updated 1/27/2011 8:46:33 AM ET 2011-01-27T13:46:33

  • Record earnings driven by expansion of top line revenue
  • Strong organic loan growth across all businesses and markets
  • Dividend increased again by 7%
  • Franchise primed to continue superior growth

BUFFALO, N.Y., Jan. 27, 2011 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) capped a very successful 2010 by delivering record results in the fourth quarter with operating (Non-GAAP) earnings of $49.7 million or $0.24 per diluted share. In addition, the Company increased its quarterly cash dividend by $.01 or 7% for the second consecutive quarter, to $0.16 per share.

"2010 was a year of remarkable accomplishment and transformation for First Niagara," President and Chief Executive Officer John R. Koelmel said. "We significantly enhanced our franchise – strategically, financially, and operationally – emerging as a regional force in the financial services industry. In executing our game plan of disciplined growth and expansion, we have added the framework for a valuable and competitive Northeast footprint. We ended the year on a high note with another record performance that further demonstrates the strength of what we've built both in our Upstate New York markets where we continue to increase market share and in our newer Pennsylvania markets where we are exceeding our original expectations for new business generation. Given that consistently strong performance combined with our very solid capital position, we are pleased to announce a dividend increase for the second consecutive quarter, which will further enhance shareholder returns."

Mr. Koelmel added, "As proud as we are of our achievements, our focus remains on the future. We are a growth company differentiated by our track record of strong performance, excellent positioning, and outstanding potential. We operate in markets that are among the most attractive in the country. We have made key investments in talent and infrastructure that provide us the operating platform to achieve our growth aspirations. While today's operating environment has a fair degree of uncertainty, we remain committed to high performance outcomes. Therefore, knowing that we can't rely solely on revenue growth in the near term, we are accelerating our plans to achieve greater productivity and efficiency by taking a hard look at our distribution system and other assets that are producing suboptimal returns. We also eagerly await the closing of the NewAlliance merger and bringing our winning business model to the customers and communities in their markets."

Fourth Quarter and Full Year Results

For the quarter ended December 31, 2010, operating (Non-GAAP) net earnings - that is, reported net income exclusive of non-operating items - were $49.7 million or $0.24 per diluted share. This compared to $46.9 million or $0.23 per diluted share in the linked quarter and $31.3 million or $0.17 per diluted share in the fourth quarter of 2009. Reported (GAAP) net income inclusive of non-operating items, primarily acquisition and integration expenses, totaled $45.9 million or $0.22 per diluted share compared to $45.6 million or $0.22 in the linked quarter and $28.9 million or $0.16 in the prior year.

For the full year 2010, the Company produced operating (Non-GAAP) income of $174.1 million or $0.87 per diluted share compared to $105.6 million or $0.72 per share in 2009. The 21% increase in operating earnings per share for the year occurred despite a 36% increase in weighted average shares outstanding, reflecting the immediately accretive benefit of recent acquisitions along with strong organic growth. Reported (GAAP) net income amounted to $140.4 million or $0.70 per diluted share in 2010 and $79.4 million or $0.46 per diluted share in 2009.

Annual Results

Operating Results (Non-GAAP) 2010 2009
Net interest income $ 597.8 $ 364.4
Provision for credit losses 48.6 43.7
Noninterest income 186.6 123.5
Noninterest expense 472.7 280.5
Net income before non-operating items 174.1 105.6
Weighted average diluted shares outstanding 200.6 147.2
Earnings per diluted share $ 0.87 $ 0.72
 
Reported Results (GAAP) 
Net income before non-operating items $ 174.1 $  105.6
Non-operating items(a) 33.7 26.2
Net income 140.4 79.4
TARP expense(b) -- 12.0
Net income available to shareholders 140.4 67.3
Weighted average diluted shares outstanding 200.6 147.2
Earnings per diluted share $ 0.70 $  0.46

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. 

(a) 2010 – Q4: After-tax noninterest expense: Acquisition related expenses of $3.8 million.  Q3: After-tax noninterest expense: Acquisition related expenses of $1.3 million, Q2: After-tax noninterest expense: Acquisition related expenses of $18.8 million, $5.6 million charitable contribution related to the acquired markets in Eastern Pennsylvania and severance and related costs of $0.5 million. Q1: After-tax noninterest expense:  Acquisition related expenses of $3.7 million. 

2009 - Q4: After-tax noninterest expense: Acquisition related expenses of $2.4 million. Q3: After-tax noninterest income: Gain on the sale of the merchant services' customer list of $1.5 million. After-tax noninterest expense: Acquisition related expenses of $14.9 million, and a $3.0 million charitable contribution related to the acquired markets in Western Pennsylvania.  Q2: After-tax noninterest expense: FDIC special assessment charge of $3.3 million based on each insured depository institution's assets less Tier 1 Capital. Also, acquisition related expenses of $1.4 million. Q1: After-tax noninterest expense: Settlement of service mark infringement matter of $1.8 million and acquisition related expenses of $1.0 million.

(b) 2009 - Q2: Accelerated discount accretion of $7.7 million resulting from the redemption of preferred stock purchased by the U.S. Treasury Department under the Troubled Asset Relief Program and $1.7 million of accrued dividends and preferred stock discount accretion through the redemption date. Q1: Accrued dividends and preferred stock discount accretion of $2.7 million.

Record performance driven by strong top line

The Company's performance continues to be driven by steady revenue growth and consistently increasing core business volumes. 

 

in millions
 

Q4 2010
vs. Q3 2010

(annualized)
Revenues $ 221.7 + 21%
Commercial loans (avg.) 6,749 + 18%
Core deposits (avg.) 9,812 + 5%
Tax equivalent net interest margin  3.65% + 4 bp

Organic loan growth across all markets

The Company is generating robust loan growth in each of its major markets as it steadily attracts new customers and expands existing relationships. Business volumes rose throughout 2010. Response to the Company's comprehensive product offerings and service model has been very positive and is driving market share gains. In the newer Pennsylvania markets, customer retention and new business generation continue to exceed original expectations.

   

Upstate New York
(acquired Sept 2009)

Western Pennsylvania  
(acquired Apr 2010)

Eastern Pennsylvania 
in millions Dec 31 '10 vs. Dec 31'09 Dec 31 '10 vs. Dec 31'09 Dec 31 '10 vs. Jun 30 '10
C&I loan balances $ 1,266 +25% $   747 +69% $ 381  +7%
             
  Q4 '10 vs. Q4 '09 Q4 '10 vs. Q4 '09 Q4 '10 vs. Q2 '10
Total loan originations

and line advances
 

$ 1,281
 

+64%
 

$ 738
 

+99%
 

$    438
 

+34%

Shareholders benefiting from consistent financial performance and capital strength

At December 31, 2010 the Company's consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 14.35% and 12.76%, respectively, well above current regulatory guidelines for well capitalized institutions. The Company also expects to be substantially above anticipated regulatory thresholds associated with recently released Basel III guidelines. As was the case in the prior quarter, the Company's consistent performance and capital strength affords it the opportunity to distribute excess capital to its shareholders. Accordingly, the Board of Directors has approved a 7% increase in the quarterly common dividend to $0.16 per share. The dividend is payable on February 22, 2011 to stockholders of record on February 8, 2011.

Chief Financial Officer Michael W. Harrington said, "The fourth quarter culminated another excellent year as the strength of our top line drove record performance. Our fundamentals have never been in better shape. Nothing symbolizes this better than the exceptional commercial loan growth we've consistently produced as we steadily gain traction from our increased capacity, deeper product set and active presence in the marketplace. This growth is being achieved without a relaxation of credit standards as demonstrated by our sound credit quality. We've also been able to successfully withstand the pressure on interest margins confronting our industry from the low rate environment through resourceful treasury management. Operating expense levels in the fourth quarter were well contained. The improvement in the related efficiency ratio stems directly from the positive operating leverage we continue to generate. We expect to drive this measure even lower by expediting our efforts to optimize overall resource utilization. With the multiple levers at our disposal, we are confident in our ability to continue producing strong results despite the uncertain macro environment. We enter the new year in excellent health, poised to exploit our position of strength."

Quarterly Results

Operating Results (Non-GAAP)  Q4 2010 Q3 2010 Q4 2009
Net interest income $ 167.5 $ 161.3 $ 112.9
Provision for credit losses 13.5 11.0 11.0
Noninterest income 54.1 49.5 35.5
Noninterest expense 133.4 130.7 90.7
Net income before non-operating items $ 49.7 $ 46.9 $ 31.3
Weighted average diluted shares outstanding 206.2 206.1 185.3
Earnings per diluted share $ 0.24 $ 0.23 $ 0.17
       
Reported Results (GAAP)
Net income before non-operating items $ 49.7 $ 46.9 $ 31.3
Non-operating items(a) 3.8 1.3 2.4
Net income $ 45.9 $ 45.6 $ 28.9 
Weighted average diluted shares outstanding 206.2 206.1 185.3
Earnings per diluted share $ 0.22 $ 0.22 $ 0.16

All amounts in millions except earnings per diluted share. The Non-GAAP/Operating Results table above summarized the Company's operating results excluding certain non-operating items. 

(a) 2010 – Q4: After-tax noninterest expense: Acquisition related expenses of $3.8 million. 2010 – Q3. After tax noninterest expense Acquisition related expenses of $1.3 million. 2009 - Q4: After-tax noninterest expense: Acquisition related expenses of $2.4 million.

Loans

The commercial loan portfolio continued to grow at an exceptional pace, rising at an annualized rate of 18% in the fourth quarter to $6.7 billion on average. The Company's concerted efforts to meet the needs of creditworthy businesses have consistently led to double-digit loan growth, far outpacing industry peers. Origination volumes have been robust across the Upstate New York and newer Pennsylvania markets and reached record monthly levels during the fourth quarter. The commercial pipeline remains strong. Similarly, the home equity portfolio maintained its vigorous growth rate as customers respond favorably to the Company's product offerings and promotional campaigns. Home equity balances grew by 12% annualized in the fourth quarter to $1.5 billion. Residential mortgage originations remained at healthy levels but portfolio balances continued to decline as the Company adheres to its practice of selling longer term fixed rate mortgages in the secondary market.

Credit Quality

The Company's credit picture remained solid and stable. Nonperforming loans at December 31, 2010 of $89.3 million equated to 0.85% of total loans as compared to 0.93% and 0.94% in the linked quarter and prior year end, respectively. Net chargeoffs of $12.7 million in the fourth quarter represented 0.49% of average loans on an annualized basis, comparable to the full year experience of 0.44% in 2010 and 0.50% in 2009. The provision for credit losses totaled $13.5 million in the fourth quarter, increasing the allowance for losses to $95.4 million at December 31, 2010. The allowance equaled 107% of nonperforming loans and, excluding loans acquired at fair value as of their acquisition dates, 1.21% of total loans.   

Deposits

Core deposit levels continued their steady ascent with average balances rising to $9.8 billion in the fourth quarter. Strong deposit activity is being generated across the retail, commercial, and municipal sectors with some of the strongest growth in the fourth quarter in noninterest-bearing deposits. The volume of new account openings in the upstate New York and newer Pennsylvania markets remains strong. Higher cost CD balances continue to decline in line with the Company's focus on more profitable relationships. At December 31, 2010 core deposits increased to 75% of total deposits versus 70% a year ago. The loan-to-deposit ratio stood at 80% at year end.

Net Interest Income

Net interest income of $167.5 million in the fourth quarter continues the trend of quarterly growth. This is primarily attributable to ongoing strong loan growth and higher earning asset levels. The taxable equivalent net interest margin for the fourth quarter rose to 3.65%, consistent with the full year 2010 margin of 3.64% and 3.65% for 2009. The Company has been successful in countering the pressure on the margin due to the prolonged low rate environment by steadily reducing its cost of funds, achieving a higher yielding loan mix, and profitably reinvesting excess liquidity.

Noninterest Income

Noninterest income grew by 9% over the linked quarter to $54.1 million reflecting the Company's increased emphasis on fee based services and cross-selling to existing customers. Most of the growth in the fourth quarter was driven by higher loan and banking service fees arising from increased loan origination primarily mortgage banking and deposit activity. The Company has been adding more sophisticated product offerings to its commercial clients which are gaining traction across all markets.

Noninterest Expense

Operating (Non-GAAP) noninterest expense grew modestly in the fourth quarter to $133.4 million in line with higher revenue levels and increased capacity. The related efficiency ratio improved to 60% as compared to 62% in the previous quarter. The higher expense level was attributable to increases in various categories such as professional fees, FDIC premiums, and occupancy costs. This was partially offset by lower employee related costs. Reported (GAAP) noninterest expense for the current quarter totaled $139.3 million and included non-operating merger and integration costs.

First Niagara Financial Group, Inc., through its wholly owned subsidiary, First Niagara Bank, N.A., has $21 billion in assets, 257 branches and $13 billion in deposits. First Niagara Bank, N.A. is a multi-state community-oriented bank providing financial services to individuals, families and businesses.  Upon completion of its pending merger with NewAlliance Bancorp, Inc. -- subject to customary closing conditions including approvals from regulators -- First Niagara will have more than $29 billion in assets, $18 billion in deposits and 340 branches across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.fnfg.com .

Conference Call – A conference call will be held at 11 a.m. Eastern Time on Thursday, January 27, 2011 to discuss the Company's financial results and business strategy. Those wishing to participate in the call may dial toll-free 1-877-276-8648. A replay of the call will be available until February 10, 2011 by dialing 1-877-344-7529, Passcode 446447.

Non-GAAP Measures - 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. 

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.                
Summary of Quarterly Financial Data (unaudited)                
  2010 2009
   December 31,   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31, 
                 
SELECTED FINANCIAL DATA                
(Amounts in thousands)                
Cash and cash equivalents  $ 213,820  315,608  332,705  186,832  236,268  823,243  169,072  165,908
Investment securities:                
Available for sale $ 7,289,455  7,341,505  7,131,393  4,876,925  4,421,678  3,652,261  3,339,871  1,800,933
Held to maturity $ 1,025,724  1,125,184  1,038,866  1,038,566  1,093,552  1,085,258  398,049  -- 
FHLB and FRB common stock $ 183,800  171,814  165,960  55,650  79,014  46,032  90,983  50,988
Loans held for sale $ 37,977  50,092  76,574  35,168  32,270  22,830  34,110  3,573
Loans and leases:                 
Commercial:                
Real estate $ 4,373,717  4,283,422  4,237,612  3,133,582  3,061,582  2,973,964  2,656,650  2,593,752
Business $ 2,619,148  2,270,679  2,164,529  1,745,738  1,689,594  1,634,530  1,166,210  1,144,547
Total commercial loans $ 6,992,865  6,554,101  6,402,141  4,879,320  4,751,176  4,608,494  3,822,860  3,738,299
Residential real estate $ 1,687,110  1,752,078  1,822,130  1,582,839  1,642,691  1,703,113  1,780,931  1,911,118
Home equity $ 1,513,047  1,470,619  1,446,281  702,735  691,069  662,308  647,878  629,916
Other consumer $ 265,528  270,578  267,349  182,790  186,341  189,271  129,738  134,689
Net deferred costs and discounts $ 24,864  26,108  26,619  25,354  25,909  29,746  30,864  31,813
Total loans and leases $ 10,483,414  10,073,484  9,964,520  7,373,038  7,297,186  7,192,932  6,412,271  6,445,835
Allowance for credit losses $ 95,354  94,532  90,409  89,488  88,303  83,077  82,542  79,613
Loans and leases, net $ 10,388,060  9,978,952  9,874,111  7,283,550  7,208,883  7,109,855  6,329,729  6,366,222
Bank owned life insurance $ 230,718  228,723  226,653  133,629  132,414  131,094  129,790  128,460
Premises and equipment $ 217,555  209,508  210,439  163,573  156,213  145,245  112,105  107,780
Goodwill and other intangibles  $1,114,144  1,099,446  1,099,155  931,347  935,384  938,687  781,047  782,808
Other assets $ 382,600  350,708  362,503  262,838  289,157  182,999  192,415  181,305
Total assets $ 21,083,853  20,871,540  20,518,359  14,968,078  14,584,833  14,137,504  11,577,171  9,587,977
                 
Deposits:                
Savings  $ 1,235,004  1,235,201  1,274,039  932,698  916,854  913,144  805,646  786,535
Interest-bearing checking $ 1,705,537  1,783,788  1,729,043  1,057,349  1,063,065  1,062,681  522,977  503,863
Money market deposits $ 4,919,014  4,941,989  4,851,504  3,825,794  3,535,736  3,457,837  2,375,493  2,216,321
Noninterest-bearing  $ 1,989,505  1,815,201  1,870,004  1,301,730  1,256,537  1,213,978  761,160  705,965
Certificates $ 3,299,784  3,619,004  4,033,584  2,676,890  2,957,332  3,275,728  1,775,052  2,015,412
Total deposits $ 13,148,844  13,395,183  13,758,174  9,794,461  9,729,524  9,923,368  6,240,328  6,228,096
                 
Short-term borrowings $ 1,788,566  1,634,481  1,691,820  1,034,236  1,674,761  750,437  2,450,501  666,836
Long-term borrowings $ 3,104,908  2,708,639  1,974,737  1,447,392  627,519  764,711  742,336  780,049
Other liabilities $ 276,465  326,676  320,163  285,367  179,368  315,384  225,427  170,605
Total liabilities $ 18,318,783  18,064,979  17,744,894  12,561,456  12,211,172  11,753,900  9,658,592  7,845,586
Stockholders' equity $ 2,765,070  2,806,561  2,773,465  2,406,622  2,373,661  2,383,604  1,918,579  1,742,391
Total liabilities and stockholders' equity $ 21,083,853  20,871,540  20,518,359  14,968,078  14,584,833  14,137,504  11,577,171  9,587,977
                 
Total interest-earning assets $ 18,922,199  18,604,341  18,234,177  13,326,364  12,902,813  12,514,069  10,278,403  8,368,268
Total interest-bearing liabilities $ 16,052,813  15,923,102  15,554,727  10,974,359  10,775,267  10,224,538  8,672,005  6,969,016
Net interest-earning assets $ 2,869,386  2,681,239  2,679,450  2,352,005  2,127,546  2,289,531  1,606,398  1,399,252
Tangible equity (1) $ 1,650,926  1,707,115  1,674,310  1,475,275  1,438,277  1,444,917  1,137,532  959,583
Unrealized gain on securities $ 70,690  131,572  117,422  42,970  17,206  34,057  3,064  852
Total loans serviced for others $ 1,554,083  1,397,674  1,293,436  875,814  823,889  770,290  678,885  615,491
                 
Legacy loans(2) $ 7,826,152  7,239,939  6,954,592  6,738,529  6,636,760  6,489,829  6,412,271  6,445,835
Acquired loans (3) $ 2,772,158  2,953,752  3,134,100  675,434  703,474  748,250  --   -- 
Credit related discount on acquired loans (4) $ (114,896)  (120,207)  (124,172)  (40,925)  (43,048)  (45,147)  --   -- 
Total loans $ 10,483,414  10,073,484  9,964,520  7,373,038  7,297,186  7,192,932  6,412,271  6,445,835
                 
First Niagara Financial Group, Inc.                
Summary of Quarterly Financial Data (unaudited) (Cont'd)              
  2010 2009
  December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
                 
ASSET QUALITY DATA                
(Amounts in thousands)                
Nonperforming loans:                
Commercial real estate $ 44,065  49,271  47,648  44,149  37,687  33,037  32,648  33,708
Commercial business $ 25,819  25,924  11,652  18,010  17,566  21,277  8,151  8,500
Residential real estate $ 14,461  13,156  11,050  10,811  9,468  9,140  8,030  6,600
Home equity $ 4,605  4,809  3,238  3,558  2,330  2,979  2,714  2,791
Other consumer $ 373  1,020  750  1,392  1,510  373  754  319
Total nonperforming loans $ 89,323  94,180  74,338  77,920  68,561  66,806  52,297  51,918
Real estate owned $ 8,647  8,619  8,559  6,774  7,057  8,872  5,758  2,001
Total nonperforming assets $ 97,970  102,799  82,897  84,694  75,618  75,678  58,055  53,919
                 
Acquired loans 90 days past due still accruing(5) $ 58,097  56,716  48,221  --   --   --   --   -- 
Accruing troubled debt restructurings (TDR) $ 21,607  18,932  19,397  18,857  11,683  6,916  6,763  6,531
                 
Net loan charge-offs (recoveries):                
Commercial real estate $ 4,765  3,078  8,849  4,275  2,056  2,213  858  4,552
Commercial business $ 6,082  3,187  658  7,134  2,958  11,786  4,289  1,788
Residential real estate $ 389  55  164  56  11  35  98  13
Home equity $ 809  196  358  162  298  125  338  110
Other consumer $ 634  361  50  318  451  306  388  467
Total net loan charge-offs $ 12,679  6,877  10,079  11,945  5,774  14,465  5,971  6,930
                 
ASSET QUALITY RATIOS                
                 
Net charge-offs to average loans (annualized) 0.49% 0.27% 0.41% 0.66% 0.32% 0.87% 0.37% 0.44%
Provision to average loans (annualized) 0.53% 0.43% 0.45% 0.73% 0.61% 0.90% 0.55% 0.55%
Total nonperforming loans to loans 0.85% 0.93% 0.74% 1.05% 0.94% 0.93% 0.81% 0.81%
Total nonperforming assets to assets 0.46% 0.49% 0.40% 0.57% 0.52% 0.54% 0.50% 0.56%
Allowance to loans 0.91% 0.93% 0.90% 1.21% 1.20% 1.15% 1.28% 1.23%
Allowance to nonperforming loans 106.8% 100.4% 121.6% 114.9% 128.8% 124.4% 157.8% 153.3%
Texas ratio (6) 8.94% 8.85% 7.43% 5.41% 4.95% 4.95% 4.76% 5.19%
                 
CAPITAL                 
                 
Consolidated:                
Tier 1 risk based capital  13.54% 14.25% 14.27% 17.54% 17.41% 17.42% 16.10% 14.66%
Tier 1 common capital (7)  12.76% 13.42% 13.43% 17.39% 17.26% 17.26% 15.92% 11.74%
Total risk based capital  14.35% 15.09% 15.09% 18.65% 18.51% 18.46% 17.29% 15.88%
Leverage ratio (8)  8.14% 8.37% 8.75%  --  --  --  --  --
Tangible capital (8)  --  --  -- 10.15% 10.34% 10.63% 10.41% 10.76%
Equity to assets  13.11% 13.45% 13.52% 16.08% 16.27% 16.86% 16.57% 18.17%
Tangible common equity to tangible assets (1) 8.27% 8.63% 8.62% 10.51% 10.54% 10.95% 10.54% 8.89%
                 
First Niagara Bank, N.A.:                
Tier 1 risk based capital  11.06% 11.88% 11.59% 13.08% 12.63% 10.92% 11.02% 11.53%
Total risk based capital  11.86% 12.72% 12.40% 14.20% 13.73% 11.96% 12.21% 12.77%
Leverage ratio (8)  6.64% 6.97% 7.10%  --  --  --  --  --
Tangible capital (8)  --  --  -- 7.55% 7.48% 6.67% 7.13% 8.48%
                     
First Niagara Financial Group, Inc.                    
Summary of Quarterly Financial Data (unaudited) (Cont'd)                    
  2010 2009
  Year-to-Date 

December 31,
Fourth 

Quarter 
Third

Quarter 
Second

Quarter 
First 

Quarter 
Year Ended

December 31,
Fourth

Quarter 
Third

Quarter 
Second

Quarter 
First 

Quarter 
                     
SELECTED OPERATIONS DATA                    
(Amounts in thousands)                    
Interest income $ 745,588  205,320  200,636  195,129  144,503  490,758  145,357  128,788  110,794  105,819
Interest expense $ 147,834  37,772  39,357  40,371  30,334  126,358  32,454  29,866  30,849  33,189
Net interest income $ 597,754  167,548  161,279  154,758  114,169  364,400  112,903  98,922  79,945  72,630
Provision for credit losses $ 48,631  13,500  11,000  11,000  13,131  43,650  11,000  15,000  8,900  8,750
Net interest income after provision $ 549,123  154,048  150,279  143,758  101,038  320,750  101,903  83,922  71,045  63,880
                     
Noninterest income:                    
Banking services $ 80,773  22,230  21,007  21,529  16,007  49,538  17,016  12,499  10,053  9,970
Insurance and benefits consulting $ 51,634  13,130  13,573  12,768  12,163  48,958  11,074  12,172  13,164  12,548
Wealth management services $ 19,838  4,940  5,939  5,711  3,248  8,555  2,655  1,848  1,834  2,218
Mortgage banking $ 12,230  6,052  3,320  1,626  1,232  4,172  1,756  1,279  690  447
Other $ 22,140  7,760  5,666  4,416  4,298  14,752  3,016  5,426  3,033  3,277
Total noninterest income $ 186,615  54,112  49,505  46,050  36,948  125,975  35,517  33,224  28,774  28,460
                     
Noninterest expense:                    
Salaries and benefits $ 246,619  65,698  68,603  64,081  48,237  161,548  50,919  42,223  35,169  33,237
Occupancy and equipment $ 54,964  16,053  15,582  13,422  9,907  29,113  9,126  7,620  5,901  6,466
Technology and communications $ 45,698  12,878  12,769  11,403  8,649  24,770  8,271  6,095  5,351  5,053
Marketing and advertising $ 18,388  3,383  5,782  7,691  1,532  10,281  2,618  2,550  2,581  2,532
Professional services $ 18,528  7,538  4,426  4,054  2,510  6,131  2,141  1,481  1,300  1,209
Amortization of intangibles $ 19,458  5,447  5,453  5,311  3,247  9,418  3,414  2,266  1,847  1,891
FDIC premiums $ 18,923  5,871  4,630  4,959  3,463  16,668  4,335  3,854  6,980  1,499
Merger and acquisition integration expenses $ 41,655  5,904  1,916  27,602  6,232  31,467  4,009  23,354  2,342  1,762
Other $ 59,095  16,562  13,448  19,680  9,405  37,276  9,887  11,277  6,614  9,498
Total noninterest expense $ 523,328  139,334  132,609  158,203  93,182  326,672  94,720  100,720  68,085  63,147
                     
Income before income taxes  $ 212,410  68,826  67,175  31,605  44,804  120,053  42,700  16,426  31,734  29,193
Income taxes  $ 72,057  22,971  21,579  11,602  15,905  40,676  13,796  5,495  10,934  10,451
Net income  $ 140,353  45,855  45,596  20,003  28,899  79,377  28,904  10,931  20,800  18,742
Preferred stock dividend and accretion $ --  --  --  --  --  12,046  --  --  9,378  2,668
Net income available to common stockholders $ 140,353  45,855  45,596  20,003  28,899  67,331  28,904  10,931  11,422  16,074
                     
First Niagara Financial Group, Inc.                    
Summary of Quarterly Financial Data (unaudited) (Cont'd)                    
  2010 2009
  Year-to-Date 

December 31, 
Fourth

Quarter 
Third

Quarter 
Second

Quarter 
First 

Quarter 
Year Ended

December 31, 
Fourth

Quarter 
 Third

Quarter 
Second

Quarter 
First

Quarter 
                     
SELECTED AVERAGE BALANCES                    
(Amounts in thousands)                    
Interest-earning assets:                    
Securities, at amortized cost $ 7,185,292  8,214,033  7,913,769  7,121,805  5,453,217  3,293,438  4,874,683  4,131,996  2,433,236  1,689,620
Loans and leases (9)                    
Commercial:                    
Real estate $ 3,960,268  4,300,625  4,245,670  4,194,002  3,084,272  2,739,914  3,026,380  2,748,701  2,616,106  2,563,165
Business $ 2,114,500  2,447,918  2,210,288  2,079,222  1,711,428  1,297,102  1,595,822  1,290,075  1,158,856  1,138,828
Total commercial loans $ 6,074,768  6,748,543  6,455,958  6,273,224  4,795,700  4,037,016  4,622,202  4,038,776  3,774,962  3,701,993
Residential $ 1,790,873  1,762,346  1,853,018  1,900,471  1,645,693  1,831,304  1,706,998  1,778,591  1,875,498  1,967,570
Home equity $ 1,263,407  1,503,187  1,460,801  1,374,245  704,450  658,826  685,342  663,220  649,832  636,325
Other consumer $ 247,222  269,090  270,416  260,953  187,272  154,971  189,387  149,321  136,394  144,349
Total loans $ 9,376,270  10,283,166  10,040,193  9,808,893  7,333,115  6,682,117  7,203,929  6,629,908  6,436,686  6,450,237
Other interest-earning assets $ 180,042  204,462  191,650  235,636  87,000  175,633  314,593  193,365  106,918  84,939
                     
Total interest-earning assets $ 16,741,604  18,701,661  18,145,612  17,166,334  12,873,332  10,151,188  12,393,205  10,955,269  8,976,840  8,224,796
Goodwill and other intangibles $ 1,063,794  1,107,958  1,101,044  1,110,565  933,279  828,554  936,590  810,946  781,718  783,473
Other noninterest-earning assets $ 1,056,896  1,199,525  1,212,134  1,071,189  737,960  555,165  712,334  577,633  498,610  428,718
Total assets $ 18,862,294  21,009,144  20,458,790  19,348,088  14,544,571  11,534,907  14,042,129  12,343,848  10,257,168  9,436,987
                     
Interest-bearing liabilities:                    
Savings accounts $ 1,164,416  1,232,897  1,260,792  1,242,052  917,397  829,246  905,899  837,852  797,431  774,262
Checking $ 1,541,259  1,710,655  1,734,463  1,675,705  1,034,659  680,606  1,042,842  676,786  510,064  486,663
Money market deposits $ 4,576,958  4,994,303  4,881,109  4,725,441  3,689,294  2,696,157  3,576,893  2,783,435  2,323,823  2,083,102
Certificates of deposit $ 3,526,389  3,441,656  3,822,620  4,007,431  2,823,804  2,290,845  3,112,978  2,113,778  1,914,353  2,012,120
Borrowed funds $ 3,430,215  4,631,406  3,833,711  2,991,598  2,233,362  1,961,173  1,580,016  2,900,715  1,845,462  1,507,374
Total interest-bearing liabilities $ 14,239,237  16,010,917  15,532,695  14,642,227  10,698,516  8,458,027  10,218,628  9,312,566  7,391,133  6,863,521
Noninterest-bearing deposits $ 1,667,760  1,873,709  1,814,399  1,728,853  1,245,565  897,684  1,237,425  914,407  743,102  689,596
Other noninterest-bearing liabilities $ 271,918  306,253  303,199  277,838  198,858  168,221  190,399  177,057  157,130  147,734
Total liabilities $ 16,178,915  18,190,879  17,650,293  16,648,918  12,142,939  9,523,932  11,646,452  10,404,030  8,291,365  7,700,851
                     
Stockholders' equity $ 2,683,379  2,818,265  2,808,497  2,699,170  2,401,632  2,010,975  2,395,677  1,939,818  1,965,803  1,736,136
                     
Total liabilities and stockholders' equity $ 18,862,294  21,009,144  20,458,790  19,348,088  14,544,571  11,534,907  14,042,129  12,343,848  10,257,168  9,436,987
                     
Net interest-earning assets $ 2,502,367  2,690,744  2,612,917  2,524,107  2,174,816  1,693,161  2,174,577  1,642,703  1,585,707  1,361,275
Total core deposits $ 8,950,393  9,811,564  9,690,763  9,372,051  6,886,915  5,103,693  6,763,059  5,212,480  4,374,420  4,033,623
Total deposits $ 12,476,782  13,253,220  13,513,383  13,379,482  9,710,719  7,394,538  9,876,037  7,326,258  6,288,773  6,045,743
Tangible equity (1) $ 1,619,585  1,710,307  1,707,453  1,588,605  1,468,353  1,182,421  1,459,087  1,128,872  1,184,085  952,663
                     
First Niagara Financial Group, Inc.                    
Summary of Quarterly Financial Data (unaudited) (Cont'd)                    
  2010 2009
  Year-to-Date

December 31,
Fourth

Quarter 
Third

Quarter 
Second

Quarter 
First

Quarter 
Year Ended

December 31,
Fourth

Quarter 
Third

Quarter 
Second

Quarter 
First

Quarter 
                     
STOCK AND RELATED PER SHARE DATA                    
(Shares in thousands)                    
Earnings per share:                    
Basic  $ 0.70 0.22 0.22 0.10 0.16 0.46 0.16 0.07 0.08 0.14
Diluted $ 0.70 0.22 0.22 0.10 0.16 0.46 0.16 0.07 0.08 0.14
Cash dividends $ 0.57 0.15 0.14 0.14 0.14 0.56 0.14 0.14 0.14 0.14
Dividend payout ratio 81.43% 68.18% 63.64% 140.00% 87.50% 121.74% 87.50% 200.00% 175.00% 100.00%
Dividend yield (annualized) 4.08% 4.26% 4.77% 4.48% 3.99% 4.03% 3.99% 4.50% 4.92% 5.21%
Market price (Nasdaq:FNFG):                    
High  $ 14.88 14.40 13.79 14.88 14.86 16.32 14.47 14.06 14.23 16.32
Low $ 11.23 11.51 11.23 12.25 13.00 9.48 12.40 10.73 10.53 9.48
Close $ 13.98 13.98 11.65 12.53 14.23 13.91 13.91 12.33 11.42 10.89
Book value per share (10) $            13.42 13.63 13.48 12.98   12.84 12.90 13.11 15.12
Tangible book value per share (1)(10) $             8.01  8.29  8.14  7.96    7.78 7.82 7.77 8.33
Weighted average common shares outstanding (10):                             
Basic 200,274 205,901 205,821 203,962 185,121 146,833 184,849 146,834 139,827 115,055
Diluted 200,596 206,229 206,058 204,402 185,585 147,205 185,343 147,184 140,165 115,433
Common shares outstanding   209,112 209,059 209,040 188,719   188,215 188,151 149,763 118,687
Treasury shares   5,994 6,047 6,066 6,092   6,596 6,659 6,706 6,732
                     
SELECTED RATIOS                    
(Annualized where appropriate)                    
Return on average assets 0.74% 0.87% 0.88% 0.41% 0.81% 0.69% 0.82% 0.35% 0.81% 0.81%
Common equity:                    
Return on average equity  5.23% 6.46% 6.44% 2.97% 4.88% 3.47% 4.79% 2.24% 2.47% 4.18%
Return on average tangible equity (1) 8.67% 10.64% 10.59% 5.05% 7.98% 6.06% 7.86% 3.84% 4.26% 8.40%
Total equity:                    
Return on average equity  5.23% 6.46% 6.44% 2.97% 4.88% 3.95% 4.79% 2.24% 4.24% 4.38%
Return on average tangible equity (1) 8.67% 10.64% 10.59% 5.05% 7.98% 6.71% 7.86% 3.84% 7.05% 7.98%
Noninterest income as a percentage of net revenue 23.8% 24.4% 23.5% 22.9% 24.4% 25.7% 23.9% 25.1% 26.5% 28.2%
Efficiency ratio - Consolidated 66.7% 62.9% 62.9% 78.8% 61.7% 66.6% 63.8% 76.2% 62.6% 62.5%
 - Banking segment (11) 65.0% 60.5% 61.1% 70.3% 59.5% 64.0% 60.9% 74.9% 59.6% 59.0%
Net loan charge-offs  41,580  12,679  6,877  10,079  11,946  33,140  5,774  14,465  5,971  6,930
Net charge-offs to average loans 0.44% 0.49% 0.27% 0.41% 0.66% 0.50% 0.32% 0.87% 0.37% 0.44%
Provision to average loans 0.52% 0.53% 0.43% 0.45% 0.73% 0.65% 0.61% 0.90% 0.55% 0.55%
Personnel FTE   3,791 3,725 3,748 2,966   2,816 2,672 2,034 1,958
Number of branches   257 255 255 172   171 170 113 113
                     
First Niagara Financial Group, Inc.                    
Summary of Quarterly Financial Data (unaudited) (Cont'd)                    
  2010 2009
  Year-to-Date

December 31, 
Fourth

Quarter 
Third 

Quarter 
Second

Quarter 
First

Quarter 
Year Ended

December 31, 
Fourth

Quarter 
Third 

Quarter 
Second

Quarter 
First

Quarter 
                     
SELECTED AVERAGE YIELDS/RATES                    
(Tax equivalent basis)                    
Interest-earning assets:                    
Securities, at amortized cost 3.51% 3.45% 3.50% 3.54% 3.56% 4.00% 4.00% 3.80% 3.99% 4.59%
Loans and leases                    
Commercial:                    
Real estate 5.75% 5.69% 5.70% 5.91% 5.71% 5.77% 5.70% 5.85% 5.78% 5.77%
Business 4.88% 4.86% 4.83% 5.21% 4.57% 4.73% 4.74% 4.56% 4.85% 4.78%
Total commercial loans 5.45% 5.39% 5.40% 5.68% 5.30% 5.44% 5.37% 5.44% 5.50% 5.47%
Residential 5.09% 4.93% 5.04% 5.18% 5.24% 5.28% 5.23% 5.29% 5.24% 5.37%
Home equity 4.66% 4.56% 4.50% 4.82% 4.89% 5.01% 4.95% 4.97% 5.01% 5.14%
Other consumer 7.40% 7.27% 7.56% 6.62% 8.48% 7.93% 8.33% 8.10% 7.57% 7.58%
Total loans 5.32% 5.24% 5.26% 5.48% 5.33% 5.41% 5.37% 5.41% 5.42% 5.45%
Other interest-earning assets 2.99% 4.73% 3.10% 1.23% 3.36% 1.77% 1.13% 1.77% 3.14% 2.47%
                     
Total interest-earning assets 4.52% 4.45% 4.47% 4.62% 4.57% 4.89% 4.72% 4.74% 5.00% 5.24%
                     
Interest-bearing liabilities:                    
Savings accounts 0.14% 0.11% 0.12% 0.17% 0.14% 0.23% 0.21% 0.24% 0.24% 0.24%
Interest-bearing checking 0.19% 0.16% 0.20% 0.25% 0.13% 0.15% 0.14% 0.14% 0.15% 0.16%
Money market deposits 0.60% 0.48% 0.59% 0.68% 0.69% 1.03% 0.82% 0.93% 1.18% 1.36%
Certificates of deposit 1.10% 1.12% 1.11% 1.10% 1.07% 1.87% 1.17% 1.68% 2.41% 2.68%
Borrowed funds 2.23% 1.78% 2.07% 2.63% 2.89% 2.68% 3.77% 1.85% 2.57% 3.29%
Total interest-bearing liabilities 1.04% 0.93% 1.00% 1.10% 1.15% 1.49% 1.26% 1.27% 1.67% 1.96%
                     
Total interest-bearing deposits 0.66% 0.59% 0.65% 0.71% 0.69% 1.13% 0.80% 1.01% 1.37% 1.58%
Total core deposits 0.36% 0.29% 0.35% 0.41% 0.41% 0.60% 0.48% 0.56% 0.69% 0.77%
Total deposits 0.57% 0.50% 0.56% 0.62% 0.60% 0.99% 0.70% 0.88% 1.21% 1.40%
                     
Tax equivalent net interest rate spread 3.48% 3.52% 3.47% 3.52% 3.42% 3.40% 3.46% 3.47% 3.33% 3.28%
Tax equivalent net interest rate margin 3.64% 3.65% 3.61% 3.68% 3.61% 3.65% 3.69% 3.66% 3.63% 3.61%
                     
                     
(1) Excludes goodwill and other intangible assets. These are non-GAAP financial measures that we believe provide investors with information that is useful in understanding our financial performance and position.
(2) Represents total loans excluding loans acquired from Harleysville or National City Bank.
(3) Represents the carrying value of acquired loans plus the principal not expected to be collected.
(4) Represents principal on acquired loans not expected to be collected.
(5) All such loans represent acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing as we primarily recognize interest income through the accretion of the difference between the carrying value of these loans and their expected cash flows.
(6) The Texas ratio is computed by dividing the sum of nonperforming assets and loans 90 days past due still accruing by the sum of tangible equity and the allowance for credit losses. This is a non-GAAP financial measure that we believe provides investors with information that is useful in understanding our financial performance and position.
(7) Tier 1 common capital is computed by subtracting the sum of preferred stock and the subordinated debentures associated with trust preferred securities from Tier I capital, divided by risk weighted assets. Tier 1 common capital, as calculated for purposes of this financial data and the earnings release, does not reflect the adjustments provided for in Basel III. This is a non-GAAP financial measure that we believe provides investors with information that is useful in understanding our financial performance and position.
(8) Tangible capital ratio presented for periods ended prior to First Niagara Bank's conversion to a national bank regulated by the OCC. Leverage ratio disclosed for periods ended subsequent to such conversion.
(9) Includes nonaccrual loans.
(10) Excludes unallocated ESOP shares and unvested restricted stock shares.
(11) Includes operating results for the banking activities segment as defined in the Company's quarterly and annual reports.
CONTACT:  Officer Contacts
          John R. Koelmel, President and Chief Executive Officer
          Michael W. Harrington, Chief Financial Officer 
          Anthony M. Alessi, Investor Relations Manager
          (716) 625-7692
          tony.alessi@fnfg.com	
          Leslie G. Garrity, Public Relations and 
          Corporate Communications Manager
          (716) 819-5921
          leslie.garrity@fnfg.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

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