Highlights:
- Non-GAAP Operating Net Income per Share of $0.19, a $0.02 Increase Over the Prior Quarter
- Net Interest Margin Increases 28 Basis Points to 3.54%
- Operating Revenues Increase 8%
- Average Commercial Loans Increase 17% Over the Prior Quarter
- 11th Consecutive Quarter of Double Digit Commercial Loan Growth
- C&I Loans Increase 24%; Commercial Real Estate Loans Increase 14%
- 15% Commercial Loan Growth in the New York Market; Continued Growth Across All Geographies
- Fee Income Increases 22%
- Mortgage Banking Revenues Increase 53% Over Prior Quarter
- Strength in Capital Markets Activity and Fees Sustained
- Core Deposit Platform Growth Continues
- Transactional Deposits Increase to 31% of Total Deposits
- Checking Account Production per Branch Increases 36% over Prior Year
- GAAP EPS of $0.14 per Share Includes $29 million of Acquisition and Restructuring Charges
BUFFALO, N.Y., Oct. 19, 2012 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today announced third quarter 2012 results reflecting continued strength and momentum in its regional banking business. The solid performance continues to be driven by sustained market share gains through new customer acquisition as well as deepening relationships with existing customers and growth in fee income.
"Our team continues to deliver differentiating results and outcomes and strong fundamental performance by helping our customers and communities Do Great Things," said John R. Koelmel, First Niagara President and Chief Executive Officer. "We have worked diligently to put the pieces together by assimilating a strong team and culture, an enviable footprint and franchise and strong ties to our growing base of customers and communities. As we look ahead, our entire organization – from top to bottom – is now singularly focused on running the business we have built and optimally executing our operating plan."
"First Niagara's lending franchise continues to deliver solid and differentiated fundamental performance throughout the continuing low-growth economic environment," said Gregory W. Norwood, Chief Financial Officer. "Our ability and continued success in gaining market share affords us the opportunity to be selective and discerning in credit underwriting. Further, the growth potential in our newer geographies coupled with the greater density in our Upstate New York markets combined with our enhanced fee generation services such as treasury management and online delivery channel are additional levers that will further improve our efficiency and profitability."
Third Quarter Performance
In the third quarter of 2012, First Niagara reported non-GAAP operating net income available to common shareholders of $66.5 million, or $0.19 per diluted share, compared to $0.17 per share in the second quarter of 2012 and $0.25 per diluted share in the third quarter of 2011. The decline in earnings per share from the year ago period was driven in large part by the June 2012 sale of $3.1 billion in mortgage backed securities (MBS) associated with the investment portfolio repositioning.
Total operating revenues of $366.5 million increased $27.8 million, or 8% over the second quarter of 2012. Net interest income was up $10.6 million, or 4%, from the prior quarter. Net interest margin increased by 28 basis points to 3.54% in the third quarter of 2012. Those increases include the benefits of the full quarter impact of the HSBC branch transaction and lower premium amortization on mortgage backed security prepayments partially offset by the loss of net interest income resulting from the June MBS sale.
Non-GAAP operating noninterest income increased 22% from the prior quarter primarily driven by the benefits of the HSBC branch acquisition and strong mortgage banking revenues.
Excluding loans acquired from HSBC, average commercial loans increased $463 million for the quarter, up 17% annualized over the prior three-month period, marking the eleventh consecutive quarter of organic double-digit average commercial portfolio growth. Indirect auto loan originations totaled $247 million in the third quarter, an increase of $76 million over the prior quarter, as that business unit continues to deliver profitable growth across its expanding dealer network.
The provision for credit losses totaled $22.2 million during the third quarter of 2012, including $12.1 million to support loan growth and $10.1 million to cover net charge-offs. Net charge-offs equaled 30 basis points of average originated loans in the third quarter of 2012 compared to 55 basis points in the prior quarter.
On a GAAP basis, First Niagara reported third quarter net income to common shareholders of $50.8 million, or $0.14 per diluted share, compared to a net loss to common shareholders of $18.5 million, or $0.05 per diluted share, in the second quarter of 2012. Reported GAAP results for the third quarter of 2012 include $29.4 million of acquisition and restructuring costs incurred primarily in connection with the HSBC branch acquisition and a $5.3 million gain related to the second quarter MBS sale.
| Operating Results (Non-GAAP) | Q3 2012 | Q2 2012 | Q3 2011 |
| Net interest income | $ 269.6 | $ 259.0 | $ 235.4 |
| Provision for credit losses | 22.2 | 28.1 | 14.5 |
| Noninterest income | 96.9 | 79.7 | 68.7 |
| Noninterest expense | 237.1 | 210.4 | 178.5 |
| Operating net income before non-operating items | 74.0 | 66.6 | 73.6 |
| Preferred stock dividend | 7.5 | 7.5 | -- |
| Operating net income available to common shareholders | 66.5 | 59.1 | 73.6 |
| Weighted average diluted shares outstanding | 349.4 | 348.9 | 292.5 |
| Operating earnings per diluted share | $ 0.19 | $ 0.17 | $ 0.25 |
| Reported Results (GAAP) | |||
| Operating net income before non-operating items | $ 74.0 | $ 66.6 | $ 73.6 |
| Gain on securities portfolio repositioning (a) | 3.5 | 10.3 | -- |
| Non-operating expenses (b) | 19.1 | 87.9 | 16.7 |
| Net income (loss) | 58.4 | (10.9) | 57.0 |
| Preferred stock dividend | 7.5 | 7.5 | -- |
| Net income (loss) available to common shareholders | 50.8 | (18.5) | 57.0 |
| Weighted average diluted shares outstanding | 349.4 | 348.9 | 292.5 |
| Earnings (loss) per diluted share | $ 0.14 | $ (0.05) | $ 0.19 |
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) Amount is shown net of tax and represents the gains recorded on the sale of $3.1 billion of mortgage-backed securities in the second and third quarters of 2012.
(b) Amounts are shown net of tax and represent expenses related to acquisition, integration, and restructuring.
Loans
Average total loans increased $540 million, or 13% annualized over the prior quarter, excluding loans acquired from HSBC on May 18. This organic increase from the prior quarter was driven by sustained strength in all commercial loan categories and indirect auto loans.
Average commercial loans increased $463 million, or 17% annualized over the prior quarter, excluding the HSBC impact. Commercial business (C&I) loans averaged $4.5 billion, or a 24% annualized increase over the prior quarter. Commercial real estate loans increased 14% annualized to $6.6 billion. Average other consumer loan balances increased $229 million and was driven by $247 million of indirect auto originations at net yields of approximately 3.5% during the quarter.
Including the impact of the HSBC branch transaction, average loans increased $1.3 billion, or 29% annualized over the prior quarter.
Deposits
The Company's strategic focus on customer acquisition, in particular increasing consumer and business checking balances, resulted in average transactional deposits, which include interest-bearing checking and non-interest bearing balances, increasing to 31% of the company's deposit base, compared to 25% a year ago. New checking account openings per branch increased an annualized 10% over the prior quarter and 36% over the prior year. The New York state franchise was a meaningful contributor at 32% as the increased branch density and positive brand positioning in these markets continues to drive significant new customer acquisitions.
Average noninterest-bearing deposits, excluding accounts acquired through the HSBC branch transaction, increased 17% over the prior quarter. Interest-bearing checking deposits increased 5% over the prior quarter, excluding the impact of the HSBC deposits. These increases were offset by the company's pricing strategy to reduce higher-cost money market and savings balances.
Net Interest Income
Net interest income of $269.6 million increased 4% from the prior quarter reflecting the favorable impacts of debt repayments using low-cost deposits acquired through the HSBC branch transaction as well as lower premium amortization expense on mortgage backed securities. Those benefits were partially offset by net interest income foregone on the sale of $3.1 billion of mortgage backed securities at the end of June. Tax equivalent net interest margin in the third quarter of 2012 was 3.54%, a 28 basis points increase over the prior quarter.
Average earning assets decreased 22% annualized compared to the prior quarter given the sale of the mortgage backed securities. Investment securities averaged $11.2 billion, a $2.8 billion decrease from the prior period. This decrease was offset by the $1.3 billion increase in average loans.
Credit Quality
At September 30, 2012, the allowance for loan losses was $149.9 million compared to $138.5 million at June 30, 2012. Information for both the originated and acquired portfolios follows.
| Q3 2012 | Q2 2012 | |||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total |
| Provision for loan losses* | $ 21.4 | $ 0.4 | $ 21.8 | $ 25.4 | $ 2.4 | $ 27.8 |
| Net charge-offs | 9.1 | 1.0 | 10.1 | 15.1 | 0.7 | 15.8 |
| NCOs/ Avg Loans | 0.30% | 0.06% | 0.21% | 0.55% | 0.04% | 0.36% |
| Total loans** | $ 12,232 | $ 7,086 | $ 19,318 | $ 11,392 | $ 7,600 | $ 18,992 |
| (*) Excludes provision for unfunded commitments of $0.4 million and $0.3 million in 3Q12 and 2Q12, respectively | ||||||
| (**) Acquired loans before associated credit discount; see accompanying tables for further information | ||||||
Originated loans
The provision for loan losses on originated loans totaled $21.4 million, down $4 million from the prior quarter. The company provided $12.3 million in excess of net charge-offs to support the ongoing momentum in originated loans. Net charge-offs decreased significantly to $9.1 million or 30 basis points of average originated loans from $15.1 million or 55 basis points in the prior quarter.
At the end of the third quarter, nonperforming assets to total assets were 0.42%, comparable to the prior quarter. Nonperforming originated loans as a percentage of originated loans decreased slightly to 0.93% at September 30, 2012 and totaled $114.2 million. At September 30, 2012, the allowance for loan losses on originated loans totaled $147.2 million or 1.20% of such loans, compared to $135.2 million or 1.19% of loans at June 30, 2012.
Acquired loans
The provision for losses on acquired loans totaled $0.4 million, compared to $2.4 million in the prior quarter. Net charge-offs on those portfolios totaled $1.0 million during the quarter, compared to $0.7 million in the prior period. At September 30, 2012, the allowance for loan losses on acquired loans totaled $2.7 million, compared to $3.3 million at June 30, 2012. Acquired nonperforming loans totaled $28.2 million, up from $19.4 million at June 30, 2012. At September 30, 2012, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $212 million.
Fee Income
Third quarter 2012 non-GAAP operating noninterest income of $96.9 million increased 22% or $17.2 million compared to the prior quarter. The increase was driven by stronger mortgage banking revenues as well as the full quarter benefit of the HSBC transaction. Deposit service charges increased $5.0 million or 23% over the prior quarter primarily with the benefit of the accounts acquired from HSBC. Mortgage banking revenues increased $3.8 million or 53% over the prior quarter driven by higher gain-on-sale margins as well as sustained strength in origination volumes. Merchant and card fees increased 30% over the prior quarter to $12.0 million reflecting the upside of the credit card accounts acquired from HSBC.
On a GAAP basis, noninterest income totaled $102.2 million, including a $5.3 million gain recognized on the sale of mortgage-backed securities in the second quarter. The gain represents the company's share of the sale proceeds in excess of the floor price set on the date of original sale to a third party.
Noninterest Expense
Third quarter non-GAAP operating noninterest expense was $237.1 million, up $26.7 million, or 13% over the second quarter of 2012. The increase primarily reflects the full quarter cost of operating the acquired HSBC branches. The non-GAAP operating efficiency ratio increased to 64.7% compared to 62.1% in the prior quarter given the impact of the loss of revenue attributed to the MBS sale.
On a GAAP basis, noninterest expense for the second quarter was $266.5 million, including $29.4 million in acquisition and restructuring expenses primarily associated with the HSBC branch transaction.
Capital
At September 30, 2012, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.5% and 7.6%, 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 430 branches, approximately $36 billion in assets, $28 billion in deposits, and approximately 6,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.
Investor Call
A conference call will be held at 10:30 a.m. Eastern Time on Friday, October 19, 2012 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-606-8413 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and is available under the investor relations tab of our website at www.firstniagara.com. A replay of the call will be available until November 2, 2012 by dialing 1-866-353-3016, passcode: 7253.
Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The Company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.
Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real estate and business loans and non-performing loans.
| First Niagara Financial Group, Inc. | ||||||||||||||
| Income Statement Highlights -- Reported Basis | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| 2012 | 2011 | Nine months ended | ||||||||||||
|
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
September 30, 2012 |
September 30, 2011 |
||||||||
| Interest income: | ||||||||||||||
| Loans and leases | $ 211,767 | $ 200,725 | $ 189,385 | $ 195,434 | $ 192,772 | $ 601,877 | $ 509,230 | |||||||
| Investment securities and other | 90,101 | 99,116 | 101,395 | 96,472 | 94,375 | 290,612 | 264,171 | |||||||
| Total interest income | 301,868 | 299,841 | 290,780 | 291,906 | 287,147 | 892,489 | 773,401 | |||||||
| Interest expense: | ||||||||||||||
| Deposits | 18,358 | 16,391 | 14,998 | 21,521 | 24,771 | 49,747 | 61,716 | |||||||
| Borrowings | 13,905 | 24,437 | 33,411 | 27,872 | 26,947 | 71,753 | 72,951 | |||||||
| Total interest expense | 32,263 | 40,828 | 48,409 | 49,393 | 51,718 | 121,500 | 134,667 | |||||||
| Net interest income | 269,605 | 259,013 | 242,371 | 242,513 | 235,429 | 770,989 | 638,734 | |||||||
| Provision for credit losses | 22,200 | 28,100 | 20,000 | 13,400 | 14,500 | 70,300 | 44,707 | |||||||
| Net interest income after provision | 247,405 | 230,913 | 222,371 | 229,113 | 220,929 | 700,689 | 594,027 | |||||||
| Noninterest income: | ||||||||||||||
| Deposit service charges | 26,422 | 21,433 | 17,037 | 18,049 | 18,413 | 64,892 | 48,095 | |||||||
| Insurance commissions | 18,764 | 17,072 | 16,833 | 15,440 | 16,886 | 52,669 | 49,685 | |||||||
| Merchant and card fees | 12,014 | 9,271 | 5,528 | 5,044 | 8,933 | 26,813 | 24,209 | |||||||
| Wealth management services | 11,069 | 9,207 | 9,039 | 8,179 | 7,933 | 29,315 | 22,550 | |||||||
| Mortgage banking | 10,974 | 7,174 | 5,649 | 5,279 | 5,254 | 23,797 | 9,903 | |||||||
| Capital markets income | 6,381 | 6,831 | 6,539 | 2,746 | 2,687 | 19,751 | 5,603 | |||||||
| Lending and leasing | 3,730 | 4,245 | 3,123 | 3,103 | 3,399 | 11,098 | 8,322 | |||||||
| Bank owned life insurance | 3,449 | 3,848 | 3,387 | 3,302 | 2,742 | 10,684 | 7,827 | |||||||
| Other income | 9,400 | 16,517 | 2,773 | 2,543 | 2,408 | 28,690 | 5,430 | |||||||
| Total noninterest income | 102,203 | 95,598 | 69,908 | 63,685 | 68,655 | 267,709 | 181,624 | |||||||
| Noninterest expense: | ||||||||||||||
| Salaries and benefits | 115,484 | 104,507 | 96,477 | 88,796 | 89,131 | 316,468 | 253,099 | |||||||
| Occupancy and equipment | 25,694 | 24,089 | 22,017 | 22,580 | 20,434 | 71,800 | 55,583 | |||||||
| Technology and communications | 28,110 | 24,434 | 19,713 | 18,942 | 16,634 | 72,257 | 43,434 | |||||||
| Marketing and advertising | 8,954 | 6,676 | 6,763 | 7,724 | 7,554 | 22,393 | 14,126 | |||||||
| Professional services | 11,193 | 9,263 | 8,895 | 11,669 | 9,171 | 29,351 | 24,348 | |||||||
| Amortization of intangibles | 14,506 | 9,839 | 6,466 | 6,586 | 6,896 | 30,811 | 18,958 | |||||||
| FDIC premiums | 8,850 | 10,552 | 6,133 | 6,097 | 10,301 | 25,535 | 22,763 | |||||||
| Merger and acquisition integration expenses | 29,404 | 131,460 | 12,970 | 6,149 | 9,008 | 173,834 | 92,012 | |||||||
| Restructuring charges | -- | 3,750 | 2,703 | 13,496 | 16,326 | 6,453 | 29,038 | |||||||
| Other expense | 24,347 | 21,069 | 18,041 | 20,132 | 18,416 | 63,457 | 50,801 | |||||||
| Total noninterest expense | 266,542 | 345,639 | 200,178 | 202,171 | 203,871 | 812,359 | 604,162 | |||||||
| Income (loss) before income tax | 83,066 | (19,128) | 92,101 | 90,627 | 85,713 | 156,039 | 171,489 | |||||||
| Income tax expense (benefit) | 24,682 | (8,204) | 32,236 | 32,166 | 28,732 | 48,714 | 56,040 | |||||||
| Net income (loss) | 58,384 | (10,924) | 59,865 | 58,461 | 56,981 | 107,325 | 115,449 | |||||||
| Preferred stock dividend | 7,547 | 7,547 | 5,115 | -- | -- | 20,209 | -- | |||||||
| Net income (loss) available to common stockholders | $ 50,837 | $ (18,471) | $ 54,750 | $ 58,461 | $ 56,981 | $ 87,116 | $ 115,449 | |||||||
| Financial Ratios: | ||||||||||||||
| Earnings (loss) per basic share | $ 0.15 | $ (0.05) | $ 0.16 | $ 0.19 | $ 0.19 | $ 0.25 | $ 0.44 | |||||||
| Earnings (loss) per diluted share | 0.14 | (0.05) | 0.16 | 0.19 | 0.19 | 0.25 | 0.44 | |||||||
| Weighted average shares outstanding - basic(1) | 349,001 | 348,941 | 348,823 | 304,065 | 292,211 | 348,956 | 260,259 | |||||||
| Weighted average shares outstanding - diluted(1) | 349,371 | 348,941 | 349,069 | 304,341 | 292,503 | 349,248 | 260,689 | |||||||
| Net revenue(2) | $ 371,808 | $ 354,611 | $ 312,279 | $ 306,198 | $ 304,084 | $ 1,038,698 | $ 820,358 | |||||||
| Noninterest income as a percentage of net revenue(2) | 27.49% | 26.96% | 22.39% | 20.80% | 22.58% | 25.77% | 22.14% | |||||||
| Pre-tax, pre-provision income(3) | $ 105,266 | $ 8,972 | $ 112,101 | $ 104,027 | $ 100,213 | $ 226,339 | $ 216,196 | |||||||
| Pre-tax, pre-provision income per diluted share(3) | $ 0.30 | $ 0.03 | $ 0.32 | $ 0.34 | $ 0.34 | $ 0.65 | $ 0.83 | |||||||
| Pre-tax, pre-provision return on average assets(3) | 1.19% | 0.10% | 1.36% | 1.30% | 1.28% | 0.86% | 1.07% | |||||||
| Net interest margin(4) | 3.54% | 3.26% | 3.34% | 3.48% | 3.48% | 3.38% | 3.63% | |||||||
| Interest yield on average loans(4) | 4.47% | 4.59% | 4.62% | 4.76% | 4.73% | 4.56% | 4.91% | |||||||
| Rate paid on interest-bearing liabilities(4) | 0.51% | 0.61% | 0.79% | 0.82% | 0.87% | 0.63% | 0.87% | |||||||
| Efficiency ratio | 71.69% | 97.47% | 64.10% | 66.03% | 67.04% | 78.21% | 73.65% | |||||||
| Effective tax rate | 29.7% | 42.9% | 35.0% | 35.5% | 33.5% | 31.2% | 32.7% | |||||||
| Return on average assets(5) | 0.66 % | (0.12)% | 0.73% | 0.73% | 0.73% | 0.41% | 0.57% | |||||||
| Return on average equity(5) | 4.77 % | (0.90)% | 4.96% | 5.54% | 5.61% | 2.95% | 4.34% | |||||||
| Return on average tangible equity(3)(5) | 10.34 % | (1.64)% | 7.90% | 9.75% | 10.28% | 5.40% | 7.76% | |||||||
| Return on average common equity | 4.46 % | (1.64)% | 4.88% | 5.63% | 5.61% | 2.57% | 4.34% | |||||||
| Return on average tangible common equity(3) | 10.60 % | (3.18)% | 8.12% | 10.03% | 10.28% | 5.02% | 7.76% | |||||||
| (1) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | ||||||||||||||
| (2) Net revenue is comprised of net interest income and noninterest income. | ||||||||||||||
| (3) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||||||||||
| (4) Yields and rates calculated on a tax equivalent basis. | ||||||||||||||
| (5) Return used to calculate ratio excludes preferred stock dividend. | ||||||||||||||
| First Niagara Financial Group, Inc. | ||||||||||
| Period End Balance Sheet | ||||||||||
| (in thousands) | ||||||||||
| 2012 | 2011 | |||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||
| Cash and cash equivalents | $ 447,087 | $ 488,227 | $ 370,380 | $ 836,555 | $ 332,437 | |||||
| Investment securities: | ||||||||||
| Available for sale | 10,579,970 | 9,937,271 | 12,248,058 | 9,348,296 | 8,349,237 | |||||
| Held to maturity | 1,387,763 | 1,463,872 | 2,503,156 | 2,669,630 | 2,830,744 | |||||
| FHLB and FRB common stock | 373,311 | 329,555 | 499,328 | 358,159 | 331,747 | |||||
| Total investment securities | 12,341,044 | 11,730,698 | 15,250,542 | 12,376,085 | 11,511,728 | |||||
| Loans held for sale | 117,375 | 101,596 | 102,513 | 94,484 | 79,820 | |||||
| Loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Real estate | 6,835,971 | 6,710,009 | 6,369,098 | 6,244,381 | 6,148,988 | |||||
| Business | 4,682,154 | 4,514,537 | 4,108,363 | 3,771,649 | 3,588,733 | |||||
| Total commercial loans | 11,518,125 | 11,224,546 | 10,477,461 | 10,016,030 | 9,737,721 | |||||
| Consumer: | ||||||||||
| Residential real estate | 3,870,756 | 4,037,045 | 3,881,003 | 4,012,267 | 4,171,374 | |||||
| Home equity | 2,661,429 | 2,683,236 | 2,149,135 | 2,165,988 | 2,177,772 | |||||
| Indirect auto | 419,258 | 185,774 | -- | -- | -- | |||||
| Credit cards | 308,387 | 304,368 | -- | -- | -- | |||||
| Other consumer | 328,571 | 328,547 | 283,320 | 278,298 | 278,499 | |||||
| Total consumer loans | 7,588,401 | 7,538,970 | 6,313,458 | 6,456,553 | 6,627,645 | |||||
| Total loans and leases | 19,106,526 | 18,763,516 | 16,790,919 | 16,472,583 | 16,365,366 | |||||
| Allowance for loan losses | 149,933 | 138,516 | 126,746 | 120,100 | 112,749 | |||||
| Loans and leases, net | 18,956,593 | 18,625,000 | 16,664,173 | 16,352,483 | 16,252,617 | |||||
| Bank owned life insurance | 401,211 | 397,739 | 395,944 | 392,468 | 416,449 | |||||
| Goodwill and other intangibles | 2,626,625 | 2,631,605 | 1,796,394 | 1,803,240 | 1,812,628 | |||||
| Other assets | 983,999 | 1,130,891 | 937,859 | 955,300 | 803,828 | |||||
| Total assets | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | $ 32,810,615 | $ 31,209,507 | |||||
| Deposits: | ||||||||||
| Savings accounts | $ 3,941,528 | $ 4,103,773 | $ 2,554,720 | $ 2,621,016 | $ 2,641,723 | |||||
| Interest-bearing checking | 4,090,322 | 3,887,568 | 2,431,672 | 2,259,576 | 2,028,052 | |||||
| Money market deposits | 10,801,280 | 10,919,766 | 7,100,646 | 7,220,902 | 7,507,189 | |||||
| Noninterest-bearing deposits | 4,658,374 | 4,774,764 | 3,200,824 | 3,335,356 | 3,095,283 | |||||
| Certificates of deposit | 4,206,192 | 4,211,116 | 3,741,525 | 3,968,265 | 4,351,930 | |||||
| Total deposits | 27,697,696 | 27,896,987 | 19,029,387 | 19,405,115 | 19,624,177 | |||||
| Short-term borrowings | 1,995,610 | 958,044 | 6,353,189 | 2,208,845 | 1,156,711 | |||||
| Long-term borrowings | 732,339 | 732,263 | 4,688,251 | 5,918,276 | 5,928,632 | |||||
| Other liabilities | 532,868 | 700,249 | 571,532 | 480,201 | 499,312 | |||||
| Total liabilities | 30,958,513 | 30,287,543 | 30,642,359 | 28,012,437 | 27,208,832 | |||||
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | -- | |||||
| Common stockholders' equity | 4,577,419 | 4,480,211 | 4,537,444 | 4,460,176 | 4,000,675 | |||||
| Total stockholders' equity | 4,915,421 | 4,818,213 | 4,875,446 | 4,798,178 | 4,000,675 | |||||
| Total liabilities and stockholders' equity | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | $ 32,810,615 | $ 31,209,507 | |||||
| Selected balance sheet information: | ||||||||||
| Total interest-earning assets(1) | $ 31,316,470 | $ 30,403,035 | $ 31,959,556 | $ 29,284,139 | $ 27,805,974 | |||||
| Total interest-bearing liabilities | 25,767,271 | 24,812,530 | 26,870,002 | 24,196,880 | 23,614,238 | |||||
| Net interest-earning assets | $ 5,549,199 | $ 5,590,505 | $ 5,089,554 | $ 5,087,259 | $ 4,191,736 | |||||
| Tangible common equity(2) | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 | $ 2,188,047 | |||||
| Unrealized gain on securities, net of tax | 204,347 | 133,430 | 152,408 | 105,276 | 116,666 | |||||
| Total core deposits | $ 23,491,504 | $ 23,685,871 | $ 15,287,862 | $ 15,436,850 | $ 15,272,247 | |||||
| Originated loans(3) | $ 12,232,568 | $ 11,392,158 | $ 10,517,021 | $ 9,876,005 | $ 9,425,194 | |||||
| Acquired loans(4) | 7,085,839 | 7,600,213 | 6,459,798 | 6,801,689 | 7,195,250 | |||||
| Credit related discount on acquired loans(5) | (211,881) | (228,855) | (185,900) | (205,111) | (255,078) | |||||
| Total Loans | $ 19,106,526 | $ 18,763,516 | $ 16,790,919 | $ 16,472,583 | $ 16,365,366 | |||||
| (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) Originated loans represent total loans excluding acquired loans. | ||||||||||
| (4) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||||||
| (5) 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 | Nine months ended | |||||||||||||||||||||||||||||
| September 30, 2012 | June 30, 2012 | September 30, 2011 | September 30, 2012 | September 30, 2011 | ||||||||||||||||||||||||||
|
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 | $ 6,783 | $ 80 | 4.60% | $ 6,501 | $ 80 | 4.88% | $ 6,143 | $ 82 | 5.23% | $ 6,529 | $ 239 | 4.81% | $ 5,467 | $ 223 | 5.39% | |||||||||||||||
| Business | 4,609 | 45 | 3.81 | 4,293 | 44 | 4.03 | 3,424 | 35 | 3.95 | 4,274 | 129 | 3.96 | 3,056 | 98 | 4.23 | |||||||||||||||
| Total commercial loans | 11,392 | 125 | 4.28 | 10,794 | 124 | 4.54 | 9,567 | 117 | 4.78 | 10,803 | 368 | 4.48 | 8,523 | 321 | 4.97 | |||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||
| Residential real estate | 3,962 | 40 | 4.03 | 3,964 | 40 | 4.07 | 4,227 | 47 | 4.49 | 3,957 | 123 | 4.13 | 3,269 | 113 | 4.60 | |||||||||||||||
| Home equity | 2,672 | 30 | 4.42 | 2,412 | 27 | 4.42 | 2,167 | 25 | 4.55 | 2,415 | 80 | 4.42 | 1,908 | 65 | 4.56 | |||||||||||||||
| Indirect auto | 301 | 3 | 3.64 | 84 | 1 | 4.16 | -- | -- | -- | 131 | 4 | 3.86 | -- | -- | -- | |||||||||||||||
| Credit cards | 308 | 9 | 11.31 | 160 | 5 | 11.58 | -- | -- | -- | 165 | 14 | 11.31 | -- | -- | -- | |||||||||||||||
| Other consumer | 329 | 7 | 8.80 | 283 | 6 | 8.12 | 277 | 5 | 6.81 | 285 | 17 | 8.07 | 272 | 14 | 6.93 | |||||||||||||||
| Total consumer loans | 7,572 | 88 | 4.64 | 6,903 | 78 | 4.55 | 6,671 | 77 | 4.58 | 6,953 | 237 | 4.56 | 5,449 | 192 | 4.71 | |||||||||||||||
| Total loans and leases | 18,964 | 213 | 4.47 | 17,697 | 202 | 4.59 | 16,238 | 194 | 4.73 | 17,756 | 605 | 4.56 | 13,972 | 513 | 4.91 | |||||||||||||||
| Residential MBS | 5,677 | 40 | 2.81 | 8,982 | 52 | 2.35 | 8,748 | 73 | 3.40 | 7,729 | 158 | 2.72 | 8,111 | 217 | 3.57 | |||||||||||||||
| Commercial MBS | 1,895 | 19 | 3.93 | 1,867 | 18 | 3.94 | 598 | 5 | 3.60 | 1,822 | 54 | 3.95 | 411 | 12 | 3.90 | |||||||||||||||
| Other investment securities | 3,645 | 29 | 3.21 | 3,183 | 27 | 3.43 | 1,594 | 18 | 4.44 | 3,038 | 76 | 3.35 | 1,341 | 42 | 4.11 | |||||||||||||||
| Total securities, at cost | 11,217 | 88 | 3.13 | 14,032 | 98 | 2.81 | 10,940 | 97 | 3.56 | 12,589 | 288 | 3.05 | 9,863 | 271 | 3.65 | |||||||||||||||
| Money market and other investments | 558 | 5 | 3.56 | 818 | 5 | 2.20 | 411 | 3 | 2.34 | 682 | 13 | 2.60 | 333 | 7 | 2.81 | |||||||||||||||
| Total interest-earning assets | 30,739 | $ 306 | 3.96% | 32,547 | $ 305 | 3.77% | 27,589 | $ 294 | 4.22% | 31,027 | $ 907 | 3.90% | 24,168 | $ 791 | 4.37% | |||||||||||||||
| Goodwill and other intangibles | 2,627 | 2,207 | 1,828 | 2,213 | 1,562 | |||||||||||||||||||||||||
| Other noninterest-earning assets | 1,938 | 1,746 | 1,566 | 1,737 | 1,373 | |||||||||||||||||||||||||
| Total assets | $ 35,304 | $ 36,500 | $ 30,983 | $ 34,977 | $ 27,103 | |||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||
| Savings accounts | $ 4,026 | $ 2 | 0.20% | $ 3,302 | $ 1 | 0.14% | $ 2,699 | $ 2 | 0.25% | $ 3,300 | $ 3 | 0.14% | $ 2,174 | $ 4 | 0.24% | |||||||||||||||
| Interest-bearing checking | 3,871 | 1 | 0.06 | 3,095 | 1 | 0.08 | 2,025 | 1 | 0.13 | 3,066 | 2 | 0.08 | 1,910 | 2 | 0.12 | |||||||||||||||
| Money market deposits | 10,899 | 8 | 0.29 | 9,125 | 6 | 0.28 | 7,148 | 11 | 0.65 | 9,071 | 19 | 0.28 | 6,197 | 27 | 0.58 | |||||||||||||||
| Certificates of deposit | 4,083 | 8 | 0.75 | 4,019 | 8 | 0.83 | 4,444 | 11 | 0.96 | 3,977 | 25 | 0.85 | 4,022 | 29 | 0.97 | |||||||||||||||
| Total interest bearing deposits | 22,879 | 19 | 0.32% | 19,541 | 16 | 0.34% | 16,316 | 25 | 0.60% | 19,414 | 50 | 0.34% | 14,303 | 62 | 0.58% | |||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||
| Short-term borrowings | 1,666 | 1 | 0.36% | 5,046 | 7 | 0.55% | 1,303 | 2 | 0.46% | 3,442 | 15 | 0.56% | 1,550 | 4 | 0.38% | |||||||||||||||
| Long-term borrowings | 732 | 12 | 6.74 | 2,433 | 18 | 2.91 | 6,048 | 25 | 1.67 | 2,825 | 57 | 2.70 | 4,897 | 69 | 1.87 | |||||||||||||||
| Total borrowings | 2,398 | 13 | 2.31 | 7,479 | 24 | 1.31 | 7,351 | 27 | 1.45 | 6,267 | 72 | 1.53 | 6,447 | 73 | 1.51 | |||||||||||||||
| Total interest-bearing liabilities | 25,277 | $ 32 | 0.51% | 27,020 | $ 41 | 0.61% | 23,667 | $ 52 | 0.87% | 25,681 | $ 122 | 0.63% | 20,750 | $ 135 | 0.87% | |||||||||||||||
| Noninterest-bearing deposits | 4,618 | 3,835 | 2,857 | 3,838 | 2,433 | |||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 536 | 765 | 431 | 590 | 367 | |||||||||||||||||||||||||
| Total liabilities | 30,431 | 31,620 | 26,955 | 30,110 | 23,550 | |||||||||||||||||||||||||
| Total stockholders' equity | 4,873 | 4,880 | 4,028 | 4,868 | 3,553 | |||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ 35,304 | $ 36,500 | $ 30,983 | $ 34,977 | $ 27,103 | |||||||||||||||||||||||||
| Net interest income (FTE) | $ 274 | $ 264 | $ 242 | $ 785 | $ 656 | |||||||||||||||||||||||||
| Taxable Equivalent Adjustment(1) | 4 | 5 | 7 | 14 | 17 | |||||||||||||||||||||||||
| Total core deposits | $ 23,414 | $ 11 | 0.18% | $ 19,357 | $ 8 | 0.17% | $ 14,729 | $ 14 | 0.38% | $ 19,275 | $ 24 | 0.17% | $ 12,714 | $ 32 | 0.34% | |||||||||||||||
| Total deposits | 27,497 | 19 | 0.27% | 23,376 | 16 | 0.28% | 19,173 | 25 | 0.51% | 23,252 | 50 | 0.29% | 16,736 | 62 | 0.49% | |||||||||||||||
| Tax equivalent net interest rate spread | 3.45% | 3.16% | 3.35% | 3.27% | 3.50% | |||||||||||||||||||||||||
| Tax equivalent net interest rate margin | 3.54% | 3.26% | 3.48% | 3.38% | 3.63% | |||||||||||||||||||||||||
| (1) Tax equivalent interest income is calculated based upon a 35% effective tax rate. | ||||||||||||||||||||||||||||||
| (2) Includes nonaccrual loans. | ||||||||||||||||||||||||||||||
| First Niagara Financial Group, Inc. | ||||||||||||||
| Allowance for Loans and Lease Losses & Asset Quality | ||||||||||||||
| (in thousands) | ||||||||||||||
| 2012 | 2011 | Nine months ended | ||||||||||||
|
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
September 30, 2012 |
September 30, 2011 |
||||||||
| Beginning balance | $ 138,516 | $ 126,746 | $ 120,100 | $ 112,749 | $ 107,028 | $ 120,100 | $ 95,354 | |||||||
| Net loan (charge-offs) recoveries: | ||||||||||||||
| Commercial real estate | $ (1,791) | $ (2,384) | $ (5,994) | $ 212 | $ (5,580) | $ (10,169) | $ (10,373) | |||||||
| Commercial business | (6,077) | (10,958) | (4,143) | (4,665) | (2,123) | (21,178) | (9,953) | |||||||
| Residential real estate | (396) | (155) | (1,120) | (318) | 171 | (1,671) | (668) | |||||||
| Home equity | (401) | (1,536) | (1,161) | (268) | (223) | (3,098) | (1,833) | |||||||
| Other consumer | (1,406) | (805) | (836) | (796) | (370) | (3,047) | (963) | |||||||
| Total net loan charge-offs | $ (10,071) | $ (15,838) | $ (13,254) | $ (5,835) | $ (8,125) | $ (39,163) | $ (23,790) | |||||||
| Provision for loan losses | 21,800 | 27,803 | 19,900 | 13,186 | 13,846 | 69,503 | 41,185 | |||||||
| Allowance related to loans sold | (312) | (195) | -- | -- | -- | (507) | -- | |||||||
| Ending balance | $ 149,933 | $ 138,516 | $ 126,746 | $ 120,100 | $ 112,749 | $ 149,933 | $ 112,749 | |||||||
| Supplemental information | ||||||||||||||
| Allowance to loans | 0.78% | 0.74% | 0.75% | 0.73% | 0.69% | 0.78% | 0.69% | |||||||
| Allowance for originated loans to originated loans(1) | 1.20% | 1.19% | 1.19% | 1.20% | 1.20% | 1.20% | 1.20% | |||||||
| Net charge-offs to average loans (annualized) | ||||||||||||||
| Commercial real estate | 0.11% | 0.15% | 0.38% | -0.01% | 0.36% | 0.21% | 0.25% | |||||||
| Commercial business | 0.53% | 1.02% | 0.42% | 0.51% | 0.25% | 0.66% | 0.43% | |||||||
| Total commercial loans | 0.28% | 0.49% | 0.40% | 0.18% | 0.32% | 0.39% | 0.32% | |||||||
| Residential real estate | 0.04% | 0.02% | 0.11% | 0.03% | -0.02% | 0.06% | 0.03% | |||||||
| Home equity | 0.06% | 0.25% | 0.22% | 0.05% | 0.04% | 0.17% | 0.13% | |||||||
| Other consumer | 0.60% | 0.61% | 1.20% | 1.14% | 0.53% | 0.70% | 0.47% | |||||||
| Total consumer loans | 0.12% | 0.15% | 0.20% | 0.08% | 0.03% | 0.15% | 0.08% | |||||||
| Total loans | 0.21% | 0.36% | 0.32% | 0.14% | 0.20% | 0.29% | 0.23% | |||||||
| Net charge-offs of originated loans to average originated loans (annualized)(1) | ||||||||||||||
| Commercial real estate | 0.12% | 0.18% | 0.16% | -0.05% | 0.59% | 0.15% | 0.37% | |||||||
| Commercial business | 0.64% | 1.25% | 0.54% | 0.67% | 0.34% | 0.82% | 0.56% | |||||||
| Total commercial loans | 0.36% | 0.66% | 0.32% | 0.25% | 0.49% | 0.45% | 0.45% | |||||||
| Residential real estate | 0.09% | 0.04% | 0.27% | 0.08% | -0.04% | 0.13% | 0.05% | |||||||
| Home equity | 0.13% | 0.51% | 0.40% | 0.10% | 0.08% | 0.35% | 0.25% | |||||||
| Other consumer | 0.59% | 0.81% | 1.25% | 1.51% | 0.93% | 0.76% | 0.90% | |||||||
| Total consumer loans | 0.18% | 0.28% | 0.38% | 0.17% | 0.06% | 0.27% | 0.17% | |||||||
| Total loans | 0.30% | 0.55% | 0.34% | 0.22% | 0.35% | 0.40% | 0.36% | |||||||
| Nonperforming loans: | ||||||||||||||
| Originated: | ||||||||||||||
| Commercial real estate | $ 46,413 | $ 46,881 | $ 44,749 | $ 43,119 | $ 41,295 | $ 46,413 | $ 41,295 | |||||||
| Commercial business | 37,375 | 30,714 | 39,682 | 20,173 | 18,839 | 37,375 | 18,839 | |||||||
| Residential real estate | 21,377 | 23,058 | 22,021 | 18,668 | 15,555 | 21,377 | 15,555 | |||||||
| Home equity | 8,084 | 8,119 | 7,071 | 6,790 | 5,428 | 8,084 | 5,428 | |||||||
| Other consumer | 938 | 926 | 697 | 1,048 | 769 | 938 | 769 | |||||||
| Total originated nonperforming loans | 114,187 | 109,698 | 114,220 | 89,798 | 81,886 | 114,187 | 81,886 | |||||||
| Total acquired nonperforming loans(2) | 28,193 | 19,374 | 19,041 | -- | -- | 28,193 | -- | |||||||
| Total nonperforming loans | 142,380 | 129,072 | 133,261 | 89,798 | 81,886 | 142,380 | 81,886 | |||||||
| Real estate owned | 9,669 | 10,632 | 7,202 | 4,482 | 9,392 | 9,669 | 9,392 | |||||||
| Total nonperforming assets | $ 152,049 | $ 139,704 | $ 140,463 | $ 94,280 | $ 91,278 | $ 152,049 | $ 91,278 | |||||||
| Accruing troubled debt restructurings (TDR) | $ 55,732 | $ 42,140 | $ 42,358 | $ 43,888 | $ 45,282 | $ 45,518 | $ 45,282 | |||||||
| Loans 90 days past due still accruing(3) | 145,323 | 125,668 | 116,810 | 143,237 | 143,270 | 145,323 | 143,270 | |||||||
| Total classified loans(4) | 693,006 | 732,762 | 753,536 | 748,375 | 692,961 | 693,006 | 692,961 | |||||||
| Total criticized loans(5) | $ 990,670 | $ 1,030,471 | $ 1,044,731 | $ 1,144,222 | $ 1,268,879 | $ 990,670 | $ 1,268,879 | |||||||
| Total nonperforming loans to loans | 0.75% | 0.69% | 0.79% | 0.55% | 0.50% | 0.75% | 0.50% | |||||||
| Total nonperforming originated loans to originated loans(1) | 0.93% | 0.96% | 1.09% | 0.91% | 0.87% | 0.93% | 0.87% | |||||||
| Total nonperforming assets to loans and real estate owned | 0.80% | 0.74% | 0.84% | 0.57% | 0.56% | 0.80% | 0.56% | |||||||
| Total nonperforming assets to assets | 0.42% | 0.40% | 0.40% | 0.29% | 0.29% | 0.42% | 0.29% | |||||||
| Allowance to nonperforming loans | 105.3% | 107.3% | 95.1% | 133.7% | 137.7% | 105.3% | 137.7% | |||||||
| Texas ratio(6) | 14.16% | 13.35% | 8.97% | 8.55% | 10.19% | 14.16% | 10.19% | |||||||
| (1) Originated loans represent total loans excluding acquired loans. | ||||||||||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. The remaining credit discount, recorded at acquisition, is adequate to cover losses on these balances. | ||||||||||||||
| (3) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection. Amounts for the first and second quarter of 2012 have been revised to include matured loans 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 "Classification of Assets" in our Annual Report on 10-K for the year ended December 31, 2011. | ||||||||||||||
| (5) Beginning in the third quarter of 2011, criticized loans include consumer loans when they are 90 days or more past due. Prior to the third quarter of 2011, criticized loans include consumer loans when they are 60 days or more past due. The impact of the change at September 30, 2011 was a reduction of criticized loans by $24 million. Criticized loans include special mention, substandard, doubtful, and loss. | ||||||||||||||
| (6) Represents ratio computed using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||||||||||
| First Niagara Financial Group, Inc. | ||||||||||||||
| Key Statistics | ||||||||||||||
| (Share counts in thousands) | ||||||||||||||
| 2012 | 2011 | |||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||
| First Niagara Financial Group, Inc capital ratios: | ||||||||||||||
| Tier 1 risk based capital | 9.51% | 9.40% | 14.66% | (1) | 15.60% | (1) | 11.90% | |||||||
| Tier 1 common capital(2) | 7.59% | 7.41% | 12.47% | (1) | 13.23% | (1) | 11.29% | |||||||
| Total risk based capital | 11.48% | 11.37% | 16.75% | (1) | 17.84% | (1) | 12.56% | |||||||
| Leverage | 6.83% | 6.32% | 9.67% | (1) | 9.97% | (1) | 7.42% | |||||||
| Equity to assets | 13.70% | 13.72% | 13.73% | (1) | 14.62% | (1) | 12.82% | |||||||
| Tangible common equity to tangible assets(2) | 5.87% | 5.69% | 8.13% | (1) | 8.57% | (1) | 7.44% | |||||||
| First Niagara Bank, N.A capital ratios: | ||||||||||||||
| Tier 1 risk based capital | 10.19% | 9.63% | 14.69% | (1) | 14.66% | (1) | 11.51% | |||||||
| Total risk based capital | 10.88% | 10.57% | 15.66% | (1) | 16.47% | (1) | 12.17% | |||||||
| Leverage | 7.32% | 6.48% | 9.69% | (1) | 9.38% | (1) | 7.17% | |||||||
| Number of branches | 432 | 452 | 334 | 333 | 332 | |||||||||
| Full time equivalent employees | 6,036 | 6,103 | 4,753 | 4,827 | 4,712 | |||||||||
| Share information and per share metrics: | ||||||||||||||
| Common shares outstanding | 352,632 | 352,665 | 351,936 | 351,834 | 294,898 | |||||||||
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | -- | |||||||||
| Treasury shares | 13,370 | 13,337 | 14,066 | 14,168 | 14,192 | |||||||||
| Market price (NASDAQ: FNFG): | $ 8.07 | $ 7.65 | $ 9.84 | $ 8.63 | $ 9.15 | |||||||||
| Book value per share(3) | 13.11 | 12.84 | 13.00 | 12.79 | 13.72 | |||||||||
| Tangible book value per share(2)(3) | 5.59 | 5.30 | 7.86 | 7.62 | 7.50 | |||||||||
| Price/Book | 61.56% | 59.58% | 75.69% | 67.47% | 66.69% | |||||||||
| Price/Tangible book(2) | 144.36% | 144.34% | 125.19% | 113.25% | 122.00% | |||||||||
| Common stock dividends | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.16 | |||||||||
| Preferred stock dividends | 0.54 | 0.54 | 0.37 | -- | -- | |||||||||
| Dividend payout ratio | 53.33% | N/M | 50.00% | 84.21% | 84.21% | |||||||||
| Dividend yield (annualized) | 3.94% | 4.21% | 3.27% | 7.36% | 6.94% | |||||||||
| N/M Not meaningful | ||||||||||||||
| (1) Ratios reflect the impact of our capital raise completed in December 2011, the proceeds of which were used to consummate the acquisition of branches from HSBC Bank-USA, National Association in May 2012. | ||||||||||||||
| (2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||||||||||
| (3) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | ||||||||||||||
| First Niagara Financial Group, Inc. | |||||||
| Appendix A - Non-GAAP Reconciliation | |||||||
| (in thousands, except per share amounts) | |||||||
| 2012 | 2011 | Nine months ended | |||||
|
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
September 30, 2012 |
September 30, 2011 |
|
| Financial ratios computed on an operating basis(1): | |||||||
| Earnings per basic share | $ 0.19 | $ 0.17 | $ 0.19 | $ 0.24 | $ 0.25 | $ 0.54 | $ 0.75 |
| Earnings per diluted share | 0.19 | 0.17 | 0.19 | 0.24 | 0.25 | 0.54 | 0.75 |
| Weighted average shares outstanding - basic(2) | 349,001 | 348,941 | 348,823 | 304,065 | 292,211 | 348,956 | 260,259 |
| Weighted average shares outstanding - diluted(2) | 349,371 | 348,941 | 349,069 | 304,341 | 292,503 | 349,248 | 260,689 |
| Pre-tax, pre-provision income | 129,333 | 128,287 | 127,774 | 123,672 | 125,547 | 385,394 | 337,246 |
| Pre-tax, pre-provision income per diluted share | 0.37 | 0.37 | 0.37 | 0.41 | 0.43 | 1.10 | 1.29 |
| Pre-tax, pre-provision return on average assets | 1.46% | 1.41% | 1.55% | 1.55% | 1.61% | 1.47% | 1.66% |
| Net interest margin(3) | 3.54% | 3.26% | 3.34% | 3.48% | 3.48% | 3.38% | 3.63% |
| Interest yield on average loans(3) | 4.47% | 4.59% | 4.62% | 4.76% | 4.73% | 4.56% | 4.91% |
| Rate paid on interest-bearing liabilities(3) | 0.51% | 0.61% | 0.79% | 0.82% | 0.87% | 0.63% | 0.87% |
| Efficiency ratio | 64.71% | 62.13% | 59.08% | 59.61% | 58.71% | 62.12% | 58.89% |
| Effective tax rate | 30.9% | 33.5% | 35.0% | 34.7% | 33.7% | 33.1% | 33.5% |
| Noninterest income as a percentage of net revenue(4) | 26.43% | 23.53% | 22.39% | 20.80% | 22.58% | 24.22% | 22.14% |
| Return on average assets | 0.83% | 0.73% | 0.85% | 0.90% | 0.94% | 0.80% | 0.96% |
| Return on average equity | 6.04% | 5.49% | 5.81% | 6.82% | 7.25% | 5.78% | 7.33% |
| Return on average tangible equity(5) | 13.11% | 10.03% | 9.24% | 12.02% | 13.28% | 10.60% | 13.08% |
| Return on average common equity | 5.83% | 5.23% | 5.79% | 6.93% | 7.25% | 5.62% | 7.33% |
| Return on average tangible common equity(6) | 13.86% | 10.18% | 9.63% | 12.36% | 13.28% | 10.98% | 13.08% |
| Reconciliation of noninterest income on operating basis to reported noninterest income(1): | |||||||
| Total noninterest income on operating basis (Non-GAAP) | $ 96,866 | $ 79,703 | $ 69,908 | $ 63,685 | $ 68,655 | $ 246,477 | $ 181,624 |
| Gain on securities portfolio repositioning | 5,337 | 15,895 | -- | -- | -- | 21,232 | -- |
| Total reported noninterest income (GAAP) | 102,203 | 95,598 | 69,908 | 63,685 | 68,655 | 267,709 | 181,624 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | |||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 237,138 | $ 210,429 | $ 184,505 | $ 182,526 | $ 178,537 | $ 632,072 | $ 483,112 |
| Merger and acquisition integration expenses | 29,404 | 131,460 | 12,970 | 6,149 | 9,008 | 173,834 | 92,012 |
| Restructuring charges | -- | 3,750 | 2,703 | 13,496 | 16,326 | 6,453 | 29,038 |
| Total reported noninterest expense (GAAP) | $ 266,542 | $ 345,639 | $ 200,178 | $ 202,171 | $ 203,871 | $ 812,359 | $ 604,162 |
| Reconciliation of net operating income to net income(1): | |||||||
| Net operating income (Non-GAAP) | $ 74,027 | $ 66,630 | $ 70,053 | $ 72,057 | $ 73,645 | $ 210,710 | $ 194,661 |
| Nonoperating income and expenses, net of tax: | |||||||
| Gain on securities portfolio repositioning | (3,469) | (10,331) | -- | -- | -- | (13,800) | -- |
| Merger and acquisition integration expenses | 19,112 | 85,448 | 8,431 | 4,256 | 5,925 | 112,991 | 60,164 |
| Restructuring charges | -- | 2,437 | 1,757 | 9,340 | 10,739 | 4,194 | 19,048 |
| Total nonoperating expenses, net of tax | 15,643 | 77,554 | 10,188 | 13,596 | 16,664 | 103,385 | 79,212 |
| Net income (GAAP) | $ 58,384 | $ (10,924) | $ 59,865 | $ 58,461 | $ 56,981 | $ 107,325 | $ 115,449 |
| 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) | $ 66,480 | $ 59,083 | $ 64,938 | $ 72,057 | $ 73,645 | $ 190,501 | $ 194,661 |
| Nonoperating income and expenses, net of tax: | |||||||
| Gain on securities portfolio repositioning | (3,469) | (10,331) | -- | -- | -- | (13,800) | -- |
| Merger and acquisition integration expenses | 19,112 | 85,448 | 8,431 | 4,256 | 5,925 | 112,991 | 60,164 |
| Restructuring charges | -- | 2,437 | 1,757 | 9,340 | 10,739 | 4,194 | 19,048 |
| Total nonoperating income and expenses, net of tax | 15,643 | 77,554 | 10,188 | 13,596 | 16,664 | 103,385 | 79,212 |
| Net income available to common stockholders (GAAP) | $ 50,837 | $ (18,471) | $ 54,750 | $ 58,461 | $ 56,981 | $ 87,116 | $ 115,449 |
| Computation of pre-tax,pre-provision income: | |||||||
| Net interest income | $ 269,605 | $ 259,013 | $ 242,371 | $ 242,513 | $ 235,429 | $ 770,989 | $ 638,734 |
| Noninterest income | 102,203 | 95,598 | 69,908 | 63,685 | 68,655 | 267,709 | 181,624 |
| Noninterest expense | (266,542) | (345,639) | (200,178) | (202,171) | (203,871) | (812,359) | (604,162) |
| Pre-tax, pre-provision income (GAAP) | 105,266 | 8,972 | 112,101 | 104,027 | 100,213 | 226,339 | 216,196 |
| Less: non-operating noninterest income (1) | (5,337) | (15,895) | -- | -- | -- | (21,232) | -- |
| Add back: non-operating noninterest expenses (1) | 29,404 | 135,210 | 15,673 | 19,645 | 25,334 | 180,287 | 121,050 |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 129,333 | $ 128,287 | $ 127,774 | $ 123,672 | $ 125,547 | $ 385,394 | $ 337,246 |
| (1) Noninterest income and expense on an operating basis, net operating income, and pre-tax, pre-provision income on an operating basis are non-GAAP measures that we believe provide meaningful comparisons of our underlying operational performance and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, we believe exclusion of these nonoperating items enables management to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations. | |||||||
| (2) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | |||||||
| (3) Yields and rates calculated on a tax equivalent basis. | |||||||
| (4) Net revenue is comprised of net interest income and noninterest income. | |||||||
| (5) Tangible equity is a non-GAAP measure and excludes goodwill and other intangibles. | |||||||
| (6) Tangible common equity is a non-GAAP measure and excludes goodwill and other intangibles as well as preferred stock. | |||||||
| First Niagara Financial Group, Inc. | ||||||||||||||
| Appendix A - Non-GAAP Reconciliation (Cont.) | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| 2012 | 2011 | Nine months ended | ||||||||||||
| Third Quarter | Second Quarter |
First Quarter |
Fourth Quarter | Third Quarter | September 30, 2012 | September 30, 2011 | ||||||||
| Computation of Ending Tangible Common Equity: | ||||||||||||||
| Total stockholders' equity | $ 4,915,421 | $ 4,818,213 | $ 4,875,446 | $ 4,798,178 | $ 4,000,675 | $ 4,915,421 | $ 4,000,675 | |||||||
| Less: Goodwill and other intangibles | (2,626,625) | (2,631,605) | (1,796,394) | (1,803,240) | (1,812,628) | (2,626,625) | (1,812,628) | |||||||
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | -- | (338,002) | -- | |||||||
| Tangible common equity | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 | $ 2,188,047 | $ 1,950,794 | $ 2,188,047 | |||||||
| Computation of Average Tangible Equity: | ||||||||||||||
| Total stockholders' equity | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,188,800 | $ 4,027,572 | $ 4,867,576 | $ 3,552,559 | |||||||
| Less: Goodwill and other intangibles | (2,626,666) | (2,206,682) | (1,800,613) | (1,809,690) | (1,827,820) | (2,212,836) | (1,562,320) | |||||||
| Tangible equity | $ 2,245,939 | $ 2,673,109 | $ 3,049,663 | $ 2,379,110 | $ 2,199,752 | $ 2,654,740 | $ 1,990,239 | |||||||
| Computation of Average Tangible Common Equity: | ||||||||||||||
| Total stockholders' equity | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,188,800 | $ 4,027,572 | $ 4,867,576 | $ 3,552,559 | |||||||
| Less: Goodwill and other intangibles | (2,626,666) | (2,206,682) | (1,800,613) | (1,809,690) | (1,827,820) | (2,212,836) | (1,562,320) | |||||||
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (66,226) | -- | (338,002) | -- | |||||||
| Tangible common equity | $ 1,907,937 | $ 2,335,107 | $ 2,711,661 | $ 2,312,884 | $ 2,199,752 | $ 2,316,738 | $ 1,990,239 | |||||||
| Computation of Texas Ratio: | ||||||||||||||
| Nonperforming Assets | $ 152,049 | $ 139,704 | $ 140,463 | $ 94,280 | $ 91,278 | $ 152,049 | $ 91,278 | |||||||
| Loans 90 days past due still accruing(1) | 145,323 | 125,668 | 116,810 | 143,237 | 143,270 | 145,323 | 143,270 | |||||||
| Sum of nonperforming assets and loans 90 days past due still accruing | $ 297,372 | $ 265,372 | $ 257,273 | $ 237,517 | $ 234,548 | $ 297,372 | $ 234,548 | |||||||
| Tangible common equity | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 | $ 2,188,047 | $ 1,950,794 | $ 2,188,047 | |||||||
| Allowance for loan loss | 149,933 | 138,516 | 126,746 | 120,100 | 112,749 | 149,933 | 112,749 | |||||||
| Sum of tangible common equity and allowance for loan loss | $ 2,100,727 | $ 1,987,122 | $ 2,867,796 | $ 2,777,036 | $ 2,300,796 | $ 2,100,727 | $ 2,300,796 | |||||||
| Sum of nonperforming assets and acquired loans 90 days past due still accruing/Sum of tangible common equity and allowance for loan loss | 14.16% | 13.35% | 8.97% | 8.55% | 10.19% | 14.16% | 10.19% | |||||||
| Computation of Tier 1 Common Capital: | ||||||||||||||
| Tier 1 capital | $ 2,225,121 | $ 2,128,702 | $ 3,009,727 | $ 2,962,031 | $ 2,151,953 | $ 2,225,121 | $ 2,151,953 | |||||||
| Less: Qualifying restricted core capital elements | (111,820) | (111,630) | (111,453) | (111,284) | (111,112) | (111,820) | (111,112) | |||||||
| Less: Perpetual non-cumulative preferred stock | (338,002) | (338,002) | (338,002) | (338,002) | -- | (338,002) | -- | |||||||
| Tier 1 common capital (Non-GAAP) | $ 1,775,299 | $ 1,679,070 | $ 2,560,272 | $ 2,512,745 | $ 2,040,841 | $ 1,775,299 | $ 2,040,841 | |||||||
| (1) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection. | ||||||||||||||