EXHIBIT 99.1
First Niagara Reports Record 2011 Results
Operating EPS Increased 13% to $0.98 in 2011, Up From $0.87 in 2010
Fourth Quarter Highlights:
- Operating non-GAAP EPS of $0.24; GAAP EPS of $0.19
- 28% annualized increase in commercial and industrial loans
- Superior credit quality continues to differentiate the franchise
- Deposit pricing actions support stable net interest margin
- Successful execution on HSBC branch-related capital and divestiture initiatives
BUFFALO, N.Y., Jan. 26, 2012 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) capped a successful 2011 by delivering solid results in the fourth quarter and record full-year earnings. Robust organic growth in commercial loans and superior credit quality underscore the continued strength of the company's core business fundamentals. In addition, over the last two months, the company also raised $1.1 billion in new capital and announced planned divestitures related to First Niagara Bank, N.A.'s pending acquisition of 195 branches from HSBC Bank USA, N.A.
Following the completion of the HSBC branch acquisition, expected in the second quarter of 2012, First Niagara will have the number-one retail deposit market share position across Upstate New York, enhancing the company's ability to deliver consistent and strong performance during this prolonged and challenging environment. The acquisition also better positions the company to capitalize on new market opportunities once more robust economic growth returns.
"Throughout 2011, we've delivered solid fundamental results while advancing our strategy to be among the best in the business and a market leader in the communities we serve," said President and Chief Executive Officer John R. Koelmel. "We are off and running in 2012, excited about our soon-to-be-enhanced market position, as we continue to acquire and serve customers and provide support to consumers and businesses across the Northeast. That will, in turn, enable us to deliver solid financial results during another challenging year for the industry. We will carry our momentum forward by continuing to sharpen our focus on operational efficiency and effectiveness, while winning every day with top talent."
Fourth-Quarter and Full Year Results
In the fourth quarter of 2011, First Niagara posted non-GAAP net operating earnings of $72.1 million, or $0.24 per diluted share. Total revenues of $306.2 million grew 3% annualized over the third quarter of 2011, driven by 12% annualized growth in net interest income, partially offset by lower fee income stemming from the October 1 implementation of the Durbin Amendment. Solid operating earnings in the fourth quarter of 2011 reflect growth in average commercial loans of $295 million and average core deposits of $485 million over the third quarter of 2011. Net interest margin was 3.48%, unchanged from the prior quarter as lower deposit costs offset asset spread compression. Non-GAAP operating earnings were $73.6 million, or $0.25 per diluted share, in the third quarter of 2011 and $49.7 million, or $0.24 per diluted share, in the fourth quarter of 2010.
On a reported GAAP basis, fourth quarter 2011 net income was $58.5 million, or $0.19 per diluted share, compared to $57.0 million, or $0.19 per diluted share, in the third quarter of 2011 and $45.9 million, or $0.22 per diluted share, in the fourth quarter of 2010. Reported GAAP net income and EPS during the fourth quarter reflect employee severance and branch closure restructuring costs and, to a lesser extent, merger integration expenses.
| Operating Results (Non-GAAP) | Q4 2011 | Q3 2011 | Q4 2010 |
| Net interest income | $ 242.5 | $ 235.4 | $ 167.5 |
| Provision for credit losses | 13.4 | 14.5 | 13.5 |
| Noninterest income | 63.7 | 68.7 | 54.1 |
| Noninterest expense | 182.5 | 178.5 | 133.4 |
| Net operating income before non-operating items | 72.1 | 73.6 | 49.7 |
| Weighted average diluted shares outstanding | 304.3 | 292.5 | 206.2 |
| Operating earnings per diluted share | $ 0.24 | $ 0.25 | $ 0.24 |
Reported Results (GAAP) | | | |
| Net operating income before non-operating items | $ 72.1 | $ 73.6 | $ 49.7 |
| Non-operating items(a) | 13.6 | 16.7 | 3.8 |
| Net income | $ 58.5 | $ 57.0 | $ 45.9 |
| Weighted average diluted shares outstanding | 304.3 | 292.5 | 206.2 |
| Earnings per diluted share | $ 0.19 | $ 0.19 | $ 0.22 |
| | | | |
| 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) Amounts are shown net of tax and represent expenses related to acquisition, integration and restructuring. | | | |
For the full year 2011, the company posted non-GAAP operating earnings of $266.7 million, or $0.98 per diluted share, compared to $174.1 million, or $0.87 per diluted share, in 2010. The 13% increase in operating EPS was driven by strong organic growth and the accretive benefit of recent acquisitions, while reflecting a 35% increase in weighted average shares outstanding. On a GAAP basis, net income for the year amounted to $173.9 million, or $0.64 per diluted share, in 2011 and $140.4 million, or $0.70 per diluted share, in 2010. In 2011, non-operating merger costs stemming from the NewAlliance and pending HSBC branch acquisitions, as well as branch restructuring costs, drove the year-over-year decline in reported GAAP net income per share.
| Operating Results (Non-GAAP) | 2011 | 2010 |
| Net interest income | $ 881.2 | $ 597.8 |
| Provision for credit losses | 58.1 | 48.6 |
| Noninterest income | 245.3 | 186.6 |
| Noninterest expense | 665.6 | 472.7 |
| Net operating income before non-operating items | 266.7 | 174.1 |
| Weighted average diluted shares outstanding | 271.6 | 200.6 |
| Operating earnings per diluted share | $ 0.98 | $ 0.87 |
Reported Results (GAAP) | | |
| Net operating income before non-operating items | $ 266.7 | $ 174.1 |
| Non-operating items(a) | 92.8 | 33.8 |
| Net income | $ 173.9 | $ 140.4 |
| Weighted average diluted shares outstanding | 271.6 | 200.6 |
| Earnings per diluted share | $ 0.64 | $ 0.70 |
| | | |
| 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) Amounts are shown net of tax and represent expenses related to acquisition, integration and restructuring. | | |
"We continue to demonstrate our ability to operate an industry leading growth company by posting our eighth consecutive quarter of double-digit organic commercial loan growth," Chief Financial Officer Gregory W. Norwood said. "Our actions to reduce deposit rates helped support our net interest margin and mitigated the effects of accelerated asset prepayment and re-pricing on our residential mortgage assets. We will continue to focus on actions to mitigate the headwinds while prudently investing in our people and businesses to position us for continued success in 2012 and to accelerate earnings growth when the economy rebounds."
Strong Commercial Loan Growth Continues
Commercial loans averaged $9.9 billion in the fourth quarter of 2011, an increase of $295 million, or 12% annualized over the prior quarter. Commercial and industrial (C&I) loans averaged $3.7 billion in the fourth quarter of 2011, increasing by $239 million, or 28% annualized over the prior quarter. Even as demand for credit nationally remains soft, First Niagara continues to drive commercial loan growth with its customer-relationship value proposition and its seasoned commercial lending team.
Total loans and leases averaged $16.4 billion in the fourth quarter of 2011, increasing by $154 million, or 4% annualized over the prior quarter. Continued strength in C&I loans was partially offset by elevated prepayment activity in real estate loan categories. Total originations in the fourth-quarter increased to $2.7 billion, a 27% annualized increase from the prior quarter, driven by acceleration of growth in First Niagara's Upstate New York and Eastern Pennsylvania markets, as well as its capital markets business.
Average residential mortgage balances in the fourth quarter were $4.1 billion, a decline of $142 million, or 13% annualized, from the third quarter due to prepayments. Average home equity loans in the fourth quarter were $2.2 billion, unchanged from the prior quarter.
Superior Credit Quality
Asset quality ratios continued to significantly outperform industry averages and remained consistent with the company's past performance. Fourth quarter 2011 net charge-offs were $5.8 million, representing an annualized 0.14% of average loans, or 0.22% excluding acquired loans. This compares favorably to $8.1 million in the prior quarter, or an annualized 0.20% of average loans, or 0.35% excluding acquired loans.
The fourth quarter 2011 provision for credit losses was $13.4 million. As in recent quarters, the loan loss provision exceeded net charge-offs as the company increased its allowance for loans and lease losses consistent with the growth and changing mix of its portfolio. At December 31, 2011, the allowance totaled $120.1 million, representing 0.73% of total loans, or 1.20% excluding acquired loans. At September 30, 2011, the allowance totaled $112.7 million, and equaled 0.69% of total loans, or 1.20% excluding acquired loans. Fair value credit marks further insulate First Niagara's credit exposure, as approximately 40% of total loans on December 31, 2011 were marked to fair value at the time of their acquisition.
At December 31, 2011, nonperforming assets equaled 0.29% of total assets, unchanged from prior quarter. Nonperforming loans were $89.8 million, representing 0.55% of total loans at December 31, 2011, compared to 0.50% of total loans at September 30, 2011. Excluding acquired loans, nonperforming loans represented 0.91% of total loans at December 31, 2011, compared to 0.87% at the end of the prior quarter.
Strong Core Deposit Growth
Average core deposits of $15.2 billion for the fourth quarter of 2011 increased $485 million, or 13% annualized, over the prior quarter. The company continued to grow organic deposit balances across its entire footprint as it continues to win market share in both its new and legacy markets. Average interest-bearing core deposits grew $265 million and noninterest-bearing deposits grew by $220 million from the prior quarter. Average core deposits as a percentage of total deposits increased to 79% in the fourth quarter.
Average noninterest-bearing checking deposits grew $220 million, or 31% annualized, over the prior quarter. This increase was driven by the realignment of certain customer balances from legacy interest bearing checking products to noninterest-bearing checking accounts as part of the "You First Checking" campaign launched in the third quarter, strong account acquisition activity, and seasonal strength. Average money market deposits increased 15% annualized over the prior quarter, reflecting the residual effect of the promotional money market campaign launched in June 2011. End-of-period money market deposits declined $286 million from September 30, 2011.
Deposit Pricing Actions Support Net Interest Margin
Average earning assets grew 10.3% annualized compared to the prior quarter. Net interest income grew $7.1 million, or 12.0% annualized from the prior quarter. Net interest margin in the fourth quarter of 2011 was 3.48%, flat compared to the prior quarter.
Deposit pricing actions taken in August mitigated the impact of asset yield compression from prepayments and refinancing. While earning asset yields declined five basis points compared to the prior quarter, to 4.17%, the cost of interest-bearing deposits declined eight basis points from the prior quarter. Higher yields on loans acquired through the Harleysville National and National City transactions also benefited net interest margin by approximately five basis points.
Noninterest Income Decline Driven by Expected Lower Debit Interchange Fees
Fourth quarter 2011 noninterest income of $63.7 million was down $5.0 million compared to the prior quarter, driven largely by expected declines in banking services fees resulting from the October 1 implementation of the Durbin Amendment. This decline was partially offset by sustained strength in mortgage banking and capital markets revenues.
Noninterest Expense Reflects Prudent Investments
Fourth quarter non-GAAP operating noninterest expense was $182.5 million, up $4.0 million, compared to the third quarter of 2011. The increase in expenses reflects continued investments to support the franchise's growth.
On a GAAP basis, noninterest expense for the fourth quarter included $13.5 million related to branch restructurings announced in early 2011, as well as employee severance expenses and $6.1 million in merger and acquisition-related expenses. Severance-related expenses of approximately $3.5 million were largely the result of the company's branch staff realignment designed to accelerate its small business and wealth management growth initiatives.
Capital
During the fourth quarter, the company announced that it raised $468 million through an offering of 57 million shares of common stock, $339 million in an offering of 14 million shares of fixed-to-floating rate non-cumulative preferred stock, and $298 million in an offering of 7.25% subordinated debt due 2021 to support the purchase of HSBC branches in Upstate New York and Connecticut. Further, in conjunction with its strategy to accelerate capital accumulation, the company announced its intention to adjust dividends to be paid to common shareholders to $0.08 per quarter, commencing in the first quarter of 2012.
At December 31, 2011, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 17.8% and 13.2%, respectively. First Niagara remains well above current regulatory guidelines for well capitalized institutions.
About First Niagara
First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank that currently has approximately $33 billion in assets, $19 billion in deposits, more than 330 branches and 5,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.fnfg.com.
When First Niagara completes its acquisition of the HSBC branches, expected to occur in the second quarter of 2012, the regional bank will have an enhanced leadership position in the Northeast, with more than 400 locations, $30 billion in total deposits, $38 billion in assets and more than 6,000 employees serving consumers, businesses and communities across New York, Pennsylvania, Connecticut and Massachusetts. The transaction will also provide First Niagara with number-one retail market share across Upstate New York, virtually doubling its number of branches in New York State to more than 200, stretching from Buffalo to Albany and down through the Hudson Valley.
Investor Call
A conference call will be held at 10 a.m. Eastern Time on Thursday, January 26, 2012 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. Presentation slides will be used during the earnings conference call and is available under the investor relations tab of our website at www.fnfg.com. A replay of the call will be available until February 9, 2012 by dialing 1-877-660-6853, Account 240, ID 386239.
Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The Company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.
Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real estate and business loans and non-performing loans.
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| First Niagara Financial Group, Inc. | | | | | | | |
| Income Statement Highlights -- Reported Basis | | | | | | | |
| (in thousands, except per share amounts) | | | | | | | |
| | | | | | | | |
| | 2011 | 2010 | For year ending |
| | Fourth | Third | Second | First | Fourth | December 31, | December 31, |
| | Quarter | Quarter | Quarter | Quarter | Quarter | 2011 | 2010 |
| | | | | | | | |
| Interest income: | | | | | | | |
| Loans and leases | $ 195,434 | $ 192,772 | $ 184,341 | $ 132,117 | $ 133,983 | $ 704,664 | $ 495,989 |
| Investment securities and other | 96,472 | 94,375 | 93,029 | 76,767 | 71,337 | 360,643 | 249,599 |
| Total interest income | 291,906 | 287,147 | 277,370 | 208,884 | 205,320 | 1,065,307 | 745,588 |
| | | | | | | | |
| Interest expense: | | | | | | | |
| Deposits | 21,521 | 24,771 | 21,324 | 15,621 | 16,825 | 83,237 | 71,150 |
| Borrowings | 27,872 | 26,947 | 25,609 | 20,395 | 20,947 | 100,823 | 76,684 |
| Total interest expense | 49,393 | 51,718 | 46,933 | 36,016 | 37,772 | 184,060 | 147,834 |
| | | | | | | | |
| Net interest income | 242,513 | 235,429 | 230,437 | 172,868 | 167,548 | 881,247 | 597,754 |
| Provision for credit losses | 13,400 | 14,500 | 17,307 | 12,900 | 13,500 | 58,107 | 48,631 |
| Net interest income after provision | 229,113 | 220,929 | 213,130 | 159,968 | 154,048 | 823,140 | 549,123 |
| | | | | | | | |
| Noninterest income: | | | | | | | |
| Banking services | 22,079 | 26,384 | 24,613 | 19,006 | 22,230 | 92,082 | 80,773 |
| Insurance commissions | 15,440 | 16,886 | 17,044 | 15,755 | 13,130 | 65,125 | 51,634 |
| Wealth management services | 8,179 | 7,933 | 7,883 | 6,734 | 4,940 | 30,729 | 19,838 |
| Mortgage banking | 5,279 | 5,254 | 3,386 | 1,263 | 6,052 | 15,182 | 12,230 |
| Lending and leasing | 3,380 | 3,582 | 2,811 | 3,763 | 3,850 | 13,536 | 11,449 |
| Bank owned life insurance | 3,302 | 2,742 | 3,055 | 2,030 | 1,994 | 11,129 | 7,261 |
| Other income | 6,026 | 5,874 | 2,103 | 3,523 | 1,916 | 17,526 | 3,430 |
| Total noninterest income | 63,685 | 68,655 | 60,895 | 52,074 | 54,112 | 245,309 | 186,615 |
| | | | | | | | |
| Noninterest expense: | | | | | | | |
| Salaries and benefits | 88,796 | 89,131 | 90,192 | 73,776 | 65,698 | 341,895 | 246,619 |
| Occupancy and equipment | 22,580 | 20,434 | 18,952 | 16,197 | 16,053 | 78,163 | 54,964 |
| Technology and communications | 18,942 | 16,634 | 13,929 | 12,871 | 12,877 | 62,376 | 45,698 |
| Marketing and advertising | 7,724 | 7,554 | 3,880 | 2,692 | 3,383 | 21,850 | 18,388 |
| Professional services | 11,669 | 9,171 | 9,138 | 6,039 | 7,538 | 36,017 | 18,528 |
| Amortization of intangibles | 6,586 | 6,896 | 6,573 | 5,489 | 5,447 | 25,544 | 19,458 |
| FDIC premiums | 6,097 | 10,301 | 6,267 | 6,195 | 5,871 | 28,860 | 18,923 |
| Merger and acquisition integration expenses | 6,149 | 9,008 | 76,828 | 6,176 | 5,905 | 98,161 | 49,890 |
| Restructuring charges | 13,496 | 16,326 | 11,656 | 1,056 | -- | 42,534 | -- |
| Other expense | 20,132 | 18,416 | 17,726 | 14,659 | 16,562 | 70,933 | 50,860 |
| Total noninterest expense | 202,171 | 203,871 | 255,141 | 145,150 | 139,334 | 806,333 | 523,328 |
| | | | | | | | |
| Income before income taxes | 90,627 | 85,713 | 18,884 | 66,892 | 68,826 | 262,116 | 212,410 |
| Income taxes | 32,166 | 28,732 | 5,334 | 21,974 | 22,971 | 88,206 | 72,057 |
| Net income | $ 58,461 | $ 56,981 | $ 13,550 | $ 44,918 | $ 45,855 | $ 173,910 | $ 140,353 |
| | | | | | | | |
| Financial Ratios: | | | | | | | |
| Earnings per basic share | $ 0.19 | $ 0.19 | $ 0.05 | $ 0.22 | $ 0.22 | $ 0.64 | $ 0.70 |
| Earnings per diluted share | 0.19 | 0.19 | 0.05 | 0.22 | 0.22 | 0.64 | 0.70 |
| Weighted average shares outstanding - basic(1) | 304,065 | 292,211 | 281,496 | 206,124 | 205,901 | 271,301 | 200,274 |
| Weighted average shares outstanding - diluted(1) | 304,341 | 292,503 | 282,420 | 206,644 | 206,229 | 271,612 | 200,596 |
| Pre-tax, pre-provision income(2) | 104,027 | 100,213 | 36,191 | 79,792 | 82,326 | 320,223 | 261,041 |
| Pre-tax, pre-provision income per diluted share(2) | 0.34 | 0.34 | 0.13 | 0.39 | 0.40 | 1.18 | 1.30 |
| Pre-tax, pre-provision return on average assets(2) | 1.30% | 1.28% | 0.50% | 1.53% | 1.55% | 1.13% | 1.38% |
| Net interest margin(3) | 3.48% | 3.48% | 3.65% | 3.80% | 3.65% | 3.58% | 3.64% |
| Interest yield on average loans(3) | 4.76% | 4.73% | 4.93% | 5.12% | 5.24% | 4.87% | 5.32% |
| Rate paid on interest-bearing liabilities(3) | 0.82% | 0.87% | 0.84% | 0.90% | 0.93% | 0.85% | 1.04% |
| Efficiency ratio | 66.03% | 67.04% | 87.58% | 64.53% | 62.90% | 71.58% | 66.72% |
| Noninterest income as a percentage of net revenue(4) | 20.80% | 22.58% | 20.90% | 23.15% | 24.40% | 21.78% | 23.79% |
| Effective tax rate | 35.5% | 33.5% | 28.2% | 32.8% | 33.4% | 33.7% | 33.9% |
| Return on average assets | 0.73% | 0.73% | 0.19% | 0.86% | 0.87% | 0.62% | 0.74% |
| Return on average equity | 5.54% | 5.61% | 1.42% | 6.56% | 6.46% | 4.68% | 5.23% |
| Return on average tangible equity(2) | 9.75% | 10.28% | 2.59% | 10.94% | 10.64% | 8.33% | 8.67% |
| Return on average common equity | 5.63% | 5.61% | 1.42% | 6.56% | 6.46% | 4.71% | 5.23% |
| Return on average tangible common equity(2) | 10.03% | 10.28% | 2.59% | 10.94% | 10.64% | 8.40% | 8.67% |
| | | | | | | | |
| (1) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | | | | | | |
| (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) Yields and rates calculated on a tax equivalent basis. | |
| (4) Net revenue is comprised of net interest income and noninterest income. | |
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| First Niagara Financial Group, Inc. | | | | | |
| Period End Balance Sheet | | | | | |
| (in thousands) | | | | | |
| | | | | | |
| | 2011 | 2010 |
| | December 31, | September 30, | June 30, | March 31, | December 31, |
| | | | | | |
| Cash and cash equivalents | $ 836,555 | $ 332,437 | $ 318,820 | $ 220,997 | $ 213,820 |
| Investment securities: | | | | | |
| Available for sale | 9,348,296 | 8,349,237 | 8,219,695 | 5,424,731 | 7,289,455 |
| Held to maturity | 2,669,630 | 2,830,744 | 2,939,933 | 3,030,320 | 1,025,724 |
| FHLB and FRB common stock | 358,159 | 331,747 | 305,241 | 166,357 | 183,800 |
| Loans held for sale | 94,484 | 79,820 | 51,141 | 26,955 | 37,977 |
| Loans and leases: | | | | | |
| Commercial: | | | | | |
| Real estate | 6,244,381 | 6,148,988 | 6,130,301 | 4,541,739 | 4,370,857 |
| Business | 3,771,649 | 3,588,733 | 3,335,330 | 2,697,274 | 2,623,079 |
| Total commercial loans | 10,016,030 | 9,737,721 | 9,465,631 | 7,239,013 | 6,993,936 |
| Residential real estate | 4,012,267 | 4,171,374 | 4,270,811 | 1,701,544 | 1,692,198 |
| Home equity | 2,165,988 | 2,177,772 | 2,160,665 | 1,507,292 | 1,524,570 |
| Other consumer | 278,298 | 278,499 | 272,118 | 263,394 | 272,710 |
| Total loans and leases | 16,472,583 | 16,365,366 | 16,169,225 | 10,711,243 | 10,483,414 |
| Allowance for loan losses | 120,100 | 112,749 | 107,028 | 100,126 | 95,354 |
| Loans and leases, net | 16,352,483 | 16,252,617 | 16,062,197 | 10,611,117 | 10,388,060 |
| Bank owned life insurance | 392,468 | 416,449 | 378,241 | 232,748 | 230,718 |
| Premises and equipment | 318,101 | 303,634 | 292,778 | 227,136 | 217,555 |
| Goodwill and other intangibles | 1,803,240 | 1,812,628 | 1,829,712 | 1,108,811 | 1,114,144 |
| Other assets | 637,199 | 500,194 | 491,888 | 390,673 | 382,600 |
| Total assets | $ 32,810,615 | $ 31,209,507 | $ 30,889,646 | $ 21,439,845 | $ 21,083,853 |
| | | | | | |
| Deposits: | | | | | |
| Savings accounts | $ 2,621,016 | $ 2,641,723 | $ 2,767,951 | $ 1,271,494 | $ 1,235,004 |
| Interest-bearing checking | 2,259,576 | 2,028,052 | 2,028,645 | 1,726,379 | 1,705,537 |
| Money market deposits | 7,220,902 | 7,507,189 | 6,878,214 | 5,177,242 | 4,919,014 |
| Noninterest-bearing deposits | 3,335,356 | 3,095,283 | 2,738,917 | 2,050,034 | 1,989,505 |
| Certificates of deposit | 3,968,265 | 4,351,930 | 4,486,768 | 3,230,674 | 3,299,784 |
| Total deposits | 19,405,115 | 19,624,177 | 18,900,495 | 13,455,823 | 13,148,844 |
| | | | | | |
| Short-term borrowings | 2,208,845 | 1,156,711 | 1,466,745 | 970,262 | 1,788,566 |
| Long-term borrowings | 5,918,276 | 5,928,632 | 6,134,181 | 3,933,791 | 3,104,908 |
| Other liabilities | 480,201 | 499,312 | 395,390 | 304,937 | 276,465 |
| Total liabilities | 28,012,437 | 27,208,832 | 26,896,811 | 18,664,813 | 18,318,783 |
| Preferred stockholders' equity | 338,002 | -- | -- | -- | -- |
| Common stockholders' equity | 4,460,176 | 4,000,675 | 3,992,835 | 2,775,032 | 2,765,070 |
| Total stockholders' equity | 4,798,178 | 4,000,675 | 3,992,835 | 2,775,032 | 2,765,070 |
| Total liabilities and stockholders' equity | $ 32,810,615 | $ 31,209,507 | $ 30,889,646 | $ 21,439,845 | $ 21,083,853 |
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| Selected balance sheet information: | | | | |
| Total interest-earning assets(1) | $ 29,284,139 | $ 27,805,974 | $ 27,560,036 | $ 19,278,620 | $ 18,922,199 |
| Total interest-bearing liabilities | 24,196,880 | 23,614,238 | 23,762,504 | 16,309,842 | 16,052,813 |
| Net interest-earning assets | $ 5,087,259 | $ 4,191,736 | $ 3,797,532 | $ 2,968,778 | $ 2,869,386 |
| | | | | | |
| Tangible equity(2) | $ 2,994,938 | $ 2,188,047 | $ 2,163,123 | $ 1,666,221 | $ 1,650,926 |
| Tangible common equity(2) | 2,656,936 | 2,188,047 | 2,163,123 | 1,666,221 | 1,650,926 |
| Unrealized gain on securities, net of tax | 105,276 | 116,666 | 102,754 | 63,893 | 70,690 |
| Total mortgage loans serviced for others | 2,071,445 | 1,922,592 | 1,834,004 | 1,572,925 | 1,554,083 |
| | | | | | |
| Total core deposits | $ 15,436,850 | $ 15,272,247 | $ 14,413,727 | $ 10,225,149 | $ 9,849,060 |
| | | | | | |
| Legacy loans(3) | $ 9,876,005 | $ 9,425,194 | $ 8,859,695 | $ 8,210,106 | $ 7,833,695 |
| Acquired loans(4) | 6,801,689 | 7,195,250 | 7,576,334 | 2,616,387 | 2,772,158 |
| Credit related discount on acquired loans(5) | (205,111) | (255,078) | (266,804) | (115,250) | (122,439) |
| Total Loans | $ 16,472,583 | $ 16,365,366 | $ 16,169,225 | $ 10,711,243 | $ 10,483,414 |
| | | | | | |
| (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) Legacy loans represent total loans excluding acquired loans. | | | | |
| (4) Represents the carrying value of acquired loans plus the principal not expected to be collected. | | | |
| (5) Represent principal on acquired loans not expected to be collected. | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| First Niagara Financial Group, Inc. | | | | | | | | | | | | | | | |
| Average Balance Sheet and Related Tax Equivalent Yields & Rates | | | | | | | | | | | | |
| (in millions) | | | | | | | | | | | | | | | |
| | For the three months ended | For year ending |
| | December 31, 2011 | September 30, 2011 | December 31, 2010 | December 31, 2011 | December 31, 2010 |
| | Average Balances
| Interest(1) | Yields and Rates(1) | Average Balances
| Interest(1) | Yields and Rates(1) | Average Balances
| Interest(1) | Yields and Rates(1) | Average Balances
| Interest(1) | Yields and Rates(1) | Average Balances
| Interest(1) | Yields and Rates(1) |
| | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | |
Loans and
leases(2) | | | | | | | | | | | | | | | |
| Commercial: | | | | | | | | | | | | | | | |
| Real estate | $ 6,199 | $ 82 | 5.19% | $ 6,143 | $ 82 | 5.23% | $ 4,301 | $ 61 | 5.69% | $ 5,651 | $ 305 | 5.33% | $ 3,960 | $ 228 | 5.75% |
| Business | 3,663 | 40 | 4.24 | 3,424 | 35 | 3.95 | 2,448 | 30 | 4.86 | 3,209 | 138 | 4.23 | 2,115 | 103 | 4.88 |
| Total commercial loans | 9,862 | 122 | 4.84 | 9,567 | 117 | 4.78 | 6,749 | 91 | 5.39 | 8,860 | 443 | 4.93 | 6,075 | 331 | 5.45 |
| Residential real estate | 4,085 | 45 | 4.41 | 4,227 | 47 | 4.49 | 1,762 | 23 | 4.93 | 3,475 | 158 | 4.54 | 1,791 | 92 | 5.09 |
| Home equity | 2,166 | 24 | 4.48 | 2,167 | 25 | 4.55 | 1,503 | 17 | 4.56 | 1,973 | 90 | 4.54 | 1,263 | 59 | 4.66 |
| Other consumer | 279 | 5 | 7.12 | 277 | 5 | 6.81 | 269 | 5 | 7.27 | 274 | 19 | 6.98 | 247 | 18 | 7.40 |
| Total loans and leases | 16,392 | 196 | 4.76 | 16,238 | 194 | 4.73 | 10,283 | 136 | 5.24 | 14,582 | 710 | 4.87 | 9,376 | 500 | 5.32 |
| Mortgage-backed securities | 9,691 | 81 | 3.34 | 9,346 | 79 | 3.41 | 7,307 | 63 | 3.39 | 8,817 | 310 | 3.51 | 6,359 | 222 | 3.48 |
| Other investment securities | 1,574 | 16 | 4.17 | 1,594 | 18 | 4.44 | 907 | 8 | 3.91 | 1,400 | 57 | 4.12 | 826 | 30 | 3.68 |
| Total securities, at cost | 11,265 | 97 | 3.45 | 10,940 | 97 | 3.56 | 8,214 | 71 | 3.45 | 10,217 | 367 | 3.60 | 7,185 | 252 | 3.51 |
| Money market and other investments | 651 | 4 | 2.27 | 411 | 3 | 2.34 | 204 | 2 | 4.73 | 412 | 11 | 2.60 | 181 | 5 | 2.99 |
| Total interest-earning assets | 28,308 | $ 297 | 4.17% | 27,589 | $ 294 | 4.22% | 18,701 | $ 209 | 4.45% | 25,211 | $ 1,088 | 4.31% | 16,742 | $ 757 | 4.52% |
| Goodwill and other intangibles | 1,810 | | | 1,828 | | | 1,108 | | | 1,625 | | | 1,064 | | |
| Other noninterest-earning assets | 1,578 | | | 1,566 | | | 1,200 | | | 1,424 | | | 1,056 | | |
| | | | | | | | | | | | | | | | |
| Total assets | $ 31,696 | | | $ 30,983 | | | $ 21,009 | | | $ 28,260 | | | $ 18,862 | | |
| | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | |
| Savings accounts | $ 2,622 | $ 1 | 0.12% | $ 2,699 | $ 2 | 0.25% | $ 1,233 | $ 1 | 0.11% | $ 2,287 | $ 5 | 0.20% | $ 1,164 | $ 2 | 0.14% |
| Interest-bearing checking | 2,101 | 1 | 0.12 | 2,025 | 1 | 0.13 | 1,711 | 1 | 0.16 | 1,958 | 2 | 0.12 | 1,541 | 3 | 0.19 |
| Money market deposits | 7,414 | 10 | 0.52 | 7,148 | 11 | 0.65 | 4,994 | 6 | 0.48 | 6,504 | 36 | 0.56 | 4,578 | 28 | 0.60 |
| Certificates of deposit | 4,162 | 10 | 0.99 | 4,444 | 11 | 0.96 | 3,442 | 9 | 1.12 | 4,057 | 40 | 0.98 | 3,526 | 38 | 1.10 |
Total interest bearing
deposits | 16,299 | 22 | 0.52% | 16,316 | 25 | 0.60% | 11,380 | 17 | 0.59% | 14,806 | 83 | 0.56% | 10,809 | 71 | 0.66% |
| Borrowings | | | | | | | | | | | | | | | |
| Short-term borrowings | 1,899 | 2 | 0.49% | 1,303 | 1 | 0.45% | 1,726 | 10 | 2.25% | 1,638 | 6 | 0.40% | 1,453 | 31 | 2.13% |
| Long-term borrowings | 5,797 | 26 | 1.75 | 6,048 | 26 | 1.67 | 2,905 | 11 | 1.53 | 5,124 | 95 | 1.84 | 1,977 | 46 | 2.31 |
| Total borrowings | 7,696 | 28 | 1.44 | 7,351 | 27 | 1.45 | 4,631 | 21 | 1.78 | 6,762 | 101 | 1.49 | 3,430 | 77 | 2.23 |
| Total interest-bearing liabilities | 23,995 | $ 49 | 0.82% | 23,667 | $ 52 | 0.87% | 16,011 | $ 38 | 0.93% | 21,568 | $ 184 | 0.85% | 14,239 | $ 148 | 1.04% |
| Noninterest-bearing deposits | 3,077 | | | 2,857 | | | 1,874 | | | 2,595 | | | 1,668 | | |
| Other noninterest-bearing liabilities | 435 | | | 431 | | | 306 | | | 384 | | | 272 | | |
| Total liabilities | 27,507 | | | 26,955 | | | 18,191 | | | 24,547 | | | 16,179 | | |
| Total stockholders' equity | 4,189 | | | 4,028 | | | 2,818 | | | 3,713 | | | 2,683 | | |
| Total liabilities and stockholders' equity | $ 31,696 | | | $ 30,983 | | | $ 21,009 | | | $ 28,260 | | | $ 18,862 | | |
| | | | | | | | | | | | | | | | |
| Net interest income (FTE) | | $ 248 | | | $ 242 | | | $ 171 | | | $ 904 | | | $ 609 | |
| Taxable Equivalent Adjustment | | 5 | | | 7 | | | 3 | | | 23 | | | 11 | |
| | | | | | | | | | | | | | | | |
| Total core deposits | $ 15,214 | $ 12 | 0.29% | $ 14,729 | $ 14 | 0.38% | $ 9,812 | $ 8 | 0.29% | $ 13,344 | $ 43 | 0.33% | $ 8,951 | $ 33 | 0.36% |
| Total deposits | 19,376 | 22 | 0.44% | 19,173 | 25 | 0.51% | 13,254 | 17 | 0.50% | 17,401 | 83 | 0.48% | 12,477 | 71 | 0.57% |
| | | | | | | | | | | | | | | | |
| Tax equivalent net interest rate spread | | | 3.35% | | | 3.35% | | | 3.52% | | | 3.46% | | | 3.48% |
| Tax equivalent net interest rate margin | | | 3.48% | | | 3.48% | | | 3.65% | | | 3.58% | | | 3.64% |
| | | | | | | | | | | | | | | | |
| (1) Calculated based upon a 35% effective tax rate | | | | | | | | | | | | | | |
| (2) Includes nonaccrual loans. | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| First Niagara Financial Group, Inc. | | | | | | | |
| Allowance for Loans and Lease Losses & Asset Quality | | | | | |
| (in thousands) | | | | | | | |
| | 2011 | 2010 | For year ending |
| | Fourth | Third | Second | First | Fourth | December 31, | December 31, |
| | Quarter | Quarter | Quarter | Quarter | Quarter | 2011 | 2010 |
| | | | | | | | |
| Beginning balance | $ 112,749 | $ 107,028 | $ 100,126 | $ 95,354 | $ 94,532 | $ 95,354 | $ 88,303 |
| Net loan (charge-offs) recoveries: | | | | | | |
| Commercial real estate | $ 212 | $ (5,580) | $ (2,787) | $ (2,006) | $ (4,765) | $ (10,161) | $ (20,967) |
| Commercial business | (4,665) | (2,123) | (3,439) | (4,391) | (6,082) | (14,618) | (17,061) |
| Residential real estate | (318) | 171 | (177) | (662) | (389) | (986) | (664) |
| Home equity | (268) | (223) | (829) | (781) | (809) | (2,101) | (1,525) |
| Other consumer | (796) | (370) | (305) | (288) | (634) | (1,759) | (1,363) |
| Total net loan charge-offs | $ (5,835) | $ (8,125) | $ (7,537) | $ (8,128) | $ (12,679) | $ (29,625) | $ (41,580) |
| Provision for loan losses | 13,186 | 13,846 | 14,439 | 12,900 | 13,500 | 54,371 | 48,631 |
| Ending balance | $ 120,100 | $ 112,749 | $ 107,028 | $ 100,126 | $ 95,354 | $ 120,100 | $ 95,354 |
| | | | | | | | |
| Supplemental information | | | | | | | |
| Allowance to loans | 0.73% | 0.69% | 0.66% | 0.93% | 0.91% | 0.73% | 0.91% |
| Allowance for legacy loans to legacy loans(1) | 1.20 | 1.20 | 1.21 | 1.22 | 1.22 | 1.20 | 1.22 |
| Provision to average loans (annualized) | 0.32 | 0.34 | 0.38 | 0.49 | 0.53 | 0.37 | 0.52 |
| Provision for legacy loans to average legacy loans(1) (annualized) | 0.45 | 0.60 | 0.64 | 0.65 | 0.71 | 0.58 | 0.68 |
| | | | | | | | |
| Net charge-offs to average loans (annualized) | | | | | | |
| Commercial real estate | -0.01% | 0.36% | 0.19% | 0.18% | 0.44% | 0.18% | 0.53% |
| Commercial business | 0.51% | 0.25% | 0.44% | 0.67% | 0.99% | 0.46% | 0.81% |
| Total commercial loans | 0.18% | 0.32% | 0.28% | 0.36% | 0.64% | 0.28% | 0.63% |
| Residential real estate | 0.03% | -0.02% | 0.02% | 0.15% | 0.09% | 0.03% | 0.04% |
| Home equity | 0.05% | 0.04% | 0.16% | 0.21% | 0.22% | 0.11% | 0.12% |
| Other consumer | 1.14% | 0.53% | 0.45% | 0.42% | 0.94% | 0.64% | 0.55% |
| Total consumer loans | 0.08% | 0.03% | 0.09% | 0.20% | 0.21% | 0.08% | 0.11% |
| Total loans | 0.14% | 0.20% | 0.20% | 0.31% | 0.49% | 0.20% | 0.44% |
| | | | | | | | |
| Net charge-offs of legacy loans to average legacy loans (annualized)(1) | | | | |
| Commercial real estate | -0.05% | 0.59% | 0.26% | 0.23% | 0.60% | 0.26% | 0.69% |
| Commercial business | 0.67% | 0.34% | 0.54% | 0.84% | 1.31% | 0.59% | 1.09% |
| Total commercial loans | 0.25% | 0.49% | 0.37% | 0.46% | 0.86% | 0.39% | 0.83% |
| Residential real estate | 0.08% | -0.04% | 0.05% | 0.18% | 0.10% | 0.06% | 0.04% |
| Home equity | 0.10% | 0.08% | 0.34% | 0.33% | 0.37% | 0.21% | 0.19% |
| Other consumer | 1.51% | 0.93% | 0.82% | 0.76% | 1.78% | 1.02% | 0.99% |
| Total consumer loans | 0.17% | 0.06% | 0.20% | 0.27% | 0.29% | 0.17% | 0.14% |
| Total loans | 0.22% | 0.35% | 0.32% | 0.40% | 0.67% | 0.32% | 0.58% |
| | | | | | | | |
| Nonperforming loans: | | | | | | | |
| Commercial real estate | $ 43,119 | $ 41,295 | $ 42,881 | $ 37,346 | $ 44,065 | $ 43,119 | $ 44,065 |
| Commercial business | 20,173 | 18,839 | 20,021 | 24,823 | 25,819 | 20,173 | 25,819 |
| Residential real estate | 18,668 | 15,555 | 14,484 | 13,433 | 14,461 | 18,668 | 14,461 |
| Home equity | 6,790 | 5,428 | 4,748 | 4,467 | 4,605 | 6,790 | 4,605 |
| Other consumer | 1,048 | 769 | 379 | 299 | 373 | 1,048 | 373 |
| Total nonperforming loans | 89,798 | 81,886 | 82,513 | 80,368 | 89,323 | 89,798 | 89,323 |
| Real estate owned | 4,482 | 9,392 | 12,315 | 6,955 | 8,647 | 4,482 | 8,647 |
| Total nonperforming assets | $ 94,280 | $ 91,278 | $ 94,828 | $ 87,323 | $ 97,970 | $ 94,280 | $ 97,970 |
| | | | | | | | |
| Accruing troubled debt restructurings (TDR) | $ 43,888 | $ 45,282 | $ 18,794 | $ 27,027 | $ 21,607 | $ 43,888 | $ 21,607 |
| Acquired loans 90 days past due still accruing(2) | 143,237 | 143,270 | 134,869 | 62,942 | 58,097 | 143,237 | 58,097 |
| Total classified loans(3) | 748,375 | 692,961 | 700,813 | 564,037 | 481,074 | 748,375 | 481,074 |
| Total criticized loans(4) | $ 1,144,222 | $ 1,268,879 | $ 1,253,937 | $ 972,148 | $ 942,941 | $ 1,144,222 | $ 942,941 |
| | | | | | | | |
| Total nonperforming loans to loans | 0.55% | 0.50% | 0.51% | 0.75% | 0.85% | 0.55% | 0.85% |
| Total nonperforming loans to legacy loans(1) | 0.91% | 0.87% | 0.93% | 0.98% | 1.14% | 0.91% | 1.14% |
| Total nonperforming assets to loans and real estate owned | 0.57% | 0.56% | 0.58% | 0.81% | 0.93% | 0.57% | 0.93% |
| Total nonperforming assets to assets | 0.29% | 0.29% | 0.31% | 0.41% | 0.46% | 0.29% | 0.46% |
| Allowance to nonperforming loans | 133.7% | 137.7% | 129.7% | 124.6% | 106.8% | 133.7% | 106.8% |
| Texas ratio(5) | 8.55% | 10.19% | 10.12% | 8.51% | 8.94% | 8.55% | 8.94% |
| | | | | | | | |
| (1) Legacy loans represent total loans excluding acquired loans. | | | | | | |
| (2) 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. | |
| (3) Includes consumer loans, which are considered classified when they are 90 days or more past due. Classified loans include substandard, doubtful, and loss, which are consistent with regulatory definitions, and as described in Item 1, "Business", under the heading "Classification of Assets" in our Annual Report on 10-K for the year ended December 31, 2010. | |
| (4) Beginning in the third quarter of 2011, criticized loans include consumer loans when they are 90 days or more past due. Prior to the third quarter of 2011, criticized loans include consumer loans when they are 60 days or more past due. The impact of the change at September 30, 2011 was a reduction of criticized loans by $24 million. Criticized loans include special mention, substandard, doubtful, and loss. | |
| (5) Represents ratio computed using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | |
| | | | | | | |
| | | | | | | |
| First Niagara Financial Group, Inc. | | | | | | |
| Key Statistics | | | | | | |
| (Share counts in thousands) | | | | | | |
| | | | | | | |
| | 2011 | 2010 |
| |
December 31, | |
September 30, |
June 30, |
March 31, | December 31, |
| | | | | | | |
| First Niagara Financial Group, Inc capital ratios: | | | | |
| Tier 1 risk based capital | 15.60% | (1) | 11.90% | 12.05% | 13.32% | 13.54% |
| Tier 1 common capital(2) | 13.23% | (1) | 11.29% | 11.41% | 12.56% | 12.76% |
| Total risk based capital | 17.84% | (1) | 12.56% | 12.69% | 14.13% | 14.35% |
| Leverage | 9.97% | (1) | 7.42% | 7.81% | 8.21% | 8.14% |
| Equity to assets | 14.62% | (1) | 12.82% | 12.93% | 12.94% | 13.11% |
| Tangible common equity to tangible assets(2) | 8.57% | (1) | 7.44% | 7.44% | 8.20% | 8.27% |
| | | | | | | |
| First Niagara Bank, N.A capital ratios: | | | | | |
| Tier 1 risk based capital | 14.66% | (1) | 11.51% | 11.72% | 11.23% | 11.06% |
| Total risk based capital | 16.47% | (1) | 12.17% | 12.37% | 12.04% | 11.86% |
| Leverage | 9.38% | (1) | 7.17% | 7.58% | 6.92% | 6.64% |
| | | | | | | |
| Number of branches | 333 | | 332 | 346 | 257 | 257 |
| Full time equivalent employees | 4,827 | | 4,712 | 4,751 | 3,825 | 3,791 |
| | | | | | | |
| Share information and per share metrics: | | | | | |
| Common shares outstanding | 351,834 | | 294,898 | 295,245 | 209,432 | 209,112 |
| Treasury shares | 14,168 | | 14,192 | 13,845 | 5,674 | 5,994 |
| Book value per share(3) | $ 12.79 | | $ 13.72 | $ 13.68 | $ 13.45 | $ 13.42 |
| Tangible book value per share(2)(3) | 7.62 | | 7.50 | 7.41 | 8.08 | 8.01 |
| Price/Book | 67.47% | | 66.69% | 96.49% | 100.97% | 104.17% |
| Price/Tangible book(2) | 113.25% | | 122.00% | 178.14% | 168.07% | 174.53% |
| Cash dividends | $ 0.16 | (4) | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.15 |
| Dividend payout ratio | 84.21% | | 84.21% | 320.00% | 72.73% | 68.18% |
| Dividend yield (annualized) | 7.36% | | 6.94% | 4.86% | 4.78% | 4.26% |
| | | | | | | |
| (1) Ratios reflect the impact of our capital raise completed in December 2011, the proceeds of which will be used to consummate the pending acquisition of branches from HSBC Bank-USA, National Association in 2012. | |
| (2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | |
| (3) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | |
| (4) Represents dividend paid in the fourth quarter to common stockholders. No preferred dividend was paid to preferred stockholders as it is noncumulative and will not receive a dividend until declared. As noted in our press release issued in December 2011, the dividend on common stock was reduced to$0.08 beginning in the first quarter of 2012. | |
| | | | | | | |
| | | | | | | |
| First Niagara Financial Group, Inc. | | | | | | |
| Appendix A - Non-GAAP Reconciliation | | | | | | |
| (in thousands, except per share amounts) | | | | | | |
| | | | | | | | |
| | 2011 | 2010 | For year ending |
| | Fourth | Third | Second | First | Fourth | December 31, | December 31, |
| | Quarter | Quarter | Quarter | Quarter | Quarter | 2011 | 2010 |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | | | | | | | |
| Total noninterest expense on operating basis (Non-GAAP) | $ 182,526 | $ 178,537 | $ 166,657 | $ 137,918 | $ 133,429 | $ 665,638 | $ 472,684 |
| Salaries and benefits | -- | -- | -- | -- | -- | -- | 754 |
| Merger and acquisition integration expenses | 6,149 | 9,008 | 76,828 | 6,176 | 5,905 | 98,161 | 49,890 |
| Restructuring charges | 13,496 | 16,326 | 11,656 | 1,056 | -- | 42,534 | -- |
| Total reported noninterest expense (GAAP) | $ 202,171 | $ 203,871 | $ 255,141 | $ 145,150 | $ 139,334 | $ 806,333 | $ 523,328 |
| | | | | | | | |
| Reconciliation of net operating income to net income(1): | | | | | |
| Net operating income (Non-GAAP) | $ 72,057 | $ 73,645 | $ 71,242 | $ 49,774 | $ 49,664 | $ 266,718 | $ 174,118 |
| Nonoperating expenses, net of tax: | | | | | | |
| Salaries and benefits | -- | -- | -- | -- | -- | -- | 513 |
| Merger and acquisition integration expenses | 4,256 | 5,925 | 50,092 | 4,147 | 3,809 | 64,420 | 33,252 |
| Restructuring charges | 9,340 | 10,739 | 7,600 | 709 | -- | 28,388 | -- |
| Total nonoperating expenses, net of tax | 13,596 | 16,664 | 57,692 | 4,856 | 3,809 | 92,808 | 33,765 |
| Net income (GAAP) | $ 58,461 | $ 56,981 | $ 13,550 | $ 44,918 | $ 45,855 | $ 173,910 | $ 140,353 |
| | | | | | | | |
| Computation of pre-tax,pre-provision income: | | | | | | | |
| Net interest income | $ 242,513 | $ 235,429 | $ 230,437 | $ 172,868 | $ 167,548 | $ 881,247 | $ 597,754 |
| Noninterest income | 63,685 | 68,655 | 60,895 | 52,074 | 54,112 | 245,309 | 186,615 |
| Noninterest expense | ��(202,171) | (203,871) | (255,141) | (145,150) | (139,334) | (806,333) | (523,328) |
| Pre-tax, pre-provision income (GAAP) | 104,027 | 100,213 | 36,191 | 79,792 | 82,326 | 320,223 | 261,041 |
| Add back: non-operating noninterest expenses (1) | 19,645 | 25,334 | 88,484 | 7,232 | 5,905 | 140,695 | 50,644 |
| Pre-tax, pre-provision income (Non-GAAP) | $ 123,672 | $ 125,547 | $ 124,675 | $ 87,024 | $ 88,231 | $ 460,918 | $ 311,685 |
| | | | | | | | |
| Financial ratios computed on an operating basis(1): | | | | | |
| Earnings per basic share | $ 0.24 | $ 0.25 | $ 0.25 | $ 0.24 | $ 0.24 | $ 0.98 | $ 0.87 |
| Earnings per diluted share | 0.24 | 0.25 | 0.25 | 0.24 | 0.24 | 0.98 | 0.87 |
| Weighted average shares outstanding - basic(2) | 304,065 | 292,211 | 281,496 | 206,124 | 205,901 | 271,301 | 200,274 |
| Weighted average shares outstanding - diluted(2) | 304,341 | 292,503 | 282,420 | 206,644 | 206,229 | 271,612 | 200,596 |
| Pre-tax, pre-provision income | 123,672 | 125,547 | 124,675 | 87,024 | 88,231 | 460,918 | 311,685 |
| Pre-tax, pre-provision income per diluted share | 0.41 | 0.43 | 0.44 | 0.42 | 0.43 | 1.70 | 1.55 |
| Pre-tax, pre-provision return on average assets | 1.55% | 1.61% | 1.72% | 1.67% | 1.67% | 1.63% | 1.65% |
| Net interest margin(3) | 3.48% | 3.48% | 3.65% | 3.80% | 3.65% | 3.58% | 3.64% |
| Interest yield on average loans(3) | 4.76% | 4.73% | 4.93% | 5.12% | 5.24% | 4.87% | 5.32% |
| Rate paid on interest-bearing liabilities(3) | 0.82% | 0.87% | 0.84% | 0.90% | 0.93% | 0.85% | 1.04% |
| Efficiency ratio | 59.61% | 58.71% | 57.21% | 61.30% | 60.20% | 59.09% | 60.26% |
| Effective tax rate | 34.7% | 33.7% | 33.6% | 32.9% | 33.5% | 33.8% | 33.8% |
| Noninterest income as a percentage of net revenue(4) | 20.80% | 22.58% | 20.90% | 23.10% | 24.41% | 21.78% | 23.79% |
| Return on average assets | 0.90% | 0.94% | 0.98% | 0.96% | 0.94% | 0.94% | 0.92% |
| Return on average equity | 6.82% | 7.25% | 7.44% | 7.27% | 6.99% | 7.18% | 6.49% |
| Return on average tangible equity | 12.02% | 13.28% | 13.61% | 12.12% | 11.52% | 12.77% | 10.75% |
| Return on average common equity | 6.93% | 7.25% | 7.44% | 7.27% | 6.99% | 7.22% | 6.49% |
| Return on average tangible common equity | 12.36% | 13.28% | 13.61% | 12.12% | 11.52% | 12.88% | 10.75% |
| | | | | | | | |
| (1) Noninterest expense on an operating basis and net operating income are non-GAAP measures that we believe provide meaningful comparisons of our underlying operational performance and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, we believe exclusion of these nonoperating items enables management to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations. |
| (2) Share count excludes unallocated ESOP shares and unvested restricted stock shares. |
| (3) Yields and rates calculated on a tax equivalent basis. |
| (4) Net revenue is comprised of net interest income and noninterest income. |
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| | | | | | | | |
| First Niagara Financial Group, Inc. | | | | | | | |
| Appendix A - Non-GAAP Reconciliation (Cont.) | | | | | | | |
| (in thousands, except per share amounts) | | | | | | | |
| | | | | | | | |
| | 2011 | 2010 | For year ending |
| |
Fourth |
Third |
Second |
First |
Fourth | December 31, | December 31, |
| | Quarter | Quarter | Quarter | Quarter | Quarter | 2011 | 2010 |
| Computation of Ending Tangible Assets: | | | | | | | |
| Total assets | $ 32,810,615 | $ 31,209,507 | $ 30,889,646 | $ 21,439,845 | $ 21,083,853 | $ 32,810,615 | $ 21,083,853 |
| Less: Goodwill and other intangibles | (1,803,240) | (1,812,628) | (1,829,712) | (1,108,811) | (1,114,144) | (1,803,240) | (1,114,144) |
| Tangible assets | $ 31,007,375 | $ 29,396,879 | $ 29,059,934 | $ 20,331,034 | $ 19,969,709 | $ 31,007,375 | $ 19,969,709 |
| | | | | | | | |
| Computation of Ending Tangible Equity: | | | | | | | |
| Total stockholders' equity | $ 4,798,178 | $ 4,000,675 | $ 3,992,835 | $ 2,775,032 | $ 2,765,070 | $ 4,798,178 | $ 2,765,070 |
| Less: Goodwill and other intangibles | (1,803,240) | (1,812,628) | (1,829,712) | (1,108,811) | (1,114,144) | (1,803,240) | (1,114,144) |
| Tangible equity | $ 2,994,938 | $ 2,188,047 | $ 2,163,123 | $ 1,666,221 | $ 1,650,926 | $ 2,994,938 | $ 1,650,926 |
| | | | | | | | |
| Computation of Ending Tangible Common Equity: | | | | | | | |
| Total stockholders' equity | $ 4,798,178 | $ 4,000,675 | $ 3,992,835 | $ 2,775,032 | $ 2,765,070 | $ 4,798,178 | $ 2,765,070 |
| Less: Goodwill and other intangibles | (1,803,240) | (1,812,628) | (1,829,712) | (1,108,811) | (1,114,144) | (1,803,240) | (1,114,144) |
| Less: Preferred stockholders' equity | (338,002) | -- | -- | -- | -- | (338,002) | -- |
| Tangible common equity | $ 2,656,936 | $ 2,188,047 | $ 2,163,123 | $ 1,666,221 | $ 1,650,926 | $ 2,656,936 | $ 1,650,926 |
| | | | | | | | |
| Computation of Average Tangible Equity: | | | | | | | |
| Total stockholders' equity | $ 4,188,800 | $ 4,027,572 | $ 3,839,101 | $ 2,777,266 | $ 2,818,265 | $ 3,712,927 | $ 2,683,379 |
| Less: Goodwill and other intangibles | (1,809,690) | (1,827,820) | (1,738,948) | (1,112,329) | (1,107,958) | (1,624,671) | (1,063,794) |
| Tangible equity | $ 2,379,110 | $ 2,199,752 | $ 2,100,153 | $ 1,664,937 | $ 1,710,307 | $ 2,088,256 | $ 1,619,585 |
| | | | | | | | |
| Computation of Average Tangible Common Equity: | | | | | | | |
| Total stockholders' equity | $ 4,188,800 | $ 4,027,572 | $ 3,839,101 | $ 2,777,266 | $ 2,818,265 | $ 3,712,927 | $ 2,683,379 |
| Less: Goodwill and other intangibles | (1,809,690) | (1,827,820) | (1,738,948) | (1,112,329) | (1,107,958) | (1,624,671) | (1,063,794) |
| Less: Preferred stockholders' equity | (66,226) | -- | -- | -- | -- | (16,693) | -- |
| Tangible common equity | $ 2,312,884 | $ 2,199,752 | $ 2,100,153 | $ 1,664,937 | $ 1,710,307 | $ 2,071,563 | $ 1,619,585 |
| | | | | | | | |
| Computation of Texas Ratio: | | | | | | | |
| Nonperforming Assets | $ 94,280 | $ 91,278 | $ 94,828 | $ 87,323 | $ 97,970 | $ 94,280 | $ 97,970 |
| Acquired loans 90 days past due still accruing(1) | 143,237 | 143,270 | 134,869 | 62,942 | 58,097 | 143,237 | 58,097 |
| Sum of nonperforming assets and acquired loans 90 days past due still accruing | $ 237,517 | $ 234,548 | $ 229,697 | $ 150,265 | $ 156,067 | $ 237,517 | $ 156,067 |
| | | | | | | | |
| Tangible common equity | $ 2,656,936 | $ 2,188,047 | $ 2,163,123 | $ 1,666,221 | $ 1,650,926 | $ 2,656,936 | $ 1,650,926 |
| Allowance for loan loss | 120,100 | 112,749 | 107,028 | 100,126 | 95,354 | 120,100 | 95,354 |
| Sum of tangible common equity and allowance for loan loss | $ 2,777,036 | $ 2,300,796 | $ 2,270,151 | $ 1,766,347 | $ 1,746,280 | $ 2,777,036 | $ 1,746,280 |
| | | | | | | | |
| Sum of nonperforming assets and acquired loans 90 days past due still accruing/Sum of tangible common equity and allowance for loan loss | 8.55% | 10.19% | 10.12% | 8.51% | 8.94% | 8.55% | 8.94% |
| | | | | | | | |
| Computation of Tier 1 Common Capital: | | | | | | | |
| Tier 1 capital | $ 2,962,031 | $ 2,151,953 | $ 2,118,085 | $ 1,632,307 | $ 1,601,892 | $ 2,962,031 | $ 1,601,892 |
| Less: Qualifying restricted core capital elements | (111,284) | (111,112) | (110,920) | (92,944) | (92,899) | (111,284) | (92,899) |
| Less: Perpetual non-cumulative preferred stock | (338,002) | -- | -- | -- | -- | (338,002) | -- |
| Tier 1 common capital (Non-GAAP) | $ 2,512,745 | $ 2,040,841 | $ 2,007,165 | $ 1,539,363 | $ 1,508,993 | $ 2,512,745 | $ 1,508,993 |
| | | | | | | | |
| (1) 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. |
CONTACT: Investors:
Ram Shankar
Senior Vice President, Investor Relations
(716) 270-8623
ram.shankar@fnfg.com
News Media:
David Lanzillo
Senior Vice President, Corporate Communications
(716) 819-5780
david.lanzillo@fnfg.com