updated 4/21/2011 8:46:53 AM ET 2011-04-21T12:46:53

  • 6% annualized revenue growth in the first quarter
  • 18% commercial loan growth; 11% increase in total loans
  • NewAlliance merger expands platform for growth
  • Solid credit trends and capital levels sustain position of strength

BUFFALO, N.Y., April 21, 2011 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) furthered its track record of strong business growth and consistent financial performance by delivering first quarter operating (Non-GAAP) earnings of $49.8 million or $0.24 per diluted share. With the just completed merger with NewAlliance Bancshares, First Niagara is now a $30 billion financial services company with over $18 billion in deposits and 345 branches across the Northeast.

"We entered the new year with confidence and determination," President and Chief Executive Officer John R. Koelmel said. "This quarter's performance is marked by strong overall momentum and organic growth. Business fundamentals remain positive as demonstrated by the ongoing increase in top-line revenues and commercial loan generation, combined with a strong credit profile and capital levels. We are taking steps to maximize the potential of our new franchise by employing multiple profitability levers to further enhance revenues, productivity, and returns. These repositioning initiatives are aimed at raising the contribution and mix of fee-based revenues improving the efficiency of our branch distribution network, continuing loan and deposit growth, and scrutinizing underperforming assets. We are committed to capitalizing on the strong position and potential of the First Niagara franchise." 

Mr. Koelmel added, "We are excited to have completed our merger with NewAlliance Bancshares.  Early enthusiasm among customers and employees has exceeded our expectations and positions us well for growth.  By combining the strengths of our respective companies, we are accelerating our growth trajectory. This week's conversion and integration was very smooth and efficient, and we are ready to bring our full array of products and services to meet the needs of consumers and businesses in our newest markets."

First Quarter Results

 For the quarter ended March 31, 2011, operating (Non-GAAP) net earnings - that is, reported net income exclusive of non-operating items - were $49.8 million or $0.24 per diluted share. This compared to $49.7 million or $0.24 per diluted share in the linked quarter and $32.6 million or $0.18 per diluted share in the first quarter of 2010. Reported (GAAP) net income inclusive of non-operating items, primarily acquisition and integration expenses, totaled $44.9 million or $0.22 per diluted share compared to $45.9 million or $0.22 in the linked quarter and $28.9 million or $0.16 in the prior year.

Operating Results (Non-GAAP) Q1 2011 Q4 2010 Q1 2010
Net interest income $ 172.9 $ 167.5 $ 114.2
Provision for credit losses 12.9 13.5 13.1
Noninterest income 52.1 54.1 36.9
Noninterest expense 137.9 133.4 87.0
Net income before non-operating items $ 49.8 $ 49.7 32.6
Weighted average diluted shares outstanding 206.6 206.2 185.6
Earnings per diluted share $ 0.24 $ 0.24 $ 0.18
       
Reported Results (GAAP)      
Net income before non-operating items $ 49.8 $ 49.7 $ 32.6
Non-operating items(a) 4.9 3.8 3.7
Net income $ 44.9 $ 45.9 $ 28.9
Weighted average diluted shares outstanding 206.6 206.2 185.6
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) Amounts are shown net of tax and represent non-recurring expenses related to acquisition, integration and restructuring.

Strong fundamentals continue

The Company's performance continues to be marked by top-line revenue growth, high volume customer activity, strong credit metrics, and balance sheet strength.

    vs. Q4 2010
in millions Q1 2011 (annualized)
Revenues $ 224.9 +6%
Commercial loans (avg.) 7,046 +18%
Core deposits (avg.) 9,827 +1%
Tax equivalent net interest margin 3.80% +15bps
Net charge-offs to average loans 0.31%  -18bps

Robust organic commercial loan growth throughout the franchise 

The Company has again generated exceptional double-digit commercial loan growth, outpacing the industry by a wide margin. It continues to capitalize on its comprehensive relationship banking model by expanding the range of services to existing customers while adding many new ones. Market share gains were again achieved in both its legacy Upstate New York and newer Pennsylvania markets where its efforts are resulting in incremental success.

      (acquired Sept 2009) (acquired Apr 2010)
  Upstate New York Western Pennsylvania Eastern Pennsylvania
Loan balances in millions Mar 31 '11 vs. Mar 31'10 Mar 31 '11 vs. Mar 31'10 Mar 31 '11 vs. Jun 30 '10
Commercial Business (a) $ 1,516 +17% $ 806 +86% $ 375 +7%
Commercial Real Estate (a) $ 3,041 +9% $ 463  +51% $ 1,038  +2%
(a) Includes net deferred costs and discounts

Loans

Total loan origination activity remained strong in both the Upstate New York and newer Pennsylvania markets with first quarter volumes of $1.6 billion. The commercial loan portfolio continued its strong upward trajectory, rising by an annualized 18% to $7.0 billion on average as solid first quarter activity followed last quarter's record origination levels. This exceptional growth trend is a direct result of the Company's concerted efforts to add capacity and product depth to its relationship banking model.  Home equity application volume kept pace with the prior quarter's level while increased payoffs moderated the portfolio's overall average balance growth.   Residential mortgage balances declined only modestly as the Company focused on the origination and retention of shorter-term product while continuing to sell longer term product in the secondary market. 

Credit Quality

First quarter credit trends improved from the fourth quarter of last year, and the Company's overall credit profile remained solid. Both nonperforming loans and net chargeoffs declined in the first quarter.  Nonperforming loans at March 31, 2011 of $80.4 million equated to 0.75% of total loans as compared to 0.85% and 1.05% in the linked quarter and a year ago, respectively. Net chargeoffs of $8.1 million in the first quarter represented 0.31% of average loans on an annualized basis compared to 0.49% last quarter and 0.66% in the first quarter of 2010. Criticized loans remain relatively flat at $954 million at March 31, 2011 compared with year end balances.  The provision for credit losses totaled $12.9 million in the first quarter, exceeding charge offs by $4.8 million, as the company continues to build reserves consistent with the growth in its loan portfolio.  The allowance equaled 125% of nonperforming loans and 0.93% of total loans. Excluding loans acquired at fair value as of their acquisition dates, the allowance equaled 1.22% of total loans.   

Deposits

Average core deposit balances of $9.8 billion were stable with the linked quarter as growth in retail checking and all other interest bearing categories was offset by lower business demand balances.   Higher cost CD balances continue to decline with the Company's focus on more profitable relationships. At March 31, 2011 core deposits increased to 76% of total deposits versus 73% a year ago. The loan-to-deposit ratio stood at 80% at quarter end.

Net Interest Income

First quarter net interest income rose by $5.3 million to $172.9 million, as net interest margin increased to 3.80% in the quarter, compared to 3.65% in the linked quarter. That margin increase was driven by the positive impact of higher yields on mortgage backed securities due to slower mortgage prepayments experienced across the industry. Also contributing to the improved yield on the securities portfolio has been the execution of our previously announced strategy to allocate a portion of our investment cash flows into investment grade credit (non-U.S. Government backed) assets.   The margin was also helped by a modest decrease in deposit and overall funding costs.

Noninterest Income

Noninterest income of $52.1 million was $2.0 million below the linked quarter primarily reflecting the industry-wide decline in mortgage banking activity and lower transaction revenues in banking services.  Partially offsetting this shortfall was seasonal and acquisition driven increases in insurance revenue as well as fees from increased activity in loan syndication and capital market businesses. Wealth management revenues rose in the first quarter as well. The Company continues to provide more sophisticated product offerings as it continues to deepen customer relationships and diversify its sources of fee income.

Noninterest Expense

Operating (Non-GAAP) noninterest expense of $137.9 million in the first quarter reflects the full phase-in of the strategic investment program implemented last year to build out talent, systems, and infrastructure to achieve the operating platform in line with the Company's growth mission. Higher expenses in the first quarter also included the effect of recent insurance agency acquisitions along with increased payroll taxes and employee benefit related costs. Looking ahead, the Company's repositioning initiatives will serve to redeploy current resources to drive improved operating leverage and efficiency. 

Reported (GAAP) noninterest expense for the current quarter totaled $145.2 million and included non-operating merger and restructuring costs.

Capital Management

At March 31, 2011 the Company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 14.13% and 12.56%, 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. 

About First Niagara

As of April 15th, First Niagara Financial Group, Inc., through its wholly owned subsidiary, First Niagara Bank, N.A., has $30 billion in assets, 345 branches and $18 billion in deposits. First Niagara Bank, N.A. is a multi-state community-oriented bank providing financial services to individuals, families and businesses 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, April 21, 2011 to discuss the Company's financial results and business strategy. Those wishing to participate in the call may dial toll-free 1-877-709-8150. A replay of the call will be available until May 12, 2011 by dialing 1-877-660-6853, Account # 240, Conference ID # 369374.

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)
             
  2011 2010 2009
  March 31, December 31,  September 30, June 30, March 31, December 31, 
       
SELECTED FINANCIAL DATA      
(Amounts in thousands)      
Cash and cash equivalents  $ 220,997  213,820  315,608  332,705  186,832  236,268
Investment securities:            
Available for sale  5,424,731  7,289,455  7,341,505  7,131,393  4,876,925  4,421,678
Held to maturity  3,030,320  1,025,724  1,125,184  1,038,866  1,038,566  1,093,552
FHLB and FRB common stock  166,357  183,800  171,814  165,960  55,650  79,014
Loans held for sale  26,955  37,977  50,092  76,574  35,168  32,270
Loans and leases:             
Commercial:            
Real estate  4,545,336  4,373,717  4,283,422  4,237,612  3,133,582  3,061,582
Business  2,693,343  2,619,148  2,270,679  2,164,529  1,745,738  1,689,594
Total commercial loans  7,238,679  6,992,865  6,554,101  6,402,141  4,879,320  4,751,176
Residential real estate  1,696,742  1,687,110  1,752,078  1,822,130  1,582,839  1,642,691
Home equity  1,495,702  1,513,047  1,470,619  1,446,281  702,735  691,069
Other consumer  256,353  265,528  270,578  267,349  182,790  186,341
Net deferred costs and discounts  23,767  24,864  26,108  26,619  25,354  25,909
Total loans and leases  10,711,243  10,483,414  10,073,484  9,964,520  7,373,038  7,297,186
Allowance for credit losses  100,126  95,354  94,532  90,409  89,488  88,303
Loans and leases, net  10,611,117  10,388,060  9,978,952  9,874,111  7,283,550  7,208,883
Bank owned life insurance  232,748  230,718  228,723  226,653  133,629  132,414
Premises and equipment  227,136  217,555  209,508  210,439  163,573  156,213
Goodwill and other intangibles  1,108,811  1,114,144  1,099,446  1,099,155  931,347  935,384
Other assets  390,673  382,600  350,708  362,503  262,838  289,157
Total assets  $ 21,439,845  21,083,853  20,871,540  20,518,359  14,968,078  14,584,833
             
Deposits:            
Savings accounts  $ 1,271,494  1,235,004  1,235,201  1,274,039  932,698  916,854
Interest-bearing checking  1,726,379  1,705,537  1,783,788  1,729,043  1,057,349  1,063,065
Money market deposits  5,177,242  4,919,014  4,941,989  4,851,504  3,825,794  3,535,736
Noninterest-bearing deposits  2,050,034  1,989,505  1,815,201  1,870,004  1,301,730  1,256,537
Certificates of deposit  3,230,674  3,299,784  3,619,004  4,033,584  2,676,890  2,957,332
Total deposits  13,455,823  13,148,844  13,395,183  13,758,174  9,794,461  9,729,524
             
Short-term borrowings  970,262  1,788,566  1,634,481  1,691,820  1,034,236  1,674,761
Long-term borrowings  3,933,791  3,104,908  2,708,639  1,974,737  1,447,392  627,519
Other liabilities  304,937  276,465  326,676  320,163  285,367  179,368
Total liabilities  18,664,813  18,318,783  18,064,979  17,744,894  12,561,456  12,211,172
Stockholders' equity  2,775,032  2,765,070  2,806,561  2,773,465  2,406,622  2,373,661
Total liabilities and stockholders' equity  $ 21,439,845  21,083,853  20,871,540  20,518,359  14,968,078  14,584,833
             
Total interest-earning assets  $ 19,278,620  18,922,199  18,604,341  18,234,177  13,326,364  12,902,813
Total interest-bearing liabilities  16,309,842  16,052,813  15,923,102  15,554,727  10,974,359  10,775,267
Net interest-earning assets  $ 2,968,778  2,869,386  2,681,239  2,679,450  2,352,005  2,127,546
             
Tangible equity (1)  $ 1,666,221  1,650,926  1,707,115  1,674,310  1,475,275  1,438,277
Unrealized gain (loss) on securities  $ 63,893  70,690  131,572  117,422  42,970  17,206
Total loans serviced for others  $ 1,572,925  1,554,083  1,397,674  1,293,436  875,814  823,889
             
Legacy loans (2)  $ 8,210,106  7,833,695  7,239,939  6,954,592  6,738,529  6,636,760
Acquired loans (3)  2,616,387  2,772,158  2,953,752  3,134,100  675,434  703,474
Credit related discount on acquired loans (4)  (115,250)  (122,439)  (120,207)  (124,172)  (40,925)  (43,048)
Total Loans  $ 10,711,243  10,483,414  10,073,484  9,964,520  7,373,038  7,297,186
 
 
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited)
             
  2011 2010 2009
  March 31, December 31,  September 30, June 30, March 31, December 31, 
ASSET QUALITY DATA      
(Amounts in thousands)      
Nonperforming loans:            
Commercial real estate  $ 37,346  44,065  49,271  47,648  44,149  37,687
Commercial business  24,823  25,819  25,924  11,652  18,010  17,566
Residential real estate  13,433  14,461  13,156  11,050  10,811  9,468
Home equity  4,467  4,605  4,809  3,238  3,558  2,330
Other consumer  299  373  1,020  750  1,392  1,510
Total nonperforming loans  80,368  89,323  94,180  74,338  77,920  68,561
Real estate owned  6,955  8,647  8,619  8,559  6,774  7,057
Total nonperforming assets  $ 87,323  97,970  102,799  82,897  84,694  75,618
             
Acquired loans 90 days past due still accruing(5)  $ 62,942  58,097  56,716  48,221  --   -- 
Accruing troubled debt restructurings (TDR)  $ 27,027  21,607  18,932  19,397  18,857  11,683
             
Net loan charge-offs (recoveries):            
Commercial real estate  $ 2,006  4,765  3,078  8,849  4,275  2,056
Commercial business  4,391  6,082  3,187  658  7,135  2,958
Residential real estate  662  389  55  164  56  11
Home equity  781  809  196  358  162  298
Other consumer  288  634  361  50  318  451
Total net loan charge-offs  $ 8,128  12,679  6,877  10,079  11,946  5,774
       
ASSET QUALITY RATIOS      
       
Net charge-offs to average loans (annualized) 0.31% 0.49% 0.27% 0.41% 0.66% 0.32%
Provision to average loans (annualized) 0.49% 0.53% 0.43% 0.45% 0.73% 0.61%
Total nonperforming loans to loans 0.75% 0.85% 0.93% 0.74% 1.05% 0.94%
Total nonperforming assets to assets 0.41% 0.46% 0.49% 0.40% 0.57% 0.52%
Allowance to loans 0.93% 0.91% 0.93% 0.90% 1.21% 1.20%
Allowance to nonperforming loans 124.6% 106.8% 100.4% 121.6% 114.9% 128.8%
Texas ratio (6) 8.51% 8.94% 8.85% 7.43% 5.41% 4.95%
       
CAPITAL      
Consolidated:            
Tier 1 risk based capital  13.32% 13.54% 14.25% 14.27% 17.54% 17.41%
Tier 1 common capital (7)  12.56% 12.76% 13.42% 13.43% 17.39% 17.26%
Total risk based capital  14.13% 14.35% 15.09% 15.09% 18.65% 18.51%
Leverage ratio (8)  8.23% 8.14% 8.37% 8.75%  --  --
Tangible capital (8)  --  --  --  -- 10.15% 10.34%
Equity to assets 12.94% 13.11% 13.45% 13.52% 16.08% 16.27%
Tangible common equity to tangible assets (1) 8.20% 8.27% 8.63% 8.62% 10.51% 10.54%
             
First Niagara Bank, N.A.:            
Tier 1 risk based capital  11.23% 11.06% 11.88% 11.59% 13.08% 12.63%
Total risk based capital  12.04% 11.86% 12.72% 12.40% 14.20% 13.73%
Leverage ratio (8)  6.94% 6.64% 6.97% 7.10%  --  --
Tangible capital (8)  --  --  --  -- 7.55% 7.48%
 
 
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited) (Cont'd)
               
  2011 2010 2009
   First   Year Ended   Fourth   Third   Second   First   Fourth 
   Quarter  December 31,  Quarter   Quarter   Quarter   Quarter   Quarter 
       
SELECTED OPERATIONS DATA      
(Amounts in thousands)      
Interest income  $ 208,884  745,588  205,320  200,636  195,129  144,503  145,357
Interest expense  36,016  147,834  37,772  39,357  40,371  30,334  32,454
Net interest income  172,868  597,754  167,548  161,279  154,758  114,169  112,903
Provision for credit losses  12,900  48,631  13,500  11,000  11,000  13,131  11,000
Net interest income after provision  159,968  549,123  154,048  150,279  143,758  101,038  101,903
               
Noninterest income:              
Banking services  19,006  80,773  22,230  21,007  21,529  16,007  17,016
Insurance and benefits consulting  15,755  51,634  13,130  13,573  12,768  12,163  11,074
Wealth management services  6,734  19,838  4,940  5,939  5,711  3,248  2,655
Mortgage banking  1,263  12,230  6,052  3,320  1,626  1,232  1,756
Other income  9,316  22,140  7,760  5,666  4,416  4,298  3,016
Total noninterest income  52,074  186,615  54,112  49,505  46,050  36,948  35,517
               
Noninterest expense:              
Salaries and benefits  74,511  246,619  65,698  68,603  64,081  48,237  50,919
Occupancy and equipment  16,197  54,964  16,053  15,582  13,422  9,907  9,126
Technology and communications  12,871  45,698  12,878  12,769  11,403  8,649  8,271
Marketing and advertising  2,692  18,388  3,383  5,782  7,691  1,532  2,618
Professional services  6,360  18,528  7,538  4,426  4,054  2,510  2,141
Amortization of intangibles  5,489  19,458  5,447  5,453  5,311  3,247  3,414
FDIC premiums  6,195  18,923  5,871  4,630  4,959  3,463  4,335
Merger and acquisition integration expenses  6,176  41,655  5,904  1,916  27,602  6,232  4,009
Other expense  14,659  59,095  16,562  13,448  19,680  9,405  9,887
Total noninterest expense  145,150  523,328  139,334  132,609  158,203  93,182  94,720
               
Income before income taxes  66,892  212,410  68,826  67,175  31,605  44,804  42,700
Income taxes  21,974  72,057  22,971  21,579  11,602  15,905  13,796
Net income  $ 44,918  140,353  45,855  45,596  20,003  28,899  28,904
 
 
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited) (Cont'd)
               
  2011 2010 2009
   First   Year Ended   Fourth   Third   Second   First   Fourth 
   Quarter   December 31,   Quarter   Quarter   Quarter   Quarter   Quarter 
       
SELECTED AVERAGE BALANCES      
(Amounts in thousands)      
Interest-earning assets:              
Securities, at amortized cost  $ 8,104,008  7,185,292  8,214,033  7,913,769  7,121,805  5,453,217  4,874,683
Loans and leases (9)              
Commercial:              
Real estate  4,430,619  3,960,268  4,300,625  4,245,670  4,194,002  3,084,272  3,026,380
Business  2,615,778  2,114,500  2,447,918  2,210,288  2,079,222  1,711,428  1,595,822
 Total commercial loans  7,046,397  6,074,768  6,748,543  6,455,958  6,273,224  4,795,700  4,622,202
Residential real estate  1,738,384  1,790,873  1,762,346  1,853,018  1,900,471  1,645,693  1,706,998
Home equity  1,508,189  1,263,407  1,503,187  1,460,801  1,374,245  704,450  685,342
Other consumer  272,894  247,222  269,090  270,416  260,953  187,272  189,387
Total loans and leases  10,565,864  9,376,270  10,283,166  10,040,193  9,808,893  7,333,115  7,203,929
Other interest-earning assets  193,430  180,042  204,462  191,650  235,636  87,000  314,593
               
Total interest-earning assets  18,863,301  16,741,604  18,701,661  18,145,612  17,166,334  12,873,332  12,393,205
Goodwill and other intangibles  1,112,329  1,063,794  1,107,958  1,101,044  1,110,565  933,279  936,590
Other noninterest-earning assets  1,143,876  1,056,896  1,199,525  1,212,134  1,071,189  737,960  712,334
Total assets  $ 21,119,506  18,862,294  21,009,144  20,458,790  19,348,088  14,544,571  14,042,129
               
Interest-bearing liabilities:              
Savings accounts  $ 1,243,856  1,164,416  1,232,897  1,260,792  1,242,052  917,397  905,899
Interest-bearing checking  1,732,971  1,541,259  1,710,655  1,734,463  1,675,705  1,034,659  1,042,842
Money market deposits  5,012,521  4,576,958  4,994,303  4,881,109  4,725,441  3,689,294  3,576,893
Certificates of deposit  3,253,538  3,526,389  3,441,656  3,822,620  4,007,431  2,823,804  3,112,978
Borrowed funds  4,963,087  3,430,215  4,631,406  3,833,711  2,991,598  2,233,362  1,580,016
Total interest-bearing liabilities  16,205,973  14,239,237  16,010,917  15,532,695  14,642,227  10,698,516  10,218,628
Noninterest-bearing deposits  1,837,248  1,667,760  1,873,709  1,814,399  1,728,853  1,245,565  1,237,425
Other noninterest-bearing liabilities  299,019  271,918  306,253  303,199  277,838  198,858  190,399
Total liabilities  18,342,240  16,178,915  18,190,879  17,650,293  16,648,918  12,142,939  11,646,452
Stockholders' equity  2,777,266  2,683,379  2,818,265  2,808,497  2,699,170  2,401,632  2,395,677
               
Total liabilities and stockholders' equity  $ 21,119,506  18,862,294  21,009,144  20,458,790  19,348,088  14,544,571  14,042,129
               
Net interest-earning assets  $ 2,657,328  2,502,367  2,690,744  2,612,917  2,524,107  2,174,816  2,174,577
Total core deposits  $ 9,826,596  8,950,393  9,811,564  9,690,763  9,372,051  6,886,915  6,763,059
Total deposits  $ 13,080,134  12,476,782  13,253,220  13,513,383  13,379,482  9,710,719  9,876,037
Tangible equity (1)  $ 1,664,937  1,619,585  1,710,307  1,707,453  1,588,605  1,468,353  1,459,087
 
 
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited) (Cont'd)
               
  2011 2010 2009
   First   Year Ended   Fourth   Third   Second   First   Fourth 
   Quarter  December 31,  Quarter   Quarter   Quarter   Quarter   Quarter 
       
STOCK AND RELATED PER SHARE DATA      
(Shares in thousands)      
Earnings per share:              
Basic 0.22 0.70 0.22 0.22 0.10 0.16 0.16
Diluted 0.22 0.70 0.22 0.22 0.10 0.16 0.16
Cash dividends 0.16 0.57 0.15 0.14 0.14 0.14 0.14
Dividend payout ratio 72.73% 81.43% 68.18% 63.64% 140.00% 87.50% 87.50%
Dividend yield (annualized) 4.78% 4.08% 4.26% 4.77% 4.48% 3.99% 3.99%
Market price (NASDAQ: FNFG):              
High 15.10 14.88 14.40 13.79 14.88 14.86 14.47
Low 13.54 11.23 11.51 11.23 12.25 13.00 12.40
Close 13.58 13.98 13.98 11.65 12.53 14.23 13.91
Book value per share (10) 13.45   13.42 13.63 13.48 12.98 12.84
Tangible book value per share (1) (10) 8.08   8.01 8.29 8.14 7.96 7.78
Weighted average common shares outstanding(10):              
Basic 206,124 200,274 205,901 205,821 203,962 185,121 184,849
Diluted 206,644 200,596 206,229 206,058 204,402 185,585 185,343
Common shares outstanding 209,432   209,112 209,059 209,040 188,719 188,215
Treasury shares 5,674   5,994 6,047 6,066 6,092 6,596
       
SELECTED RATIOS      
(Annualized where appropriate)      
Return on average assets 0.86% 0.74% 0.87% 0.88% 0.41% 0.81% 0.82%
Common equity:              
Return on average equity  6.56% 5.23% 6.46% 6.44% 2.97% 4.88% 4.79%
Return on average tangible equity (1) 10.94% 8.67% 10.64% 10.59% 5.05% 7.98% 7.86%
Total equity:              
Return on average equity  6.56% 5.23% 6.46% 6.44% 2.97% 4.88% 4.79%
Return on average tangible equity (1) 10.94% 8.67% 10.64% 10.59% 5.05% 7.98% 7.86%
Noninterest income as a percentage of net revenue 23.1% 23.8% 24.4% 23.5% 22.9% 24.4% 23.9%
Efficiency ratio - Consolidated 64.5% 66.7% 62.9% 62.9% 78.8% 61.7% 63.8%
- Banking segment (11) 62.5% 65.0% 60.5% 61.1% 70.3% 59.5% 60.9%
               
Net loan charge-offs  8,128  41,580  12,679  6,877  10,079  11,946  5,774
Net charge-offs to average loans (annualized) 0.31% 0.44% 0.49% 0.27% 0.41% 0.66% 0.32%
Provision to average loans (annualized) 0.49% 0.52% 0.53% 0.43% 0.45% 0.73% 0.61%
               
Personnel FTE 3,825   3,791 3,725 3,748 2,966 2,816
               
Number of branches 257   257 255 255 172 171
 
 
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited) (Cont'd)
               
  2011 2010 2009
   First   Year Ended   Fourth   Third   Second   First   Fourth 
   Quarter   December 31,   Quarter   Quarter   Quarter   Quarter   Quarter 
       
SELECTED AVERAGE YIELDS/RATES      
(Tax equivalent basis)      
Interest-earning assets:              
Securities, at amortized cost 3.83% 3.51% 3.45% 3.50% 3.54% 3.56% 4.00%
Loans and leases              
Commercial:              
Real estate 5.56% 5.75% 5.69% 5.70% 5.91% 5.71% 5.70%
Business 4.43% 4.88% 4.86% 4.83% 5.21% 4.57% 4.74%
 Total commercial loans 5.14% 5.45% 5.39% 5.40% 5.68% 5.30% 5.37%
Residential real estate 4.96% 5.09% 4.93% 5.04% 5.18% 5.24% 5.23%
Home equity 4.52% 4.66% 4.56% 4.50% 4.82% 4.89% 4.95%
Other consumer 6.59% 7.40% 7.27% 7.56% 6.62% 8.48% 8.33%
Total loans and leases 5.12% 5.32% 5.24% 5.26% 5.48% 5.33% 5.37%
Other interest-earning assets 4.15% 2.99% 4.73% 3.10% 1.23% 3.36% 1.13%
               
Total interest-earning assets 4.58% 4.52% 4.45% 4.47% 4.62% 4.57% 4.72%
               
Interest-bearing liabilities:              
Savings accounts 0.10% 0.14% 0.11% 0.12% 0.17% 0.14% 0.21%
Interest-bearing checking 0.11% 0.19% 0.16% 0.20% 0.25% 0.13% 0.14%
Money market deposits 0.48% 0.60% 0.48% 0.59% 0.68% 0.69% 0.82%
Certificates of deposit 1.11% 1.10% 1.12% 1.11% 1.10% 1.07% 1.17%
Borrowed funds 1.67% 2.23% 1.78% 2.07% 2.63% 2.89% 3.77%
Total interest-bearing liabilities 0.90% 1.04% 0.93% 1.00% 1.10% 1.15% 1.26%
               
Total interest-bearing deposits 0.56% 0.66% 0.59% 0.65% 0.71% 0.69% 0.80%
Total core deposits 0.28% 0.36% 0.29% 0.35% 0.41% 0.41% 0.48%
Total deposits 0.48% 0.57% 0.50% 0.56% 0.62% 0.60% 0.70%
               
Tax equivalent net interest rate spread 3.68% 3.48% 3.52% 3.47% 3.52% 3.42% 3.46%
Tax equivalent net interest rate margin 3.80% 3.64% 3.65% 3.61% 3.68% 3.61% 3.69%
               
               
(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 of 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 1 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
          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

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