First Quarter Highlights:
- Net Income of $0.17 per share included $0.01 in executive departure related charges
- Operating revenues declined 1% QOQ primarily driven by a 3% decline in fee income
- Net interest margin of 3.39% decreased 3 basis points from adjusted fourth quarter
- Lower margins drove a 20% QOQ decline in mortgage banking revenues
- Operating expenses declined $3.7 million from the prior quarter adjusted for executive departure related charges
- Average total loans increased 11% annualized QOQ driven by 13th consecutive quarter of double-digit increases in average commercial lending
- Double-digit average commercial growth rates QOQ in each of the company's geographies
- New York commercial loans increased 9% annualized since HSBC Transaction
- Interest-bearing checking balances up 19% annualized
- New checking account unit production per branch increased 15% QOQ
- Mobile banking platform successfully launched in January 2013
- Strong credit quality maintained
- Originated NPL balances flat QOQ and declined 4 basis points to 1.03% of originated loans
- NCOs equaled 0.27% of average originated loans, compared to 0.35% in 2012
BUFFALO, N.Y., April 19, 2013 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today announced first quarter 2013 results that reflect continued organic loan growth, particularly in commercial lending, positive operating leverage driven by strong focus on expense management, and strong credit quality.
"Our first-quarter results are evidence of our continued strong fundamentals and a focus on enhancing shareholder value," said Gary Crosby, Interim President and Chief Executive Officer. "We are driving profitable growth by enabling our people to provide our customers what they need every day, and focusing on the efficiency and effectiveness of our organization as never before. In 2013, it is "business as usual" at First Niagara as we continue to execute our existing strategic plan, focusing on managing expenses, maintaining our strong credit quality and maximizing the company's potential in the diverse and attractive markets we serve."
The company is progressing on its search for a permanent CEO. The Board of Directors' search committee, chaired by Nathaniel D. Woodson and including Carl A. Florio and Carlton L. Highsmith, is being assisted by the national search firm of Korn/Ferry International.
First Quarter Results
In the first quarter of 2013, First Niagara reported net income available to common shareholders of $59.7 million, or $0.17 per diluted share compared to net income of $53.6 million, or $0.15 per diluted share in the fourth quarter of 2012. Results for the first quarter 2013 include the impact of a $6.3 million pre-tax charge, or $0.01 per share related to two executive departures announced last month. 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 CMO premium amortization adjustment.
Net interest margin declined 3 basis points to 3.39% from the adjusted 3.42% reported in the fourth quarter of 2012. Net interest income in the first quarter declined 1% annualized compared to adjusted fourth quarter levels. Noninterest income decreased $2.5 million or 3% from the prior quarter primarily due to lower mortgage banking, deposit service charges, and capital markets revenues.
Balance sheet growth remained strong as average interest-earning assets increased 8% annualized compared to the prior quarter. Average commercial loans increased 17% annualized over the prior quarter, the 13th consecutive quarter of double-digit growth. Average indirect auto loan balances increased $197 million while other consumer loan categories declined modestly compared to the prior quarter. Average interest-checking deposits increased 19% annualized from the prior quarter driven by greater account acquisition activity as well as increases in balances held by customers.
The provision for loan losses on originated loans totaled $18.9 million in the first quarter of 2013, including $9.8 million to support loan growth and $9.1 million to cover net charge-offs during the quarter. At March 31, 2013, nonperforming originated loans were flat compared to prior quarter levels and as a percentage of originated loans decreased four basis points to 1.03% from 1.07% at December 31, 2012. Net charge-offs equaled 27 basis points of average originated loans, compared to 35 basis points in 2012.
First quarter 2013 expenses, excluding a $6.3 million pre-tax charge related to two executive departures announced last month, declined $3.7 million, or 2%, compared to the prior quarter. Seasonal increases in salaries and benefits expense driven by payroll taxes and employee merit increases were more than offset by expense management.
| Reported Results (GAAP) | Q1 2013 | Q4 2012 | Q1 2012 | |||
| Net interest income | $ 266.1 | $ 252.3 | $ 242.4 | |||
| Provision for credit losses | 20.2 | 22.0 | 20.0 | |||
| Noninterest income | 89.3 | 91.8 | 69.9 | |||
| Noninterest expense | 237.7 | 238.8 | 200.2 | |||
| Net income | 67.3 | 61.1 | 59.9 | |||
| Preferred stock dividend | 7.5 | 7.5 | 5.1 | |||
| Net income available to common shareholders | 59.7 | 53.6 | 54.8 | |||
| Weighted average diluted shares outstanding | 350.0 | 349.7 | 349.1 | |||
| Earnings per diluted share | $ 0.17 | $ 0.15 | $ 0.16 | |||
| All amounts in millions except earnings per diluted share. | ||||||
"During the first quarter, our focus on managing expenses drove a $3.7 million sequential reduction in operating expenses and resulted in positive operating leverage as well as protecting the downside from the industry-wide decline in mortgage banking revenues, competitive loan pricing environment and other typical seasonal weaknesses," said Gregory W. Norwood, Chief Financial Officer. "A key focus throughout the remainder of the year will be expense management with only selective hiring and investments that support maximizing revenue potential and enhancing shareholder value while driving our efficiency ratio lower."
Loans
Average total loans increased 11% annualized from the linked quarter boosted by double-digit increases in commercial business (C&I) and commercial real estate (CRE) lending as well as sustained momentum in the company's indirect auto business. For the 13th consecutive quarter, average commercial loans, which includes commercial business and commercial real estate loans, increased at a double-digit pace organically, up $484 million, or 17% annualized over the prior quarter. Commercial business loans averaged $5.0 billion, representing an 18% annualized increase over the prior quarter. Commercial real estate loans increased 16% annualized to $7.2 billion. Average commercial loans in the company's New York, Western Pennsylvania, Eastern Pennsylvania and New England markets increased at double-digit annualized growth rates of 10%, 29%, 30%, and 25%, respectively. Since the acquisition of HSBC branches in May 2012, commercial loans in the company's New York market have increased at a 9% annualized growth rate.
Average indirect auto loan balances increased $197 million to $712 million. During the first quarter, new originations yielded 3.34%, net of dealer reserve. During the quarter, the company added an additional 72 dealers to its network within its contiguous footprint. Average residential real estate loans declined by $128 million, or 14% annualized, from the fourth quarter reflecting elevated industry-wide prepayment levels.
Deposits
The company continued to focus its efforts to grow its core customer base, re-position its account mix and increase lower cost deposits. Average transaction deposits, which include interest-bearing and noninterest bearing checking balances, increased slightly over the prior quarter and currently represent 32% of the company's deposit base, up from 28% a year ago. Increases in average interest-bearing checking balances were offset by seasonal declines in non-interest bearing deposit balances.
Average interest-bearing checking deposits increased 19% annualized compared to the prior quarter driven by acquisitions of new checking accounts and mass affluent households, particularly in the company's New York state footprint as well as higher balances held by customers. New checking account openings per branch increased 15% over the prior quarter. Average total core deposits, excluding time deposits, totaled $23.4 billion, representing a $150 million decline, or 3% annualized, from the linked quarter. This decline was partially driven by balance attrition due to continued pricing actions taken by the company on money market and online savings accounts.
The average cost of interest-bearing deposits declined four basis points to 0.25% from 0.29% in the fourth quarter. Pricing actions on non-transactional deposit accounts together with a favorable shift in mix of deposits drove the decline in overall cost of interest-bearing deposits.
The company continues to grow and deepen customer relationships by delivering its "Simple Fast Easy" value proposition. First Niagara launched its mobile banking offering in the first quarter, and approximately 20% of the company's online banking customers have signed up for mobile banking services via smartphone and tablet applications.
The company's Retail business, in tandem with Consumer Finance, continues to further expand relationships with core checking account customers. Beginning in the first quarter, the incentive program for sales personnel at the branches was enhanced to drive greater cross-solving referrals to Consumer Finance and Investment Services businesses. At March 31, 2013, the number of checking account households that also had a mortgage with the company increased 12% annualized from the prior quarter. The number of credit card accounts opened per branch increased by a factor greater than 3x compared to the prior quarter and was primarily driven by marketing campaigns targeted at existing deposit customers and greater cross-solving referrals at the point of sale.
Net Interest Income
First quarter 2013 net interest income of $266.1 million decreased slightly from the prior quarter adjusted amount of $268.6 million. Compared to the prior quarter, the benefits of an 8% annualized increase in average interest-earning assets were offset by a 3 basis point decline in the adjusted net interest margin from the prior quarter.
In the first quarter of 2013, total premium amortization on the CMO portfolio was $10.4 million compared to an adjusted $14.5 million in the prior quarter. The modest benefits from slower CMO cash flows together with a 4 basis point decline in cost of interest bearing deposits were offset by continued compression of loan yields from elevated prepayments and reinvestments at lower spreads.
Credit Quality
At March 31, 2013, the allowance for loan losses was $172.0 million, compared to $162.5 million at December 31, 2012. Information for both the originated and acquired portfolios follows.
| Q1 2013 | Q4 2012 | |||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total |
| Provision for loan losses* | $ 18.9 | $ 0.9 | $ 19.8 | $ 21.4 | $ 0.2 | $ 21.5 |
| Net charge-offs | 9.1 | 1.2 | 10.3 | 7.6 | 1.3 | 8.9 |
| NCOs/ Avg Loans | 0.27 % | 0.08 % | 0.21 % | 0.24 % | 0.08 % | 0.18 % |
| Total loans** | $ 14,100 | $ 6,084 | $ 20,035 | $ 13,372 | $ 6,514 | $ 19,710 |
| (*) Excludes provision for unfunded commitments of $0.4 million and $0.5 million in 1Q13 and 4Q12, respectively | ||||||
| (**) Acquired loans before associated credit discount; see accompanying tables for further information | ||||||
Originated loans
The provision for loan losses on originated loans totaled $18.9 million, compared to $21.4 million in the prior quarter. This provision included $9.8 million to support sequential originated loan growth of $0.7 billion and $9.1 million to cover net charge-offs. Net charge-offs equaled 27 basis points of average originated loans in the first quarter of 2013, compared to 35 basis points in 2012.
At March 31, 2013, nonperforming assets to total assets were 0.50%, unchanged from the prior quarter. Nonperforming originated loans as a percentage of originated loans decreased four basis points to 1.03% at March 31, 2013 from 1.07% at December 31, 2012.
At March 31, 2013, the allowance for loan losses on originated loans totaled $170.7 million or 1.21% of such loans, compared to $161.0 million or 1.20% of loans at December 31, 2012.
Acquired loans
The provision for losses on acquired loans totaled $0.9 million, compared to $0.2 million in the prior quarter. Net charge-offs on those portfolios totaled $1.2 million during the quarter, compared to $1.3 million in the prior period. At March 31, 2013, the allowance for loan losses on acquired loans totaled $1.3 million, compared to $1.6 million at December 31, 2012. Acquired nonperforming loans totaled $27.7 million, compared to $29.6 million at the end of the prior quarter. At March 31, 2013, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $149 million.
Fee Income
First quarter 2013 noninterest income of $89.3 million decreased 3% or $2.5 million compared to the prior quarter primarily due to lower mortgage banking, deposit service charges, and capital markets revenues.
Mortgage banking revenues declined 20% to $6.4 million from $8.1 million in the prior quarter. Deposit service charges declined $1.5 million or 6% from the prior quarter in large part due to seasonality and to a lesser extent due to lower customer non-sufficient funds (NSF) incident rates. Capital markets income declined 15% to $6.0 million from an all-time high in the prior quarter due to lower derivative swap activity during the quarter.
These declines were partially offset by higher wealth management fees and seasonal increase in insurance commissions. Wealth management services fees increased 7% driven by an 18% annualized increase in assets under management. Insurance commissions increased 6% compared to the fourth quarter driven by typical seasonal increases in renewal rates.
Noninterest Expense
First quarter noninterest expenses were $237.7 million and included $6.3 million in charges related to two recently announced executive departures. Excluding these charges, operating expenses totaled $231.4 million or $3.7 million lower than operating expenses in the fourth quarter of 2012.
First Niagara's focus on expense management resulted in a first-quarter reduction in brand-related marketing expenses as the company focused on select product promotions, as well as sequential decreases in professional fees, technology and communications expenses driven by vendor sourcing management. Compared to the fourth quarter of 2012, marketing and advertising expense declined $4.9 million and professional fees and technology and communications expenses declined $1.6 million and $1.1 million, respectively.
Salaries and benefits expenses increased $4.8 million, compared to the fourth quarter of 2012, entirely due to seasonal increases in payroll tax expenses and employee merit increases.
Operating expenses, excluding the executive departure charges, declined 1.6% outpacing a 1.4% decline in operating revenues and resulted in positive operating leverage during the quarter. The efficiency ratio, excluding the executive departure related charge, was 65.1% in the first quarter, down slightly from 65.2% in the prior quarter.
Capital
At March 31, 2013, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.4% 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 $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 10:00 a.m. Eastern Time on Friday, April 19, 2013 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-324-3414 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 May 2, 2013 by dialing 1-866-421-6880, passcode: 2563.
Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.
Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real estate and business loans and non-performing loans.
| First Niagara Financial Group, Inc. | ||||||
| Income Statement Highlights -- Reported Basis | ||||||
| (in thousands, except per share amounts) | ||||||
| 2013 | 2012 | 2011 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Interest income: | ||||||
| Loans and leases | $ 206,640 | $ 212,035 | $ 211,767 | $ 200,725 | $ 189,385 | $ 195,434 |
| Investment securities and other | 88,961 | 71,564 | 90,101 | 99,116 | 101,395 | 96,472 |
| Total interest income | 295,601 | 283,599 | 301,868 | 299,841 | 290,780 | 291,906 |
| Interest expense: | ||||||
| Deposits | 14,277 | 16,902 | 18,358 | 16,391 | 14,998 | 21,521 |
| Borrowings | 15,194 | 14,411 | 13,905 | 24,437 | 33,411 | 27,872 |
| Total interest expense | 29,471 | 31,313 | 32,263 | 40,828 | 48,409 | 49,393 |
| Net interest income | 266,130 | 252,286 | 269,605 | 259,013 | 242,371 | 242,513 |
| Provision for credit losses | 20,200 | 22,000 | 22,200 | 28,100 | 20,000 | 13,400 |
| Net interest income after provision | 245,930 | 230,286 | 247,405 | 230,913 | 222,371 | 229,113 |
| Noninterest income: | ||||||
| Deposit service charges | 24,800 | 26,345 | 26,422 | 21,433 | 17,037 | 18,049 |
| Insurance commissions | 16,355 | 15,497 | 18,764 | 17,072 | 16,833 | 15,440 |
| Merchant and card fees | 11,298 | 11,945 | 12,014 | 9,271 | 5,528 | 5,044 |
| Wealth management services | 12,845 | 12,000 | 11,069 | 9,207 | 9,039 | 8,179 |
| Mortgage banking | 6,424 | 8,060 | 10,974 | 7,174 | 5,649 | 5,279 |
| Capital markets income | 6,031 | 7,098 | 6,381 | 6,831 | 6,539 | 2,746 |
| Lending and leasing | 3,906 | 3,739 | 3,730 | 4,245 | 3,123 | 3,103 |
| Bank owned life insurance | 3,467 | 3,021 | 3,449 | 3,848 | 3,387 | 3,302 |
| Other income | 4,186 | 4,116 | 9,400 | 16,517 | 2,773 | 2,543 |
| Total noninterest income | 89,312 | 91,821 | 102,203 | 95,598 | 69,908 | 63,685 |
| Noninterest expense: | ||||||
| Salaries and benefits | 115,790 | 111,026 | 115,484 | 104,507 | 96,477 | 88,796 |
| Occupancy and equipment | 28,045 | 27,609 | 25,694 | 24,089 | 22,017 | 22,580 |
| Technology and communications | 27,113 | 28,257 | 28,110 | 24,434 | 19,713 | 18,942 |
| Marketing and advertising | 4,346 | 9,292 | 8,954 | 6,676 | 6,763 | 7,724 |
| Professional services | 9,603 | 11,163 | 11,193 | 9,263 | 8,895 | 11,669 |
| Amortization of intangibles | 14,119 | 14,224 | 14,506 | 9,839 | 6,466 | 6,586 |
| FDIC premiums | 8,901 | 9,158 | 8,850 | 10,552 | 6,133 | 6,097 |
| Merger and acquisition integration expenses | -- | 3,678 | 29,404 | 131,460 | 12,970 | 6,149 |
| Restructuring charges | -- | -- | -- | 3,750 | 2,703 | 13,496 |
| Other expense | 29,749 | 24,377 | 24,347 | 21,069 | 18,041 | 20,132 |
| Total noninterest expense | 237,666 | 238,784 | 266,542 | 345,639 | 200,178 | 202,171 |
| Income (loss) before income tax | 97,576 | 83,323 | 83,066 | (19,128) | 92,101 | 90,627 |
| Income tax expense (benefit) | 30,291 | 22,226 | 24,682 | (8,204) | 32,236 | 32,166 |
| Net income (loss) | 67,285 | 61,097 | 58,384 | (10,924) | 59,865 | 58,461 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 5,115 | -- |
| Net income (loss) available to common stockholders | $ 59,738 | $ 53,550 | $ 50,837 | $ (18,471) | $ 54,750 | $ 58,461 |
| Financial Ratios: | ||||||
| Earnings (loss) per basic share | $ 0.17 | $ 0.15 | $ 0.15 | $ (0.05) | $ 0.16 | $ 0.19 |
| Earnings (loss) per diluted share | $ 0.17 | 0.15 | 0.14 | (0.05) | 0.16 | 0.19 |
| Weighted average shares outstanding - basic(1) | 349,278 | 349,071 | 349,001 | 348,941 | 348,823 | 304,065 |
| Weighted average shares outstanding - diluted(1) | 349,999 | 349,663 | 349,371 | 348,941 | 349,069 | 304,341 |
| Net revenue(2) | $ 355,442 | $ 344,107 | $ 371,808 | $ 354,611 | $ 312,279 | $ 306,198 |
| Noninterest income as a percentage of net revenue(2) | 25.13% | 26.68% | 27.49% | 26.96% | 22.39% | 20.80% |
| Pre-tax, pre-provision income(3) | $ 117,776 | $ 105,323 | $ 105,266 | $ 8,972 | $ 112,101 | $ 104,027 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.34 | $ 0.30 | $ 0.30 | $ 0.03 | $ 0.32 | $ 0.34 |
| Pre-tax, pre-provision return on average assets(3) | 1.30% | 1.15% | 1.19% | 0.10% | 1.36% | 1.30% |
| Net interest margin(4) | 3.39% | 3.22% | 3.54% | 3.26% | 3.34% | 3.48% |
| Interest yield on average loans(4) | 4.25% | 4.39% | 4.47% | 4.59% | 4.62% | 4.76% |
| Rate paid on interest-bearing liabilities | 0.44% | 0.48% | 0.51% | 0.61% | 0.79% | 0.82% |
| Efficiency ratio | 66.86% | 69.39% | 71.69% | 97.47% | 64.10% | 66.03% |
| Effective tax rate | 31.0% | 26.7% | 29.7% | 42.9% | 35.0% | 35.5% |
| Return on average assets(5) | 0.74 % | 0.67% | 0.66% | (0.12)% | 0.73% | 0.73% |
| Return on average equity(5) | 5.50 % | 4.92% | 4.77% | (0.90)% | 4.96% | 5.54% |
| Return on average tangible equity(3)(5) | 11.62 % | 10.45% | 10.34% | (1.64)% | 7.90% | 9.75% |
| Return on average common equity | 5.24 % | 4.62% | 4.46% | (1.64)% | 4.88% | 5.63% |
| Return on average tangible common equity(3) | 12.05 % | 10.72% | 10.60% | (3.18)% | 8.12% | 10.03% |
| (1) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | ||||||
| (2) Net revenue is comprised of net interest income and noninterest income. | ||||||
| (3) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||
| (4) Yields and rates calculated on a tax equivalent basis. | ||||||
| (5) Return used to calculate ratio excludes preferred stock dividend. | ||||||
| First Niagara Financial Group, Inc. | ||||||
| Period End Balance Sheet | ||||||
| (in thousands) | ||||||
| 2013 | 2012 | 2011 | ||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | |
| Cash and cash equivalents | $ 424,176 | $ 430,862 | $ 447,087 | $ 488,227 | $ 370,380 | $ 836,555 |
| Investment securities: | ||||||
| Available for sale | 7,876,160 | 10,993,605 | 10,579,970 | 9,937,271 | 12,248,058 | 9,348,296 |
| Held to maturity | 4,218,687 | 1,299,806 | 1,387,763 | 1,463,872 | 2,503,156 | 2,669,630 |
| FHLB and FRB common stock | 401,373 | 420,277 | 373,311 | 329,555 | 499,328 | 358,159 |
| Total investment securities | 12,496,220 | 12,713,688 | 12,341,044 | 11,730,698 | 15,250,542 | 12,376,085 |
| Loans held for sale | 126,389 | 154,745 | 117,375 | 101,596 | 102,513 | 94,484 |
| Loans and leases: | ||||||
| Commercial: | ||||||
| Real estate | 7,295,544 | 7,093,193 | 6,835,971 | 6,710,009 | 6,369,098 | 6,244,381 |
| Business | 5,044,738 | 4,953,323 | 4,682,154 | 4,514,537 | 4,108,363 | 3,771,649 |
| Total commercial loans | 12,340,282 | 12,046,516 | 11,518,125 | 11,224,546 | 10,477,461 | 10,016,030 |
| Consumer: | ||||||
| Residential real estate | 3,614,912 | 3,761,567 | 3,870,756 | 4,037,045 | 3,881,003 | 4,012,267 |
| Home equity | 2,646,645 | 2,651,891 | 2,661,429 | 2,683,236 | 2,149,135 | 2,165,988 |
| Indirect auto | 818,401 | 601,456 | 419,258 | 185,774 | -- | -- |
| Credit cards | 298,310 | 314,973 | 308,387 | 304,368 | -- | -- |
| Other consumer | 316,669 | 333,609 | 328,571 | 328,547 | 283,320 | 278,298 |
| Total consumer loans | 7,694,937 | 7,663,496 | 7,588,401 | 7,538,970 | 6,313,458 | 6,456,553 |
| Total loans and leases | 20,035,219 | 19,710,012 | 19,106,526 | 18,763,516 | 16,790,919 | 16,472,583 |
| Allowance for loan losses | 172,002 | 162,522 | 149,933 | 138,516 | 126,746 | 120,100 |
| Loans and leases, net | 19,863,217 | 19,547,490 | 18,956,593 | 18,625,000 | 16,664,173 | 16,352,483 |
| Bank owned life insurance | 407,419 | 404,321 | 401,211 | 397,739 | 395,944 | 392,468 |
| Goodwill and other intangibles | 2,567,681 | 2,617,810 | 2,626,625 | 2,631,605 | 1,796,394 | 1,803,240 |
| Other assets | 959,459 | 937,317 | 983,999 | 1,130,891 | 937,859 | 955,300 |
| Total assets | $ 36,844,561 | $ 36,806,232 | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | $ 32,810,615 |
| Deposits: | ||||||
| Savings accounts | $ 3,915,836 | $ 3,887,587 | $ 3,941,528 | $ 4,103,773 | $ 2,554,720 | $ 2,621,016 |
| Interest-bearing checking | 4,534,444 | 4,450,970 | 4,090,322 | 3,887,568 | 2,431,672 | 2,259,576 |
| Money market deposits | 10,493,243 | 10,581,137 | 10,801,280 | 10,919,766 | 7,100,646 | 7,220,902 |
| Noninterest-bearing deposits | 4,803,835 | 4,643,580 | 4,658,374 | 4,774,764 | 3,200,824 | 3,335,356 |
| Certificates of deposit | 3,985,702 | 4,113,257 | 4,206,192 | 4,211,116 | 3,741,525 | 3,968,265 |
| Total deposits | 27,733,060 | 27,676,531 | 27,697,696 | 27,896,987 | 19,029,387 | 19,405,115 |
| Short-term borrowings | 2,928,929 | 2,983,718 | 1,995,610 | 958,044 | 6,353,189 | 2,208,845 |
| Long-term borrowings | 732,510 | 732,425 | 732,339 | 732,263 | 4,688,251 | 5,918,276 |
| Other liabilities | 503,389 | 487,000 | 532,868 | 700,249 | 571,532 | 480,201 |
| Total liabilities | 31,897,888 | 31,879,674 | 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 | 338,002 |
| Common stockholders' equity | 4,608,671 | 4,588,556 | 4,577,419 | 4,480,211 | 4,537,444 | 4,460,176 |
| Total stockholders' equity | 4,946,673 | 4,926,558 | 4,915,421 | 4,818,213 | 4,875,446 | 4,798,178 |
| Total liabilities and stockholders' equity | $ 36,844,561 | $ 36,806,232 | $ 35,873,934 | $ 35,105,756 | $ 35,517,805 | $ 32,810,615 |
| Selected balance sheet information: | ||||||
| Total interest-earning assets(1) | $ 32,524,313 | $ 32,321,964 | $ 31,316,470 | $ 30,403,035 | $ 31,959,556 | $ 29,284,139 |
| Total interest-bearing liabilities | 26,590,664 | 26,749,094 | 25,767,271 | 24,812,530 | 26,870,002 | 24,196,880 |
| Net interest-earning assets | $ 5,933,649 | $ 5,572,870 | $ 5,549,199 | $ 5,590,505 | $ 5,089,554 | $ 5,087,259 |
| Tangible common equity(2) | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | 1,848,606 | 2,741,050 | 2,656,936 |
| Unrealized gain on securities, net of tax(3) | 160,942 | 206,732 | 204,347 | 133,430 | 152,408 | 105,276 |
| Total core deposits | $ 23,747,358 | $ 23,563,274 | $ 23,491,504 | $ 23,685,871 | $ 15,287,862 | $ 15,436,850 |
| Originated loans(4) | $ 14,100,190 | $ 13,372,357 | $ 12,232,568 | $ 11,392,158 | $ 10,517,021 | $ 9,876,005 |
| Acquired loans(5) | 6,083,912 | 6,513,636 | 7,085,839 | 7,600,213 | 6,459,798 | 6,801,689 |
| Credit related discount on acquired loans(6) | (148,883) | (175,981) | (211,881) | (228,855) | (185,900) | (205,111) |
| Total Loans | $ 20,035,219 | $ 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) Unrealized gain at March 31, 2013 excludes $54 million of net pre-tax unrealized gains recorded in accumulated other comprehensive income related to available for sale securities transferred to held to maturity classification as of March 31, 2013. | ||||||
| (4) Originated loans represent total loans excluding acquired loans. | ||||||
| (5) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||
| (6) Represent principal on acquired loans not expected to be collected. | ||||||
| First Niagara Financial Group, Inc. | ||||||||||
| Average Balance Sheet and Related Tax Equivalent Yields & Rates | ||||||||||
| (in millions) | ||||||||||
| For the three months ended | ||||||||||
| March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
| Average | Interest(1) | Yields | Average | Interest(1) | Yields | Average | Interest(1) | Yields | ||
|
Balances |
and Rates(1) |
Balances |
and Rates(1)(2) |
Balances |
and Rates(1) |
|||||
| Interest-earning assets: | ||||||||||
| Loans and leases(3) | ||||||||||
| Commercial: | ||||||||||
| Real estate | $ 7,179 | $ 76 | 4.25% | $ 6,911 | $ 79 | 4.45% | $ 6,300 | $ 79 | 4.98% | |
| Business | 4,999 | 47 | 3.74 | 4,783 | 47 | 3.89 | 3,915 | 41 | 4.08 | |
| Total commercial loans | 12,178 | 123 | 4.04 | 11,694 | 126 | 4.22 | 10,215 | 120 | 4.63 | |
| Consumer: | ||||||||||
| Residential real estate | 3,691 | 37 | 4.01 | 3,819 | 39 | 4.05 | 3,945 | 42 | 4.28 | |
| Home equity | 2,648 | 28 | 4.29 | 2,659 | 29 | 4.31 | 2,157 | 24 | 4.40 | |
| Indirect auto | 712 | 6 | 3.29 | 515 | 5 | 3.50 | -- | -- | -- | |
| Credit cards | 304 | 8 | 10.40 | 310 | 8 | 10.19 | -- | -- | -- | |
| Other consumer | 328 | 7 | 8.17 | 328 | 7 | 8.73 | 278 | 5 | 7.34 | |
| Total consumer loans | 7,683 | 85 | 4.50 | 7,631 | 87 | 4.54 | 6,380 | 71 | 4.47 | |
| Total loans and leases | 19,861 | 208 | 4.25 | 19,325 | 213 | 4.39 | 16,595 | 191 | 4.62 | |
| Residential MBS(2) | 5,488 | 34 | 2.50 | 5,746 | 36 | 2.50 | 8,550 | 65 | 3.03 | |
| Commercial MBS | 1,914 | 18 | 3.78 | 1,953 | 18 | 3.79 | 1,704 | 17 | 3.99 | |
| Other investment securities (4) | 4,822 | 38 | 3.19 | 4,474 | 35 | 3.16 | 2,678 | 23 | 3.44 | |
| Total securities, at cost(2) | 12,224 | 91 | 2.97 | 12,173 | 90 | 2.95 | 12,932 | 105 | 3.24 | |
| Money market and other investments | 241 | 1 | 1.31 | 207 | 1 | 1.54 | 256 | 1 | 0.94 | |
| Total interest-earning assets(2) | 32,326 | $ 300 | 3.76% | 31,705 | $ 304 | 3.81% | 29,783 | $ 296 | 3.99% | |
| Goodwill and other intangibles | 2,609 | 2,619 | 1,801 | |||||||
| Other noninterest-earning assets | 1,872 | 2,005 | 1,540 | |||||||
| Total assets | $ 36,807 | $ 36,329 | $ 33,124 | |||||||
| Interest-bearing liabilities: | ||||||||||
| Deposits | ||||||||||
| Savings accounts | $ 3,894 | $ 1 | 0.11% | $ 3,898 | $ 2 | 0.18% | $ 2,566 | $ -- | 0.03% | |
| Interest-bearing checking | 4,379 | 1 | 0.05 | 4,181 | 1 | 0.07 | 2,224 | 1 | 0.10 | |
| Money market deposits | 10,643 | 6 | 0.23 | 10,810 | 7 | 0.25 | 7,167 | 5 | 0.28 | |
| Certificates of deposit | 4,081 | 7 | 0.67 | 4,259 | 8 | 0.71 | 3,827 | 9 | 0.98 | |
| Total interest bearing deposits | 22,997 | 14 | 0.25% | 23,148 | 17 | 0.29% | 15,784 | 15 | 0.38% | |
| Borrowings | ||||||||||
| Short-term borrowings | 3,152 | 3 | 0.40% | 2,331 | 2 | 0.38% | 3,632 | 6 | 0.65% | |
| Long-term borrowings | 730 | 12 | 6.71 | 732 | 12 | 6.63 | 5,334 | 27 | 2.07 | |
| Total borrowings | 3,882 | 15 | 1.59 | 3,063 | 14 | 1.87 | 8,966 | 33 | 1.50 | |
| Total interest-bearing liabilities | 26,879 | $ 29 | 0.44% | 26,211 | $ 31 | 0.48% | 24,750 | $ 48 | 0.79% | |
| Noninterest-bearing deposits | 4,468 | 4,645 | 3,053 | |||||||
| Other noninterest-bearing liabilities | 502 | 528 | 471 | |||||||
| Total liabilities | 31,849 | 31,384 | 28,274 | |||||||
| Total stockholders' equity | 4,958 | 4,945 | 4,850 | |||||||
| Total liabilities and stockholders' equity | $ 36,807 | $ 36,329 | $ 33,124 | |||||||
| Net interest income (FTE) | $ 270 | $ 273 | $ 248 | |||||||
| Taxable Equivalent Adjustment(1) | 4 | 4 | 6 | |||||||
| Total core deposits | $ 23,384 | $ 8 | 0.13% | $ 23,534 | $ 10 | 0.16% | $ 15,010 | $ 6 | 0.15% | |
| Total deposits | 27,465 | 14 | 0.21% | 27,793 | 17 | 0.24% | 18,837 | 15 | 0.32% | |
| Tax equivalent net interest rate spread(2) | 3.32% | 3.33% | 3.20% | |||||||
| Tax equivalent net interest rate margin(2) | 3.39% | 3.42% | 3.34% | |||||||
| (1) Tax equivalent interest income is calculated using a 35% tax rate. | ||||||||||
| (2) Amounts for the three months ended December 31, 2012 exclude accelerated CMO adjustments of $16 million. The yields, including these adjustments, are: | ||||||||||
|
Three months ended December 31, 2012 |
||||||||||
| Residential MBS | 1.37% | |||||||||
| Total securities, at cost | 2.41% | |||||||||
| Total interest earning assets | 3.61% | |||||||||
| Tax equivalent net interest rate spread | 3.13% | |||||||||
| Tax equivalent net interest rate margin | 3.22% | |||||||||
| (3) Includes nonaccrual loans. | ||||||||||
| (4) Includes debt securities, collateralized loan obligations, asset-backed securities, FHLB and FRB common stock, and other investment securities. | ||||||||||
| First Niagara Financial Group, Inc. | ||||||
| Allowance for Loans and Lease Losses & Asset Quality | ||||||
| (in thousands) | ||||||
| 2013 | 2012 | 2011 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Beginning balance | $ 162,522 | $ 149,933 | $ 138,516 | $ 126,746 | $ 120,100 | $ 112,749 |
| Net loan (charge-offs) recoveries: | ||||||
| Commercial real estate | $ (2,121) | $ (1,935) | $ (1,791) | $ (2,384) | $ (5,994) | $ 212 |
| Commercial business | (4,902) | (3,385) | (6,077) | (10,958) | (4,143) | (4,665) |
| Residential real estate | (427) | (658) | (396) | (155) | (1,120) | (318) |
| Home equity | (613) | (673) | (401) | (1,536) | (1,161) | (268) |
| Other consumer | (2,257) | (2,285) | (1,406) | (805) | (836) | (796) |
| Total net loan charge-offs | $ (10,320) | $ (8,936) | $ (10,071) | $ (15,838) | $ (13,254) | $ (5,835) |
| Provision for loan losses | 19,800 | 21,525 | 21,800 | 27,803 | 19,900 | 13,186 |
| Allowance related to loans sold | -- | -- | (312) | (195) | -- | -- |
| Ending balance | $ 172,002 | $ 162,522 | $ 149,933 | $ 138,516 | $ 126,746 | $ 120,100 |
| Supplemental information | ||||||
| Allowance to loans | 0.86% | 0.82% | 0.78% | 0.74% | 0.75% | 0.73% |
| Allowance for originated loans to originated loans(1) | 1.21% | 1.20% | 1.20% | 1.19% | 1.19% | 1.20% |
| Net charge-offs to average loans (annualized) | ||||||
| Commercial real estate | 0.12% | 0.11% | 0.11% | 0.15% | 0.38% | -0.01% |
| Commercial business | 0.39% | 0.28% | 0.53% | 1.02% | 0.42% | 0.51% |
| Total commercial loans | 0.23% | 0.18% | 0.28% | 0.49% | 0.40% | 0.18% |
| Residential real estate | 0.05% | 0.07% | 0.04% | 0.02% | 0.11% | 0.03% |
| Home equity | 0.09% | 0.10% | 0.06% | 0.25% | 0.22% | 0.05% |
| Other consumer | 0.67% | 0.79% | 0.60% | 0.61% | 1.20% | 1.14% |
| Total consumer loans | 0.17% | 0.19% | 0.12% | 0.15% | 0.20% | 0.08% |
| Total loans | 0.21% | 0.18% | 0.21% | 0.36% | 0.32% | 0.14% |
| Net charge-offs of originated loans to average originated loans (annualized)(1) | ||||||
| Commercial real estate | 0.10% | 0.07% | 0.12% | 0.18% | 0.16% | -0.05% |
| Commercial business | 0.45% | 0.33% | 0.64% | 1.25% | 0.54% | 0.67% |
| Total commercial loans | 0.26% | 0.19% | 0.36% | 0.66% | 0.32% | 0.25% |
| Residential real estate | 0.10% | 0.15% | 0.09% | 0.04% | 0.27% | 0.08% |
| Home equity | 0.19% | 0.21% | 0.13% | 0.51% | 0.40% | 0.10% |
| Other consumer | 0.64% | 0.94% | 0.59% | 0.81% | 1.25% | 1.51% |
| Total consumer loans | 0.28% | 0.35% | 0.18% | 0.28% | 0.38% | 0.17% |
| Total loans | 0.27% | 0.24% | 0.30% | 0.55% | 0.34% | 0.22% |
| Nonperforming loans: | ||||||
| Originated(1): | ||||||
| Commercial real estate | $ 49,953 | $ 50,848 | $ 46,413 | $ 46,881 | $ 44,749 | $ 43,119 |
| Commercial business | 47,523 | 47,066 | 37,375 | 30,714 | 39,682 | 20,173 |
| Residential real estate | 28,455 | 27,192 | 21,377 | 23,058 | 22,021 | 18,668 |
| Home equity | 14,270 | 14,233 | 8,084 | 8,119 | 7,071 | 6,790 |
| Other consumer | 5,444 | 3,737 | 938 | 926 | 697 | 1,048 |
| Total originated nonperforming loans | 145,645 | 143,076 | 114,187 | 109,698 | 114,220 | 89,798 |
| Total acquired nonperforming loans(2) | 27,678 | 29,648 | 28,193 | 19,374 | 19,041 | -- |
| Total nonperforming loans | 173,323 | 172,724 | 142,380 | 129,072 | 133,261 | 89,798 |
| Real estate owned | 10,816 | 10,114 | 9,669 | 10,632 | 7,202 | 4,482 |
| Total nonperforming assets | $ 184,139 | $ 182,838 | $ 152,049 | $ 139,704 | $ 140,463 | $ 94,280 |
| Accruing troubled debt restructurings (TDR) | $ 64,311 | $ 46,280 | $ 55,732 | $ 42,140 | $ 42,358 | $ 43,888 |
| Loans 90 days past due still accruing(3) | 172,062 | 171,568 | 145,323 | 125,668 | 116,810 | 143,237 |
| Total classified loans(4) | 720,197 | 708,468 | 693,006 | 732,762 | 753,536 | 748,375 |
| Total criticized loans(5) | $ 1,044,874 | $ 1,002,659 | $ 990,670 | $ 1,030,471 | $ 1,044,731 | $ 1,144,222 |
| Total nonperforming loans to loans | 0.87% | 0.88% | 0.75% | 0.69% | 0.79% | 0.55% |
| Total nonperforming originated loans to originated loans(1) | 1.03% | 1.07% | 0.93% | 0.96% | 1.09% | 0.91% |
| Total nonperforming assets to loans and real estate owned | 0.92% | 0.93% | 0.80% | 0.74% | 0.84% | 0.57% |
| Total nonperforming assets to assets | 0.50% | 0.50% | 0.42% | 0.40% | 0.34% | 0.29% |
| Allowance to nonperforming loans | 99.2% | 94.1% | 105.3% | 107.3% | 95.1% | 133.7% |
| Texas ratio(6) | 16.10% | 16.61% | 14.16% | 13.35% | 8.97% | 8.55% |
| Originated loans(1) | $ 14,100,190 | $ 13,372,357 | $ 12,232,568 | $ 11,392,158 | $ 10,517,021 | $ 9,876,005 |
| Acquired loans(7) | 6,083,912 | 6,513,636 | 7,085,839 | 7,600,213 | 6,459,798 | 6,801,689 |
| Credit related discount on acquired loans(8) | (148,883) | (175,981) | (211,881) | (228,855) | (185,900) | (205,111) |
| Total Loans | $ 20,035,219 | $ 19,710,012 | $ 19,106,526 | $ 18,763,516 | $ 16,790,919 | $ 16,472,583 |
| (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 "Asset Quality Review" in our Annual Report on 10-K for the year ended December 31, 2012. | ||||||
| (5) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss. | ||||||
| (6) Represents 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. | ||||||
| (7) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||
| (8) Represent principal on acquired loans not expected to be collected. | ||||||
| First Niagara Financial Group, Inc. | ||||||||
| Key Statistics | ||||||||
| (Share counts in thousands) | ||||||||
| 2013 | 2012 | 2011 | ||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | |||
| First Niagara Financial Group, Inc capital ratios: | ||||||||
| Tier 1 risk based capital | 9.45% | 9.29% | 9.51% | 9.40% | 14.66% | (1) | 15.60% | (1) |
| Tier 1 common capital(2) | 7.64% | 7.45% | 7.59% | 7.41% | 12.47% | (1) | 13.23% | (1) |
| Total risk based capital | 11.38% | 11.23% | 11.48% | 11.37% | 16.75% | (1) | 17.84% | (1) |
| Leverage | 6.92% | 6.75% | 6.83% | 6.32% | 9.67% | (1) | 9.97% | (1) |
| Equity to assets | 13.43% | 13.39% | 13.70% | 13.72% | 13.73% | (1) | 14.62% | (1) |
| Tangible common equity to tangible assets(2) | 5.95% | 5.77% | 5.87% | 5.69% | 8.13% | (1) | 8.57% | (1) |
| First Niagara Bank, N.A capital ratios: | ||||||||
| Tier 1 risk based capital | 10.15% | 9.94% | 10.19% | 9.63% | 14.69% | (1) | 14.66% | (1) |
| Total risk based capital | 10.89% | 10.66% | 10.88% | 10.57% | 15.66% | (1) | 16.47% | (1) |
| Leverage | 7.43% | 7.23% | 7.32% | 6.48% | 9.69% | (1) | 9.38% | (1) |
| Number of branches | 427 | 430 | 432 | 452 | 334 | 333 | ||
| Full time equivalent employees | 5,875 | 5,927 | 6,036 | 6,103 | 4,753 | 4,827 | ||
| Share information and per share metrics: | ||||||||
| Common shares outstanding | 353,008 | 352,621 | 352,632 | 352,665 | 351,936 | 351,834 | ||
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | ||
| Treasury shares | 12,994 | 13,381 | 13,370 | 13,337 | 14,066 | 14,168 | ||
| Market price (NASDAQ: FNFG): | $ 8.86 | $ 7.93 | $ 8.07 | $ 7.65 | $ 9.84 | $ 8.63 | ||
| Book value per share(3) | 13.19 | 13.15 | 13.11 | 12.84 | 13.00 | 12.79 | ||
| Tangible book value per share(2)(3) | 5.84 | 5.65 | 5.59 | 5.30 | 7.86 | 7.62 | ||
| Price/Book | 67.17% | 60.30% | 61.56% | 59.58% | 75.69% | 67.47% | ||
| Price/Tangible book(2) | 151.71% | 140.35% | 144.36% | 144.34% | 125.19% | 113.25% | ||
| Common stock dividends | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.16 | ||
| Preferred stock dividends | 0.54 | 0.54 | 0.54 | 0.54 | 0.37 | -- | ||
| Dividend payout ratio | 47.06% | 53.33% | 53.33% | N/M | 50.00% | 84.21% | ||
| Dividend yield (annualized) | 3.66% | 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) | ||||||
| 2013 | 2012 | 2011 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Financial ratios computed on an operating basis(1): | ||||||
| Earnings per basic share | $ 0.17 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.24 |
| Earnings per diluted share | 0.17 | 0.19 | 0.19 | 0.19 | 0.19 | 0.24 |
| Weighted average shares outstanding - basic(2) | 349,278 | 349,071 | 349,001 | 348,941 | 348,823 | 304,065 |
| Weighted average shares outstanding - diluted(2) | 349,999 | 349,663 | 349,371 | 348,941 | 349,069 | 304,341 |
| Noninterest income as a percentage of net revenue(4) | 25.13% | 25.48% | 26.43% | 22.96% | 22.39% | 20.80% |
| Pre-tax, pre-provision income | 117,776 | 125,281 | 129,333 | 136,645 | 127,774 | 123,672 |
| Pre-tax, pre-provision income per diluted share | 0.34 | 0.36 | 0.37 | 0.39 | 0.37 | 0.41 |
| Pre-tax, pre-provision return on average assets | 1.30% | 1.37% | 1.46% | 1.51% | 1.55% | 1.55% |
| Net interest margin(3) | 3.39% | 3.42% | 3.54% | 3.37% | 3.34% | 3.48% |
| Interest yield on average loans(3) | 4.25% | 4.39% | 4.47% | 4.59% | 4.62% | 4.76% |
| Rate paid on interest-bearing liabilities(3) | 0.44% | 0.48% | 0.51% | 0.61% | 0.79% | 0.82% |
| Efficiency ratio | 66.86% | 65.24% | 64.71% | 60.63% | 59.08% | 59.61% |
| Effective tax rate | 31.0% | 27.0% | 30.9% | 33.5% | 35.0% | 34.7% |
| Return on average assets | 0.74% | 0.83% | 0.83% | 0.80% | 0.85% | 0.90% |
| Return on average equity | 5.50% | 6.06% | 6.04% | 5.95% | 5.81% | 6.82% |
| Return on average tangible equity(5) | 11.62% | 12.89% | 13.11% | 10.86% | 9.24% | 12.02% |
| Return on average common equity | 5.24% | 5.86% | 5.83% | 5.72% | 5.79% | 6.93% |
| Return on average tangible common equity(6) | 12.05% | 13.57% | 13.86% | 11.13% | 9.63% | 12.36% |
| Reconciliation of net interest income on operating basis to reported net interest income(1): | ||||||
| Total net interest income on operating basis (Non-GAAP) | $ 266,130 | $ 268,566 | $ 269,605 | $ 267,371 | $ 242,371 | $ 242,513 |
| Additional premium amortization on securities portfolio | -- | (16,280) | -- | (8,358) | -- | -- |
| Total reported net interest income (GAAP) | 266,130 | 252,286 | 269,605 | 259,013 | 242,371 | 242,513 |
| Reconciliation of noninterest income on operating basis to reported noninterest income(1): | ||||||
| Total noninterest income on operating basis (Non-GAAP) | $ 89,312 | $ 91,821 | $ 96,866 | $ 79,703 | $ 69,908 | $ 63,685 |
| Gain on securities portfolio repositioning | -- | -- | 5,337 | 15,895 | -- | -- |
| Total reported noninterest income (GAAP) | 89,312 | 91,821 | 102,203 | 95,598 | 69,908 | 63,685 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | ||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 237,666 | $ 235,106 | $ 237,138 | $ 210,429 | $ 184,505 | $ 182,526 |
| Merger and acquisition integration expenses | -- | 3,678 | 29,404 | 131,460 | 12,970 | 6,149 |
| Restructuring charges | -- | -- | -- | 3,750 | 2,703 | 13,496 |
| Total reported noninterest expense (GAAP) | $ 237,666 | $ 238,784 | $ 266,542 | $ 345,639 | $ 200,178 | $ 202,171 |
| Reconciliation of net operating income to net income(1): | ||||||
| Net operating income (Non-GAAP) | $ 67,285 | $ 75,358 | $ 74,027 | $ 72,188 | $ 70,053 | $ 72,057 |
| Nonoperating income and expenses, net of tax: | ||||||
| Additional premium amortization on securities portfolio | -- | 11,633 | -- | 5,558 | -- | -- |
| Gain on securities portfolio repositioning | -- | -- | (3,469) | (10,331) | -- | -- |
| Merger and acquisition integration expenses | -- | 2,628 | 19,112 | 85,448 | 8,431 | 4,256 |
| Restructuring charges | -- | -- | -- | 2,437 | 1,757 | 9,340 |
| Total nonoperating expenses, net of tax | -- | 14,261 | 15,643 | 83,112 | 10,188 | 13,596 |
| Net income (GAAP) | $ 67,285 | $ 61,097 | $ 58,384 | $ (10,924) | $ 59,865 | $ 58,461 |
| 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) | $ 59,738 | $ 67,811 | $ 66,480 | $ 64,641 | $ 64,938 | $ 72,057 |
| Nonoperating income and expenses, net of tax: | ||||||
| Additional premium amortization on securities portfolio | -- | 11,633 | -- | 5,558 | -- | -- |
| Gain on securities portfolio repositioning | -- | -- | (3,469) | (10,331) | -- | -- |
| Merger and acquisition integration expenses | -- | 2,628 | 19,112 | 85,448 | 8,431 | 4,256 |
| Restructuring charges | -- | -- | -- | 2,437 | 1,757 | 9,340 |
| Total nonoperating income and expenses, net of tax | -- | 14,261 | 15,643 | 83,112 | 10,188 | 13,596 |
| Net income available to common stockholders (GAAP) | $ 59,738 | $ 53,550 | $ 50,837 | $ (18,471) | $ 54,750 | $ 58,461 |
| Computation of pre-tax,pre-provision income: | ||||||
| Net interest income | $ 266,130 | $ 252,286 | $ 269,605 | $ 259,013 | $ 242,371 | $ 242,513 |
| Noninterest income | 89,312 | 91,821 | 102,203 | 95,598 | 69,908 | 63,685 |
| Noninterest expense | (237,666) | (238,784) | (266,542) | (345,639) | (200,178) | (202,171) |
| Pre-tax, pre-provision income (GAAP) | 117,776 | 105,323 | 105,266 | 8,972 | 112,101 | 104,027 |
| Add back: non-operating premium amortization | -- | 16,280 | -- | 8,358 | -- | -- |
| Add back: non-operating noninterest expenses (1) | -- | 3,678 | 29,404 | 135,210 | 15,673 | 19,645 |
| Less: non-operating noninterest income (1) | -- | -- | (5,337) | (15,895) | -- | -- |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 117,776 | $ 125,281 | $ 129,333 | $ 136,645 | $ 127,774 | $ 123,672 |
| (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) | ||||||
| 2013 | 2012 | 2011 | ||||
| First | Fourth | Third | Second | First | Fourth | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |
| Computation of Ending Tangible Common Equity: | ||||||
| Total stockholders' equity | $ 4,946,673 | $ 4,926,558 | $ 4,915,421 | $ 4,818,213 | $ 4,875,446 | $ 4,798,178 |
| Less: Goodwill and other intangibles | (2,567,681) | (2,617,810) | (2,626,625) | (2,631,605) | (1,796,394) | (1,803,240) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tangible common equity | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 |
| Computation of Average Tangible Equity: | ||||||
| Total stockholders' equity | $ 4,958,402 | $ 4,945,132 | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,188,800 |
| Less: Goodwill and other intangibles | (2,609,409) | (2,619,322) | (2,626,666) | (2,206,682) | (1,800,613) | (1,809,690) |
| Tangible equity | $ 2,348,993 | $ 2,325,810 | $ 2,245,939 | $ 2,673,109 | $ 3,049,663 | $ 2,379,110 |
| Computation of Average Tangible Common Equity: | ||||||
| Total stockholders' equity | $ 4,958,402 | $ 4,945,132 | $ 4,872,605 | $ 4,879,791 | $ 4,850,276 | $ 4,188,800 |
| Less: Goodwill and other intangibles | (2,609,409) | (2,619,322) | (2,626,666) | (2,206,682) | (1,800,613) | (1,809,690) |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (66,226) |
| Tangible common equity | $ 2,010,991 | $ 1,987,808 | $ 1,907,937 | $ 2,335,107 | $ 2,711,661 | $ 2,312,884 |
| Computation of Texas Ratio: | ||||||
| Nonperforming Assets | $ 184,139 | $ 182,838 | $ 152,049 | $ 139,704 | $ 140,463 | $ 94,280 |
| Loans 90 days past due still accruing(1) | 172,062 | 171,548 | 145,323 | 125,668 | 116,810 | 143,237 |
| Sum of nonperforming assets and loans 90 days past due still accruing | $ 356,201 | $ 354,386 | $ 297,372 | $ 265,372 | $ 257,273 | $ 237,517 |
| Tangible common equity | $ 2,040,990 | $ 1,970,746 | $ 1,950,794 | $ 1,848,606 | $ 2,741,050 | $ 2,656,936 |
| Allowance for loan losses | 172,002 | 162,522 | 149,933 | 138,516 | 126,746 | 120,100 |
| Sum of tangible common equity and allowance for loan losses | $ 2,212,992 | $ 2,133,268 | $ 2,100,727 | $ 1,987,122 | $ 2,867,796 | $ 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 losses | 16.10% | 16.61% | 14.16% | 13.35% | 8.97% | 8.55% |
| Computation of Tier 1 Common Capital: | ||||||
| Tier 1 capital | $ 2,356,763 | $ 2,264,679 | $ 2,225,121 | $ 2,128,702 | $ 3,009,727 | $ 2,962,031 |
| Less: Qualifying restricted core capital elements | (112,236) | (112,025) | (111,820) | (111,630) | (111,453) | (111,284) |
| Less: Perpetual non-cumulative preferred stock | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) |
| Tier 1 common capital (Non-GAAP) | $ 1,906,525 | $ 1,814,652 | $ 1,775,299 | $ 1,679,070 | $ 2,560,272 | $ 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. | ||||||