First Quarter Highlights:
-
Operating Earnings of $0.17 per diluted share, excluding restructuring charges
- GAAP Earnings of $0.15 per diluted share
-
Revenues flat YOY excluding Historic Tax Credit (HTC) asset amortization
- Net interest income increased 2% YOY driven by balance sheet growth
- Fees, excluding HTC amortization, decreased 6% YOY driven by lower mortgage banking and capital markets revenues
-
Organic loan growth continues, with average loans up 8% annualized QOQ
- Average commercial business and real estate loans increased 9% QOQ
- Momentum in average indirect auto loans continues with $160 million increase
-
Strong credit quality maintained
- NCOs decreased to 0.36% of average originated loans in the first quarter of 2014
- Nonperforming originated loans to originated loans decreased 11 basis points QOQ
-
Successful launch of remote deposit capture mobile feature in January 2014
- Transactional deposits averaged 36% of deposits, up from 32% a year-ago
BUFFALO, N.Y., April 24, 2014 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today reported first quarter results, highlighted by continued balance sheet growth, consistent credit quality and stable core net interest margin.
"As we execute on our strategic investment plan to position First Niagara to generate long-term shareholder value, our first quarter results demonstrate that the organization continues to be focused on acquiring and deepening customer relationships and delivering on our objectives," said Gary M. Crosby, President and Chief Executive Officer. "Our customers and their preferences will remain at the center of all we do as we execute on our strategic investment plan. The main focus of those investments will be dedicated to expanding and enhancing our products and services and improving our operating efficiency."
"In the first quarter of 2014, business momentum remained strong as evidenced by the 9% annualized increase in average commercial loans and 8% annualized increase in total loans," said Gregory W. Norwood, Chief Financial Officer. "Consistent with industry trends in the first quarter, fee income declined from the prior quarter driven by lower activity consistent with seasonal trends. Operating expenses, excluding restructuring expenses, increased from the fourth quarter of 2013 and were driven by seasonal increases in payroll taxes as well as technology and consulting expenses related to our previously announced strategic investment plan."
First Quarter Results
In the first quarter of 2014, First Niagara reported net income available to common shareholders of $51.9 million, or $0.15 per diluted share, which included $8.3 million in after-tax restructuring and severance expenses, or $0.02 per diluted share, incurred primarily in connection with the previously announced branch staffing realignment and consolidation of certain branches completed in the first quarter. 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. For the first quarter of 2013, net income available to common shareholders was $59.7 million or $0.17 per diluted share and included $4.3 million in after-tax charges related to executive departures.
Balance sheet growth remained strong as average loans increased 8% annualized compared to the prior quarter. Average commercial business and real estate loans increased 9% annualized over the prior quarter, while average consumer loans increased 6% 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 checking and noninterest bearing deposits, were unchanged compared to the prior quarter. The company continues to garner strong customer traction to the recent roll-out of mobile remote deposit capture.
Revenues, excluding the $7.5 million amortization related to the company's historic tax credit investments (HTC amortization), decreased 4% in the first quarter of 2014 compared to the prior quarter due in large part to seasonal declines in certain fee income categories and two fewer days in the quarter. Net interest income decreased 3% in the first quarter compared to the prior quarter driven in large part due to items that benefited the prior quarter as well as two fewer days. Net interest margin was 3.33%, as compared to 3.41% in the fourth quarter of 2013. Noninterest income, excluding the $7.5 million HTC amortization, declined 6% from the prior quarter primarily due to seasonally lower deposit service charges and lower derivative sales volumes in the capital markets business.
The provision for loan losses on originated loans totaled $21.2 million in the first quarter of 2014, including $5.5 million to support loan growth and $15.6 million to cover net charge-offs during the quarter. At March 31, 2014, nonperforming originated loans comprised 0.82% of originated loans, a 11 basis point improvement from the prior quarter. Net charge-offs equaled 0.36% of average originated loans, consistent with 0.34% reported in 2013.
Excluding $10.4 million in restructuring expenses, operating expenses for first quarter of 2014 were $238.4 million, and increased $11.2 million from the prior quarter. This increase was driven by seasonal increases in payroll taxes, higher marketing costs, as well as technology and consulting expenses related to the previously announced strategic investment plan.
| Operating Results (Non-GAAP) | Q1 2014 | Q4 2013 | Q1 2013 |
| Net interest income | $ 270.7 | $ 280.3 | $ 266.1 |
| Provision for credit losses | 24.8 | 32.0 | 20.2 |
| Noninterest income | 76.7 | 89.3 | 89.3 |
| Noninterest expense | 238.4 | 227.1 | 237.7 |
| Operating net income | 67.8 | 77.7 | 67.3 |
| Preferred stock dividend | 7.5 | 7.5 | 7.5 |
| Operating net income available to common shareholders | $ 60.2 | $ 70.1 | $ 59.7 |
| Weighted average diluted shares outstanding | 351.4 | 350.7 | 350.0 |
| Operating earnings per diluted share | $ 0.17 | $ 0.20 | $ 0.17 |
|
Reported Results (GAAP) |
|||
| Operating net income before non-operating items | $ 67.8 | $ 77.7 | $ 67.3 |
| Non-operating expenses (a) | 8.3 | -- | -- |
| Net income | 59.4 | 77.7 | 67.3 |
| Preferred stock dividend | 7.5 | 7.5 | 7.5 |
| Net income available to common shareholders | $ 51.9 | $ 70.1 | $ 59.7 |
| Weighted average diluted shares outstanding | 351.4 | 350.7 | 350.0 |
| Earnings per diluted share | $ 0.15 | $ 0.20 | $ 0.17 |
|
All amounts in millions except earnings per diluted share. The Non-GAAP/Operating Results table above summarizes the company's operating results excluding certain non-operating items. For a detailed reconciliation of non-GAAP measures, refer to the attached tables. |
|||
| (a) Restructuring charges primarily related to branch realignment and consolidations, net of taxes. | |||
Loans
Average total loans increased 8% annualized from the prior quarter, driven by continued growth in the company's commercial lending businesses as well as sustained momentum in the company's indirect auto business.
Average CRE loans increased 7% annualized to $7.8 billion compared to the fourth quarter of 2013. Commercial business (C&I) loans averaged $5.4 billion, representing a 12% annualized increase over the prior quarter. All of First Niagara's regional markets contributed to first quarter commercial lending growth, with particular strength in the company's New York and Western Pennsylvania regions, which posted growth rates of 8% and 17%, respectively.
Average indirect auto loan balances increased $160 million to $1.6 billion. During the first quarter, indirect auto originations totaled $242 million at an average customer FICO score of 753 and yielded 3.21%, net of dealer reserve. Average residential real estate loans declined by $63 million, or 7% annualized reflecting industry-wide weakness in application volumes. Home equity balances increased for the fourth consecutive quarter, and averaged $2.8 billion, or a 4% annualized quarter-over-quarter increase.
Deposits
The company strategic focus remains on efforts to grow its core deposit customer base, re-position its account mix and introduce new products and services that further enhance its value proposition. Average transaction deposit balances, which include interest-bearing and noninterest bearing checking accounts, were unchanged from the prior quarter and currently represent 36% of the company's deposit balances, up from 32% a year ago. The average cost of interest-bearing deposits of 0.23% was unchanged from the prior quarter.
Average noninterest-bearing checking deposits decreased 1% annualized compared to the prior quarter, driven by seasonal trends particularly in commercial account balances. Interest-bearing checking balances averaged $4.7 billion and increased 1% annualized from the prior quarter.
Money market and time deposit balances declined 1% and 6% annualized, respectively, driven by the company's continued pricing actions.
In response to changing consumer banking behaviors, First Niagara continues to invest in enhancing its self-service channels such as online, mobile and telephonic banking capabilities for retail and small business customers, while continuing to transform its branch network and in-branch experience. In the first quarter of 2014, the company introduced mobile remote deposit capture through which a growing number of mobile banking customers can deposit checks using their smartphones.
Net Interest Income
First quarter 2014 net interest income decreased 3% from the prior quarter to $270.7 million and was driven by an eight basis point decrease in the net interest margin to 3.33% and the effect of two fewer days in the quarter, partially offset by a 4% annualized increase in average earning assets. Growth in average earning assets reflected continued strong loan growth. Average investment securities balances remained consistent with the prior quarter.
The eight basis point quarter-over-quarter decrease in net interest margin reflected lower benefits from retroactive adjustments on the company's residential mortgage backed securities (RMBS) portfolio, lower commercial real estate prepayment income as well as continued compression of loan yields from prepayments and reinvestments at current market rates.
In the first quarter, premium amortization on the RMBS portfolio was $3.8 million, which included a $1.1 million retroactive adjustment to reflect updated estimates of future prepayment speeds. The premium amortization on the RMBS portfolio in the fourth quarter of 2013 was $0.3 million which included a $3.5 million retroactive adjustment.
Credit Quality
At March 31, 2014, the allowance for loan losses was $215.0 million, compared to $209.3 million at December 31, 2013. Nonperforming assets to total assets were 0.52%, down 4 basis points from the prior quarter, driven by a decrease in nonperforming originated loans.
Information for both the originated and acquired portfolios follows.
| Q1 2014 | Q4 2013 | |||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total |
| Provision for loan losses* | $21.2 | $3.2 | $24.4 | $28.2 | $3.4 | $31.6 |
| Net charge-offs | 15.6 | 3.0 | 18.6 | 17.8 | 2.4 | 20.3 |
| NCOs/ Avg Loans | 0.36% | 0.28% | 0.34% | 0.43% | 0.21% | 0.38% |
| Total loans** | $17,389 | $4,476 | $21,750 | $16,922 | $4,643 | $21,440 |
| (*) Excludes provision for unfunded commitments of $0.4 million each in 1Q14 and 4Q13 | ||||||
| (**) Acquired loans before associated credit discount; see accompanying tables for further information | ||||||
Originated loans
The provision for loan losses on originated loans totaled $21.2 million, compared to $28.2 million in the prior quarter. The provision in the first quarter included $5.5 million to support sequential originated loan growth of $466 million, compared to $10.3 million in the prior quarter that supported $711 million of originated loan growth. Net charge-offs equaled $15.6 million, or 36 basis points of average originated loans, in the first quarter of 2014, consistent with 34 basis points reported in 2013.
At March 31, 2014, nonperforming originated loans comprised 0.82% of originated loans, compared to 0.93% at December 31, 2013. Nonperforming originated loan balances declined 10% from the prior quarter driven by resolutions of credits.
At March 31, 2014, the allowance for loan losses on originated loans totaled $210.8 million or 1.21% of such loans, compared to $205.3 million at December 31, 2013.
Acquired loans
The provision for losses on acquired loans totaled $3.2 million, compared to $3.4 million in the prior quarter. Net charge-offs on those portfolios totaled $3.0 million during the quarter, compared to $2.4 million in the prior period. At March 31, 2014, the allowance for loan losses on acquired loans totaled $4.2 million, compared to $4.0 million at December 31, 2013. Acquired nonperforming loans totaled $30.6 million, compared to $30.1 million at the end of the prior quarter. At March 31, 2014, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $113 million.
Fee Income
First quarter noninterest income was $76.7 million and included the $7.5 million HTC amortization charge. Excluding HTC amortization, noninterest income totaled $84.2 million and decreased 6%, or $5.1 million compared to the prior quarter. Seasonal weakness drove the quarter-over-quarter decline in deposit service charges and merchant and card fees.
Capital markets revenue decreased $2.7 million from the fourth quarter reflecting lower derivative sales volume in the current pricing environment. Deposit service charges decreased 9% from the prior quarter and were driven by seasonal patterns and lower NSF incident rates. Insurance commissions increased 2% from the prior quarter reflecting higher policy renewal activity. Mortgage banking revenues improved $0.6 million from the fourth quarter of 2013, but declined by $3.0 million or 47% from the year-ago quarter driven by lower volumes as well as lower gain-on-sale margins. Wealth management revenues increased 1% from the prior quarter and were driven by annuity sales.
Noninterest Expense
First quarter noninterest expenses were $248.7 million and included $10.4 million in restructuring charges primarily related to branch staffing realignment and consolidation of branches. Excluding these charges, operating expenses were $238.4 million. Salaries and benefit expenses increased by $4.2 million from the prior quarter driven primarily by typical resetting of payroll taxes, new hires and employee merit increases partially offset by lower healthcare costs. Marketing and advertising expense increased $2.5 million driven by promotional marketing campaigns. Professional services expenses increased $2.6 million or 28% from the prior quarter reflecting consulting fees associated with the company's strategic investments.
In the first quarter of 2014, the efficiency ratio, excluding the restructuring charges and HTC amortization, was 67.2% compared to 61.5% in the prior quarter, reflecting various seasonal impacts in both operating revenues and expenses.
Capital
At March 31, 2014, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.6% and 7.9% respectively. The company remains well above current regulatory guidelines for well-capitalized institutions.
Effective Tax Rate
In the first quarter of 2014, the company's effective tax rate declined to 19.6% from 29.7% in the prior quarter reflecting the benefits derived from historic tax credit investments funded during the quarter as well as the taxable reorganization of a subsidiary.
About First Niagara
First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank with 411 branches, $38 billion in assets, $28 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 10:00 a.m. Eastern Time on Thursday, April 24, 2014 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-469-1365 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 June 1, 2014 by dialing 1-888-567-0414, passcode: 9468.
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; and (6) execution risk associated with the announced strategic investment plan.
| First Niagara Financial Group, Inc. | ||||||
| Income Statement Highlights -- Reported Basis | ||||||
| (in thousands, except per share amounts) | ||||||
| 2014 | 2013 | 2012 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Interest income: | ||||||
| Loans and leases | $ 209,644 | $ 213,778 | $ 214,746 | $ 209,970 | $ 206,640 | $ 212,035 |
| Investment securities and other | 90,421 | 96,020 | 91,996 | 88,110 | 88,961 | 71,564 |
| Total interest income | 300,065 | 309,798 | 306,742 | 298,080 | 295,601 | 283,599 |
| Interest expense: | ||||||
| Deposits | 12,236 | 12,941 | 12,931 | 12,967 | 14,277 | 16,902 |
| Borrowings | 17,082 | 16,579 | 16,271 | 15,670 | 15,194 | 14,411 |
| Total interest expense | 29,318 | 29,520 | 29,202 | 28,637 | 29,471 | 31,313 |
| Net interest income | 270,747 | 280,278 | 277,540 | 269,443 | 266,130 | 252,286 |
| Provision for credit losses | 24,800 | 32,000 | 27,600 | 25,200 | 20,200 | 22,000 |
| Net interest income after provision | 245,947 | 248,278 | 249,940 | 244,243 | 245,930 | 230,286 |
| Noninterest income: | ||||||
| Deposit service charges | 23,356 | 25,726 | 27,115 | 26,482 | 24,800 | 26,345 |
| Insurance commissions | 15,691 | 15,431 | 17,854 | 17,692 | 16,355 | 15,497 |
| Merchant and card fees | 11,504 | 12,567 | 12,464 | 12,380 | 11,298 | 11,945 |
| Wealth management services | 15,587 | 15,441 | 15,189 | 14,945 | 12,845 | 12,000 |
| Mortgage banking | 3,396 | 2,754 | 2,268 | 6,882 | 6,424 | 8,060 |
| Capital markets income | 3,623 | 6,310 | 5,058 | 5,002 | 6,031 | 7,098 |
| Lending and leasing | 4,732 | 4,140 | 4,886 | 4,534 | 3,906 | 3,739 |
| Bank owned life insurance | 5,405 | 6,027 | 3,725 | 3,321 | 3,467 | 3,021 |
| Other income | (6,570) | 916 | 2,863 | 4,308 | 4,186 | 4,116 |
| Total noninterest income | 76,724 | 89,312 | 91,422 | 95,546 | 89,312 | 91,821 |
| Noninterest expense: | ||||||
| Salaries and benefits | 117,940 | 113,754 | 115,034 | 116,305 | 115,790 | 111,026 |
| Occupancy and equipment | 27,876 | 27,420 | 26,582 | 28,506 | 28,045 | 27,609 |
| Technology and communications | 30,345 | 29,483 | 28,999 | 29,603 | 27,113 | 28,257 |
| Marketing and advertising | 7,364 | 4,879 | 5,822 | 5,450 | 4,346 | 9,292 |
| Professional services | 11,923 | 9,314 | 9,820 | 9,782 | 9,603 | 11,163 |
| Amortization of intangibles | 7,509 | 7,562 | 7,702 | 10,850 | 14,119 | 14,224 |
| FDIC premiums | 8,855 | 7,431 | 9,351 | 9,348 | 8,901 | 9,158 |
| Merger and acquisition integration expenses | -- | -- | -- | -- | -- | 3,678 |
| Restructuring charges | 10,356 | -- | -- | -- | -- | -- |
| Other expense | 26,568 | 27,305 | 27,883 | 25,326 | 29,749 | 24,377 |
| Total noninterest expense | 248,736 | 227,148 | 231,193 | 235,170 | 237,666 | 238,784 |
| Income before income tax | 73,935 | 110,442 | 110,169 | 104,619 | 97,576 | 83,323 |
| Income tax expense | 14,491 | 32,752 | 31,026 | 33,485 | 30,291 | 22,226 |
| Net income | 59,444 | 77,690 | 79,143 | 71,134 | 67,285 | 61,097 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 |
| Net income available to common stockholders | $ 51,897 | $ 70,143 | $ 71,596 | $ 63,587 | $ 59,738 | $ 53,550 |
| Financial Ratios: | ||||||
| Earnings per basic share | $ 0.15 | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.17 | $ 0.15 |
| Earnings per diluted share | 0.15 | 0.20 | 0.20 | 0.18 | 0.17 | 0.15 |
| Weighted average shares outstanding - basic(1) | 349,906 | 349,718 | 349,653 | 349,542 | 349,278 | 349,071 |
| Weighted average shares outstanding - diluted(1) | 351,408 | 350,699 | 350,896 | 350,384 | 349,999 | 349,663 |
| Net revenue(2) | $ 347,471 | $ 369,590 | $ 368,962 | $ 364,989 | $ 355,442 | $ 344,107 |
| Noninterest income as a percentage of net revenue(2) | 22.08% | 24.17% | 24.78% | 26.18% | 25.13% | 26.68% |
| Pre-tax, pre-provision income(3) | $ 98,735 | $ 142,442 | $ 137,769 | $ 129,819 | $ 117,776 | $ 105,323 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.28 | $ 0.41 | $ 0.39 | $ 0.37 | $ 0.34 | $ 0.30 |
| Pre-tax, pre-provision return on average assets(3) | 1.06% | 1.51% | 1.47% | 1.41% | 1.30% | 1.15% |
| Net interest margin(4) | 3.33% | 3.41% | 3.40% | 3.36% | 3.39% | 3.22% |
| Interest yield on average loans(4) | 3.98% | 4.04% | 4.14% | 4.19% | 4.25% | 4.39% |
| Rate paid on interest-bearing liabilities | 0.44% | 0.43% | 0.43% | 0.43% | 0.44% | 0.48% |
| Efficiency ratio | 71.58% | 61.46% | 62.66% | 64.43% | 66.86% | 69.39% |
| Expenses as a percentage of average loans and deposits | 2.06% | 1.89% | 1.94% | 1.98% | 2.01% | 2.03% |
| Effective tax rate | 19.6% | 29.7% | 28.2% | 32.0% | 31.0% | 26.7% |
| Return on average assets(5) | 0.64 % | 0.82% | 0.85% | 0.77 % | 0.74% | 0.67% |
| Return on average equity(5) | 4.79 % | 6.18% | 6.37% | 5.72 % | 5.50% | 4.92% |
| Return on average tangible equity(3)(5) | 9.66 % | 12.64% | 13.20% | 11.75 % | 11.62% | 10.45% |
| Return on average common equity | 4.48 % | 5.99% | 6.18% | 5.48 % | 5.24% | 4.62% |
| Return on average tangible common equity(3) | 9.76 % | 13.25% | 13.92% | 12.21 % | 12.05% | 10.72% |
| (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) | ||||||
| 2014 | 2013 | 2012 | ||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | |
| Cash and cash equivalents | $ 503,070 | $ 462,927 | $ 558,086 | $ 552,210 | $ 424,176 | $ 430,862 |
| Investment securities: | ||||||
| Available for sale | 7,060,237 | 7,423,162 | 7,609,676 | 7,916,353 | 7,876,160 | 10,993,605 |
| Held to maturity | 4,467,213 | 4,042,481 | 3,841,700 | 3,856,960 | 4,218,687 | 1,299,806 |
| FHLB and FRB common stock | 437,550 | 469,217 | 437,534 | 429,740 | 401,373 | 420,277 |
| Total investment securities | 11,965,000 | 11,934,860 | 11,888,910 | 12,203,053 | 12,496,220 | 12,713,688 |
| Loans held for sale | 34,465 | 50,137 | 80,468 | 118,104 | 126,389 | 154,745 |
| Loans and leases: | ||||||
| Commercial: | ||||||
| Real estate | 7,867,724 | 7,777,903 | 7,697,407 | 7,482,375 | 7,295,544 | 7,093,193 |
| Business | 5,470,177 | 5,290,392 | 5,204,672 | 5,165,606 | 5,044,738 | 4,953,323 |
| Total commercial loans | 13,337,901 | 13,068,295 | 12,902,079 | 12,647,981 | 12,340,282 | 12,046,516 |
| Consumer: | ||||||
| Residential real estate | 3,389,071 | 3,447,997 | 3,519,233 | 3,558,274 | 3,614,912 | 3,761,567 |
| Home equity | 2,767,024 | 2,752,229 | 2,706,603 | 2,670,672 | 2,646,645 | 2,651,891 |
| Indirect auto | 1,655,489 | 1,543,983 | 1,339,449 | 1,049,763 | 818,401 | 601,456 |
| Credit cards | 305,663 | 325,140 | 311,600 | 303,455 | 298,310 | 314,973 |
| Other consumer | 295,692 | 302,009 | 310,107 | 313,037 | 316,669 | 333,609 |
| Total consumer loans | 8,412,939 | 8,371,358 | 8,186,992 | 7,895,201 | 7,694,937 | 7,663,496 |
| Total loans and leases | 21,750,840 | 21,439,653 | 21,089,071 | 20,543,182 | 20,035,219 | 19,710,012 |
| Allowance for loan losses | 215,037 | 209,274 | 197,953 | 183,708 | 172,002 | 162,522 |
| Loans and leases, net | 21,535,803 | 21,230,379 | 20,891,118 | 20,359,474 | 19,863,217 | 19,547,490 |
| Bank owned life insurance | 417,031 | 415,205 | 413,555 | 410,182 | 407,419 | 404,321 |
| Goodwill and other intangibles | 2,535,271 | 2,542,783 | 2,549,931 | 2,557,560 | 2,567,681 | 2,617,810 |
| Other assets | 999,804 | 992,071 | 958,473 | 949,144 | 959,459 | 937,316 |
| Total assets | $ 37,990,444 | $ 37,628,362 | $ 37,340,541 | $ 37,149,727 | $ 36,844,561 | $ 36,806,232 |
| Deposits: | ||||||
| Savings accounts | $ 3,664,765 | $ 3,666,759 | $ 3,695,221 | $ 3,878,053 | $ 3,915,836 | $ 3,887,587 |
| Interest-bearing checking | 4,929,302 | 4,743,829 | 4,637,807 | 4,499,963 | 4,534,444 | 4,450,970 |
| Money market deposits | 10,106,569 | 9,739,539 | 9,905,341 | 10,013,996 | 10,493,243 | 10,581,137 |
| Noninterest-bearing deposits | 5,101,681 | 4,865,873 | 4,968,501 | 4,845,835 | 4,803,835 | 4,643,580 |
| Certificates of deposit | 3,795,438 | 3,649,257 | 3,762,132 | 3,911,989 | 3,985,702 | 4,113,257 |
| Total deposits | 27,597,755 | 26,665,257 | 26,969,002 | 27,149,836 | 27,733,060 | 27,676,531 |
| Short-term borrowings | 4,137,496 | 4,822,222 | 4,169,416 | 3,698,279 | 2,928,929 | 2,983,718 |
| Long-term borrowings | 733,384 | 733,883 | 732,547 | 732,598 | 732,510 | 732,425 |
| Other liabilities | 495,590 | 413,647 | 531,379 | 666,270 | 503,389 | 487,000 |
| Total liabilities | 32,964,225 | 32,635,009 | 32,402,344 | 32,246,983 | 31,897,888 | 31,879,674 |
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 |
| Common stockholders' equity | 4,688,217 | 4,655,351 | 4,600,195 | 4,564,742 | 4,608,671 | 4,588,556 |
| Total stockholders' equity | 5,026,219 | 4,993,353 | 4,938,197 | 4,902,744 | 4,946,673 | 4,926,558 |
| Total liabilities and stockholders' equity | $ 37,990,444 | $ 37,628,362 | $ 37,340,541 | $ 37,149,727 | $ 36,844,561 | $ 36,806,232 |
| Selected balance sheet information: | ||||||
| Total interest-earning assets(1) | $ 33,684,828 | $ 33,396,058 | $ 33,039,023 | $ 32,906,363 | $ 32,524,313 | $ 32,321,964 |
| Total interest-bearing liabilities | 27,366,955 | 27,355,489 | 26,902,465 | 26,734,878 | 26,590,664 | 26,749,094 |
| Net interest-earning assets | $ 6,317,873 | $ 6,040,569 | $ 6,136,558 | $ 6,171,485 | $ 5,933,649 | $ 5,572,870 |
| Tangible common equity(2) | $ 2,152,946 | $ 2,112,568 | $ 2,050,264 | 2,007,182 | 2,040,990 | 1,970,746 |
| Unrealized gain on available for sale securities, net of tax(3) | 72,579 | 63,930 | 76,686 | 83,898 | 160,942 | 206,733 |
| Total core deposits | $ 23,802,317 | $ 23,016,000 | $ 23,206,870 | $ 23,237,847 | $ 23,747,358 | $ 23,563,274 |
| Originated loans(4) | $ 17,388,542 | $ 16,922,161 | $ 16,211,505 | $ 15,102,336 | $ 14,100,190 | $ 13,372,357 |
| Acquired loans(5) | 4,475,593 | 4,642,775 | 5,006,753 | 5,581,651 | 6,083,912 | 6,513,636 |
| Credit related discount on acquired loans(6) | (113,295) | (125,283) | (129,187) | (140,805) | (148,883) | (175,981) |
| Total Loans | $ 21,750,840 | $ 21,439,653 | $ 21,089,071 | $ 20,543,182 | $ 20,035,219 | $ 19,710,012 |
| (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 | |||||||||
| March 31, 2014 | December 31, 2013 | March 31, 2013 | |||||||
| Average | Interest(1) | Yields | Average | Interest(1) | Yields | Average | Interest(1) | Yields | |
|
Balances |
and Rates(1) |
Balances |
and Rates(1) |
Balances |
and Rates(1) |
||||
| Interest-earning assets: | |||||||||
| Loans and leases(2) | |||||||||
| Commercial: | |||||||||
| Real estate | $ 7,801 | $ 76 | 3.89% | $ 7,673 | $ 79 | 4.02% | $ 7,179 | $ 76 | 4.25% |
| Business | 5,413 | 48 | 3.56 | 5,257 | 48 | 3.60 | 4,999 | 47 | 3.74 |
| Total commercial loans | 13,214 | 124 | 3.76 | 12,930 | 127 | 3.85 | 12,178 | 123 | 4.04 |
| Consumer: | |||||||||
| Residential real estate | 3,416 | 33 | 3.88 | 3,479 | 34 | 3.89 | 3,691 | 37 | 4.01 |
| Home equity | 2,756 | 28 | 4.12 | 2,732 | 29 | 4.15 | 2,648 | 28 | 4.29 |
| Indirect auto | 1,613 | 12 | 2.93 | 1,453 | 11 | 3.03 | 712 | 6 | 3.29 |
| Credit cards | 314 | 9 | 11.64 | 313 | 9 | 11.38 | 304 | 8 | 10.40 |
| Other consumer | 300 | 6 | 8.64 | 307 | 7 | 8.66 | 328 | 7 | 8.17 |
| Total consumer loans | 8,399 | 88 | 4.26 | 8,284 | 89 | 4.27 | 7,683 | 85 | 4.50 |
| Total loans and leases | 21,613 | 212 | 3.98 | 21,214 | 216 | 4.04 | 19,861 | 208 | 4.25 |
| Residential MBS | 5,689 | 39 | 2.75 | 5,502 | 42 | 3.07 | 5,488 | 34 | 2.50 |
| Commercial MBS | 1,697 | 14 | 3.28 | 1,772 | 17 | 3.84 | 1,914 | 18 | 3.78 |
| Other investment securities (3) | 4,388 | 39 | 3.55 | 4,505 | 38 | 3.40 | 4,822 | 38 | 3.19 |
| Total securities, at amortized cost | 11,774 | 92 | 3.12 | 11,779 | 98 | 3.31 | 12,224 | 91 | 2.97 |
| Money market and other investments | 125 | 1 | 1.64 | 189 | 1 | 1.38 | 241 | 1 | 1.31 |
| Total interest-earning assets | 33,512 | $ 305 | 3.69% | 33,182 | $ 314 | 3.76% | 32,326 | $ 300 | 3.76% |
| Goodwill and other intangibles | 2,539 | 2,546 | 2,609 | ||||||
| Other noninterest-earning assets | 1,697 | 1,651 | 1,872 | ||||||
| Total assets | $ 37,748 | $ 37,379 | $ 36,807 | ||||||
| Interest-bearing liabilities: | |||||||||
| Deposits | |||||||||
| Savings accounts | $ 3,631 | $ 1 | 0.08% | $ 3,670 | $ 1 | 0.09% | $ 3,894 | $ 1 | 0.11% |
| Interest-bearing checking | 4,735 | -- | 0.03 | 4,725 | -- | 0.04 | 4,379 | 1 | 0.05 |
| Money market deposits | 9,887 | 5 | 0.20 | 9,900 | 5 | 0.20 | 10,643 | 6 | 0.23 |
| Certificates of deposit | 3,647 | 6 | 0.70 | 3,698 | 7 | 0.71 | 4,081 | 7 | 0.67 |
| Total interest bearing deposits | 21,900 | 12 | 0.23% | 21,993 | 13 | 0.23% | 22,997 | 14 | 0.25% |
| Borrowings | |||||||||
| Short-term borrowings | 4,642 | 5 | 0.44% | 4,259 | 4 | 0.42% | 3,152 | 3 | 0.40% |
| Long-term borrowings | 734 | 12 | 6.69 | 732 | 12 | 6.56 | 730 | 12 | 6.71 |
| Total borrowings | 5,376 | 17 | 1.29 | 4,991 | 17 | 1.32 | 3,882 | 15 | 1.59 |
| Total interest-bearing liabilities | 27,276 | $ 29 | 0.44% | 26,984 | $ 30 | 0.43% | 26,879 | $ 29 | 0.44% |
| Noninterest-bearing deposits | 4,864 | 4,878 | 4,468 | ||||||
| Other noninterest-bearing liabilities | 574 | 532 | 502 | ||||||
| Total liabilities | 32,714 | 32,395 | 31,849 | ||||||
| Total stockholders' equity | 5,034 | 4,984 | 4,958 | ||||||
| Total liabilities and stockholders' equity | $ 37,748 | $ 37,379 | $ 36,807 | ||||||
| Net interest income (FTE) | $ 275 | $ 285 | $ 270 | ||||||
| Taxable Equivalent Adjustment(1) | 4 | 5 | 4 | ||||||
| Total core deposits | $ 23,117 | $ 6 | 0.10% | $ 23,173 | $ 6 | 0.11% | $ 23,384 | $ 8 | 0.13% |
| Total transactional deposits | 9,599 | -- | 0.02% | 9,603 | -- | 0.02% | 8,847 | 1 | 0.03% |
| Total deposits | 26,764 | 12 | 0.19% | 26,871 | 13 | 0.19% | 27,465 | 14 | 0.21% |
| Tax equivalent net interest rate spread(2) | 3.25% | 3.33% | 3.32% | ||||||
| Tax equivalent net interest rate margin(2) | 3.33% | 3.41% | 3.39% | ||||||
| (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) | |||||||
| 2014 | 2013 | 2012 | |||||
| First | Fourth | Third | Second | First | Fourth | ||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | ||
| Beginning balance | $ 209,274 | $ 197,953 | $ 183,708 | $ 172,002 | $ 162,522 | $ 149,933 | |
| Net loan (charge-offs) recoveries: | |||||||
| Commercial real estate | $ 905 | $ (5,764) | $ 1,013 | $ (2,817) | $ (2,121) | $ (1,935) | |
| Commercial business | (9,138) | (6,382) | (9,694) | (7,175) | (4,902) | (3,385) | |
| Residential real estate | (174) | (168) | (137) | (291) | (427) | (658) | |
| Home equity | (3,045) | (1,528) | (322) | (905) | (613) | (673) | |
| Indirect auto | (2,086) | (1,215) | (692) | (552) | (252) | (231) | |
| Credit cards | (3,044) | (3,082) | (1,300) | (194) | (204) | (291) | |
| Other consumer | (2,055) | (2,140) | (1,823) | (1,160) | (1,801) | (1,763) | |
| Total net loan charge-offs | $ (18,637) | $ (20,279) | $ (12,955) | $ (13,094) | $ (10,320) | $ (8,936) | |
| Provision for loan losses | 24,400 | 31,600 | 27,200 | 24,800 | 19,800 | 21,525 | |
| Ending balance | $ 215,037 | $ 209,274 | $ 197,953 | $ 183,708 | $ 172,002 | $ 162,522 | |
| Supplemental information | |||||||
| Allowance to loans | 0.99 % | 0.98 % | 0.94 % | 0.89 % | 0.86 % | 0.82 % | |
| Allowance for originated loans to originated loans(1) | 1.21 % | 1.21 % | 1.20 % | 1.21 % | 1.21 % | 1.20 % | |
| Net charge-offs (recoveries) to average loans (annualized) | |||||||
| Commercial real estate | (0.05)% | 0.30 % | (0.05)% | 0.15 % | 0.12 % | 0.11 % | |
| Commercial business | 0.68 % | 0.49 % | 0.75 % | 0.56 % | 0.39 % | 0.28 % | |
| Total commercial loans | 0.25 % | 0.38 % | 0.27 % | 0.32 % | 0.23 % | 0.18 % | |
| Residential real estate | 0.02 % | 0.02 % | 0.02 % | 0.03 % | 0.05 % | 0.07 % | |
| Home equity | 0.44 % | 0.22 % | 0.05 % | 0.14 % | 0.09 % | 0.10 % | |
| Indirect auto | 0.52 % | 0.33 % | 0.23 % | 0.23 % | 0.15 % | 0.18 % | |
| Credit cards | 3.88 % | 3.93 % | 1.68 % | 0.26 % | 0.27 % | 0.38 % | |
| Other consumer | 2.74 % | 2.79 % | 2.01 % | 0.88 % | 1.27 % | 1.29 % | |
| Total consumer loans | 0.50 % | 0.40 % | 0.22 % | 0.16 % | 0.17 % | 0.19 % | |
| Total loans | 0.34 % | 0.38 % | 0.25 % | 0.26 % | 0.21 % | 0.18 % | |
| Net charge-offs (recoveries) of originated loans to average originated loans (annualized)(1) | |||||||
| Commercial real estate | (0.11)% | 0.24 % | (0.07)% | 0.14 % | 0.10 % | 0.07 % | |
| Commercial business | 0.73 % | 0.53 % | 0.83 % | 0.64 % | 0.45 % | 0.33 % | |
| Total commercial loans | 0.26 % | 0.37 % | 0.33 % | 0.36 % | 0.26 % | 0.19 % | |
| Residential real estate | 0.04 % | 0.04 % | 0.03 % | 0.07 % | 0.10 % | 0.15 % | |
| Home equity | 0.21 % | 0.29 % | 0.09 % | 0.26 % | 0.19 % | 0.21 % | |
| Indirect auto | 0.52 % | 0.33 % | 0.23 % | 0.23 % | 0.15 % | 0.18 % | |
| Credit cards | 3.88 % | 3.93 % | 1.68 % | 0.26 % | 0.34 % | 0.69 % | |
| Other consumer | 2.74 % | 2.80 % | 2.59 % | 1.91 % | 2.44 % | 1.71 % | |
| Total consumer loans | 0.57 % | 0.56 % | 0.33 % | 0.27 % | 0.28 % | 0.33 % | |
| Total loans | 0.36 % | 0.43 % | 0.33 % | 0.33 % | 0.27 % | 0.24 % | |
| Nonperforming loans: | |||||||
| Originated(1): | |||||||
| Commercial real estate | $ 41,296 | $ 53,395 | $ 51,302 | $ 59,624 | $ 49,953 | $ 50,848 | |
| Commercial business | 35,335 | 42,013 | 35,854 | 44,658 | 47,523 | 47,066 | |
| Residential real estate | 32,736 | 31,478 | 31,312 | 29,667 | 28,455 | 27,192 | |
| Home equity | 19,516 | 18,426 | 15,709 | 14,601 | 14,270 | 14,233 | |
| Indirect auto | 7,943 | 6,274 | 5,129 | 3,276 | 2,426 | 931 | |
| Other consumer | 5,216 | 5,838 | 5,538 | 2,818 | 3,018 | 2,806 | |
| Total originated nonperforming loans | 142,042 | 157,424 | 144,844 | 154,644 | 145,645 | 143,076 | |
| Total acquired nonperforming loans(2) | 30,617 | 30,088 | 30,388 | 27,556 | 27,678 | 29,648 | |
| Total nonperforming loans | 172,659 | 187,512 | 175,232 | 182,200 | 173,323 | 172,724 | |
| Real estate owned | 25,466 | 24,788 | 24,262 | 8,144 | 10,816 | 10,114 | |
| Total nonperforming assets | $ 198,125 | $ 212,300 | $ 199,494 | $ 190,344 | $ 184,139 | $ 182,838 | |
| Accruing troubled debt restructurings (TDR) | $ 56,038 | $ 52,263 | $ 69,877 | $ 69,892 | $ 64,311 | $ 46,280 | |
| Loans 90 days past due still accruing(3) | 119,134 | 113,212 | 136,248 | 167,560 | 172,062 | 171,568 | |
| Total classified loans(4) | 667,327 | 663,700 | 648,235 | 701,104 | 720,197 | 708,468 | |
| Total criticized loans(5) | $ 1,075,523 | $ 985,019 | $ 977,798 | $ 1,012,305 | $ 1,044,874 | $ 1,002,659 | |
| Total nonperforming loans to loans | 0.79 % | 0.87 % | 0.83 % | 0.89 % | 0.87 % | 0.88 % | |
| Total nonperforming originated loans to originated loans(1) | 0.82 % | 0.93 % | 0.89 % | 1.02 % | 1.03 % | 1.07 % | |
| Total nonperforming assets to loans and real estate owned | 0.91 % | 0.99 % | 0.94 % | 0.93 % | 0.92 % | 0.93 % | |
| Total nonperforming assets to assets | 0.52 % | 0.56 % | 0.53 % | 0.51 % | 0.50 % | 0.50 % | |
| Allowance to nonperforming loans | 124.5 % | 111.6 % | 113.0 % | 100.8 % | 99.2 % | 94.1 % | |
| Originated loans(1) | $ 17,388,542 | $ 16,922,161 | $ 16,211,505 | $ 15,102,336 | $ 14,100,190 | $ 13,372,357 | |
| Acquired loans(6) | 4,475,593 | 4,642,775 | 5,006,753 | 5,581,651 | 6,083,912 | 6,513,636 | |
| Credit related discount on acquired loans(7) | (113,295) | (125,283) | (129,187) | (140,805) | (148,883) | (175,981) | |
| Total Loans | $ 21,750,840 | $ 21,439,653 | $ 21,089,071 | $ 20,543,182 | $ 20,035,219 | $ 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, 2013. | |||||||
| (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) | ||||||
| 2014 | 2013 | 2012 | ||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | |
| First Niagara Financial Group, Inc. capital ratios: | ||||||
| Tier 1 risk based capital | 9.62% | 9.56% | 9.45% | 9.41% | 9.45% | 9.29% |
| Tier 1 common capital(1) | 7.92% | 7.86% | 7.72% | 7.65% | 7.64% | 7.45% |
| Total risk based capital | 11.60% | 11.53% | 11.40% | 11.35% | 11.38% | 11.23% |
| Leverage | 7.28% | 7.26% | 7.14% | 7.01% | 6.92% | 6.75% |
| Equity to assets | 13.23% | 13.27% | 13.22% | 13.20% | 13.43% | 13.39% |
| Tangible common equity to tangible assets(1) | 6.07% | 6.02% | 5.89% | 5.80% | 5.95% | 5.77% |
| Total risk weighted assets(2) | $ 26,639 | $ 26,412 | $ 26,078 | $ 25,564 | $ 24,949 | $ 24,379 |
| First Niagara Bank, N.A capital ratios: | ||||||
| Tier 1 risk based capital | 10.22% | 10.15% | 10.08% | 10.08% | 10.15% | 9.94% |
| Total risk based capital | 11.08% | 10.99% | 10.89% | 10.85% | 10.89% | 10.66% |
| Leverage | 7.74% | 7.70% | 7.61% | 7.50% | 7.43% | 7.23% |
| Total risk weighted assets(2) | $ 26,597 | $ 26,365 | $ 26,037 | $ 25,520 | $ 24,933 | $ 24,379 |
| Number of branches | 411 | 421 | 422 | 422 | 427 | 430 |
| Full time equivalent employees | 5,750 | 5,807 | 5,788 | 5,779 | 5,875 | 5,927 |
| Share information and per share metrics: | ||||||
| Common shares outstanding | 354,127 | 353,941 | 353,973 | 353,932 | 353,008 | 352,621 |
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 |
| Treasury shares | 11,875 | 12,061 | 12,029 | 12,070 | 12,994 | 13,381 |
| Market price (NASDAQ:FNFG): | $ 9.45 | $ 10.62 | $ 10.37 | $ 10.07 | $ 8.86 | $ 7.93 |
| Book value per common share(3) | 13.40 | 13.31 | 13.15 | 13.06 | 13.19 | 13.15 |
| Tangible book value per common share(1)(3) | 6.15 | 6.04 | 5.86 | 5.74 | 5.84 | 5.65 |
| Price/Book | 70.52% | 79.79% | 78.86% | 77.11% | 67.17% | 60.30% |
| Price/Tangible book(1) | 153.66% | 175.83% | 176.96% | 175.44% | 151.71% | 140.35% |
| 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% | 40.00% | 40.00% | 44.44% | 47.06% | 53.33% |
| Dividend yield (annualized) | 3.43% | 2.99% | 3.06% | 3.19% | 3.66% | 4.01% |
| (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 March 31, 2014. 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) | ||||||
| 2014 | 2013 | 2012 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Financial ratios computed on an operating basis(1): | ||||||
| Earnings per basic share | $ 0.17 | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.17 | $ 0.19 |
| Earnings per diluted share | 0.17 | 0.20 | 0.20 | 0.18 | 0.17 | 0.19 |
| Weighted average shares outstanding - basic(2) | 349,906 | 349,718 | 349,653 | 349,542 | 349,278 | 349,071 |
| Weighted average shares outstanding - diluted(2) | 351,408 | 350,699 | 350,896 | 350,384 | 349,999 | 349,663 |
| Noninterest income as a percentage of net revenue(3) | 22.08% | 24.17% | 24.78% | 26.18% | 25.13% | 25.48% |
| Pre-tax, pre-provision income | 109,091 | 142,442 | 137,769 | 129,819 | 117,776 | 125,281 |
| Pre-tax, pre-provision income per diluted share | 0.31 | 0.41 | 0.39 | 0.37 | 0.34 | 0.36 |
| Pre-tax, pre-provision return on average assets | 1.17% | 1.51% | 1.47% | 1.41% | 1.30% | 1.37% |
| Net interest margin(4) | 3.33% | 3.41% | 3.40% | 3.36% | 3.39% | 3.42% |
| Interest yield on average loans(4) | 3.98% | 4.04% | 4.14% | 4.19% | 4.25% | 4.39% |
| Rate paid on interest-bearing liabilities | 0.44% | 0.43% | 0.43% | 0.43% | 0.44% | 0.48% |
| Efficiency ratio | 68.60% | 61.46% | 62.66% | 64.43% | 66.86% | 65.24% |
| Effective tax rate | 19.6% | 29.7% | 28.2% | 32.0% | 31.0% | 27.0% |
| Return on average assets | 0.73% | 0.82% | 0.85% | 0.77% | 0.74% | 0.83% |
| Return on average equity | 5.46% | 6.18% | 6.37% | 5.72% | 5.50% | 6.06% |
| Return on average tangible equity(5) | 11.02% | 12.64% | 13.20% | 11.75% | 11.62% | 12.89% |
| Return on average common equity | 5.20% | 5.99% | 6.18% | 5.48% | 5.24% | 5.86% |
| Return on average tangible common equity(6) | 11.33% | 13.25% | 13.92% | 12.21% | 12.05% | 13.57% |
| Reconciliation of net interest income on operating basis to reported net interest income(1): | ||||||
| Total net interest income on operating basis (Non-GAAP) | $ 270,747 | $ 280,278 | $ 277,540 | $ 269,443 | $ 266,130 | $ 268,566 |
| Additional premium amortization on securities portfolio | -- | -- | -- | -- | -- | (16,280) |
| Total reported net interest income (GAAP) | 270,747 | 280,278 | 277,540 | 269,443 | 266,130 | 252,286 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | ||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 238,380 | $ 227,148 | $ 231,193 | $ 235,170 | $ 237,666 | $ 235,106 |
| Merger and acquisition integration expenses | -- | -- | -- | -- | -- | 3,678 |
| Restructuring charges | 10,356 | -- | -- | -- | -- | -- |
| Total reported noninterest expense (GAAP) | $ 248,736 | $ 227,148 | $ 231,193 | $ 235,170 | $ 237,666 | $ 238,784 |
| Reconciliation of net operating income to net income(1): | ||||||
| Net operating income (Non-GAAP) | $ 67,789 | $ 77,690 | $ 79,143 | $ 71,134 | $ 67,285 | $ 75,358 |
| Nonoperating income and expenses, net of tax: | ||||||
| Additional premium amortization on securities portfolio | -- | -- | -- | -- | -- | 11,633 |
| Merger and acquisition integration expenses | -- | -- | -- | -- | -- | 2,628 |
| Restructuring charges | 8,345 | -- | -- | -- | -- | -- |
| Total nonoperating expenses, net of tax | 8,345 | -- | -- | -- | -- | 14,261 |
| Net income (GAAP) | $ 59,444 | $ 77,690 | $ 79,143 | $ 71,134 | $ 67,285 | $ 61,097 |
| 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) | $ 60,242 | $ 70,143 | $ 71,596 | $ 63,587 | $ 59,738 | $ 67,811 |
| Nonoperating income and expenses, net of tax: | ||||||
| Additional premium amortization on securities portfolio | -- | -- | -- | -- | -- | 11,633 |
| Merger and acquisition integration expenses | -- | -- | -- | -- | -- | 2,628 |
| Restructuring charges | 8,345 | -- | -- | -- | -- | -- |
| Total nonoperating income and expenses, net of tax | 8,345 | -- | -- | -- | -- | 14,261 |
| Net income available to common stockholders (GAAP) | $ 51,897 | $ 70,143 | $ 71,596 | $ 63,587 | $ 59,738 | $ 53,550 |
| Computation of pre-tax,pre-provision income: | ||||||
| Net interest income | $ 270,747 | $ 280,278 | $ 277,540 | $ 269,443 | $ 266,130 | $ 252,286 |
| Noninterest income | 76,724 | 89,312 | 91,422 | 95,546 | 89,312 | 91,821 |
| Noninterest expense | (248,736) | (227,148) | (231,193) | (235,170) | (237,666) | (238,784) |
| Pre-tax, pre-provision income (GAAP) | 98,735 | 142,442 | 137,769 | 129,819 | 117,776 | 105,323 |
| Add back: non-operating premium amortization | -- | -- | -- | -- | -- | 16,280 |
| Add back: non-operating noninterest expenses (1) | 10,356 | -- | -- | -- | -- | 3,678 |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 109,091 | $ 142,442 | $ 137,769 | $ 129,819 | $ 117,776 | $ 125,281 |
| (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) | ||||||
| 2014 | 2013 | 2012 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Computation of Ending Tangible Common Equity: | ||||||
| Total stockholders' equity | $ 5,026,219 | $ 4,993,353 | $ 4,938,197 | $ 4,902,744 | $ 4,946,673 | $ 4,993,353 |
| Less: Goodwill and other intangibles | (2,535,271) | (2,542,783) | (2,549,931) | (2,557,560) | (2,567,681) | (2,617,810) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,152,946 | $ 2,112,568 | $ 2,050,264 | $ 2,007,182 | $ 2,040,990 | $ 2,037,541 |
| Computation of Average Tangible Equity: | ||||||
| Total stockholders' equity | $ 5,034,093 | $ 4,984,003 | $ 4,932,949 | $ 4,989,006 | $ 4,958,402 | $ 4,945,132 |
| Less: Goodwill and other intangibles | (2,538,891) | (2,546,031) | (2,553,647) | (2,561,507) | (2,609,409) | (2,619,322) |
| Tangible equity | $ 2,495,202 | $ 2,437,972 | $ 2,379,302 | $ 2,427,499 | $ 2,348,993 | $ 2,325,810 |
| Computation of Average Tangible Common Equity: | ||||||
| Total stockholders' equity | $ 5,034,093 | $ 4,984,003 | $ 4,932,949 | $ 4,989,006 | $ 4,958,402 | $ 4,945,132 |
| Less: Goodwill and other intangibles | (2,538,891) | (2,546,031) | (2,553,647) | (2,561,507) | (2,609,409) | (2,619,322) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,157,200 | $ 2,099,970 | $ 2,041,300 | $ 2,089,497 | $ 2,010,991 | $ 1,987,808 |
| Computation of Tier 1 Common Capital: | ||||||
| Tier 1 capital | $ 2,562,261 | $ 2,525,656 | $ 2,464,801 | $ 2,406,473 | $ 2,356,763 | $ 2,264,679 |
| Less: Qualifying restricted core capital elements | (113,107) | (112,886) | (112,667) | (112,449) | (112,236) | (112,025) |
| Less: Perpetual non-cumulative preferred stock | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tier 1 common capital (Non-GAAP) | $ 2,111,152 | $ 2,074,768 | $ 2,014,132 | $ 1,956,022 | $ 1,906,525 | $ 1,814,652 |