Second Quarter 2015 Highlights:
- Second quarter GAAP earnings of $0.15 per diluted share
-
Revenues, excluding the impact of tax credit amortization, of $353 million increased 2% QOQ
- Noninterest income increased 9% driven by customer activity and favorable seasonal trends
- Net interest income stable QOQ
-
Period-end commercial business loans increased 9% QOQ
- Average consumer loan growth increased 2% QOQ driven by Indirect Auto and Home Equity balances
- Strong commercial loan pipeline at the end of the second quarter
-
Average transactional deposit balances increased 5% QOQ and averaged 37% of deposits
- Average consumer checking balances increased 12% annualized QOQ and 5% YOY
- Strong customer response to Simple Checking and Companion Savings deposit products
-
Strong credit quality maintained
- NCOs averaged 0.31% of originated loans, unchanged QOQ
- Nonperforming loans declined 9% QOQ; Total criticized loans decreased 5% QOQ
BUFFALO, N.Y., July 24, 2015 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (NASDAQ:FNFG) today reported GAAP net income available to common shareholders of $53.5 million, or $0.15 per diluted share for the second quarter of 2015, compared to $43.8 million, or $0.12 per diluted share, for the quarter ended March 31, 2015.
"We had solid execution in the second quarter reflecting adherence to our prudent credit underwriting practices and progress in implementing our strategic investment plan, which remains on-time and on-budget," said Gary M. Crosby, President and Chief Executive Officer. "Our team is focused on providing a faster, easier, simpler and more secure banking experience, and our customers are responding well. I'm especially proud of our recent recognition by the Reputation Institute as the number four most-reputable bank based on customer feedback. In particular, we received high scores for innovation, citizenship and product quality. Customer-centricity is the heart of our strategy and culture. Every decision we make and every action we take are with our customers, and ultimately our shareholders, top-of-mind and we're gratified to see those efforts recognized by the people we serve."
"Compared to the prior quarter, revenues increased as most noninterest income categories benefited from strong customer activity as well as seasonal strength," said Gregory W. Norwood, Chief Financial Officer. "In our commercial lending business, we ended the quarter on a strong note with period-end commercial business (C&I) balances increasing 9% annualized from the prior quarter benefitting from strong activity in June. Importantly, our loan pipeline at the end of the quarter also was robust. Sequentially, average consumer deposit balances increased 5% annualized driven by interest-checking and money market deposit balances. Net interest margin of 3.02% was in line with our expectations."
Second Quarter Results
On a GAAP basis, in the second quarter of 2015, First Niagara reported net income available to common shareholders of $53.5 million, or $0.15 per diluted share, compared to $43.8 million, or $0.12 per diluted share in the first quarter of 2015, and $68.3 million, or $0.19 per diluted share, for the quarter ended June 30, 2014.
Compared to the first quarter of 2015, the increase in net income available to common shareholders was primarily driven by a 5% increase in noninterest income as well as the impact of $11 million in after-tax restructuring charges or $0.03 per share that were incurred in the first quarter of 2015 primarily in connection with previously announced branch consolidations and the company's Organization Simplification initiative. These were partially offset by an increase in provision for credit losses from very low first quarter levels. Compared to the year-ago period, the decline in GAAP earnings was driven by a higher effective tax rate and net interest margin compression.
In the second quarter of 2015, average loans increased 1% annualized from the linked quarter. Average commercial business and real estate loans increased 1% annualized over the prior quarter, driven by increases in commercial business loan balances; period-end commercial business loan balances increased 9% annualized. Average consumer loans increased 2% annualized, driven by increases in indirect auto and home equity balances. Average interest-bearing deposit balances increased 8% annualized, led by sequential increases across all categories. Average transactional deposit balances, which include interest-bearing and noninterest-bearing checking account balances, increased 5% annualized and currently represent 37% of the company's deposit balances.
Revenues, excluding the impact of $3 million in amortization related to the company's investments in tax credits, increased 2% from the prior quarter primarily driven by an increase in noninterest income. Net interest income was unchanged from prior quarter levels as the benefits of earning asset growth and one extra day in the quarter were offset by the continued impact of reinvestments and re-pricing of assets in the current low interest rate and competitive pricing environment. Net interest margin was 3.02%, down 5 basis points from the prior quarter. Noninterest income, excluding tax credit amortization, increased 9% from the prior quarter driven by strong customer activity and favorable seasonal trends that benefited certain noninterest income categories. Excluding the impact of restructuring charges incurred in the prior quarter, noninterest expenses of $248 million increased 2% sequentially, reflecting business and volume related expenses as well as vendor and other costs associated with the company's strategic initiatives and other corporate activities.
The provision for loan losses on originated loans totaled $20 million and covered net charge-offs of $15.5 million, or 0.31% of average originated loans. At June 30, 2015, total criticized loans decreased 5% from the prior quarter. At June 30, 2015, nonperforming originated loans were $181 million, or 8% lower than at March 31, 2015.
| Operating Results (Non-GAAP) | Q2 2015 | Q1 2015 | Q4 2014 | Q3 2014 | Q2 2014 | |||||
| Net interest income | $ 263.1 | $ 262.9 | $ 269.8 | $ 273.3 | $ 271.8 | |||||
| Provision for credit losses | 20.8 | 12.8 | 35.7 | 16.7 | 19.8 | |||||
| Noninterest income | 86.6 | 82.2 | 77.2 | 75.4 | 80.9 | |||||
| Noninterest expense | 247.9 | 243.5 | 248.2 | 249.5 | 244.1 | |||||
| Operating net income | 61.0 | 62.2 | 60.7 | 74.0 | 75.9 | |||||
| Preferred stock dividend | 7.5 | 7.5 | 7.5 | 7.5 | 7.5 | |||||
| Operating net income available to common | $ 53.5 | $ 54.7 | $ 53.2 | $ 66.5 | $ 68.3 | |||||
| Weighted average diluted shares outstanding | 352.8 | 352.6 | 352.2 | 351.9 | 351.5 | |||||
| Operating earnings per diluted share | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.19 | $ 0.19 | |||||
| Reported Results (GAAP) | Q2 2015 | Q1 2015 | Q4 2014 | Q3 2014 | Q2 2014 | |||||
| Operating net income before non-op. items | $ 61.0 | $ 62.2 | $ 60.7 | $ 74.0 | $ 75.9 | |||||
| Non-operating items (a) | -- | 10.9 | (8.4) | 994.1 | -- | |||||
| Net Income / (loss) | 61.0 | 51.4 | 69.1 | (920.0) | 75.9 | |||||
| Preferred stock dividend | 7.5 | 7.5 | 7.5 | 7.5 | 7.5 | |||||
| Net income / (loss) available to common | $ 53.5 | $ 43.8 | $ 61.5 | $ (927.6) | $ 68.3 | |||||
| Weighted average diluted shares outstanding | 352.8 | 352.6 | 352.2 | 350.4 | 351.5 | |||||
| Earnings per diluted share | $ 0.15 | $ 0.12 | $ 0.17 | $ (2.65) | $ 0.19 | |||||
| All amounts in millions except earnings per diluted share. | ||||||||||
| (a) Q1 2015: Restructuring charges primarily related to staffing realignment, branch consolidations and third-party professional fees incurred in connection with the overstatement of allowance resulting from mid-level employee misconduct, net of taxes. | ||||||||||
| Q4 2014: Benefit from reversal of process issue reserve related to certain customer deposit accounts less severance and other restructuring charges related to Organizational Simplification initiative, net of taxes. | ||||||||||
| Q3 2014: $1.1 billion non-cash goodwill impairment charge, reserves related to a process issue, and restructuring charges primarily related to branch realignment, net of taxes. | ||||||||||
Loans
On an end-of-period basis, total loans increased 4% from the prior quarter driven by a 9% increase in commercial business (C&I) loans.
Average loans increased 1% annualized from the prior quarter to $23.2 billion, driven primarily by increases in the company's indirect auto, home equity and C&I loan portfolios.
Average commercial loans, which include C&I and commercial real estate (CRE) loans, increased 1% annualized to $14.1 billion, driven by growth primarily in the company's Eastern Pennsylvania and Tri-State markets. Average commercial loan growth in the second quarter was impacted by the timing of new business volumes, commercial real estate pay-downs early in the quarter as well as the company's continued focus on balancing volume growth with prudent credit underwriting.
Average C&I loans increased 2% annualized to $5.8 billion, driven primarily by increases in the middle market and healthcare segments. CRE loans averaged $8.3 billion and were relatively flat compared to the prior quarter due to higher principal pay-downs driven primarily by customers' sale of the properties.
Average indirect auto loan balances increased 9% annualized or by $51 million to $2.2 billion, as strong new origination activity was partially offset by increased pay-downs. Indirect auto originations during the quarter totaled $273 million. New originations in the second quarter yielded 3.38%, net of dealer reserve, an increase of 13 basis points compared to the prior quarter originations.
Average residential real estate loans decreased 1% annualized, driven by prepayment of adjustable rate mortgages and the company's limited appetite for longer-duration mortgage assets. Home equity balances increased for the ninth consecutive quarter to $3.0 billion, or 3% annualized from the prior quarter reflecting higher customer draws and the benefits of promotional and cross-sell campaigns.
Deposits
Average deposits increased 6% annualized from the prior quarter to $28.2 billion. Average consumer deposit balances increased 5% annualized to $18.1 billion, driven by higher customer balances, new account acquisitions, and successful money market deposit promotional campaigns primarily in the company's New York State footprint. Average consumer interest-bearing and noninterest-bearing checking account balances increased 12% annualized to $5.4 billion, driven by higher balances held by customers as well as new customer acquisitions. Average savings balances increased 7% annualized driven by new Companion Savings accounts as well as higher average customer balances.
Money market deposit balances increased 5% annualized, reflecting promotional marketing campaigns. Time deposits increased 15% annualized to $3.9 billion, as increases in brokered certificate of deposit balances were partially offset by lower consumer and municipal certificate of deposit balances. Non-interest checking deposit balances averaged $5.4 billion, and were unchanged from the prior quarter but increased 7% from the year-ago period driven by higher business deposit balances.
Net Interest Income
Second quarter 2015 GAAP net interest income of $263 million was consistent with the prior quarter as the benefit of a 2% annualized increase in average earning assets was offset by a 5 basis point decline in the net interest margin. The decrease in net interest margin reflects continued compression of earning asset yields in the current low interest rate and competitive pricing environment as well as the impact of deposit pricing promotional campaigns.
Yields on loans decreased 2 basis points to 3.73%, driven primarily by elevated refinance activity in the company's residential real estate portfolio. Yields on investment securities declined 3 basis points due primarily to higher premium amortization on the residential mortgage-backed securities portfolio as well as purchases of new securities at yields lower than the overall portfolio.
The average cost of interest-bearing deposits increased 1 basis point to 0.29% from the prior quarter, reflecting a modest shift in deposit mix and the impact of promotional pricing on money market deposit accounts.
Credit Quality
At June 30, 2015, the allowance for loan losses was $236 million, compared to $231 million at March 31, 2015. Nonperforming assets decreased to $225 million and comprised 0.58% of total assets, compared to $247 million or 0.63% of total assets at March 31, 2015. Total criticized loans decreased 5% from the prior quarter.
Information for both the originated and acquired portfolios follows.
| Q2 2015 | Q1 2015 | |||||||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total | ||||
| Provision for loan losses* | $ 19.5 | $ 0.9 | $ 20.5 | $ 11.1 | $ 3.0 | $ 14.2 | ||||
| Net charge-offs | 15.5 | 0.5 | 16.0 | 15.0 | 2.3 | 17.3 | ||||
| NCOs/ Avg Loans | 0.31 % | 0.06 % | 0.28 % | 0.31 % | 0.25 % | 0.30 % | ||||
| Total loans** | $ 19,930 | $ 3,438 | $ 23,368 | $ 19,529 | $ 3,590 | $ 23,118 | ||||
| (*) Excludes provision for unfunded commitments of $0.3 million and $(1.4) million in 2Q15 and 1Q15, respectively | ||||||||||
| (**) Acquired loans net of associated credit discount; see accompanying tables for further information | ||||||||||
Originated loans
The provision for loan losses on originated loans totaled $20 million, compared to $11 million in the first quarter of 2015. This increase was in large part driven by provisioning associated with the $0.4 billion increase in period-end originated loans from the prior quarter. Net charge-offs in the second quarter equaled $15 million or 31 basis points of average originated loans, and were consistent with the prior quarter.
At June 30, 2015, nonperforming originated loans decreased $17 million or 8% from March 31, 2015, and comprised 0.91% of originated loans, compared to 1.01% at March 31, 2015. This decrease was driven by principal pay-downs as well as loan charge-offs.
At June 30, 2015, the allowance for loan losses on originated loans totaled $228 million or 1.15% of such loans, compared to $224 million or 1.15% of such loans at March 31, 2015.
Acquired loans
The provision for losses on acquired loans totaled $0.9 million, compared to $3 million in the prior quarter. Net charge-offs on the acquired portfolio totaled $0.5 million during the quarter, compared to $2.3 million of net charge-offs in the prior quarter. At June 30, 2015, the allowance for loan losses on acquired loans totaled $7 million, relatively unchanged from March 31, 2015. Acquired nonperforming loans totaled $27 million, a 12% decrease from the prior quarter. Acquired classified and criticized loans decreased 8% and 13%, respectively from March 31, 2015. At June 30, 2015, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $79 million.
Noninterest Income
Excluding the impact of $3 million in amortization of tax credit investments, second quarter 2015 noninterest income of $90 million increased 9% or $7 million compared to the prior quarter. This sequential increase was across most noninterest income categories reflecting strong customer activity as well as typical seasonal patterns.
Deposit service charges increased 9% from the prior quarter reflecting typical seasonal trends. Insurance commissions also increased $1 million or 9% driven primarily by higher revenues from the health and welfare business line as well as contingent commissions. Merchant and card fees increased $1 million or 12% and was driven by higher debit and credit card purchase volumes. Wealth management services increased $1 million or 7%, reflecting strong annuity sales and 1% increase in assets under management during the quarter. Capital markets income, which primarily includes income from derivatives and syndications, increased $1 million. Mortgage banking increased $1 million or 18%, driven by an increase in gain-on-sale margins as well as a 5% increase in new locked volumes.
Offsetting these benefits, other noninterest income declined $3 million from the prior quarter reflecting amortization related to the company's tax credit investments.
Noninterest Expense
Noninterest expenses totaled $248 million in the second quarter of 2015, or $13 million lower than the first quarter of 2015 which included $18 million in restructuring charges primarily related to severance and other expenses from previously announced branch consolidations and the completion of the company's Organizational Simplification initiative. Excluding the impact of restructuring expenses, the quarter-over-quarter increase was primarily driven by variable expenses tied to business volume and revenue growth as well as higher professional services fees.
Salaries and benefits expenses increased $2 million or 1% compared to the prior quarter, and was driven primarily by higher commissions expense tied to revenue growth. Occupancy and equipment expense decreased $1 million or 5%, due primarily to lower building maintenance expenses. Technology and communications expenses increased $1 million or 4%, due primarily to higher debit transaction volumes. Professional services fees increased $3 million in large part due to vendor and other costs associated with the company's strategic initiatives and other corporate activities in the second quarter of 2015.
In the second quarter of 2015, the operating efficiency ratio was 70.9%, consistent with 70.5% in the prior quarter.
Effective Tax Rate
The effective tax rate, on a GAAP basis, was 25%, compared to 28% in the prior quarter, primarily reflecting the benefits related to the company's tax credit investments.
Capital
Beginning in the first quarter of 2015, all regulatory capital ratios and amounts were calculated under the Basel III standardized transitional approach. At June 30, 2015, the company's estimated consolidated Total Risk Based capital and Common Equity Tier 1 capital ratios were 12.0% and 8.5% respectively, unchanged from March 31, 2015, 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 390 branches, $39 billion in assets, $28 billion in deposits, and approximately 5,400 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 8:30 a.m. Eastern Time on Friday, July 24, 2015 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-800-732-6870 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 September 1, 2015 by dialing 1-800-633-8284, passcode: 21771915.
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) execution risk associated with the announced investment plan; (7) regulatory approval to continue payment of common and preferred dividends.
| First Niagara Financial Group, Inc. | ||||||||
| Income Statement Highlights -- Reported Basis | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2015 | 2014 | Six months ended | ||||||
|
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
June 30, 2015 |
June 30, 2014 |
|
| Interest income: | ||||||||
| Loans and leases | $ 211,899 | $ 210,371 | $ 214,609 | $ 212,452 | $ 210,218 | $ 209,644 | $ 422,270 | $ 419,862 |
| Investment securities and other | 86,356 | 86,280 | 86,919 | 91,668 | 91,566 | 90,421 | 172,636 | 181,987 |
| Total interest income | 298,255 | 296,651 | 301,528 | 304,120 | 301,784 | 300,065 | 594,906 | 601,849 |
| Interest expense: | ||||||||
| Deposits | 16,568 | 15,344 | 14,295 | 13,590 | 13,183 | 12,236 | 31,912 | 25,419 |
| Borrowings | 18,577 | 18,363 | 17,450 | 17,251 | 16,789 | 17,082 | 36,940 | 33,871 |
| Total interest expense | 35,145 | 33,707 | 31,745 | 30,841 | 29,972 | 29,318 | 68,852 | 59,290 |
| Net interest income | 263,110 | 262,944 | 269,783 | 273,279 | 271,812 | 270,747 | 526,054 | 542,559 |
| Provision for credit losses | 20,756 | 12,765 | 35,706 | 16,700 | 19,800 | 23,700 | 33,521 | 43,500 |
| Net interest income after provision | 242,354 | 250,179 | 234,077 | 256,579 | 252,012 | 247,047 | 492,533 | 499,059 |
| Noninterest income: | ||||||||
| Deposit service charges | 22,208 | 20,389 | 22,611 | 20,373 | 23,733 | 23,356 | 42,597 | 47,089 |
| Insurance commissions | 17,060 | 15,714 | 14,764 | 18,352 | 17,343 | 15,691 | 32,774 | 33,034 |
| Merchant and card fees | 13,317 | 11,907 | 13,043 | 12,991 | 12,834 | 11,504 | 25,224 | 24,338 |
| Wealth management services | 15,718 | 14,650 | 14,404 | 15,367 | 15,949 | 15,587 | 30,368 | 31,536 |
| Mortgage banking | 5,783 | 4,887 | 4,600 | 4,358 | 5,241 | 3,396 | 10,670 | 8,637 |
| Capital markets income | 5,284 | 4,152 | 8,312 | 3,509 | 2,917 | 3,623 | 9,436 | 6,540 |
| Lending and leasing | 3,998 | 4,353 | 4,567 | 3,914 | 4,680 | 4,732 | 8,351 | 9,412 |
| Bank owned life insurance | 3,160 | 3,592 | 3,187 | 3,080 | 3,145 | 5,405 | 6,752 | 8,550 |
| Other income | 79 | 2,600 | (8,311) | (6,552) | (4,985) | (6,570) | 2,679 | (11,555) |
| Total noninterest income | 86,607 | 82,244 | 77,177 | 75,392 | 80,857 | 76,724 | 168,851 | 157,581 |
| Noninterest expense: | ||||||||
| Salaries and employee benefits | 113,561 | 111,973 | 110,985 | 116,245 | 117,728 | 117,940 | 225,534 | 235,668 |
| Occupancy and equipment | 26,021 | 27,332 | 28,379 | 27,450 | 28,553 | 27,876 | 53,353 | 56,429 |
| Technology and communications | 36,486 | 35,061 | 33,940 | 31,465 | 31,140 | 30,345 | 71,547 | 61,485 |
| Marketing and advertising | 10,297 | 9,863 | 11,584 | 7,746 | 8,439 | 7,364 | 20,160 | 15,803 |
| Professional services | 16,321 | 13,070 | 16,644 | 13,988 | 13,029 | 11,923 | 29,391 | 24,952 |
| Amortization of intangibles | 5,092 | 6,205 | 6,432 | 6,521 | 6,790 | 7,509 | 11,297 | 14,299 |
| Federal deposit insurance premiums | 11,750 | 11,158 | 11,911 | 9,579 | 9,756 | 8,855 | 22,908 | 18,611 |
| Restructuring charges | -- | 17,517 | 9,066 | 2,364 | -- | 10,356 | 17,517 | 10,356 |
| Goodwill impairment | -- | -- | -- | 1,100,000 | -- | -- | -- | -- |
| Deposit account remediation | -- | -- | (23,000) | 45,000 | -- | -- | -- | -- |
| Other expense | 28,371 | 28,859 | 28,371 | 36,467 | 28,680 | 26,568 | 57,230 | 55,248 |
| Total noninterest expense | 247,899 | 261,038 | 234,312 | 1,396,825 | 244,115 | 248,736 | 508,937 | 492,851 |
| Income (loss) before income tax | 81,062 | 71,385 | 76,942 | (1,064,854) | 88,754 | 75,035 | 152,447 | 163,789 |
| Income tax expense (benefit) | 20,052 | 20,000 | 7,875 | (144,808) | 12,879 | 14,825 | 40,052 | 27,704 |
| Net income (loss) | 61,010 | 51,385 | 69,067 | (920,046) | 75,875 | 60,210 | 112,395 | 136,085 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 15,094 | 15,094 |
| Net income (loss) available to common stockholders | $ 53,463 | $ 43,838 | $ 61,520 | $ (927,593) | $ 68,328 | $ 52,663 | $ 97,301 | $ 120,991 |
| Financial Ratios: | ||||||||
| Earnings (loss) per basic share | $ 0.15 | $ 0.12 | $ 0.17 | $ (2.65) | $ 0.19 | $ 0.15 | $ 0.27 | $ 0.34 |
| Earnings (loss) per diluted share | $ 0.15 | $ 0.12 | $ 0.17 | $ (2.65) | $ 0.19 | 0.15 | $ 0.27 | 0.34 |
| Weighted average shares outstanding - basic(1) | 351,126 | 350,741 | 350,444 | 350,381 | 350,229 | 349,906 | 350,935 | 350,068 |
| Weighted average shares outstanding - diluted(1) | 352,791 | 352,621 | 352,152 | 350,381 | 351,541 | 351,408 | 352,683 | 351,448 |
| Net revenue(2) | $ 349,717 | $ 345,188 | $ 346,960 | $ 348,671 | $ 352,669 | $ 347,471 | $ 694,905 | $ 700,140 |
| Noninterest income as a percentage of net revenue(2) | 24.76% | 23.83% | 22.24% | 21.62% | 22.93% | 22.08% | 24.30% | 22.51% |
| Pre-tax, pre-provision income (loss)(3) | $ 101,818 | $ 84,150 | $ 112,648 | $ (1,048,154) | $ 108,554 | $ 98,735 | $ 185,968 | $ 207,289 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.29 | $ 0.24 | $ 0.32 | $ (2.99) | $ 0.31 | $ 0.28 | $ 0.53 | $ 0.59 |
| Pre-tax, pre-provision return on average assets(3) | 1.05% | 0.88% | 1.17 % | (10.8)% | 1.14% | 1.06% | 0.97 % | 1.10% |
| Net interest margin(4) | 3.02% | 3.07% | 3.11% | 3.21% | 3.26% | 3.33% | 3.04% | 3.30% |
| Interest yield on average loans(4) | 3.73% | 3.75% | 3.78% | 3.80% | 3.89% | 3.98% | 3.74% | 3.94% |
| Rate paid on interest-bearing liabilities | 0.49% | 0.48% | 0.45% | 0.44% | 0.44% | 0.44% | 0.49% | 0.44% |
| Efficiency ratio | 70.9% | 75.6% | 67.5% | 400.6% | 69.2% | 71.6% | 73.2% | 70.4% |
| Expenses as a percentage of average loans and deposits | 1.93% | 2.05% | 1.85% | 11.19% | 1.97% | 2.06% | 2.01% | 2.03% |
| Effective tax rate (benefit) | 24.7% | 28.0% | 10.2 % | (13.6)% | 14.5% | 19.8% | 26.3 % | 16.9% |
| Return on average assets(5) | 0.63 % | 0.54 % | 0.72 % | (9.46)% | 0.80 % | 0.65% | 0.58 % | 0.72% |
| Return on average equity(5) | 5.90 % | 5.05 % | 6.62 % | (71.57)% | 6.01 % | 4.85% | 5.48 % | 5.43% |
| Return on average tangible equity(3)(5) | 8.94 % | 7.68 % | 10.07 % | (141.16)% | 12.01 % | 9.79% | 8.32 % | 10.91% |
| Return on average common equity | 5.63 % | 4.69 % | 6.42 % | (77.27)% | 5.80 % | 4.55% | 5.17 % | 5.18% |
| Return on average tangible common equity(3) | 8.94 % | 7.48 % | 10.24 % | (163.71)% | 12.48 % | 9.90% | 8.22 % | 11.21% |
| (1) Share count excludes unallocated ESOP shares prior to January 1, 2015 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 the 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) | ||||||
| 2015 | 2014 | |||||
| June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | |
| Cash and cash equivalents | $ 527,323 | $ 387,676 | $ 420,033 | $ 451,313 | $ 557,423 | $ 503,070 |
| Investment securities: | ||||||
| Available for sale | 5,750,860 | 5,911,419 | 5,915,338 | 6,198,140 | 6,683,914 | 7,060,237 |
| Held to maturity | 6,169,838 | 6,214,561 | 5,941,621 | 5,351,977 | 4,834,279 | 4,467,213 |
| FHLB and FRB common stock | 379,135 | 375,090 | 411,857 | 389,870 | 434,322 | 437,550 |
| Total investment securities | 12,299,833 | 12,501,070 | 12,268,816 | 11,939,987 | 11,952,515 | 11,965,000 |
| Loans held for sale | 59,816 | 48,755 | 39,825 | 31,245 | 45,446 | 34,465 |
| Loans and leases: | ||||||
| Commercial: | ||||||
| Real estate | 8,312,332 | 8,287,108 | 8,204,027 | 8,013,622 | 7,940,977 | 7,867,724 |
| Business | 5,923,524 | 5,790,980 | 5,775,413 | 5,836,235 | 5,741,684 | 5,470,177 |
| Total commercial loans | 14,235,856 | 14,078,088 | 13,979,440 | 13,849,857 | 13,682,661 | 13,337,901 |
| Consumer: | ||||||
| Residential real estate | 3,329,799 | 3,330,216 | 3,353,081 | 3,360,805 | 3,358,347 | 3,389,071 |
| Home equity | 2,984,872 | 2,943,844 | 2,936,123 | 2,886,655 | 2,835,421 | 2,767,024 |
| Indirect auto | 2,256,004 | 2,200,913 | 2,166,320 | 2,073,843 | 1,871,688 | 1,655,489 |
| Credit cards | 304,682 | 301,228 | 324,113 | 312,549 | 311,640 | 305,663 |
| Other consumer | 257,204 | 263,985 | 278,305 | 286,140 | 286,062 | 295,692 |
| Total consumer loans | 9,132,561 | 9,040,186 | 9,057,942 | 8,919,992 | 8,663,158 | 8,412,939 |
| Total loans and leases | 23,368,417 | 23,118,274 | 23,037,382 | 22,769,849 | 22,345,819 | 21,750,840 |
| Allowance for loan losses | 235,600 | 231,138 | 234,251 | 222,753 | 219,426 | 213,937 |
| Loans and leases, net | 23,132,817 | 22,887,136 | 22,803,131 | 22,547,096 | 22,126,393 | 21,536,903 |
| Bank owned life insurance | 431,335 | 428,454 | 426,192 | 423,376 | 420,230 | 417,031 |
| Goodwill and other intangibles | 1,404,201 | 1,410,800 | 1,417,005 | 1,423,437 | 2,528,481 | 2,535,271 |
| Other assets | 1,208,218 | 1,243,588 | 1,176,036 | 1,155,588 | 997,120 | 999,469 |
| Total assets | $ 39,063,543 | $ 38,907,479 | $ 38,551,038 | $ 37,972,042 | $ 38,627,608 | $ 37,991,209 |
| Deposits: | ||||||
| Savings accounts | $ 3,483,777 | $ 3,488,441 | $ 3,451,616 | $ 3,458,661 | $ 3,626,750 | $ 3,664,765 |
| Interest-bearing checking | 5,088,856 | 5,158,264 | 5,084,456 | 5,055,458 | 4,743,684 | 4,929,302 |
| Money market deposits | 10,303,873 | 10,368,358 | 9,962,220 | 9,894,346 | 9,834,344 | 10,106,569 |
| Noninterest-bearing deposits | 5,549,944 | 5,500,484 | 5,407,382 | 5,308,736 | 5,284,037 | 5,101,681 |
| Certificates of deposit | 4,020,367 | 3,734,226 | 3,875,563 | 3,952,879 | 3,955,754 | 3,795,438 |
| Total deposits | 28,446,817 | 28,249,773 | 27,781,237 | 27,670,080 | 27,444,569 | 27,597,755 |
| Short-term borrowings | 4,275,886 | 4,739,264 | 5,471,974 | 4,928,762 | 4,890,343 | 4,137,496 |
| Long-term borrowings | 1,683,476 | 1,233,550 | 733,620 | 733,684 | 733,337 | 733,384 |
| Other liabilities | 536,239 | 559,646 | 471,449 | 543,813 | 477,685 | 495,589 |
| Total liabilities | 34,942,418 | 34,782,233 | 34,458,280 | 33,876,339 | 33,545,934 | 32,964,224 |
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 |
| Common stockholders' equity | 3,783,123 | 3,787,244 | 3,754,756 | 3,757,701 | 4,743,672 | 4,688,983 |
| Total stockholders' equity | 4,121,125 | 4,125,246 | 4,092,758 | 4,095,703 | 5,081,674 | 5,026,985 |
| Total liabilities and stockholders' equity | $ 39,063,543 | $ 38,907,479 | $ 38,551,038 | $ 37,972,042 | $ 38,627,608 | $ 37,991,209 |
| Selected balance sheet information: | ||||||
| Total interest-earning assets(1) | $ 35,813,498 | $ 35,594,208 | $ 35,310,447 | $ 34,720,650 | $ 34,305,451 | $ 33,684,828 |
| Total interest-bearing liabilities | 28,856,235 | 28,722,103 | 28,579,449 | 28,023,790 | 27,784,211 | 27,366,955 |
| Net interest-earning assets | $ 6,957,263 | $ 6,872,105 | $ 6,730,998 | $ 6,696,860 | $ 6,521,240 | $ 6,317,873 |
| Tangible common equity(1)(2) | $ 2,378,922 | $ 2,376,444 | $ 2,337,751 | $ 2,334,263 | $ 2,215,191 | $ 2,153,712 |
| Unrealized gain on available for sale securities, net of tax(3) | 37,464 | 68,194 | 52,244 | 55,052 | 86,244 | 72,579 |
| Total core deposits | $ 24,426,450 | $ 24,515,547 | $ 23,905,674 | $ 23,717,201 | $ 23,488,815 | $ 23,802,317 |
| Originated loans(4) | $ 19,929,719 | $ 19,528,609 | $ 19,295,553 | $ 18,841,896 | $ 18,196,302 | $ 17,388,542 |
| Acquired loans(5) | 3,517,525 | 3,681,354 | 3,834,931 | 4,028,091 | 4,254,750 | 4,475,593 |
| Credit related discount on acquired loans(6) | (78,827) | (91,689) | (93,102) | (100,138) | (105,233) | (113,295) |
| Total Loans | $ 23,368,417 | $ 23,118,274 | $ 23,037,382 | $ 22,769,849 | $ 22,345,819 | $ 21,750,840 |
| (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 the 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) Carrying value of acquired loans plus the principal not expected to be collected. | ||||||
| (6) 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, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||
|
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) |
|
| Interest-earning assets: | |||||||||||||||
| Loans and leases(2) | |||||||||||||||
| Commercial: | |||||||||||||||
| Real estate | $ 8,257 | $ 75 | 3.61% | $ 8,263 | $ 74 | 3.60% | $ 7,899 | $ 75 | 3.77% | $ 8,260 | $ 150 | 3.60% | $ 7,850 | $ 151 | 3.83% |
| Business | 5,830 | 52 | 3.48 | 5,797 | 50 | 3.43 | 5,564 | 50 | 3.56 | 5,813 | 101 | 3.46 | 5,489 | 98 | 3.56 |
| Total commercial loans | 14,087 | 127 | 3.56 | 14,060 | 124 | 3.53 | 13,463 | 125 | 3.68 | 14,073 | 251 | 3.54 | 13,339 | 249 | 3.72 |
| Consumer: | |||||||||||||||
| Residential real estate | 3,326 | 31 | 3.68 | 3,338 | 32 | 3.78 | 3,361 | 32 | 3.80 | 3,332 | 62 | 3.73 | 3,389 | 65 | 3.84 |
| Home equity | 2,963 | 28 | 3.86 | 2,939 | 28 | 3.91 | 2,800 | 28 | 4.06 | 2,951 | 57 | 3.89 | 2,778 | 56 | 4.09 |
| Indirect auto | 2,238 | 15 | 2.74 | 2,187 | 15 | 2.79 | 1,750 | 12 | 2.85 | 2,213 | 30 | 2.77 | 1,682 | 24 | 2.89 |
| Credit cards | 304 | 9 | 11.40 | 311 | 9 | 11.74 | 308 | 9 | 11.44 | 307 | 18 | 11.57 | 311 | 18 | 11.54 |
| Other consumer | 260 | 5 | 8.49 | 275 | 6 | 8.49 | 291 | 6 | 8.53 | 267 | 11 | 8.49 | 295 | 13 | 8.59 |
| Total consumer loans | 9,091 | 88 | 3.91 | 9,050 | 90 | 4.02 | 8,510 | 88 | 4.13 | 9,070 | 178 | 3.96 | 8,455 | 176 | 4.20 |
| Total loans and leases | 23,178 | 215 | 3.73 | 23,110 | 214 | 3.75 | 21,973 | 213 | 3.89 | 23,143 | 429 | 3.74 | 21,794 | 425 | 3.94 |
| Residential MBS | 7,381 | 43 | 2.30 | 7,180 | 45 | 2.49 | 6,097 | 41 | 2.67 | 7,281 | 87 | 2.39 | 5,895 | 80 | 2.71 |
| Commercial MBS | 1,311 | 11 | 3.42 | 1,404 | 11 | 3.26 | 1,608 | 14 | 3.45 | 1,357 | 23 | 3.34 | 1,652 | 28 | 3.36 |
| Other investment securities (3) | 3,604 | 34 | 3.75 | 3,554 | 31 | 3.52 | 4,159 | 38 | 3.69 | 3,580 | 65 | 3.63 | 4,272 | 77 | 3.62 |
| Total securities, at amortized cost | 12,296 | 88 | 2.85 | 12,138 | 87 | 2.88 | 11,864 | 93 | 3.13 | 12,218 | 175 | 2.86 | 11,819 | 185 | 3.13 |
| Money market and other investments | 100 | -- | 1.56 | 158 | -- | 1.01 | 165 | 1 | 1.27 | 129 | 1 | 1.22 | 145 | 1 | 1.43 |
| Total interest-earning assets | 35,574 | $ 303 | 3.42% | 35,406 | $ 302 | 3.45% | 34,002 | $ 307 | 3.62% | 35,490 | $ 605 | 3.44% | 33,758 | $ 611 | 3.65% |
| Goodwill and other intangibles | 1,408 | 1,414 | 2,532 | 1,411 | 2,535 | ||||||||||
| Other noninterest-earning assets | 1,931 | 1,887 | 1,679 | 1,909 | 1,689 | ||||||||||
| Total assets | $ 38,913 | $ 38,707 | $ 38,213 | $ 38,810 | $ 37,982 | ||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits | |||||||||||||||
| Savings accounts | $ 3,494 | $ 1 | 0.09% | $ 3,432 | $ -- | 0.08% | $ 3,654 | $ 1 | 0.09% | $ 3,463 | $ 1 | 0.09% | $ 3,643 | $ 2 | 0.08% |
| Interest-bearing checking | 5,131 | -- | 0.03 | 5,001 | -- | 0.03 | 4,820 | -- | 0.03 | 5,067 | 1 | 0.03 | 4,778 | 1 | 0.03 |
| Money market deposits | 10,251 | 8 | 0.29 | 10,132 | 7 | 0.26 | 9,971 | 5 | 0.22 | 10,192 | 14 | 0.27 | 9,929 | 10 | 0.21 |
| Certificates of deposit | 3,917 | 8 | 0.82 | 3,778 | 8 | 0.84 | 3,971 | 7 | 0.66 | 3,848 | 16 | 0.83 | 3,810 | 13 | 0.68 |
| Total interest bearing deposits | 22,793 | 17 | 0.29% | 22,343 | 15 | 0.28% | 22,416 | 13 | 0.24% | 22,570 | 32 | 0.29% | 22,160 | 25 | 0.23% |
| Borrowings | |||||||||||||||
| Short-term borrowings | 4,522 | 5 | 0.48% | 5,125 | 6 | 0.46% | 4,410 | 5 | 0.43% | 4,821 | 11 | 0.47% | 4,525 | 10 | 0.43% |
| Long-term borrowings | 1,359 | 13 | 3.90 | 1,027 | 13 | 4.98 | 733 | 12 | 6.62 | 1,194 | 26 | 4.36 | 733 | 24 | 6.65 |
| Total borrowings | 5,881 | 18 | 1.27 | 6,152 | 19 | 1.21 | 5,143 | 17 | 1.31 | 6,015 | 37 | 1.24 | 5,258 | 34 | 1.30 |
| Total interest-bearing liabilities | 28,674 | $ 35 | 0.49% | 28,495 | $ 34 | 0.48% | 27,559 | $ 30 | 0.44% | 28,585 | $ 69 | 0.49% | 27,418 | $ 59 | 0.44% |
| Noninterest-bearing deposits | 5,427 | 5,430 | 5,077 | 5,428 | 4,971 | ||||||||||
| Other noninterest-bearing liabilities | 667 | 654 | 511 | 660 | 543 | ||||||||||
| Total liabilities | 34,768 | 34,579 | 33,147 | 34,673 | 32,932 | ||||||||||
| Total stockholders' equity | 4,145 | 4,128 | 5,066 | 4,137 | 5,050 | ||||||||||
| Total liabilities and stockholders' equity | $ 38,913 | $ 38,707 | $ 38,213 | $ 38,810 | $ 37,982 | ||||||||||
| Net interest income (FTE) | $ 268 | $ 268 | $ 277 | $ 536 | $ 552 | ||||||||||
| Taxable Equivalent Adjustment(1) | 5 | 5 | 5 | 10 | 9 | ||||||||||
| Total core deposits | $ 24,303 | $ 9 | 0.14% | $ 23,995 | $ 7 | 0.13% | $ 23,522 | $ 6 | 0.11% | $ 24,150 | $ 16 | 0.13% | $ 23,321 | $ 13 | 0.11% |
| Total transactional deposits | 10,558 | -- | 0.01% | 10,431 | -- | 0.01% | 9,897 | -- | 0.01% | 10,495 | 1 | 0.01% | 9,749 | 1 | 0.02% |
| Total deposits | 28,220 | 17 | 0.24% | 27,773 | 15 | 0.22% | 27,493 | 13 | 0.19% | 27,998 | 32 | 0.23% | 27,131 | 25 | 0.19% |
| Tax equivalent net interest rate spread | 2.93% | 2.97% | 3.18% | 2.95% | 3.21% | ||||||||||
| Tax equivalent net interest rate margin | 3.02% | 3.07% | 3.26% | 3.04% | 3.30% | ||||||||||
| (1) Tax equivalent interest income is calculated using a 35% tax rate. | |||||||||||||||
| (2) Includes nonaccrual loans. | |||||||||||||||
| (3) 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) | ||||||||
| 2015 | 2014 | Six months ended | ||||||
|
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
June 30, 2015 |
June 30, 2014 |
|
| Beginning balance | $ 231,138 | $ 234,251 | $ 222,753 | $ 219,426 | $ 213,937 | $ 209,274 | $ 234,251 | $ 209,274 |
| Net loan (charge-offs) recoveries: | ||||||||
| Commercial real estate | $ (5,525) | $ (5,825) | $ (2,008) | $ (2,259) | $ (4,885) | $ 905 | $ (11,350) | $ (3,980) |
| Commercial business | (3,513) | (4,178) | (12,650) | (3,148) | (1,795) | (9,138) | (7,691) | (10,933) |
| Residential real estate | (197) | (266) | (476) | (102) | (352) | (174) | (463) | (526) |
| Home equity | (1,367) | (1,526) | (1,406) | (1,131) | (1,294) | (3,045) | (2,893) | (4,339) |
| Indirect auto | (1,342) | (1,226) | (2,241) | (1,621) | (1,455) | (2,086) | (2,568) | (3,541) |
| Credit cards | (2,522) | (2,450) | (2,464) | (2,726) | (2,930) | (3,044) | (4,972) | (5,974) |
| Other consumer | (1,528) | (1,807) | (1,457) | (1,986) | (1,200) | (2,055) | (3,335) | (3,255) |
| Total net loan charge-offs | $ (15,994) | $ (17,278) | $ (22,702) | $ (12,973) | $ (13,911) | $ (18,637) | $ (33,272) | $ (32,548) |
| Provision for loan losses | 20,456 | 14,165 | 34,200 | 16,300 | 19,400 | 23,300 | 34,621 | 42,700 |
| Ending balance | $ 235,600 | $ 231,138 | $ 234,251 | $ 222,753 | $ 219,426 | $ 213,937 | $ 235,600 | $ 219,426 |
| Supplemental information | ||||||||
| Allowance to loans | 1.01% | 1.00% | 1.02% | 0.98% | 0.98 % | 0.98 % | 1.01% | 0.98% |
| Allowance for originated loans to originated loans(1) | 1.15% | 1.15% | 1.18% | 1.16% | 1.18 % | 1.21 % | 1.15% | 1.18% |
| Net charge-offs (recoveries) to average loans (annualized) | ||||||||
| Commercial real estate | 0.27 % | 0.29 % | 0.10 % | 0.11% | 0.25 % | (0.05)% | 0.27 % | 0.10% |
| Commercial business | 0.24 % | 0.29 % | 0.87 % | 0.22% | 0.13 % | 0.68 % | 0.26 % | 0.40% |
| Total commercial loans | 0.26 % | 0.28 % | 0.42 % | 0.16% | 0.20 % | 0.25 % | 0.27 % | 0.22% |
| Residential real estate | 0.02 % | 0.03 % | 0.06 % | 0.01% | 0.04 % | 0.02 % | 0.03 % | 0.03% |
| Home equity | 0.18 % | 0.21 % | 0.19 % | 0.16% | 0.18 % | 0.44 % | 0.20 % | 0.31% |
| Indirect auto | 0.24 % | 0.22 % | 0.42 % | 0.33% | 0.33 % | 0.52 % | 0.23 % | 0.42% |
| Credit cards | 3.32 % | 3.16 % | 3.13 % | 3.49% | 3.80 % | 3.88 % | 3.24 % | 3.84% |
| Other consumer | 2.35 % | 2.63 % | 2.06 % | 2.77% | 1.65 % | 2.74 % | 2.49 % | 2.20% |
| Total consumer loans | 0.31 % | 0.33 % | 0.36 % | 0.35% | 0.34 % | 0.50 % | 0.31 % | 0.42% |
| Total loans | 0.28 % | 0.30 % | 0.40 % | 0.23% | 0.25 % | 0.34 % | 0.29 % | 0.30% |
| Net charge-offs (recoveries) of originated loans to average originated loans (annualized)(1) | ||||||||
| Commercial real estate | 0.31 % | 0.24 % | 0.06 % | 0.13% | 0.29 % | (0.11)% | 0.28 % | 0.09% |
| Commercial business | 0.25 % | 0.31 % | 0.93 % | 0.24% | 0.14 % | 0.73 % | 0.28 % | 0.43% |
| Total commercial loans | 0.28 % | 0.27 % | 0.44 % | 0.18% | 0.22 % | 0.26 % | 0.28 % | 0.24% |
| Residential real estate | 0.04 % | 0.05 % | 0.09 % | 0.02% | 0.07 % | 0.04 % | 0.04 % | 0.05% |
| Home equity | 0.17 % | 0.16 % | 0.15 % | 0.17% | 0.16 % | 0.21 % | 0.16 % | 0.19% |
| Indirect auto | 0.24 % | 0.22 % | 0.42 % | 0.33% | 0.33 % | 0.52 % | 0.23 % | 0.42% |
| Credit cards | 3.32 % | 3.16 % | 3.13 % | 3.49% | 3.80 % | 3.88 % | 3.24 % | 3.84% |
| Other consumer | 2.35 % | 2.63 % | 2.06 % | 2.77% | 1.65 % | 2.74 % | 2.49 % | 2.20% |
| Total consumer loans | 0.37 % | 0.38 % | 0.44 % | 0.45% | 0.45 % | 0.57 % | 0.38 % | 0.51% |
| Total loans | 0.31 % | 0.31 % | 0.44 % | 0.27% | 0.30 % | 0.36 % | 0.31 % | 0.33% |
| Nonperforming loans: | ||||||||
| Originated(1): | ||||||||
| Commercial real estate | $ 60,021 | $ 65,655 | $ 53,164 | $ 57,340 | $ 55,945 | $ 41,296 | $ 60,021 | $ 55,945 |
| Commercial business | 42,979 | 54,506 | 45,201 | 36,939 | 32,861 | 35,335 | 42,979 | 32,861 |
| Residential real estate | 32,877 | 32,791 | 33,652 | 36,113 | 33,870 | 32,736 | 32,877 | 33,870 |
| Home equity | 27,092 | 26,163 | 23,749 | 23,392 | 19,429 | 19,516 | 27,092 | 19,429 |
| Indirect auto | 13,066 | 13,399 | 12,616 | 11,890 | 9,821 | 7,943 | 13,066 | 9,821 |
| Other consumer | 4,917 | 5,065 | 5,140 | 5,134 | 5,037 | 5,216 | 4,917 | 5,037 |
| Total originated nonperforming loans | 180,952 | 197,579 | 173,522 | 170,808 | 156,963 | 142,042 | 180,952 | 156,963 |
| Total acquired nonperforming loans(2) | 26,553 | 30,236 | 30,223 | 28,611 | 32,488 | 30,617 | 26,553 | 32,488 |
| Total nonperforming loans | 207,505 | 227,815 | 203,745 | 199,419 | 189,451 | 172,659 | 207,505 | 189,451 |
| Real estate owned | 17,397 | 19,128 | 20,541 | 20,261 | 24,270 | 25,466 | 17,397 | 24,270 |
| Total nonperforming assets(3) | $ 224,902 | $ 246,943 | $ 224,286 | $ 219,680 | $ 213,721 | $ 198,125 | $ 224,902 | $ 213,721 |
| Accruing troubled debt restructurings (TDR) | $ 64,643 | $ 64,401 | $ 67,102 | $ 69,199 | $ 80,214 | $ 56,038 | $ 64,643 | $ 80,214 |
| Loans 90 days past due still accruing(4) | 78,279 | 87,213 | 93,903 | 108,615 | 112,718 | 119,134 | 78,279 | 112,718 |
| Total classified loans(5) | 592,148 | 615,518 | 609,316 | 649,320 | 661,699 | 667,327 | 592,148 | 661,699 |
| Total criticized loans(6) | $ 938,951 | $ 990,656 | $ 1,041,050 | $ 1,089,851 | $ 1,072,133 | $ 1,075,523 | $ 915,160 | $ 1,072,133 |
| Total nonperforming loans to loans | 0.89% | 0.99% | 0.88% | 0.88% | 0.85 % | 0.79 % | 0.89% | 0.85% |
|
Total nonperforming originated loans to originated loans(1) |
0.91% | 1.01% | 0.90% | 0.91% | 0.86 % | 0.82 % | 0.91% | 0.86% |
| Total nonperforming assets to loans and real estate owned | 0.96% | 1.07% | 0.97% | 0.96% | 0.96 % | 0.91 % | 0.96% | 0.96% |
| Total nonperforming assets to assets | 0.58% | 0.63% | 0.58% | 0.58% | 0.55 % | 0.52 % | 0.58% | 0.55% |
| Allowance to nonperforming loans | 113.5% | 101.5% | 115.0% | 111.7% | 115.8 % | 123.9 % | 113.5% | 115.8% |
| Originated loans(1) | $ 19,929,719 | $ 19,528,609 | $ 19,295,553 | $ 18,841,896 | $ 18,196,302 | $ 17,388,542 | $ 19,929,719 | $ 18,196,302 |
| Acquired loans(7) | 3,517,525 | 3,681,354 | 3,834,931 | 4,028,091 | 4,254,750 | 4,475,593 | 3,517,525 | 4,254,750 |
| Credit related discount on acquired loans(8) | (78,827) | (91,689) | (93,102) | (100,138) | (105,233) | (113,295) | (78,827) | (105,233) |
| Total Loans | $ 23,368,417 | $ 23,118,274 | $ 23,037,382 | $ 22,769,849 | $ 22,345,819 | $ 21,750,840 | $ 23,368,417 | $ 22,345,819 |
| (1) Originated loans represent total loans excluding acquired loans. | ||||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. | ||||||||
| (3) Does not include a $5.5 million nonperforming loan that was classified as held for sale at March 31, 2015, which was sold and for which we received the proceeds on April 2, 2015. | ||||||||
| (4) 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. | ||||||||
| (5) 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, 2014. | ||||||||
| (6) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss. | ||||||||
| (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 | ||||||
| (Risk weighted assets in millions; share counts in thousands) | ||||||
| 2015 | 2014 | |||||
| June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | |
| First Niagara Financial Group, Inc. capital ratios(1)(2): | ||||||
| Tier 1 risk based capital | 10.03% | 10.02% | 9.81% | 9.82% | 9.58% | 9.62% |
| Total risk based capital | 11.96% | 11.95% | 11.75% | 11.75% | 11.53% | 11.60% |
| Common equity tier 1 capital | 8.50% | 8.48% | N/A | N/A | N/A | N/A |
| Tier 1 common capital(3) | N/A | N/A | 8.20% | 8.19% | 7.93% | 7.93% |
| Leverage | 7.60% | 7.56% | 7.50% | 7.34% | 7.34% | 7.28% |
| Equity to assets | 10.55% | 10.60% | 10.62% | 10.79% | 13.16% | 13.23% |
| Tangible common equity to tangible assets(3) | 6.32% | 6.34% | 6.30% | 6.39% | 6.14% | 6.07% |
| Total risk weighted assets | $ 28,445 | $ 28,153 | $ 28,186 | $ 27,729 | $ 27,313 | $ 26,638 |
| First Niagara Bank, N.A capital ratios(1)(2): | ||||||
| Tier 1 risk based capital | 10.66% | 10.65% | 10.48% | 10.41% | 10.19% | 10.23% |
| Total risk based capital | 11.54% | 11.53% | 11.37% | 11.27% | 11.05% | 11.08% |
| Common equity tier 1 capital | 10.66% | 10.65% | N/A | N/A | N/A | N/A |
| Leverage | 8.07% | 8.03% | 8.01% | 7.78% | 7.80% | 7.74% |
| Total risk weighted assets | $ 28,359 | $ 28,068 | $ 28,146 | $ 27,686 | $ 27,272 | $ 26,595 |
| Number of branches | 394 | 394 | 411 | 411 | 411 | 411 |
| Full time equivalent employees | 5,364 | 5,322 | 5,572 | 5,768 | 5,874 | 5,750 |
| Share information and per share metrics: | ||||||
| Common shares outstanding | 354,890 | 353,717 | 353,388 | 355,423 | 355,483 | 354,127 |
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 |
| Treasury shares | 11,112 | 12,285 | 12,614 | 10,579 | 10,519 | 11,875 |
| Market price (NASDAQ: FNFG): | $ 9.44 | $ 8.84 | $ 8.43 | $ 8.33 | $ 8.74 | $ 9.45 |
| Book value per common share(4) | 10.77 | 10.80 | 10.71 | 10.72 | 13.54 | 13.40 |
| Tangible book value per common share(3)(4) | 6.77 | 6.78 | 6.67 | 6.66 | 6.32 | 6.15 |
| Price/Book | 87.65% | 81.85% | 78.71% | 77.71% | 64.55% | 70.52% |
| Price/Tangible book(1) | 139.44% | 130.38% | 126.39% | 125.08% | 138.29% | 153.66% |
| 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 | 53.33% | 66.67% | 47.06% | N/M | 42.11% | 53.33% |
| Dividend yield (annualized) | 3.40% | 3.67% | 3.77% | 3.81% | 3.67% | 3.43% |
| N/M Not meaningful. | ||||||
| (1) Represents an estimate as of June 30, 2015. All preceding quarters represent actual amounts. | ||||||
| (2) Basel III Transitional rules became effective for us on January 1, 2015. Ratios and amounts presented prior to March 31, 2015 are calculated under Basel I rules. As of March 31, 2015, the ratios presented are calculated under the Basel III Standardized Transitional Approach. Common equity tier 1 capital under Basel III replaced Tier 1 common capital under Basel I. Prior to Basel III becoming effective on January 1, 2015, tier 1 common capital under Basel I was a non-GAAP financial measure. | ||||||
| (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) Share count excludes unallocated ESOP shares prior to January 1, 2015 and unvested restricted stock shares. | ||||||
| First Niagara Financial Group, Inc. | ||||||||
| Appendix A - Non-GAAP Reconciliation | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2015 | 2014 | Six months ended | ||||||
|
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
June 30, 2015 |
June 30, 2014 |
|
| Financial ratios computed on an operating basis(1): | ||||||||
| Earnings per basic share | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.19 | $ 0.19 | $ 0.17 | $ 0.31 | $ 0.37 |
| Earnings per diluted share | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.19 | $ 0.19 | $ 0.17 | $ 0.30 | $ 0.37 |
| Weighted average shares outstanding - basic(2) | 351,126 | 350,741 | 350,444 | 350,381 | 350,229 | 349,906 | 350,935 | 350,068 |
| Weighted average shares outstanding - diluted(2) | 352,791 | 352,621 | 352,152 | 351,898 | 351,541 | 351,408 | 352,683 | 351,448 |
| Noninterest income as a percentage of net revenue(3) | 24.76% | 23.83% | 22.24% | 21.62% | 22.93% | 22.08% | 24.30% | 22.51% |
| Pre-tax, pre-provision income | 101,818 | 101,667 | 98,714 | 99,210 | 108,554 | 109,091 | 203,485 | 217,645 |
| Pre-tax, pre-provision income per diluted share | $ 0.29 | $ 0.29 | $ 0.28 | $ 0.28 | $ 0.31 | $ 0.31 | $ 0.58 | $ 0.62 |
| Pre-tax, pre-provision return on average assets | 1.05% | 1.07% | 1.02% | 1.02% | 1.14% | 1.17% | 1.06% | 1.16% |
| Net interest margin(4) | 3.02% | 3.07% | 3.11% | 3.21% | 3.26% | 3.33% | 3.04% | 3.30% |
| Interest yield on average loans(4) | 3.73% | 3.75% | 3.78% | 3.80% | 3.89% | 3.98% | 3.74% | 3.94% |
| Rate paid on interest-bearing liabilities | 0.49% | 0.48% | 0.45% | 0.44% | 0.44% | 0.44% | 0.49% | 0.44% |
| Efficiency ratio | 70.9% | 70.5% | 71.5% | 71.5% | 69.2% | 68.6% | 70.7% | 68.9% |
| Effective tax rate | 24.7% | 30.0% | 3.7% | 10.3% | 14.5% | 19.7% | 27.5% | 17.1% |
| Return on average assets | 0.63% | 0.65% | 0.63% | 0.76% | 0.80% | 0.74% | 0.64% | 0.77% |
| Return on average equity | 5.90% | 6.12% | 5.82% | 5.76% | 6.01% | 5.52% | 6.01% | 5.77% |
| Return on average tangible equity(5) | 8.94% | 9.30% | 8.85% | 11.35% | 12.01% | 11.14% | 9.12% | 11.58% |
| Return on average common equity | 5.63% | 5.85% | 5.54% | 5.54% | 5.80% | 5.27% | 5.74% | 5.54% |
| Return on average tangible common equity(6) | 8.94% | 9.34% | 8.85% | 11.73% | 12.48% | 11.47% | 9.13% | 11.98% |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | ||||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 247,899 | $ 243,521 | $ 248,246 | $ 249,461 | $ 244,115 | $ 238,380 | $ 491,420 | $ 482,495 |
| Restructuring charges | -- | 17,517 | 9,066 | 2,364 | -- | 10,356 | 17,517 | 10,356 |
| Goodwill impairment | -- | -- | -- | 1,100,000 | -- | -- | -- | -- |
| Deposit account remediation | -- | -- | (23,000) | 45,000 | -- | -- | -- | -- |
| Total reported noninterest expense (GAAP) | $ 247,899 | $ 261,038 | $ 234,312 | $ 1,396,825 | $ 244,115 | $ 248,736 | $ 508,937 | $ 492,851 |
| Reconciliation of net operating income to net income(1): | ||||||||
| Net operating income (Non-GAAP) | $ 61,010 | $ 62,246 | $ 60,697 | $ 74,009 | $ 75,875 | $ 68,555 | $ 123,256 | $ 144,430 |
| Nonoperating income and expenses, net of tax: | ||||||||
| Restructuring charges | -- | 10,861 | 6,364 | 1,555 | -- | 8,345 | 10,861 | 8,345 |
| Goodwill impairment | -- | -- | -- | 963,267 | -- | -- | -- | -- |
| Deposit account remediation | -- | -- | (14,734) | 29,233 | -- | -- | -- | -- |
| Total nonoperating expenses, net of tax | -- | 10,861 | (8,370) | 994,055 | -- | 8,345 | 10,861 | 8,345 |
| Net income (loss) (GAAP) | $ 61,010 | $ 51,385 | $ 69,067 | $ (920,046) | $ 75,875 | $ 60,210 | $ 112,395 | $ 136,085 |
| 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) |
$ 53,463 | $ 54,699 | $ 53,150 | $ 66,462 | $ 68,328 | $ 61,008 | $ 108,162 | $ 129,336 |
| Nonoperating income and expenses, net of tax: | ||||||||
| Restructuring charges | -- | 10,861 | 6,364 | 1,555 | -- | 8,345 | 10,861 | 8,345 |
| Goodwill impairment | -- | -- | -- | 963,267 | -- | -- | -- | -- |
| Deposit account remediation | -- | -- | (14,734) | 29,233 | -- | -- | -- | -- |
| Total nonoperating income and expenses, net of tax | -- | 10,861 | (8,370) | 994,055 | -- | 8,345 | 10,861 | 8,345 |
| Net income (loss) available to common stockholders (GAAP) | $ 53,463 | $ 43,838 | $ 61,520 | $ (927,593) | $ 68,328 | $ 52,663 | $ 97,301 | $ 120,991 |
| Computation of pre-tax,pre-provision income: | ||||||||
| Net interest income | $ 263,110 | $ 262,944 | $ 269,783 | $ 273,279 | $ 271,812 | $ 270,747 | $ 526,054 | $ 542,559 |
| Noninterest income | 86,607 | 82,244 | 77,177 | 75,392 | 80,857 | 76,724 | 168,851 | 157,581 |
| Noninterest expense | (247,899) | (261,038) | (234,312) | (1,396,825) | (244,115) | (248,736) | (508,937) | (492,851) |
| Pre-tax, pre-provision income (loss) (GAAP) | 101,818 | 84,150 | 112,648 | (1,048,154) | 108,554 | 98,735 | 185,968 | 207,289 |
| Add back: non-operating noninterest expenses (1) | -- | 17,517 | (13,934) | 1,147,364 | -- | 10,356 | 17,517 | 10,356 |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 101,818 | $ 101,667 | $ 98,714 | $ 99,210 | $ 108,554 | $ 109,091 | $ 203,485 | $ 217,645 |
| (1) Noninterest 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) | ||||||||
| 2015 | 2014 | Six months ended | ||||||
|
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
June 30, 2015 |
June 30, 2014 |
|
| Computation of Ending Tangible Assets: | ||||||||
| Total assets | $ 39,063,543 | $ 38,907,479 | $ 38,551,038 | $ 37,972,042 | $ 38,627,608 | $ 37,991,209 | $ 39,063,543 | $ 38,627,608 |
| Less: Goodwill and other intangibles | (1,404,201) | (1,410,800) | (1,417,005) | (1,423,437) | (2,528,481) | (2,535,271) | (1,404,201) | (2,528,481) |
| Tangible assets | $ 37,659,342 | $ 37,496,679 | $ 37,134,033 | $ 36,548,605 | $ 36,099,127 | $ 35,455,938 | $ 37,659,342 | $ 36,099,127 |
| Computation of Average Tangible Assets: | ||||||||
| Total assets | $ 38,913,219 | $ 38,706,545 | $ 38,317,930 | $ 38,591,115 | $ 38,212,597 | $ 37,378,587 | $ 38,810,454 | $ 37,981,521 |
| Less: Goodwill and other intangibles | (1,407,946) | (1,413,765) | (1,420,119) | (2,514,581) | (2,531,612) | (2,546,031) | (1,410,840) | (2,535,232) |
| Tangible assets | $ 37,505,273 | $ 37,292,780 | $ 36,897,811 | $ 36,076,534 | $ 35,680,985 | $ 34,832,556 | $ 37,399,614 | $ 35,446,289 |
| Computation of Ending Tangible Equity: | ||||||||
| Total stockholders' equity | $ 4,121,125 | $ 4,125,246 | $ 4,092,758 | $ 4,095,702 | $ 5,081,674 | $ 5,026,985 | $ 4,121,125 | $ 5,081,674 |
| Less: Goodwill and other intangibles | (1,404,201) | (1,410,800) | (1,417,005) | (1,423,437) | (2,528,481) | (2,535,271) | (1,404,201) | (2,528,481) |
| Tangible equity | $ 2,716,924 | $ 2,714,446 | $ 2,675,753 | $ 2,672,265 | $ 2,553,193 | $ 2,491,714 | $ 2,716,924 | $ 2,553,193 |
| Computation of Ending Tangible Common Equity: | ||||||||
| Total stockholders' equity | $ 4,121,125 | $ 4,125,246 | $ 4,092,758 | $ 4,095,702 | $ 5,081,674 | $ 5,026,985 | $ 4,121,125 | $ 5,081,674 |
| Less: Goodwill and other intangibles | (1,404,201) | (1,410,800) | (1,417,005) | (1,423,437) | (2,528,481) | (2,535,271) | (1,404,201) | (2,528,481) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,378,922 | $ 2,376,444 | $ 2,337,751 | $ 2,334,263 | $ 2,215,191 | $ 2,153,712 | $ 2,378,922 | $ 2,215,191 |
| Computation of Average Tangible Equity: | ||||||||
| Total stockholders' equity | $ 4,145,334 | $ 4,127,743 | $ 4,141,141 | $ 5,100,494 | $ 5,065,797 | $ 5,034,093 | $ 4,136,587 | $ 5,050,037 |
| Less: Goodwill and other intangibles | (1,407,946) | (1,413,765) | (1,420,119) | (2,514,581) | (2,531,612) | (2,538,891) | (1,410,840) | (2,535,232) |
| Tangible equity | $ 2,737,388 | $ 2,713,978 | $ 2,721,022 | $ 2,585,913 | $ 2,534,185 | $ 2,495,202 | $ 2,725,747 | $ 2,514,805 |
| Computation of Average Tangible Common Equity: | ||||||||
| Total stockholders' equity | $ 4,145,334 | $ 4,127,743 | $ 4,141,141 | $ 5,100,494 | $ 5,065,797 | $ 5,034,093 | $ 4,136,587 | $ 5,050,037 |
| Less: Goodwill and other intangibles | (1,407,946) | (1,413,765) | (1,420,119) | (2,514,581) | (2,531,612) | (2,538,891) | (1,410,840) | (2,535,232) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,399,386 | $ 2,375,976 | $ 2,383,020 | $ 2,247,911 | $ 2,196,183 | $ 2,157,200 | $ 2,387,745 | $ 2,176,803 |
| Computation of Tier 1 Common Capital: | ||||||||
| Tier 1 capital | N/A | N/A | $ 2,764,117 | $ 2,722,685 | $ 2,613,584 | $ 2,562,261 | N/A | $ 2,613,584 |
| Less: Qualifying restricted core capital elements | N/A | N/A | (113,785) | (113,556) | (113,330) | (113,107) | N/A | (113,330) |
| Less: Perpetual non-cumulative preferred stock | N/A | N/A | (338,002) | (338,002) | (338,002) | (338,002) | N/A | (338,002) |
| Tier 1 common capital (Non-GAAP) | N/A | N/A | $ 2,312,330 | $ 2,271,127 | $ 2,162,252 | $ 2,111,152 | N/A | $ 2,162,252 |