Fourth Quarter Highlights:
- Non-GAAP Operating Income of $0.19 per Share, Consistent with the Prior Quarter
- GAAP EPS of $0.15 including CMO premium adjustment ($0.03) and restructuring charges ($0.01)
- Business Trends Continue to be Very Strong
- 12th consecutive quarter of double digit commercial loan growth
- Interest-bearing checking balances up 32%
- Mortgage originations increase 12% to an all-time high
- Wealth Management fees increase 8%
- Capital Markets revenue up 11%
- Net Interest Income Stable, Excluding Impacts of Additional CMO Premium Amortization
- 13% increase in average interest earning assets
- Loan yields decline 8 basis points; deposit rates down 3 basis points
BUFFALO, N.Y., Jan. 23, 2013 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today announced fourth-quarter and full-year 2012 results that reflect strong core business fundamentals and core customer acquisition across the company's regional banking footprint. Solid operating performance continues to be driven by sustained market share gains through new customer acquisition as well as deepening relationships with existing customers.
"We finished 2012 with our team and franchise in a very solid and stable position – and most importantly, focused on optimizing our performance and results in 2013," said John R. Koelmel, First Niagara President and Chief Executive Officer. "The fundamentals of our business continue to improve as we more fully leverage the expanded capacities and competencies we now have, which has created very positive momentum as we start the new year. And while the impact of our CMO portfolio on fourth quarter results is disappointing, it doesn't at all diminish the consistent core operating performance we have again produced.
"As we look ahead to the next twelve months, our focus is to (1) better position our balance sheet by continuing the strong growth performance of our commercial and consumer lending teams; (2) ensure we do that while maintaining best in class credit outcomes; (3) deepen relationships across all business lines to improve the performance of our fee based businesses and services; and, (4) be more operationally effective and efficient by controlling costs and doing more with what we have already invested," continued Mr. Koelmel. "As I have consistently stated, running our business a little bit better each and every day is what we are about in 2013."
"Throughout 2012, First Niagara has delivered solid fundamental operating performance across all geographies enabled by strong traction with our new products and services," said Gregory W. Norwood, Chief Financial Officer. "Given the impact of a prolonged low interest rate environment, we will continue to sharpen our focus to maximize returns by optimizing the franchise and a commitment to manage expenses aggressively and create positive operating leverage."
Fourth Quarter Operating Results
In the fourth quarter of 2012, First Niagara reported non-GAAP operating net income available to common shareholders of $67.8 million, or $0.19 per diluted share, compared to $66.5 million, or $0.19 per diluted share, in the third quarter of 2012 and $72.1 million, or $0.24 per diluted share in the fourth quarter of 2011.
Those results exclude the impacts of the previously disclosed pre-tax adjustment of $16 million to accelerate premium amortization on its Collateralized Mortgage Obligations (CMO) portfolio and $3.7 million in restructuring charges.
Net interest income in the fourth quarter was essentially flat to the prior quarter. Excluding the impact of a quarter-over-quarter increase in premium amortization expense, net interest margin declined 8 basis points to 3.46%, driven by the continued downward re-pricing of loans and securities. However, those impacts on net interest income were offset by the benefits of a 13% increase in average interest-earning assets.
Non-interest revenues in the fourth quarter of 2012 decreased $5.0 million from the prior quarter as a result of seasonal declines in insurance commissions and lower mortgage banking revenues.
Average commercial loans increased 11% annualized over the prior quarter, the 12th consecutive quarter of double-digit growth as strong commercial business and commercial real estate loan demand continues across the company's footprint. Average transactional deposits, which include interest-bearing checking and non-interest bearing deposit balances, increased 16% annualized from the prior quarter driven by increases in balances held by customers.
The provision for loan losses on originated loans totaled $21.3 million in the fourth quarter of 2012, including $13.7 million to support loan growth and $7.6 million to cover net charge-offs during the quarter. Net charge-offs equaled 24 basis points of average originated loans, a six basis point decrease from the prior quarter.
Operating expenses in the fourth quarter of 2012 were $235.1 million, decreasing $2 million, or 1%, compared to the third quarter. Salaries and benefits expense declined $4.5 million, or 4%, driven by the company's workforce optimization initiative in the third quarter.
GAAP Results
On a GAAP basis, First Niagara reported fourth quarter net income to common shareholders of $53.5 million, or $0.15 per diluted share, compared to income of $50.8 million, or $0.14 per diluted share, in the third quarter of 2012. Reported GAAP results for the fourth quarter of 2012 included $3.7 million of restructuring charges as well as the impact of the $16 million accelerated premium amortization adjustment.
| Operating Results (Non-GAAP) | Q4 2012 | Q3 2012 | Q4 2011 |
| Net interest income | $ 268.6 | $ 269.6 | $ 242.5 |
| Provision for credit losses | 22.0 | 22.2 | 13.4 |
| Noninterest income | 91.8 | 96.9 | 63.7 |
| Noninterest expense | 235.1 | 237.1 | 182.5 |
| Operating net income | 75.4 | 74.0 | 72.1 |
| Preferred stock dividend | 7.5 | 7.5 | -- |
| Operating net income available to common shareholders | 67.8 | 66.5 | 72.1 |
| Weighted average diluted shares outstanding | 349.7 | 349.4 | 304.3 |
| Operating earnings per diluted share | $ 0.19 | $ 0.19 | $ 0.24 |
| Reported Results (GAAP) | |||
| Operating net income before non-operating items | $ 75.4 | $ 74.0 | $ 72.1 |
| CMO premium amortization adjustment (a) | 11.6 | -- | -- |
| Gain on securities portfolio repositioning (b) | -- | 3.5 | -- |
| Non-operating expenses (c) | 2.6 | 19.1 | 13.6 |
| Net income | 61.1 | 58.4 | 58.5 |
| Preferred stock dividend | 7.5 | 7.5 | -- |
| Net income available to common shareholders | 53.5 | 50.8 | 58.5 |
| Weighted average diluted shares outstanding | 349.7 | 349.4 | 304.3 |
| Earnings per diluted share | $ 0.15 | $ 0.14 | $ 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 retroactive adjustment to accelerate premium amortization on the CMO portfolio. | |||
| (b) Amount is shown net of tax and represents the gains recorded on the sale of $3.1 billion of mortgage-backed securities in the third quarter of 2012. | |||
| (c) Amounts are shown net of tax and represent expenses related to acquisition, integration, and restructuring. |
Full Year Results
For the full year ended December 31, 2012, the company posted non-GAAP operating earnings of $263.9 million, or $0.75 per diluted share, compared to $266.7 million, or $0.98 per diluted share, in 2011. The principal reasons for the decline were foregone interest income on $3.1 billion of mortgage-backed securities sold in the second quarter of 2012, continued pressures on asset pricing from the low interest rate environment, and the impacts of common and preferred shares issued in December 2011 to fund, in advance, the May 18, 2012 purchase of deposits and loans in the HSBC branch transaction.
For the full year 2012, the company posted GAAP net income of $140.7 million, or $0.40 per diluted share compared to $173.9 million, or $0.64 per diluted share, in 2011. Included in the calculation of GAAP net income are $184.0 million in pre-tax acquisition and restructuring related expenses, $24.6 million in accelerated premium amortization adjustments, and $21.2 million in gains related to the sale of $3.1 billion of mortgage-backed securities in the second quarter of 2012. In 2011, merger and restructuring related expenses totaled $140.7 million.
| Operating Results (Non-GAAP) | 2012 | 2011 |
| Net interest income | $ 1,047.9 | $ 881.2 |
| Provision for credit losses | 92.3 | 58.1 |
| Noninterest income | 338.3 | 245.3 |
| Noninterest expense | 867.2 | 665.6 |
| Net operating income before non-operating items | 291.6 | 266.7 |
| Preferred stock dividend | 27.8 | -- |
| Operating net income available to common shareholders | 263.9 | 266.7 |
| Weighted average diluted shares outstanding | 349.4 | 271.6 |
| Operating earnings per diluted share | $ 0.75 | $ 0.98 |
| Reported Results (GAAP) | ||
| Net operating income before non-operating items | $ 291.6 | $ 266.7 |
| CMO premium amortization adjustment (a) | 17.2 | -- |
| Gain on securities portfolio repositioning (b) | 13.8 | -- |
| Non-operating expenses (c) | 119.8 | 92.8 |
| Net income | 168.4 | 173.9 |
| Preferred stock dividend | 27.8 | -- |
| Net income available to common shareholders | 140.7 | 173.9 |
| Weighted average diluted shares outstanding | 349.4 | 271.6 |
| Earnings per diluted share | $ 0.40 | $ 0.64 |
| 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 retroactive adjustment to accelerate premium amortization on the CMO portfolio. | ||
| (b) Amount is shown net of tax and represents the gains recorded on the sale of $3.1 billion of mortgage-backed securities in 2012. | ||
| (c) Amounts are shown net of tax and represent expenses related to acquisition, integration, and restructuring. | ||
Loans
For the twelfth consecutive quarter, average commercial loans increased at a double-digit pace organically, up $302 million, or 11% annualized over the prior quarter. Commercial business loans averaged $4.8 billion, representing a 15% annualized increase over the prior quarter. Commercial real estate loans increased 8% annualized to $6.9 billion. Strength in specialty lending business lines such as equipment finance, healthcare lending, and capital markets augmented a robust pace of growth in the company's traditional middle market and commercial real estate businesses. Commercial loans in the company's Western and Eastern Pennsylvania and New England markets delivered double-digit annualized growth rates of 12%, 28%, and 10%, respectively, while balances in the New York market increased 6% following a strong third quarter.
Average indirect auto loan balances increased $214 million to $515 million. During the fourth quarter, new originations yielded 3.43%. The company continues to target and engage new car dealers within its contiguous footprint to lend and finance primarily used car purchases for high credit quality customers.
Average residential real estate loans declined by $143 million, or 14% annualized, from the third quarter reflecting higher prepayments. Average credit card and other consumer loan balances were unchanged.
Deposits
The company's strategic focus on core customer acquisition continued to allow it to successfully re-position its account mix and increase low cost deposits. Average transactional accounts, which include interest-bearing checking and noninterest-bearing balances, increased to $8.8 billion, up 16% annualized compared to the prior quarter, with double-digit increases across each market. These low-cost deposits now represent 32% of the company's deposit base, compared to 26% a year ago.
Average noninterest-bearing deposits increased 2% annualized while interest-bearing checking deposits increased 32% annualized over the prior quarter driven by strong customer engagement that resulted in higher account balances. These increases were offset by the company's pricing initiatives to reduce higher-cost money market balances. Average total core deposits, excluding time deposits, increased to $23.5 billion, or 2% annualized, compared to the third quarter.
Net Interest Income
Non-GAAP net interest income of $268.6 million was essentially flat to the prior quarter. The benefits of a 13% annualized increase in average earning assets were offset by the impacts of continued downward re-pricing pressure on earning asset yields. On a GAAP basis, net interest income of $252.3 million included the $16.3 million accelerated premium amortization adjustment related to the CMO portfolio.
Total premium amortization on the CMO portfolio increased to $30.8 million in the fourth quarter from $11.1 million in the prior quarter, driven by the $16.3 million in accelerated CMO premium amortization adjustment. Excluding the impacts of that increase, net interest margin in the fourth quarter was 3.46%, an eight basis point decline from the third quarter of 2012. Continued compression of loan yields from prepayments and lower spreads was partially offset by a three basis point decline in cost of interest bearing deposits.
"After our thorough evaluation of the CMO portfolio, including the substantial level of prepayments received in recent months as well as those expected to continue for the foreseeable future, we recorded an adjustment of $16 million to accelerate the premium amortization," said Mr. Norwood. "With this adjustment, the remaining premium has been reduced to $74 million, or 1.6% of par at December 31, 2012, significantly reducing potential future volatility in our CMO yields."
Credit Quality
At December 31, 2012, the allowance for loan losses was $162.5 million, compared to $149.9 million at September 30, 2012. Information for both the originated and acquired portfolios follows.
| Q4 2012 | Q3 2012 | |||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total |
| Provision for loan losses* | $ 21.3 | $ 0.2 | $ 21.5 | $ 21.4 | $ 0.4 | $ 21.8 |
| Net charge-offs | 7.6 | 1.3 | 8.9 | 9.1 | 1.0 | 10.1 |
| NCOs/ Avg Loans | 0.24% | 0.08% | 0.18% | 0.30% | 0.06% | 0.21% |
| Total loans** | $ 13,372 | $ 6,514 | $ 19,710 | $ 12,233 | $ 7,086 | $ 19,106 |
| (*) Excludes provision for unfunded commitments of $0.5 million and $0.4 million in 4Q12 and 3Q12, respectively | ||||||
| (**) Acquired loans before associated credit discount; see accompanying tables for further information | ||||||
Originated loans
The provision for loan losses on originated loans totaled $21.3 million, unchanged from the prior quarter. This provision included $13.7 million to support sequential originated loan growth of $1.1 billion and $7.6 million to cover net charge-offs. Net charge-offs equaled 24 basis points of average originated loans in the fourth quarter of 2012, a six basis points improvement from the prior quarter.
At the end of the fourth quarter, nonperforming assets to total assets were 0.50%, and increased eight basis points from the prior quarter. Nonperforming originated loans as a percentage of originated loans increased to 1.07% at December 31, 2012 from 0.93% at September 30, 2012. Approximately a third of the $29 million sequential increase in nonperforming originated loans related to guidance issued by the Office of the Comptroller of the Currency (OCC) to place consumer loans discharged in bankruptcy on nonaccrual status. The remaining increase in commercial nonaccruals was driven primarily by one large commercial credit in the company's Eastern Pennsylvania market.
At December 31, 2012, the allowance for loan losses on originated loans totaled $160.9 million or 1.20% of such loans, compared to $147.2 million or 1.20% of loans at September 30, 2012.
Acquired loans
The provision for losses on acquired loans totaled $0.2 million, compared to $0.4 million in the prior quarter. Net charge-offs on those portfolios totaled $1.3 million during the quarter, compared to $1.0 million in the prior period. At December 31, 2012, the allowance for loan losses on acquired loans totaled $1.6 million, compared to $2.7 million at September 30, 2012. Acquired nonperforming loans totaled $29.6 million, compared to $28.2 million at the end of the prior quarter. At December 31, 2012, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $176 million.
Fee Income
Fourth quarter 2012 non-GAAP operating noninterest income of $91.8 million decreased 5% or $5.0 million compared to the prior quarter.
Continued strength in derivative swap activity and increased assets under management in the company's wealth management platform contributed to 11% and 8% sequential increases in capital markets and wealth management fees, respectively.
These increases were offset by lower mortgage banking revenues as well as typical fourth quarter declines in insurance fees. Mortgage banking revenues decreased $2.9 million from the prior quarter driven by lower application volumes and gain-on-sale margins. However, closed mortgage origination volumes increased 12% from the prior quarter to an all-time high. During the quarter, the company opened a third mortgage processing center to expediently meet and exceed the needs of its customers.
On a GAAP basis, noninterest income of $91.8 million declined $10.4 million from the prior quarter. Prior quarter results included a $5.3 million gain recognized on the sale of $3.1 billion in CMOs in the second quarter.
Noninterest Expense
Fourth quarter non-GAAP operating noninterest expenses were $235.1 million, decreasing $2.0 million, or 1%, compared to the third quarter, driven by the initial impact of the company's workforce optimization initiative in the third quarter. The benefit of the resulting $4.5 million decrease in salaries and benefits was minimized by seasonal increases in occupancy expenses. Excluding the additional $3.4 million in additional premium amortization recognized in the fourth quarter, the efficiency ratio of 64.6% was comparable to 64.7% in the prior quarter.
On a GAAP basis, noninterest expense for the fourth quarter was $238.8 million, including $3.7 million in restructuring charges.
Capital
At December 31, 2012, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.2% and 7.5% 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 $37 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 8:30 a.m. Eastern Time on Wednesday, January 23, 2013 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-324-9650 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 February 6, 2013 by dialing 1-888-566-0438, passcode: 15645.
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 | For year ending | |||||
| Fourth | Third | Second | First | Fourth | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | 2012 | 2011 | |
| Interest income: | |||||||
| Loans and leases | $ 212,035 | $ 211,767 | $ 200,725 | $ 189,385 | $ 195,434 | $ 813,912 | $ 704,664 |
| Investment securities and other | 71,564 | 90,101 | 99,116 | 101,395 | 96,472 | 362,176 | 360,643 |
| Total interest income | 283,599 | 301,868 | 299,841 | 290,780 | 291,906 | 1,176,088 | 1,065,307 |
| Interest expense: | |||||||
| Deposits | 16,902 | 18,358 | 16,391 | 14,998 | 21,521 | 66,649 | 83,237 |
| Borrowings | 14,411 | 13,905 | 24,437 | 33,411 | 27,872 | 86,164 | 100,823 |
| Total interest expense | 31,313 | 32,263 | 40,828 | 48,409 | 49,393 | 152,813 | 184,060 |
| Net interest income | 252,286 | 269,605 | 259,013 | 242,371 | 242,513 | 1,023,275 | 881,247 |
| Provision for credit losses | 22,000 | 22,200 | 28,100 | 20,000 | 13,400 | 92,300 | 58,107 |
| Net interest income after provision | 230,286 | 247,405 | 230,913 | 222,371 | 229,113 | 930,975 | 823,140 |
| Noninterest income: | |||||||
| Deposit service charges | 26,345 | 26,422 | 21,433 | 17,037 | 18,049 | 91,237 | 66,144 |
| Insurance commissions | 15,497 | 18,764 | 17,072 | 16,833 | 15,440 | 68,166 | 65,125 |
| Merchant and card fees | 11,945 | 12,014 | 9,271 | 5,528 | 5,044 | 38,758 | 29,253 |
| Wealth management services | 12,000 | 11,069 | 9,207 | 9,039 | 8,179 | 41,315 | 30,729 |
| Mortgage banking | 8,060 | 10,974 | 7,174 | 5,649 | 5,279 | 31,857 | 15,182 |
| Capital markets income | 7,098 | 6,381 | 6,831 | 6,539 | 2,746 | 26,849 | 8,349 |
| Lending and leasing | 3,739 | 3,730 | 4,245 | 3,123 | 3,103 | 14,837 | 11,425 |
| Bank owned life insurance | 3,021 | 3,449 | 3,848 | 3,387 | 3,302 | 13,705 | 11,129 |
| Other income | 4,116 | 9,400 | 16,517 | 2,773 | 2,543 | 32,806 | 7,973 |
| Total noninterest income | 91,821 | 102,203 | 95,598 | 69,908 | 63,685 | 359,530 | 245,309 |
| Noninterest expense: | |||||||
| Salaries and benefits | 111,026 | 115,484 | 104,507 | 96,477 | 88,796 | 427,494 | 341,895 |
| Occupancy and equipment | 27,609 | 25,694 | 24,089 | 22,017 | 22,580 | 99,409 | 78,163 |
| Technology and communications | 28,257 | 28,110 | 24,434 | 19,713 | 18,942 | 100,514 | 62,376 |
| Marketing and advertising | 9,292 | 8,954 | 6,676 | 6,763 | 7,724 | 31,685 | 21,850 |
| Professional services | 11,163 | 11,193 | 9,263 | 8,895 | 11,669 | 40,514 | 36,017 |
| Amortization of intangibles | 14,224 | 14,506 | 9,839 | 6,466 | 6,586 | 45,035 | 25,544 |
| FDIC premiums | 9,158 | 8,850 | 10,552 | 6,133 | 6,097 | 34,693 | 28,860 |
| Merger and acquisition integration expenses | 3,678 | 29,404 | 131,460 | 12,970 | 6,149 | 177,512 | 98,161 |
| Restructuring charges | -- | -- | 3,750 | 2,703 | 13,496 | 6,453 | 42,534 |
| Other expense | 24,377 | 24,347 | 21,069 | 18,041 | 20,132 | 87,834 | 70,933 |
| Total noninterest expense | 238,784 | 266,542 | 345,639 | 200,178 | 202,171 | 1,051,143 | 806,333 |
| Income (loss) before income tax | 83,323 | 83,066 | (19,128) | 92,101 | 90,627 | 239,362 | 262,116 |
| Income tax expense (benefit) | 22,226 | 24,682 | (8,204) | 32,236 | 32,166 | 70,940 | 88,206 |
| Net income (loss) | 61,097 | 58,384 | (10,924) | 59,865 | 58,461 | 168,422 | 173,910 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 5,115 | -- | 27,756 | -- |
| Net income (loss) available to common stockholders | $ 53,550 | $ 50,837 | $ (18,471) | $ 54,750 | $ 58,461 | $ 140,666 | $ 173,910 |
| Financial Ratios: | |||||||
| Earnings (loss) per basic share | $ 0.15 | $ 0.15 | $ (0.05) | $ 0.16 | $ 0.19 | $ 0.40 | $ 0.64 |
| Earnings (loss) per diluted share | 0.15 | 0.14 | (0.05) | 0.16 | 0.19 | 0.40 | 0.64 |
| Weighted average shares outstanding - basic(1) | 349,071 | 349,001 | 348,941 | 348,823 | 304,065 | 348,960 | 271,301 |
| Weighted average shares outstanding - diluted(1) | 349,663 | 349,371 | 348,941 | 349,069 | 304,341 | 349,368 | 271,612 |
| Net revenue(2) | $ 344,107 | $ 371,808 | $ 354,611 | $ 312,279 | $ 306,198 | $ 1,382,805 | $ 1,126,556 |
| Noninterest income as a percentage of net revenue(2) | 26.68% | 27.49% | 26.96% | 22.39% | 20.80% | 26.00% | 21.78% |
| Pre-tax, pre-provision income(3) | $ 105,323 | $ 105,266 | $ 8,972 | $ 112,101 | $ 104,027 | $ 331,662 | $ 320,223 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.30 | $ 0.30 | $ 0.03 | $ 0.32 | $ 0.34 | $ 0.95 | $ 1.18 |
| Pre-tax, pre-provision return on average assets(3) | 1.15% | 1.19% | 0.10% | 1.36% | 1.30% | 0.94% | 1.13% |
| Net interest margin(4) | 3.22% | 3.54% | 3.26% | 3.34% | 3.48% | 3.42% | 3.58% |
| Interest yield on average loans(4) | 4.39% | 4.47% | 4.59% | 4.62% | 4.76% | 4.51% | 4.87% |
| Rate paid on interest-bearing liabilities(4) | 0.48% | 0.51% | 0.61% | 0.79% | 0.82% | 0.59% | 0.85% |
| Efficiency ratio | 69.39% | 71.69% | 97.47% | 64.10% | 66.03% | 76.02% | 71.58% |
| Effective tax rate | 26.7% | 29.7% | 42.9% | 35.0% | 35.5% | 29.6% | 33.7% |
| Return on average assets(5) | 0.67% | 0.66% | (0.12)% | 0.73% | 0.73% | 0.48% | 0.62% |
| Return on average equity(5) | 4.92% | 4.77% | (0.90)% | 4.96% | 5.54% | 3.45% | 4.68% |
| Return on average tangible equity(3)(5) | 10.45% | 10.34% | (1.64)% | 7.90% | 9.75% | 6.55% | 8.33% |
| Return on average common equity | 4.62% | 4.46% | (1.64)% | 4.88% | 5.63% | 3.09% | 4.71% |
| Return on average tangible common equity(3) | 10.72% | 10.60% | (3.18)% | 8.12% | 10.03% | 6.30% | 8.33% |
| (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 | ||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |
| Cash and cash equivalents | $ 430,862 | $ 447,087 | $ 488,227 | $ 370,380 | $ 836,555 |
| Investment securities: | |||||
| Available for sale | 10,996,102 | 10,579,970 | 9,937,271 | 12,248,058 | 9,348,296 |
| Held to maturity | 1,299,806 | 1,387,763 | 1,463,872 | 2,503,156 | 2,669,630 |
| FHLB and FRB common stock | 420,277 | 373,311 | 329,555 | 499,328 | 358,159 |
| Total investment securities | 12,716,185 | 12,341,044 | 11,730,698 | 15,250,542 | 12,376,085 |
| Loans held for sale | 154,745 | 117,375 | 101,596 | 102,513 | 94,484 |
| Loans and leases: | |||||
| Commercial: | |||||
| Real estate | 7,093,193 | 6,835,971 | 6,710,009 | 6,369,098 | 6,244,381 |
| Business | 4,953,323 | 4,682,154 | 4,514,537 | 4,108,363 | 3,771,649 |
| Total commercial loans | 12,046,516 | 11,518,125 | 11,224,546 | 10,477,461 | 10,016,030 |
| Consumer: | |||||
| Residential real estate | 3,761,567 | 3,870,756 | 4,037,045 | 3,881,003 | 4,012,267 |
| Home equity | 2,651,891 | 2,661,429 | 2,683,236 | 2,149,135 | 2,165,988 |
| Indirect auto | 601,456 | 419,258 | 185,774 | -- | -- |
| Credit cards | 314,973 | 308,387 | 304,368 | -- | -- |
| Other consumer | 333,609 | 328,571 | 328,547 | 283,320 | 278,298 |
| Total consumer loans | 7,663,496 | 7,588,401 | 7,538,970 | 6,313,458 | 6,456,553 |
| Total loans and leases | 19,710,012 | 19,106,526 | 18,763,516 | 16,790,919 | 16,472,583 |
| Allowance for loan losses | 162,522 | 149,933 | 138,516 | 126,746 | 120,100 |
| Loans and leases, net | 19,547,490 | 18,956,593 | 18,625,000 | 16,664,173 | 16,352,483 |
| Bank owned life insurance | 404,321 | 401,211 | 397,739 | 395,944 | 392,468 |
| Goodwill and other intangibles | 2,617,809 | 2,626,625 | 2,631,605 | 1,796,394 | 1,803,240 |
| Other assets | 937,317 | 983,999 | 1,130,891 | 937,859 | 955,300 |
| Total assets | $ 36,808,729 | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | $ 32,810,615 |
| Deposits: | |||||
| Savings accounts | $ 3,887,587 | $ 3,941,528 | $ 4,103,773 | $ 2,554,720 | $ 2,621,016 |
| Interest-bearing checking | 4,450,970 | 4,090,322 | 3,887,568 | 2,431,672 | 2,259,576 |
| Money market deposits | 10,581,137 | 10,801,280 | 10,919,766 | 7,100,646 | 7,220,902 |
| Noninterest-bearing deposits | 4,643,580 | 4,658,374 | 4,774,764 | 3,200,824 | 3,335,356 |
| Certificates of deposit | 4,113,257 | 4,206,192 | 4,211,116 | 3,741,525 | 3,968,265 |
| Total deposits | 27,676,531 | 27,697,696 | 27,896,987 | 19,029,387 | 19,405,115 |
| Short-term borrowings | 2,983,718 | 1,995,610 | 958,044 | 6,353,189 | 2,208,845 |
| Long-term borrowings | 732,425 | 732,339 | 732,263 | 4,688,251 | 5,918,276 |
| Other liabilities | 487,958 | 532,868 | 700,249 | 571,532 | 480,201 |
| Total liabilities | 31,880,632 | 30,958,513 | 30,287,543 | 30,642,359 | 28,012,437 |
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 |
| Common stockholders' equity | 4,590,095 | 4,577,419 | 4,480,211 | 4,537,444 | 4,460,176 |
| Total stockholders' equity | 4,928,097 | 4,915,421 | 4,818,213 | 4,875,446 | 4,798,178 |
| Total liabilities and stockholders' equity | $ 36,808,729 | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | $ 32,810,615 |
| Selected balance sheet information: | |||||
| Total interest-earning assets(1) | $ 32,321,964 | $ 31,316,470 | $ 30,403,035 | $ 31,959,556 | $ 29,284,139 |
| Total interest-bearing liabilities | 26,749,094 | 25,767,271 | 24,812,530 | 26,870,002 | 24,196,880 |
| Net interest-earning assets | $ 5,572,870 | $ 5,549,199 | $ 5,590,505 | $ 5,089,554 | $ 5,087,259 |
| Tangible common equity(2) | $ 1,972,286 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 |
| Unrealized gain on securities, net of tax | 208,271 | 204,347 | 133,430 | 152,408 | 105,276 |
| Total core deposits | $ 23,563,274 | $ 23,491,504 | $ 23,685,871 | $ 15,287,862 | $ 15,436,850 |
| Originated loans(3) | $ 13,372,357 | $ 12,232,568 | $ 11,392,158 | $ 10,517,021 | $ 9,876,005 |
| Acquired loans(4) | 6,513,636 | 7,085,839 | 7,600,213 | 6,459,798 | 6,801,689 |
| Credit related discount on acquired loans(5) | (175,981) | (211,881) | (228,855) | (185,900) | (205,111) |
| Total Loans | $ 19,710,012 | $ 19,106,526 | $ 18,763,516 | $ 16,790,919 | $ 16,472,583 |
| (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 | For year ending | ||||||||||||||
| December 31, 2012 | September 30, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 | |||||||||||
|
Average Balances |
Interest(1) |
Yields and Rates(1)(2) |
Average Balances |
Interest(1) |
Yields and Rates(1) |
Average Balances |
Interest(1) |
Yields and Rates(1)(2) |
Average Balances |
Interest(1) |
Yields and Rates(1)(2) |
Average Balances |
Interest(1) |
Yields and Rates(1) |
|
| Interest-earning assets: | |||||||||||||||
| Loans and leases(3) | |||||||||||||||
| Commercial: | |||||||||||||||
| Real estate | $ 6,911 | $ 79 | 4.45% | $ 6,783 | $ 80 | 4.60% | $ 6,199 | $ 82 | 5.19% | $ 6,625 | $ 318 | 4.72% | $ 5,651 | $ 305 | 5.33% |
| Business | 4,783 | 47 | 3.89 | 4,609 | 45 | 3.81 | 3,663 | 40 | 4.24 | 4,402 | 176 | 3.94 | 3,209 | 138 | 4.23 |
| Total commercial loans | 11,694 | 126 | 4.22 | 11,392 | 125 | 4.28 | 9,862 | 122 | 4.84 | 11,027 | 494 | 4.41 | 8,860 | 443 | 4.93 |
| Consumer: | |||||||||||||||
| Residential real estate | 3,819 | 39 | 4.05 | 3,962 | 40 | 4.03 | 4,085 | 45 | 4.41 | 3,922 | 161 | 4.11 | 3,475 | 158 | 4.54 |
| Home equity | 2,659 | 29 | 4.31 | 2,672 | 30 | 4.42 | 2,166 | 24 | 4.48 | 2,476 | 109 | 4.39 | 1,973 | 90 | 4.54 |
| Indirect auto | 515 | 5 | 3.50 | 301 | 3 | 3.64 | -- | -- | -- | 228 | 8 | 3.65 | -- | -- | -- |
| Credit cards | 310 | 8 | 10.19 | 308 | 9 | 11.31 | -- | -- | -- | 202 | 22 | 10.88 | -- | -- | -- |
| Other consumer | 328 | 7 | 8.73 | 329 | 7 | 8.80 | 279 | 5 | 7.12 | 296 | 24 | 8.25 | 274 | 19 | 6.98 |
| Total consumer loans | 7,631 | 87 | 4.54 | 7,572 | 88 | 4.64 | 6,530 | 75 | 4.53 | 7,124 | 324 | 4.55 | 5,721 | 267 | 4.66 |
| Total loans and leases | 19,325 | 213 | 4.39 | 18,964 | 213 | 4.47 | 16,392 | 196 | 4.76 | 18,151 | 818 | 4.51 | 14,582 | 710 | 4.87 |
| Residential MBS(2) | 5,746 | 36 | 2.50 | 5,677 | 40 | 2.81 | 8,429 | 68 | 3.21 | 7,230 | 202 | 2.79 | 8,191 | 284 | 3.47 |
| Commercial MBS | 1,953 | 18 | 3.79 | 1,895 | 19 | 3.93 | 1,262 | 13 | 4.19 | 1,855 | 73 | 3.91 | 626 | 25 | 4.03 |
| Other investment securities (4) | 4,474 | 35 | 3.16 | 4,002 | 33 | 3.35 | 1,926 | 19 | 4.04 | 3,705 | 123 | 3.32 | 1,680 | 68 | 3.97 |
| Total securities, at cost(2) | 12,173 | 90 | 2.95 | 11,574 | 92 | 3.18 | 11,617 | 100 | 3.45 | 12,790 | 397 | 3.11 | 10,497 | 377 | 3.59 |
| Money market and other investments | 207 | 1 | 1.54 | 201 | 1 | 1.41 | 299 | 1 | 0.86 | 257 | 3 | 1.13 | 132 | 2 | 1.33 |
| Total interest-earning assets(2) | 31,705 | $ 304 | 3.81% | 30,739 | $ 306 | 3.96% | 28,308 | $ 297 | 4.17% | 31,198 | $ 1,219 | 3.91% | 25,211 | $ 1,089 | 4.31% |
| Goodwill and other intangibles | 2,619 | 2,627 | 1,810 | 2,315 | 1,625 | ||||||||||
| Other noninterest-earning assets | 2,005 | 1,938 | 1,578 | 1,804 | 1,424 | ||||||||||
| Total assets | $ 36,329 | $ 35,304 | $ 31,696 | $ 35,317 | $ 28,260 | ||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits | |||||||||||||||
| Savings accounts | $ 3,898 | $ 2 | 0.18% | $ 4,026 | $ 2 | 0.20% | $ 2,622 | $ 1 | 0.12% | $ 3,451 | $ 5 | 0.15% | $ 2,287 | $ 5 | 0.20% |
| Interest-bearing checking | 4,181 | 1 | 0.07 | 3,871 | 1 | 0.06 | 2,101 | 1 | 0.12 | 3,347 | 2 | 0.07 | 1,958 | 2 | 0.12 |
| Money market deposits | 10,810 | 7 | 0.25 | 10,899 | 8 | 0.29 | 7,414 | 10 | 0.52 | 9,506 | 27 | 0.28 | 6,504 | 36 | 0.56 |
| Certificates of deposit | 4,259 | 8 | 0.71 | 4,083 | 8 | 0.75 | 4,162 | 10 | 0.99 | 4,048 | 33 | 0.81 | 4,057 | 40 | 0.98 |
| Total interest bearing deposits | 23,148 | 17 | 0.29% | 22,879 | 19 | 0.32% | 16,299 | 22 | 0.52% | 20,352 | 67 | 0.33% | 14,806 | 83 | 0.56% |
| Borrowings | |||||||||||||||
| Short-term borrowings | 2,331 | 2 | 0.38% | 1,666 | 1 | 0.36% | 1,899 | 2 | 0.49% | 3,163 | 17 | 0.53% | 1,638 | 6 | 0.40% |
| Long-term borrowings | 732 | 12 | 6.63 | 732 | 12 | 6.74 | 5,797 | 26 | 1.75 | 2,299 | 69 | 3.02 | 5,124 | 95 | 1.84 |
| Total borrowings | 3,063 | 14 | 1.87 | 2,398 | 13 | 2.31 | 7,696 | 28 | 1.44 | 5,462 | 86 | 1.58 | 6,762 | 101 | 1.49 |
| Total interest-bearing liabilities | 26,211 | $ 31 | 0.48% | 25,277 | $ 32 | 0.51% | 23,995 | $ 49 | 0.82% | 25,814 | $ 153 | 0.59% | 21,568 | $ 184 | 0.85% |
| Noninterest-bearing deposits | 4,645 | 4,618 | 3,077 | 4,041 | 2,595 | ||||||||||
| Other noninterest-bearing liabilities | 528 | 536 | 435 | 575 | 384 | ||||||||||
| Total liabilities | 31,384 | 30,431 | 27,507 | 30,430 | 24,547 | ||||||||||
| Total stockholders' equity | 4,945 | 4,873 | 4,189 | 4,887 | 3,713 | ||||||||||
| Total liabilities and stockholders' equity | $ 36,329 | $ 35,304 | $ 31,696 | $ 35,317 | $ 28,260 | ||||||||||
| Net interest income (FTE) | $ 273 | $ 274 | $ 248 | $ 1,066 | $ 904 | ||||||||||
| Taxable Equivalent Adjustment(1) | 4 | 4 | 5 | 18 | 23 | ||||||||||
| Total core deposits | $ 23,534 | $ 10 | 0.16% | $ 23,414 | $ 11 | 0.18% | $ 15,214 | $ 12 | 0.29% | $ 20,345 | $ 34 | 0.17% | $ 13,344 | $ 43 | 0.33% |
| Total deposits | 27,793 | 17 | 0.24% | 27,497 | 19 | 0.27% | 19,376 | 22 | 0.44% | 24,393 | 67 | 0.27% | 17,401 | 83 | 0.48% |
| Tax equivalent net interest rate spread(2) | 3.33% | 3.45% | 3.35% | 3.32% | 3.46% | ||||||||||
| Tax equivalent net interest rate margin(2) | 3.42% | 3.54% | 3.48% | 3.42% | 3.58% | ||||||||||
| (1) Tax equivalent interest income is calculated based upon a 35% effective tax rate. | |||||||||||||||
| (2) Amounts for the three months and year ended December 31, 2012 exclude accelerated CMO adjustments of $16 million and $25 million, respectively. The yields, including these adjustments, are: | |||||||||||||||
| Three months ended December 31, 2012 | Year ended December 31, 2012 | ||||||||||||||
| Residential MBS | 1.37% | 2.45% | |||||||||||||
| Total securities, at cost | 2.41% | 2.91% | |||||||||||||
| Total interest earning assets | 3.61% | 3.83% | |||||||||||||
| Tax equivalent net interest rate spread | 3.13% | 3.24% | |||||||||||||
| Tax equivalent net interest rate margin | 3.22% | 3.34% | |||||||||||||
| (3) Includes nonaccrual loans. | |||||||||||||||
| (4) Includes debt securities, collateralized loan obligations, asset-backed securities, FHLB and FRB common stock, and other investment securities. | |||||||||||||||
| First Niagara Financial Group, Inc. | |||||||
| Allowance for Loans and Lease Losses & Asset Quality | |||||||
| (in thousands) | |||||||
| 2012 | 2011 | For year ending | |||||
| Fourth | Third | Second | First | Fourth | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | 2012 | 2011 | |
| Beginning balance | $ 149,933 | $ 138,516 | $ 126,746 | $ 120,100 | $ 112,749 | $ 120,100 | $ 95,354 |
| Net loan (charge-offs) recoveries: | |||||||
| Commercial real estate | $ (1,935) | $ (1,791) | $ (2,384) | $ (5,994) | $ 212 | $ (12,104) | $ (10,161) |
| Commercial business | (3,385) | (6,077) | (10,958) | (4,143) | (4,665) | (24,563) | (14,618) |
| Residential real estate | (658) | (396) | (155) | (1,120) | (318) | (2,329) | (986) |
| Home equity | (673) | (401) | (1,536) | (1,161) | (268) | (3,771) | (2,101) |
| Other consumer | (2,285) | (1,406) | (805) | (836) | (796) | (5,332) | (1,759) |
| Total net loan charge-offs | $ (8,936) | $ (10,071) | $ (15,838) | $ (13,254) | $ (5,835) | $ (48,099) | $ (29,625) |
| Provision for loan losses | 21,525 | 21,800 | 27,803 | 19,900 | 13,186 | 91,028 | 54,371 |
| Allowance related to loans sold | -- | (312) | (195) | -- | -- | (507) | -- |
| Ending balance | $ 162,522 | $ 149,933 | $ 138,516 | $ 126,746 | $ 120,100 | $ 162,522 | $ 120,100 |
| Supplemental information | |||||||
| Allowance to loans | 0.82% | 0.78% | 0.74% | 0.75% | 0.73% | 0.82% | 0.73% |
| Allowance for originated loans to originated loans(1) | 1.20% | 1.20% | 1.19% | 1.19% | 1.20% | 1.20% | 1.20% |
| Net charge-offs to average loans (annualized) | |||||||
| Commercial real estate | 0.11% | 0.11% | 0.15% | 0.38% | -0.01% | 0.18% | 0.18% |
| Commercial business | 0.28% | 0.53% | 1.02% | 0.42% | 0.51% | 0.56% | 0.46% |
| Total commercial loans | 0.18% | 0.28% | 0.49% | 0.40% | 0.18% | 0.33% | 0.28% |
| Residential real estate | 0.07% | 0.04% | 0.02% | 0.11% | 0.03% | 0.06% | 0.03% |
| Home equity | 0.10% | 0.06% | 0.25% | 0.22% | 0.05% | 0.15% | 0.11% |
| Other consumer | 0.79% | 0.60% | 0.61% | 1.20% | 1.14% | 0.73% | 0.64% |
| Total consumer loans | 0.19% | 0.12% | 0.15% | 0.20% | 0.08% | 0.16% | 0.08% |
| Total loans | 0.18% | 0.21% | 0.36% | 0.32% | 0.14% | 0.26% | 0.20% |
| Net charge-offs of originated loans to average originated loans (annualized)(1) | |||||||
| Commercial real estate | 0.07% | 0.12% | 0.18% | 0.16% | -0.05% | 0.13% | 0.26% |
| Commercial business | 0.33% | 0.64% | 1.25% | 0.54% | 0.67% | 0.68% | 0.59% |
| Total commercial loans | 0.19% | 0.36% | 0.66% | 0.32% | 0.25% | 0.38% | 0.39% |
| Residential real estate | 0.15% | 0.09% | 0.04% | 0.27% | 0.08% | 0.14% | 0.06% |
| Home equity | 0.21% | 0.13% | 0.51% | 0.40% | 0.10% | 0.31% | 0.21% |
| Other consumer | 0.94% | 0.59% | 0.81% | 1.25% | 1.51% | 0.84% | 1.02% |
| Total consumer loans | 0.35% | 0.18% | 0.28% | 0.38% | 0.17% | 0.30% | 0.17% |
| Total loans | 0.24% | 0.30% | 0.55% | 0.34% | 0.22% | 0.35% | 0.32% |
| Nonperforming loans: | |||||||
| Originated: | |||||||
| Commercial real estate | $ 50,848 | $ 46,413 | $ 46,881 | $ 44,749 | $ 43,119 | $ 50,848 | $ 43,119 |
| Commercial business | 47,076 | 37,375 | 30,714 | 39,682 | 20,173 | 47,076 | 20,173 |
| Residential real estate | 27,192 | 21,377 | 23,058 | 22,021 | 18,668 | 27,192 | 18,668 |
| Home equity | 14,233 | 8,084 | 8,119 | 7,071 | 6,790 | 14,233 | 6,790 |
| Other consumer | 3,737 | 938 | 926 | 697 | 1,048 | 3,737 | 1,048 |
| Total originated nonperforming loans | 143,086 | 114,187 | 109,698 | 114,220 | 89,798 | 143,086 | 89,798 |
| Total acquired nonperforming loans(2) | 29,638 | 28,193 | 19,374 | 19,041 | -- | 29,638 | -- |
| Total nonperforming loans | 172,724 | 142,380 | 129,072 | 133,261 | 89,798 | 172,724 | 89,798 |
| Real estate owned | 10,114 | 9,669 | 10,632 | 7,202 | 4,482 | 10,114 | 4,482 |
| Total nonperforming assets | $ 182,838 | $ 152,049 | $ 139,704 | $ 140,463 | $ 94,280 | $ 182,838 | $ 94,280 |
| Accruing troubled debt restructurings (TDR) | $ 46,280 | $ 55,732 | $ 42,140 | $ 42,358 | $ 43,888 | $ 46,280 | $ 43,888 |
| Loans 90 days past due still accruing(3) | 171,548 | 145,323 | 125,668 | 116,810 | 143,237 | 171,548 | 143,237 |
| Total classified loans(4) | 708,468 | 693,006 | 732,762 | 753,536 | 748,375 | 708,468 | 748,375 |
| Total criticized loans | $ 1,002,659 | $ 990,670 | $ 1,030,471 | $ 1,044,731 | $ 1,144,222 | $ 1,002,659 | $ 1,144,222 |
| Total nonperforming loans to loans | 0.88% | 0.75% | 0.69% | 0.79% | 0.55% | 0.88% | 0.55% |
| Total nonperforming originated loans to originated loans(1) | 1.07% | 0.93% | 0.96% | 1.09% | 0.91% | 1.07% | 0.91% |
| Total nonperforming assets to loans and real estate owned | 0.93% | 0.80% | 0.74% | 0.84% | 0.57% | 0.93% | 0.57% |
| Total nonperforming assets to assets | 0.50% | 0.42% | 0.40% | 0.40% | 0.29% | 0.50% | 0.29% |
| Allowance to nonperforming loans | 94.1% | 105.3% | 107.3% | 95.1% | 133.7% | 94.1% | 133.7% |
| Texas ratio(5) | 16.60% | 14.16% | 13.35% | 8.97% | 8.55% | 16.60% | 8.55% |
| (1) Originated loans represent total loans excluding acquired loans. | |||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. The remaining credit discount, recorded at acquisition, is adequate to cover losses on these balances. | |||||||
| (3) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection. | |||||||
| (4) Includes consumer loans, which are considered classified when they are 90 days or more past due. Classified loans include substandard, doubtful, and loss, which are consistent with regulatory definitions, and as described in Item 1, "Business", under the heading "Classification of Assets" in our Annual Report on 10-K for the year ended December 31, 2011. | |||||||
| (5) 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 | ||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||
| First Niagara Financial Group, Inc capital ratios: | |||||||
| Tier 1 risk based capital | 9.29% | 9.51% | 9.40% | 14.66% | (1) | 15.60% | (1) |
| Tier 1 common capital(2) | 7.45% | 7.59% | 7.41% | 12.47% | (1) | 13.23% | (1) |
| Total risk based capital | 11.23% | 11.48% | 11.37% | 16.75% | (1) | 17.84% | (1) |
| Leverage | 6.75% | 6.83% | 6.32% | 9.67% | (1) | 9.97% | (1) |
| Equity to assets | 13.39% | 13.70% | 13.72% | 13.73% | (1) | 14.62% | (1) |
| Tangible common equity to tangible assets(2) | 5.77% | 5.87% | 5.69% | 8.13% | (1) | 8.57% | (1) |
| First Niagara Bank, N.A capital ratios: | |||||||
| Tier 1 risk based capital | 9.94% | 10.19% | 9.63% | 14.69% | (1) | 14.66% | (1) |
| Total risk based capital | 10.66% | 10.88% | 10.57% | 15.66% | (1) | 16.47% | (1) |
| Leverage | 7.23% | 7.32% | 6.48% | 9.69% | (1) | 9.38% | (1) |
| Number of branches | 430 | 432 | 452 | 334 | 333 | ||
| Full time equivalent employees | 5,927 | 6,036 | 6,103 | 4,753 | 4,827 | ||
| Share information and per share metrics: | |||||||
| Common shares outstanding | 352,621 | 352,632 | 352,665 | 351,936 | 351,834 | ||
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | ||
| Treasury shares | 13,381 | 13,370 | 13,337 | 14,066 | 14,168 | ||
| Market price (NASDAQ: FNFG): | $ 7.93 | $ 8.07 | $ 7.65 | $ 9.84 | $ 8.63 | ||
| Book value per share(3) | 13.15 | 13.11 | 12.84 | 13.00 | 12.79 | ||
| Tangible book value per share(2)(3) | 5.65 | 5.59 | 5.30 | 7.86 | 7.62 | ||
| Price/Book | 60.30% | 61.56% | 59.58% | 75.69% | 67.47% | ||
| Price/Tangible book(2) | 140.35% | 144.36% | 144.34% | 125.19% | 113.25% | ||
| Common stock dividends | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.16 | ||
| Preferred stock dividends | 0.54 | 0.54 | 0.54 | 0.37 | -- | ||
| Dividend payout ratio | 53.33% | 53.33% | N/M | 50.00% | 84.21% | ||
| Dividend yield (annualized) | 4.01% | 3.94% | 4.21% | 3.27% | 7.36% | ||
| 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 | For year ending | |||||
| Fourth | Third | Second | First | Fourth | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | 2012 | 2011 | |
| Financial ratios computed on an operating basis(1): | |||||||
| Earnings per basic share | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.24 | $ 0.75 | $ 0.98 |
| Earnings per diluted share | 0.19 | 0.19 | 0.19 | 0.19 | 0.24 | 0.75 | 0.98 |
| Weighted average shares outstanding - basic(2) | 349,071 | 349,001 | 348,941 | 348,823 | 304,065 | 348,960 | 271,301 |
| Weighted average shares outstanding - diluted(2) | 349,663 | 349,371 | 348,941 | 349,069 | 304,341 | 349,368 | 271,612 |
| Noninterest income as a percentage of net revenue(4) | 25.48% | 26.43% | 22.96% | 22.39% | 20.80% | 24.40% | 21.78% |
| Pre-tax, pre-provision income | 125,281 | 129,333 | 136,645 | 127,774 | 123,672 | 519,033 | 460,918 |
| Pre-tax, pre-provision income per diluted share | 0.36 | 0.37 | 0.39 | 0.37 | 0.41 | 1.49 | 1.70 |
| Pre-tax, pre-provision return on average assets | 1.37% | 1.46% | 1.51% | 1.55% | 1.55% | 1.47% | 1.63% |
| Net interest margin(3) | 3.42% | 3.54% | 3.37% | 3.34% | 3.48% | 3.42% | 3.58% |
| Interest yield on average loans(3) | 4.39% | 4.47% | 4.59% | 4.62% | 4.76% | 4.51% | 4.87% |
| Rate paid on interest-bearing liabilities(3) | 0.48% | 0.51% | 0.61% | 0.79% | 0.82% | 0.59% | 0.85% |
| Efficiency ratio | 65.24% | 64.71% | 60.63% | 59.08% | 59.61% | 62.56% | 59.09% |
| Effective tax rate | 27.0% | 30.9% | 33.5% | 35.0% | 34.7% | 31.7% | 33.8% |
| Return on average assets | 0.83% | 0.83% | 0.80% | 0.85% | 0.90% | 0.83% | 0.94% |
| Return on average equity | 6.06% | 6.04% | 5.95% | 5.81% | 6.82% | 5.97% | 7.18% |
| Return on average tangible equity(5) | 12.89% | 13.11% | 10.86% | 9.24% | 12.02% | 11.34% | 12.77% |
| Return on average common equity | 5.86% | 5.83% | 5.72% | 5.79% | 6.93% | 5.80% | 7.22% |
| Return on average tangible common equity(6) | 13.57% | 13.86% | 11.13% | 9.63% | 12.36% | 11.81% | 12.88% |
| Reconciliation of net interest income on operating basis to reported net interest income(1): | |||||||
| Total net interest income on operating basis (Non-GAAP) | $ 268,566 | $ 269,605 | $ 267,371 | $ 242,371 | $ 242,513 | $ 1,047,913 | $ 881,247 |
| Additional premium amortization on securities portfolio | (16,280) | -- | (8,358) | -- | -- | (24,638) | -- |
| Total reported net interest income (GAAP) | 252,286 | 269,605 | 259,013 | 242,371 | 242,513 | 1,023,275 | 881,247 |
| Reconciliation of noninterest income on operating basis to reported noninterest income(1): | |||||||
| Total noninterest income on operating basis (Non-GAAP) | $ 91,821 | $ 96,866 | $ 79,703 | $ 69,908 | $ 63,685 | $ 338,298 | $ 245,309 |
| Gain on securities portfolio repositioning | -- | 5,337 | 15,895 | -- | -- | 21,232 | -- |
| Total reported noninterest income (GAAP) | 91,821 | 102,203 | 95,598 | 69,908 | 63,685 | 359,530 | 245,309 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | |||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 235,106 | $ 237,138 | $ 210,429 | $ 184,505 | $ 182,526 | $ 867,178 | $ 665,638 |
| Merger and acquisition integration expenses | 3,678 | 29,404 | 131,460 | 12,970 | 6,149 | 177,512 | 98,161 |
| Restructuring charges | -- | -- | 3,750 | 2,703 | 13,496 | 6,453 | 42,534 |
| Total reported noninterest expense (GAAP) | $ 238,784 | $ 266,542 | $ 345,639 | $ 200,178 | $ 202,171 | $ 1,051,143 | $ 806,333 |
| Reconciliation of net operating income to net income(1): | |||||||
| Net operating income (Non-GAAP) | $ 75,358 | $ 74,027 | $ 72,188 | $ 70,053 | $ 72,057 | $ 291,626 | $ 266,718 |
| Nonoperating income and expenses, net of tax: | |||||||
| Additional premium amortization on securities portfolio | 11,633 | -- | 5,558 | -- | -- | 17,191 | -- |
| Gain on securities portfolio repositioning | -- | (3,469) | (10,331) | -- | -- | (13,800) | -- |
| Merger and acquisition integration expenses | 2,628 | 19,112 | 85,448 | 8,431 | 4,256 | 115,619 | 64,420 |
| Restructuring charges | -- | -- | 2,437 | 1,757 | 9,340 | 4,194 | 28,388 |
| Total nonoperating expenses, net of tax | 14,261 | 15,643 | 83,112 | 10,188 | 13,596 | 123,204 | 92,808 |
| Net income (GAAP) | $ 61,097 | $ 58,384 | $ (10,924) | $ 59,865 | $ 58,461 | $ 168,422 | $ 173,910 |
| 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) | $ 67,811 | $ 66,480 | $ 64,641 | $ 64,938 | $ 72,057 | $ 263,870 | $ 266,718 |
| Nonoperating income and expenses, net of tax: | |||||||
| Additional premium amortization on securities portfolio | 11,633 | -- | 5,558 | -- | -- | 17,191 | -- |
| Gain on securities portfolio repositioning | -- | (3,469) | (10,331) | -- | -- | (13,800) | -- |
| Merger and acquisition integration expenses | 2,628 | 19,112 | 85,448 | 8,431 | 4,256 | 115,619 | 64,420 |
| Restructuring charges | -- | -- | 2,437 | 1,757 | 9,340 | 4,194 | 28,388 |
| Total nonoperating income and expenses, net of tax | 14,261 | 15,643 | 83,112 | 10,188 | 13,596 | 123,204 | 92,808 |
| Net income available to common stockholders (GAAP) | $ 53,550 | $ 50,837 | $ (18,471) | $ 54,750 | $ 58,461 | $ 140,666 | $ 173,910 |
| Computation of pre-tax,pre-provision income: | |||||||
| Net interest income | $ 252,286 | $ 269,605 | $ 259,013 | $ 242,371 | $ 242,513 | $ 1,023,275 | $ 881,247 |
| Noninterest income | 91,821 | 102,203 | 95,598 | 69,908 | 63,685 | 359,530 | 245,309 |
| Noninterest expense | (238,784) | (266,542) | (345,639) | (200,178) | (202,171) | (1,051,143) | (806,333) |
| Pre-tax, pre-provision income (GAAP) | 105,323 | 105,266 | 8,972 | 112,101 | 104,027 | 331,662 | 320,223 |
| Add back: non-operating premium amortization | 16,280 | -- | 8,358 | -- | -- | 24,638 | -- |
| Less: non-operating noninterest income (1) | -- | (5,337) | (15,895) | -- | -- | (21,232) | -- |
| Add back: non-operating noninterest expenses (1) | 3,678 | 29,404 | 135,210 | 15,673 | 19,645 | 183,965 | 140,695 |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 125,281 | $ 129,333 | $ 136,645 | $ 127,774 | $ 123,672 | $ 519,033 | $ 460,918 |
| (1) Net interest income, noninterest income and expense on an operating basis, net operating income, and pre-tax, pre-provision income on an operating basis are non-GAAP measures that we believe provide meaningful comparisons of our underlying operational performance and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, we believe exclusion of these nonoperating items enables management to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations. | |||||||
| (2) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | |||||||
| (3) Yields and rates calculated on a tax equivalent basis. | |||||||
| (4) Net revenue is comprised of net interest income and noninterest income. | |||||||
| (5) Tangible equity is a non-GAAP measure and excludes goodwill and other intangibles. | |||||||
| (6) Tangible common equity is a non-GAAP measure and excludes goodwill and other intangibles as well as preferred stock. | |||||||
| First Niagara Financial Group, Inc. | |||||||
| Appendix A - Non-GAAP Reconciliation (Cont.) | |||||||
| (in thousands, except per share amounts) | |||||||
| 2012 | 2011 | For year ending | |||||
| Fourth | Third | Second | First | Fourth | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | 2012 | 2011 | |
| Computation of Ending Tangible Common Equity: | |||||||
| Total stockholders' equity | $ 4,928,097 | $ 4,915,421 | $ 4,818,213 | $ 4,875,446 | $ 4,798,178 | $ 4,928,097 | $ 4,798,178 |
| Less: Goodwill and other intangibles | (2,617,809) | (2,626,625) | (2,631,605) | (1,796,394) | (1,803,240) | (2,617,809) | (1,803,240) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 1,972,286 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 | $ 1,972,286 | $ 2,656,936 |
| Computation of Average Tangible Equity: | |||||||
| Total stockholders' equity | $ 4,945,132 | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,188,800 | $ 4,887,071 | $ 3,712,927 |
| Less: Goodwill and other intangibles | (2,619,322) | (2,626,666) | (2,206,682) | (1,800,613) | (1,809,690) | (2,315,013) | (1,624,671) |
| Tangible equity | $ 2,325,810 | $ 2,245,939 | $ 2,673,109 | $ 3,049,663 | $ 2,379,110 | $ 2,572,058 | $ 2,088,256 |
| Computation of Average Tangible Common Equity: | |||||||
| Total stockholders' equity | $ 4,945,132 | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,188,800 | $ 4,887,071 | $ 3,712,927 |
| Less: Goodwill and other intangibles | (2,619,322) | (2,626,666) | (2,206,682) | (1,800,613) | (1,809,690) | (2,315,013) | (1,624,671) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (66,226) | (338,002) | (16,693) |
| Tangible common equity | $ 1,987,808 | $ 1,907,937 | $ 2,335,107 | $ 2,711,661 | $ 2,312,884 | $ 2,234,056 | $ 2,071,563 |
| Computation of Texas Ratio: | |||||||
| Nonperforming Assets | $ 182,838 | $ 152,049 | $ 139,704 | $ 140,463 | $ 94,280 | $ 182,838 | $ 94,280 |
| Loans 90 days past due still accruing(1) | 171,548 | 145,323 | 125,668 | 116,810 | 143,237 | 171,548 | 143,237 |
| Sum of nonperforming assets and loans 90 days past due still accruing | $ 354,386 | $ 297,372 | $ 265,372 | $ 257,273 | $ 237,517 | $ 354,386 | $ 237,517 |
| Tangible common equity | $ 1,972,286 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 | $ 1,972,286 | $ 2,656,936 |
| Allowance for loan loss | 162,522 | 149,933 | 138,516 | 126,746 | 120,100 | 162,522 | 120,100 |
| Sum of tangible common equity and allowance for loan loss | $ 2,134,808 | $ 2,100,727 | $ 1,987,122 | $ 2,867,796 | $ 2,777,036 | $ 2,134,808 | $ 2,777,036 |
| Sum of nonperforming assets and acquired loans 90 days past due still accruing/Sum of tangible common equity and allowance for loan loss | 16.60% | 14.16% | 13.35% | 8.97% | 8.55% | 16.60% | 8.55% |
| Computation of Tier 1 Common Capital: | |||||||
| Tier 1 capital | $ 2,264,679 | $ 2,225,121 | $ 2,128,702 | $ 3,009,727 | $ 2,962,031 | $ 2,264,679 | $ 2,962,031 |
| Less: Qualifying restricted core capital elements | (112,025) | (111,820) | (111,630) | (111,453) | (111,284) | (112,025) | (111,284) |
| Less: Perpetual non-cumulative preferred stock | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tier 1 common capital (Non-GAAP) | $ 1,814,652 | $ 1,775,299 | $ 1,679,070 | $ 2,560,272 | $ 2,512,745 | $ 1,814,652 | $ 2,512,745 |
| (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. | |||||||