- First quarter operating earnings of $0.14 per diluted share
- First quarter GAAP earnings of $0.11 per diluted share, including merger-related integration expenses
- Average loans increased 5% annualized QOQ
- Average commercial loans (CRE and commercial business) up 7% annualized QOQ
- Average consumer loans increased 2% annualized QOQ driven by indirect auto loan growth
- Average deposit balances increased 1% annualized QOQ and 4% YOY
- Average retail deposit balances increased 8% annualized QOQ and 3% YOY
- Average retail noninterest-bearing deposit balances increased 18% annualized QOQ and 4% YOY
- Originated net charge-offs decreased 15 basis points QOQ to 0.22% of average originated loans
BUFFALO, N.Y., April 29, 2016 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (NASDAQ:FNFG) today reported GAAP net income available to common shareholders of $40.8 million, or $0.11 per diluted share for the first quarter of 2016, compared to $43.3 million, or $0.12 per diluted share, for the quarter ended December 31, 2015. Excluding merger-related costs incurred during the first quarter of 2016, operating net income available to common shareholders was $49.9 million, or $0.14 per diluted share.
“The First Niagara team remains fully committed to keeping our customers at the center of all we do and their efforts are reflected in our first-quarter performance, which is highlighted by continued strong core business fundamentals, particularly loan and deposit growth. Compared to the year-ago quarter, we grew average commercial loans by 5%, delivered 7% growth in average checking account deposit balances, and reported improved credit metrics," said Gary M. Crosby, President and Chief Executive Officer. “We’re maintaining a strong competitive position while we move forward on our planned merger with KeyCorp.”
“In the first quarter, we delivered on the strong commercial loan pipeline at year-end which translated to an 11% annualized increase in period-end C&I loan balances and 5% QOQ increase on an average basis,” said Gregory W. Norwood, Chief Financial Officer. “Revenue and expenses were largely consistent with typical first quarter seasonal trends. Our originated net charge-offs of just 22 basis points in the first quarter also reflects continued stable asset quality as well as the recovery on an energy credit that was previously charged-off.”
First Quarter Results
In the first quarter of 2016, First Niagara reported GAAP net income available to common shareholders of $40.8 million, or $0.11 per diluted share, compared to $43.3 million, or $0.12 per diluted share in the fourth quarter of 2015. Reported results in the first quarter of 2016 and fourth quarter of 2015 reflect pre-tax merger related and restructuring costs of $13 million and $18 million, respectively. Excluding these items, operating net income available to common shareholders was $49.9 million, or $0.14 per diluted share, compared to $55.3 million, or $0.15 per diluted share in the fourth quarter of 2015.
Compared to the fourth quarter of 2015, the change in operating net income available to common shareholders was primarily driven by:
- A $1 million increase in net interest income driven by a 5% annualized increase in average earning assets and two basis point expansion in net interest margin in part driven by higher short-term interest rates, and partially offset by lower net interest income from one less day in the first quarter.
- A $10 million or 12% decrease in noninterest income driven by moderation in capital markets income from strong fourth quarter levels which included a favorable credit valuation adjustment, seasonal declines in deposit service charges and merchant and card fees, lower wealth management income due to lower producer levels and equity market volatility, and lower mortgage banking revenues due to a $1 million repurchase reserve reversal taken in the fourth quarter of 2015.
- A $6 million or 2% decrease in operating noninterest expenses primarily driven by lower technology and professional services spend, partially offset by typical first quarter increases in payroll taxes and other benefits expenses.
- A higher effective tax rate attributable to the expiration of benefits from certain tax credit investments.
In the first quarter of 2015, First Niagara reported GAAP net income available to common shareholders of $43.8 million, or $0.12 per diluted share. Results in the first quarter of 2015 included $18 million of pre-tax restructuring charges. Excluding these nonrecurring items, first quarter 2015 net income available to common shareholders was $54.7 million, or $0.15 per diluted share.
Compared to the first quarter of 2015, the change in operating net income available to common shareholders in the first quarter of 2016 was primarily driven by:
- A 2% increase in net interest income driven by a 3% annualized increase in average earning assets, offset by a seven basis point compression in the net interest margin driven by increases in cost of deposits and borrowings.
- A $10 million increase in provision for loan losses driven by greater reserve build.
- A 4% decrease in noninterest income, driven by lower capital markets, lower commercial lines insurance revenues, and lower wealth management income attributable to market volatility in the first quarter of 2016.
- Modestly lower noninterest expense as an increase in incentive compensation expenses was offset by declines in amortization of intangibles, marketing spend, FDIC assessments and third party professional services expenses.
| Operating Results (Non-GAAP) | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Net interest income | $ | 267.6 | $ | 266.5 | $ | 263.5 | $ | 263.1 | $ | 262.9 | |||||
| Provision for credit losses | 22.5 | 22.9 | 19.8 | 20.8 | 12.8 | ||||||||||
| Noninterest income | 79.1 | 89.4 | 83.4 | 86.6 | 82.2 | ||||||||||
| Noninterest expense | 241.9 | 247.4 | 245.4 | 247.9 | 243.5 | ||||||||||
| Operating net income | 57.4 | 62.8 | 60.5 | 61.0 | 62.2 | ||||||||||
| Preferred stock dividend | 7.5 | 7.5 | 7.5 | 7.5 | 7.5 | ||||||||||
| Operating net income available to common | $ | 49.9 | $ | 55.3 | $ | 52.9 | $ | 53.5 | $ | 54.7 | |||||
| Weighted average diluted shares outstanding | 354.0 | 353.8 | 353.2 | 352.8 | 352.6 | ||||||||||
| Operating earnings per diluted share | $ | 0.14 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | |||||
Reported Results (GAAP) | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Operating net income before non-op. items | $ | 57.4 | $ | 62.8 | $ | 60.5 | $ | 61.0 | $ | 62.2 | |||||
| Non-operating items (a) | 9.1 | 12.0 | - | - | 10.9 | ||||||||||
| Net Income | 48.3 | 50.8 | 60.5 | 61.0 | 51.4 | ||||||||||
| Preferred stock dividend | 7.5 | 7.5 | 7.5 | 7.5 | 7.5 | ||||||||||
| Net income available to common | $ | 40.8 | $ | 43.3 | $ | 52.9 | $ | 53.5 | $ | 43.8 | |||||
| Weighted average diluted shares outstanding | 354.0 | 353.8 | 353.2 | 352.8 | 352.6 | ||||||||||
| Earnings per diluted share | $ | 0.11 | $ | 0.12 | $ | 0.15 | $ | 0.15 | $ | 0.12 | |||||
All amounts in millions except earnings per diluted share.
(a) Q1 2016: Non-operating charges comprised of merger related costs including employee retention expenses, classification of compensation of certain personnel dedicated to merger integration efforts as well as costs related to securing shareholder approval for the merger, net of taxes.
Q4 2015: Non-operating charges primarily comprised of merger related costs including investment banker and other professional services fees, employee retention expenses, classification of compensation of certain personnel dedicated to merger integration efforts as well as third-party professional fees incurred in connection with the overstatement of allowance resulting from mid-level employee misconduct, net of taxes.
Q1 2015: Non-operating charges primarily related to staffing realignment, branch consolidations and third-party professional fees incurred in connection with the overstatement of allowance resulting from mid-level employee misconduct, net of taxes.
Loans
Average loans increased 5% annualized from the prior quarter to $24.1 billion, driven primarily by increases in the company’s commercial real estate (CRE), commercial business (C&I), and indirect auto portfolios. On an end-of-period basis, total loans increased 2% annualized from the prior quarter driven by an 11% annualized increase in C&I loans and 12% increase in indirect auto loans.
Average commercial loans, which include commercial business (C&I) and commercial real estate (CRE) loans, increased 7% annualized from prior quarter to $14.7 billion, primarily driven by growth in the company’s New England, Western Pennsylvania, and Tri-State regions.
- Average CRE loans increased 7% annualized from the prior quarter to $8.6 billion driven by new commercial mortgage and construction lending volumes.
- Average C&I loans increased 6% annualized QOQ to $6.1 billion reflecting strong origination activity across the company’s footprint.
Average consumer loans increased 2% annualized from prior quarter to $9.4 billion.
- Average indirect auto loan balances increased 9% annualized or by $51 million to $2.4 billion, as strong new origination activity was partially offset by increased pay-downs. Indirect auto originations during the quarter totaled $314 million. New originations in the first quarter yielded 3.41%, net of dealer reserve, compared to 3.30% on originations in the prior quarter.
- Average residential real estate loans were flat to the prior quarter.
- Home equity balances increased for the twelfth consecutive quarter to $3.1 billion, or 2% annualized from the prior quarter as new volumes were offset by pay-downs driven by higher customer refinancing activity given low mortgage rates.
- Credit card balances were down $8 million, or 11% annualized due to typical seasonality.
| Average Loans | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Commercial real estate | $ | 8,625 | $ | 8,476 | $ | 8,277 | $ | 8,257 | $ | 8,263 | |||||
| Commercial business | 6,062 | 5,971 | 5,972 | 5,830 | 5,797 | ||||||||||
| Total commercial | 14,687 | 14,447 | 14,249 | 14,087 | 14,060 | ||||||||||
| Residential real estate | 3,346 | 3,346 | 3,338 | 3,326 | 3,338 | ||||||||||
| Home equity | 3,066 | 3,052 | 3,001 | 2,963 | 2,939 | ||||||||||
| Indirect auto | 2,420 | 2,369 | 2,293 | 2,238 | 2,187 | ||||||||||
| Credit cards | 297 | 305 | 306 | 304 | 311 | ||||||||||
| Other consumer | 242 | 250 | 255 | 260 | 275 | ||||||||||
| Total consumer | 9,371 | 9,322 | 9,193 | 9,091 | 9,050 | ||||||||||
| Total loans | $ | 24,058 | $ | 23,769 | $ | 23,442 | $ | 23,178 | $ | 23,110 | |||||
All amounts in millions.
Credit Quality
At March 31, 2016, the allowance for loan losses was $253 million, compared to $242 million at December 31, 2015. In the first quarter, provision for loan losses totaled $22.5 million, compared to $22.4 million in the prior quarter. Nonperforming assets comprised 0.59% of total assets, essentially flat compared to December 31, 2015. Information for both the originated and acquired portfolios follows.
| Q1 2016 | Q4 2015 | ||||||||||||||||||
| $ in millions | Originated | Acquired | Total | Originated | Acquired | Total | |||||||||||||
| Provision for loan losses* | $ | 22 .5 | $ | 0.0 | $ | 22.5 | $ | 22.4 | $ | 0.0 | $ | 22.4 | |||||||
| Net charge-offs | 11.4 | 0.4 | 11.8 | 19.1 | 0.0 | 19.1 | |||||||||||||
| NCOs/ Avg Loans | 0.22 | % | 0.05 | % | 0.20 | % | 0.37 | % | 0.00 | % | 0.32 | % | |||||||
| Total loans** | $ | 21,362 | $ | 2,817 | $ | 24,178 | $ | 21,101 | $ | 2,937 | $ | 24,038 | |||||||
| Allowance | $ | 247.8 | $ | 5.0 | $ | 252.8 | $ | 236.7 | $ | 5.3 | $ | 242.0 | |||||||
| Allowance/Loans | 1.16 | % | 0.18 | % | 1.05 | % | 1.12 | % | 0.18 | % | 1.01 | % | |||||||
| Nonperforming Loans | $ | 196.7 | $ | 24.9 | $ | 221.5 | $ | 188.2 | $ | 25.3 | $ | 213.6 | |||||||
| NPLs/ Loans | 0.92 | % | 0.88 | % | 0.92 | % | 0.89 | % | 0.86 | % | 0.89 | % | |||||||
| Criticized | $ | 775.9 | $ | 178.5 | $ | 954.5 | $ | 761.6 | $ | 183.2 | $ | 944.8 | |||||||
| Criticized as % of Loans | 3.63 | % | 6.34 | % | 3.95 | % | 3.61 | % | 6.24 | % | 3.93 | % | |||||||
| Classified | $ | 462.9 | $ | 138.6 | $ | 601.5 | $ | 450.7 | $ | 152.2 | $ | 602.9 | |||||||
| Classified as % of Loans | 2.17 | % | 4.92 | % | 2.49 | % | 2.14 | % | 5.18 | % | 2.51 | % | |||||||
(*) Excludes provision for unfunded commitment of $0.5 million in 4Q15; none in 1Q16
(**) Acquired loans net of associated credit discount; see accompanying tables for further information
Originated loans
The provision for loan losses on originated loans totaled $23 million, compared to $22 million in the fourth quarter of 2015. The current quarter provision included $11 million to cover net charge-offs on originated loans and $11 million to support both $261 million in originated loan growth and reserve build toward the company’s exposure to scrap metal companies and demolition companies whose profitability is partially dependent on the sale of scrap metal. Originated net charge-offs in the first quarter equaled $11 million or 22 basis points of average originated loans, down from 37 basis points in the fourth quarter of 2015. The decrease in net charge-offs were driven by a recovery on a previously charged-off energy credit as well as moderation from elevated fourth quarter levels which included losses related to two commercial credits.
At March 31, 2016, nonperforming originated loans totaled $197 million, or 0.92% of originated loans, compared to 0.89% at December 31, 2015. The increase was primarily driven by new inflows of a few energy-related commercial credits, as well as a demolition contractor whose profitability is partially dependent on the sale of scrap metal, and offset by pay-downs, charge-offs and resolutions. At March 31, 2016, the allowance for loan losses on originated loans totaled $248 million or 1.16% of such loans, compared to $237 million or 1.12% of such loans at December 31, 2015. The increase in allowance coverage ratio reflects reserve build toward the company’s modest metals exposure.
Acquired loans
There was no provision for losses on acquired loans in both the first quarter of 2016 and the fourth quarter of 2015. Net charge-offs on the acquired portfolio were $0.4 million, compared to zero in the prior quarter. At March 31, 2016, the allowance for loan losses on acquired loans totaled $5 million, unchanged from December 31, 2015. Acquired nonperforming loans totaled $25 million, also unchanged from the prior quarter. At March 31, 2016, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $57 million.
Deposits
Average deposits increased 1% annualized from the prior quarter to $28.9 billion.
- Non-interest checking deposit balances averaged $5.7 billion, decreased 14% annualized from the prior quarter driven by business and municipal deposit balances but were up 4% from the year-ago period.
- Time deposits increased 24% annualized to $3.7 billion, driven by a $144 million increase in brokered certificate of deposit (CD) balances and an $86 million increase in Retail CDs.
- Money market deposit balances were flat from the prior quarter as a $135 million, or 8%, increase in retail money market balances was offset by seasonal declines in municipal money market deposit balances.
- Average transactional deposit balances, which include interest-bearing and noninterest-bearing checking account balances, increased 6% from the year-ago period and decreased 6% annualized from the prior quarter and currently represents 38% of the company’s deposit balances.
- The 2% sequential increase in interest-checking deposit balances was driven by a $74 million increase in retail interest checking balances.
- Average savings balances increased 1% annualized from the prior quarter driven by modestly higher retail balances.
| Average Deposits | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Noninterest-bearing deposits | $ | 5,666 | $ | 5,868 | $ | 5,661 | $ | 5,427 | $ | 5,430 | |||||
| Savings accounts | 3,371 | 3,364 | 3,427 | 3,494 | 3,432 | ||||||||||
| Interest-bearing checking | 5,362 | 5,333 | 5,165 | 5,131 | 5,001 | ||||||||||
| Money market deposits | 10,725 | 10,719 | 10,403 | 10,251 | 10,132 | ||||||||||
| Certificates of deposit | 3,726 | 3,515 | 3,962 | 3,917 | 3,778 | ||||||||||
| Total deposits | $ | 28,850 | $ | 28,799 | $ | 28,618 | $ | 28,220 | $ | 27,773 | |||||
All amounts in millions.
Net Interest Income
First quarter 2016 GAAP net interest income of $268 million increased $1 million from the prior quarter, driven in part by earning asset growth and modest benefit from an increase in short-term interest rates and offset by one less day in the quarter. Reported net interest margin of 3.00% was up 2 basis points from the prior quarter.
- Yields on loans increased 8 basis points to 3.73% primarily reflecting benefit from the recent increase in short-term interest rates.
- Yields on investment securities increased 2 basis points to 2.92%.
- The average cost of interest-bearing deposits increased 2 basis points from the prior quarter to 0.32%.
| Net Interest Income (Tax Equivalent) | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Quarter as Reported | $ | 272.8 | $ | 271.7 | $ | 268.5 | $ | 268.0 | $ | 267.8 | |||||
| Less: CLO pay-off discount recognition | - | - | (1.2 | ) | (2.3 | ) | - | ||||||||
| Add: CMO Retroactive premium amortization | - | - | - | 1.1 | - | ||||||||||
| Add: CRE prepayment penalties | - | (0.5 | ) | - | - | - | |||||||||
| Less: Early loan payoffs | - | - | - | (1.7 | ) | - | |||||||||
| Less: Other miscellaneous items | (0.6 | ) | (0.5 | ) | - | - | - | ||||||||
| Sub-Total | (0.6 | ) | (1.0 | ) | (1.2 | ) | (2.9 | ) | - | ||||||
| Normalized Net Interest Income | $ | 272.2 | $ | 270.7 | $ | 267.3 | $ | 265.1 | $ | 267.8 | |||||
All amounts in millions.
| Net Interest Margin (Tax Equivalent) | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Quarter as Reported | 3.00 | % | 2.98 | % | 2.98 | % | 3.02 | % | 3.07 | % | |||||
| Less: CLO pay-off discount recognition | - | - | (0.01 | )% | (0.03 | )% | - | ||||||||
| Add: CMO Retroactive premium amortization | - | - | - | 0.01 | % | - | |||||||||
| Add: CRE prepayment penalties | - | (0.01 | )% | - | - | - | |||||||||
| Less: Early loan payoffs | - | - | - | (0.02 | %) | - | |||||||||
| Less: Other miscellaneous items | (0.01 | )% | (0.01 | )% | - | - | - | ||||||||
| Sub-Total | (0.01 | )% | (0.02 | )% | (0.01 | )% | (0.03 | )% | - | ||||||
| Normalized Net Interest Margin | 2.99 | % | 2.96 | % | 2.97 | % | 2.99 | % | 3.07 | % | |||||
Noninterest Income
First quarter 2016 noninterest income of $79 million decreased 12% or $10 million compared to the prior quarter.
- Deposit service charges decreased $1 million or 6% due to typical first quarter seasonality.
- Merchant and card fees decreased $1 million driven by seasonally lower interchange revenues consistent with lower card transaction volumes.
- Wealth management revenue decreased $1 million from prior quarter driven in part by equity market volatility.
- Capital markets income, which includes income from derivatives and syndications, decreased $4 million, primarily driven by an unfavorable quarter-over-quarter change in credit valuation adjustments.
- Mortgage banking revenues were $1 million lower than the prior quarter reflecting a $1 million repurchase reserve reversal recognized in the fourth quarter of 2015. Locked volumes increased QOQ, while gain-on-sale margin remained relatively flat.
- Other noninterest income decreased $2 million from the prior quarter due to lower equity and investment gains as well as a one-time gain from the sale of a low-income housing property recognized in the prior quarter.
| Noninterest Income | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Deposit service charges | $ | 21.5 | $ | 22.9 | $ | 22.9 | $ | 22.2 | $ | 20.4 | |||||
| Insurance commissions | 14.6 | 14.9 | 18.3 | 17.1 | 15.7 | ||||||||||
| Merchant and card fees | 12.3 | 13.3 | 13.4 | 13.3 | 11.9 | ||||||||||
| Wealth management services | 13.6 | 14.6 | 14.6 | 15.7 | 14.7 | ||||||||||
| Mortgage banking | 4.0 | 4.9 | 5.1 | 5.8 | 4.9 | ||||||||||
| Capital markets income | 2.3 | 6.6 | 2.6 | 5.3 | 4.2 | ||||||||||
| Lending and leasing | 4.1 | 4.2 | 4.5 | 4.0 | 4.4 | ||||||||||
| Bank owned life insurance | 3.5 | 3.3 | 2.8 | 3.2 | 3.6 | ||||||||||
| Other income | 3.2 | 4.7 | (0.7 | ) | 0.1 | 2.6 | |||||||||
| Total noninterest income | $ | 79.1 | $ | 89.4 | $ | 83.4 | $ | 86.6 | $ | 82.2 | |||||
All amounts in millions.
Noninterest Expense
Operating noninterest expenses totaled $242 million in the first quarter of 2016, or 2% lower than fourth quarter 2015 levels. The quarter-over-quarter decrease was primarily driven by lower technology and professional services expenses.
- Salaries and benefits expense of $115 million increased modestly compared to the prior quarter as typical resetting of payroll taxes and other seasonal benefits more than offset lower salaries from lower headcount.
- Occupancy and equipment expense increased 2%, due primarily to lower rental income associated with a property that was sold.
- Technology and communications decreased $3 million, or 7% from prior quarter on lower infrastructure costs and depreciation expense.
- Marketing and advertising spend were $1 million lower compared to fourth quarter levels and consistent with seasonal patterns.
- Professional services fees decreased $3 million from fourth quarter levels driven by pause of certain projects and the associated decline in third party services expenses.
- Other expenses decreased $1 million sequentially driven in part by lower other real estate (ORE) valuation write-downs and other corporate expenses.
| Operating Noninterest Expense (Non-GAAP)* | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | ||||||||||
| Salaries and employee benefits | $ | 115.0 | $ | 113.1 | $ | 113.8 | $ | 113.6 | $ | 112.0 | |||||
| Occupancy and equipment | 26.5 | 26.0 | 25.5 | 26.0 | 27.3 | ||||||||||
| Technology and communications | 35.4 | 38.2 | 38.3 | 36.5 | 35.1 | ||||||||||
| Marketing and advertising | 8.8 | 9.7 | 8.4 | 10.3 | 9.9 | ||||||||||
| Professional services | 12.4 | 15.4 | 18.1 | 16.3 | 13.1 | ||||||||||
| Amortization of intangibles | 3.9 | 4.0 | 4.0 | 5.1 | 6.2 | ||||||||||
| Federal deposit insurance premiums | 10.5 | 10.4 | 10.0 | 11.8 | 11.2 | ||||||||||
| Other expense | 29.4 | 30.7 | 27.3 | 28.4 | 28.9 | ||||||||||
| Total operating noninterest expense | $ | 241.9 | $ | 247.4 | $ | 245.4 | $ | 247.9 | $ | 243.5 | |||||
*All amounts in millions. See appendix for reconciliation of GAAP to Non-GAAP amounts
In the first quarter of 2016, the operating efficiency ratio was 69.8%, compared to 69.5% in the prior quarter.
Capital
Beginning in the first quarter of 2015, all regulatory capital ratios and amounts were calculated under the Basel III standardized transitional approach. At March 31, 2016, the company’s consolidated Total Risk Based capital and Common Equity Tier 1 capital ratios were 12.1% and 8.6%, respectively, relatively unchanged from December 31, 2015. The company remains well above current regulatory guidelines for well-capitalized institutions.
About First Niagara
First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank with approximately 390 branches, $40 billion in assets, $30 billion in deposits, and approximately 5,300 employees providing financial services to individuals, families and businesses across New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.
Safe Harbor Statement
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) impact of the pending merger agreement on customers and employees; and (7) ability to consummate the merger transaction with KeyCorp on a timely basis or at all.
| First Niagara Financial Group, Inc. | |||||||||||||||||||||||||||
| Income Statement Highlights - Reported Basis | |||||||||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Fourth | ||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||
| Loans and leases | $ | 219,050 | $ | 214,945 | $ | 211,407 | $ | 211,899 | $ | 210,371 | $ | 214,609 | |||||||||||||||
| Investment securities and other | 89,759 | 88,825 | 87,914 | 86,356 | 86,280 | 86,919 | |||||||||||||||||||||
| Total interest income | 308,809 | 303,770 | 299,321 | 298,255 | 296,651 | 301,528 | |||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||
| Deposits | 18,640 | 17,147 | 17,040 | 16,568 | 15,344 | 14,295 | |||||||||||||||||||||
| Borrowings | 22,578 | 20,074 | 18,790 | 18,577 | 18,363 | 17,450 | |||||||||||||||||||||
| Total interest expense | 41,218 | 37,221 | 35,830 | 35,145 | 33,707 | 31,745 | |||||||||||||||||||||
| Net interest income | 267,591 | 266,549 | 263,491 | 263,110 | 262,944 | 269,783 | |||||||||||||||||||||
| Provision for credit losses | 22,519 | 22,900 | 19,768 | 20,756 | 12,765 | 35,706 | |||||||||||||||||||||
| Net interest income after provision | 245,072 | 243,649 | 243,723 | 242,354 | 250,179 | 234,077 | |||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||
| Deposit service charges | 21,507 | 22,919 | 22,944 | 22,208 | 20,389 | 22,611 | |||||||||||||||||||||
| Insurance commissions | 14,562 | 14,920 | 18,252 | 17,060 | 15,714 | 14,764 | |||||||||||||||||||||
| Merchant and card fees | 12,329 | 13,318 | 13,423 | 13,317 | 11,907 | 13,043 | |||||||||||||||||||||
| Wealth management services | 13,610 | 14,567 | 14,572 | 15,718 | 14,650 | 14,404 | |||||||||||||||||||||
| Mortgage banking | 3,950 | 4,894 | 5,070 | 5,783 | 4,887 | 4,600 | |||||||||||||||||||||
| Capital markets income | 2,323 | 6,580 | 2,608 | 5,284 | 4,152 | 8,312 | |||||||||||||||||||||
| Lending and leasing | 4,051 | 4,248 | 4,487 | 3,998 | 4,353 | 4,567 | |||||||||||||||||||||
| Bank owned life insurance | 3,540 | 3,259 | 2,819 | 3,160 | 3,592 | 3,187 | |||||||||||||||||||||
| Other income | 3,196 | 4,696 | (732 | ) | 79 | 2,600 | (8,311 | ) | |||||||||||||||||||
| Total noninterest income | 79,068 | 89,401 | 83,443 | 86,607 | 82,244 | 77,177 | |||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||
| Salaries and employee benefits | 115,007 | 113,063 | 113,794 | 113,561 | 111,973 | 110,985 | |||||||||||||||||||||
| Occupancy and equipment | 26,466 | 25,961 | 25,538 | 26,021 | 27,332 | 28,379 | |||||||||||||||||||||
| Technology and communications | 35,419 | 38,232 | 38,301 | 36,486 | 35,061 | 33,940 | |||||||||||||||||||||
| Marketing and advertising | 8,821 | 9,719 | 8,445 | 10,297 | 9,863 | 11,584 | |||||||||||||||||||||
| Professional services | 12,401 | 15,361 | 18,052 | 16,321 | 13,070 | 16,644 | |||||||||||||||||||||
| Amortization of intangibles | 3,860 | 3,972 | 4,001 | 5,092 | 6,205 | 6,432 | |||||||||||||||||||||
| Federal deposit insurance premiums | 10,460 | 10,383 | 10,026 | 11,750 | 11,158 | 11,911 | |||||||||||||||||||||
| Merger and acquisition integration expenses | 13,473 | 14,198 | - | - | - | - | |||||||||||||||||||||
| Restructuring charges | - | 3,378 | - | - | 17,517 | 9,066 | |||||||||||||||||||||
| Deposit account remediation | - | - | - | - | - | (23,000 | ) | ||||||||||||||||||||
| Other expense | 29,445 | 30,728 | 27,276 | 28,371 | 28,859 | 28,371 | |||||||||||||||||||||
| Total noninterest expense | 255,352 | 264,995 | 245,433 | 247,899 | 261,038 | 234,312 | |||||||||||||||||||||
| Income before income tax | 68,788 | 68,055 | 81,733 | 81,062 | 71,385 | 76,942 | |||||||||||||||||||||
| Income tax expense | 20,481 | 17,255 | 21,251 | 20,052 | 20,000 | 7,875 | |||||||||||||||||||||
| Net income | 48,307 | 50,800 | 60,482 | 61,010 | 51,385 | 69,067 | |||||||||||||||||||||
| Preferred stock dividend | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | 7,547 | |||||||||||||||||||||
| Net income available to common stockholders | $ | 40,760 | $ | 43,253 | $ | 52,935 | $ | 53,463 | $ | 43,838 | $ | 61,520 | |||||||||||||||
| Financial Ratios: | |||||||||||||||||||||||||||
| Earnings per basic share | $ | 0.11 | $ | 0.12 | $ | 0.15 | $ | 0.15 | 0.12 | 0.17 | |||||||||||||||||
| Earnings per diluted share | $ | 0.11 | $ | 0.12 | $ | 0.15 | $ | 0.15 | 0.12 | 0.17 | |||||||||||||||||
| Weighted average shares outstanding - basic(1) | 351,372 | 351,306 | 351,293 | 351,126 | 350,741 | 350,444 | |||||||||||||||||||||
| Weighted average shares outstanding - diluted(1) | 353,965 | 353,797 | 353,248 | 352,791 | 352,621 | 352,152 | |||||||||||||||||||||
| Net revenue(2) | $ | 346,659 | $ | 355,950 | $ | 346,934 | $ | 349,717 | $ | 345,188 | $ | 346,960 | |||||||||||||||
| Noninterest income as a percentage of net revenue(2) | 22.81 | % | 25.12 | % | 24.05 | % | 24.76 | % | 23.83 | % | 22.24 | % | |||||||||||||||
| Pre-tax, pre-provision income(3) | $ | 91,307 | $ | 90,955 | $ | 101,501 | $ | 101,818 | $ | 84,150 | $ | 112,648 | |||||||||||||||
| Pre-tax, pre-provision income per diluted share(3) | $ | 0.26 | $ | 0.26 | $ | 0.29 | $ | 0.29 | $ | 0.24 | $ | 0.32 | |||||||||||||||
| Pre-tax, pre-provision return on average assets(3) | 0.92 | % | 0.91 | % | 1.03 | % | 1.05 | % | 0.88 | % | 1.17 | % | |||||||||||||||
| Net interest margin(4) | 3.00 | % | 2.98 | % | 2.98 | % | 3.02 | % | 3.07 | % | 3.11 | % | |||||||||||||||
| Interest yield on average loans(4) | 3.73 | % | 3.65 | % | 3.64 | % | 3.73 | % | 3.75 | % | 3.78 | % | |||||||||||||||
| Rate paid on interest-bearing liabilities | 0.56 | % | 0.51 | % | 0.50 | % | 0.49 | % | 0.48 | % | 0.45 | % | |||||||||||||||
| Efficiency ratio | 73.7 | % | 74.4 | % | 70.7 | % | 70.9 | % | 75.6 | % | 67.5 | % | |||||||||||||||
| Expenses as a percentage of average loans and deposits | 1.9 | % | 2.0 | % | 1.9 | % | 1.9 | % | 2.1 | % | 1.8 | % | |||||||||||||||
| Effective tax rate | 29.8 | % | 25.4 | % | 26.0 | % | 24.7 | % | 28.0 | % | 10.2 | % | |||||||||||||||
| Return on average assets(5) | 0.49 | % | 0.51 | % | 0.61 | % | 0.63 | % | 0.54 | % | 0.72 | % | |||||||||||||||
| Return on average equity(5) | 4.68 | % | 4.85 | % | 5.78 | % | 5.90 | % | 5.05 | % | 6.62 | % | |||||||||||||||
| Return on average tangible equity(3)(5) | 7.04 | % | 7.32 | % | 8.73 | % | 8.94 | % | 7.68 | % | 10.07 | % | |||||||||||||||
| Return on average common equity | 4.30 | % | 4.50 | % | 5.51 | % | 5.63 | % | 4.69 | % | 6.42 | % | |||||||||||||||
| Return on average tangible common equity(3) | 6.77 | % | 7.10 | % | 8.72 | % | 8.94 | % | 7.48 | % | 10.24 | % | |||||||||||||||
| (1) Share count excludes unallocated ESOP shares prior to January 1, 2015 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 the 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 | 3 | |||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| 2016 | 2015 | 2014 | ||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||||||||
| Cash and cash equivalents | $ | 382,539 | $ | 672,243 | $ | 420,289 | $ | 527,323 | $ | 387,676 | $ | 420,033 | ||||||||||||||
| Investment securities: | ||||||||||||||||||||||||||
| Available for sale | 5,439,220 | 5,471,291 | 5,725,608 | 5,750,860 | 5,911,419 | 5,915,338 | ||||||||||||||||||||
| Held to maturity | 6,720,817 | 6,387,689 | 6,280,049 | 6,169,838 | 6,214,561 | 5,941,621 | ||||||||||||||||||||
| FHLB and FRB common stock | 375,960 | 410,452 | 373,066 | 379,135 | 375,090 | 411,857 | ||||||||||||||||||||
| Total investment securities | 12,535,997 | 12,269,432 | 12,378,723 | 12,299,833 | 12,501,070 | 12,268,816 | ||||||||||||||||||||
| Loans held for sale | 26,592 | 46,096 | 51,056 | 59,816 | 48,755 | 39,825 | ||||||||||||||||||||
| Loans and leases: | ||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||
| Real estate | 8,625,965 | 8,652,255 | 8,365,808 | 8,312,332 | 8,287,108 | 8,204,027 | ||||||||||||||||||||
| Business | 6,174,753 | 6,013,217 | 6,031,358 | 5,923,524 | 5,790,980 | 5,775,413 | ||||||||||||||||||||
| Total commercial loans | 14,800,718 | 14,665,472 | 14,397,166 | 14,235,856 | 14,078,088 | 13,979,440 | ||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||
| Residential real estate | 3,330,533 | 3,354,639 | 3,345,701 | 3,329,799 | 3,330,216 | 3,353,081 | ||||||||||||||||||||
| Home equity | 3,057,154 | 3,068,962 | 3,032,618 | 2,984,872 | 2,943,844 | 2,936,123 | ||||||||||||||||||||
| Indirect auto | 2,464,318 | 2,393,105 | 2,330,826 | 2,256,004 | 2,200,913 | 2,166,320 | ||||||||||||||||||||
| Credit cards | 288,747 | 310,813 | 305,779 | 304,682 | 301,228 | 324,113 | ||||||||||||||||||||
| Other consumer | 236,911 | 244,935 | 254,109 | 257,204 | 263,985 | 278,305 | ||||||||||||||||||||
| Total consumer loans | 9,377,663 | 9,372,454 | 9,269,033 | 9,132,561 | 9,040,186 | 9,057,942 | ||||||||||||||||||||
| Total loans and leases | 24,178,381 | 24,037,926 | 23,666,199 | 23,368,417 | 23,118,274 | 23,037,382 | ||||||||||||||||||||
| Allowance for loan losses | 252,800 | 242,036 | 238,700 | 235,600 | 231,138 | 234,251 | ||||||||||||||||||||
| Loans and leases, net | 23,925,581 | 23,795,890 | 23,427,499 | 23,132,817 | 22,887,136 | 22,803,131 | ||||||||||||||||||||
| Bank owned life insurance | 439,084 | 436,709 | 434,263 | 431,335 | 428,454 | 426,192 | ||||||||||||||||||||
| Goodwill and other intangibles | 1,392,367 | 1,396,227 | 1,400,199 | 1,404,201 | 1,410,800 | 1,417,005 | ||||||||||||||||||||
| Other assets | 1,370,275 | 1,301,789 | 1,301,152 | 1,208,218 | 1,243,588 | 1,176,036 | ||||||||||||||||||||
| Total assets | $ | 40,072,435 | $ | 39,918,386 | $ | 39,413,181 | $ | 39,063,543 | $ | 38,907,479 | $ | 38,551,038 | ||||||||||||||
| Deposits: | ||||||||||||||||||||||||||
| Savings accounts | $ | 3,428,924 | $ | 3,389,728 | $ | 3,359,320 | $ | 3,483,777 | $ | 3,488,441 | $ | 3,451,616 | ||||||||||||||
| Interest-bearing checking | 5,553,928 | 5,478,947 | 5,285,987 | 5,088,856 | 5,158,264 | 5,084,456 | ||||||||||||||||||||
| Money market deposits | 10,884,350 | 10,653,792 | 10,483,721 | 10,303,873 | 10,368,358 | 9,962,220 | ||||||||||||||||||||
| Noninterest-bearing deposits | 5,739,509 | 5,834,534 | 5,813,571 | 5,549,944 | 5,500,484 | 5,407,382 | ||||||||||||||||||||
| Certificates of deposit | 3,954,033 | 3,343,878 | 3,873,521 | 4,020,367 | 3,734,226 | 3,875,563 | ||||||||||||||||||||
| Total deposits | 29,560,744 | 28,700,879 | 28,816,120 | 28,446,817 | 28,249,773 | 27,781,237 | ||||||||||||||||||||
| Short-term borrowings | 3,255,890 | 4,348,586 | 4,086,415 | 4,275,886 | 4,739,264 | 5,471,974 | ||||||||||||||||||||
| Long-term borrowings | 2,608,014 | 2,308,101 | 1,783,402 | 1,683,476 | 1,233,550 | 733,620 | ||||||||||||||||||||
| Other liabilities | 498,084 | 434,492 | 587,867 | 536,239 | 559,646 | 471,449 | ||||||||||||||||||||
| Total liabilities | 35,922,732 | 35,792,058 | 35,273,804 | 34,942,418 | 34,782,233 | 34,458,280 | ||||||||||||||||||||
| Preferred stockholders' equity | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | 338,002 | ||||||||||||||||||||
| Common stockholders' equity | 3,811,701 | 3,788,326 | 3,801,375 | 3,783,123 | 3,787,244 | 3,754,756 | ||||||||||||||||||||
| Total stockholders' equity | 4,149,703 | 4,126,328 | 4,139,377 | 4,121,125 | 4,125,246 | 4,092,758 | ||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 40,072,435 | $ | 39,918,386 | $ | 39,413,181 | $ | 39,063,543 | $ | 38,907,479 | $ | 38,551,038 | ||||||||||||||
| Selected balance sheet information: | ||||||||||||||||||||||||||
| Total interest-earning assets(1) | $ | 36,789,339 | $ | 36,677,134 | $ | 36,099,580 | $ | 35,813,498 | $ | 35,594,208 | $ | 35,310,447 | ||||||||||||||
| Total interest-bearing liabilities | 29,685,139 | 29,523,032 | 28,872,365 | 28,856,235 | 28,722,103 | 28,579,449 | ||||||||||||||||||||
| Net interest-earning assets | $ | 7,104,200 | $ | 7,154,102 | $ | 7,227,215 | $ | 6,957,263 | $ | 6,872,105 | $ | 6,730,998 | ||||||||||||||
| Tangible common equity(1)(2) | $ | 2,419,334 | $ | 2,392,099 | $ | 2,401,176 | $ | 2,378,922 | $ | 2,376,444 | $ | 2,337,751 | ||||||||||||||
| Unrealized gain (loss) on available for sale securities, net of tax(3) | 1,246 | (9,577 | ) | 29,877 | 37,464 | 68,194 | 52,244 | |||||||||||||||||||
| Total core deposits | $ | 25,606,711 | $ | 25,357,001 | $ | 24,942,599 | $ | 24,426,450 | $ | 24,515,547 | $ | 23,905,674 | ||||||||||||||
| Originated loans(4) | $ | 21,361,753 | $ | 21,101,040 | $ | 20,591,532 | $ | 19,929,719 | $ | 19,528,609 | $ | 19,295,553 | ||||||||||||||
| Acquired loans(5) | 2,873,372 | 2,998,530 | 3,138,568 | 3,517,525 | 3,681,354 | 3,834,931 | ||||||||||||||||||||
| Credit related discount on acquired loans(6) | (56,744 | ) | (61,644 | ) | (63,901 | ) | (78,827 | ) | (91,689 | ) | (93,102 | ) | ||||||||||||||
| Total Loans | $ | 24,178,381 | $ | 24,037,926 | $ | 23,666,199 | $ | 23,368,417 | $ | 23,118,274 | $ | 23,037,382 | ||||||||||||||
| (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 the 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) Carrying value of acquired loans plus the principal not expected to be collected. | ||||||||||||||||||||||||||
| (6) 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 | ||||||||||||||||||||||||||||||||||
| March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||||||||||||||||||||||||||||
| Average | Interest(1) | Yields | Average | Interest(1) | Yields | Average | Interest(1) | Yields | ||||||||||||||||||||||||||
| Balances | and Rates(1) | Balances | and Rates(1) | Balances | and Rates(1) | |||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||
| Loans and leases(2) | ||||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||||
| Real estate | $ | 8,625 | $ | 79 | 3.61 | % | $ | 8,476 | $ | 77 | 3.57 | % | $ | 8,263 | $ | 74 | 3.60 | % | ||||||||||||||||
| Business | 6,062 | 52 | 3.42 | 5,971 | 50 | 3.28 | 5,797 | 50 | 3.43 | |||||||||||||||||||||||||
| Total commercial loans | 14,687 | 131 | 3.53 | 14,447 | 127 | 3.45 | 14,060 | 124 | 3.53 | |||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||||
| Residential real estate | 3,346 | 31 | 3.65 | 3,346 | 31 | 3.65 | 3,338 | 32 | 3.78 | |||||||||||||||||||||||||
| Home equity | 3,066 | 30 | 3.93 | 3,052 | 29 | 3.80 | 2,939 | 28 | 3.91 | |||||||||||||||||||||||||
| Indirect auto | 2,420 | 18 | 2.91 | 2,369 | 17 | 2.90 | 2,187 | 15 | 2.79 | |||||||||||||||||||||||||
| Credit cards | 297 | 9 | 11.80 | 305 | 9 | 11.45 | 311 | 9 | 11.74 | |||||||||||||||||||||||||
| Other consumer | 242 | 4 | 8.57 | 250 | 5 | 8.50 | 275 | 6 | 8.49 | |||||||||||||||||||||||||
| Total consumer loans | 9,371 | 92 | 3.94 | 9,322 | 91 | 3.88 | 9,050 | 90 | 4.02 | |||||||||||||||||||||||||
| Total loans and leases | 24,058 | 223 | 3.73 | 23,769 | 218 | 3.65 | 23,110 | 214 | 3.75 | |||||||||||||||||||||||||
| Residential MBS | 7,864 | 48 | 2.43 | 7,705 | 47 | 2.44 | 7,180 | 45 | 2.49 | |||||||||||||||||||||||||
| Commercial MBS | 997 | 12 | 4.68 | 1,126 | 12 | 4.31 | 1,404 | 11 | 3.26 | |||||||||||||||||||||||||
| Other investment securities (3) | 3,513 | 30 | 3.53 | 3,540 | 31 | 3.47 | 3,554 | 31 | 3.52 | |||||||||||||||||||||||||
| Total securities, at amortized cost | 12,374 | 90 | 2.92 | 12,371 | 90 | 2.90 | 12,138 | 87 | 2.88 | |||||||||||||||||||||||||
| Money market and other investments | 205 | 1 | 1.37 | 88 | 1 | 2.29 | 158 | - | 1.01 | |||||||||||||||||||||||||
| Total interest-earning assets | 36,637 | $ | 314 | 3.45 | % | 36,228 | $ | 309 | 3.38 | % | 35,406 | $ | 302 | 3.45 | % | |||||||||||||||||||
| Goodwill and other intangibles | 1,394 | 1,398 | 1,414 | |||||||||||||||||||||||||||||||
| Other noninterest-earning assets | 1,929 | 1,951 | 1,887 | |||||||||||||||||||||||||||||||
| Total assets | $ | 39,960 | $ | 39,577 | $ | 38,707 | ||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||||||
| Savings accounts | $ | 3,371 | $ | 1 | 0.09 | % | $ | 3,364 | $ | 1 | 0.09 | % | $ | 3,432 | $ | - | 0.08 | % | ||||||||||||||||
| Interest-bearing checking | 5,362 | - | 0.03 | 5,333 | - | 0.03 | 5,001 | - | 0.03 | |||||||||||||||||||||||||
| Money market deposits | 10,725 | 9 | 0.32 | 10,719 | 8 | 0.30 | 10,132 | 7 | 0.26 | |||||||||||||||||||||||||
| Certificates of deposit | 3,726 | 9 | 0.97 | 3,515 | 8 | 0.89 | 3,778 | 8 | 0.84 | |||||||||||||||||||||||||
| Total interest bearing deposits | 23,184 | 19 | 0.32 | % | 22,931 | 17 | 0.30 | % | 22,343 | 15 | 0.28 | % | ||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||||||
| Short-term borrowings | 3,815 | 7 | 0.72 | % | 4,014 | 6 | 0.56 | % | 5,125 | 6 | 0.46 | % | ||||||||||||||||||||||
| Long-term borrowings | 2,416 | 15 | 2.62 | 1,971 | 14 | 2.89 | 1,027 | 13 | 4.98 | |||||||||||||||||||||||||
| Total borrowings | 6,231 | 22 | 1.46 | 5,985 | 20 | 1.33 | 6,152 | 19 | 1.21 | |||||||||||||||||||||||||
| Total interest-bearing liabilities | 29,415 | $ | 41 | 0.56 | % | 28,916 | $ | 37 | 0.51 | % | 28,495 | $ | 34 | 0.48 | % | |||||||||||||||||||
| Noninterest-bearing deposits | 5,666 | 5,868 | 5,430 | |||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 725 | 640 | 654 | |||||||||||||||||||||||||||||||
| Total liabilities | 35,806 | 35,424 | 34,579 | |||||||||||||||||||||||||||||||
| Total stockholders' equity | 4,154 | 4,153 | 4,128 | |||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 39,960 | $ | 39,577 | $ | 38,707 | ||||||||||||||||||||||||||||
| Net interest income (FTE) | $ | 273 | $ | 272 | $ | 268 | ||||||||||||||||||||||||||||
| Taxable Equivalent Adjustment(1) | 5 | 5 | 5 | |||||||||||||||||||||||||||||||
| Total core deposits | $ | 25,124 | $ | 10 | 0.15 | % | $ | 25,284 | $ | 9 | 0.15 | % | $ | 23,995 | $ | 7 | 0.13 | % | ||||||||||||||||
| Total transactional deposits | 11,028 | - | 0.02 | % | 11,201 | - | 0.02 | % | 10,431 | - | 0.01 | % | ||||||||||||||||||||||
| Total deposits | 28,850 | 19 | 0.26 | % | 28,799 | 17 | 0.24 | % | 27,773 | 15 | 0.22 | % | ||||||||||||||||||||||
| Tax equivalent net interest rate spread | 2.89 | % | 2.87 | % | 2.97 | % | ||||||||||||||||||||||||||||
| Tax equivalent net interest rate margin | 3.00 | % | 2.98 | % | 3.07 | % | ||||||||||||||||||||||||||||
| (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. | ||||||||||||||||||||||||||||||||||
| First Niagara Financial Group, Inc. | ||||||||||||||||||||||||||||
| Allowance for Loans and Lease Losses & Asset Quality | ||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||
| 2016 | 2015 | 2014 | ||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Fourth | |||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||||
| Beginning balance | $ | 242,036 | $ | 238,700 | $ | 235,600 | $ | 231,138 | $ | 234,251 | $ | 222,753 | ||||||||||||||||
| Net loan (charge-offs) recoveries: | ||||||||||||||||||||||||||||
| Commercial real estate | $ | (254 | ) | $ | (1,476 | ) | $ | (2,686 | ) | $ | (5,525 | ) | $ | (5,825 | ) | $ | (2,008 | ) | ||||||||||
| Commercial business | (3,903 | ) | (10,441 | ) | (6,286 | ) | (3,513 | ) | (4,178 | ) | (12,650 | ) | ||||||||||||||||
| Residential real estate | (135 | ) | (94 | ) | (230 | ) | (197 | ) | (266 | ) | (476 | ) | ||||||||||||||||
| Home equity | (995 | ) | (723 | ) | (1,056 | ) | (1,367 | ) | (1,526 | ) | (1,406 | ) | ||||||||||||||||
| Indirect auto | (2,030 | ) | (2,122 | ) | (1,743 | ) | (1,342 | ) | (1,226 | ) | (2,241 | ) | ||||||||||||||||
| Credit cards | (2,654 | ) | (2,450 | ) | (2,215 | ) | (2,522 | ) | (2,450 | ) | (2,464 | ) | ||||||||||||||||
| Other consumer | (1,784 | ) | (1,758 | ) | (1,952 | ) | (1,528 | ) | (1,807 | ) | (1,457 | ) | ||||||||||||||||
| Total net loan charge-offs | $ | (11,755 | ) | $ | (19,064 | ) | $ | (16,168 | ) | $ | (15,994 | ) | $ | (17,278 | ) | $ | (22,702 | ) | ||||||||||
| Provision for loan losses | 22,519 | 22,400 | 19,268 | 20,456 | 14,165 | 34,200 | ||||||||||||||||||||||
| Ending balance | $ | 252,800 | $ | 242,036 | $ | 238,700 | $ | 235,600 | $ | 231,138 | $ | 234,251 | ||||||||||||||||
| Supplemental information | ||||||||||||||||||||||||||||
| Allowance to loans | 1.05 | % | 1.01 | % | 1.01 | % | 1.01 | % | 1.00 | % | 1.02 | % | ||||||||||||||||
| Allowance for originated loans to originated loans(1) | 1.16 | % | 1.12 | % | 1.13 | % | 1.15 | % | 1.15 | % | 1.18 | % | ||||||||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | ||||||||||||||||||||||||||||
| Commercial real estate | 0.01 | % | 0.07 | % | 0.13 | % | 0.27 | % | 0.29 | % | 0.10 | % | ||||||||||||||||
| Commercial business | 0.26 | % | 0.70 | % | 0.42 | % | 0.24 | % | 0.29 | % | 0.87 | % | ||||||||||||||||
| Total commercial loans | 0.11 | % | 0.33 | % | 0.25 | % | 0.26 | % | 0.28 | % | 0.42 | % | ||||||||||||||||
| Residential real estate | 0.02 | % | 0.01 | % | 0.03 | % | 0.02 | % | 0.03 | % | 0.06 | % | ||||||||||||||||
| Home equity | 0.13 | % | 0.09 | % | 0.14 | % | 0.18 | % | 0.21 | % | 0.19 | % | ||||||||||||||||
| Indirect auto | 0.34 | % | 0.36 | % | 0.30 | % | 0.24 | % | 0.22 | % | 0.42 | % | ||||||||||||||||
| Credit cards | 3.57 | % | 3.21 | % | 2.90 | % | 3.32 | % | 3.16 | % | 3.13 | % | ||||||||||||||||
| Other consumer | 2.95 | % | 2.81 | % | 3.06 | % | 2.35 | % | 2.63 | % | 2.06 | % | ||||||||||||||||
| Total consumer loans | 0.33 | % | 0.31 | % | 0.32 | % | 0.31 | % | 0.33 | % | 0.36 | % | ||||||||||||||||
| Total loans | 0.20 | % | 0.32 | % | 0.28 | % | 0.28 | % | 0.30 | % | 0.40 | % | ||||||||||||||||
| Net charge-offs (recoveries) of originated loans to average originated loans (annualized)(1) | ||||||||||||||||||||||||||||
| Commercial real estate | 0.00 | % | 0.08 | % | 0.14 | % | 0.31 | % | 0.24 | % | 0.06 | % | ||||||||||||||||
| Commercial business | 0.26 | % | 0.72 | % | 0.44 | % | 0.25 | % | 0.31 | % | 0.93 | % | ||||||||||||||||
| Total commercial loans | 0.11 | % | 0.36 | % | 0.27 | % | 0.28 | % | 0.27 | % | 0.44 | % | ||||||||||||||||
| Residential real estate | 0.02 | % | 0.02 | % | 0.04 | % | 0.04 | % | 0.05 | % | 0.09 | % | ||||||||||||||||
| Home equity | 0.16 | % | 0.14 | % | 0.14 | % | 0.17 | % | 0.16 | % | 0.15 | % | ||||||||||||||||
| Indirect auto | 0.34 | % | 0.36 | % | 0.30 | % | 0.24 | % | 0.22 | % | 0.42 | % | ||||||||||||||||
| Credit cards | 3.57 | % | 3.21 | % | 2.90 | % | 3.32 | % | 3.16 | % | 3.13 | % | ||||||||||||||||
| Other consumer | 2.95 | % | 2.81 | % | 3.06 | % | 2.35 | % | 2.63 | % | 2.06 | % | ||||||||||||||||
| Total consumer loans | 0.40 | % | 0.39 | % | 0.38 | % | 0.37 | % | 0.38 | % | 0.44 | % | ||||||||||||||||
| Total loans | 0.22 | % | 0.37 | % | 0.31 | % | 0.31 | % | 0.31 | % | 0.44 | % | ||||||||||||||||
| Nonperforming loans: | ||||||||||||||||||||||||||||
| Originated(1): | ||||||||||||||||||||||||||||
| Commercial real estate | $ | 37,087 | $ | 44,438 | $ | 54,699 | $ | 60,021 | $ | 65,655 | $ | 53,164 | ||||||||||||||||
| Commercial business | 71,999 | 56,382 | 45,389 | 42,979 | 54,506 | 45,201 | ||||||||||||||||||||||
| Residential real estate | 30,234 | 31,513 | 32,455 | 32,877 | 32,791 | 33,652 | ||||||||||||||||||||||
| Home equity | 35,701 | 35,561 | 34,191 | 27,092 | 26,163 | 23,749 | ||||||||||||||||||||||
| Indirect auto | 16,536 | 15,131 | 13,795 | 13,066 | 13,399 | 12,616 | ||||||||||||||||||||||
| Other consumer | 5,093 | 5,201 | 5,047 | 4,917 | 5,065 | 5,140 | ||||||||||||||||||||||
| Total originated nonperforming loans | 196,650 | 188,226 | 185,576 | 180,952 | 197,579 | 173,522 | ||||||||||||||||||||||
| Total acquired nonperforming loans(2) | 24,874 | 25,335 | 25,365 | 26,553 | 30,236 | 30,223 | ||||||||||||||||||||||
| Total nonperforming loans | 221,524 | 213,561 | 210,941 | 207,505 | 227,815 | 203,745 | ||||||||||||||||||||||
| Real estate owned | 16,457 | 16,063 | 18,359 | 17,397 | 19,128 | 20,541 | ||||||||||||||||||||||
| Total nonperforming assets(3) | $ | 237,981 | $ | 229,624 | $ | 229,300 | $ | 224,902 | $ | 246,943 | $ | 224,286 | ||||||||||||||||
| Accruing troubled debt restructurings (TDR) | $ | 63,659 | $ | 62,630 | $ | 60,941 | $ | 64,643 | $ | 64,401 | $ | 67,102 | ||||||||||||||||
| Loans 90 days past due still accruing(4) | 57,259 | 67,718 | 69,879 | 78,279 | 87,213 | 93,903 | ||||||||||||||||||||||
| Total classified loans(5) | 601,539 | 602,912 | 591,771 | 592,148 | 615,518 | 609,316 | ||||||||||||||||||||||
| Total criticized loans(6) | $ | 954,480 | $ | 944,779 | $ | 858,243 | $ | 938,951 | $ | 990,656 | $ | 1,041,050 | ||||||||||||||||
| Total nonperforming loans to loans | 0.92 | % | 0.89 | % | 0.89 | % | 0.89 | % | 0.99 | % | 0.88 | % | ||||||||||||||||
| Total nonperforming originated loans to originated loans(1) | 0.92 | % | 0.89 | % | 0.90 | % | 0.91 | % | 1.01 | % | 0.90 | % | ||||||||||||||||
| Total nonperforming assets to loans and real estate owned | 0.98 | % | 0.95 | % | 0.97 | % | 0.96 | % | 1.07 | % | 0.97 | % | ||||||||||||||||
| Total nonperforming assets to assets | 0.59 | % | 0.58 | % | 0.58 | % | 0.58 | % | 0.63 | % | 0.58 | % | ||||||||||||||||
| Allowance to nonperforming loans | 114.1 | % | 113.3 | % | 113.2 | % | 113.5 | % | 101.5 | % | 115.0 | % | ||||||||||||||||
| Originated loans(1) | $ | 21,361,753 | $ | 21,101,040 | $ | 20,591,532 | $ | 19,929,719 | $ | 19,528,609 | $ | 19,295,553 | ||||||||||||||||
| Acquired loans(7) | 2,873,372 | 2,998,530 | 3,138,568 | 3,517,525 | 3,681,354 | 3,834,931 | ||||||||||||||||||||||
| Credit related discount on acquired loans(8) | (56,744 | ) | (61,644 | ) | (63,901 | ) | (78,827 | ) | (91,689 | ) | (93,102 | ) | ||||||||||||||||
| Total Loans | $ | 24,178,381 | $ | 24,037,926 | $ | 23,666,199 | $ | 23,368,417 | $ | 23,118,274 | $ | 23,037,382 | ||||||||||||||||
| (1) Originated loans represent total loans excluding acquired loans. | ||||||||||||||||||||||||||||
| (2) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. | ||||||||||||||||||||||||||||
| (3) Does not include a $5.5 million nonperforming loan that was classified as held for sale at March 31, 2015, which was sold and for which we received the proceeds on April 2, 2015. | ||||||||||||||||||||||||||||
| (4) 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. | ||||||||||||||||||||||||||||
| (5) 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, 2015. | ||||||||||||||||||||||||||||
| (6) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss. | ||||||||||||||||||||||||||||
| (7) Represents the carrying value of acquired loans plus the principal not expected to be collected. | ||||||||||||||||||||||||||||
| (8) 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) | |||||||||||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||||
| First Niagara Financial Group, Inc. capital ratios(1)(2): | |||||||||||||||||||||||||
| Tier 1 risk based capital | 10.12 | % | 10.08 | % | 10.05 | % | 10.03 | % | 10.02 | % | 9.81 | % | |||||||||||||
| Total risk based capital | 12.09 | % | 12.01 | % | 11.97 | % | 11.96 | % | 11.95 | % | 11.75 | % | |||||||||||||
| Common equity tier 1 capital | 8.58 | % | 8.55 | % | 8.52 | % | 8.50 | % | 8.48 | % | N/A | ||||||||||||||
| Tier 1 common capital(3) | N/A | N/A | N/A | N/A | N/A | 8.20 | % | ||||||||||||||||||
| Leverage | 7.55 | % | 7.62 | % | 7.66 | % | 7.60 | % | 7.56 | % | 7.50 | % | |||||||||||||
| Equity to assets | 10.36 | % | 10.34 | % | 10.50 | % | 10.55 | % | 10.60 | % | 10.62 | % | |||||||||||||
| Tangible common equity to tangible assets(3) | 6.25 | % | 6.21 | % | 6.32 | % | 6.32 | % | 6.34 | % | 6.30 | % | |||||||||||||
| Total risk weighted assets | $ | 28,809 | $ | 28,881 | $ | 28,716 | $ | 28,445 | $ | 28,152 | $ | 28,186 | |||||||||||||
| First Niagara Bank, N.A capital ratios(1)(2): | |||||||||||||||||||||||||
| Tier 1 risk based capital | 10.73 | % | 10.65 | % | 10.67 | % | 10.66 | % | 10.65 | % | 10.48 | % | |||||||||||||
| Total risk based capital | 11.67 | % | 11.55 | % | 11.56 | % | 11.54 | % | 11.53 | % | 11.37 | % | |||||||||||||
| Common equity tier 1 capital | 10.73 | % | 10.65 | % | 10.67 | % | 10.66 | % | 10.65 | % | N/A | ||||||||||||||
| Leverage | 8.00 | % | 8.05 | % | 8.12 | % | 8.07 | % | 8.03 | % | 8.01 | % | |||||||||||||
| Total risk weighted assets | $ | 28,742 | $ | 28,813 | $ | 28,632 | $ | 28,359 | $ | 28,068 | $ | 28,146 | |||||||||||||
| Number of branches | 392 | 392 | 394 | 394 | 394 | 411 | |||||||||||||||||||
| Full time equivalent employees | 5,322 | 5,428 | 5,397 | 5,364 | 5,322 | 5,572 | |||||||||||||||||||
| Share information and per share metrics: | |||||||||||||||||||||||||
| Common shares outstanding | 354,977 | 354,762 | 354,788 | 354,890 | 353,717 | 353,388 | |||||||||||||||||||
| Preferred shares outstanding | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | |||||||||||||||||||
| Treasury shares | 11,025 | 11,240 | 11,214 | 11,112 | 12,285 | 12,614 | |||||||||||||||||||
| Market price (NASDAQ: FNFG): | $ | 9.68 | $ | 10.85 | $ | 10.21 | $ | 9.44 | $ | 8.84 | $ | 8.43 | |||||||||||||
| Book value per common share(4) | 10.84 | 10.78 | 10.82 | 10.77 | 10.80 | 10.71 | |||||||||||||||||||
| Tangible book value per common share(3)(4) | 6.88 | 6.81 | 6.84 | 6.77 | 6.78 | 6.67 | |||||||||||||||||||
| Price/Book | 89.30 | % | 100.65 | % | 94.36 | % | 87.65 | % | 81.85 | % | 78.71 | % | |||||||||||||
| Price/Tangible book(1) | 140.70 | % | 159.32 | % | 149.27 | % | 139.44 | % | 130.38 | % | 126.39 | % | |||||||||||||
| 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 | 72.73 | % | 66.67 | % | 53.33 | % | 53.33 | % | 66.67 | % | 47.06 | % | |||||||||||||
| Dividend yield (annualized) | 3.32 | % | 2.93 | % | 3.11 | % | 3.40 | % | 3.67 | % | 3.77 | % | |||||||||||||
| (1) Represents an estimate as of March 31, 2016. All preceding quarters represent actual amounts. | |||||||||||||||||||||||||
| (2) Basel III Transitional rules became effective for us on January 1, 2015. Ratios and amounts presented prior to March 31, 2015 are calculated under Basel I rules. As of March 31, 2015, the ratios presented are calculated under the Basel III Standardized Transitional Approach. Common equity tier 1 capital under Basel III replaced Tier 1 common capital under Basel I. Prior to Basel III becoming effective on January 1, 2015, tier 1 common capital under Basel I was a non-GAAP financial measure. | |||||||||||||||||||||||||
| (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) Share count excludes unallocated ESOP shares prior to January 1, 2015 and unvested restricted stock shares. | |||||||||||||||||||||||||
| First Niagara Financial Group, Inc. | |||||||||||||||||||||||||||
| Appendix A - Non-GAAP Reconciliation | |||||||||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Fourth | ||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||
| Financial ratios computed on an operating basis(1): | |||||||||||||||||||||||||||
| Earnings per basic share | $ | 0.14 | $ | 0.16 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | |||||||||||||||
| Earnings per diluted share | $ | 0.14 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | |||||||||||||||
| Weighted average shares outstanding - basic(2) | 351,372 | 351,306 | 351,293 | 351,126 | 350,741 | 350,444 | |||||||||||||||||||||
| Weighted average shares outstanding - diluted(2) | 353,965 | 353,797 | 353,248 | 352,791 | 352,621 | 352,152 | |||||||||||||||||||||
| Noninterest income as a percentage of net revenue(3) | 22.81 | % | 25.12 | % | 24.05 | % | 24.76 | % | 23.83 | % | 22.24 | % | |||||||||||||||
| Pre-tax, pre-provision income | 104,780 | 108,531 | 101,501 | 101,818 | 101,667 | 98,714 | |||||||||||||||||||||
| Pre-tax, pre-provision income per diluted share | $ | 0.30 | $ | 0.31 | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.28 | |||||||||||||||
| Pre-tax, pre-provision return on average assets | 1.05 | % | 1.09 | % | 1.03 | % | 1.05 | % | 1.07 | % | 1.02 | % | |||||||||||||||
| Net interest margin(4) | 3.00 | % | 2.98 | % | 2.98 | % | 3.02 | % | 3.07 | % | 3.11 | % | |||||||||||||||
| Interest yield on average loans(4) | 3.73 | % | 3.65 | % | 3.64 | % | 3.73 | % | 3.75 | % | 3.78 | % | |||||||||||||||
| Rate paid on interest-bearing liabilities | 0.56 | % | 0.51 | % | 0.50 | % | 0.49 | % | 0.48 | % | 0.45 | % | |||||||||||||||
| Efficiency ratio | 69.8 | % | 69.5 | % | 70.7 | % | 70.9 | % | 70.5 | % | 71.5 | % | |||||||||||||||
| Effective tax rate | 30.2 | % | 26.6 | % | 26.0 | % | 24.7 | % | 30.0 | % | 3.7 | % | |||||||||||||||
| Return on average assets | 0.58 | % | 0.63 | % | 0.61 | % | 0.63 | % | 0.65 | % | 0.63 | % | |||||||||||||||
| Return on average equity | 5.56 | % | 6.00 | % | 5.78 | % | 5.90 | % | 6.12 | % | 5.82 | % | |||||||||||||||
| Return on average tangible equity(5) | 8.37 | % | 9.05 | % | 8.73 | % | 8.94 | % | 9.30 | % | 8.85 | % | |||||||||||||||
| Return on average common equity | 5.26 | % | 5.75 | % | 5.51 | % | 5.63 | % | 5.85 | % | 5.54 | % | |||||||||||||||
| Return on average tangible common equity(6) | 8.29 | % | 9.07 | % | 8.72 | % | 8.94 | % | 9.34 | % | 8.85 | % | |||||||||||||||
| Reconciliation of noninterest expense on operating basis to reported noninterest expense(1): | |||||||||||||||||||||||||||
| Total noninterest expense on operating basis (Non-GAAP) | $ | 241,879 | $ | 247,419 | $ | 245,433 | $ | 247,899 | $ | 243,521 | $ | 248,246 | |||||||||||||||
| Merger and acquisition integration expenses | 13,473 | 14,198 | - | - | - | - | |||||||||||||||||||||
| Restructuring charges | - | 3,378 | - | - | 17,517 | 9,066 | |||||||||||||||||||||
| Deposit account remediation | - | - | - | - | - | (23,000 | ) | ||||||||||||||||||||
| Total reported noninterest expense (GAAP) | $ | 255,352 | $ | 264,995 | $ | 245,433 | $ | 247,899 | $ | 261,038 | $ | 234,312 | |||||||||||||||
| Reconciliation of net operating income to net income(1): | |||||||||||||||||||||||||||
| Net operating income (Non-GAAP) | $ | 57,448 | $ | 62,813 | $ | 60,482 | $ | 61,010 | $ | 62,246 | $ | 60,697 | |||||||||||||||
| Nonoperating income and expenses, net of tax: | |||||||||||||||||||||||||||
| Merger and acquisition integration expenses | 9,141 | 9,919 | - | - | - | - | |||||||||||||||||||||
| Restructuring charges | - | 2,094 | - | - | 10,861 | 6,364 | |||||||||||||||||||||
| Deposit account remediation | - | - | - | - | - | (14,734 | ) | ||||||||||||||||||||
| Total nonoperating expenses, net of tax | 9,141 | 12,013 | - | - | 10,861 | (8,370 | ) | ||||||||||||||||||||
| Net income (GAAP) | $ | 48,307 | $ | 50,800 | $ | 60,482 | $ | 61,010 | $ | 51,385 | $ | 69,067 | |||||||||||||||
| 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) | $ | 49,901 | $ | 55,266 | $ | 52,935 | $ | 53,463 | $ | 54,699 | $ | 53,150 | |||||||||||||||
| Nonoperating income and expenses, net of tax: | |||||||||||||||||||||||||||
| Merger and acquisition integration expenses | 9,141 | 9,919 | - | - | - | - | |||||||||||||||||||||
| Restructuring charges | - | 2,094 | - | - | 10,861 | 6,364 | |||||||||||||||||||||
| Deposit account remediation | - | - | - | - | - | (14,734 | ) | ||||||||||||||||||||
| Total nonoperating income and expenses, net of tax | 9,141 | 12,013 | - | - | 10,861 | (8,370 | ) | ||||||||||||||||||||
| Net income available to common stockholders (GAAP) | $ | 40,760 | $ | 43,253 | $ | 52,935 | $ | 53,463 | $ | 43,838 | $ | 61,520 | |||||||||||||||
| Computation of pre-tax,pre-provision income: | |||||||||||||||||||||||||||
| Net interest income | $ | 267,591 | $ | 266,549 | $ | 263,491 | $ | 263,110 | $ | 262,944 | $ | 269,783 | |||||||||||||||
| Noninterest income | 79,068 | 89,401 | 83,443 | 86,607 | 82,244 | 77,177 | |||||||||||||||||||||
| Noninterest expense | (255,352 | ) | (264,995 | ) | (245,433 | ) | (247,899 | ) | (261,038 | ) | (234,312 | ) | |||||||||||||||
| Pre-tax, pre-provision income (GAAP) | 91,307 | 90,955 | 101,501 | 101,818 | 84,150 | 112,648 | |||||||||||||||||||||
| Add back: non-operating noninterest expenses (1) | - | 17,576 | - | - | 17,517 | (13,934 | ) | ||||||||||||||||||||
| Pre-tax, pre-provision income (Non-GAAP)(1) | $ | 91,307 | $ | 108,531 | $ | 101,501 | $ | 101,818 | $ | 101,667 | $ | 98,714 | |||||||||||||||
| (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) | |||||||||||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||||||||||
| First | Fourth | Third | Second | First | Fourth | ||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||
| Computation of Ending Tangible Assets: | |||||||||||||||||||||||||
| Total assets | $ | 40,072,435 | $ | 39,918,386 | $ | 39,413,181 | $ | 39,063,543 | $ | 38,907,479 | $ | 38,551,038 | |||||||||||||
| Less: Goodwill and other intangibles | (1,392,367 | ) | (1,396,227 | ) | (1,400,199 | ) | (1,404,201 | ) | (1,410,800 | ) | (1,417,005 | ) | |||||||||||||
| Tangible assets | $ | 38,680,068 | $ | 38,522,159 | $ | 38,012,982 | $ | 37,659,342 | $ | 37,496,679 | $ | 37,134,033 | |||||||||||||
| Computation of Average Tangible Assets: | |||||||||||||||||||||||||
| Total assets | $ | 39,959,615 | $ | 39,576,697 | $ | 39,051,359 | $ | 38,913,219 | $ | 38,706,545 | $ | 38,317,930 | |||||||||||||
| Less: Goodwill and other intangibles | (1,394,178 | ) | (1,398,122 | ) | (1,402,138 | ) | (1,407,946 | ) | (1,413,765 | ) | (1,420,119 | ) | |||||||||||||
| Tangible assets | $ | 38,565,437 | $ | 38,178,575 | $ | 37,649,221 | $ | 37,505,273 | $ | 37,292,780 | $ | 36,897,811 | |||||||||||||
| Computation of Ending Tangible Equity: | |||||||||||||||||||||||||
| Total stockholders' equity | $ | 4,149,703 | $ | 4,126,328 | $ | 4,139,377 | $ | 4,121,125 | $ | 4,125,246 | $ | 4,092,758 | |||||||||||||
| Less: Goodwill and other intangibles | (1,392,367 | ) | (1,396,227 | ) | (1,400,199 | ) | (1,404,201 | ) | (1,410,800 | ) | (1,417,005 | ) | |||||||||||||
| Tangible equity | $ | 2,757,336 | $ | 2,730,101 | $ | 2,739,178 | $ | 2,716,924 | $ | 2,714,446 | $ | 2,675,753 | |||||||||||||
| Computation of Ending Tangible Common Equity: | |||||||||||||||||||||||||
| Total stockholders' equity | $ | 4,149,703 | $ | 4,126,328 | $ | 4,139,377 | $ | 4,121,125 | $ | 4,125,246 | $ | 4,092,758 | |||||||||||||
| Less: Goodwill and other intangibles | (1,392,367 | ) | (1,396,227 | ) | (1,400,199 | ) | (1,404,201 | ) | (1,410,800 | ) | (1,417,005 | ) | |||||||||||||
| Less: Preferred stockholders' equity | (338,002 | ) | (338,002 | ) | (338,002 | ) | (338,002 | ) | (338,002 | ) | (338,002 | ) | |||||||||||||
| Tangible common equity | $ | 2,419,334 | $ | 2,392,099 | $ | 2,401,176 | $ | 2,378,922 | $ | 2,376,444 | $ | 2,337,751 | |||||||||||||
| Computation of Average Tangible Equity: | |||||||||||||||||||||||||
| Total stockholders' equity | $ | 4,154,033 | $ | 4,152,977 | $ | 4,149,635 | $ | 4,145,334 | $ | 4,127,743 | $ | 4,141,141 | |||||||||||||
| Less: Goodwill and other intangibles | (1,394,178 | ) | (1,398,122 | ) | (1,402,138 | ) | (1,407,946 | ) | (1,413,765 | ) | (1,420,119 | ) | |||||||||||||
| Tangible equity | $ | 2,759,855 | $ | 2,754,855 | $ | 2,747,497 | $ | 2,737,388 | $ | 2,713,978 | $ | 2,721,022 | |||||||||||||
| Computation of Average Tangible Common Equity: | |||||||||||||||||||||||||
| Total stockholders' equity | $ | 4,154,033 | $ | 4,152,977 | $ | 4,149,635 | $ | 4,145,334 | $ | 4,127,743 | $ | 4,141,141 | |||||||||||||
| Less: Goodwill and other intangibles | (1,394,178 | ) | (1,398,122 | ) | (1,402,138 | ) | (1,407,946 | ) | (1,413,765 | ) | (1,420,119 | ) | |||||||||||||
| Less: Preferred stockholders' equity | (338,002 | ) | (338,002 | ) | (338,002 | ) | (338,002 | ) | (338,002 | ) | (338,002 | ) | |||||||||||||
| Tangible common equity | $ | 2,421,853 | $ | 2,416,853 | $ | 2,409,495 | $ | 2,399,386 | $ | 2,375,976 | $ | 2,383,020 | |||||||||||||
| Computation of Tier 1 Common Capital: | |||||||||||||||||||||||||
| Tier 1 capital | N/A | N/A | N/A | N/A | N/A | $ | 2,764,117 | ||||||||||||||||||
| Less: Qualifying restricted core capital elements | N/A | N/A | N/A | N/A | N/A | (113,785 | ) | ||||||||||||||||||
| Less: Perpetual non-cumulative preferred stock | N/A | N/A | N/A | N/A | N/A | (338,002 | ) | ||||||||||||||||||
| Tier 1 common capital (Non-GAAP) | N/A | N/A | N/A | N/A | N/A | $ | 2,312,330 | ||||||||||||||||||