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First Niagara Reports First Quarter 2014 Results

April 24, 2014 7:15 AM EDT

First Quarter Highlights:

  • Operating Earnings of $0.17 per diluted share, excluding restructuring charges
    • GAAP Earnings of $0.15 per diluted share
  • Revenues flat YOY excluding Historic Tax Credit (HTC) asset amortization
    • Net interest income increased 2% YOY driven by balance sheet growth
    • Fees, excluding HTC amortization, decreased 6% YOY driven by lower mortgage banking and capital markets revenues
  • Organic loan growth continues, with average loans up 8% annualized QOQ
    • Average commercial business and real estate loans increased 9% QOQ
    • Momentum in average indirect auto loans continues with $160 million increase
  • Strong credit quality maintained
    • NCOs decreased to 0.36% of average originated loans in the first quarter of 2014
    • Nonperforming originated loans to originated loans decreased 11 basis points QOQ
  • Successful launch of remote deposit capture mobile feature in January 2014
    • Transactional deposits averaged 36% of deposits, up from 32% a year-ago

BUFFALO, N.Y., April 24, 2014 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq: FNFG) today reported first quarter results, highlighted by continued balance sheet growth, consistent credit quality and stable core net interest margin.

"As we execute on our strategic investment plan to position First Niagara to generate long-term shareholder value, our first quarter results demonstrate that the organization continues to be focused on acquiring and deepening customer relationships and delivering on our objectives," said Gary M. Crosby, President and Chief Executive Officer. "Our customers and their preferences will remain at the center of all we do as we execute on our strategic investment plan. The main focus of those investments will be dedicated to expanding and enhancing our products and services and improving our operating efficiency."

"In the first quarter of 2014, business momentum remained strong as evidenced by the 9% annualized increase in average commercial loans and 8% annualized increase in total loans," said Gregory W. Norwood, Chief Financial Officer. "Consistent with industry trends in the first quarter, fee income declined from the prior quarter driven by lower activity consistent with seasonal trends. Operating expenses, excluding restructuring expenses, increased from the fourth quarter of 2013 and were driven by seasonal increases in payroll taxes as well as technology and consulting expenses related to our previously announced strategic investment plan."

First Quarter Results

In the first quarter of 2014, First Niagara reported net income available to common shareholders of $51.9 million, or $0.15 per diluted share, which included $8.3 million in after-tax restructuring and severance expenses, or $0.02 per diluted share, incurred primarily in connection with the previously announced branch staffing realignment and consolidation of certain branches completed in the first quarter. In the fourth quarter of 2013, First Niagara reported net income available to common shareholders of $70.1 million, or $0.20 per diluted share. For the first quarter of 2013, net income available to common shareholders was $59.7 million or $0.17 per diluted share and included $4.3 million in after-tax charges related to executive departures.

Balance sheet growth remained strong as average loans increased 8% annualized compared to the prior quarter. Average commercial business and real estate loans increased 9% annualized over the prior quarter, while average consumer loans increased 6% annualized driven by continued growth in indirect auto loan balances, partially offset by a decline in residential mortgage loans. Average transactional deposit balances, which include interest-bearing checking and noninterest bearing deposits, were unchanged compared to the prior quarter. The company continues to garner strong customer traction to the recent roll-out of mobile remote deposit capture.

Revenues, excluding the $7.5 million amortization related to the company's historic tax credit investments (HTC amortization), decreased 4% in the first quarter of 2014 compared to the prior quarter due in large part to seasonal declines in certain fee income categories and two fewer days in the quarter. Net interest income decreased 3% in the first quarter compared to the prior quarter driven in large part due to items that benefited the prior quarter as well as two fewer days. Net interest margin was 3.33%, as compared to 3.41% in the fourth quarter of 2013. Noninterest income, excluding the $7.5 million HTC amortization, declined 6% from the prior quarter primarily due to seasonally lower deposit service charges and lower derivative sales volumes in the capital markets business.

The provision for loan losses on originated loans totaled $21.2 million in the first quarter of 2014, including $5.5 million to support loan growth and $15.6 million to cover net charge-offs during the quarter. At March 31, 2014, nonperforming originated loans comprised 0.82% of originated loans, a 11 basis point improvement from the prior quarter. Net charge-offs equaled 0.36% of average originated loans, consistent with 0.34% reported in 2013.

Excluding $10.4 million in restructuring expenses, operating expenses for first quarter of 2014 were $238.4 million, and increased $11.2 million from the prior quarter. This increase was driven by seasonal increases in payroll taxes, higher marketing costs, as well as technology and consulting expenses related to the previously announced strategic investment plan.

 

Operating Results (Non-GAAP) Q1 2014 Q4 2013 Q1 2013
Net interest income $ 270.7 $ 280.3 $ 266.1
Provision for credit losses 24.8 32.0 20.2
Noninterest income 76.7 89.3 89.3
Noninterest expense 238.4 227.1 237.7
Operating net income 67.8 77.7 67.3
Preferred stock dividend 7.5 7.5 7.5
Operating net income available to common shareholders $ 60.2 $ 70.1 $ 59.7
Weighted average diluted shares outstanding 351.4 350.7 350.0
Operating earnings per diluted share $ 0.17 $ 0.20 $ 0.17
  Reported Results (GAAP)      
Operating net income before non-operating items $ 67.8 $ 77.7 $ 67.3
Non-operating expenses (a) 8.3 -- --
Net income 59.4 77.7 67.3
Preferred stock dividend 7.5 7.5 7.5
Net income available to common shareholders $ 51.9 $ 70.1 $ 59.7
Weighted average diluted shares outstanding 351.4 350.7 350.0
Earnings per diluted share $ 0.15  $ 0.20  $ 0.17
 
All amounts in millions except earnings per diluted share. The Non-GAAP/Operating Results table above summarizes the company's operating results excluding certain non-operating items. For a detailed reconciliation of non-GAAP measures, refer to the attached tables.  
(a) Restructuring charges primarily related to branch realignment and consolidations, net of taxes.

Loans

Average total loans increased 8% annualized from the prior quarter, driven by continued growth in the company's commercial lending businesses as well as sustained momentum in the company's indirect auto business.

Average CRE loans increased 7% annualized to $7.8 billion compared to the fourth quarter of 2013. Commercial business (C&I) loans averaged $5.4 billion, representing a 12% annualized increase over the prior quarter. All of First Niagara's regional markets contributed to first quarter commercial lending growth, with particular strength in the company's New York and Western Pennsylvania regions, which posted growth rates of 8% and 17%, respectively.

Average indirect auto loan balances increased $160 million to $1.6 billion. During the first quarter, indirect auto originations totaled $242 million at an average customer FICO score of 753 and yielded 3.21%, net of dealer reserve. Average residential real estate loans declined by $63 million, or 7% annualized reflecting industry-wide weakness in application volumes. Home equity balances increased for the fourth consecutive quarter, and averaged $2.8 billion, or a 4% annualized quarter-over-quarter increase.

Deposits

The company strategic focus remains on efforts to grow its core deposit customer base, re-position its account mix and introduce new products and services that further enhance its value proposition. Average transaction deposit balances, which include interest-bearing and noninterest bearing checking accounts, were unchanged from the prior quarter and currently represent 36% of the company's deposit balances, up from 32% a year ago. The average cost of interest-bearing deposits of 0.23% was unchanged from the prior quarter.

Average noninterest-bearing checking deposits decreased 1% annualized compared to the prior quarter, driven by seasonal trends particularly in commercial account balances. Interest-bearing checking balances averaged $4.7 billion and increased 1% annualized from the prior quarter.

Money market and time deposit balances declined 1% and 6% annualized, respectively, driven by the company's continued pricing actions.

In response to changing consumer banking behaviors, First Niagara continues to invest in enhancing its self-service channels such as online, mobile and telephonic banking capabilities for retail and small business customers, while continuing to transform its branch network and in-branch experience. In the first quarter of 2014, the company introduced mobile remote deposit capture through which a growing number of mobile banking customers can deposit checks using their smartphones.

Net Interest Income

First quarter 2014 net interest income decreased 3% from the prior quarter to $270.7 million and was driven by an eight basis point decrease in the net interest margin to 3.33% and the effect of two fewer days in the quarter, partially offset by a 4% annualized increase in average earning assets. Growth in average earning assets reflected continued strong loan growth. Average investment securities balances remained consistent with the prior quarter.

The eight basis point quarter-over-quarter decrease in net interest margin reflected lower benefits from retroactive adjustments on the company's residential mortgage backed securities (RMBS) portfolio, lower commercial real estate prepayment income as well as continued compression of loan yields from prepayments and reinvestments at current market rates. 

In the first quarter, premium amortization on the RMBS portfolio was $3.8 million, which included a $1.1 million retroactive adjustment to reflect updated estimates of future prepayment speeds. The premium amortization on the RMBS portfolio in the fourth quarter of 2013 was $0.3 million which included a $3.5 million retroactive adjustment.

Credit Quality

At March 31, 2014, the allowance for loan losses was $215.0 million, compared to $209.3 million at December 31, 2013. Nonperforming assets to total assets were 0.52%, down 4 basis points from the prior quarter, driven by a decrease in nonperforming originated loans.

Information for both the originated and acquired portfolios follows. 

  Q1 2014 Q4 2013
$ in millions Originated Acquired Total Originated Acquired Total
Provision for loan losses* $21.2 $3.2 $24.4 $28.2 $3.4 $31.6
Net charge-offs 15.6 3.0 18.6 17.8 2.4 20.3
NCOs/ Avg Loans 0.36% 0.28% 0.34% 0.43% 0.21% 0.38%
Total loans** $17,389 $4,476 $21,750 $16,922 $4,643 $21,440
 
(*) Excludes provision for unfunded commitments of $0.4 million each in 1Q14 and 4Q13
(**) Acquired loans before associated credit discount; see accompanying tables for further information

Originated loans

The provision for loan losses on originated loans totaled $21.2 million, compared to $28.2 million in the prior quarter. The provision in the first quarter included $5.5 million to support sequential originated loan growth of $466 million, compared to $10.3 million in the prior quarter that supported $711 million of originated loan growth. Net charge-offs equaled $15.6 million, or 36 basis points of average originated loans, in the first quarter of 2014, consistent with 34 basis points reported in 2013.

At March 31, 2014, nonperforming originated loans comprised 0.82% of originated loans, compared to 0.93% at December 31, 2013. Nonperforming originated loan balances declined 10% from the prior quarter driven by resolutions of credits.

At March 31, 2014, the allowance for loan losses on originated loans totaled $210.8 million or 1.21% of such loans, compared to $205.3 million at December 31, 2013.

Acquired loans

The provision for losses on acquired loans totaled $3.2 million, compared to $3.4 million in the prior quarter. Net charge-offs on those portfolios totaled $3.0 million during the quarter, compared to $2.4 million in the prior period. At March 31, 2014, the allowance for loan losses on acquired loans totaled $4.2 million, compared to $4.0 million at December 31, 2013. Acquired nonperforming loans totaled $30.6 million, compared to $30.1 million at the end of the prior quarter. At March 31, 2014, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $113 million.

Fee Income

First quarter noninterest income was $76.7 million and included the $7.5 million HTC amortization charge. Excluding HTC amortization, noninterest income totaled $84.2 million and decreased 6%, or $5.1 million compared to the prior quarter.  Seasonal weakness drove the quarter-over-quarter decline in deposit service charges and merchant and card fees.

Capital markets revenue decreased $2.7 million from the fourth quarter reflecting lower derivative sales volume in the current pricing environment. Deposit service charges decreased 9% from the prior quarter and were driven by seasonal patterns and lower NSF incident rates. Insurance commissions increased 2% from the prior quarter reflecting higher policy renewal activity. Mortgage banking revenues improved $0.6 million from the fourth quarter of 2013, but declined by $3.0 million or 47% from the year-ago quarter driven by lower volumes as well as lower gain-on-sale margins. Wealth management revenues increased 1% from the prior quarter and were driven by annuity sales.

Noninterest Expense

First quarter noninterest expenses were $248.7 million and included $10.4 million in restructuring charges primarily related to branch staffing realignment and consolidation of branches. Excluding these charges, operating expenses were $238.4 million. Salaries and benefit expenses increased by $4.2 million from the prior quarter driven primarily by typical resetting of payroll taxes, new hires and employee merit increases partially offset by lower healthcare costs. Marketing and advertising expense increased $2.5 million driven by promotional marketing campaigns. Professional services expenses increased $2.6 million or 28% from the prior quarter reflecting consulting fees associated with the company's strategic investments.

In the first quarter of 2014, the efficiency ratio, excluding the restructuring charges and HTC amortization, was 67.2% compared to 61.5% in the prior quarter, reflecting various seasonal impacts in both operating revenues and expenses.

Capital

At March 31, 2014, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.6% and 7.9% respectively. The company remains well above current regulatory guidelines for well-capitalized institutions. 

Effective Tax Rate

In the first quarter of 2014, the company's effective tax rate declined to 19.6% from 29.7% in the prior quarter reflecting the benefits derived from historic tax credit investments funded during the quarter as well as the taxable reorganization of a subsidiary.

About First Niagara

First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank with 411 branches, $38 billion in assets, $28 billion in deposits, and approximately 5,800 employees providing financial services to individuals, families and businesses across New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.

Investor Call

A conference call will be held at 10:00 a.m. Eastern Time on Thursday, April 24, 2014 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-469-1365 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and are available under the investor relations tab of our website at www.firstniagara.com. A replay of the call will be available until June 1, 2014 by dialing 1-888-567-0414, passcode: 9468.

Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.

Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; and (6) execution risk associated with the announced strategic investment plan.

First Niagara Financial Group, Inc.        
Income Statement Highlights -- Reported Basis      
(in thousands, except per share amounts)        
             
  2014 2013 2012
   First   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter   Quarter 
Interest income:            
Loans and leases  $ 209,644  $ 213,778  $ 214,746  $ 209,970  $ 206,640  $ 212,035
Investment securities and other   90,421  96,020  91,996  88,110  88,961  71,564
Total interest income   300,065  309,798  306,742  298,080  295,601  283,599
             
Interest expense:            
Deposits   12,236  12,941  12,931  12,967  14,277  16,902
Borrowings   17,082  16,579  16,271  15,670  15,194  14,411
Total interest expense   29,318  29,520  29,202  28,637  29,471  31,313
             
Net interest income  270,747  280,278  277,540  269,443  266,130  252,286
Provision for credit losses  24,800  32,000  27,600  25,200  20,200  22,000
Net interest income after provision  245,947  248,278  249,940  244,243  245,930  230,286
             
Noninterest income:            
Deposit service charges  23,356  25,726  27,115  26,482  24,800  26,345
Insurance commissions  15,691  15,431  17,854  17,692  16,355  15,497
Merchant and card fees  11,504  12,567  12,464  12,380  11,298  11,945
Wealth management services  15,587  15,441  15,189  14,945  12,845  12,000
Mortgage banking  3,396  2,754  2,268  6,882  6,424  8,060
Capital markets income  3,623  6,310  5,058  5,002  6,031  7,098
Lending and leasing   4,732  4,140  4,886  4,534  3,906  3,739
Bank owned life insurance   5,405  6,027  3,725  3,321  3,467  3,021
Other income  (6,570)  916  2,863  4,308  4,186  4,116
Total noninterest income  76,724  89,312  91,422  95,546  89,312  91,821
             
Noninterest expense:            
Salaries and benefits  117,940  113,754  115,034  116,305  115,790  111,026
Occupancy and equipment  27,876  27,420  26,582  28,506  28,045  27,609
Technology and communications  30,345  29,483  28,999  29,603  27,113  28,257
Marketing and advertising  7,364  4,879  5,822  5,450  4,346  9,292
Professional services  11,923  9,314  9,820  9,782  9,603  11,163
Amortization of intangibles  7,509  7,562  7,702  10,850  14,119  14,224
FDIC premiums  8,855  7,431  9,351  9,348  8,901  9,158
Merger and acquisition integration expenses  --   --   --   --   --   3,678
Restructuring charges  10,356  --   --   --   --   -- 
Other expense  26,568  27,305  27,883  25,326  29,749  24,377
Total noninterest expense  248,736  227,148  231,193  235,170  237,666  238,784
             
Income before income tax  73,935  110,442  110,169  104,619  97,576  83,323
Income tax expense  14,491  32,752  31,026  33,485  30,291  22,226
Net income  59,444  77,690  79,143  71,134  67,285  61,097
Preferred stock dividend  7,547  7,547   7,547   7,547   7,547   7,547 
Net income available to common stockholders  $ 51,897  $ 70,143  $ 71,596  $ 63,587  $ 59,738  $ 53,550
             
Financial Ratios:          
Earnings per basic share  $ 0.15  $ 0.20  $ 0.20  $ 0.18  $ 0.17  $ 0.15
Earnings per diluted share  0.15  0.20  0.20  0.18  0.17  0.15
Weighted average shares outstanding - basic(1)  349,906  349,718  349,653  349,542  349,278  349,071
Weighted average shares outstanding - diluted(1)  351,408  350,699  350,896  350,384  349,999  349,663
Net revenue(2)  $ 347,471  $ 369,590  $ 368,962  $ 364,989  $ 355,442  $ 344,107
Noninterest income as a percentage of net revenue(2) 22.08% 24.17% 24.78% 26.18% 25.13% 26.68%
Pre-tax, pre-provision income(3)  $ 98,735  $ 142,442  $ 137,769  $ 129,819  $ 117,776  $ 105,323
Pre-tax, pre-provision income per diluted share(3)  $ 0.28  $ 0.41  $ 0.39  $ 0.37  $ 0.34  $ 0.30
Pre-tax, pre-provision return on average assets(3) 1.06% 1.51% 1.47% 1.41% 1.30% 1.15%
Net interest margin(4) 3.33% 3.41% 3.40% 3.36% 3.39% 3.22%
Interest yield on average loans(4) 3.98% 4.04% 4.14% 4.19% 4.25% 4.39%
Rate paid on interest-bearing liabilities 0.44% 0.43% 0.43% 0.43% 0.44% 0.48%
Efficiency ratio 71.58% 61.46% 62.66% 64.43% 66.86% 69.39%
Expenses as a percentage of average loans and deposits 2.06% 1.89% 1.94% 1.98% 2.01% 2.03%
Effective tax rate 19.6% 29.7% 28.2% 32.0% 31.0% 26.7%
Return on average assets(5)  0.64 % 0.82% 0.85%  0.77 % 0.74% 0.67%
Return on average equity(5)  4.79 % 6.18% 6.37%  5.72 % 5.50% 4.92%
Return on average tangible equity(3)(5)  9.66 % 12.64% 13.20%  11.75 % 11.62% 10.45%
Return on average common equity  4.48 % 5.99% 6.18%  5.48 % 5.24% 4.62%
Return on average tangible common equity(3)  9.76 % 13.25% 13.92%  12.21 % 12.05% 10.72%
             
(1) Share count excludes unallocated ESOP shares and unvested restricted stock shares.
(2) Net revenue is comprised of net interest income and noninterest income.
(3) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(4) Yields and rates calculated on a tax equivalent basis.
(5) Return used to calculate ratio excludes preferred stock dividend.
           
           
           
First Niagara Financial Group, Inc.          
Period End Balance Sheet            
(in thousands)            
             
  2014 2013 2012
  March 31, December 31,  September 30, June 30, March 31, December 31, 
Cash and cash equivalents  $ 503,070  $ 462,927  $ 558,086  $ 552,210  $ 424,176  $ 430,862
Investment securities:            
Available for sale  7,060,237  7,423,162  7,609,676  7,916,353  7,876,160  10,993,605
Held to maturity  4,467,213  4,042,481  3,841,700  3,856,960  4,218,687  1,299,806
FHLB and FRB common stock  437,550  469,217  437,534  429,740  401,373  420,277
Total investment securities  11,965,000  11,934,860  11,888,910  12,203,053  12,496,220  12,713,688
Loans held for sale  34,465  50,137  80,468  118,104  126,389  154,745
Loans and leases:             
Commercial:            
Real estate  7,867,724  7,777,903  7,697,407  7,482,375  7,295,544  7,093,193
Business  5,470,177  5,290,392  5,204,672  5,165,606  5,044,738  4,953,323
Total commercial loans  13,337,901  13,068,295  12,902,079  12,647,981  12,340,282  12,046,516
Consumer:            
Residential real estate  3,389,071  3,447,997  3,519,233  3,558,274  3,614,912  3,761,567
Home equity  2,767,024  2,752,229  2,706,603  2,670,672  2,646,645  2,651,891
Indirect auto  1,655,489  1,543,983  1,339,449  1,049,763  818,401  601,456
Credit cards  305,663  325,140  311,600  303,455  298,310  314,973
Other consumer  295,692  302,009  310,107  313,037  316,669  333,609
Total consumer loans  8,412,939  8,371,358  8,186,992  7,895,201  7,694,937  7,663,496
Total loans and leases  21,750,840  21,439,653  21,089,071  20,543,182  20,035,219  19,710,012
Allowance for loan losses  215,037  209,274  197,953  183,708  172,002  162,522
Loans and leases, net  21,535,803  21,230,379  20,891,118  20,359,474  19,863,217  19,547,490
Bank owned life insurance  417,031  415,205  413,555  410,182  407,419  404,321
Goodwill and other intangibles  2,535,271  2,542,783  2,549,931  2,557,560  2,567,681  2,617,810
Other assets  999,804  992,071  958,473  949,144  959,459  937,316
Total assets  $ 37,990,444  $ 37,628,362  $ 37,340,541  $ 37,149,727  $ 36,844,561  $ 36,806,232
             
Deposits:            
Savings accounts  $ 3,664,765  $ 3,666,759  $ 3,695,221  $ 3,878,053  $ 3,915,836  $ 3,887,587
Interest-bearing checking  4,929,302  4,743,829  4,637,807  4,499,963  4,534,444  4,450,970
Money market deposits  10,106,569  9,739,539  9,905,341  10,013,996  10,493,243  10,581,137
Noninterest-bearing deposits  5,101,681  4,865,873  4,968,501  4,845,835  4,803,835  4,643,580
Certificates of deposit  3,795,438  3,649,257  3,762,132  3,911,989  3,985,702  4,113,257
Total deposits  27,597,755  26,665,257  26,969,002  27,149,836  27,733,060  27,676,531
             
Short-term borrowings  4,137,496  4,822,222  4,169,416  3,698,279  2,928,929  2,983,718
Long-term borrowings  733,384  733,883  732,547  732,598  732,510  732,425
Other liabilities  495,590  413,647  531,379  666,270  503,389  487,000
Total liabilities  32,964,225  32,635,009  32,402,344  32,246,983  31,897,888  31,879,674
Preferred stockholders' equity  338,002  338,002  338,002  338,002  338,002  338,002
Common stockholders' equity  4,688,217  4,655,351  4,600,195  4,564,742  4,608,671  4,588,556
Total stockholders' equity  5,026,219  4,993,353  4,938,197  4,902,744  4,946,673  4,926,558
Total liabilities and stockholders' equity  $ 37,990,444  $ 37,628,362  $ 37,340,541  $ 37,149,727  $ 36,844,561  $ 36,806,232
             
Selected balance sheet information:          
Total interest-earning assets(1)  $ 33,684,828  $ 33,396,058  $ 33,039,023  $ 32,906,363  $ 32,524,313  $ 32,321,964
Total interest-bearing liabilities  27,366,955  27,355,489  26,902,465  26,734,878  26,590,664  26,749,094
Net interest-earning assets  $ 6,317,873  $ 6,040,569  $ 6,136,558  $ 6,171,485  $ 5,933,649  $ 5,572,870
             
Tangible common equity(2)  $ 2,152,946  $ 2,112,568  $ 2,050,264  2,007,182  2,040,990  1,970,746
Unrealized gain on available for sale securities, net of tax(3)  72,579  63,930  76,686  83,898  160,942  206,733
             
Total core deposits  $ 23,802,317  $ 23,016,000  $ 23,206,870  $ 23,237,847  $ 23,747,358  $ 23,563,274
             
Originated loans(4)  $ 17,388,542  $ 16,922,161  $ 16,211,505  $ 15,102,336  $ 14,100,190  $ 13,372,357
Acquired loans(5)  4,475,593  4,642,775  5,006,753  5,581,651  6,083,912  6,513,636
Credit related discount on acquired loans(6)  (113,295)  (125,283)  (129,187)  (140,805)  (148,883)  (175,981)
Total Loans  $ 21,750,840  $ 21,439,653  $ 21,089,071  $ 20,543,182  $ 20,035,219  $ 19,710,012
             
(1) Includes interest bearing cash and cash equivalents, investment securities at amortized cost, loans held for sale, and total loans and leases.
(2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(3) Excludes unamortized unrealized gains recorded in accumulated other comprehensive income related to available for sale securities transferred to held to maturity.
(4) Originated loans represent total loans excluding acquired loans.
(5) Represents the carrying value of acquired loans plus the principal not expected to be collected.
(6) Represent principal on acquired loans not expected to be collected.
               
               
First Niagara Financial Group, Inc.              
Average Balance Sheet and Related Tax Equivalent Yields & Rates        
(in millions)                  
                   
  For the three months ended
  March 31, 2014 December 31, 2013 March 31, 2013
   Average  Interest(1)  Yields   Average  Interest(1)  Yields   Average  Interest(1)  Yields 
   Balances     and Rates(1)  Balances     and Rates(1)  Balances     and Rates(1)
Interest-earning assets:                  
Loans and leases(2)                
Commercial:                  
Real estate  $ 7,801  $ 76 3.89%  $ 7,673  $ 79 4.02%  $ 7,179  $ 76 4.25%
Business  5,413  48  3.56   5,257  48  3.60   4,999  47  3.74 
Total commercial loans  13,214  124  3.76   12,930  127  3.85   12,178  123  4.04 
Consumer:                  
Residential real estate  3,416  33  3.88   3,479  34  3.89   3,691  37  4.01 
Home equity  2,756  28  4.12   2,732  29  4.15   2,648  28  4.29 
Indirect auto  1,613  12  2.93   1,453  11  3.03   712  6  3.29 
Credit cards  314  9  11.64   313  9  11.38   304  8  10.40 
Other consumer  300  6  8.64   307  7  8.66   328  7  8.17 
Total consumer loans  8,399  88  4.26   8,284  89  4.27   7,683  85  4.50 
Total loans and leases  21,613  212  3.98   21,214  216  4.04   19,861  208  4.25 
Residential MBS  5,689  39  2.75   5,502  42  3.07   5,488  34  2.50 
Commercial MBS  1,697  14  3.28   1,772  17  3.84   1,914  18  3.78 
Other investment securities (3)  4,388  39  3.55   4,505  38  3.40   4,822  38  3.19 
Total securities, at amortized cost  11,774  92  3.12   11,779  98  3.31   12,224  91  2.97 
Money market and other investments  125  1  1.64   189  1  1.38   241  1  1.31 
Total interest-earning assets  33,512  $ 305 3.69%  33,182  $ 314 3.76%  32,326  $ 300 3.76%
Goodwill and other intangibles  2,539      2,546      2,609    
Other noninterest-earning assets  1,697      1,651      1,872    
                   
Total assets   $ 37,748      $ 37,379      $ 36,807    
                   
Interest-bearing liabilities:                 
Deposits                  
Savings accounts  $ 3,631  $ 1 0.08%  $ 3,670  $ 1 0.09%  $ 3,894  $ 1 0.11%
Interest-bearing checking  4,735  --   0.03   4,725  --   0.04   4,379  1  0.05 
Money market deposits   9,887  5  0.20   9,900  5  0.20   10,643  6  0.23 
Certificates of deposit   3,647  6  0.70   3,698  7  0.71   4,081  7  0.67 
Total interest bearing deposits  21,900  12 0.23%  21,993  13 0.23%  22,997  14 0.25%
Borrowings                  
Short-term borrowings  4,642  5 0.44%  4,259  4 0.42%  3,152  3 0.40%
Long-term borrowings  734  12  6.69   732  12  6.56   730  12  6.71 
Total borrowings   5,376  17  1.29   4,991  17  1.32   3,882  15  1.59 
Total interest-bearing liabilities   27,276  $ 29 0.44%  26,984  $ 30 0.43%  26,879  $ 29 0.44%
Noninterest-bearing deposits   4,864      4,878      4,468    
Other noninterest-bearing liabilities   574      532      502    
Total liabilities   32,714      32,395      31,849    
Total stockholders' equity  5,034      4,984      4,958    
Total liabilities and stockholders' equity  $ 37,748      $ 37,379      $ 36,807    
                   
Net interest income (FTE)  $ 275      $ 285      $ 270  
Taxable Equivalent Adjustment(1)    4      5      4  
                   
 Total core deposits   $ 23,117  $ 6 0.10%  $ 23,173  $ 6 0.11%  $ 23,384  $ 8 0.13%
 Total transactional deposits   9,599  --  0.02%  9,603  --  0.02%  8,847  1 0.03%
 Total deposits   26,764  12 0.19%  26,871  13 0.19%  27,465  14 0.21%
                   
Tax equivalent net interest rate spread(2)     3.25%     3.33%     3.32%
Tax equivalent net interest rate margin(2)     3.33%     3.41%     3.39%
                   
(1) Tax equivalent interest income is calculated using a 35% tax rate.
(2) Includes nonaccrual loans.
(3) Includes debt securities, collateralized loan obligations, asset-backed securities, FHLB and FRB common stock, and other investment securities.
             
             
First Niagara Financial Group, Inc.            
Allowance for Loans and Lease Losses & Asset Quality            
(in thousands)            
             
  2014 2013 2012
   First   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter   Quarter 
Beginning balance  $ 209,274  $ 197,953  $ 183,708  $ 172,002  $ 162,522  $ 149,933
Net loan (charge-offs) recoveries:            
Commercial real estate  $ 905  $ (5,764)  $ 1,013  $ (2,817)  $ (2,121)  $ (1,935)
Commercial business  (9,138)  (6,382)  (9,694)  (7,175)  (4,902)  (3,385)
Residential real estate  (174)  (168)  (137)  (291)  (427)  (658)
Home equity  (3,045)  (1,528)  (322)  (905)  (613)  (673)
Indirect auto  (2,086)  (1,215)  (692)  (552)  (252)  (231)
Credit cards  (3,044)  (3,082)  (1,300)  (194)  (204)  (291)
Other consumer  (2,055)  (2,140)  (1,823)  (1,160)  (1,801)  (1,763)
Total net loan charge-offs  $ (18,637)  $ (20,279)  $ (12,955)  $ (13,094)  $ (10,320)  $ (8,936)
Provision for loan losses  24,400  31,600  27,200  24,800  19,800  21,525
Ending balance  $ 215,037  $ 209,274  $ 197,953  $ 183,708  $ 172,002  $ 162,522
             
Supplemental information            
Allowance to loans  0.99 %  0.98 %  0.94 %  0.89 %  0.86 %  0.82 %
Allowance for originated loans to originated loans(1)  1.21 %  1.21 %  1.20 %  1.21 %  1.21 %  1.20 %
             
Net charge-offs (recoveries) to average loans (annualized)            
Commercial real estate  (0.05)%  0.30 %  (0.05)%  0.15 %  0.12 %  0.11 %
Commercial business  0.68 %  0.49 %  0.75 %  0.56 %  0.39 %  0.28 %
Total commercial loans  0.25 %  0.38 %  0.27 %  0.32 %  0.23 %  0.18 %
Residential real estate  0.02 %  0.02 %  0.02 %  0.03 %  0.05 %  0.07 %
Home equity  0.44 %  0.22 %  0.05 %  0.14 %  0.09 %  0.10 %
Indirect auto  0.52 %  0.33 %  0.23 %  0.23 %  0.15 %  0.18 %
Credit cards  3.88 %  3.93 %  1.68 %  0.26 %  0.27 %  0.38 %
Other consumer  2.74 %  2.79 %  2.01 %  0.88 %  1.27 %  1.29 %
Total consumer loans  0.50 %  0.40 %  0.22 %  0.16 %  0.17 %  0.19 %
Total loans  0.34 %  0.38 %  0.25 %  0.26 %  0.21 %  0.18 %
             
Net charge-offs (recoveries) of originated loans to average originated loans (annualized)(1)        
Commercial real estate  (0.11)%  0.24 %  (0.07)%  0.14 %  0.10 %  0.07 %
Commercial business  0.73 %  0.53 %  0.83 %  0.64 %  0.45 %  0.33 %
Total commercial loans  0.26 %  0.37 %  0.33 %  0.36 %  0.26 %  0.19 %
Residential real estate  0.04 %  0.04 %  0.03 %  0.07 %  0.10 %  0.15 %
Home equity  0.21 %  0.29 %  0.09 %  0.26 %  0.19 %  0.21 %
Indirect auto  0.52 %  0.33 %  0.23 %  0.23 %  0.15 %  0.18 %
Credit cards  3.88 %  3.93 %  1.68 %  0.26 %  0.34 %  0.69 %
Other consumer  2.74 %  2.80 %  2.59 %  1.91 %  2.44 %  1.71 %
Total consumer loans  0.57 %  0.56 %  0.33 %  0.27 %  0.28 %  0.33 %
Total loans  0.36 %  0.43 %  0.33 %  0.33 %  0.27 %  0.24 %
             
Nonperforming loans:            
Originated(1):            
Commercial real estate  $ 41,296  $ 53,395  $ 51,302  $ 59,624  $ 49,953  $ 50,848
Commercial business  35,335  42,013  35,854  44,658  47,523  47,066
Residential real estate  32,736  31,478  31,312  29,667  28,455  27,192
Home equity  19,516  18,426  15,709  14,601  14,270  14,233
Indirect auto  7,943  6,274  5,129  3,276  2,426  931
Other consumer  5,216  5,838  5,538  2,818  3,018  2,806
Total originated nonperforming loans  142,042  157,424  144,844  154,644  145,645  143,076
Total acquired nonperforming loans(2)  30,617  30,088  30,388  27,556  27,678  29,648
Total nonperforming loans  172,659  187,512  175,232  182,200  173,323  172,724
Real estate owned  25,466  24,788  24,262  8,144  10,816  10,114
Total nonperforming assets  $ 198,125  $ 212,300  $ 199,494  $ 190,344  $ 184,139  $ 182,838
             
Accruing troubled debt restructurings (TDR)  $ 56,038  $ 52,263  $ 69,877  $ 69,892  $ 64,311  $ 46,280
Loans 90 days past due still accruing(3)  119,134  113,212  136,248  167,560  172,062  171,568
Total classified loans(4)  667,327  663,700  648,235  701,104  720,197  708,468
Total criticized loans(5)  $ 1,075,523  $ 985,019  $ 977,798  $ 1,012,305  $ 1,044,874  $ 1,002,659
             
Total nonperforming loans to loans  0.79 %  0.87 %  0.83 %  0.89 %  0.87 %  0.88 %
Total nonperforming originated loans to originated loans(1)  0.82 %  0.93 %  0.89 %  1.02 %  1.03 %  1.07 %
Total nonperforming assets to loans and real estate owned  0.91 %  0.99 %  0.94 %  0.93 %  0.92 %  0.93 %
Total nonperforming assets to assets  0.52 %  0.56 %  0.53 %  0.51 %  0.50 %  0.50 %
Allowance to nonperforming loans  124.5 %  111.6 %  113.0 %  100.8 %  99.2 %  94.1 %
             
Originated loans(1)  $ 17,388,542  $ 16,922,161  $ 16,211,505  $ 15,102,336  $ 14,100,190  $ 13,372,357
Acquired loans(6)  4,475,593  4,642,775  5,006,753  5,581,651  6,083,912  6,513,636
Credit related discount on acquired loans(7)  (113,295)   (125,283)   (129,187)   (140,805)   (148,883)   (175,981) 
 Total Loans  $ 21,750,840  $ 21,439,653  $ 21,089,071  $ 20,543,182  $ 20,035,219  $ 19,710,012
             
(1) Originated loans represent total loans excluding acquired loans. 
(2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. 
(3) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection.
(4) Includes consumer loans, which are considered classified when they are 90 days or more past due. Classified loans include substandard, doubtful, and loss, which are consistent with regulatory definitions, and as described in Item 1, "Business", under the heading "Asset Quality Review" in our Annual Report on 10-K for the year ended December 31, 2013.
(5) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss.
(6) Represents the carrying value of acquired loans plus the principal not expected to be collected.
(7) Represent principal on acquired loans not expected to be collected.
 
First Niagara Financial Group, Inc.
Key Statistics
(Share counts in thousands)
             
  2014 2013 2012
  March 31, December 31,  September 30, June 30, March 31, December 31, 
First Niagara Financial Group, Inc. capital ratios:      
Tier 1 risk based capital 9.62% 9.56% 9.45% 9.41% 9.45% 9.29%
Tier 1 common capital(1) 7.92% 7.86% 7.72% 7.65% 7.64% 7.45%
Total risk based capital 11.60% 11.53% 11.40% 11.35% 11.38% 11.23%
Leverage 7.28% 7.26% 7.14% 7.01% 6.92% 6.75%
Equity to assets 13.23% 13.27% 13.22% 13.20% 13.43% 13.39%
Tangible common equity to tangible assets(1) 6.07% 6.02% 5.89% 5.80% 5.95% 5.77%
Total risk weighted assets(2)  $ 26,639  $ 26,412  $ 26,078  $ 25,564  $ 24,949  $ 24,379
             
First Niagara Bank, N.A capital ratios:        
Tier 1 risk based capital 10.22% 10.15% 10.08% 10.08% 10.15% 9.94%
Total risk based capital 11.08% 10.99% 10.89% 10.85% 10.89% 10.66%
Leverage 7.74% 7.70% 7.61% 7.50% 7.43% 7.23%
Total risk weighted assets(2)  $ 26,597  $ 26,365  $ 26,037  $ 25,520  $ 24,933  $ 24,379
             
Number of branches  411  421  422  422  427  430
Full time equivalent employees  5,750  5,807  5,788  5,779  5,875  5,927
             
Share information and per share metrics:        
Common shares outstanding  354,127  353,941  353,973  353,932  353,008  352,621
Preferred shares outstanding  14,000  14,000  14,000  14,000  14,000  14,000
Treasury shares  11,875  12,061  12,029  12,070  12,994  13,381
Market price (NASDAQ: FNFG):  $ 9.45  $ 10.62  $ 10.37  $ 10.07  $ 8.86  $ 7.93
Book value per common share(3)  13.40  13.31  13.15  13.06  13.19  13.15
Tangible book value per common share(1)(3)  6.15  6.04  5.86  5.74  5.84  5.65
Price/Book 70.52% 79.79% 78.86% 77.11% 67.17% 60.30%
Price/Tangible book(1) 153.66% 175.83% 176.96% 175.44% 151.71% 140.35%
Common stock dividends  $ 0.08  $ 0.08  $ 0.08  $ 0.08  $ 0.08  $ 0.08
Preferred stock dividends  0.54  0.54  0.54  0.54  0.54  0.54
Dividend payout ratio 53.33% 40.00% 40.00% 44.44% 47.06% 53.33%
Dividend yield (annualized) 3.43% 2.99% 3.06% 3.19% 3.66% 4.01%
             
(1) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(2) Represents an estimate of total risk weighted assets as of March 31, 2014. All preceding quarters represent actual calculated balances.
(3) Share count excludes unallocated ESOP shares and unvested restricted stock shares.
 
 
First Niagara Financial Group, Inc.
Appendix A - Non-GAAP Reconciliation
(in thousands, except per share amounts)
             
  2014 2013 2012
   First   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter   Quarter 
Financial ratios computed on an operating basis(1):        
Earnings per basic share  $ 0.17  $ 0.20  $ 0.20  $ 0.18  $ 0.17  $ 0.19
Earnings per diluted share  0.17  0.20  0.20  0.18  0.17  0.19
Weighted average shares outstanding - basic(2)  349,906  349,718  349,653  349,542  349,278  349,071
Weighted average shares outstanding - diluted(2)  351,408  350,699  350,896  350,384  349,999  349,663
Noninterest income as a percentage of net revenue(3) 22.08% 24.17% 24.78% 26.18% 25.13% 25.48%
Pre-tax, pre-provision income  109,091  142,442  137,769  129,819  117,776  125,281
Pre-tax, pre-provision income per diluted share  0.31  0.41  0.39  0.37  0.34  0.36
Pre-tax, pre-provision return on average assets 1.17% 1.51% 1.47% 1.41% 1.30% 1.37%
Net interest margin(4) 3.33% 3.41% 3.40% 3.36% 3.39% 3.42%
Interest yield on average loans(4) 3.98% 4.04% 4.14% 4.19% 4.25% 4.39%
Rate paid on interest-bearing liabilities 0.44% 0.43% 0.43% 0.43% 0.44% 0.48%
Efficiency ratio 68.60% 61.46% 62.66% 64.43% 66.86% 65.24%
Effective tax rate 19.6% 29.7% 28.2% 32.0% 31.0% 27.0%
Return on average assets 0.73% 0.82% 0.85% 0.77% 0.74% 0.83%
Return on average equity 5.46% 6.18% 6.37% 5.72% 5.50% 6.06%
Return on average tangible equity(5) 11.02% 12.64% 13.20% 11.75% 11.62% 12.89%
Return on average common equity 5.20% 5.99% 6.18% 5.48% 5.24% 5.86%
Return on average tangible common equity(6) 11.33% 13.25% 13.92% 12.21% 12.05% 13.57%
             
Reconciliation of net interest income on operating basis to reported net interest income(1):            
Total net interest income on operating basis (Non-GAAP)  $ 270,747  $ 280,278  $ 277,540  $ 269,443  $ 266,130  $ 268,566
Additional premium amortization on securities portfolio  --   --   --  --   --  (16,280)
Total reported net interest income (GAAP)  270,747  280,278  277,540  269,443  266,130  252,286
             
Reconciliation of noninterest expense on operating basis to reported noninterest expense(1):  
Total noninterest expense on operating basis (Non-GAAP)  $ 238,380  $ 227,148  $ 231,193  $ 235,170  $ 237,666  $ 235,106
Merger and acquisition integration expenses  --   --  --  --  --  3,678
Restructuring charges  10,356  --   --   --   --   -- 
Total reported noninterest expense (GAAP)  $ 248,736  $ 227,148  $ 231,193  $ 235,170  $ 237,666  $ 238,784
             
Reconciliation of net operating income to net income(1):            
Net operating income (Non-GAAP)  $ 67,789  $ 77,690  $ 79,143  $ 71,134  $ 67,285  $ 75,358
Nonoperating income and expenses, net of tax:        
Additional premium amortization on securities portfolio  --   --  --  --  --  11,633
Merger and acquisition integration expenses  --   --  --  --  --  2,628
Restructuring charges  8,345  --   --   --   --   -- 
Total nonoperating expenses, net of tax  8,345  --  --  --  --  14,261
Net income (GAAP)  $ 59,444  $ 77,690  $ 79,143  $ 71,134  $ 67,285  $ 61,097
             
Reconciliation of net operating income available to common stockholders to net income available to common stockholders(1):            
Net operating income available to common stockholders (Non-GAAP)  $ 60,242  $ 70,143  $ 71,596  $ 63,587  $ 59,738  $ 67,811
Nonoperating income and expenses, net of tax:        
Additional premium amortization on securities portfolio  --   --  --   --  --  11,633
Merger and acquisition integration expenses  --   --  --  --  --  2,628
Restructuring charges  8,345  --  --   --  --  -- 
Total nonoperating income and expenses, net of tax  8,345  --  --  --  --  14,261
Net income available to common stockholders (GAAP)  $ 51,897  $ 70,143  $ 71,596  $ 63,587  $ 59,738  $ 53,550
             
Computation of pre-tax,pre-provision income:            
Net interest income  $ 270,747  $ 280,278  $ 277,540  $ 269,443  $ 266,130  $ 252,286
Noninterest income  76,724   89,312   91,422   95,546   89,312   91,821 
Noninterest expense  (248,736)  (227,148)  (231,193)  (235,170)  (237,666)  (238,784)
Pre-tax, pre-provision income (GAAP)  98,735  142,442  137,769  129,819  117,776  105,323
Add back: non-operating premium amortization  --   --   --   --   --   16,280
Add back: non-operating noninterest expenses (1)  10,356  --   --   --   --   3,678
Pre-tax, pre-provision income (Non-GAAP)(1)  $ 109,091  $ 142,442  $ 137,769  $ 129,819  $ 117,776  $ 125,281
             
(1) Net interest income, noninterest income and expense on an operating basis, net operating income, and pre-tax, pre-provision income on an operating basis are non-GAAP measures that we believe provide meaningful comparisons of our underlying operational performance and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, we believe exclusion of these nonoperating items enables management to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations.
(2) Share count excludes unallocated ESOP shares and unvested restricted stock shares.
(3) Net revenue is comprised of net interest income and noninterest income.
(4) Yields and rates calculated on a tax equivalent basis.
(5) Tangible equity is a non-GAAP measure and excludes goodwill and other intangibles.
(6) Tangible common equity is a non-GAAP measure and excludes goodwill and other intangibles as well as preferred stock.
         
         
First Niagara Financial Group, Inc.        
Appendix A - Non-GAAP Reconciliation (Cont.)      
(in thousands, except per share amounts)        
             
  2014 2013 2012
   First   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter   Quarter 
Computation of Ending Tangible Common Equity:      
Total stockholders' equity  $ 5,026,219  $ 4,993,353  $ 4,938,197  $ 4,902,744  $ 4,946,673  $ 4,993,353
Less: Goodwill and other intangibles  (2,535,271)  (2,542,783)  (2,549,931)  (2,557,560)  (2,567,681)  (2,617,810)
Less: Preferred stockholders' equity  (338,002)  (338,002)  (338,002)  (338,002)  (338,002)  (338,002)
Tangible common equity  $ 2,152,946  $ 2,112,568  $ 2,050,264  $ 2,007,182  $ 2,040,990  $ 2,037,541
             
Computation of Average Tangible Equity:        
Total stockholders' equity  $ 5,034,093  $ 4,984,003  $ 4,932,949  $ 4,989,006  $ 4,958,402  $ 4,945,132
Less: Goodwill and other intangibles  (2,538,891)  (2,546,031)  (2,553,647)  (2,561,507)  (2,609,409)  (2,619,322)
Tangible equity  $ 2,495,202  $ 2,437,972  $ 2,379,302  $ 2,427,499  $ 2,348,993  $ 2,325,810
             
Computation of Average Tangible Common Equity:      
Total stockholders' equity  $ 5,034,093  $ 4,984,003  $ 4,932,949  $ 4,989,006  $ 4,958,402  $ 4,945,132
Less: Goodwill and other intangibles  (2,538,891)  (2,546,031)  (2,553,647)  (2,561,507)  (2,609,409)  (2,619,322)
Less: Preferred stockholders' equity  (338,002)  (338,002)  (338,002)  (338,002)  (338,002)  (338,002)
Tangible common equity  $ 2,157,200  $ 2,099,970  $ 2,041,300  $ 2,089,497  $ 2,010,991  $ 1,987,808
             
Computation of Tier 1 Common Capital:        
Tier 1 capital  $ 2,562,261  $ 2,525,656  $ 2,464,801  $ 2,406,473  $ 2,356,763  $ 2,264,679
Less: Qualifying restricted core capital elements  (113,107)  (112,886)  (112,667)  (112,449)  (112,236)  (112,025)
Less: Perpetual non-cumulative preferred stock  (338,002)  (338,002)  (338,002)  (338,002)  (338,002)  (338,002)
Tier 1 common capital (Non-GAAP)  $ 2,111,152  $ 2,074,768  $ 2,014,132  $ 1,956,022  $ 1,906,525  $ 1,814,652
CONTACT: First Niagara

         Investors:
         Ram Shankar
         Senior Vice President, Investor Relations
         (716) 270-8623
         [email protected]

         News Media:
         David Lanzillo
         Senior Vice President, Corporate Communications
         (716) 819-5780
         [email protected]

Source: First Niagara Financial Group, Inc.


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