Fourth Quarter and 2014 Highlights:
-
Fourth quarter operating earnings of $61.7 million or $0.17 per diluted share
- Full Year 2014 operating earnings of $0.71 per diluted share
-
Fourth quarter GAAP earnings of $0.20 per diluted share
- Full Year 2014 reported GAAP loss of $2.12 per share reflecting third quarter non-cash goodwill impairment charge
-
Loan growth continued to outperform the industry, with average loans up 7% annualized QOQ
- Average commercial business and real estate loans increased 6% QOQ
- Average consumer loans increased 10% led by Indirect Auto and Home Equity balances
-
Noninterest-bearing checking deposit balances increased 17% annualized QOQ
- Strong customer response to July 2014 launch of Simple Checking product
- Transactional deposits averaged 38% of deposits, up from 36% a year-ago
-
Strong credit quality maintained
- NCOs averaged 0.23% of originated loans, four basis points lower QOQ
- Nonperforming originated loans declined to 85 basis points of originated loans, down 6 basis points QOQ
- Tier 1 Common Ratio increased 35 basis points from 2013
BUFFALO, N.Y., Jan. 23, 2015 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today reported GAAP net income available to common shareholders of $70.0 million or $0.20 per diluted share for the fourth quarter of 2014, compared to $70.1 million, or $0.20 per diluted share, for the quarter ended December 31, 2013. Excluding certain non-recurring items incurred during the fourth quarter of 2014, operating net income available to common shareholders was $61.7 million, or $0.17 per diluted share.
"During the fourth quarter, our core business fundamentals remained strong as evidenced by our 7% annualized loan growth, 18% transactional deposit growth, and outstanding credit metrics," said Gary M. Crosby, President and Chief Executive Officer. "We also just completed a comprehensive top-to-bottom re-design of our organization structure in order to streamline our company, be even more responsive to our customers and ultimately deliver a truly differentiated customer experience. This simplification of our organization structure reduced the number of management positions we will need going forward and together with other expense savings, we expect to limit our year-over-year increase in operating expenses to less than 1% in 2015. We have redeployed a portion of these savings to pay for other investments in our business. I'm also pleased with the progress we have made in implementing our Strategic Investment Plan, which will better enable us to better serve customers. As 2015 begins, our Strategic Investment Plan continues to be on track, on budget and we are already beginning to see some of the benefits from those investments."
Mr. Crosby also noted, "We have made significant progress related to our previously disclosed process issue. We have submitted a remediation plan to our regulators. Based on our remediation plan, we have lowered the reserve recorded in the third quarter by $23 million which benefitted fourth quarter reported earnings."
"Our fourth quarter financial results were highlighted by strong credit performance partially offset by the continued impact of low interest rates on net interest margin," said Gregory W. Norwood, Chief Financial Officer. "Our credit metrics improved further from low third quarter levels as net charge-offs, non-accruals, classified and criticized levels all declined from the prior quarter. Our 2014 operating expenses of $980 million were in line with our full year expectations communicated a year ago."
Fourth Quarter Results Summary
In the fourth quarter of 2014, First Niagara reported GAAP net income available to common shareholders of $70.0 million, or $0.20 per diluted share, compared to net income of $70.1 million, or $0.20 per diluted share in the fourth quarter of 2013. Results for the fourth quarter 2014 include the benefit of a pre-tax $23 million reversal of reserves related to a previously disclosed process issue on certain customer deposit accounts as well as the expense impact of $9 million in pre-tax non-recurring restructuring charges primarily associated with the completion of an Organizational Simplification initiative. Excluding these items, operating net income available to common shareholders was $61.7 million, or $0.17 per diluted share.
By comparison, in the third quarter of 2014, First Niagara reported GAAP net loss of $931 million, or $(2.66) per share, that included a $1.1 billion non-cash goodwill impairment charge and a pre-tax $45 million reserve to address the process issue related to certain customer deposit accounts. Excluding these non-recurring charges, operating net income available to common shareholders was $63.3 million, or $0.18 per diluted share.
Balance sheet growth remained strong as average loans increased 7% annualized compared to the prior quarter. Average commercial business and real estate loans increased 6% annualized over the prior quarter, while average consumer loans increased 10% annualized driven by continued increases in indirect auto and home equity balances. Average transactional deposit balances, which include interest-bearing and noninterest-bearing checking accounts, increased 18% over the prior quarter and currently represent 38% of the company's deposit balances, up from 36% a year ago.
Excluding historic tax credit amortization of $11 million, operating revenues were $358 million, and increased modestly from the prior quarter. Net interest income decreased 1% in the fourth quarter compared to the prior quarter primarily driven by lower one-time income accretion from prepayments of certain collateralized loan obligations (CLOs) which reduced net interest margin by 6 basis points. Normalized net interest margin was 3.09%, compared to 3.16% in the prior quarter. Excluding the impact of historic tax credit amortization, noninterest income increased $5 million or 6% from the prior quarter. In the fourth quarter, non-GAAP operating expenses were $248 million and declined modestly from the prior quarter.
The provision for loan losses on originated loans totaled $20 million in the fourth quarter of 2014, consistent with the prior quarter. Net charge-offs equaled 0.23% of average originated loans, a decrease of four basis points from 0.27% in the third quarter. At December 31, 2014, nonperforming originated loans declined 4% to $164 million, or 0.85% of originated loans, compared to 0.91% at the end of the prior quarter.
| Operating Results (Non-GAAP) | Q4 2014 | Q3 2014 | Q4 2013 |
| Net interest income | $ 269.8 | $ 273.3 | $ 280.3 |
| Provision for credit losses | 22.9 | 21.2 | 32.0 |
| Noninterest income | 77.2 | 75.4 | 89.3 |
| Noninterest expense | 248.2 | 249.5 | 227.1 |
| Operating net income | 69.2 | 70.9 | 77.7 |
| Preferred stock dividend | 7.5 | 7.5 | 7.5 |
| Operating net income available to common shareholders | $ 61.7 | $ 63.3 | $ 70.1 |
| Weighted average diluted shares outstanding | 352.2 | 351.9 | 350.7 |
| Operating earnings per diluted share | $ 0.17 | $ 0.18 | $ 0.20 |
|
Reported Results (GAAP) |
|||
| Operating net income before non-operating items | $ 69.2 | $ 70.9 | $ 77.7 |
| Non-operating items (a) | (8.4) | 994.1 | -- |
| Net Income / (loss) | 77.6 | (923.2) | 77.7 |
| Preferred stock dividend | 7.5 | 7.5 | 7.5 |
| Net income / (loss) available to common shareholders | $ 70.0 | $ (930.7) | $ 70.1 |
| Weighted average diluted shares outstanding | 352.2 | 350.4 | 350.7 |
| Earnings per diluted share | $ 0.20 | $ (2.66) | $ 0.20 |
| All amounts in millions except earnings per diluted share. | |||
| (a) Q4 2014: Benefit from reversal of process issue reserve related to certain customer deposit accounts less severance and other restructuring charges related to Organizational Simplification initiative, net of taxes. | |||
| Q3 2014: $1.1 billion non-cash goodwill impairment charge, reserves related to a process issue, and restructuring charges primarily related to branch realignment, net of taxes. | |||
Full Year 2014 Results Summary
For the full year ended December 31, 2014, the company reported GAAP net loss of $743 million, or $(2.12) per diluted share, compared to net income available to common shareholders of $265.1 million, or $0.75 per diluted share, in 2013. GAAP net income for 2014 was impacted by a pre-tax $1.1 billion non-cash goodwill impairment charge, $22 million in non-recurring restructuring expenses and $22 million in reserves to address the process issue related to certain customer deposit accounts. Excluding these charges, non-GAAP operating net income available to common shareholders in 2014 was $0.71 per diluted share, compared to $0.75 per diluted share in 2013.
Loans
Average total loans increased 7% annualized from the prior quarter, driven by continued growth in the company's commercial lending, indirect auto and home equity portfolios.
Average commercial loans, which include commercial business (C&I) and commercial real estate (CRE) loans, increased to $13.9 billion, or a 6% annualized increase from the prior quarter, driven primarily by growth in the company's Upstate New York, Western Pennsylvania, and Tri-State markets. C&I loans averaged $5.8 billion, or a 7% annualized increase over the prior quarter. Average CRE loans increased 5% annualized to $8.1 billion.
Average indirect auto loan balances increased $154 million to $2.1 billion. Indirect auto originations during the quarter totaled $284 million at an average customer FICO score of 763 and yielded 3.1%, net of dealer reserve, an increase of 25 basis points compared to the prior quarter originations. Average residential real estate loans increased $13 million, or 2% annualized. Home equity balances increased for the seventh consecutive quarter to $2.9 billion, or 8% annualized from the prior quarter reflecting higher customer draws and the benefits of promotional and cross-sell campaigns.
Deposits
Average transactional deposit balances, which include interest-bearing and noninterest-bearing checking accounts, increased an annualized 18% over the prior quarter and currently represent 38% of the company's deposit balances, up from 36% a year ago.
Average noninterest-bearing checking deposit balances increased 17% annualized compared to the prior quarter, driven by business checking account acquisitions and seasonality. Interest-bearing checking balances averaged $5.0 billion, a 19% annualized increase from the prior quarter primarily driven by an increase in municipal deposits.
Money market deposit balances increased 6% annualized reflecting normal seasonal trends in municipal deposit balances. Time deposits declined 8% annualized to $3.9 billion driven primarily by a decrease in brokered deposits.
The average cost of interest-bearing deposits increased one basis point to 0.25% from the prior quarter.
Net Interest Income
Fourth quarter 2014 GAAP net interest income decreased $3 million or 1% from the prior quarter to $270 million. This decrease was primarily driven by a $4.7 million sequential decline in income accretion from prepayments of certain CLOs. Average earning assets increased 8% annualized from the prior quarter, driven primarily by strong loan growth.
Normalized net interest margin declined 7 basis points to 3.09%, reflecting continued compression of commercial and consumer loan yields in the current low interest rate environment. Average C&I and consumer loan yields declined 8 and 5 basis points, respectively, from the prior quarter.
Credit Quality
At December 31, 2014, the allowance for loan losses was $241 million, compared to $231 million at September 30, 2014. Nonperforming assets decreased 2% from the prior quarter and comprised 0.56% of total assets.
Information for both the originated and acquired portfolios follows.
| Q4 2014 | Q3 2014 | |||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total |
| Provision for loan losses* | $ 19.9 | $ 2.6 | $ 22.5 | $ 19.6 | $ 1.2 | $ 20.8 |
| Net charge-offs | 10.8 | 1.7 | 12.4 | 12.5 | 0.5 | 13.0 |
| NCOs/ Avg Loans | 0.23% | 0.17% | 0.22% | 0.27% | 0.05% | 0.23% |
| Total loans** | $ 19,306 | $ 3,835 | $ 23,048 | $ 18,842 | $ 4,028 | $ 22,770 |
| (*) Excludes provision for unfunded commitments of $0.4 million each in 4Q14 and 3Q14 | ||||||
| (**) Acquired loans before associated credit discount; see accompanying tables for further information | ||||||
Originated loans
The provision for loan losses on originated loans totaled $20 million, unchanged from the prior quarter. Provision for loan losses exceeded net charge-offs as the company continues to provision for loan growth. In the fourth quarter, the company also recognized an additional $5 million in provision expense to appropriately cover exposure to borrowers servicing the energy sector following the recent fall in oil prices.
Net charge-offs equaled $11 million or 23 basis points of average originated loans in the fourth quarter of 2014, compared to $13 million or 27 basis points in the prior quarter. For the full year 2014, net charge-offs on originated loans averaged 29 basis points, a 5 basis point improvement from 2013.
At December 31, 2014, nonperforming originated loans comprised 0.85% of originated loans, compared to 0.91% at September 30, 2014.
At December 31, 2014, the allowance for loan losses on originated loans totaled $236 million or 1.22% of such loans, compared to $227 million or 1.20% of such loans at September 30, 2014.
Acquired loans
The provision for losses on acquired loans totaled $3 million, compared to $1 million in the prior quarter. Net charge-offs on those portfolios totaled $2 million during the quarter, compared to $0.5 million in the prior period. At December 31, 2014, the allowance for loan losses on acquired loans totaled $6 million, compared to $5 million at September 30, 2014. Acquired nonperforming loans totaled $30 million, compared to $29 million at the end of the prior quarter. At December 31, 2014, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $93 million.
Noninterest Income
Reported fourth quarter 2014 noninterest income of $77 million increased 2% or $2 million compared to the prior quarter. Amortization of the company's investments in historic tax credits increased to $11 million from $8 million in the third quarter, reflecting additional investments in the fourth quarter. Excluding these amounts, noninterest income increased $5 million or 6% from the prior quarter driven by higher capital markets income and deposit service charges.
Capital markets income increased $5 million or 137% to $8 million reflecting strong derivative sales and syndication activity in the quarter. Deposit service charges increased $2 million or 11% from the prior quarter and was driven by lower actual impact of the previously disclosed process issue related to certain deposit accounts. Mortgage banking revenues increased modestly from the prior quarter, driven by higher gain-on-sale revenues.
Insurance commissions declined $4 million or 20% from the prior quarter, primarily driven by seasonal trends. Wealth management services income declined $1 million from the prior quarter as lower interest rates resulted in lower demand for annuity products. Other fee income decreased $2 million from the prior quarter and was driven by higher historic tax credit amortization.
Noninterest Expense
Reported fourth quarter expenses of $234 million included a benefit of $23 million related to reversal of reserves recognized to address a previously disclosed process issue related to certain customer deposit accounts as well as $9 million in restructuring charges. Third quarter expenses totaled $1.4 billion and included a $1.1 billion non-cash goodwill impairment charge, $45 million in reserves to address the process issue and other restructuring charges. Excluding these non-operating items in both quarters, expenses totaled $248 million, slightly below $249 million incurred in the third quarter of 2014.
Salaries and benefits expenses declined $5 million or 5% from the prior quarter due primarily to lower headcount and lower incentive compensation. Occupancy and equipment expense increased $1 million due to seasonally higher building maintenance expenses. Marketing and advertising expenses increased $4 million or 50% driven by the company's increased focus on customer and deposit acquisitions. Professional services fees increased $3 million and were driven by legal costs and other professional fees for other corporate activities. Technology and communications expense increased $2 million or 8% due to higher hardware and software expenses and to a lesser extent higher depreciation expense related to completed technology projects. Other expenses decreased $8 million or 22% from elevated third quarter levels which had included higher ORE write-downs related to a single commercial property, expenses related to Home Depot card breach, and state franchise tax reserve adjustment.
In the fourth quarter of 2014, the operating efficiency ratio was unchanged from the prior quarter.
Capital
At December 31, 2014, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.8% and 8.2% respectively, and were unchanged from September 30, 2014, and up 25 basis points and 35 basis points from 11.5% and 7.9% at December 31, 2013, respectively.
The company remains well above current regulatory guidelines for well-capitalized institutions.
Effective Tax Rate
The effective tax rate was 14% in the fourth quarter, primarily reflecting the benefits of previously disclosed tax strategies and the benefit of historic tax credit investments.
About First Niagara
First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank with approximately 410 branches, $39 billion in assets, $28 billion in deposits, and approximately 5,600 employees providing financial services to individuals, families and businesses across New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.
Investor Call
A conference call will be held at 8:30 a.m. Eastern Time on Friday, January 23, 2015 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-456-0351 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and are available under the investor relations tab of our website at www.firstniagara.com. A replay of the call will be available until March 1, 2015 by dialing 1-866-400-9648, passcode: 4249.
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) execution risk associated with the announced investment plan; (7) regulatory approval to continue payment of common and preferred dividends.
| First Niagara Financial Group, Inc. | ||||||||
| Income Statement Highlights -- Reported Basis | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2014 | 2013 | For year ending | ||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2014 | 2013 | |
| Interest income: | ||||||||
| Loans and leases | $ 214,609 | $ 212,452 | $ 210,218 | $ 209,644 | $ 213,778 | $ 214,746 | $ 846,923 | $ 845,134 |
| Investment securities and other | 86,919 | 91,668 | 91,566 | 90,421 | 96,020 | 91,996 | 360,574 | 365,087 |
| Total interest income | 301,528 | 304,120 | 301,784 | 300,065 | 309,798 | 306,742 | 1,207,497 | 1,210,221 |
| Interest expense: | ||||||||
| Deposits | 14,295 | 13,590 | 13,183 | 12,236 | 12,941 | 12,931 | 53,304 | 53,116 |
| Borrowings | 17,450 | 17,251 | 16,789 | 17,082 | 16,579 | 16,271 | 68,572 | 63,714 |
| Total interest expense | 31,745 | 30,841 | 29,972 | 29,318 | 29,520 | 29,202 | 121,876 | 116,830 |
| Net interest income | 269,783 | 273,279 | 271,812 | 270,747 | 280,278 | 277,540 | 1,085,621 | 1,093,391 |
| Provision for credit losses | 22,900 | 21,200 | 22,800 | 24,800 | 32,000 | 27,600 | 91,700 | 105,000 |
| Net interest income after provision | 246,883 | 252,079 | 249,012 | 245,947 | 248,278 | 249,940 | 993,921 | 988,391 |
| Noninterest income: | ||||||||
| Deposit service charges | 22,611 | 20,373 | 23,733 | 23,356 | 25,726 | 27,115 | 90,073 | 104,123 |
| Insurance commissions | 14,764 | 18,352 | 17,343 | 15,691 | 15,431 | 17,854 | 66,150 | 67,332 |
| Merchant and card fees | 13,043 | 12,991 | 12,834 | 11,504 | 12,567 | 12,464 | 50,372 | 48,709 |
| Wealth management services | 14,404 | 15,367 | 15,949 | 15,587 | 15,441 | 15,189 | 61,307 | 58,420 |
| Mortgage banking | 4,600 | 4,358 | 5,241 | 3,396 | 2,754 | 2,268 | 17,595 | 18,328 |
| Capital markets income | 8,312 | 3,509 | 2,917 | 3,623 | 6,310 | 5,058 | 18,361 | 22,401 |
| Lending and leasing | 4,567 | 3,914 | 4,680 | 4,732 | 4,140 | 4,886 | 17,893 | 17,466 |
| Bank owned life insurance | 3,187 | 3,080 | 3,145 | 5,405 | 6,027 | 3,725 | 14,817 | 16,540 |
| Other income | (8,311) | (6,552) | (4,985) | (6,570) | 916 | 2,863 | (26,418) | 12,273 |
| Total noninterest income | 77,177 | 75,392 | 80,857 | 76,724 | 89,312 | 91,422 | 310,150 | 365,592 |
| Noninterest expense: | ||||||||
| Salaries and employee benefits | 110,985 | 116,245 | 117,728 | 117,940 | 113,754 | 115,034 | 462,898 | 460,883 |
| Occupancy and equipment | 28,379 | 27,450 | 28,553 | 27,876 | 27,420 | 26,582 | 112,258 | 110,553 |
| Technology and communications | 33,940 | 31,465 | 31,140 | 30,345 | 29,483 | 28,999 | 126,890 | 115,198 |
| Marketing and advertising | 11,584 | 7,746 | 8,439 | 7,364 | 4,879 | 5,822 | 35,133 | 20,497 |
| Professional services | 16,644 | 13,988 | 13,029 | 11,923 | 9,314 | 9,820 | 55,584 | 38,519 |
| Amortization of intangibles | 6,432 | 6,521 | 6,790 | 7,509 | 7,562 | 7,702 | 27,252 | 40,233 |
| Federal deposit insurance premiums | 11,911 | 9,579 | 9,756 | 8,855 | 7,431 | 9,351 | 40,101 | 35,031 |
| Restructuring charges | 9,066 | 2,364 | -- | 10,356 | -- | -- | 21,786 | -- |
| Goodwill impairment | -- | 1,100,000 | -- | -- | -- | -- | 1,100,000 | -- |
| Deposit account remediation | (23,000) | 45,000 | -- | -- | -- | -- | 22,000 | -- |
| Other expense | 28,371 | 36,467 | 28,680 | 26,568 | 27,305 | 27,883 | 120,086 | 110,263 |
| Total noninterest expense | 234,312 | 1,396,825 | 244,115 | 248,736 | 227,148 | 231,193 | 2,123,988 | 931,177 |
| Income (loss) before income tax | 89,748 | (1,069,354) | 85,754 | 73,935 | 110,442 | 110,169 | (819,917) | 422,806 |
| Income tax expense (benefit) | 12,180 | (146,173) | 11,969 | 14,491 | 32,752 | 31,026 | (107,533) | 127,554 |
| Net income (loss) | 77,568 | (923,181) | 73,785 | 59,444 | 77,690 | 79,143 | (712,384) | 295,252 |
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 30,188 | 30,188 |
|
Net income (loss) available to common stockholders |
$ 70,021 | $ (930,728) | $ 66,238 | $ 51,897 | $ 70,143 | $ 71,596 | $ (742,572) | $ 265,064 |
| Financial Ratios: | ||||||||
| Earnings (loss) per basic share | $ 0.20 | $ (2.66) | $ 0.19 | $ 0.15 | $ 0.20 | $ 0.20 | $ (2.12) | $ 0.75 |
| Earnings (loss) per diluted share | 0.20 | (2.66) | 0.19 | 0.15 | 0.20 | 0.20 | (2.12) | 0.75 |
| Weighted average shares outstanding - basic(1) | 350,444 | 350,381 | 350,229 | 349,906 | 349,718 | 349,653 | 350,237 | 349,549 |
| Weighted average shares outstanding - diluted(1) | 352,152 | 350,381 | 351,541 | 351,408 | 350,699 | 350,896 | 350,237 | 350,381 |
| Net revenue(2) | $ 346,960 | $ 348,671 | $ 352,669 | $ 347,471 | $ 369,590 | $ 368,962 | $ 1,395,771 | $ 1,458,983 |
| Noninterest income as a percentage of net revenue(2) | 22.24% | 21.62% | 22.93% | 22.08% | 24.17% | 24.78% | 22.22% | 25.06% |
| Pre-tax, pre-provision income (loss)(3) | $ 112,648 | $ (1,048,154) | $ 108,554 | $ 98,735 | $ 142,442 | $ 137,769 | $ (728,217) | $ 527,806 |
| Pre-tax, pre-provision income per diluted share(3) | $ 0.32 | $ (2.99) | $ 0.31 | $ 0.28 | $ 0.41 | $ 0.39 | $ (2.08) | $ 1.51 |
| Pre-tax, pre-provision return on average assets(3) | 1.17% | (10.78)% | 1.14% | 1.06% | 1.51% | 1.47% | (1.91)% | 1.42% |
| Net interest margin(4) | 3.11% | 3.21% | 3.26% | 3.33% | 3.41% | 3.40% | 3.23% | 3.39% |
| Interest yield on average loans(4) | 3.78% | 3.80% | 3.89% | 3.98% | 4.04% | 4.14% | 3.86% | 4.15% |
| Rate paid on interest-bearing liabilities | 0.45% | 0.44% | 0.44% | 0.44% | 0.43% | 0.43% | 0.44% | 0.44% |
| Efficiency ratio | 67.53% | 400.61% | 69.22% | 71.58% | 61.46% | 62.66% | 152.17% | 63.82% |
| Expenses as a percentage of average loans and deposits | 1.85% | 11.19% | 1.97% | 2.06% | 1.89% | 1.94% | 4.28% | 1.96% |
| Effective tax rate (benefit) | 13.6% | (13.7)% | 14.0% | 19.6% | 29.7% | 28.2% | (13.1)% | 30.2% |
| Return on average assets(5) | 0.80 % | (9.49)% | 0.77 % | 0.64 % | 0.82% | 0.85% | (1.86)% | 0.80% |
| Return on average equity(5) | 7.44 % | (71.85)% | 5.84 % | 4.79 % | 6.18% | 6.37% | (14.75)% | 5.95% |
| Return on average tangible equity(3)(5) | 11.33 % | (141.80)% | 11.68 % | 9.66 % | 12.64% | 13.20% | (27.59)% | 12.31% |
| Return on average common equity | 7.32 % | (77.58)% | 5.62 % | 4.48 % | 5.99% | 6.18% | (16.53)% | 5.73% |
| Return on average tangible common equity(3) | 11.69 % | (164.48)% | 12.10 % | 9.76 % | 13.25% | 13.92% | (33.09)% | 12.86% |
| (1) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | ||||||||
| (2) Net revenue is comprised of net interest income and noninterest income. | ||||||||
| (3) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||||
| (4) Yields and rates calculated on a tax equivalent basis. | ||||||||
| (5) Return used to calculate ratio excludes preferred stock dividend. | ||||||||
| First Niagara Financial Group, Inc. | ||||||
| Period End Balance Sheet | ||||||
| (in thousands) | ||||||
| 2014 | 2013 | |||||
| December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | |
| Cash and cash equivalents | $ 420,033 | $ 451,313 | $ 557,423 | $ 503,070 | $ 462,927 | $ 558,086 |
| Investment securities: | ||||||
| Available for sale | 5,915,338 | 6,198,140 | 6,683,914 | 7,060,237 | 7,423,162 | 7,609,676 |
| Held to maturity | 5,941,621 | 5,351,977 | 4,834,279 | 4,467,213 | 4,042,481 | 3,841,700 |
| FHLB and FRB common stock | 411,857 | 389,870 | 434,322 | 437,550 | 469,217 | 437,534 |
| Total investment securities | 12,268,816 | 11,939,987 | 11,952,515 | 11,965,000 | 11,934,860 | 11,888,910 |
| Loans held for sale | 39,825 | 31,245 | 45,446 | 34,465 | 50,137 | 80,468 |
| Loans and leases: | ||||||
| Commercial: | ||||||
| Real estate | 8,204,027 | 8,013,622 | 7,940,977 | 7,867,724 | 7,777,903 | 7,697,407 |
| Business | 5,785,672 | 5,836,235 | 5,741,684 | 5,470,177 | 5,290,392 | 5,204,672 |
| Total commercial loans | 13,989,699 | 13,849,857 | 13,682,661 | 13,337,901 | 13,068,295 | 12,902,079 |
| Consumer: | ||||||
| Residential real estate | 3,353,081 | 3,360,805 | 3,358,347 | 3,389,071 | 3,447,997 | 3,519,233 |
| Home equity | 2,936,123 | 2,886,655 | 2,835,421 | 2,767,024 | 2,752,229 | 2,706,603 |
| Indirect auto | 2,166,320 | 2,073,843 | 1,871,688 | 1,655,489 | 1,543,983 | 1,339,449 |
| Credit cards | 324,113 | 312,549 | 311,640 | 305,663 | 325,140 | 311,600 |
| Other consumer | 278,305 | 286,140 | 286,062 | 295,692 | 302,009 | 310,107 |
| Total consumer loans | 9,057,942 | 8,919,992 | 8,663,158 | 8,412,939 | 8,371,358 | 8,186,992 |
| Total loans and leases | 23,047,641 | 22,769,849 | 22,345,819 | 21,750,840 | 21,439,653 | 21,089,071 |
| Allowance for loan losses | 241,411 | 231,353 | 223,526 | 215,037 | 209,274 | 197,953 |
| Loans and leases, net | 22,806,230 | 22,538,496 | 22,122,293 | 21,535,803 | 21,230,379 | 20,891,118 |
| Bank owned life insurance | 426,192 | 423,376 | 420,230 | 417,031 | 415,205 | 413,555 |
| Goodwill and other intangibles | 1,417,005 | 1,423,437 | 2,528,481 | 2,535,271 | 2,542,783 | 2,549,931 |
| Other assets | 1,174,341 | 1,158,197 | 998,364 | 999,804 | 992,071 | 958,473 |
| Total assets | $ 38,552,442 | $ 37,966,051 | $ 38,624,752 | $ 37,990,444 | $ 37,628,362 | $ 37,340,541 |
| Deposits: | ||||||
| Savings accounts | $ 3,451,616 | $ 3,458,661 | $ 3,626,750 | $ 3,664,765 | $ 3,666,759 | $ 3,695,221 |
| Interest-bearing checking | 5,084,456 | 5,055,458 | 4,743,684 | 4,929,302 | 4,743,829 | 4,637,807 |
| Money market deposits | 9,962,220 | 9,894,346 | 9,834,344 | 10,106,569 | 9,739,539 | 9,905,341 |
| Noninterest-bearing deposits | 5,407,382 | 5,308,736 | 5,284,037 | 5,101,681 | 4,865,873 | 4,968,501 |
| Certificates of deposit | 3,875,563 | 3,952,879 | 3,955,754 | 3,795,438 | 3,649,257 | 3,762,132 |
| Total deposits | 27,781,237 | 27,670,080 | 27,444,569 | 27,597,755 | 26,665,257 | 26,969,002 |
| Short-term borrowings | 5,471,974 | 4,928,762 | 4,890,343 | 4,137,496 | 4,822,222 | 4,169,416 |
| Long-term borrowings | 733,620 | 733,684 | 733,337 | 733,384 | 733,883 | 732,547 |
| Other liabilities | 470,342 | 543,813 | 477,685 | 495,590 | 413,647 | 531,379 |
| Total liabilities | 34,457,173 | 33,876,339 | 33,545,934 | 32,964,225 | 32,635,009 | 32,402,344 |
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 |
| Common stockholders' equity | 3,757,267 | 3,751,710 | 4,740,816 | 4,688,217 | 4,655,351 | 4,600,195 |
| Total stockholders' equity | 4,095,269 | 4,089,712 | 5,078,818 | 5,026,219 | 4,993,353 | 4,938,197 |
| Total liabilities and stockholders' equity | $ 38,552,442 | $ 37,966,051 | $ 38,624,752 | $ 37,990,444 | $ 37,628,362 | $ 37,340,541 |
| Selected balance sheet information: | ||||||
| Total interest-earning assets(1) | $ 35,320,706 | $ 34,720,650 | $ 34,305,451 | $ 33,684,828 | $ 33,396,058 | $ 33,039,023 |
| Total interest-bearing liabilities | 28,579,449 | 28,023,790 | 27,784,211 | 27,366,955 | 27,355,489 | 26,902,465 |
| Net interest-earning assets | $ 6,741,257 | $ 6,696,860 | $ 6,521,240 | $ 6,317,873 | $ 6,040,569 | $ 6,136,558 |
| Tangible common equity(1)(2) | $ 2,340,262 | $ 2,328,273 | $ 2,212,335 | $ 2,152,946 | $ 2,112,568 | $ 2,050,264 |
| Unrealized gain on available for sale securities, net of tax(3) | 52,244 | 55,052 | 86,244 | 72,579 | 63,930 | 76,686 |
| Total core deposits | $ 23,905,674 | $ 23,717,201 | $ 23,488,815 | $ 23,802,317 | $ 23,016,000 | $ 23,206,870 |
| Originated loans(4) | $ 19,305,812 | $ 18,841,896 | $ 18,196,302 | $ 17,388,542 | $ 16,922,161 | $ 16,211,505 |
| Acquired loans(5) | 3,834,931 | 4,028,091 | 4,254,750 | 4,475,593 | 4,642,775 | 5,006,753 |
| Credit related discount on acquired loans(6) | (93,102) | (100,138) | (105,233) | (113,295) | (125,283) | (129,187) |
| Total Loans | $ 23,047,641 | $ 22,769,849 | $ 22,345,819 | $ 21,750,840 | $ 21,439,653 | $ 21,089,071 |
| (1) Includes interest bearing cash and cash equivalents, investment securities at amortized cost, loans held for sale, and total loans and leases. | ||||||
| (2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail. | ||||||
| (3) Excludes unamortized unrealized gains recorded in accumulated other comprehensive income related to available for sale securities transferred to held to maturity. | ||||||
| (4) Originated loans represent total loans excluding acquired loans. | ||||||
| (5) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||
| (6) Represent principal on acquired loans not expected to be collected. | ||||||
| First Niagara Financial Group, Inc. | |||||||||||||||
| Average Balance Sheet and Related Tax Equivalent Yields & Rates | |||||||||||||||
| (in millions) | |||||||||||||||
| For the three months ended | For year ending | ||||||||||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | |||||||||||
|
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 | $ 8,087 | $ 76 | 3.68% | $ 7,985 | $ 74 | 3.65% | $ 7,673 | $ 79 | 4.02% | $ 7,944 | $ 302 | 3.75% | $ 7,446 | $ 314 | 4.16% |
| Business | 5,791 | 51 | 3.43 | 5,694 | 51 | 3.51 | 5,257 | 48 | 3.60 | 5,617 | 200 | 3.51 | 5,134 | 190 | 3.66 |
| Total commercial loans | 13,878 | 127 | 3.58 | 13,679 | 126 | 3.59 | 12,930 | 127 | 3.85 | 13,561 | 502 | 3.65 | 12,580 | 504 | 3.95 |
| Consumer: | |||||||||||||||
| Residential real estate | 3,364 | 32 | 3.79 | 3,351 | 32 | 3.77 | 3,479 | 34 | 3.89 | 3,373 | 129 | 3.81 | 3,569 | 141 | 3.94 |
| Home equity | 2,912 | 29 | 3.94 | 2,857 | 29 | 4.01 | 2,732 | 29 | 4.15 | 2,832 | 114 | 4.03 | 2,681 | 113 | 4.21 |
| Indirect auto | 2,132 | 15 | 2.82 | 1,978 | 14 | 2.84 | 1,453 | 11 | 3.03 | 1,870 | 53 | 2.86 | 1,077 | 34 | 3.12 |
| Credit cards | 315 | 9 | 11.47 | 313 | 9 | 11.44 | 313 | 9 | 11.38 | 312 | 36 | 11.50 | 307 | 34 | 11.20 |
| Other consumer | 283 | 6 | 8.47 | 287 | 6 | 8.54 | 307 | 7 | 8.66 | 290 | 25 | 8.55 | 315 | 27 | 8.43 |
| Total consumer loans | 9,005 | 91 | 4.01 | 8,786 | 90 | 4.06 | 8,284 | 89 | 4.27 | 8,677 | 357 | 4.11 | 7,949 | 348 | 4.38 |
| Total loans and leases | 22,883 | 218 | 3.78 | 22,465 | 215 | 3.80 | 21,214 | 216 | 4.04 | 22,239 | 859 | 3.86 | 20,529 | 853 | 4.15 |
| Residential MBS | 6,892 | 43 | 2.51 | 6,406 | 41 | 2.56 | 5,502 | 42 | 3.07 | 6,275 | 164 | 2.61 | 5,500 | 146 | 2.66 |
| Commercial MBS | 1,512 | 13 | 3.37 | 1,564 | 13 | 3.32 | 1,772 | 17 | 3.84 | 1,595 | 53 | 3.35 | 1,844 | 68 | 3.69 |
| Other investment securities (3) | 3,585 | 32 | 3.59 | 3,854 | 39 | 4.06 | 4,505 | 38 | 3.40 | 3,994 | 149 | 3.72 | 4,694 | 158 | 3.36 |
| Total securities, at amortized cost | 11,989 | 88 | 2.94 | 11,824 | 93 | 3.15 | 11,779 | 98 | 3.31 | 11,863 | 366 | 3.09 | 12,038 | 372 | 3.09 |
| Money market and other investments | 161 | -- | 1.21 | 86 | 1 | 2.76 | 189 | 1 | 1.38 | 134 | 2 | 1.58 | 189 | 3 | 1.65 |
| Total interest-earning assets | 35,033 | $ 307 | 3.47% | 34,375 | $ 309 | 3.57% | 33,182 | $ 314 | 3.76% | 34,236 | $ 1,227 | 3.58% | 32,756 | $ 1,228 | 3.75% |
| Goodwill and other intangibles | 1,420 | 2,515 | 2,546 | 2,249 | 2,567 | ||||||||||
| Other noninterest-earning assets | 1,859 | 1,698 | 1,651 | 1,733 | 1,744 | ||||||||||
| Total assets | $ 38,312 | $ 38,588 | $ 37,379 | $ 38,218 | $ 37,067 | ||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Deposits | |||||||||||||||
| Savings accounts | $ 3,447 | $ 1 | 0.09% | $ 3,552 | $ 1 | 0.09% | $ 3,670 | $ 1 | 0.09% | $ 3,571 | $ 3 | 0.09% | $ 3,813 | $ 4 | 0.10% |
| Interest-bearing checking | 5,049 | -- | 0.03 | 4,821 | -- | 0.03 | 4,725 | -- | 0.04 | 4,857 | 2 | 0.03 | 4,524 | 2 | 0.04 |
| Money market deposits | 10,037 | 6 | 0.24 | 9,882 | 6 | 0.23 | 9,900 | 5 | 0.20 | 9,944 | 22 | 0.22 | 10,167 | 21 | 0.21 |
| Certificates of deposit | 3,888 | 7 | 0.72 | 3,970 | 7 | 0.67 | 3,698 | 7 | 0.71 | 3,870 | 27 | 0.69 | 3,875 | 26 | 0.68 |
| Total interest bearing deposits | 22,421 | 14 | 0.25% | 22,225 | 14 | 0.24% | 21,993 | 13 | 0.23% | 22,241 | 53 | 0.24% | 22,379 | 53 | 0.24% |
| Borrowings | |||||||||||||||
| Short-term borrowings | 4,917 | 5 | 0.43% | 4,737 | 5 | 0.43% | 4,259 | 4 | 0.42% | 4,678 | 20 | 0.43% | 3,744 | 15 | 0.41% |
| Long-term borrowings | 734 | 12 | 6.56 | 733 | 12 | 6.56 | 732 | 12 | 6.56 | 733 | 48 | 6.61 | 732 | 48 | 6.61 |
| Total borrowings | 5,651 | 17 | 1.23 | 5,470 | 17 | 1.25 | 4,991 | 17 | 1.32 | 5,411 | 69 | 1.27 | 4,476 | 64 | 1.42 |
| Total interest-bearing liabilities | 28,072 | $ 32 | 0.45% | 27,695 | $ 31 | 0.44% | 26,984 | $ 30 | 0.43% | 27,653 | $ 122 | 0.44% | 26,855 | $ 117 | 0.44% |
| Noninterest-bearing deposits | 5,485 | 5,259 | 4,878 | 5,173 | 4,712 | ||||||||||
| Other noninterest-bearing liabilities | 620 | 536 | 533 | 561 | 534 | ||||||||||
| Total liabilities | 34,177 | 33,490 | 32,395 | 33,386 | 32,101 | ||||||||||
| Total stockholders' equity | 4,135 | 5,098 | 4,984 | 4,831 | 4,966 | ||||||||||
| Total liabilities and stockholders' equity | $ 38,312 | $ 38,588 | $ 37,379 | $ 38,218 | $ 37,067 | ||||||||||
| Net interest income (FTE) | $ 275 | $ 278 | $ 285 | $ 1,105 | $ 1,111 | ||||||||||
| Taxable Equivalent Adjustment(1) | 5 | 5 | 5 | 19 | 18 | ||||||||||
| Total core deposits | $ 24,018 | $ 7 | 0.12% | $ 23,514 | $ 7 | 0.12% | $ 23,173 | $ 6 | 0.11% | $ 23,545 | $ 27 | 0.11% | $ 23,216 | $ 27 | 0.12% |
| Total transactional deposits | 10,534 | -- | 0.02% | 10,080 | -- | 0.01% | 9,603 | -- | 0.02% | 10,030 | 2 | 0.02% | 9,236 | 2 | 0.02% |
| Total deposits | 27,906 | 14 | 0.20% | 27,484 | 14 | 0.20% | 26,871 | 13 | 0.19% | 27,414 | 53 | 0.19% | 27,091 | 53 | 0.20% |
| Tax equivalent net interest rate spread | 3.02% | 3.13% | 3.33% | 3.14% | 3.31% | ||||||||||
| Tax equivalent net interest rate margin(4) | 3.11% | 3.21% | 3.41% | 3.23% | 3.39% | ||||||||||
| (1) Tax equivalent interest income is calculated using a 35% tax rate. | |||||||||||||||
| (2) Includes nonaccrual loans. | |||||||||||||||
| (3) Includes debt securities, collateralized loan obligations, asset-backed securities, FHLB and FRB common stock, and other investment securities. | |||||||||||||||
| (4) Includes certain adjustments for the following periods which impacted our tax equivalent net interest margin as follows: | |||||||||||||||
| Three months ended | |||||||||||||||
| December 31, 2014 | September 30, 2014 | ||||||||||||||
| Tax equivalent net interest rate margin as reported (GAAP) | 3.11% | 3.21% | |||||||||||||
| CLO payoff discount recognition | -0.01% | -0.06% | |||||||||||||
| CMBS prepayment normalization | -0.01% | 0.00% | |||||||||||||
| CMO amortization and retroactive adjustment | 0.01% | 0.01% | |||||||||||||
| CRE prepayment penalties | -0.01% | 0.01% | |||||||||||||
| Acquired loans early payoffs | 0.00% | -0.01% | |||||||||||||
| Other adjustments | 0.00% | 0.00% | |||||||||||||
| Tax equivalent net interest rate margin normalized (non-GAAP) | 3.09% | 3.16% | |||||||||||||
| First Niagara Financial Group, Inc. | ||||||||
| Allowance for Loans and Lease Losses & Asset Quality | ||||||||
| (in thousands) | ||||||||
| 2014 | 2013 | For year ending | ||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | |
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2014 | 2013 | |
| Beginning balance | $ 231,353 | $ 223,526 | $ 215,037 | $ 209,274 | $ 197,953 | $ 183,708 | $ 209,274 | $ 162,522 |
| Net loan (charge-offs) recoveries: | ||||||||
| Commercial real estate | $ (2,008) | $ (2,259) | $ (4,885) | $ 905 | $ (5,764) | $ 1,013 | $ (8,247) | $ (9,689) |
| Commercial business | (2,391) | (3,148) | (1,795) | (9,138) | (6,382) | (9,694) | (16,472) | (28,153) |
| Residential real estate | (476) | (102) | (352) | (174) | (168) | (137) | (1,104) | (1,023) |
| Home equity | (1,406) | (1,131) | (1,294) | (3,045) | (1,528) | (322) | (6,876) | (3,368) |
| Indirect auto | (2,241) | (1,621) | (1,455) | (2,086) | (1,215) | (692) | (7,403) | (2,711) |
| Credit cards | (2,464) | (2,726) | (2,930) | (3,044) | (3,082) | (1,300) | (11,164) | (4,780) |
| Other consumer | (1,457) | (1,986) | (1,200) | (2,055) | (2,140) | (1,823) | (6,698) | (6,924) |
| Total net loan charge-offs | $ (12,443) | $ (12,973) | $ (13,911) | $ (18,637) | $ (20,279) | $ (12,955) | $ (57,964) | $ (56,648) |
| Provision for loan losses | 22,500 | 20,800 | 22,400 | 24,400 | 31,600 | 27,200 | 90,100 | 103,400 |
| Ending balance | $ 241,411 | $ 231,353 | $ 223,526 | $ 215,037 | $ 209,274 | $ 197,953 | $ 241,411 | $ 209,274 |
| Supplemental information | ||||||||
| Allowance to loans | 1.05% | 1.02% | 1.00% | 0.99 % | 0.98 % | 0.94 % | 1.05% | 0.98% |
| Allowance for originated loans to originated loans(1) | 1.22% | 1.20% | 1.21% | 1.21 % | 1.21 % | 1.20 % | 1.22% | 1.21% |
| Net charge-offs (recoveries) to average loans (annualized) | ||||||||
| Commercial real estate | 0.10 % | 0.11 % | 0.25% | (0.05)% | 0.30 % | (0.05)% | 0.10% | 0.13% |
| Commercial business | 0.17 % | 0.22 % | 0.13% | 0.68 % | 0.49 % | 0.75 % | 0.29% | 0.55% |
| Total commercial loans | 0.13 % | 0.16 % | 0.20% | 0.25 % | 0.38 % | 0.27 % | 0.18% | 0.30% |
| Residential real estate | 0.06 % | 0.01 % | 0.04% | 0.02 % | 0.02 % | 0.02 % | 0.03% | 0.03% |
| Home equity | 0.19 % | 0.16 % | 0.18% | 0.44 % | 0.22 % | 0.05 % | 0.24% | 0.13% |
| Indirect auto | 0.42 % | 0.33 % | 0.33% | 0.52 % | 0.33 % | 0.23 % | 0.40% | 0.25% |
| Credit cards | 3.13 % | 3.49 % | 3.80% | 3.88 % | 3.93 % | 1.68 % | 3.57% | 1.56% |
| Other consumer | 2.06 % | 2.77 % | 1.65% | 2.74 % | 2.79 % | 2.01 % | 2.31% | 2.20% |
| Total consumer loans | 0.36 % | 0.35 % | 0.34% | 0.50 % | 0.40 % | 0.22 % | 0.38% | 0.24% |
| Total loans | 0.22 % | 0.23 % | 0.25% | 0.34 % | 0.38 % | 0.25 % | 0.26% | 0.28% |
| Net charge-offs (recoveries) of originated loans to average originated loans (annualized)(1) | ||||||||
| Commercial real estate | 0.06 % | 0.13 % | 0.29% | (0.11)% | 0.24 % | (0.07)% | 0.10% | 0.10% |
| Commercial business | 0.17 % | 0.24 % | 0.14% | 0.73 % | 0.53 % | 0.83 % | 0.31% | 0.61% |
| Total commercial loans | 0.11 % | 0.18 % | 0.22% | 0.26 % | 0.37 % | 0.33 % | 0.19% | 0.33% |
| Residential real estate | 0.09 % | 0.02 % | 0.07% | 0.04 % | 0.04 % | 0.03 % | 0.06% | 0.06% |
| Home equity | 0.15 % | 0.17 % | 0.16% | 0.21 % | 0.29 % | 0.09 % | 0.17% | 0.21% |
| Indirect auto | 0.42 % | 0.33 % | 0.33% | 0.52 % | 0.33 % | 0.23 % | 0.40% | 0.25% |
| Credit cards | 3.13 % | 3.49 % | 3.80% | 3.88 % | 3.93 % | 1.68 % | 3.57% | 1.56% |
| Other consumer | 2.06 % | 2.77 % | 1.65% | 2.74 % | 2.80 % | 2.59 % | 2.31% | 2.65% |
| Total consumer loans | 0.44 % | 0.45 % | 0.45% | 0.57 % | 0.56 % | 0.33 % | 0.48% | 0.37% |
| Total loans | 0.23 % | 0.27 % | 0.30% | 0.36 % | 0.43 % | 0.33 % | 0.29% | 0.34% |
| Nonperforming loans: | ||||||||
| Originated(1): | ||||||||
| Commercial real estate | $ 51,940 | $ 57,340 | $ 55,945 | $ 41,296 | $ 53,395 | $ 51,302 | $ 51,940 | $ 53,395 |
| Commercial business | 37,332 | 36,939 | 32,861 | 35,335 | 42,013 | 35,854 | 37,332 | 42,013 |
| Residential real estate | 33,652 | 36,113 | 33,870 | 32,736 | 31,478 | 31,312 | 33,652 | 31,478 |
| Home equity | 23,749 | 23,392 | 19,429 | 19,516 | 18,426 | 15,709 | 23,749 | 18,426 |
| Indirect auto | 12,616 | 11,890 | 9,821 | 7,943 | 6,274 | 5,129 | 12,615 | 6,274 |
| Other consumer | 5,140 | 5,134 | 5,037 | 5,216 | 5,838 | 5,538 | 5,140 | 5,838 |
| Total originated nonperforming loans | 164,429 | 170,808 | 156,963 | 142,042 | 157,424 | 144,844 | 164,428 | 157,424 |
| Total acquired nonperforming loans(2) | 30,223 | 28,611 | 32,488 | 30,617 | 30,088 | 30,388 | 30,222 | 30,088 |
| Total nonperforming loans | 194,652 | 199,419 | 189,451 | 172,659 | 187,512 | 175,232 | 194,650 | 187,512 |
| Real estate owned | 20,541 | 20,261 | 24,270 | 25,466 | 24,788 | 24,262 | 20,541 | 24,788 |
| Total nonperforming assets | $ 215,193 | $ 219,680 | $ 213,721 | $ 198,125 | $ 212,300 | $ 199,494 | $ 215,191 | $ 212,300 |
| Accruing troubled debt restructurings (TDR) | $ 63,667 | $ 69,199 | $ 80,214 | $ 56,038 | $ 52,263 | $ 69,877 | $ 63,667 | $ 52,263 |
| Loans 90 days past due still accruing(3) | 93,903 | 108,615 | 112,718 | 119,134 | 113,212 | 136,248 | 93,903 | 113,212 |
| Total classified loans(4) | 599,194 | 649,320 | 661,699 | 667,327 | 663,700 | 648,235 | 599,194 | 663,700 |
| Total criticized loans(5) | $ 1,030,929 | $ 1,089,851 | $ 1,072,133 | $ 1,075,523 | $ 985,019 | $ 977,798 | $ 1,030,929 | $ 985,019 |
| Total nonperforming loans to loans | 0.84% | 0.88% | 0.85% | 0.79 % | 0.87 % | 0.83 % | 0.84% | 0.87% |
| Total nonperforming originated loans to originated loans(1) | 0.85% | 0.91% | 0.86% | 0.82 % | 0.93 % | 0.89 % | 0.85% | 0.93% |
| Total nonperforming assets to loans and real estate owned | 0.93% | 0.96% | 0.96% | 0.91 % | 0.99 % | 0.94 % | 0.93% | 0.99% |
| Total nonperforming assets to assets | 0.56% | 0.58% | 0.55% | 0.52 % | 0.56 % | 0.53 % | 0.56% | 0.56% |
| Allowance to nonperforming loans | 124.0% | 116.0% | 118.0% | 124.5 % | 111.6 % | 113.0 % | 124.0% | 111.6% |
| Originated loans(1) | $ 19,305,812 | $ 18,841,896 | $ 18,196,302 | $ 17,388,542 | $ 16,922,161 | $ 16,211,505 | $ 19,305,812 | $ 16,922,161 |
| Acquired loans(6) | 3,834,931 | 4,028,091 | 4,254,750 | 4,475,593 | 4,642,775 | 5,006,753 | 3,834,931 | 4,642,775 |
| Credit related discount on acquired loans(7) | (93,102) | (100,138) | (105,233) | (113,295) | (125,283) | (129,187) | (93,102) | (125,283) |
| Total Loans | $ 23,047,641 | $ 22,769,849 | $ 22,345,819 | $ 21,750,840 | $ 21,439,653 | $ 21,089,071 | $ 23,047,641 | $ 21,439,653 |
| (1) Originated loans represent total loans excluding acquired loans. | ||||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. | ||||||||
| (3) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection. | ||||||||
| (4) Includes consumer loans, which are considered classified when they are 90 days or more past due. Classified loans include substandard, doubtful, and loss, which are consistent with regulatory definitions, and as described in Item 1, "Business", under the heading "Asset Quality Review" in our Annual Report on 10-K for the year ended December 31, 2013. | ||||||||
| (5) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss. | ||||||||
| (6) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||||
| (7) Represent principal on acquired loans not expected to be collected. | ||||||||
| First Niagara Financial Group, Inc. | ||||||
| Key Statistics | ||||||
| (Risk weighted assets in millions; share counts in thousands) | ||||||
| 2014 | 2013 | |||||
| December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | |
| First Niagara Financial Group, Inc. capital ratios(1): | ||||||
| Tier 1 risk based capital | 9.81% | 9.80% | 9.57% | 9.62% | 9.56% | 9.45% |
| Tier 1 common capital(2) | 8.21% | 8.17% | 7.92% | 7.92% | 7.86% | 7.72% |
| Total risk based capital | 11.78% | 11.76% | 11.53% | 11.60% | 11.53% | 11.40% |
| Leverage | 7.50% | 7.32% | 7.33% | 7.28% | 7.26% | 7.14% |
| Equity to assets | 10.62% | 10.77% | 13.15% | 13.23% | 13.27% | 13.22% |
| Tangible common equity to tangible assets(2) | 6.30% | 6.37% | 6.13% | 6.07% | 6.02% | 5.89% |
| Total risk weighted assets | $ 28,197 | $ 27,731 | $ 27,314 | $ 26,639 | $ 26,412 | $ 26,078 |
| First Niagara Bank, N.A capital ratios(1): | ||||||
| Tier 1 risk based capital | 10.48% | 10.39% | 10.18% | 10.22% | 10.15% | 10.08% |
| Total risk based capital | 11.39% | 11.28% | 11.05% | 11.08% | 10.99% | 10.89% |
| Leverage | 8.01% | 7.76% | 7.79% | 7.74% | 7.70% | 7.61% |
| Total risk weighted assets | $ 28,157 | $ 27,689 | $ 27,273 | $ 26,597 | $ 26,365 | $ 26,037 |
| Number of branches | 411 | 411 | 411 | 411 | 421 | 422 |
| Full time equivalent employees | 5,572 | 5,768 | 5,874 | 5,750 | 5,807 | 5,788 |
| Share information and per share metrics: | ||||||
| Common shares outstanding | 353,388 | 355,423 | 355,483 | 354,127 | 353,941 | 353,973 |
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 |
| Treasury shares | 12,614 | 10,579 | 10,519 | 11,875 | 12,061 | 12,029 |
| Market price (NASDAQ: FNFG): | $ 8.43 | $ 8.33 | $ 8.74 | $ 9.45 | $ 10.62 | $ 10.37 |
| Book value per common share(3) | 10.71 | 10.71 | 13.53 | 13.40 | 13.31 | 13.15 |
| Tangible book value per common share(2)(3) | 6.67 | 6.64 | 6.31 | 6.15 | 6.04 | 5.86 |
| Price/Book | 78.71% | 77.78% | 64.60% | 70.52% | 79.79% | 78.86% |
| Price/Tangible book(1) | 126.39% | 125.45% | 138.51% | 153.66% | 175.83% | 176.96% |
| Common stock dividends | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 |
| Preferred stock dividends | 0.54 | 0.54 | 0.54 | 0.54 | 0.54 | 0.54 |
| Dividend payout ratio | 40.00% | N/M | 42.11% | 53.33% | 40.00% | 40.00% |
| Dividend yield (annualized) | 3.77% | 3.81% | 3.67% | 3.43% | 2.99% | 3.06% |
| N/M Not meaningful. | ||||||
| (1) Represents an estimate as of December 31, 2014. All preceding quarters represent actual amounts. | ||||||
| (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. | ||||||
| First Niagara Financial Group, Inc. | |||||||||
| Appendix A - Non-GAAP Reconciliation | |||||||||
| (in thousands, except per share amounts) | |||||||||
| 2014 | 2013 | For year ending | |||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | ||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2014 | 2013 | ||
| Financial ratios computed on an operating basis(1): | |||||||||
| Earnings per basic share | $ 0.17 | $ 0.18 | $ 0.19 | $ 0.17 | $ 0.20 | $ 0.20 | $ 0.71 | $ 0.75 | |
| Earnings per diluted share | 0.17 | 0.18 | 0.19 | 0.17 | 0.20 | 0.20 | 0.71 | 0.75 | |
| Weighted average shares outstanding - basic(2) | 350,444 | 350,381 | 350,229 | 349,906 | 349,718 | 349,653 | 350,237 | 349,549 | |
| Weighted average shares outstanding - diluted(2) | 352,152 | 351,898 | 351,541 | 351,408 | 350,699 | 350,896 | 351,750 | 350,381 | |
| Noninterest income as a percentage of net revenue(3) | 22.24% | 21.62% | 22.93% | 22.08% | 24.17% | 24.78% | 22.22% | 25.06% | |
| Pre-tax, pre-provision income | 98,714 | 99,210 | 108,554 | 109,091 | 142,442 | 137,769 | 415,569 | 527,806 | |
| Pre-tax, pre-provision income per diluted share | 0.28 | 0.28 | 0.31 | 0.31 | 0.41 | 0.39 | 1.18 | 1.51 | |
| Pre-tax, pre-provision return on average assets | 1.02% | 1.02% | 1.14% | 1.17% | 1.51% | 1.47% | 1.09% | 1.42% | |
| Net interest margin(4) | 3.11% | 3.21% | 3.26% | 3.33% | 3.41% | 3.40% | 3.23% | 3.39% | |
| Interest yield on average loans(4) | 3.78% | 3.80% | 3.89% | 3.98% | 4.04% | 4.14% | 3.86% | 4.15% | |
| Rate paid on interest-bearing liabilities | 0.45% | 0.44% | 0.44% | 0.44% | 0.43% | 0.43% | 0.44% | 0.44% | |
| Efficiency ratio | 71.55% | 71.55% | 69.22% | 68.60% | 61.46% | 62.66% | 70.23% | 63.82% | |
| Effective tax rate | 8.7% | 9.1% | 14.0% | 19.6% | 29.7% | 28.2% | 13.0% | 30.2% | |
| Return on average assets | 0.72% | 0.73% | 0.77% | 0.73% | 0.82% | 0.85% | 0.74% | 0.80% | |
| Return on average equity | 6.64% | 5.52% | 5.84% | 5.46% | 6.18% | 6.37% | 5.83% | 5.95% | |
| Return on average tangible equity(5) | 10.11% | 10.89% | 11.68% | 11.02% | 12.64% | 13.20% | 10.91% | 12.31% | |
| Return on average common equity | 6.44% | 5.28% | 5.62% | 5.20% | 5.99% | 6.18% | 5.60% | 5.73% | |
| Return on average tangible common equity(6) | 10.29% | 11.19% | 12.10% | 11.33% | 13.25% | 13.92% | 11.20% | 12.86% | |
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | |||||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ 248,246 | $ 249,461 | $ 244,115 | $ 238,380 | $ 227,148 | $ 231,193 | $ 980,202 | $ 931,177 | |
| Restructuring charges | 9,066 | 2,364 | -- | 10,356 | -- | -- | 21,786 | -- | |
| Goodwill impairment | -- | 1,100,000 | -- | -- | -- | -- | 1,100,000 | -- | |
| Deposit account remediation | (23,000) | 45,000 | -- | -- | -- | -- | 22,000 | -- | |
| Total reported noninterest expense (GAAP) | $ 234,312 | $ 1,396,825 | $ 244,115 | $ 248,736 | $ 227,148 | $ 231,193 | $ 2,123,988 | $ 931,177 | |
| Reconciliation of net operating income to net income(1): | |||||||||
| Net operating income (Non-GAAP) | $ 69,197 | $ 70,874 | $ 73,785 | $ 67,789 | $ 77,690 | $ 79,143 | $ 281,645 | $ 295,252 | |
| Nonoperating income and expenses, net of tax: | |||||||||
| Restructuring charges | 6,363 | 1,555 | -- | 8,345 | -- | -- | 16,263 | -- | |
| Goodwill impairment | -- | 963,267 | -- | -- | -- | -- | 963,267 | -- | |
| Deposit account remediation | (14,734) | 29,233 | -- | -- | -- | -- | 14,499 | -- | |
| Total nonoperating expenses, net of tax | (8,371) | 994,055 | -- | 8,345 | -- | -- | 994,029 | -- | |
| Net income (loss) (GAAP) | $ 77,568 | $ (923,181) | $ 73,785 | $ 59,444 | $ 77,690 | $ 79,143 | $ (712,384) | $ 295,252 | |
| Reconciliation of net operating income available to common stockholders to net income available to common stockholders(1): | |||||||||
| Net operating income available to common stockholders (Non-GAAP) | $ 61,650 | $ 63,327 | $ 66,238 | $ 60,242 | $ 70,143 | $ 71,596 | $ 251,457 | $ 265,064 | |
| Nonoperating income and expenses, net of tax: | |||||||||
| Restructuring charges | 6,363 | 1,555 | -- | 8,345 | -- | -- | 16,263 | -- | |
| Goodwill impairment | -- | 963,267 | -- | -- | -- | -- | 963,267 | -- | |
| Deposit account remediation | (14,734) | 29,233 | -- | -- | -- | -- | 14,499 | -- | |
| Total nonoperating income and expenses, net of tax | (8,371) | 994,055 | -- | 8,345 | -- | -- | 994,029 | -- | |
| Net income (loss) available to common stockholders (GAAP) | $ 70,021 | $ (930,728) | $ 66,238 | $ 51,897 | $ 70,143 | $ 71,596 | $ (742,572) | $ 265,064 | |
| Computation of pre-tax, pre-provision income: | |||||||||
| Net interest income | $ 269,783 | $ 273,279 | $ 271,812 | $ 270,747 | $ 280,278 | $ 277,540 | $ 1,085,621 | $ 1,093,391 | |
| Noninterest income | 77,177 | 75,392 | 80,857 | 76,724 | 89,312 | 91,422 | 310,150 | 365,592 | |
| Noninterest expense | (234,312) | (1,396,825) | (244,115) | (248,736) | (227,148) | (231,193) | (2,123,988) | (931,177) | |
| Pre-tax, pre-provision income (loss) (GAAP) | 112,648 | (1,048,154) | 108,554 | 98,735 | 142,442 | 137,769 | (728,217) | 527,806 | |
| Add back: non-operating noninterest expenses (1) | (13,934) | 1,147,364 | -- | 10,356 | -- | -- | 1,143,786 | -- | |
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ 98,714 | $ 99,210 | $ 108,554 | $ 109,091 | $ 142,442 | $ 137,769 | $ 415,569 | $ 527,806 | |
| (1) Noninterest expense on an operating basis, net operating income, and pre-tax, pre-provision income on an operating basis are non-GAAP measures that we believe provide meaningful comparisons of our underlying operational performance and facilitates investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, we believe exclusion of these nonoperating items enables management to perform a more effective evaluation and comparison of our results and to assess performance in relation to our ongoing operations. | |||||||||
| (2) Share count excludes unallocated ESOP shares and unvested restricted stock shares. | |||||||||
| (3) Net revenue is comprised of net interest income and noninterest income. | |||||||||
| (4) Yields and rates calculated on a tax equivalent basis. | |||||||||
| (5) Tangible equity is a non-GAAP measure and excludes goodwill and other intangibles. | |||||||||
| (6) Tangible common equity is a non-GAAP measure and excludes goodwill and other intangibles as well as preferred stock. | |||||||||
| First Niagara Financial Group, Inc. | |||||||||
| Appendix A - Non-GAAP Reconciliation (Cont.) | |||||||||
| (in thousands, except per share amounts) | |||||||||
| 2014 | 2013 | For year ending | |||||||
| Fourth | Third | Second | First | Fourth | Third | December 31, | December 31, | ||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | 2014 | 2013 | ||
| Computation of Ending Tangible Assets: | |||||||||
| Total assets | $ 38,552,442 | $ 37,966,051 | $ 38,624,752 | $ 37,990,444 | $ 37,628,362 | $ 37,340,541 | $ 38,552,442 | $ 37,628,362 | |
| Less: Goodwill and other intangibles | (1,417,005) | (1,423,437) | (2,528,481) | (2,535,271) | (2,542,783) | (2,549,931) | (1,417,005) | (2,542,783) | |
| Tangible assets | $ 37,135,437 | $ 36,542,614 | $ 36,096,271 | $ 35,455,173 | $ 35,085,579 | $ 34,790,610 | $ 37,135,437 | $ 35,085,579 | |
| Computation of Average Tangible Assets: | |||||||||
| Total assets | $ 38,312,021 | $ 38,588,226 | $ 38,211,808 | $ 37,747,869 | $ 37,378,780 | $ 37,093,236 | $ 38,217,550 | $ 37,067,126 | |
| Less: Goodwill and other intangibles | (1,420,119) | (2,514,581) | (2,531,612) | (2,538,891) | (2,546,031) | (2,553,647) | (2,248,958) | (2,567,436) | |
| Tangible assets | $ 36,891,902 | $ 36,073,645 | $ 35,680,196 | $ 35,208,978 | $ 34,832,749 | $ 34,539,589 | $ 35,968,592 | $ 34,499,690 | |
| Computation of Ending Tangible Equity: | |||||||||
| Total stockholders' equity | $ 4,095,269 | $ 4,089,712 | $ 5,078,818 | $ 5,026,219 | $ 4,993,353 | $ 4,938,197 | $ 4,095,269 | $ 4,993,353 | |
| Less: Goodwill and other intangibles | (1,417,005) | (1,423,437) | (2,528,481) | (2,535,271) | (2,542,783) | (2,549,931) | (1,417,005) | (2,542,783) | |
| Tangible equity | $ 2,678,264 | $ 2,666,275 | $ 2,550,337 | $ 2,490,948 | $ 2,450,570 | $ 2,388,266 | $ 2,678,264 | $ 2,450,570 | |
| Computation of Ending Tangible Common Equity: | |||||||||
| Total stockholders' equity | $ 4,095,269 | $ 4,089,712 | $ 5,078,818 | $ 5,026,219 | $ 4,993,353 | $ 4,938,197 | $ 4,095,269 | $ 4,993,353 | |
| Less: Goodwill and other intangibles | (1,417,005) | (1,423,437) | (2,528,481) | (2,535,271) | (2,542,783) | (2,549,931) | (1,417,005) | (2,542,783) | |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | |
| Tangible common equity | $ 2,340,262 | $ 2,328,273 | $ 2,212,335 | $ 2,152,946 | $ 2,112,568 | $ 2,050,264 | $ 2,340,262 | $ 2,112,568 | |
| Computation of Average Tangible Equity: | |||||||||
| Total stockholders' equity | $ 4,135,243 | $ 5,097,604 | $ 5,065,008 | $ 5,034,093 | $ 4,984,003 | $ 4,932,949 | $ 4,831,249 | $ 4,960,026 | |
| Less: Goodwill and other intangibles | (1,420,119) | (2,514,581) | (2,531,612) | (2,538,891) | (2,546,031) | (2,553,647) | (2,248,958) | (2,574,650) | |
| Tangible equity | $ 2,715,124 | $ 2,583,023 | $ 2,533,396 | $ 2,495,202 | $ 2,437,972 | $ 2,379,302 | $ 2,582,291 | $ 2,385,376 | |
| Computation of Average Tangible Common Equity: | |||||||||
| Total stockholders' equity | $ 4,135,243 | $ 5,097,604 | $ 5,065,008 | $ 5,034,093 | $ 4,984,003 | $ 4,932,949 | $ 4,831,249 | $ 4,960,026 | |
| Less: Goodwill and other intangibles | (1,420,119) | (2,514,581) | (2,531,612) | (2,538,891) | (2,546,031) | (2,553,647) | (2,248,958) | (2,574,650) | |
| Less: Preferred stockholders' equity | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | |
| Tangible common equity | $ 2,377,122 | $ 2,245,021 | $ 2,195,394 | $ 2,157,200 | $ 2,099,970 | $ 2,041,300 | $ 2,244,289 | $ 2,047,374 | |
| Computation of Tier 1 Common Capital: | |||||||||
| Tier 1 capital | $ 2,766,628 | $ 2,716,439 | $ 2,613,584 | $ 2,562,261 | $ 2,525,656 | $ 2,464,801 | $ 2,766,628 | $ 2,525,656 | |
| Less: Qualifying restricted core capital elements | (113,785) | (113,556) | (113,330) | (113,107) | (112,886) | (112,667) | (113,785) | (112,886) | |
| Less: Perpetual non-cumulative preferred stock | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | (338,002) | |
| Tier 1 common capital (Non-GAAP) | $ 2,314,841 | $ 2,264,881 | $ 2,162,252 | $ 2,111,152 | $ 2,074,768 | $ 2,014,132 | $ 2,314,841 | $ 2,074,768 | |