[LOGO]
First Niagara
Financial Group, Inc.
FIRST NIAGARA FINANCIAL GROUP, INC. REPORTS 2nd QUARTER DILUTED EPS OF $0.13 PER
SHARE
Lockport, N.Y. - July 14, 2003 - First Niagara Financial Group, Inc. (NASDAQ:
FNFG), today announced that net income for the quarter ended June 30, 2003
increased 30% to $9.1 million, or $0.13 per diluted share from $7.0 million, or
$0.11 per diluted share for the same period of 2002. This increase is primarily
the result of internal growth and the Company's simultaneous acquisition of
Finger Lakes Bancorp, Inc. and second step stock offering on January 17, 2003.
On a linked quarter basis, net income for the current quarter represented a $1.5
million, or 20% increase over the first quarter of 2003.
"I am pleased with our results for the second quarter given the challenging
environment we are currently in," stated Chairman, President and CEO, William E.
Swan. "During the second quarter our net interest margin stabilized as a result
of asset/liability management initiatives taken by the Company. Additionally,
commercial loan growth, credit quality and expense control remained strong.
During the second quarter we continued to strategically deploy the capital
raised in our second step stock offering by opening our 46th banking center
located in the Syracuse/Onondaga market and agreeing, effective on July 1, 2003,
to acquire two Monroe County insurance agencies. Also, we announced our
intentions to open two new banking centers later this year which will expand our
presence in Monroe and Erie counties."
Net interest income was $26.6 million for the second quarter of 2003 compared to
$25.4 million for the first quarter of 2003. This 5% increase was mainly the
result of a $23.0 million increase in net earning assets from March 31, 2003 to
June 30, 2003 due to a $53.3 million increase in total loans during the same
period. Total loans outstanding at June 30, 2003 grew to $2.28 billion as
compared to $2.23 billion at March 31, 2003. This was primarily attributable to
the continued expansion of the Company's commercial lending operations, which
resulted in commercial real-estate and business loans increasing $52.4 million,
or 6% from the first quarter of 2003 to the second quarter of 2003. Accordingly,
the Company increased its provision for credit losses to $2.2 million for the
quarter ended June 30, 2003 from $2.0 million for the first quarter of 2003.
However, asset quality remained strong as non-performing loans were 0.44% of
total loans at June 30, 2003 compared to 0.45% at March 31, 2003. Total deposits
were $2.36 billion at June 30, 2003 compared to $2.40 billion at March 31, 2003.
This decrease primarily resulted from a $72.1 million decline in time deposits
from the first quarter of 2003 to the second quarter of 2003 as a result of the
Company lowering interest rates on such deposits to reflect the pricing in its
markets.
The increase in net interest income can also be attributed to a 3 basis point
increase in the Company's net interest rate spread to 2.81% for the quarter
ended June 30, 2003 from 2.78% for the quarter ended March 31, 2003. This
increase was primarily due to the low interest rate environment, which caused
the Company's interest bearing liabilities to reprice faster than its interest
earning assets and as lower yielding federal funds and other short-term
investments were invested in higher yielding investment securities and
commercial loans. These improvements to the net interest rate spread were almost
entirely offset by the continued high level of principal prepayments on both
residential mortgages and mortgage-backed securities that the Company is
experiencing. This high level of principal prepayments on mortgage-backed
securities further reduced the effective yield earned as the Company amortized
$3.4 million of premiums paid at purchase for those securities in the second
quarter of 2003 compared to $2.3 million for the first quarter of 2003. As a
result of the increases in net earning assets and net interest rate spread, the
net interest margin improved to 3.25% for the quarter ended June 30, 2003 from
3.21% for the quarter ended March 31, 2003.
For the second quarter of 2003, the Company had $10.8 million of noninterest
income, an increase of $757 thousand over the first quarter of 2003. This
increase was largely the result of bank service charges and fee income which
grew $446 thousand due to higher transaction volume related to the Company's
overdraft protection service and debit cards during the quarter. Additionally,
insurance services and fee income grew $322 thousand from the first quarter of
2003 to the second quarter of 2003 due to the seasonality of this business and
the timing of premium renewals. These increases were partially offset by a $211
thousand decrease in other noninterest income from the first quarter of 2003 to
the second quarter of 2003 as a result of a writedown in CRA related small
business investment corporation (SBIC) investments.
Noninterest expense for the three months ended June 30, 2003 decreased $975
thousand to $21.1 million from $22.0 million for the three months ended March
31, 2003. More specifically, salaries and benefits expense decreased by $547
thousand which is partially attributable to lower expense from stock based and
incentive compensation due to payments made in the first quarter of 2003, which
did not reoccur in the second quarter. Additionally, this decrease in salaries
and benefits expense can be attributed to a reduction in staffing levels and a
$100 thousand gain realized in the second quarter of 2003 related to the
termination of the Company's self insurance health and welfare plan. During the
second quarter of 2003, marketing and advertising expense decreased $282
thousand in comparison to the first quarter of 2003 as a result of initial
startup costs incurred in connection with the "First Niagara" branding campaign
in the first quarter of 2003. Additionally, occupancy and equipment decreased
$182 thousand, of which approximately $166 thousand can be attributed to the
seasonality of these expenses. As a result of this reduced level of expenses, as
well as the increases in revenue described above, the Company's efficiency ratio
improved to 56.3% for the second quarter of 2003 from 63.4% for the first
quarter of 2003.
Outlook - "Based upon the results of our first two quarters and our assumption
that mortgage-backed securities premium amortization will slow down in the third
quarter as interest rates remain flat, we are comfortable with our previously
issued earnings guidance of $0.53 to $0.57 per diluted common share for 2003,"
stated Paul J. Kolkmeyer, Executive Vice President, COO and CFO. "We expect that
our net interest rate margin will improve to the 3.30% level by the end of the
year and remain comfortable with our 20% commercial loan growth target for 2003.
We expect to see a modest pick-up in expenses for the second half of the year as
we continue to grow, which includes the opening of two more banking centers and
the completion of the previously announced Monroe County insurance agency
acquisitions. Financially, 2003 looks to be another record year for First
Niagara."
Profile - First Niagara Financial Group, Inc., through its wholly owned
subsidiary First Niagara Bank, has assets of $3.6 billion and deposits of $2.4
billion. First Niagara Bank is a full-service, community-oriented bank that
provides financial services to individuals, families and businesses through 46
banking centers, a loan production office, several financial services
subsidiaries, and 84 ATMs throughout upstate New York. First Niagara's range of
products includes personal and business checking, savings, business loan and
mortgage products, cash management services, investment alternatives, lease
financing and trust services. The Company offers an expanded product line, which
includes commercial and personal insurance and investment advisory services.
Conference Call - A conference call will be held at 10:00 a.m. (EST) on Monday
July 14 to discuss these second quarter results, as well as the Company's
strategy and future outlook. Those wishing to participate in the call may dial
1-800-967-7185, access code 702141. A replay of the call will be available until
July 21, 2003 by dialing 1-888-203-1112, access code 702141.
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.
Officer Contacts
William E. Swan.......... Chairman, President and CEO
Paul J. Kolkmeyer........ Executive Vice President, COO and CFO
Christopher J. Thome..... Reporting and Investor Relations Manager
(716) 625-7645
chris.thome@fnfg.com
Leslie G. Garrity........ Public Relations and Corporate Communications Manager
(716) 625-7528
leslie.garrity@fnfg.com
Corporate Information
First Niagara Financial Group, Inc. Transfer Agent and Registrar
6950 South Transit Road Mellon Investor Services, LLC
P.O. Box 514 P.O. Box 3315
Lockport, New York 14095-0514 South Hackensack, NJ 07606
Telephone (800) 201-6621 Telephone (800) 851-9677
www.fnfg.com www.melloninvestor.com
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data
2003
-------------------------------------------------
As of Second First
June 30, Quarter Quarter
-------------- --------------- --------------
- ----------------------------------------------------------------------------------------------------
SELECTED FINANCIAL DATA
(Amounts in thousands)
- ----------------------------------------------------------------------------------------------------
Total assets $ 3,561,646 3,561,646 3,603,432
Total interest-earning assets $ 3,250,975 3,250,975 3,293,147
Fed funds and other short-term investments $ 159,675 159,675 392,956
Securities, at amortized cost $ 806,552 806,552 666,750
Loans:
Real estate loans:
One-to four-family $ 983,984 983,984 992,949
Home equity $ 168,568 168,568 167,087
Multi-family $ 186,347 186,347 171,582
Commercial real-estate $ 402,528 402,528 377,878
Construction $ 116,141 116,141 117,324
-------------- --------------- --------------
Total real estate loans $ 1,857,568 1,857,568 1,826,820
-------------- --------------- --------------
Commercial business loans $ 221,316 221,316 208,137
Consumer loans $ 197,087 197,087 188,260
Net deferred costs and discounts $ 8,556 8,556 7,965
-------------- --------------- --------------
Total loans $ 2,284,527 2,284,527 2,231,182
Goodwill and other intangibles $ 107,803 107,803 107,048
Total interest-bearing liabilities $ 2,641,372 2,641,372 2,706,561
Deposits:
Interest-bearing deposits:
Savings accounts $ 666,003 666,003 688,597
Interest-bearing checking $ 540,274 540,274 511,941
Certificates of deposit $ 982,903 982,903 1,054,996
Mortgagors' payments held in escrow $ 16,925 16,925 9,317
Noninterest-bearing deposits $ 149,134 149,134 133,946
-------------- --------------- --------------
Total deposits $ 2,355,239 2,355,239 2,398,797
Stock subscription proceeds (1) $ N/A N/A N/A
Short-term borrowings $ 67,564 67,564 63,980
Long-term borrowings $ 367,703 367,703 377,730
Stockholders' equity $ 718,390 718,390 711,646
Tangible equity (2) $ 610,587 610,587 604,598
Fair value adjustment included in
stockholders' equity $ 3,558 3,558 3,333
Common shares outstanding 66,228 66,228 66,071
Total loans serviced for others $ 271,401 271,401 289,341
2002
-----------------------------------------------------------------
As of Fourth Third Second
December 31, Quarter Quarter Quarter
-------------- -------------- --------------- -------------
- -----------------------------------------------------------------------------------------------------------------
SELECTED FINANCIAL DATA
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------
Total assets 2,934,795 2,934,795 2,882,867 2,872,223
Total interest-earning assets 2,676,194 2,676,194 2,617,973 2,614,950
Fed funds and other short-term investments 45,167 45,167 216,543 125,177
Securities, at amortized cost 625,324 625,324 431,741 550,720
Loans:
Real estate loans:
One-to four-family 927,453 927,453 926,162 944,268
Home equity 136,986 136,986 134,641 130,642
Multi-family 170,357 170,357 153,786 145,650
Commercial real-estate 303,136 303,136 302,197 291,778
Construction 107,200 107,200 94,046 82,133
-------------- -------------- --------------- -------------
Total real estate loans 1,645,132 1,645,132 1,610,832 1,594,471
-------------- -------------- --------------- -------------
Commercial business loans 178,555 178,555 174,867 154,778
Consumer loans 169,155 169,155 172,104 178,725
Net deferred costs and discounts 2,591 2,591 2,355 2,365
-------------- -------------- --------------- -------------
Total loans 1,995,433 1,995,433 1,960,158 1,930,339
Goodwill and other intangibles 80,493 80,493 80,717 80,776
Total interest-bearing liabilities 2,468,396 2,468,396 2,425,613 2,431,133
Deposits:
Interest-bearing deposits:
Savings accounts 632,894 632,894 634,312 623,412
Interest-bearing checking 467,550 467,550 484,778 512,719
Certificates of deposit 879,246 879,246 880,130 871,759
Mortgagors' payments held in escrow 15,619 15,619 12,698 16,387
Noninterest-bearing deposits 134,160 134,160 127,614 123,997
-------------- -------------- --------------- -------------
Total deposits 2,129,469 2,129,469 2,139,532 2,148,274
Stock subscription proceeds (1) 75,952 75,952 N/A N/A
Short-term borrowings 69,312 69,312 73,426 72,633
Long-term borrowings 327,823 327,823 340,269 334,223
Stockholders' equity 283,696 283,696 279,173 272,303
Tangible equity (2) 203,203 203,203 198,456 191,527
Fair value adjustment included in
stockholders' equity 4,230 4,230 3,675 3,197
Common shares outstanding 25,005 25,005 24,988 24,925
Total loans serviced for others 242,871 242,871 258,997 255,818
2003
-------------------------------------------------
Year-to-Date Second First
June 30, Quarter Quarter
-------------- --------------- --------------
- ----------------------------------------------------------------------------------------------------
SELECTED AVERAGE BALANCES (3)
(Amounts in thousands)
- ----------------------------------------------------------------------------------------------------
Total assets $ 3,520,358 3,579,903 3,460,151
Total interest-earning assets $ 3,222,492 3,280,842 3,163,493
Fed funds and other short-term investments $ 289,257 282,842 295,743
Securities, at amortized cost $ 707,918 734,489 681,051
Loans (4) $ 2,209,251 2,250,864 2,167,176
Goodwill and other intangibles $ 104,680 107,631 101,695
Interest-bearing liabilities:
Savings accounts $ 673,988 676,024 671,930
Interest-bearing checking $ 506,663 527,440 485,655
Certificates of deposit $ 1,018,009 1,021,369 1,014,610
Mortgagors' payments held in escrow $ 14,547 16,832 12,237
Stock subscription proceeds (1) $ 17,403 - 35,000
Other borrowed funds $ 437,107 436,178 438,047
-------------- --------------- --------------
Total interest-bearing liabilities $ 2,667,717 2,677,843 2,657,479
Interest-bearing deposits $ 2,213,207 2,241,665 2,184,432
Noninterest-bearing deposits $ 130,461 132,895 128,000
-------------- --------------- --------------
Total deposits $ 2,343,668 2,374,560 2,312,432
Stockholders' equity $ 667,861 716,980 618,195
Tangible equity (2) $ 563,181 609,349 516,500
Common shares outstanding (5):
Basic 65,943 66,126 65,758
Diluted 67,500 67,722 67,268
2002
-----------------------------------------------------------------
Year-to-Date Fourth Third Second
December 31, Quarter Quarter Quarter
-------------- -------------- --------------- -------------
- -----------------------------------------------------------------------------------------------------------------
SELECTED AVERAGE BALANCES (3)
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------
Total assets 2,852,799 2,872,553 2,894,726 2,869,204
Total interest-earning assets 2,597,142 2,614,851 2,638,472 2,617,506
Fed funds and other short-term investments 137,639 144,490 208,145 121,566
Securities, at amortized cost 513,561 480,747 456,455 573,919
Loans (4) 1,931,288 1,973,358 1,954,118 1,911,144
Goodwill and other intangibles 80,866 80,639 80,784 80,932
Interest-bearing liabilities:
Savings accounts 588,611 627,502 634,107 592,461
Interest-bearing checking 507,305 470,735 501,684 519,283
Certificates of deposit 883,867 878,675 877,185 900,201
Mortgagors' payments held in escrow 17,579 15,528 22,660 16,733
Stock subscription proceeds (1) 2,355 9,342 N/A N/A
Other borrowed funds 414,064 409,182 411,520 411,557
-------------- -------------- --------------- -------------
Total interest-bearing liabilities 2,413,781 2,410,964 2,447,156 2,440,235
Interest-bearing deposits 1,997,362 1,992,440 2,035,636 2,028,678
Noninterest-bearing deposits 115,977 127,315 121,324 111,738
-------------- -------------- --------------- -------------
Total deposits 2,113,339 2,119,755 2,156,960 2,140,416
Stockholders' equity 274,533 283,087 278,073 270,796
Tangible equity (2) 193,667 202,448 197,289 189,864
Common shares outstanding (5):
Basic 64,445 64,647 64,543 64,375
Diluted 65,883 66,194 66,080 65,770
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (Cont'd)
2003
------------------------------------------------
Year-to-Date Second First
June 30, Quarter Quarter
-------------- --------------- -------------
- ---------------------------------------------------------------------------------------------------------------------
SELECTED OPERATIONS DATA
(Amounts in thousands)
- ---------------------------------------------------------------------------------------------------------------------
Interest income $ 85,525 42,602 42,923
Interest expense $ 33,511 15,976 17,535
-------------- --------------- -------------
Net interest income $ 52,014 26,626 25,388
Provision for credit losses $ 4,165 2,208 1,957
-------------- --------------- -------------
Net interest income after provision for credit losses $ 47,849 24,418 23,431
Noninterest income:
Bank service charges and fees $ 8,046 4,246 3,800
Lending and leasing income $ 1,858 959 899
Insurance services and fees $ 6,940 3,631 3,309
Bank-owned life insurance earnings $ 1,552 799 753
Annuity and mutual fund commissions $ 1,611 859 752
Investment advisory and fiduciary services $ 413 193 220
(Loss) gain from investment securities available for sale $ (18) (2) (16)
Gain on sale of banking center (6) $ - - -
Other $ 449 119 330
-------------- --------------- -------------
Total noninterest income $ 20,851 10,804 10,047
Noninterest expense:
Salaries and benefits $ 24,597 12,025 12,572
Occupancy and equipment $ 4,700 2,259 2,441
Technology and communications $ 4,697 2,337 2,360
Marketing and advertising $ 1,854 786 1,068
Amortization of other intangibles $ 608 290 318
Other $ 6,663 3,375 3,288
-------------- --------------- -------------
Total noninterest expense $ 43,119 21,072 22,047
Income from continuing operations before income taxes $ 25,581 14,150 11,431
Income taxes from continuing operations $ 9,053 5,073 3,980
-------------- --------------- -------------
Income from continuing operations $ 16,528 9,077 7,451
-------------- --------------- -------------
Income from discontinued operations, net of tax (7) $ 186 23 163
-------------- --------------- -------------
Net income $ 16,714 9,100 7,614
-------------- --------------- -------------
- ---------------------------------------------------------------------------------------------------------------------
STOCK AND RELATED PER SHARE DATA
(Amounts in thousands)
- ---------------------------------------------------------------------------------------------------------------------
Net income per share (5):
Basic $ 0.25 0.14 0.12
Diluted $ 0.25 0.13 0.11
Cash dividends (5) $ 0.10 0.05 0.05
Dividend payout ratio 40.00% 35.71% 41.67%
Dividend yield (annualized) (8) 1.45% 1.44% 1.73%
Book value (5) $ 10.85 10.85 10.77
Tangible book value (2) (5) $ 9.22 9.22 9.15
Market price (NASDAQ: FNFG) (5):
High $ 14.20 14.20 11.92
Low $ 10.11 11.40 10.11
Close $ 13.92 13.92 11.75
- ---------------------------------------------------------------------------------------------------------------------
PERFORMANCE RATIOS (3)
(Annualized)
- ---------------------------------------------------------------------------------------------------------------------
Net income:
Return on average assets 0.96% 1.02% 0.89%
Return on average equity 5.05% 5.09% 5.00%
Return on average tangible equity (2) 5.98% 5.99% 5.98%
Yield on interest-earning assets 5.33% 5.20% 5.46%
Rate on interest-bearing liabilities 2.53% 2.39% 2.68%
-------------- --------------- -------------
Net interest rate spread 2.80% 2.81% 2.78%
Net interest margin 3.23% 3.25% 3.21%
As a percentage of average assets:
Noninterest income (9) 1.20% 1.21% 1.18%
Noninterest expense 2.47% 2.36% 2.58%
-------------- --------------- -------------
Net overhead 1.27% 1.15% 1.40%
Efficiency ratio (9) 59.81% 56.30% 63.41%
2002
-------------------------------------------------------
Year-to-Date Fourth Third Second
December 31, Quarter Quarter Quarter
-------------- -------------- ---------- ---------
- -------------------------------------------------------------------------------------------------------------------------
SELECTED OPERATIONS DATA
(Amounts in thousands)
- -------------------------------------------------------------------------------------------------------------------------
Interest income 167,637 40,654 41,914 42,536
Interest expense 76,107 17,103 18,857 19,828
-------------- -------------- ---------- ---------
Net interest income 91,530 23,551 23,057 22,708
Provision for credit losses 6,824 1,835 1,729 1,730
-------------- -------------- ---------- ---------
Net interest income after provision for credit losses 84,706 21,716 21,328 20,978
Noninterest income:
Bank service charges and fees 14,226 3,748 3,662 3,477
Lending and leasing income 5,523 1,771 1,521 1,192
Insurance services and fees 12,610 2,846 3,063 3,579
Bank-owned life insurance earnings 2,706 689 680 683
Annuity and mutual fund commissions 2,585 660 679 773
Investment advisory and fiduciary services 1,112 232 244 309
(Loss) gain from investment securities available for sale (1,044) (801) (311) 82
Gain on sale of banking center (6) 2,429 2,429 - -
Other 1,640 391 435 496
-------------- -------------- ---------- ---------
Total noninterest income 41,787 11,965 9,973 10,591
Noninterest expense:
Salaries and benefits 45,180 11,595 11,663 10,809
Occupancy and equipment 7,526 1,845 1,880 1,871
Technology and communications 8,599 2,375 2,085 2,233
Marketing and advertising 2,612 768 686 620
Amortization of other intangibles 677 175 178 162
Other 12,737 3,855 2,984 2,916
-------------- -------------- ---------- ---------
Total noninterest expense 77,331 20,613 19,476 18,611
Income from continuing operations before income taxes 49,162 13,068 11,825 12,958
Income taxes from continuing operations 18,752 4,735 4,018 6,085
-------------- -------------- ---------- ---------
Income from continuing operations 30,410 8,333 7,807 6,873
-------------- -------------- ---------- ---------
Income from discontinued operations, net of tax (7) 385 69 129 134
-------------- -------------- ---------- ---------
Net income 30,795 8,402 7,936 7,007
-------------- -------------- ---------- ---------
- -------------------------------------------------------------------------------------------------------------------------
STOCK AND RELATED PER SHARE DATA
(Amounts in thousands)
- -------------------------------------------------------------------------------------------------------------------------
Net income per share (5):
Basic 0.48 0.13 0.12 0.11
Diluted 0.47 0.13 0.12 0.11
Cash dividends (5) 0.17 0.05 0.04 0.04
Dividend payout ratio 35.42% 38.46% 33.33% 36.36%
Dividend yield (annualized) (8) 1.68% 1.96% 1.30% 1.50%
Book value (5) 4.39 4.39 4.32 4.22
Tangible book value (2) (5) 3.14 3.14 3.07 2.97
Market price (NASDAQ: FNFG) (5):
High 12.41 12.39 12.41 11.59
Low 6.07 10.03 10.31 6.57
Close 10.10 10.10 12.21 10.73
- -------------------------------------------------------------------------------------------------------------------------
PERFORMANCE RATIOS (3)
(Annualized)
- -------------------------------------------------------------------------------------------------------------------------
Net income:
Return on average assets 1.08% 1.16% 1.09% 0.98%
Return on average equity 11.22% 11.78% 11.32% 10.38%
Return on average tangible equity (2) 15.90% 16.47% 15.96% 14.80%
Yield on interest-earning assets 6.45% 6.20% 6.33% 6.51%
Rate on interest-bearing liabilities 3.15% 2.81% 3.06% 3.26%
-------------- -------------- ---------- ---------
Net interest rate spread 3.30% 3.39% 3.27% 3.25%
Net interest margin 3.52% 3.60% 3.50% 3.47%
As a percentage of average assets:
Noninterest income (9) 1.42% 1.43% 1.41% 1.47%
Noninterest expense 2.71% 2.85% 2.67% 2.60%
-------------- -------------- ---------- ---------
Net overhead 1.29% 1.42% 1.26% 1.13%
Efficiency ratio (9) 60.39% 62.44% 60.11% 57.87%
First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (Cont'd)
2003
-----------------------------------------------------
As of Second First
June 30, Quarter Quarter
---------------- ---------------- ---------------- -
- -------------------------------------------------------------------------------------------------------------
CAPITAL RATIOS (10)
- -------------------------------------------------------------------------------------------------------------
Tier 1 risk based capital 18.70% 18.70% 18.64%
Total risk based capital 19.80% 19.80% 19.70%
Tier 1 (core) capital 12.40% 12.40% 12.21%
Tangible capital 12.34% 12.34% 12.15%
Equity to assets 20.17% 20.17% 19.75%
- -------------------------------------------------------------------------------------------------------------
ASSET QUALITY DATA
(Amounts in thousands)
- -------------------------------------------------------------------------------------------------------------
Non-performing loans:
One-to four-family $ 3,395 3,395 3,723
Home equity $ 467 467 474
Commercial real-estate and multi-family $ 1,614 1,614 1,537
Consumer $ 1,040 1,040 630
Commercial business $ 3,537 3,537 3,572
---------------- ---------------- ---------------- -
Total non-performing loans $ 10,053 10,053 9,936
Other non-performing assets $ 1,375 1,375 1,646
---------------- ---------------- ---------------- -
Total non-performing assets $ 11,428 11,428 11,582
Allowance for credit losses $ 24,781 24,781 23,913
Net loan charge-offs $ 2,258 1,340 918
Provision for credit losses as a
percentage of net loan charge-offs 184.46% 164.78% 213.18%
Total non-performing assets as a
percentage of total assets 0.32% 0.32% 0.32%
Total non-performing loans to total loans 0.44% 0.44% 0.45%
Net charge-offs to average loans (annualized) 0.21% 0.24% 0.17%
Allowance for credit losses to total loans 1.08% 1.08% 1.07%
Allowance for credit losses
to non-performing loans 246.50% 246.50% 240.67%
- -------------------------------------------------------------------------------------------------------------
Personnel FTE 891 891 897
Number of banking centers 46 46 45
2002
----------------------------------------------------------
As of Fourth Third Second
December 31, Quarter Quarter Quarter
-------------- ---------------- ----------- ----------
- ---------------------------------------------------------------------------------------------------------------
CAPITAL RATIOS (10)
- ---------------------------------------------------------------------------------------------------------------
Tier 1 risk based capital 10.27% 10.27% 10.69% 10.18%
Total risk based capital 11.34% 11.34% 11.81% 11.25%
Tier 1 (core) capital 6.54% 6.54% 6.90% 6.73%
Tangible capital 6.54% 6.54% N/A N/A
Equity to assets 9.67% 9.67% 9.68% 9.48%
- ---------------------------------------------------------------------------------------------------------------
ASSET QUALITY DATA
(Amounts in thousands)
- ---------------------------------------------------------------------------------------------------------------
Non-performing loans:
One-to four-family 4,071 4,071 4,656 4,252
Home equity 332 332 396 488
Commercial real-estate and multi-family 1,225 1,225 2,187 2,240
Consumer 652 652 690 619
Commercial business 1,198 1,198 2,992 4,134
-------------- ---------------- ----------- ----------
Total non-performing loans 7,478 7,478 10,921 11,733
Other non-performing assets 1,423 1,423 151 310
-------------- ---------------- ----------- ----------
Total non-performing assets 8,901 8,901 11,072 12,043
Allowance for credit losses 20,873 20,873 20,299 19,694
Net loan charge-offs 4,678 1,261 1,124 1,019
Provision for credit losses as a
percentage of net loan charge-offs 145.87% 145.52% 153.83% 169.77%
Total non-performing assets as a
percentage of total assets 0.30% 0.30% 0.38% 0.42%
Total non-performing loans to total loans 0.37% 0.37% 0.56% 0.61%
Net charge-offs to average loans (annualized) 0.24% 0.25% 0.23% 0.21%
Allowance for credit losses to total loans 1.05% 1.05% 1.04% 1.02%
Allowance for credit losses
to non-performing loans 279.13% 279.13% 185.87% 167.85%
- ---------------------------------------------------------------------------------------------------------------
Personnel FTE 945 945 937 941
Number of banking centers 38 38 39 38
- ----------
(1) Represents stock subscription proceeds received exclusive of funds
authorized for withdrawal from deposit accounts with First Niagara Bank,
which are included within their respective deposit account categories and
totaled $13.2 million at December 31, 2002.
(2) Excludes goodwill and other intangibles.
(3) Averages presented are daily averages.
(4) Net of deferred costs and unearned discounts.
(5) All per share data and references to the number of shares outstanding for
purposes of calculating per share amounts are restated to give retroactive
recognition to the 2.58681 exchange ratio applied in the January 17, 2003
conversion.
(6) On October 25, 2002, the Company sold its Lacona Banking Center. In
connection with this transaction, approximately $2.6 million of assets and
$26.4 million of deposits were sold, which resulted in a gain of $2.4
million.
(7) Effective February 17, 2003, First Niagara Bank sold NOVA Healthcare
Administrator, Inc. its wholly- owned third-party benefit plan
administrator subsidiary as it was not considered one of the Company's
strategic core businesses. Accordingly, in accordance with SFAS No. 144,
"Accounting for the impairment or disposal of long-lived assets," for
current and prior periods presented the Company has reported the results
of operations from NOVA as "Discontinued Operations," including the net of
tax gain on sale realized of $230 thousand.
(8) Computed based upon the period end closing stock price.
(9) Excludes net gain/loss on securities available for sale and gain on sale
of banking center and NOVA.
(10) Effective November 8, 2002, First Niagara Bank converted to a federal
charter subject to Office of Thrift Supervision ("OTS") capital
requirements. These capital requirements apply only to First Niagara Bank
and do not consider additional capital retained by the Holding Company.
Prior to converting to federal charters, the Holding Company and First
Niagara Bank were required to maintain minimum capital ratios calculated
in a similar manner to, but not entirely the same as, the framework of the
OTS. Amounts prior to the fourth quarter of 2002 have not been recomputed
to reflect OTS requirements.