, or $0.75 per diluted share, compared to $140.7 million, or $0.40 per diluted share, in 2012. GAAP net income for 2012 included $184.0 million in pre-tax acquisition and restructuring related expenses, $24.6 million in accelerated premium amortization adjustments, and $21.2 million in gains related to the sale of $3.1 billion of mortgage-backed securities in the second quarter of 2012. In 2013, the company incurred a pre-tax $6.3 million charge, or $0.01 per share, related to two executive departures. Excluding this charge, non-GAAP operating net income available to common shareholders in 2013 was $0.76 per diluted share.
| Reported Results (GAAP) | 2013 | 2012 |
| Net interest income | $1,093.4 | $1,023.3 |
| Provision for credit losses | 105.0 | 92.3 |
| Noninterest income | 365.6 | 359.5 |
| Noninterest expense | 931.2 | 1,051.1 |
| Net income | 295.3 | 168.4 |
| Preferred stock dividend | 30.2 | 27.8 |
| Net income available to common shareholders | $265.1 | $140.7 |
| Weighted average diluted shares outstanding | 350.4 | 349.4 |
| Earnings per diluted share | $0.75 | $0.40 |
| All amounts in millions except earnings per diluted share. | ||
Loans
Average total loans increased 9% annualized from the prior quarter, driven by continued growth in the company's commercial lending and indirect auto businesses as well as strength in home equity lending. Average commercial loans increased 7% reflecting strength in the company's middle market, business banking and equipment financing lines of businesses. Prepayment activity among investor-backed commercial real estate properties continued to remain elevated driven by the intense competitive landscape as well as the company's decision not to match lending terms that did not meet its established underwriting criteria.
Commercial business (C&I) loans averaged $5.3 billion, representing a 7% annualized increase over the prior quarter. Average commercial real estate (CRE) loans increased 6% annualized to $7.7 billion compared to the third quarter of 2013. Average commercial loans in the company's Western Pennsylvania and New England markets increased at double-digit annualized growth rates of 20% and 11%, respectively.
Average indirect auto loan balances increased $246 million to $1.5 billion. During the fourth quarter, indirect auto originations totaled $317 million at an average customer FICO score of 754 and yielded 3.06%, net of dealer reserve. Home equity balances increased 7% annualized from the prior quarter reflecting the successes of targeted marketing campaigns during the fall. Average residential real estate loans declined by $59 million, or 7% annualized reflecting normal amortization and prepayment of portfolio balances.
Deposits
The company continued to focus its efforts to grow its core customer base and re-position its account mix while tailoring its retail bank delivery to match evolving customer preferences through investments in alternative delivery channels such as mobile banking. Average transaction deposit balances, which include interest-bearing and noninterest-bearing checking accounts, increased an annualized 14% over the prior quarter and represented 36% of the company's deposit balances, up from 32% a year ago. Transactional deposit balance growth was strong across the company's footprint reflecting an increase in account balances typical with seasonal patterns.
Average interest-bearing checking and noninterest-bearing checking deposit balances increased 21% and 8% annualized, respectively, compared to the prior quarter, driven by seasonal strength in commercial account balances. Money market and time deposit balances declined 2% and 13% annualized, respectively, driven by the company's continued pricing actions. The average cost of interest-bearing deposits of 0.23% was unchanged from the prior quarter.
In response to changing consumer banking behaviors, First Niagara has and continues to take actions including additional investments in enhancing its online, mobile and telephonic banking capabilities for retail and small business customers, while continuing to transform its branch network and in-branch experience. During the first quarter of 2014, the company expects to roll out its remote deposit capture feature that will enable customers to deposit checks and transact using mobile devices.
Net Interest Income
Fourth quarter 2013 net interest income increased 1% from the prior quarter to $280 million and was driven by a 4% annualized increase in average earning assets together with a one basis point improvement in the net interest margin (NIM) to 3.41%. Growth in average earning assets reflected continued strong loan growth which was moderated by lower investment securities balances. Average investment securities declined 6% or $166 million from the prior quarter.
The stable NIM in the fourth quarter of 2013 reflected the benefits of reinvestment of cash flows from lower yielding investment securities into higher yielding loans and securities as well as lower premium amortization on the company's residential mortgage backed securities (RMBS) portfolio. These benefits were partially offset by continued compression of loan yields from prepayments and reinvestments at current market rates.
In the fourth quarter, premium amortization on the RMBS portfolio was $0.3 million, net of a $3.5 million retroactive adjustment to reflect slower prepayment speeds. The premium amortization on the RMBS portfolio in the third quarter of 2013 was $6 million, net of a $1.8 million retroactive adjustment for slower prepayment speeds.
Credit Quality
At December 31, 2013, the allowance for loan losses was $209.3 million, compared to $198.0 million at September 30, 2013. Nonperforming assets to total assets were 0.56%, up three basis points from the prior quarter.
Information for both the originated and acquired portfolios follows.
| Q4 2013 | Q3 2013 | |||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total |
| Provision for loan losses* | $ 28.2 | $ 3.4 | $ 31.6 | $ 25.4 | $ 1.8 | $ 27.2 |
| Net charge-offs | 17.8 | 2.4 | 20.3 | 12.9 | 0.1 | 13.0 |
| NCOs/ Avg Loans | 0.43% | 0.21% | 0.38% | 0.33% | 0.01% | 0.25% |
| Total loans** | $ 16,922 | $ 4,643 | $ 21,440 | $ 16,212 | $ 5,007 | $ 21,089 |
| (*) Excludes provision for unfunded commitments of $0.4 million each in 4Q13 and 3Q13 | ||||||
| (**) Acquired loans before associated credit discount; see accompanying tables for further information | ||||||
Originated loans
The provision for loan losses on originated loans totaled $28.2 million, compared to $25.4 million in the prior quarter. The company continued to build its loan loss reserves in the fourth quarter. Such reserve build totaled $10.3 million, compared to $12.5 million in the prior quarter. Net charge-offs equaled $17.8 million or 43 basis points of average originated loans in the fourth quarter of 2013, a 10 basis point increase from the third quarter. The increase from the prior quarter primarily reflects the impact of a $3 million net loan recovery in the third quarter on the pay-off of a previously charged-down loan as well as the full quarter impact of losses on credit card loans in the fourth quarter that were previously charged to the credit mark.
At December 31, 2013, nonperforming originated loans comprised 0.93% of originated loans, compared to 0.89% at September 30, 2013. The increase from the prior quarter reflects two commercial credits that were transferred to non-accrual status.
At December 31, 2013, the allowance for loan losses on originated loans totaled $205.3 million or 1.21% of such loans, compared to $195.0 million or 1.20% of loans at September 30, 2013.
Acquired loans
The provision for losses on acquired loans totaled $3.4 million, up from $1.8 million in the prior quarter. Net charge-offs on those portfolios totaled $2.4 million in the fourth quarter, compared to $0.1 million in the prior quarter. At December 31, 2013, the allowance for loan losses on acquired loans totaled $4.0 million, compared to $3.0 million at September 30, 2013. Acquired nonperforming loans totaled $30.1 million, compared to $30.4 million at the end of the prior quarter. At December 31, 2013, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $125 million.
Fee Income
Fourth quarter 2013 noninterest income of $89.3 million decreased 2% or $2.1 million compared to the prior quarter driven largely by seasonal decreases in deposit service charges and insurance commissions and partially offset by increases in capital markets income and bank owned life insurance.
Insurance commissions declined 14% from the prior quarter to $15.4 million reflecting low policy renewal activity that is typical in the fourth quarter. Deposit service charges decreased 5% from the prior quarter and were primarily driven by a seasonal decrease in non-sufficient-fund (NSF) incidence rates. Mortgage banking revenues improved modestly from the third quarter reflecting higher servicing income. Capital markets revenue increased $1.3 million from the third quarter due to higher derivative fee income. The $2.3 million increase in bank owned life insurance from the prior quarter was primarily driven by a benefit received on an insurance claim in the fourth quarter. Other income decreased $1.9 million from the third quarter driven by lower gains from investment partnerships and tax credit investments.
Noninterest Expense
Fourth quarter noninterest expenses were $227.1 million, 2% lower than the prior quarter. Excluding approximately $2 million in nonrecurring operational losses in the quarter, operating expenses in the fourth quarter of 2013 were $225 million. Salaries and benefit expenses declined by $1.3 million from the prior quarter driven primarily by lower overtime and temporary help expenses. FDIC premium expense declined by $1.9 million from the third quarter due in large part to lower high-risk loan levels and lower insured deposits.
In the fourth quarter of 2013, the efficiency ratio improved to 61.5% from 62.7% in the prior quarter and reflected the positive operating leverage achieved.
Capital
At December 31, 2013, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.5% and 7.9% 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, $38 billion in assets, $27 billion in deposits, and approximately 5,800 employees providing financial services to individuals, families and businesses across New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.
Investor Call
A conference call will be held at 8:00 a.m. Eastern Time on Friday, January 24, 2014 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-800-369-2136 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and are available under the investor relations tab of our website at www.firstniagara.com. A replay of the call will be available until February 7, 2014 by dialing 1-888-562-4451, passcode: 6712.
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) | ||||||||
| 2013 | 2012 | For year ending | ||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | |
| Interest income: | ||||||||
| Loans and leases | $ 213,778 | $ 214,746 | $ 209,970 | $ 206,640 | $ 212,035 | $ 211,767 | $ 845,134 | $ 813,912 |
| Investment securities and other | 96,020 | 91,996 | 88,110 | 88,961 | 71,564 | 90,101 | 365,087 | 362,176 |
| Total interest income | 309,798 | 306,742 | 298,080 | 295,601 | 283,599 | 301,868 | 1,210,221 | 1,176,088 |
| Interest expense: | ||||||||
| Deposits | 12,941 | 12,931 | 12,967 | 14,277 | 16,902 | 18,358 | 53,116 | 66,649 |
| Borrowings | 16,579 | 16,271 | 15,670 | 15,194 | 14,411 | 13,905 | 63,714 | 86,164 |
| Total interest expense | 29,520 | 29,202 | 28,637 | 29,471 | 31,313 | 32,263 | 116,830 | 152,813 |
| Net interest income | 280,278 | 277,540 | 269,443 | 266,130 | 252,286 | 269,605 | 1,093,391 | 1,023,275 |
| Provision for credit losses | 32,000 | 27,600 | 25,200 | 20,200 | 22,000 | 22,200 | 105,000 | 92,300 |
| Net interest income after provision | 248,278 | 249,940 | 244,243 | 245,930 | 230,286 | 247,405 | 988,391 | 930,975 |
| Noninterest income: | ||||||||
| Deposit service charges | 25,726 | 27,115 | 26,482 | 24,800 | 26,345 | 26,422 | 104,123 | 91,237 |
| Insurance commissions | 15,431 | 17,854 | 17,692 | 16,355 | 15,497 | 18,764 | 67,332 | 68,166 |
| Merchant and card fees | 12,567 | 12,464 | 12,380 | 11,298 | 11,945 | 12,014 | 48,709 | 38,758 |
| Wealth management services | 15,441 | 15,189 | 14,945 | 12,845 | 12,000 | 11,069 | 58,420 | 41,315 |
| Mortgage banking | 2,754 | 2,268 | 6,882 | 6,424 | 8,060 | 10,974 | 18,328 | 31,857 |
| Capital markets income | 6,310 | 5,058 | 5,002 | 6,031 | 7,098 | 6,381 | 22,401 | 26,849 |
| Lending and leasing | 4,140 | 4,886 | 4,534 | 3,906 | 3,739 | 3,730 | 17,466 | 14,837 |
| Bank owned life insurance | 6,027 | 3,725 | 3,321 | 3,467 | 3,021 | 3,449 | 16,540 | 13,705 |
| Other income | 916 | 2,863 | 4,308 | 4,186 | 4,116 | 9,400 | 12,273 | 32,806 |
| Total noninterest income | 89,312 | 91,422 | 95,546 | 89,312 | 91,821 | 102,203 | 365,592 | 359,530 |
| Noninterest expense: | ||||||||
| Salaries and benefits | 113,754 | 115,034 | 116,305 | 115,790 | 111,026 | 115,484 | 460,883 | 427,494 |
| Occupancy and equipment | 27,420 | 26,582 | 28,506 | 28,045 | 27,609 | 25,694 | 110,553 | 99,409 |
| Technology and communications | 29,483 | 28,999 | 29,603 | 27,113 | 28,257 | 28,110 | 115,198 | 100,514 |
| Marketing and advertising | 4,879 | 5,822 | 5,450 | 4,346 | 9,292 | 8,954 | 20,497 | 31,685 |
| Professional services | 9,314 | 9,820 | 9,782 | 9,603 | 11,163 | 11,193 | 38,519 | 40,514 |
| Amortization of intangibles | 7,562 | 7,702 | 10,850 | 14,119 | 14,224 | 14,506 | 40,233 | 45,035 |
| FDIC premiums | 7,431 | 9,351 | 9,348 | 8,901 | 9,158 | 8,850 | 35,031 | 34,693 |
| Merger and acquisition integration expenses | -- | -- | -- | -- | 3,678 | 29,404 | -- | 177,512 |
| Restructuring charges | -- | -- | -- | -- | -- | -- | -- | 6,453 |
| Other expense | 27,305 | 27,883 | 25,326 | 29,749 | 24,377 | 24,347 | 110,263 | 87,834 |
| Total noninterest expense | 227,148 | 231,193 | 235,170 | 237,666 | 238,784 | 266,542 | 931,177 | 1,051,143 |
| Income before income tax | 110,442 | 110,169 | 104,619 | 97,576 | 83,323 | 83,066 | 422,806 | 239,362 |
| Income tax expense | 32,752 | 31,026 | 33,485 | 30,291 | 22,226 | 24,682 | 127,554 | 70,940 |
| Net income | 77,690 | 79,143 | 71,134 | 67,285 | 61,097 | 58,384 | 295,252 | 168,422 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 30,188 | 27,756 |
| Net income available to common stockholders | $ 70,143 | $ 71,596 | $ 63,587 | $ 59,738 | $ 53,550 | $ 50,837 | $ 265,064 | $ 140,666 |
| Financial Ratios: | ||||||||
| Earnings per basic share | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.75 | $ 0.40 |
| Earnings per diluted share | 0.20 | 0.20 | 0.18 | 0.17 | 0.15 | 0.14 | 0.75 | 0.40 |
| Weighted average shares outstanding - basic(1) | 349,718 | 349,653 | 349,542 | 349,278 | 349,071 | 349,001 | 349,549 | 348,960 |
| Weighted average shares outstanding - diluted(1) | 350,699 | 350,896 | 350,384 | 349,999 | 349,663 | 349,371 | 350,381 | 349,368 |
| Net revenue(2) | $ 369,590 | $ 368,962 | $ 364,989 | $ 355,442 | $ 344,107 | $ 371,808 | $ 1,458,983 | $ 1,382,805 |
| Noninterest income as a percentage of net revenue(2) | 24.17% | 24.78% | 26.18% | 25.13% | 26.68% | 27.49% | 25.06% | 26.00% |
| Pre-tax, pre-provision income(3) | $ 142,442 | $ 137,769 | $ 129,819 | $ 117,776 | $ 105,323 | $ 105,266 | $ 527,806 | $ 331,662 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.41 | $ 0.39 | $ 0.37 | $ 0.34 | $ 0.30 | $ 0.30 | $ 1.51 | $ 0.95 |
| Pre-tax, pre-provision return on average assets(3) | 1.51% | 1.47% | 1.41% | 1.30% | 1.15% | 1.19% | 1.42% | 0.94% |
| Net interest margin(4) | 3.41% | 3.40% | 3.36% | 3.39% | 3.22% | 3.54% | 3.39% | 3.34% |
| Interest yield on average loans(4) | 4.04% | 4.14% | 4.19% | 4.25% | 4.39% | 4.47% | 4.15% | 4.51% |
| Rate paid on interest-bearing liabilities | 0.43% | 0.43% | 0.43% | 0.44% | 0.48% | 0.51% | 0.44% | 0.59% |
| Efficiency ratio | 61.46% | 62.66% | 64.43% | 66.86% | 69.39% | 71.69% | 63.82% | 76.02% |
| Expenses as a percentage of average loans and deposits | 1.89% | 1.94% | 1.98% | 2.01% | 2.03% | 2.29% | 1.96% | 2.47% |
| Effective tax rate | 29.7% | 28.2% | 32.0% | 31.0% | 26.7% | 29.7% | 30.2% | 29.6% |
| Return on average assets(5) | 0.82 % | 0.85 % | 0.77 % | 0.74 % | 0.67% | 0.66% | 0.80% | 0.48% |
| Return on average equity(5) | 6.18 % | 6.37 % | 5.72 % | 5.50 % | 4.92% | 4.77% | 5.95% | 3.45% |
| Return on average tangible equity(3)(5) | 12.64 % | 13.20 % | 11.75 % | 11.62 % | 10.45% | 10.34% | 12.31% | 6.55% |
| Return on average common equity | 5.99 % | 6.18 % | 5.48 % | 5.24 % | 4.62% | 4.46% | 5.73% | 3.09% |
| Return on average tangible common equity(3) | 13.25 % | 13.92 % | 12.21 % | 12.05 % | 10.72% | 10.60% | 12.86% | 6.30% |
| (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) | ||||||
| 2013 | 2012 | |||||
| December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | |
| Cash and cash equivalents | $ 462,927 | $ 558,086 | $ 552,210 | $ 424,176 | $ 430,862 | $ 447,087 |
| Investment securities: | ||||||
| Available for sale | 7,423,162 | 7,609,676 | 7,916,353 | 7,876,160 | 10,993,605 | 10,579,970 |
| Held to maturity | 4,042,481 | 3,841,700 | 3,856,960 | 4,218,687 | 1,299,806 | 1,387,763 |
| FHLB and FRB common stock | 469,217 | 437,534 | 429,740 | 401,373 | 420,277 | 373,311 |
| Total investment securities | 11,934,860 | 11,888,910 | 12,203,053 | 12,496,220 | 12,713,688 | 12,341,044 |
| Loans held for sale | 50,137 | 80,468 | 118,104 | 126,389 | 154,745 | 117,375 |
| Loans and leases: | ||||||
| Commercial: | ||||||
| Real estate | 7,777,903 | 7,697,407 | 7,482,375 | 7,295,544 | 7,093,193 | 6,835,971 |
| Business | 5,290,392 | 5,204,672 | 5,165,606 | 5,044,738 | 4,953,323 | 4,682,154 |
| Total commercial loans | 13,068,295 | 12,902,079 | 12,647,981 | 12,340,282 | 12,046,516 | 11,518,125 |
| Consumer: | ||||||
| Residential real estate | 3,447,997 | 3,519,233 | 3,558,274 | 3,614,912 | 3,761,567 | 3,870,756 |
| Home equity | 2,752,229 | 2,706,603 | 2,670,672 | 2,646,645 | 2,651,891 | 2,661,429 |
| Indirect auto | 1,543,983 | 1,339,449 | 1,049,763 | 818,401 | 601,456 | 419,258 |
| Credit cards | 325,140 | 311,600 | 303,455 | 298,310 | 314,973 | 308,387 |
| Other consumer | 302,009 | 310,107 | 313,037 | 316,669 | 333,609 | 328,571 |
| Total consumer loans | 8,371,358 | 8,186,992 | 7,895,201 | 7,694,937 | 7,663,496 | 7,588,401 |
| Total loans and leases | 21,439,653 | 21,089,071 | 20,543,182 | 20,035,219 | 19,710,012 | 19,106,526 |
| Allowance for loan losses | 209,274 | 197,953 | 183,708 | 172,002 | 162,522 | 149,933 |
| Loans and leases, net | 21,230,379 | 20,891,118 | 20,359,474 | 19,863,217 | 19,547,490 | 18,956,593 |
| Bank owned life insurance | 415,205 | 413,555 | 410,182 | 407,419 | 404,321 | 401,211 |
| Goodwill and other intangibles | 2,542,783 | 2,549,931 | 2,557,560 | 2,567,681 | 2,617,810 | 2,626,625 |
| Other assets | 992,071 | 958,473 | 949,144 | 959,459 | 937,316 | 983,999 |
| Total assets | $ 37,628,362 | $ 37,340,541 | $ 37,149,727 | $ 36,844,561 | $ 36,806,232 | $ 35,873,934 |
| Deposits: | ||||||
| Savings accounts | $ 3,666,759 | $ 3,695,221 | $ 3,878,053 | $ 3,915,836 | $ 3,887,587 | $ 3,941,528 |
| Interest-bearing checking | 4,743,829 | 4,637,807 | 4,499,963 | 4,534,444 | 4,450,970 | 4,090,322 |
| Money market deposits | 9,739,539 | 9,905,341 | 10,013,996 | 10,493,243 | 10,581,137 | 10,801,280 |
| Noninterest-bearing deposits | 4,865,873 | 4,968,501 | 4,845,835 | 4,803,835 | 4,643,580 | 4,658,374 |
| Certificates of deposit | 3,649,257 | 3,762,132 | 3,911,989 | 3,985,702 | 4,113,257 | 4,206,192 |
| Total deposits | 26,665,257 | 26,969,002 | 27,149,836 | 27,733,060 | 27,676,531 | 27,697,696 |
| Short-term borrowings | 4,822,222 | 4,169,416 | 3,698,279 | 2,928,929 | 2,983,718 | 1,995,610 |
| Long-term borrowings | 733,883 | 732,547 | 732,598 | 732,510 | 732,425 | 732,339 |
| Other liabilities | 413,647 | 531,379 | 666,270 | 503,389 | 487,000 | 532,868 |
| Total liabilities | 32,635,009 | 32,402,344 | 32,246,983 | 31,897,888 | 31,879,674 | 30,958,513 |
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 |
| Common stockholders' equity | 4,655,351 | 4,600,195 | 4,564,742 | 4,608,671 | 4,588,556 | 4,577,419 |
| Total stockholders' equity | 4,993,353 | 4,938,197 | 4,902,744 | 4,946,673 | 4,926,558 | 4,915,421 |
| Total liabilities and stockholders' equity | $ 37,628,362 | $ 37,340,541 | $ 37,149,727 | $ 36,844,561 | $ 36,806,232 | $ 35,873,934 |
| Selected balance sheet information: | ||||||
| Total interest-earning assets(1) | $ 33,396,058 | $ 33,039,023 | $ 32,906,363 | $ 32,524,313 | $ 32,321,964 | $ 31,316,470 |
| Total interest-bearing liabilities | 27,355,489 | 26,902,465 | 26,734,878 | 26,590,664 | 26,749,094 | 25,767,271 |
| Net interest-earning assets | $ 6,040,569 | $ 6,136,558 | $ 6,171,485 | $ 5,933,649 | $ 5,572,870 | $ 5,549,199 |
| Tangible common equity(2) | $ 2,112,568 | $ 2,050,264 | $ 2,007,182 | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 |
| Unrealized gain on available for sale securities, net of tax(3) | 63,930 | 76,686 | 83,898 | 160,942 | 206,733 | 204,347 |
| Total core deposits | $ 23,016,000 | $ 23,206,870 | $ 23,237,847 | $ 23,747,358 | $ 23,563,274 | $ 23,491,504 |
| Originated loans(4) | $ 16,922,161 | $ 16,211,505 | $ 15,102,336 | $ 14,100,190 | $ 13,372,357 | $ 12,232,568 |
| Acquired loans(5) | 4,642,775 | 5,006,753 | 5,581,651 | 6,083,912 | 6,513,636 | 7,085,839 |
| Credit related discount on acquired loans(6) | (125,283) | (129,187) | (140,805) | (148,883) | (175,981) | (211,881) |
| Total Loans | $ 21,439,653 | $ 21,089,071 | $ 20,543,182 | $ 20,035,219 | $ 19,710,012 | $ 19,106,526 |
| (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) Excludes unamortized unrealized gains recorded in accumulated other comprehensive income related to available for sale securities transferred to held to maturity. | ||||||
| (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 | For year ending | ||||||||||||||||||||||||||||
| December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||
|
Average Balances |
Interest(1) |
Yields and Rates(1) |
Average Balances |
Interest(1) |
Yields and Rates(1) |
Average Balances |
Interest(1) |
Yields and Rates(1) |
Average Balances |
Interest(1) |
Yields and Rates(1) |
Average Balances |
Interest(1) |
Yields and Rates(1)(2) |
|||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||
| Loans and leases(3) | |||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Real estate | $ 7,673 | $ 79 | 4.02% | $ 7,551 | $ 80 | 4.16% | $ 6,911 | $ 79 | 4.45% | $ 7,446 | $ 314 | 4.16% | $ 6,625 | $ 318 | 4.72% | ||||||||||||||
| Business | 5,257 | 48 | 3.60 | 5,163 | 48 | 3.64 | 4,783 | 47 | 3.89 | 5,134 | 190 | 3.66 | 4,402 | 176 | 3.94 | ||||||||||||||
| Total commercial loans | 12,930 | 127 | 3.85 | 12,714 | 128 | 3.95 | 11,694 | 126 | 4.22 | 12,580 | 504 | 3.95 | 11,027 | 494 | 4.41 | ||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| Residential real estate | 3,479 | 34 | 3.89 | 3,538 | 35 | 3.91 | 3,819 | 39 | 4.05 | 3,569 | 141 | 3.94 | 3,922 | 161 | 4.11 | ||||||||||||||
| Home equity | 2,732 | 29 | 4.15 | 2,683 | 28 | 4.17 | 2,659 | 29 | 4.31 | 2,681 | 113 | 4.21 | 2,476 | 109 | 4.39 | ||||||||||||||
| Indirect auto | 1,453 | 11 | 3.03 | 1,207 | 9 | 3.09 | 515 | 5 | 3.50 | 1,077 | 34 | 3.12 | 228 | 8 | 3.65 | ||||||||||||||
| Credit cards | 313 | 9 | 11.38 | 309 | 9 | 12.02 | 310 | 8 | 10.19 | 307 | 34 | 11.20 | 202 | 22 | 10.88 | ||||||||||||||
| Other consumer | 307 | 7 | 8.66 | 313 | 7 | 8.48 | 328 | 7 | 8.73 | 315 | 27 | 8.43 | 296 | 24 | 8.25 | ||||||||||||||
| Total consumer loans | 8,284 | 89 | 4.27 | 8,050 | 88 | 4.35 | 7,631 | 87 | 4.54 | 7,949 | 348 | 4.38 | 7,124 | 324 | 4.55 | ||||||||||||||
| Total loans and leases | 21,214 | 216 | 4.04 | 20,764 | 216 | 4.14 | 19,325 | 213 | 4.39 | 20,529 | 853 | 4.15 | 18,151 | 818 | 4.51 | ||||||||||||||
| Residential MBS(2) | 5,502 | 42 | 3.07 | 5,515 | 37 | 2.68 | 5,746 | 36 | 2.50 | 5,500 | 146 | 2.66 | 7,230 | 202 | 2.79 | ||||||||||||||
| Commercial MBS | 1,772 | 17 | 3.84 | 1,810 | 17 | 3.68 | 1,953 | 18 | 3.79 | 1,844 | 68 | 3.69 | 1,855 | 73 | 3.91 | ||||||||||||||
| Other investment securities (4) | 4,505 | 38 | 3.40 | 4,620 | 40 | 3.47 | 4,474 | 35 | 3.16 | 4,694 | 158 | 3.36 | 3,705 | 123 | 3.32 | ||||||||||||||
| Total securities, at amortized cost(2) | 11,779 | 98 | 3.31 | 11,945 | 94 | 3.14 | 12,173 | 90 | 2.95 | 12,038 | 372 | 3.09 | 12,790 | 397 | 3.11 | ||||||||||||||
| Money market and other investments | 189 | 1 | 1.38 | 157 | 1 | 2.27 | 207 | 1 | 1.54 | 189 | 3 | 1.65 | 257 | 3 | 1.13 | ||||||||||||||
| Total interest-earning assets(2) | 33,182 | $ 314 | 3.76% | 32,866 | $ 311 | 3.75% | 31,705 | $ 304 | 3.81% | 32,756 | $ 1,228 | 3.75% | 31,198 | $ 1,219 | 3.91% | ||||||||||||||
| Goodwill and other intangibles | 2,546 | 2,554 | 2,619 | 2,567 | 2,315 | ||||||||||||||||||||||||
| Other noninterest-earning assets | 1,651 | 1,673 | 2,005 | 1,744 | 1,804 | ||||||||||||||||||||||||
| Total assets | $ 37,379 | $ 37,093 | $ 36,329 | $ 37,067 | $ 35,317 | ||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||||||||
| Savings accounts | $ 3,670 | $ 1 | 0.09% | $ 3,793 | $ 1 | 0.09% | $ 3,898 | $ 2 | 0.18% | $ 3,813 | $ 4 | 0.10% | $ 3,451 | $ 5 | 0.15% | ||||||||||||||
| Interest-bearing checking | 4,725 | -- | 0.04 | 4,483 | -- | 0.04 | 4,181 | 1 | 0.07 | 4,524 | 2 | 0.04 | 3,347 | 2 | 0.07 | ||||||||||||||
| Money market deposits | 9,900 | 5 | 0.20 | 9,959 | 5 | 0.20 | 10,810 | 7 | 0.25 | 10,167 | 21 | 0.21 | 9,506 | 27 | 0.28 | ||||||||||||||
| Certificates of deposit | 3,698 | 7 | 0.71 | 3,824 | 7 | 0.69 | 4,259 | 8 | 0.71 | 3,875 | 26 | 0.68 | 4,048 | 33 | 0.81 | ||||||||||||||
| Total interest bearing deposits | 21,993 | 13 | 0.23% | 22,059 | 13 | 0.23% | 23,148 | 17 | 0.29% | 22,379 | 53 | 0.24% | 20,352 | 67 | 0.33% | ||||||||||||||
| Borrowings | |||||||||||||||||||||||||||||
| Short-term borrowings | 4,259 | 4 | 0.42% | 4,014 | 4 | 0.41% | 2,331 | 2 | 0.38% | 3,744 | 15 | 0.41% | 3,163 | 17 | 0.53% | ||||||||||||||
| Long-term borrowings | 732 | 12 | 6.56 | 733 | 12 | 6.55 | 732 | 12 | 6.63 | 732 | 48 | 6.61 | 2,299 | 69 | 3.02 | ||||||||||||||
| Total borrowings | 4,991 | 17 | 1.32 | 4,747 | 16 | 1.36 | 3,063 | 14 | 1.87 | 4,476 | 64 | 1.42 | 5,462 | 86 | 1.58 | ||||||||||||||
| Total interest-bearing liabilities | 26,984 | $ 30 | 0.43% | 26,806 | $ 29 | 0.43% | 26,211 | $ 31 | 0.48% | 26,855 | $ 117 | 0.44% | 25,814 | $ 153 | 0.59% | ||||||||||||||
| Noninterest-bearing deposits | 4,878 | 4,787 | 4,645 | 4,712 | 4,041 | ||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 533 | 567 | 528 | 534 | 575 | ||||||||||||||||||||||||
| Total liabilities | 32,395 | 32,160 | 31,384 | 32,101 | 30,430 | ||||||||||||||||||||||||
| Total stockholders' equity | 4,984 | 4,933 | 4,945 | 4,966 | 4,887 | ||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ 37,379 | $ 37,093 | $ 36,329 | $ 37,067 | $ 35,317 | ||||||||||||||||||||||||
| Net interest income (FTE) | $ 285 | $ 282 | $ 273 | $ 1,111 | $ 1,066 | ||||||||||||||||||||||||
| Taxable Equivalent Adjustment(1) | 5 | 4 | 4 | 18 | 18 | ||||||||||||||||||||||||
| Total core deposits | $ 23,173 | $ 6 | 0.11% | $ 23,022 | $ 6 | 0.11% | $ 23,534 | $ 10 | 0.16% | $ 23,216 | $ 27 | 0.12% | $ 20,345 | $ 34 | 0.17% | ||||||||||||||
| Total transactional deposits | 9,603 | -- | 0.02% | 9,270 | -- | 0.02% | 8,826 | 1 | 0.03% | 9,236 | 2 | 0.02% | 7,388 | 2 | 0.03% | ||||||||||||||
| Total deposits | 26,871 | 13 | 0.19% | 26,846 | 13 | 0.19% | 27,793 | 17 | 0.24% | 27,091 | 53 | 0.20% | 24,393 | 67 | 0.27% | ||||||||||||||
| Tax equivalent net interest rate spread(2) | 3.33% | 3.32% | 3.33% | 3.31% | 3.32% | ||||||||||||||||||||||||
| Tax equivalent net interest rate margin(2) | 3.41% | 3.40% | 3.42% | 3.39% | 3.42% | ||||||||||||||||||||||||
| (1) Tax equivalent interest income is calculated using a 35% tax rate. | |||||||||||||||||||||||||||||
| (2) Amounts for the three and twelve months ended December 31, 2012 exclude accelerated CMO adjustments of $16 million and $25 million, respectively. The yields, including these adjustments, are: | |||||||||||||||||||||||||||||
|
Three months ended December 31, 2012 |
Year ending December 31, 2012 |
||||||||||||||||||||||||||||
| Residential MBS | 1.37% | 2.45% | |||||||||||||||||||||||||||
| Total securities, at amortized cost | 2.41% | 2.91% | |||||||||||||||||||||||||||
| Total interest-earning assets | 3.61% | 3.83% | |||||||||||||||||||||||||||
| Tax equivalent net interest rate spread | 3.13% | 3.24% | |||||||||||||||||||||||||||
| Tax equivalent net interest rate margin | 3.22% | 3.34% | |||||||||||||||||||||||||||
| (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) | |||||||||||||||||
| 2013 | 2012 | For year ending | |||||||||||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | ||||||||||
| Quarter | Quarter |
Quarter |
Quarter | Quarter | Quarter | 2013 | 2012 | ||||||||||
| Beginning balance | $ 197,953 | $ 183,708 | $ 172,002 | $ 162,522 | $ 149,933 | $ 138,516 | $ 162,522 | $ 120,100 | |||||||||
| Net loan (charge-offs) recoveries: | |||||||||||||||||
| Commercial real estate | $ (5,764) | $ 1,013 | $ (2,817) | $ (2,121) | $ (1,935) | $ (1,791) | $ (9,689) | $ (12,104) | |||||||||
| Commercial business | (6,382) | (9,694) | (7,175) | (4,902) | (3,385) | (6,077) | (28,153) | (24,563) | |||||||||
| Residential real estate | (168) | (137) | (291) | (427) | (658) | (396) | (1,023) | (2,329) | |||||||||
| Home equity | (1,528) | (322) | (905) | (613) | (673) | (401) | (3,368) | (3,771) | |||||||||
| Indirect auto | (1,215) | (692) | (552) | (252) | (231) | 14 | (2,711) | (239) | |||||||||
| Credit cards | (3,082) | (1,300) | (194) | (204) | (291) | (149) | (4,780) | (945) | |||||||||
| Other consumer | (2,140) | (1,823) | (1,160) | (1,801) | (1,763) | (1,271) | (6,924) | (4,148) | |||||||||
| Total net loan charge-offs | $ (20,279) | $ (12,955) | $ (13,094) | $ (10,320) | $ (8,936) | $ (10,071) | $ (56,648) | $ (48,099) | |||||||||
| Provision for loan losses | 31,600 | 27,200 | 24,800 | 19,800 | 21,525 | 21,800 | 103,400 | 91,028 | |||||||||
| Allowance related to loans sold | -- | -- | -- | -- | -- | (312) | -- | (507) | |||||||||
| Ending balance | $ 209,274 | $ 197,953 | $ 183,708 | $ 172,002 | $ 162,522 | $ 149,933 | $ 209,274 | $ 162,522 | |||||||||
| Supplemental information | |||||||||||||||||
| Allowance to loans | 0.98% | 0.94% | 0.89% | 0.86% | 0.82% | 0.78% | 0.98% | 0.82% | |||||||||
| Allowance for originated loans to originated loans(1) | 1.21% | 1.20% | 1.21% | 1.21% | 1.20% | 1.20% | 1.21% | 1.20% | |||||||||
| Net charge-offs (recoveries) to average loans (annualized) | |||||||||||||||||
| Commercial real estate | 0.30 % | (0.05)% | 0.15% | 0.12% | 0.11% | 0.11% | 0.13% | 0.18% | |||||||||
| Commercial business | 0.49 % | 0.75 % | 0.56% | 0.39% | 0.28% | 0.53% | 0.55% | 0.56% | |||||||||
| Total commercial loans | 0.38 % | 0.27 % | 0.32% | 0.23% | 0.18% | 0.28% | 0.30% | 0.33% | |||||||||
| Residential real estate | 0.02 % | 0.02 % | 0.03% | 0.05% | 0.07% | 0.04% | 0.03% | 0.06% | |||||||||
| Home equity | 0.22 % | 0.05 % | 0.14% | 0.09% | 0.10% | 0.06% | 0.13% | 0.15% | |||||||||
| Indirect auto | 0.33 % | 0.23 % | 0.23% | 0.15% | 0.18% | 0.02 % | 0.25% | 0.10% | |||||||||
| Credit cards | 3.93 % | 1.68 % | 0.26% | 0.27% | 0.38% | 0.19% | 1.56% | 0.47% | |||||||||
| Other consumer | 2.79 % | 2.01 % | 0.88% | 1.27% | 1.29% | 0.89% | 2.20% | 1.40% | |||||||||
| Total consumer loans | 0.40 % | 0.22 % | 0.16% | 0.17% | 0.19% | 0.12% | 0.24% | 0.16% | |||||||||
| Total loans | 0.38 % | 0.25 % | 0.26% | 0.21% | 0.18% | 0.21% | 0.28% | 0.26% | |||||||||
| Net charge-offs (recoveries) of originated loans to average originated loans (annualized)(1) | |||||||||||||||||
| Commercial real estate | 0.24 % | (0.07)% | 0.14% | 0.10% | 0.07% | 0.12% | 0.10% | 0.13% | |||||||||
| Commercial business | 0.53 % | 0.83 % | 0.64% | 0.45% | 0.33% | 0.64% | 0.61% | 0.68% | |||||||||
| Total commercial loans | 0.37 % | 0.33 % | 0.36% | 0.26% | 0.19% | 0.36% | 0.33% | 0.38% | |||||||||
| Residential real estate | 0.04 % | 0.03 % | 0.07% | 0.10% | 0.15% | 0.09% | 0.06% | 0.14% | |||||||||
| Home equity | 0.29 % | 0.09 % | 0.26% | 0.19% | 0.21% | 0.13% | 0.21% | 0.31% | |||||||||
| Indirect auto | 0.33 % | 0.23 % | 0.23% | 0.15% | 0.18% | 0.02 % | 0.25% | 0.11% | |||||||||
| Credit cards | 3.93 % | 1.68 % | 0.26% | 0.34% | 0.69% | 0.61 % | 1.56% | 1.14% | |||||||||
| Other consumer | 2.80 % | 2.59 % | 1.91% | 2.44% | 1.71% | 1.04% | 2.65% | 1.76% | |||||||||
| Total consumer loans | 0.56 % | 0.33 % | 0.27% | 0.28% | 0.33% | 0.18% | 0.37% | 0.30% | |||||||||
| Total loans | 0.43 % | 0.33 % | 0.33% | 0.27% | 0.24% | 0.30% | 0.34% | 0.35% | |||||||||
| Nonperforming loans: | |||||||||||||||||
| Originated(1): | |||||||||||||||||
| Commercial real estate | $ 53,395 | $ 51,302 | $ 59,624 | $ 49,953 | $ 50,848 | $ 46,413 | $ 53,395 | $ 50,848 | |||||||||
| Commercial business | 42,013 | 35,854 | 44,658 | 47,523 | 47,066 | 37,375 | 42,013 | 47,066 | |||||||||
| Residential real estate | 31,478 | 31,312 | 29,667 | 28,455 | 27,192 | 21,377 | 31,478 | 27,192 | |||||||||
| Home equity | 18,426 | 15,709 | 14,601 | 14,270 | 14,233 | 8,084 | 18,426 | 14,233 | |||||||||
| Indirect auto | 6,274 | 5,129 | 3,276 | 2,426 | 931 | 99 | 6,274 | 931 | |||||||||
| Other consumer | 5,838 | 5,538 | 2,818 | 3,018 | 2,806 | 839 | 5,838 | 2,806 | |||||||||
| Total originated nonperforming loans | 157,424 | 144,844 | 154,644 | 145,645 | 143,076 | 114,187 | 157,424 | 143,076 | |||||||||
| Total acquired nonperforming loans(2) | 30,088 | 30,388 | 27,556 | 27,678 | 29,648 | 28,193 | 30,088 | 29,648 | |||||||||
| Total nonperforming loans | 187,512 | 175,232 | 182,200 | 173,323 | 172,724 | 142,380 | 187,512 | 172,724 | |||||||||
| Real estate owned | 24,788 | 24,262 | 8,144 | 10,816 | 10,114 | 9,669 | 24,788 | 10,114 | |||||||||
| Total nonperforming assets | $ 212,300 | $ 199,494 | $ 190,344 | $ 184,139 | $ 182,838 | $ 152,049 | $ 212,300 | $ 182,838 | |||||||||
| Accruing troubled debt restructurings (TDR) | $ 52,263 | $ 69,877 | $ 69,892 | $ 64,311 | $ 46,280 | $ 55,732 | $ 52,263 | $ 46,280 | |||||||||
| Loans 90 days past due still accruing(3) | 113,212 | 136,248 | 167,560 | 172,062 | 171,568 | 145,323 | 113,212 | 171,568 | |||||||||
| Total classified loans(4) | 663,700 | 648,235 | 701,104 | 720,197 | 708,468 | 693,006 | 663,700 | 708,468 | |||||||||
| Total criticized loans(5) | $ 985,019 | $ 977,798 | $ 1,012,305 | $ 1,044,874 | $ 1,002,659 | $ 990,670 | $ 985,019 | $ 1,002,659 | |||||||||
| Total nonperforming loans to loans | 0.87% | 0.83% | 0.89% | 0.87% | 0.88% | 0.75% | 0.87% | 0.88% | |||||||||
| Total nonperforming originated loans to originated loans(1) | 0.93% | 0.89% | 1.02% | 1.03% | 1.07% | 0.93% | 0.93% | 1.07% | |||||||||
| Total nonperforming assets to loans and real estate owned | 0.99% | 0.94% | 0.93% | 0.92% | 0.93% | 0.80% | 0.99% | 0.93% | |||||||||
| Total nonperforming assets to assets | 0.56% | 0.53% | 0.51% | 0.50% | 0.50% | 0.42% | 0.56% | 0.50% | |||||||||
| Allowance to nonperforming loans | 111.6% | 113.0% | 100.8% | 99.2% | 94.1% | 105.3% | 111.6% | 94.1% | |||||||||
| Originated loans(1) | $ 16,922,161 | $ 16,211,505 | $ 15,102,336 | $ 14,100,190 | $ 13,372,357 | $ 12,232,568 | $ 16,922,161 | $ 13,372,357 | |||||||||
| Acquired loans(6) | 4,642,775 | 5,006,753 | 5,581,651 | 6,083,912 | 6,513,636 | 7,085,839 | 4,642,775 | 6,513,636 | |||||||||
| Credit related discount on acquired loans(7) | (125,283) | (129,187) | (140,805) | (148,883) | (175,981) | (211,881) | (125,283) | (175,981) | |||||||||
| Total Loans | $ 21,439,653 | $ 21,089,071 | $ 20,543,182 | $ 20,035,219 | $ 19,710,012 | $ 19,106,526 | $ 21,439,653 | $ 19,710,012 | |||||||||
| (1) Originated loans represent total loans excluding acquired loans. | |||||||||||||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. | |||||||||||||||||
| (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 the carrying value of acquired loans plus the principal not expected to be collected. | |||||||||||||||||
| (7) Represent principal on acquired loans not expected to be collected. | |||||||||||||||||
| First Niagara Financial Group, Inc. | ||||||
| Key Statistics | ||||||
| (Share counts in thousands) | ||||||
| 2013 | 2012 | |||||
| December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | |
| First Niagara Financial Group, Inc capital ratios: | ||||||
| Tier 1 risk based capital | 9.56% | 9.45% | 9.41% | 9.45% | 9.29% | 9.51% |
| Tier 1 common capital(1) | 7.86% | 7.72% | 7.65% | 7.64% | 7.45% | 7.59% |
| Total risk based capital | 11.53% | 11.40% | 11.35% | 11.38% | 11.23% | 11.48% |
| Leverage | 7.26% | 7.14% | 7.01% | 6.92% | 6.75% | 6.83% |
| Equity to assets | 13.27% | 13.22% | 13.20% | 13.43% | 13.39% | 13.70% |
| Tangible common equity to tangible assets(1) | 6.02% | 5.89% | 5.80% | 5.95% | 5.77% | 5.87% |
| Total risk weighted assets(2) | $ 26,412 | $ 26,078 | $ 25,564 | $ 24,949 | $ 24,379 | $ 23,403 |
| First Niagara Bank, N.A capital ratios: | ||||||
| Tier 1 risk based capital | 10.15% | 10.08% | 10.08% | 10.15% | 9.94% | 10.19% |
| Total risk based capital | 10.99% | 10.89% | 10.85% | 10.89% | 10.66% | 10.88% |
| Leverage | 7.70% | 7.61% | 7.50% | 7.43% | 7.23% | 7.32% |
| Total risk weighted assets(2) | $ 26,365 | $ 26,038 | $ 25,520 | $ 24,933 | $ 24,379 | $ 23,390 |
| Number of branches | 421 | 422 | 422 | 427 | 430 | 432 |
| Full time equivalent employees | 5,807 | 5,788 | 5,779 | 5,875 | 5,927 | 6,036 |
| Share information and per share metrics: | ||||||
| Common shares outstanding | 353,941 | 353,973 | 353,932 | 353,008 | 352,621 | 352,632 |
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 |
| Treasury shares | 12,061 | 12,029 | 12,070 | 12,994 | 13,381 | 13,370 |
| Market price (Nasdaq:FNFG): | $ 10.62 | $ 10.37 | $ 10.07 | $ 8.86 | $ 7.93 | $ 8.07 |
| Book value per common share(3) | 13.31 | 13.15 | 13.06 | 13.19 | 13.15 | 13.11 |
| Tangible book value per common share(1)(3) | 6.04 | 5.86 | 5.74 | 5.84 | 5.65 | 5.59 |
| Price/Book | 79.79% | 78.86% | 77.11% | 67.17% | 60.30% | 61.56% |
| Price/Tangible book(1) | 175.83% | 176.96% | 175.44% | 151.71% | 140.35% | 144.36% |
| 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 | 0.54 |
| Dividend payout ratio | 40.00% | 40.00% | 44.44% | 47.06% | 53.33% | 53.33% |
| Dividend yield (annualized) | 2.99% | 3.06% | 3.19% | 3.66% | 4.01% | 3.94% |
| (1) 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. | ||||||
| (2) Represents an estimate of total risk weighted assets as of December 31, 2013. All preceding quarters represent actual calculated balances. | ||||||
| (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) | ||||||||
| 2013 | 2012 | For year ending | ||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | |
| Financial ratios computed on an operating basis(1): | ||||||||
| Earnings per basic share | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.17 | $ 0.19 | $ 0.19 | $ 0.75 | $ 0.75 |
| Earnings per diluted share | 0.20 | 0.20 | 0.18 | 0.17 | 0.19 | 0.19 | 0.75 | 0.75 |
| Weighted average shares outstanding - basic(2) | 349,718 | 349,653 | 349,542 | 349,278 | 349,071 | 349,001 | 349,549 | 348,960 |
| Weighted average shares outstanding - diluted(2) | 350,699 | 350,896 | 350,384 | 349,999 | 349,663 | 349,371 | 350,381 | 349,368 |
| Noninterest income as a percentage of net revenue(3) | 24.17% | 24.78% | 26.18% | 25.13% | 25.48% | 26.43% | 25.06% | 24.40% |
| Pre-tax, pre-provision income | 142,442 | 137,769 | 129,819 | 117,776 | 125,281 | 129,333 | 527,806 | 519,033 |
| Pre-tax, pre-provision income per diluted share | 0.41 | 0.39 | 0.37 | 0.34 | 0.36 | 0.37 | 1.51 | 1.49 |
| Pre-tax, pre-provision return on average assets | 1.51% | 1.47% | 1.41% | 1.30% | 1.37% | 1.46% | 1.42% | 1.47% |
| Net interest margin(4) | 3.41% | 3.40% | 3.36% | 3.39% | 3.42% | 3.54% | 3.39% | 3.42% |
| Interest yield on average loans(4) | 4.04% | 4.14% | 4.19% | 4.25% | 4.39% | 4.47% | 4.15% | 4.51% |
| Rate paid on interest-bearing liabilities(4) | 0.43% | 0.43% | 0.43% | 0.44% | 0.48% | 0.51% | 0.44% | 0.59% |
| Efficiency ratio | 61.46% | 62.66% | 64.43% | 66.86% | 65.24% | 64.71% | 63.82% | 62.56% |
| Effective tax rate | 29.7% | 28.2% | 32.0% | 31.0% | 27.0% | 30.9% | 30.2% | 31.7% |
| Return on average assets | 0.82% | 0.85% | 0.77% | 0.74% | 0.83% | 0.83% | 0.80% | 0.83% |
| Return on average equity | 6.18% | 6.37% | 5.72% | 5.50% | 6.06% | 6.04% | 5.95% | 5.97% |
| Return on average tangible equity(5) | 12.64% | 13.20% | 11.75% | 11.62% | 12.89% | 13.11% | 12.31% | 11.34% |
| Return on average common equity | 5.99% | 6.18% | 5.48% | 5.24% | 5.86% | 5.83% | 5.73% | 5.80% |
| Return on average tangible common equity(6) | 13.25% | 13.92% | 12.21% | 12.05% | 13.57% | 13.86% | 12.86% | 11.81% |
| Reconciliation of net interest income on operating basis to reported net interest income(1): | ||||||||
| Total net interest income on operating basis (Non-GAAP) | $ 280,278 | $ 277,540 | $ 269,443 | $ 266,130 | $ 268,566 | $ 269,605 | $ 1,093,391 | $ 1,047,913 |
| Additional premium amortization on securities portfolio | -- | -- | -- | -- | (16,280) | -- | -- | (24,638) |
| Total reported net interest income (GAAP) | 280,278 | 277,540 | 269,443 | 266,130 | 252,286 | 269,605 | 1,093,391 | 1,023,275 |
| Reconciliation of noninterest income on operating basis to reported noninterest income(1): | ||||||||
| Total noninterest income on operating basis (Non-GAAP) | $ 89,312 | $ 91,422 | $ 95,546 | $ 89,312 | $ 91,821 | $ 96,866 | $ 365,592 | $ 338,298 |
| Gain on securities portfolio repositioning | -- | -- | -- | -- | -- | 5,337 | -- | 21,232 |
| Total reported noninterest income (GAAP) | 89,312 | 91,422 | 95,546 | 89,312 | 91,821 | 102,203 | 365,592 | 359,530 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | ||||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 227,148 | $ 231,193 | $ 235,170 | $ 237,666 | $ 235,106 | $ 237,138 | $ 931,177 | $ 867,178 |
| Merger and acquisition integration expenses | -- | -- | -- | -- | 3,678 | 29,404 | -- | 177,512 |
| Restructuring charges | -- | -- | -- | -- | -- | -- | -- | 6,453 |
| Total reported noninterest expense (GAAP) | $ 227,148 | $ 231,193 | $ 235,170 | $ 237,666 | $ 238,784 | $ 266,542 | $ 931,177 | $ 1,051,143 |
| Reconciliation of net operating income to net income(1): | ||||||||
| Net operating income (Non-GAAP) | $ 77,690 | $ 79,143 | $ 71,134 | $ 67,285 | $ 75,358 | $ 74,027 | $ 295,252 | $ 291,626 |
| Nonoperating income and expenses, net of tax: | ||||||||
| Additional premium amortization on securities portfolio | -- | -- | -- | -- | 11,633 | -- | -- | 17,191 |
| Gain on securities portfolio repositioning | -- | -- | -- | -- | -- | (3,469) | -- | (13,800) |
| Merger and acquisition integration expenses | -- | -- | -- | -- | 2,628 | 19,112 | -- | 115,619 |
| Restructuring charges | -- | -- | -- | -- | -- | -- | -- | 4,194 |
| Total nonoperating expenses, net of tax | -- | -- | -- | -- | 14,261 | 15,643 | -- | 123,204 |
| Net income (GAAP) | $ 77,690 | $ 79,143 | $ 71,134 | $ 67,285 | $ 61,097 | $ 58,384 | $ 295,252 | $ 168,422 |
| 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) | $ 70,143 | $ 71,596 | $ 63,587 | $ 59,738 | $ 67,811 | $ 66,480 | $ 265,064 | $ 263,870 |
| Nonoperating income and expenses, net of tax: | ||||||||
| Additional premium amortization on securities portfolio | -- | -- | -- | -- | 11,633 | -- | -- | 17,191 |
| Gain on securities portfolio repositioning | -- | -- | -- | -- | -- | (3,469) | -- | (13,800) |
| Merger and acquisition integration expenses | -- | -- | -- | -- | 2,628 | 19,112 | -- | 115,619 |
| Restructuring charges | -- | -- | -- | -- | -- | -- | -- | 4,194 |
| Total nonoperating income and expenses, net of tax | -- | -- | -- | -- | 14,261 | 15,643 | -- | 123,204 |
| Net income available to common stockholders (GAAP) | $ 70,143 | $ 71,596 | $ 63,587 | $ 59,738 | $ 53,550 | $ 50,837 | $ 265,064 | $ 140,666 |
| Computation of pre-tax,pre-provision income: | ||||||||
| Net interest income | $ 280,278 | $ 277,540 | $ 269,443 | $ 266,130 | $ 252,286 | $ 269,605 | $ 1,093,391 | $ 1,023,275 |
| Noninterest income | 89,312 | 91,422 | 95,546 | 89,312 | 91,821 | 102,203 | 365,592 | 359,530 |
| Noninterest expense | (227,148) | (231,193) | (235,170) | (237,666) | (238,784) | (266,542) | (931,177) | (1,051,143) |
| Pre-tax, pre-provision income (GAAP) | 142,442 | 137,769 | 129,819 | 117,776 | 105,323 | 105,266 | 527,806 | 331,662 |
| Add back: non-operating premium amortization | -- | -- | -- | -- | 16,280 | -- | -- | 24,638 |
| Add back: non-operating noninterest expenses (1) | -- | -- | -- | -- | 3,678 | 29,404 | -- | 183,965 |
| Less: non-operating noninterest income (1) | -- | -- | -- | -- | -- | (5,337) | -- | (21,232) |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 142,442 | $ 137,769 | $ 129,819 | $ 117,776 | $ 125,281 | $ 129,333 | $ 527,806 | $ 519,033 |
| (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) Net revenue is comprised of net interest income and noninterest income. | ||||||||
| (4) Yields and rates calculated on a tax equivalent basis. | ||||||||
| (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) | ||||||||
| 2013 | 2012 | For year ending | ||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2013 | 2012 | |
| Computation of Ending Tangible Common Equity: | ||||||||
| Total stockholders' equity | $ 4,993,353 | $ 4,938,197 | $ 4,902,744 | $ 4,946,673 | $ 4,926,558 | $ 4,915,421 | $ 4,993,353 | $ 4,928,097 |
| Less: Goodwill and other intangibles | (2,542,783) | (2,549,931) | (2,557,560) | (2,567,681) | (2,617,810) | (2,626,625) | (2,542,783) | (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 | $ 2,112,568 | $ 2,050,264 | $ 2,007,182 | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | $ 2,112,568 | $ 1,972,286 |
| Computation of Average Tangible Equity: | ||||||||
| Total stockholders' equity | $ 4,984,003 | $ 4,932,949 | $ 4,989,006 | $ 4,958,402 | $ 4,945,132 | $ 4,872,605 | $ 4,966,069 | $ 4,887,071 |
| Less: Goodwill and other intangibles | (2,546,031) | (2,553,647) | (2,561,507) | (2,609,409) | (2,619,322) | (2,626,666) | (2,567,436) | (2,315,013) |
| Tangible equity | $ 2,437,972 | $ 2,379,302 | $ 2,427,499 | $ 2,348,993 | $ 2,325,810 | $ 2,245,939 | $ 2,398,633 | $ 2,572,058 |
| Computation of Average Tangible Common Equity: | ||||||||
| Total stockholders' equity | $ 4,984,003 | $ 4,932,949 | $ 4,989,006 | $ 4,958,402 | $ 4,945,132 | $ 4,872,605 | $ 4,966,069 | $ 4,887,071 |
| Less: Goodwill and other intangibles | (2,546,031) | (2,553,647) | (2,561,507) | (2,609,409) | (2,619,322) | (2,626,666) | (2,567,436) | (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 | $ 2,099,970 | $ 2,041,300 | $ 2,089,497 | $ 2,010,991 | $ 1,987,808 | $ 1,907,937 | $ 2,060,631 | $ 2,234,056 |
| Computation of Tier 1 Common Capital: | ||||||||
| Tier 1 capital | $ 2,525,656 | $ 2,464,801 | $ 2,406,473 | $ 2,356,763 | $ 2,264,679 | $ 2,225,121 | $ 2,525,656 | $ 2,264,679 |
| Less: Qualifying restricted core capital elements | (112,886) | (112,667) | (112,449) | (112,236) | (112,025) | (111,820) | (112,886) | (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) | $ 2,074,768 | $ 2,014,132 | $ 1,956,022 | $ 1,906,525 | $ 1,814,652 | $ 1,775,299 | $ 2,074,768 | $ 1,814,652 |