EX-99.1 2 newsrelease.htm PRESS RELEASE First Niagara Produces Record Operating Earnings in 2009

EXHIBIT 99.1

First Niagara Produces Record Operating Earnings in 2009

18% Above Prior Year

 

 

 

 

  • Loan originations total $3.5 billion, up 20% over prior year
  • Core deposits rise by 11% in 2009
  • Strength of capital, credit and liquidity continues to distinguish
  • Over 300 new jobs in New York and Pennsylvania markets-200 more to be added
  • Expanded franchise poised for superior growth

BUFFALO, N.Y., Jan. 21, 2010 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) concluded a highly successful 2009 with a solid fourth quarter performance that brought operating(Non-GAAP) net income to over $100 million for the year, an 18% increase from the prior year. The Company has continued to capitalize on its financial strength and proven business model to drive profitable growth across its Upstate New York and Western Pennsylvania markets.

For the full year 2009, the Company generated operating (Non-GAAP) net income – that is, reported net income exclusive of nonrecurring items - of $105.6 million compared to $89.8 million in 2008. The corresponding earnings per diluted share of $0.72 in 2009 versus $0.83 in the prior year reflects the impact of 78 million incremental shares issued in three equity offerings since late 2008 to further strengthen the Company’s offensive capital position. Average diluted common shares outstanding totaled 147.2 million in 2009 compared to 108.2 million in 2008. Reported (GAAP) net income inclusive of non-recurring items, primarily acquisition and integration expenses, totaled $79.4 million or $0.46 per diluted share for 2009 and $88.4 million or $0.81 per diluted share for 2008. Fourth quarter operating (Non-GAAP) net income amounted to $31.3 million or $0.17 per diluted share.  Reported (GAAP) net income for the fourth quarter was $28.9 million or $0.16 per diluted share. 

“The fourth quarter culminated an exceptional year for us, especially in light of the economic environment,” President and CEO John R. Koelmel said. “We have delivered financially while advancing our growth strategy with determination and passion. The strength of our performance has allowed us to continue making the required investments in all areas vital to supporting our ongoing expansion. We have the balance sheet strength, talent, and mindset to seize on our competitive advantages and drive the franchise further. Early results after hitting the ground running in Western Pennsylvania are very favorable. Deposit retention and strong new business generation are exceeding our expectations, validating the market opportunity as well as the great energy and commitment of our employee team. The success of our equity offerings and the solid debt ratings recently received are important external signs of confidence. Our pride in our accomplishments is only matched by our excitement and enthusiasm as we look to even greater opportunities in the year ahead.”

Mr. Koelmel added, “Throughout the economic crisis and turmoil in our industry, we have been a poster child for what a healthy bank should be doing to provide real stimulus and help Main Street get back on its feet. We have been aggressively and enthusiastically meeting the credit needs of worthy borrowers with $3.5 billion in new originations. We are supporting much needed job creation with over 300 new hires with plans to add at least 200 more. We also have active outreach programs in place to provide valuable financial and intellectual capital assistance in all of our communities. As we continue to grow as a company, our commitment remains steadfast to make an even greater impact.”

Full Year Results

Operating Results (Non-GAAP) 2009 2008
Net interest income $364.4 $268.6
Provision for credit losses 43.7 22.5
Noninterest income 123.5 115.7
Noninterest expense 280.5 226.2
Net income 105.6 89.8
Weighted average diluted shares outstanding 147.2 108.2
Earnings per diluted share $0.72 $0.83


Reported Results (GAAP)
Nonrecurring items(a) $26.2 $1.4
Net income 79.4 88.4
TARP(b) 12.0 1.2
Net income available to shareholders 67.3 87.3
Weighted average diluted shares outstanding 147.2 108.2
Earnings per diluted share $0.46 $0.81

 All amounts in millions except earnings per diluted share. The Non-GAAP/Operating Results table above summarized the Company’s operating results excluding certain non-recurring items. 

(a) 2009 - Q4: After-tax noninterest expense: Harleysville National Corporation acquisition related expenses of $2.4 million. 2009 - Q3: After-tax noninterest income: Gain on the sale of the merchant services’ customer list of $1.5 million. After-tax noninterest expense: Expenses of $14.9 million primarily related to the National City branch acquisition and anticipated merger with Harleysville National Corporation. Also, a $3.0 million contribution to the First Niagara Bank Foundation in support of charitable giving in Western Pennsylvania.  2009 - Q2: After-tax noninterest expense: FDIC special assessment charge of $3.3 million based on each insured depository institution’s assets less Tier 1 Capital. Also, expenses related to the National City branch acquisition of $1.4 million. 2009 - Q1: After-tax noninterest expense: Settlement of service mark infringement matter of $1.8 million and professional service fees related to the National City branch acquisition of $1.0 million.

2008 – Q1 After-tax noninterest expense: real estate write-downs and severance related to the acquisition of Greater Buffalo Savings Bank of $1.4 million.

(b)  2009 - Q2: Accelerated discount accretion of $7.7 million resulting from the redemption of preferred stock purchased by the U.S. Treasury Department under the Troubled Asset Relief Program and $1.7 million of accrued dividends and preferred stock discount accretion through the redemption date. 2009 – Q1: Accrued dividends and preferred stock discount accretion of $2.7 million.

2008 – Q4: Accrued dividends and preferred stock discount accretion of $1.2 million

Chief Financial Officer Michael H. Harrington said, “Our fundamentals have been consistently strong and the fourth quarter was no exception. Commercial loan volume continues to grow at a robust pace. Our focused relationship approach has led to healthy growth in low-cost core deposits and has driven our interest margin to a cyclical high. Our disciplined underwriting and in-depth knowledge of local markets continues to result in excellent credit quality which compares quite favorably to industry peers. Our ample level of capital provides a strong line of defense against current economic weakness while allowing us to confidently pursue a growth strategy. We are entering the new year with sustained momentum and are operating from a position of real strength.”

Quarterly Results

Operating Results (Non-GAAP) Q4 2009 Q3 2009 Q4 2008  
Net interest income $112.9 $98.9 $71.7
Provision for credit losses 11.0 15.0 8.0
Noninterest income 35.5 30.7 27.6
Noninterest expense 90.7 70.9 57.5
Net income 31.3 27.3 22.8
Weighted average diluted shares outstanding 185.3 147.2 115.6
Earnings per diluted share $0.17 $0.19 $0.20

Reported Results (GAAP)		      
Nonrecurring(c) $2.4 $16.4 $0.0
Net income 28.9 10.9 22.8
TARP(d) -- -- 1.2
Net income available to shareholders 28.9 10.9 21.6
Weighted average diluted shares outstanding 185.3 147.2 115.6
Earnings per diluted share $0.16 $0.07 $0.19

 

 

 

All amounts in millions except earnings per diluted share. The Non-GAAP/Operating Results table above summarized the Company’s operating results excluding certain non-recurring items. 

 

(c) 2009 - Q4: After-tax noninterest expense: Harleysville National Corporation acquisition related expenses of $2.4 million. 2009 - Q3: After-tax noninterest income: Gain on the sale of the merchant services’ customer list of $1.5 million. After-tax noninterest expense: Expenses of $14.9 million, primarily related to the National City branch acquisition and anticipated merger with Harleysville National Corporation. Also, a $3.0 million contribution to the First Niagara Bank Foundation in support of charitable giving in Western Pennsylvania.

(d) 2008 – Q4: Accrued dividends and preferred stock discount accretion of $1.2 million.

Pennsylvania Market Update

The Company continues to make excellent progress in the integration of the former National City branches in Western Pennsylvania and planning for the acquisition of Harleysville National Corporation in Eastern Pennsylvania. After the expected first quarter 2010 closing of this latter transaction, the Company will have 140 branches, $8.0 billion in deposits and $3.7 billion in loans in its Pennsylvania marketplace.

Western Pennsylvania:   All major integration initiatives, including systems conversions, staffing, and initial branding have been successfully completed. Business generation efforts have been very encouraging. Deposit retention stood at 95% as of year end and strong new loan origination volume totaled $371 million in the fourth quarter. Cross-selling of First Niagara products and services has met with initial success, especially in branch based wealth management services.

Eastern Pennsylvania: The successful integration effort in Western Pennsylvania lays the groundwork for a smooth integration. Systems conversions including networks, equipment, and major applications are planned for the first quarter.  The restoration of Harleysville National Bank to well-capitalized status for regulatory purposes has been completed and each major business line has plans in place for new business generation including cross-selling First Niagara’s services to Harleysville’s customer base.

Loans

Loan activity was robust throughout the year. Total loan and line of credit originations grew to $3.5 billion in 2009, up 20% from 2008.   Average commercial loan balances in Upstate New York markets grew by $325 million or 9% over the prior year. Business loans sustained their double-digit growth rate during the year, including 10% annualized growth in the fourth quarter, and were accompanied by consistent growth in the commercial real estate portfolio. Commercial loan pipelines remain strong. Similarly, the home equity portfolio benefited from increased line usage and newer customers as average balances grew by $67 million or 11% in 2009. Residential loan originations totaled $575 million in 2009 while average balances declined by $247 million or 12% from the prior year as the Company continued selling the majority of its long-term fixed rate mortgages into the secondary markets for balance sheet management purposes.

Credit Quality

During the fourth quarter, nonperforming loans increased by only $1.8 million from the linked quarter to $68.6 million. At year end, nonperforming loans were 0.94% of total loans compared to 0.93% in the linked quarter and 0.72% at the prior year end. Net charge-offs in the fourth quarter declined to $5.8 million or 0.32% annualized of average loans compared to $14.5 million or 0.87% annualized in the linked quarter. Full year 2009 net charge-offs were 0.50% of average loans compared to 0.28% in the prior year. The provision for credit losses was $11.0 million in the fourth quarter compared to $15.0 million in the linked quarter. The allowance for credit losses was 1.20% of total loans at December 31, 2009, compared to 1.15% at the end of the linked quarter and 1.20% at the prior year end. Excluding loans obtained in the National City branch acquisition, which were recorded at fair market value as of the acquisition date, the allowance for credit losses was 1.33% of total loans compared to 1.28% in the linked quarter and 1.20% at the prior year end.

Deposits

The Company’s emphasis on low-cost profitable relationships continues to generate strong core deposit growth. Excluding the deposits associated with the acquired branches, average core deposits grew by $341 million or 11% in 2009. In the fourth quarter, core deposits grew by 9% annualized over the linked quarter. Much of this growth stemmed from higher retail money market and business checking balances.  Conversely, higher cost CD balances declined by 26% on average in 2009.  Core deposits have now risen to 70% of total deposits versus 66% a year ago. The Company’s liquidity position has been similarly strengthened with a loans-to-deposit ratio of 75% at the end of 2009 versus 109% a year earlier.  

Net Interest Income

Net interest income grew significantly in 2009 to $364 million, an increase of $96 million or 36% over the prior year. This was driven by a number of factors including strong loan growth, considerably lower funding costs, and the September acquisition of the former National City branches. The tax equivalent net interest margin grew each successive quarter during 2009 and ended the year at 3.69% in the fourth quarter. The overall cost of interest-bearing liabilities dropped sharply in 2009 to 1.49% from 2.59% in the prior year as the Company benefited from core deposit growth, a decline in higher cost CD’s, and the periodic use of advantaged wholesale borrowings.

Noninterest Income

Operating (Non-GAAP) noninterest income rose by 7% to $123.5 million in 2009 from $115.7 million in 2008 primarily due to higher deposit related banking fees including those from the acquired branches. Most other categories of noninterest income were fairly stable for the year. Reported (GAAP) noninterest income of $126.0 million in 2009 included a third quarter gain on the sale of the merchant services’ customer list. Reported (GAAP) noninterest income totaled $35.5 million in the fourth quarter and included the initial success in cross-selling wealth management services to the Western Pennsylvania customer base. 

Noninterest Expense

Operating (Non-GAAP) noninterest expense increased to $280.5 million in 2009 from $226.2 million in 2008, with the increase attributable to the acquired Western Pennsylvania franchise, higher FDIC premiums and targeted investments to build additional operating capacity to support the Harleysville acquisition as well as future growth opportunities. Operating (Non-GAAP) noninterest expense for the fourth quarter amounted to $90.7 million. Reported (GAAP) noninterest expense for full year 2009 and the fourth quarter was $326.7 million and $94.7 million, respectively, and included ongoing merger and integration costs.

Capital Management

The tangible equity ratio - that is, tangible common shareholders’ equity as a percentage of tangible assets - at December 31, 2009 was 10.5% compared to 11.0% a year earlier. Additionally, consolidated Total Risk Based capital and Tier 1 Risk Based Capital ratios were 18.5% and 17.4%, respectively.  These strong levels reflect three successful equity offerings since September of 2008 in which the Company issued an additional 78 million shares and raised $955 million in new capital. The weighted average diluted shares outstanding for the fourth quarter were 185.3 million compared to 115.6 million for the fourth quarter of 2008.

First Niagara Financial Group, Inc., through its wholly owned subsidiary, First Niagara Bank, will have $19.3 billion in assets, 254 branches and $13.9 billion in deposits at the close of its acquisition of Harleysville National Corporation, which is expected in the first quarter of 2010, subject to regulatory and Harleysville shareholder approval. First Niagara Bank is a community-oriented bank providing financial services to individuals, families and businesses across Upstate New York and Pennsylvania. For more information, visit www.fnfg.com.  

Conference Call – A conference call will be held at 11 a.m. Eastern Time on Thursday, January 21, 2010 to discuss the Company’s financial results and business strategy. Those wishing to participate in the call may dial toll-free 1-877-709-8150. A replay of the call will be available until February 4, 2010 by dialing 1-877-660-6853, account #240, ID # 342420.

Non-GAAP Measures - The Company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the Company, and facilitate investors’ assessments of business and performance trends in comparison to others in the financial services industry. In addition, the Company believes the exclusion of these 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. The Company believes that the ratio of tangible common shareholders’ equity as a percentage of tangible assets is a measure of capital strength that provides additional useful information to investors supplementing the Total Risk Based Capital and Tier 1 Risk Based ratios. This ratio excludes intangible assets from the numerator and the denominator and expresses a percentage of the actual book value of assets, as opposed to a percentage of a risk-based reduced value established in accordance with regulatory requirements.

Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans.

  

First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited)              
                 
          2009
          December 31, September 30, June 30, March 31,
                 
SELECTED FINANCIAL DATA                
(Amounts in thousands)                
Securities available for sale       $ 4,421,678 3,652,261 3,339,871 1,800,933
Securities held to maturity       $ 1,093,552 1,085,258 398,049 --
Loans and leases:                
Commercial:                
Real estate       $ 3,061,582 2,973,964 2,656,650 2,593,752
Business       $ 1,481,845 1,425,956 983,913 969,836
Specialized lending       $ 207,749 208,574 182,297 174,711
Total commercial loans       $ 4,751,176 4,608,494 3,822,860 3,738,299
                 
Residential real estate       $ 1,674,961 1,725,943 1,815,041 1,914,691
Home equity       $ 691,069 662,308 647,878 629,916
Other consumer       $ 186,341 189,271 129,738 134,689
Net deferred costs and discounts       $ 25,909 29,746 30,864 31,813
Total loans and leases       $ 7,329,456 7,215,762 6,446,381 6,449,408
Allowance for credit losses       $ 88,303 83,077 82,542 79,613
Loans and leases, net       $ 7,241,153 7,132,685 6,363,839 6,369,795
Goodwill and other intangibles       $ 935,384 938,687 781,047 782,808
Total assets       $ 14,584,833 14,137,504 11,577,171 9,587,977
Total interest-earning assets       $ 12,902,813 12,514,069 10,278,403 8,368,268
                 
Deposits:                
Savings       $ 916,854 913,144 805,646 786,535
Interest-bearing checking       $ 1,063,065 1,062,681 522,977 503,863
Money market deposits       $ 3,535,736 3,457,837 2,375,493 2,216,321
Noninterest-bearing       $ 1,256,537 1,213,978 761,160 705,965
Certificates       $ 2,957,332 3,275,728 1,775,052 2,015,412
Total deposits       $ 9,729,524 9,923,368 6,240,328 6,228,096
                 
Borrowings       $ 2,302,280 1,515,148 3,192,837 1,446,885
Total interest-bearing liabilities       $ 10,775,267 10,224,538 8,672,005 6,969,016
Net interest-earning assets       $ 2,127,546 2,289,531 1,606,398 1,399,252
Stockholders' equity       $ 2,373,661 2,383,604 1,918,579 1,742,391
Tangible equity (1)       $ 1,438,277 1,444,917 1,137,532 959,583
Unrealized gain (loss) on securities     $ 17,206 34,057 3,064 852
Total loans serviced for others       $ 823,889 770,290 678,885 615,491
                 
ASSET QUALITY DATA                
(Amounts in thousands)                
Nonperforming loans:                
Commercial real estate       $ 37,129 32,477 32,075 33,536
Commercial business       $ 4,759 4,629 4,542 3,772
Specialized lending       $ 1,962 3,105 3,609 4,728
Shared national credits       $ 11,403 14,103 573 172
Residential real estate       $ 9,468 9,140 8,030 6,600
Home equity       $ 2,330 2,979 2,714 2,791
Other consumer       $ 1,510 373 754 319
Total nonperforming loans       $ 68,561 66,806 52,297 51,918
Real estate owned       $ 7,057 8,872 5,758 2,001
Total nonperforming assets       $ 75,618 75,678 58,055 53,919
                 
Net loan charge-offs (recoveries):                
Commercial real estate       $ 2,056 2,213 858 4,552
Commercial business       $ 884 1,768 2,309 729
Specialized lending       $ 2,031 1,518 1,980 1,059
Shared national credits       $ 43 8,500 -- --
Residential real estate       $ 11 35 98 13
Home equity       $ 298 125 338 110
Other consumer       $ 451 306 388 467
Total net loan charge-offs       $ 5,774 14,465 5,971 6,930

 

 

 

 

          2008
          December 31,   September 30,   June 30,   March 31,
                       
SELECTED FINANCIAL DATA                    
(Amounts in thousands)                      
Securities available for sale   $ 1,573,101   1,250,074   1,289,738   1,414,774
Securities held to maturity   $ --   --   --   --
Loans and leases:                      
Commercial:                      
Real estate       $ 2,551,966   2,489,601   2,468,932   2,388,769
Business       $ 940,304   914,452   906,810   863,152
Specialized lending       $ 178,916   184,739   181,683   174,476
Total commercial loans       $ 3,671,186   3,588,792   3,557,425   3,426,397
                       
Residential real estate       $ 1,990,784   2,038,351   2,094,813   2,149,363
Home equity       $ 624,495   607,800   589,846   564,164
Other consumer       $ 143,989   152,640   162,603   173,264
Net deferred costs and discounts $ 33,321   33,895   34,106   34,980
Total loans and leases       $ 6,463,775   6,421,478   6,438,793   6,348,168
Allowance for credit losses   $ 77,793   77,664   75,128   74,283
Loans and leases, net       $ 6,385,982   6,343,814   6,363,665   6,273,885
Goodwill and other intangibles $ 784,549   803,914   806,327   808,262
Total assets       $ 9,331,372   9,008,383   9,074,502   9,067,701
Total interest-earning assets $ 8,136,806   7,782,496   7,825,324   7,813,212
                       
Deposits:                      
Savings       $ 788,767   778,794   811,160   795,464
Interest-bearing checking     $ 485,220   521,206   505,656   509,121
Money market deposits       $ 1,940,136   1,915,122   1,974,430   1,885,113
Noninterest-bearing       $ 718,593   693,424   728,839   680,397
Certificates       $ 2,010,897   1,908,174   2,138,148   2,367,176
Total deposits       $ 5,943,613   5,816,720   6,158,233   6,237,271
                       
Borrowings       $ 1,540,227   1,603,777   1,363,379   1,265,521
Total interest-bearing liabilities $ 6,765,247   6,727,073   6,792,773   6,822,395
Net interest-earning assets   $ 1,371,559   1,055,423   1,032,551   990,817
Stockholders' equity       $ 1,727,263   1,441,022   1,431,352   1,432,632
Tangible equity (1)       $ 942,714   637,108   625,025   624,370
Unrealized gain (loss) on securities $ (12,716)   (11,132)   (6,011)   5,853
Total loans serviced for others $ 568,767   568,750   570,614   571,707
                       
ASSET QUALITY DATA                      
(Amounts in thousands)                      
Nonperforming loans:                      
Commercial real estate       $ 26,546   28,884   20,456   19,921
Commercial business       $ 7,411   4,274   4,095   3,518
Specialized lending       $ 4,354   4,205   3,430   2,872
Shared national credits       $ --   --   --   --
Residential real estate       $ 5,516   5,167   4,957   5,113
Home equity       $ 2,076   1,541   927   1,180
Other consumer       $ 514   627   528   832
Total nonperforming loans   $ 46,417   44,698   34,393   33,436
Real estate owned       $ 2,001   2,782   1,414   976
Total nonperforming assets   $ 48,418   47,480   35,807   34,412
                       
Net loan charge-offs (recoveries):                
Commercial real estate       $ 1,364   2,151   1,550   230
Commercial business       $ 4,777   696   1,400   587
Specialized lending       $ 1,193   647   813   879
Shared national credits       $ --   --   --   --
Residential real estate       $ 32   --   (34)   79
Home equity       $ 177   (15)   23   2
Other consumer       $ 328   485   303   177
Total net loan charge-offs     $ 7,871   3,964   4,055   1,954
                       

 

First Niagara Financial Group, Inc.  
Summary of Quarterly Financial Data (unaudited) (Cont'd)  
                   
          2009
          Year Ended Fourth Third Second First
          December 31 Quarter Quarter Quarter Quarter
                   
SELECTED OPERATIONS DATA            
(Amounts in thousands)            
Interest income $ 490,758 145,357 128,788 110,794 105,819
Interest expense $ 126,358 32,454 29,866 30,849 33,189
Net interest income $ 364,400 112,903 98,922 79,945 72,630
Provision for credit losses $ 43,650 11,000 15,000 8,900 8,750
Net interest income after provision $ 320,750 101,903 83,922 71,045 63,880
                   
Noninterest income:            
Banking services $ 49,538 17,016 12,499 10,053 9,970
Insurance and benefits consulting $ 48,958 11,074 12,172 13,164 12,548
Wealth management services $ 8,555 2,655 1,848 1,834 2,218
Lending and leasing $ 10,888 3,714 2,950 2,240 1,984
Bank owned life insurance $ 5,251 1,320 1,301 1,321 1,309
Other $ 2,785 (262) 2,454 162 431
Total noninterest income $ 125,975 35,517 33,224 28,774 28,460
                   
Noninterest expense:            
Salaries and benefits $ 161,548 50,919 42,223 35,169 33,237
Occupancy and equipment $ 29,113 9,126 7,620 5,901 6,466
Technology and communications $ 24,770 8,271 6,095 5,351 5,053
Marketing and advertising $ 10,281 2,618 2,550 2,581 2,532
Professional services $ 6,131 2,141 1,481 1,300 1,209
Amortization of intangibles $ 9,418 3,414 2,266 1,847 1,891
FDIC premiums $ 16,668 4,335 3,854 6,980 1,499
Merger and acquisition integration expenses $ 31,467 4,009 23,354 2,342 1,762
Other $ 37,276 9,887 11,277 6,614 9,498
Total noninterest expense $ 326,672 94,720 100,720 68,085 63,147
                   
Income before income taxes $ 120,053 42,700 16,426 31,734 29,193
Income taxes $ 40,676 13,796 5,495 10,934 10,451
Net income $ 79,377 28,904 10,931 20,800 18,742
Preferred stock dividend and accretion $ 12,046 -- -- 9,378 2,668
Net income available to common stockholders $ 67,331 28,904 10,931 11,422 16,074

 

          2008
          Year Ended Fourth Third Second First
          December 31, Quarter Quarter Quarter Quarter
                   
SELECTED OPERATIONS DATA            
(Amounts in thousands)            
Interest income $ 441,138 109,798 109,951 111,402 109,987
Interest expense $ 172,561 38,092 39,751 44,793 49,925
Net interest income $ 268,577 71,706 70,200 66,609 60,062
Provision for credit losses $ 22,500 8,000 6,500 4,900 3,100
Net interest income after provision $ 246,077 63,706 63,700 61,709 56,962
                   
Noninterest income:            
Banking services $ 40,082 10,427 10,390 9,955 9,310
Insurance and benefits consulting $ 49,733 11,540 12,302 13,129 12,762
Wealth management services $ 9,922 2,159 2,686 2,860 2,217
Lending and leasing $ 8,783 2,079 2,224 2,225 2,255
Bank owned life insurance $ 5,449 1,723 1,294 1,255 1,177
Other $ 1,766 (285) 293 212 1,546
Total noninterest income $ 115,735 27,643 29,189 29,636 29,267
                   
Noninterest expense:            
Salaries and benefits $ 133,785 33,018 33,914 33,812 33,041
Occupancy and equipment $ 23,823 6,199 5,744 5,723 6,157
Technology and communications $ 19,849 5,188 4,971 4,924 4,766
Marketing and advertising $ 10,496 3,076 2,639 2,458 2,323
Professional services $ 4,659 1,678 1,061 923 997
Amortization of intangibles $ 8,824 2,218 2,146 2,209 2,251
FDIC premiums $ 1,265 391 384 246 244
Merger and acquisition integration expenses $ 2,186 -- -- 139 2,047
Other $ 23,523 5,787 5,895 6,160 5,681
Total noninterest expense $ 228,410 57,555 56,754 56,594 57,507
                   
Income before income taxes $ 133,402 33,794 36,135 34,751 28,722
Income taxes $ 44,964 10,988 12,395 11,672 9,909
Net income $ 88,438 22,806 23,740 23,079 18,813
Preferred stock dividend and accretion $ 1,184 1,184 -- -- --
Net income available to common stockholders $ 87,254 21,622 23,740 23,079 18,813

 

First Niagara Financial Group, Inc.  
Summary of Quarterly Financial Data (unaudited) (Cont'd)
                   
                   
          2009
          Year Ended Fourth Third Second First
          December 31 Quarter Quarter Quarter Quarter
                   
SELECTED AVERAGE BALANCES            
(Amounts in thousands)            
Securities, at amortized cost $ 3,293,438 4,874,683 4,131,996 2,433,236 1,689,620
Loans (2)            
Commercial:            
Real estate $ 2,739,914 3,026,380 2,748,701 2,616,106 2,563,165
Business $ 1,103,103 1,384,790 1,091,131 975,510 956,523
Specialized lending $ 193,999 211,032 198,944 183,346 182,305
Total commercial loans $ 4,037,016 4,622,202 4,038,776 3,774,962 3,701,993
Residential $ 1,831,304 1,706,998 1,778,591 1,875,498 1,967,570
Home equity $ 658,826 685,342 663,220 649,832 636,325
Other consumer $ 154,971 189,387 149,321 136,394 144,349
Total loans $ 6,682,117 7,203,929 6,629,908 6,436,686 6,450,237
                   
Total interest-earning assets $ 10,151,188 12,393,205 10,955,269 8,976,840 8,224,796
Goodwill and other intangibles $ 828,554 936,590 810,946 781,718 783,473
Total assets $ 11,534,907 14,042,129 12,343,848 10,257,168 9,436,987
                   
Interest-bearing liabilities:            
Savings accounts $ 829,246 905,899 837,852 797,431 774,262
Checking $ 680,606 1,042,842 676,786 510,064 486,663
Money market deposits $ 2,696,157 3,576,893 2,783,435 2,323,823 2,083,102
Certificates of deposit $ 2,290,845 3,112,978 2,113,778 1,914,353 2,012,120
Borrowed funds $ 1,961,173 1,580,016 2,900,715 1,845,462 1,507,374
Total interest-bearing liabilities $ 8,458,027 10,218,628 9,312,566 7,391,133 6,863,521
                   
Noninterest-bearing deposits $ 897,684 1,237,425 914,407 743,102 689,596
Total deposits $ 7,394,538 9,876,037 7,326,258 6,288,773 6,045,743
Total liabilities $ 9,523,932 11,646,451 10,404,030 8,291,365 7,700,851
Net interest-earning assets $ 1,693,161 2,174,577 1,642,703 1,585,707 1,361,275
Stockholders' equity $ 2,010,975 2,395,677 1,939,818 1,965,803 1,736,136
Tangible equity (1) $ 1,182,421 1,459,087 1,128,872 1,184,085 952,663

 

          2008
          Year Ended Fourth Third Second First
          December 31, Quarter Quarter Quarter Quarter
                   
SELECTED AVERAGE BALANCES            
(Amounts in thousands)            
Securities, at amortized cost $ 1,327,183 1,398,235 1,265,630 1,335,744 1,309,020
Loans (2)            
Commercial:            
Real estate $ 2,432,981 2,517,850 2,477,054 2,434,075 2,301,529
Business $ 880,222 928,052 906,773 890,154 795,092
Specialized lending $ 187,311 189,244 189,867 183,469 186,616
Total commercial loans $ 3,500,514 3,635,146 3,573,694 3,507,698 3,283,237
Residential $ 2,074,277 2,023,596 2,078,863 2,131,922 2,063,235
Home equity $ 589,721 626,031 608,610 581,834 541,804
Other consumer $ 161,096 153,188 161,074 173,426 156,784
Total loans $ 6,325,608 6,437,961 6,422,241 6,394,880 6,045,060
                   
Total interest-earning assets $ 7,735,545 7,939,383 7,768,427 7,805,792 7,425,978
Goodwill and other intangibles $ 794,915 802,275 804,886 807,034 765,275
Total assets $ 8,963,141 9,148,625 8,991,899 9,115,902 8,593,783
                   
Interest-bearing liabilities:            
Savings accounts $ 790,707 772,359 802,900 804,834 782,804
Checking $ 486,789 486,166 498,065 494,395 468,411
Money market deposits $ 1,899,010 1,944,965 1,963,454 1,932,942 1,753,468
Certificates of deposit $ 2,106,481 1,958,090 1,985,925 2,249,847 2,235,016
Borrowed funds $ 1,372,314 1,526,141 1,444,923 1,309,847 1,205,857
Total interest-bearing liabilities $ 6,655,301 6,687,721 6,695,267 6,791,865 6,445,556
                   
Noninterest-bearing deposits $ 687,741 707,300 726,852 688,403 627,762
Total deposits $ 5,970,728 5,868,880 5,977,196 6,170,421 5,867,461
Total liabilities $ 7,486,817 7,514,116 7,554,117 7,679,743 7,198,252
Net interest-earning assets $ 1,080,244 1,251,662 1,073,160 1,013,927 980,422
Stockholders' equity $ 1,476,324 1,634,510 1,437,782 1,436,159 1,395,531
Tangible equity (1) $ 681,409 832,235 632,896 629,125 630,256

 

First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited) (Cont'd)
             
    2009
    Year Ended Fourth Third Second First
    December 31, Quarter Quarter Quarter Quarter
             
STOCK AND RELATED PER SHARE DATA            
Earnings per share:            
Basic $ 0.46 0.16 0.07 0.08 0.14
Diluted $ 0.46 0.16 0.07 0.08 0.14
Cash dividends $ 0.56 0.14 0.14 0.14 0.14
Dividend payout ratio   121.74% 87.50% 200.00% 175.00% 100.00%
Dividend yield (annualized)   4.03% 3.99% 4.50% 4.92% 5.21%
Market price (NASDAQ: FNFG):            
High $ 16.32 14.47 14.06 14.23 16.32
Low $ 9.48 12.40 10.73 10.53 9.48
Close $ 13.91 13.91 12.33 11.42 10.89
Weighted average common shares outstanding (3):            
Basic   146,833 184,849 146,834 139,827 115,055
Diluted   147,205 185,343 147,184 140,165 115,433
Common shares outstanding     188,215 188,151 149,763 118,687
Treasury shares     6,596 6,659 6,706 6,732
             
SELECTED RATIOS            
Return on average assets   0.69% 0.82% 0.35% 0.81% 0.81%
Common equity:            
Return on average equity   3.47% 4.79% 2.24% 2.47% 4.18%
Return on average tangible equity (1)   6.06% 7.86% 3.84% 4.26% 8.40%
Total equity:            
Return on average equity   3.95% 4.79% 2.24% 4.24% 4.38%
Return on average tangible equity (1)   6.71% 7.86% 3.84% 7.05% 7.98%
             
Noninterest income as a percentage of net revenue   25.7% 23.9% 25.1% 26.5% 28.2%
Efficiency ratio - Consolidated   66.6% 63.8% 76.2% 62.6% 62.5%
- Banking segment (4)   64.0% 60.9% 74.9% 59.6% 59.0%
             
Net loan charge-offs   33,140 5,774 14,465 5,971 6,930
Net charge-offs to average loans (annualized)   0.50% 0.32% 0.87% 0.37% 0.44%
Provision to average loans (annualized)   0.65% 0.61% 0.90% 0.55% 0.55%
Total nonperforming loans to loans     0.94% 0.93% 0.81% 0.81%
Total nonperforming assets to assets     0.52% 0.54% 0.50% 0.56%
Allowance to loans     1.20% 1.15% 1.28% 1.23%
Allowance to nonperforming loans     128.8% 124.4% 157.8% 153.3%
Texas ratio(5)     4.95% 4.95% 4.76% 5.19%
             
Personnel FTE     2,816 2,672 2,034 1,958
Number of branches     171 170 113 113
             
CAPITAL            
First Niagara Bank:            
Tier 1 risk based capital     12.63% 10.92% 11.02% 11.53%
Total risk based capital     13.73% 11.96% 12.21% 12.77%
Tier 1 (core) capital     7.48% 6.67% 7.13% 8.48%
Tangible capital     7.48% 6.67% 7.13% 8.48%
Consolidated:            
Equity to assets     16.27% 16.86% 16.57% 18.17%
Tangible common equity to tangible assets (1)     10.54% 10.95% 10.54% 8.89%
Tangible equity to tangible assets (1)     10.54% 10.95% 10.54% 10.90%
Book value per share (3)     12.84 12.90 13.11 15.12
Tangible book value per share (1)(3)     7.78 7.82 7.77 8.33

 

      2008
      Year Ended Fourth Third Second First
      December 31, Quarter Quarter Quarter Quarter
               
STOCK AND RELATED PER SHARE DATA              
Earnings per share:              
Basic $   0.81 0.19 0.22 0.22 0.18
Diluted $   0.81 0.19 0.22 0.22 0.18
Cash dividends $   0.56 0.14 0.14 0.14 0.14
Dividend payout ratio     69.14% 73.68% 63.64% 63.64% 77.78%
Dividend yield (annualized)     3.46% 3.44% 3.54% 4.38% 4.14%
Market price (NASDAQ: FNFG):              
High $   22.38 16.45 22.38 15.00 14.15
Low $   9.98 11.00 11.68 12.60 9.98
Close $   16.17 16.17 15.75 12.86 13.59
Weighted average common shares outstanding (3):              
Basic     107,531 114,870 106,075 105,884 103,230
Diluted     108,174 115,626 106,795 106,523 103,641
Common shares outstanding       118,562 109,992 109,722 109,703
Treasury shares       6,858 15,427 15,697 15,718
               
SELECTED RATIOS              
Return on average assets     0.99% 0.99% 1.05% 1.02% 0.88%
Common equity:              
Return on average equity     5.99% 5.53% 6.57% 6.46% 5.42%
Return on average tangible equity (1)     13.19% 11.41% 14.92% 14.75% 12.01%
Total equity:              
Return on average equity     5.99% 5.55% 6.57% 6.46% 5.42%
Return on average tangible equity (1)     12.98% 10.90% 14.92% 14.75% 12.01%
               
Noninterest income as a percentage of net revenue     30.1% 27.8% 29.4% 30.8% 32.8%
Efficiency ratio - Consolidated     59.4% 57.9% 57.1% 58.8% 64.4%
- Banking segment (4)     55.3% 52.6% 52.2% 54.2% 60.0%
               
Net loan charge-offs     17,844 7,871 3,964 4,055 1,954
Net charge-offs to average loans (annualized)     0.28% 0.49% 0.25% 0.26% 0.13%
Provision to average loans (annualized)     0.36% 0.49% 0.40% 0.31% 0.21%
Total nonperforming loans to loans       0.72% 0.70% 0.53% 0.53%
Total nonperforming assets to assets       0.52% 0.53% 0.39% 0.38%
Allowance to loans       1.20% 1.21% 1.17% 1.17%
Allowance to nonperforming loans       167.6% 173.8% 218.4% 222.2%
Texas ratio(5)       4.74% 6.64% 5.11% 4.93%
               
Personnel FTE       1,909 1,910 1,892 1,903
Number of branches       114 114 114 115
               
CAPITAL              
First Niagara Bank:              
Tier 1 risk based capital       11.48% 10.05% 10.08% 9.84%
Total risk based capital       12.72% 11.30% 11.30% 11.06%
Tier 1 (core) capital       8.47% 7.58% 7.61% 7.29%
Tangible capital       8.47% 7.58% 7.61% 7.29%
Consolidated:              
Equity to assets       18.51% 16.00% 15.77% 15.80%
Tangible common equity to tangible assets (1)       8.96% 7.77% 7.56% 7.56%
Tangible equity to tangible assets (1)       11.03% 7.77% 7.56% 7.56%
Book value per share (3)       15.02 13.55 13.51 13.54
Tangible book value per share (1)(3)       8.20 5.99 5.90 5.90

 

First Niagara Financial Group, Inc.
Summary of Quarterly Financial Data (unaudited) (Cont'd)
                 
        2009
        Year Ended Fourth Third Second First
        December 31 Quarter Quarter Quarter Quarter
                 
SELECTED AVERAGE YIELDS/RATES                
(Tax equivalent basis)                
Securities, at amortized cost       4.00% 4.00% 3.80% 3.99% 4.59%
Loans                
Commercial:                
Real estate       5.77% 5.70% 5.85% 5.78% 5.77%
Business       4.39% 4.47% 4.16% 4.48% 4.43%
Specialized lending       6.67% 6.51% 6.74% 6.81% 6.63%
Total commercial loans       5.44% 5.37% 5.44% 5.50% 5.47%
Residential       5.28% 5.23% 5.29% 5.24% 5.37%
Home equity       5.01% 4.95% 4.97% 5.01% 5.14%
Other consumer       7.93% 8.33% 8.10% 7.57% 7.58%
Total loans       5.41% 5.37% 5.41% 5.42% 5.45%
                 
Total interest-earning assets       4.89% 4.72% 4.74% 5.00% 5.24%
                 
Savings accounts       0.23% 0.21% 0.24% 0.24% 0.24%
Interest-bearing checking       0.15% 0.14% 0.14% 0.15% 0.16%
Money market deposits       1.03% 0.82% 0.93% 1.18% 1.36%
Certificates of deposit       1.87% 1.17% 1.68% 2.41% 2.68%
Borrowed funds       2.68% 3.77% 1.85% 2.57% 3.29%
Total interest-bearing liabilities       1.49% 1.26% 1.27% 1.67% 1.96%
                 
Tax equivalent net interest rate spread       3.40% 3.46% 3.47% 3.33% 3.28%
Tax equivalent net interest rate margin       3.65% 3.69% 3.66% 3.63% 3.61%

 

        2008
        Year Ended Fourth Third Second First
        December 31, Quarter Quarter Quarter Quarter
                 
SELECTED AVERAGE YIELDS/RATES                
(Tax equivalent basis)                
Securities, at amortized cost       4.92% 4.72% 4.95% 5.04% 5.00%
Loans                
Commercial:                
Real estate       6.27% 6.21% 6.15% 6.27% 6.48%
Business       5.65% 5.07% 5.52% 5.64% 6.50%
Specialized lending       7.41% 6.85% 7.20% 7.72% 7.89%
Total commercial loans       6.18% 5.95% 6.05% 6.19% 6.56%
Residential       5.55% 5.54% 5.53% 5.52% 5.60%
Home equity       5.86% 5.53% 5.65% 5.84% 6.50%
Other consumer       7.46% 7.68% 7.44% 7.25% 7.49%
Total loans       5.97% 5.82% 5.88% 5.96% 6.25%
                 
Total interest-earning assets       5.78% 5.59% 5.72% 5.81% 6.03%
                 
Savings accounts       0.28% 0.25% 0.26% 0.27% 0.33%
Interest-bearing checking       0.28% 0.23% 0.27% 0.30% 0.33%
Money market deposits       2.29% 1.91% 2.10% 2.27% 2.98%
Certificates of deposit       3.40% 2.82% 2.95% 3.55% 4.16%
Borrowed funds       3.91% 3.67% 3.78% 4.02% 4.26%
Total interest-bearing liabilities       2.59% 2.26% 2.36% 2.65% 3.11%
                 
Tax equivalent net interest rate spread       3.19% 3.33% 3.36% 3.16% 2.92%
Tax equivalent net interest rate margin       3.55% 3.68% 3.68% 3.50% 3.33%

(1) Excludes goodwill and other intangible assets. These are non-GAAP financial measures that we believe provide investors with information that is useful in understanding our financial performance and position.

(2) Includes nonaccrual loans.

(3) Excludes unallocated ESOP shares and unvested restricted stock shares.

(4) Includes operating results for the banking activities segment as defined in the Company's quarterly and annual reports.

(5) The Texas ratio is computed by dividing nonperforming assets by the sum of tangible equity and the allowance for credit losses. This is a non-GAAP financial measure that we believe provides investors with information that is useful in understanding our financial performance and position.
 

 

CONTACT:  First Niagara Financial Group, Inc.
          John R. Koelmel, President and Chief Executive Officer
          Michael W. Harrington, Chief Financial Officer
          Anthony M. Alessi, Investor Relations Manager
            (716) 625-7692
            tony.alessi@fnfg.com
          Leslie G. Garrity, Public Relations and Corporate Communications Manager
            (716) 625-7528
            leslie.garrity@fnfg.com