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First Niagara Reports First Quarter 2013 Results

First Quarter Highlights:

  • Net Income of $0.17 per share included $0.01 in executive departure related charges
  • Operating revenues declined 1% QOQ primarily driven by a 3% decline in fee income
  • Net interest margin of 3.39% decreased 3 basis points from adjusted fourth quarter
  • Lower margins drove a 20% QOQ decline in mortgage banking revenues
  • Operating expenses declined $3.7 million from the prior quarter adjusted for executive departure related charges
  • Average total loans increased 11% annualized QOQ driven by 13th consecutive quarter of double-digit increases in average commercial lending
  • Double-digit average commercial growth rates QOQ in each of the company's geographies
  • New York commercial loans increased 9% annualized since HSBC Transaction
  • Interest-bearing checking balances up 19% annualized
  • New checking account unit production per branch increased 15% QOQ
  • Mobile banking platform successfully launched in January 2013
  • Strong credit quality maintained
  • Originated NPL balances flat QOQ and declined 4 basis points to 1.03% of originated loans
  • NCOs equaled 0.27% of average originated loans, compared to 0.35% in 2012

BUFFALO, N.Y., April 19, 2013 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) today announced first quarter 2013 results that reflect continued organic loan growth, particularly in commercial lending, positive operating leverage driven by strong focus on expense management, and strong credit quality.

"Our first-quarter results are evidence of our continued strong fundamentals and a focus on enhancing shareholder value," said Gary Crosby, Interim President and Chief Executive Officer. "We are driving profitable growth by enabling our people to provide our customers what they need every day, and focusing on the efficiency and effectiveness of our organization as never before. In 2013, it is "business as usual" at First Niagara as we continue to execute our existing strategic plan, focusing on managing expenses, maintaining our strong credit quality and maximizing the company's potential in the diverse and attractive markets we serve."

The company is progressing on its search for a permanent CEO. The Board of Directors' search committee, chaired by Nathaniel D. Woodson and including Carl A. Florio and Carlton L. Highsmith, is being assisted by the national search firm of Korn/Ferry International.

First Quarter Results

In the first quarter of 2013, First Niagara reported net income available to common shareholders of $59.7 million, or $0.17 per diluted share compared to net income of $53.6 million, or $0.15 per diluted share in the fourth quarter of 2012. Results for the first quarter 2013 include the impact of a $6.3 million pre-tax charge, or $0.01 per share related to two executive departures announced last month. Reported GAAP results for the fourth quarter of 2012 included $3.7 million of restructuring charges as well as the impact of the $16 million accelerated CMO premium amortization adjustment.

Net interest margin declined 3 basis points to 3.39% from the adjusted 3.42% reported in the fourth quarter of 2012. Net interest income in the first quarter declined 1% annualized compared to adjusted fourth quarter levels. Noninterest income decreased $2.5 million or 3% from the prior quarter primarily due to lower mortgage banking, deposit service charges, and capital markets revenues.

Balance sheet growth remained strong as average interest-earning assets increased 8% annualized compared to the prior quarter. Average commercial loans increased 17% annualized over the prior quarter, the 13th consecutive quarter of double-digit growth. Average indirect auto loan balances increased $197 million while other consumer loan categories declined modestly compared to the prior quarter. Average interest-checking deposits increased 19% annualized from the prior quarter driven by greater account acquisition activity as well as increases in balances held by customers.

The provision for loan losses on originated loans totaled $18.9 million in the first quarter of 2013, including $9.8 million to support loan growth and $9.1 million to cover net charge-offs during the quarter. At March 31, 2013, nonperforming originated loans were flat compared to prior quarter levels and as a percentage of originated loans decreased four basis points to 1.03% from 1.07% at December 31, 2012. Net charge-offs equaled 27 basis points of average originated loans, compared to 35 basis points in 2012.

First quarter 2013 expenses, excluding a $6.3 million pre-tax charge related to two executive departures announced last month, declined $3.7 million, or 2%, compared to the prior quarter. Seasonal increases in salaries and benefits expense driven by payroll taxes and employee merit increases were more than offset by expense management.

Reported Results (GAAP) Q1 2013 Q4 2012 Q1 2012
Net interest income $ 266.1 $ 252.3 $ 242.4
Provision for credit losses 20.2 22.0 20.0
Noninterest income 89.3 91.8 69.9
Noninterest expense 237.7 238.8 200.2
Net income 67.3 61.1 59.9
Preferred stock dividend 7.5 7.5 5.1
Net income available to common shareholders 59.7 53.6 54.8
Weighted average diluted shares outstanding 350.0 349.7 349.1
Earnings per diluted share $ 0.17 $ 0.15 $ 0.16
All amounts in millions except earnings per diluted share.

"During the first quarter, our focus on managing expenses drove a $3.7 million sequential reduction in operating expenses and resulted in positive operating leverage as well as protecting the downside from the industry-wide decline in mortgage banking revenues, competitive loan pricing environment and other typical seasonal weaknesses," said Gregory W. Norwood, Chief Financial Officer. "A key focus throughout the remainder of the year will be expense management with only selective hiring and investments that support maximizing revenue potential and enhancing shareholder value while driving our efficiency ratio lower."

Loans

Average total loans increased 11% annualized from the linked quarter boosted by double-digit increases in commercial business (C&I) and commercial real estate (CRE) lending as well as sustained momentum in the company's indirect auto business. For the 13th consecutive quarter, average commercial loans, which includes commercial business and commercial real estate loans, increased at a double-digit pace organically, up $484 million, or 17% annualized over the prior quarter. Commercial business loans averaged $5.0 billion, representing an 18% annualized increase over the prior quarter. Commercial real estate loans increased 16% annualized to $7.2 billion. Average commercial loans in the company's New York, Western Pennsylvania, Eastern Pennsylvania and New England markets increased at double-digit annualized growth rates of 10%, 29%, 30%, and 25%, respectively. Since the acquisition of HSBC branches in May 2012, commercial loans in the company's New York market have increased at a 9% annualized growth rate.

Average indirect auto loan balances increased $197 million to $712 million. During the first quarter, new originations yielded 3.34%, net of dealer reserve. During the quarter, the company added an additional 72 dealers to its network within its contiguous footprint. Average residential real estate loans declined by $128 million, or 14% annualized, from the fourth quarter reflecting elevated industry-wide prepayment levels.

Deposits

The company continued to focus its efforts to grow its core customer base, re-position its account mix and increase lower cost deposits. Average transaction deposits, which include interest-bearing and noninterest bearing checking balances, increased slightly over the prior quarter and currently represent 32% of the company's deposit base, up from 28% a year ago. Increases in average interest-bearing checking balances were offset by seasonal declines in non-interest bearing deposit balances.

Average interest-bearing checking deposits increased 19% annualized compared to the prior quarter driven by acquisitions of new checking accounts and mass affluent households, particularly in the company's New York state footprint as well as higher balances held by customers. New checking account openings per branch increased 15% over the prior quarter. Average total core deposits, excluding time deposits, totaled $23.4 billion, representing a $150 million decline, or 3% annualized, from the linked quarter. This decline was partially driven by balance attrition due to continued pricing actions taken by the company on money market and online savings accounts.

The average cost of interest-bearing deposits declined four basis points to 0.25% from 0.29% in the fourth quarter. Pricing actions on non-transactional deposit accounts together with a favorable shift in mix of deposits drove the decline in overall cost of interest-bearing deposits.

The company continues to grow and deepen customer relationships by delivering its "Simple Fast Easy" value proposition. First Niagara launched its mobile banking offering in the first quarter, and approximately 20% of the company's online banking customers have signed up for mobile banking services via smartphone and tablet applications.

The company's Retail business, in tandem with Consumer Finance, continues to further expand relationships with core checking account customers. Beginning in the first quarter, the incentive program for sales personnel at the branches was enhanced to drive greater cross-solving referrals to Consumer Finance and Investment Services businesses. At March 31, 2013, the number of checking account households that also had a mortgage with the company increased 12% annualized from the prior quarter. The number of credit card accounts opened per branch increased by a factor greater than 3x compared to the prior quarter and was primarily driven by marketing campaigns targeted at existing deposit customers and greater cross-solving referrals at the point of sale.

Net Interest Income

First quarter 2013 net interest income of $266.1 million decreased slightly from the prior quarter adjusted amount of $268.6 million. Compared to the prior quarter, the benefits of an 8% annualized increase in average interest-earning assets were offset by a 3 basis point decline in the adjusted net interest margin from the prior quarter.

In the first quarter of 2013, total premium amortization on the CMO portfolio was $10.4 million compared to an adjusted $14.5 million in the prior quarter. The modest benefits from slower CMO cash flows together with a 4 basis point decline in cost of interest bearing deposits were offset by continued compression of loan yields from elevated prepayments and reinvestments at lower spreads.

Credit Quality


At March 31, 2013, the allowance for loan losses was $172.0 million, compared to $162.5 million at December 31, 2012. Information for both the originated and acquired portfolios follows.

Q1 2013 Q4 2012
$ in millions Originated Acquired Total Originated Acquired Total
Provision for loan losses* $ 18.9 $ 0.9 $ 19.8 $ 21.4 $ 0.2 $ 21.5
Net charge-offs 9.1 1.2 10.3 7.6 1.3 8.9
NCOs/ Avg Loans 0.27 % 0.08 % 0.21 % 0.24 % 0.08 % 0.18 %
Total loans** $ 14,100 $ 6,084 $ 20,035 $ 13,372 $ 6,514 $ 19,710
(*) Excludes provision for unfunded commitments of $0.4 million and $0.5 million in 1Q13 and 4Q12, respectively
(**) Acquired loans before associated credit discount; see accompanying tables for further information

Originated loans

The provision for loan losses on originated loans totaled $18.9 million, compared to $21.4 million in the prior quarter. This provision included $9.8 million to support sequential originated loan growth of $0.7 billion and $9.1 million to cover net charge-offs. Net charge-offs equaled 27 basis points of average originated loans in the first quarter of 2013, compared to 35 basis points in 2012.

At March 31, 2013, nonperforming assets to total assets were 0.50%, unchanged from the prior quarter. Nonperforming originated loans as a percentage of originated loans decreased four basis points to 1.03% at March 31, 2013 from 1.07% at December 31, 2012.

At March 31, 2013, the allowance for loan losses on originated loans totaled $170.7 million or 1.21% of such loans, compared to $161.0 million or 1.20% of loans at December 31, 2012.

Acquired loans

The provision for losses on acquired loans totaled $0.9 million, compared to $0.2 million in the prior quarter. Net charge-offs on those portfolios totaled $1.2 million during the quarter, compared to $1.3 million in the prior period. At March 31, 2013, the allowance for loan losses on acquired loans totaled $1.3 million, compared to $1.6 million at December 31, 2012. Acquired nonperforming loans totaled $27.7 million, compared to $29.6 million at the end of the prior quarter. At March 31, 2013, remaining credit marks available to absorb losses on a pool-by-pool basis totaled $149 million.

Fee Income

First quarter 2013 noninterest income of $89.3 million decreased 3% or $2.5 million compared to the prior quarter primarily due to lower mortgage banking, deposit service charges, and capital markets revenues.

Mortgage banking revenues declined 20% to $6.4 million from $8.1 million in the prior quarter. Deposit service charges declined $1.5 million or 6% from the prior quarter in large part due to seasonality and to a lesser extent due to lower customer non-sufficient funds (NSF) incident rates. Capital markets income declined 15% to $6.0 million from an all-time high in the prior quarter due to lower derivative swap activity during the quarter.

These declines were partially offset by higher wealth management fees and seasonal increase in insurance commissions. Wealth management services fees increased 7% driven by an 18% annualized increase in assets under management. Insurance commissions increased 6% compared to the fourth quarter driven by typical seasonal increases in renewal rates.

Noninterest Expense

First quarter noninterest expenses were $237.7 million and included $6.3 million in charges related to two recently announced executive departures. Excluding these charges, operating expenses totaled $231.4 million or $3.7 million lower than operating expenses in the fourth quarter of 2012.

First Niagara's focus on expense management resulted in a first-quarter reduction in brand-related marketing expenses as the company focused on select product promotions, as well as sequential decreases in professional fees, technology and communications expenses driven by vendor sourcing management. Compared to the fourth quarter of 2012, marketing and advertising expense declined $4.9 million and professional fees and technology and communications expenses declined $1.6 million and $1.1 million, respectively.

Salaries and benefits expenses increased $4.8 million, compared to the fourth quarter of 2012, entirely due to seasonal increases in payroll tax expenses and employee merit increases.

Operating expenses, excluding the executive departure charges, declined 1.6% outpacing a 1.4% decline in operating revenues and resulted in positive operating leverage during the quarter. The efficiency ratio, excluding the executive departure related charge, was 65.1% in the first quarter, down slightly from 65.2% in the prior quarter.

Capital

At March 31, 2013, the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Based capital ratios were 11.4% and 7.6% respectively. 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 430 branches, approximately $37 billion in assets, $28 billion in deposits, and approximately 6,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.

Investor Call

A conference call will be held at 10:00 a.m. Eastern Time on Friday, April 19, 2013 to discuss the company's financial results. Those wishing to participate in the call may dial toll-free 1-888-324-3414 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and is available under the investor relations tab of our website at www.firstniagara.com. A replay of the call will be available until May 2, 2013 by dialing 1-866-421-6880, passcode: 2563.

Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.

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

First Niagara Financial Group, Inc.
Income Statement Highlights -- Reported Basis
(in thousands, except per share amounts)
2013 2012 2011
First Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter Quarter
Interest income:
Loans and leases $ 206,640 $ 212,035 $ 211,767 $ 200,725 $ 189,385 $ 195,434
Investment securities and other 88,961 71,564 90,101 99,116 101,395 96,472
Total interest income 295,601 283,599 301,868 299,841 290,780 291,906
Interest expense:
Deposits 14,277 16,902 18,358 16,391 14,998 21,521
Borrowings 15,194 14,411 13,905 24,437 33,411 27,872
Total interest expense 29,471 31,313 32,263 40,828 48,409 49,393
Net interest income 266,130 252,286 269,605 259,013 242,371 242,513
Provision for credit losses 20,200 22,000 22,200 28,100 20,000 13,400
Net interest income after provision 245,930 230,286 247,405 230,913 222,371 229,113
Noninterest income:
Deposit service charges 24,800 26,345 26,422 21,433 17,037 18,049
Insurance commissions 16,355 15,497 18,764 17,072 16,833 15,440
Merchant and card fees 11,298 11,945 12,014 9,271 5,528 5,044
Wealth management services 12,845 12,000 11,069 9,207 9,039 8,179
Mortgage banking 6,424 8,060 10,974 7,174 5,649 5,279
Capital markets income 6,031 7,098 6,381 6,831 6,539 2,746
Lending and leasing 3,906 3,739 3,730 4,245 3,123 3,103
Bank owned life insurance 3,467 3,021 3,449 3,848 3,387 3,302
Other income 4,186 4,116 9,400 16,517 2,773 2,543
Total noninterest income 89,312 91,821 102,203 95,598 69,908 63,685
Noninterest expense:
Salaries and benefits 115,790 111,026 115,484 104,507 96,477 88,796
Occupancy and equipment 28,045 27,609 25,694 24,089 22,017 22,580
Technology and communications 27,113 28,257 28,110 24,434 19,713 18,942
Marketing and advertising 4,346 9,292 8,954 6,676 6,763 7,724
Professional services 9,603 11,163 11,193 9,263 8,895 11,669
Amortization of intangibles 14,119 14,224 14,506 9,839 6,466 6,586
FDIC premiums 8,901 9,158 8,850 10,552 6,133 6,097
Merger and acquisition integration expenses -- 3,678 29,404 131,460 12,970 6,149
Restructuring charges -- -- -- 3,750 2,703 13,496
Other expense 29,749 24,377 24,347 21,069 18,041 20,132
Total noninterest expense 237,666 238,784 266,542 345,639 200,178 202,171
Income (loss) before income tax 97,576 83,323 83,066 (19,128) 92,101 90,627
Income tax expense (benefit) 30,291 22,226 24,682 (8,204) 32,236 32,166
Net income (loss) 67,285 61,097 58,384 (10,924) 59,865 58,461
Preferred stock dividend 7,547 7,547 7,547 7,547 5,115 --
Net income (loss) available to common stockholders $ 59,738 $ 53,550 $ 50,837 $ (18,471) $ 54,750 $ 58,461
Financial Ratios:
Earnings (loss) per basic share $ 0.17 $ 0.15 $ 0.15 $ (0.05) $ 0.16 $ 0.19
Earnings (loss) per diluted share $ 0.17 0.15 0.14 (0.05) 0.16 0.19
Weighted average shares outstanding - basic(1) 349,278 349,071 349,001 348,941 348,823 304,065
Weighted average shares outstanding - diluted(1) 349,999 349,663 349,371 348,941 349,069 304,341
Net revenue(2) $ 355,442 $ 344,107 $ 371,808 $ 354,611 $ 312,279 $ 306,198
Noninterest income as a percentage of net revenue(2) 25.13% 26.68% 27.49% 26.96% 22.39% 20.80%
Pre-tax, pre-provision income(3) $ 117,776 $ 105,323 $ 105,266 $ 8,972 $ 112,101 $ 104,027
Pre-tax, pre-provision income per diluted share(3) $ 0.34 $ 0.30 $ 0.30 $ 0.03 $ 0.32 $ 0.34
Pre-tax, pre-provision return on average assets(3) 1.30% 1.15% 1.19% 0.10% 1.36% 1.30%
Net interest margin(4) 3.39% 3.22% 3.54% 3.26% 3.34% 3.48%
Interest yield on average loans(4) 4.25% 4.39% 4.47% 4.59% 4.62% 4.76%
Rate paid on interest-bearing liabilities 0.44% 0.48% 0.51% 0.61% 0.79% 0.82%
Efficiency ratio 66.86% 69.39% 71.69% 97.47% 64.10% 66.03%
Effective tax rate 31.0% 26.7% 29.7% 42.9% 35.0% 35.5%
Return on average assets(5) 0.74 % 0.67% 0.66% (0.12)% 0.73% 0.73%
Return on average equity(5) 5.50 % 4.92% 4.77% (0.90)% 4.96% 5.54%
Return on average tangible equity(3)(5) 11.62 % 10.45% 10.34% (1.64)% 7.90% 9.75%
Return on average common equity 5.24 % 4.62% 4.46% (1.64)% 4.88% 5.63%
Return on average tangible common equity(3) 12.05 % 10.72% 10.60% (3.18)% 8.12% 10.03%
(1) Share count excludes unallocated ESOP shares and unvested restricted stock shares.
(2) Net revenue is comprised of net interest income and noninterest income.
(3) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(4) Yields and rates calculated on a tax equivalent basis.
(5) Return used to calculate ratio excludes preferred stock dividend.
First Niagara Financial Group, Inc.
Period End Balance Sheet
(in thousands)
2013 2012 2011
March 31, December 31, September 30, June 30, March 31, December 31,
Cash and cash equivalents $ 424,176 $ 430,862 $ 447,087 $ 488,227 $ 370,380 $ 836,555
Investment securities:
Available for sale 7,876,160 10,993,605 10,579,970 9,937,271 12,248,058 9,348,296
Held to maturity 4,218,687 1,299,806 1,387,763 1,463,872 2,503,156 2,669,630
FHLB and FRB common stock 401,373 420,277 373,311 329,555 499,328 358,159
Total investment securities 12,496,220 12,713,688 12,341,044 11,730,698 15,250,542 12,376,085
Loans held for sale 126,389 154,745 117,375 101,596 102,513 94,484
Loans and leases:
Commercial:
Real estate 7,295,544 7,093,193 6,835,971 6,710,009 6,369,098 6,244,381
Business 5,044,738 4,953,323 4,682,154 4,514,537 4,108,363 3,771,649
Total commercial loans 12,340,282 12,046,516 11,518,125 11,224,546 10,477,461 10,016,030
Consumer:
Residential real estate 3,614,912 3,761,567 3,870,756 4,037,045 3,881,003 4,012,267
Home equity 2,646,645 2,651,891 2,661,429 2,683,236 2,149,135 2,165,988
Indirect auto 818,401 601,456 419,258 185,774 -- --
Credit cards 298,310 314,973 308,387 304,368 -- --
Other consumer 316,669 333,609 328,571 328,547 283,320 278,298
Total consumer loans 7,694,937 7,663,496 7,588,401 7,538,970 6,313,458 6,456,553
Total loans and leases 20,035,219 19,710,012 19,106,526 18,763,516 16,790,919 16,472,583
Allowance for loan losses 172,002 162,522 149,933 138,516 126,746 120,100
Loans and leases, net 19,863,217 19,547,490 18,956,593 18,625,000 16,664,173 16,352,483
Bank owned life insurance 407,419 404,321 401,211 397,739 395,944 392,468
Goodwill and other intangibles 2,567,681 2,617,810 2,626,625 2,631,605 1,796,394 1,803,240
Other assets 959,459 937,317 983,999 1,130,891 937,859 955,300
Total assets $ 36,844,561 $ 36,806,232 $ 35,873,934 $ 35,105,756 $ 35,517,805 $ 32,810,615
Deposits:
Savings accounts $ 3,915,836 $ 3,887,587 $ 3,941,528 $ 4,103,773 $ 2,554,720 $ 2,621,016
Interest-bearing checking 4,534,444 4,450,970 4,090,322 3,887,568 2,431,672 2,259,576
Money market deposits 10,493,243 10,581,137 10,801,280 10,919,766 7,100,646 7,220,902
Noninterest-bearing deposits 4,803,835 4,643,580 4,658,374 4,774,764 3,200,824 3,335,356
Certificates of deposit 3,985,702 4,113,257 4,206,192 4,211,116 3,741,525 3,968,265
Total deposits 27,733,060 27,676,531 27,697,696 27,896,987 19,029,387 19,405,115
Short-term borrowings 2,928,929 2,983,718 1,995,610 958,044 6,353,189 2,208,845
Long-term borrowings 732,510 732,425 732,339 732,263 4,688,251 5,918,276
Other liabilities 503,389 487,000 532,868 700,249 571,532 480,201
Total liabilities 31,897,888 31,879,674 30,958,513 30,287,543 30,642,359 28,012,437
Preferred stockholders' equity 338,002 338,002 338,002 338,002 338,002 338,002
Common stockholders' equity 4,608,671 4,588,556 4,577,419 4,480,211 4,537,444 4,460,176
Total stockholders' equity 4,946,673 4,926,558 4,915,421 4,818,213 4,875,446 4,798,178
Total liabilities and stockholders' equity $ 36,844,561 $ 36,806,232 $ 35,873,934 $ 35,105,756 $ 35,517,805 $ 32,810,615
Selected balance sheet information:
Total interest-earning assets(1) $ 32,524,313 $ 32,321,964 $ 31,316,470 $ 30,403,035 $ 31,959,556 $ 29,284,139
Total interest-bearing liabilities 26,590,664 26,749,094 25,767,271 24,812,530 26,870,002 24,196,880
Net interest-earning assets $ 5,933,649 $ 5,572,870 $ 5,549,199 $ 5,590,505 $ 5,089,554 $ 5,087,259
Tangible common equity(2) $ 2,040,990 $ 1,970,746 $ 1,950,794 1,848,606 2,741,050 2,656,936
Unrealized gain on securities, net of tax(3) 160,942 206,732 204,347 133,430 152,408 105,276
Total core deposits $ 23,747,358 $ 23,563,274 $ 23,491,504 $ 23,685,871 $ 15,287,862 $ 15,436,850
Originated loans(4) $ 14,100,190 $ 13,372,357 $ 12,232,568 $ 11,392,158 $ 10,517,021 $ 9,876,005
Acquired loans(5) 6,083,912 6,513,636 7,085,839 7,600,213 6,459,798 6,801,689
Credit related discount on acquired loans(6) (148,883) (175,981) (211,881) (228,855) (185,900) (205,111)
Total Loans $ 20,035,219 $ 19,710,012 $ 19,106,526 $ 18,763,516 $ 16,790,919 $ 16,472,583
(1) Includes interest bearing cash and cash equivalents, investment securities at amortized cost, loans held for sale, and total loans and leases.
(2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(3) Unrealized gain at March 31, 2013 excludes $54 million of net pre-tax unrealized gains recorded in accumulated other comprehensive income related to available for sale securities transferred to held to maturity classification as of March 31, 2013.
(4) Originated loans represent total loans excluding acquired loans.
(5) Represents the carrying value of acquired loans plus the principal not expected to be collected.
(6) Represent principal on acquired loans not expected to be collected.
First Niagara Financial Group, Inc.
Average Balance Sheet and Related Tax Equivalent Yields & Rates
(in millions)
For the three months ended
March 31, 2013 December 31, 2012 March 31, 2012
Average Interest(1) Yields Average Interest(1) Yields Average Interest(1) Yields
Balances
and
Rates(1)
Balances
and
Rates(1)(2)
Balances
and
Rates(1)
Interest-earning assets:
Loans and leases(3)
Commercial:
Real estate $ 7,179 $ 76 4.25% $ 6,911 $ 79 4.45% $ 6,300 $ 79 4.98%
Business 4,999 47 3.74 4,783 47 3.89 3,915 41 4.08
Total commercial loans 12,178 123 4.04 11,694 126 4.22 10,215 120 4.63
Consumer:
Residential real estate 3,691 37 4.01 3,819 39 4.05 3,945 42 4.28
Home equity 2,648 28 4.29 2,659 29 4.31 2,157 24 4.40
Indirect auto 712 6 3.29 515 5 3.50 -- -- --
Credit cards 304 8 10.40 310 8 10.19 -- -- --
Other consumer 328 7 8.17 328 7 8.73 278 5 7.34
Total consumer loans 7,683 85 4.50 7,631 87 4.54 6,380 71 4.47
Total loans and leases 19,861 208 4.25 19,325 213 4.39 16,595 191 4.62
Residential MBS(2) 5,488 34 2.50 5,746 36 2.50 8,550 65 3.03
Commercial MBS 1,914 18 3.78 1,953 18 3.79 1,704 17 3.99
Other investment securities (4) 4,822 38 3.19 4,474 35 3.16 2,678 23 3.44
Total securities, at cost(2) 12,224 91 2.97 12,173 90 2.95 12,932 105 3.24
Money market and other investments 241 1 1.31 207 1 1.54 256 1 0.94
Total interest-earning assets(2) 32,326 $ 300 3.76% 31,705 $ 304 3.81% 29,783 $ 296 3.99%
Goodwill and other intangibles 2,609 2,619 1,801
Other noninterest-earning assets 1,872 2,005 1,540
Total assets $ 36,807 $ 36,329 $ 33,124
Interest-bearing liabilities:
Deposits
Savings accounts $ 3,894 $ 1 0.11% $ 3,898 $ 2 0.18% $ 2,566 $ -- 0.03%
Interest-bearing checking 4,379 1 0.05 4,181 1 0.07 2,224 1 0.10
Money market deposits 10,643 6 0.23 10,810 7 0.25 7,167 5 0.28
Certificates of deposit 4,081 7 0.67 4,259 8 0.71 3,827 9 0.98
Total interest bearing deposits 22,997 14 0.25% 23,148 17 0.29% 15,784 15 0.38%
Borrowings
Short-term borrowings 3,152 3 0.40% 2,331 2 0.38% 3,632 6 0.65%
Long-term borrowings 730 12 6.71 732 12 6.63 5,334 27 2.07
Total borrowings 3,882 15 1.59 3,063 14 1.87 8,966 33 1.50
Total interest-bearing liabilities 26,879 $ 29 0.44% 26,211 $ 31 0.48% 24,750 $ 48 0.79%
Noninterest-bearing deposits 4,468 4,645 3,053
Other noninterest-bearing liabilities 502 528 471
Total liabilities 31,849 31,384 28,274
Total stockholders' equity 4,958 4,945 4,850
Total liabilities and stockholders' equity $ 36,807 $ 36,329 $ 33,124
Net interest income (FTE) $ 270 $ 273 $ 248
Taxable Equivalent Adjustment(1) 4 4 6
Total core deposits $ 23,384 $ 8 0.13% $ 23,534 $ 10 0.16% $ 15,010 $ 6 0.15%
Total deposits 27,465 14 0.21% 27,793 17 0.24% 18,837 15 0.32%
Tax equivalent net interest rate spread(2) 3.32% 3.33% 3.20%
Tax equivalent net interest rate margin(2) 3.39% 3.42% 3.34%
(1) Tax equivalent interest income is calculated using a 35% tax rate.
(2) Amounts for the three months ended December 31, 2012 exclude accelerated CMO adjustments of $16 million. The yields, including these adjustments, are:
Three months ended
December 31, 2012
Residential MBS 1.37%
Total securities, at cost 2.41%
Total interest earning assets 3.61%
Tax equivalent net interest rate spread 3.13%
Tax equivalent net interest rate margin 3.22%
(3) Includes nonaccrual loans.
(4) 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)
2013 2012 2011
First Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter Quarter
Beginning balance $ 162,522 $ 149,933 $ 138,516 $ 126,746 $ 120,100 $ 112,749
Net loan (charge-offs) recoveries:
Commercial real estate $ (2,121) $ (1,935) $ (1,791) $ (2,384) $ (5,994) $ 212
Commercial business (4,902) (3,385) (6,077) (10,958) (4,143) (4,665)
Residential real estate (427) (658) (396) (155) (1,120) (318)
Home equity (613) (673) (401) (1,536) (1,161) (268)
Other consumer (2,257) (2,285) (1,406) (805) (836) (796)
Total net loan charge-offs $ (10,320) $ (8,936) $ (10,071) $ (15,838) $ (13,254) $ (5,835)
Provision for loan losses 19,800 21,525 21,800 27,803 19,900 13,186
Allowance related to loans sold -- -- (312) (195) -- --
Ending balance $ 172,002 $ 162,522 $ 149,933 $ 138,516 $ 126,746 $ 120,100
Supplemental information
Allowance to loans 0.86% 0.82% 0.78% 0.74% 0.75% 0.73%
Allowance for originated loans to originated loans(1) 1.21% 1.20% 1.20% 1.19% 1.19% 1.20%
Net charge-offs to average loans (annualized)
Commercial real estate 0.12% 0.11% 0.11% 0.15% 0.38% -0.01%
Commercial business 0.39% 0.28% 0.53% 1.02% 0.42% 0.51%
Total commercial loans 0.23% 0.18% 0.28% 0.49% 0.40% 0.18%
Residential real estate 0.05% 0.07% 0.04% 0.02% 0.11% 0.03%
Home equity 0.09% 0.10% 0.06% 0.25% 0.22% 0.05%
Other consumer 0.67% 0.79% 0.60% 0.61% 1.20% 1.14%
Total consumer loans 0.17% 0.19% 0.12% 0.15% 0.20% 0.08%
Total loans 0.21% 0.18% 0.21% 0.36% 0.32% 0.14%
Net charge-offs of originated loans to average originated loans (annualized)(1)
Commercial real estate 0.10% 0.07% 0.12% 0.18% 0.16% -0.05%
Commercial business 0.45% 0.33% 0.64% 1.25% 0.54% 0.67%
Total commercial loans 0.26% 0.19% 0.36% 0.66% 0.32% 0.25%
Residential real estate 0.10% 0.15% 0.09% 0.04% 0.27% 0.08%
Home equity 0.19% 0.21% 0.13% 0.51% 0.40% 0.10%
Other consumer 0.64% 0.94% 0.59% 0.81% 1.25% 1.51%
Total consumer loans 0.28% 0.35% 0.18% 0.28% 0.38% 0.17%
Total loans 0.27% 0.24% 0.30% 0.55% 0.34% 0.22%
Nonperforming loans:
Originated(1):
Commercial real estate $ 49,953 $ 50,848 $ 46,413 $ 46,881 $ 44,749 $ 43,119
Commercial business 47,523 47,066 37,375 30,714 39,682 20,173
Residential real estate 28,455 27,192 21,377 23,058 22,021 18,668
Home equity 14,270 14,233 8,084 8,119 7,071 6,790
Other consumer 5,444 3,737 938 926 697 1,048
Total originated nonperforming loans 145,645 143,076 114,187 109,698 114,220 89,798
Total acquired nonperforming loans(2) 27,678 29,648 28,193 19,374 19,041 --
Total nonperforming loans 173,323 172,724 142,380 129,072 133,261 89,798
Real estate owned 10,816 10,114 9,669 10,632 7,202 4,482
Total nonperforming assets $ 184,139 $ 182,838 $ 152,049 $ 139,704 $ 140,463 $ 94,280
Accruing troubled debt restructurings (TDR) $ 64,311 $ 46,280 $ 55,732 $ 42,140 $ 42,358 $ 43,888
Loans 90 days past due still accruing(3) 172,062 171,568 145,323 125,668 116,810 143,237
Total classified loans(4) 720,197 708,468 693,006 732,762 753,536 748,375
Total criticized loans(5) $ 1,044,874 $ 1,002,659 $ 990,670 $ 1,030,471 $ 1,044,731 $ 1,144,222
Total nonperforming loans to loans 0.87% 0.88% 0.75% 0.69% 0.79% 0.55%
Total nonperforming originated loans to originated loans(1) 1.03% 1.07% 0.93% 0.96% 1.09% 0.91%
Total nonperforming assets to loans and real estate owned 0.92% 0.93% 0.80% 0.74% 0.84% 0.57%
Total nonperforming assets to assets 0.50% 0.50% 0.42% 0.40% 0.34% 0.29%
Allowance to nonperforming loans 99.2% 94.1% 105.3% 107.3% 95.1% 133.7%
Texas ratio(6) 16.10% 16.61% 14.16% 13.35% 8.97% 8.55%
Originated loans(1) $ 14,100,190 $ 13,372,357 $ 12,232,568 $ 11,392,158 $ 10,517,021 $ 9,876,005
Acquired loans(7) 6,083,912 6,513,636 7,085,839 7,600,213 6,459,798 6,801,689
Credit related discount on acquired loans(8) (148,883) (175,981) (211,881) (228,855) (185,900) (205,111)
Total Loans $ 20,035,219 $ 19,710,012 $ 19,106,526 $ 18,763,516 $ 16,790,919 $ 16,472,583
(1 ) Originated loans represent total loans excluding acquired loans.
(2 ) Nonperforming acquired loans include certain lines of credit that are considered nonaccruing. The remaining credit discount, recorded at acquisition, is adequate to cover losses on these balances.
(3) Includes acquired loans that were originally recorded at fair value upon acquisition, credit card loans, and loans that have matured which are in the process of collection.
(4) Includes consumer loans, which are considered classified when they are 90 days or more past due. Classified loans include substandard, doubtful, and loss, which are consistent with regulatory definitions, and as described in Item 1, "Business", under the heading "Asset Quality Review" in our Annual Report on 10-K for the year ended December 31, 2012.
(5) Criticized loans includes consumer loans when they are 90 days or more past due. Criticized loans include special mention, substandard, doubtful, and loss.
(6) Represents ratio computed using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(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
(Share counts in thousands)
2013 2012 2011
March 31, December 31, September 30, June 30, March 31, December 31,
First Niagara Financial Group, Inc capital ratios:
Tier 1 risk based capital 9.45% 9.29% 9.51% 9.40% 14.66% (1) 15.60% (1)
Tier 1 common capital(2) 7.64% 7.45% 7.59% 7.41% 12.47% (1) 13.23% (1)
Total risk based capital 11.38% 11.23% 11.48% 11.37% 16.75% (1) 17.84% (1)
Leverage 6.92% 6.75% 6.83% 6.32% 9.67% (1) 9.97% (1)
Equity to assets 13.43% 13.39% 13.70% 13.72% 13.73% (1) 14.62% (1)
Tangible common equity to tangible assets(2) 5.95% 5.77% 5.87% 5.69% 8.13% (1) 8.57% (1)
First Niagara Bank, N.A capital ratios:
Tier 1 risk based capital 10.15% 9.94% 10.19% 9.63% 14.69% (1) 14.66% (1)
Total risk based capital 10.89% 10.66% 10.88% 10.57% 15.66% (1) 16.47% (1)
Leverage 7.43% 7.23% 7.32% 6.48% 9.69% (1) 9.38% (1)
Number of branches 427 430 432 452 334 333
Full time equivalent employees 5,875 5,927 6,036 6,103 4,753 4,827
Share information and per share metrics:
Common shares outstanding 353,008 352,621 352,632 352,665 351,936 351,834
Preferred shares outstanding 14,000 14,000 14,000 14,000 14,000 14,000
Treasury shares 12,994 13,381 13,370 13,337 14,066 14,168
Market price (NASDAQ: FNFG): $ 8.86 $ 7.93 $ 8.07 $ 7.65 $ 9.84 $ 8.63
Book value per share(3) 13.19 13.15 13.11 12.84 13.00 12.79
Tangible book value per share(2)(3) 5.84 5.65 5.59 5.30 7.86 7.62
Price/Book 67.17% 60.30% 61.56% 59.58% 75.69% 67.47%
Price/Tangible book(2) 151.71% 140.35% 144.36% 144.34% 125.19% 113.25%
Common stock dividends $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.16
Preferred stock dividends 0.54 0.54 0.54 0.54 0.37 --
Dividend payout ratio 47.06% 53.33% 53.33% N/M 50.00% 84.21%
Dividend yield (annualized) 3.66% 4.01% 3.94% 4.21% 3.27% 7.36%
N/M Not meaningful
(1) Ratios reflect the impact of our capital raise completed in December 2011, the proceeds of which were used to consummate the acquisition of branches from HSBC Bank-USA, National Association in May 2012.
(2) The tables in this earnings release present computation of earnings and certain other ratios using non-GAAP financial measures, which we believe provide investors with information that is useful in understanding our financial performance and position. See Appendix A for further detail.
(3) Share count excludes unallocated ESOP shares and unvested restricted stock shares.
First Niagara Financial Group, Inc.
Appendix A - Non-GAAP Reconciliation
(in thousands, except per share amounts)
2013 2012 2011
First Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter Quarter
Financial ratios computed on an operating basis(1):
Earnings per basic share $ 0.17 $ 0.19 $ 0.19 $ 0.19 $ 0.19 $ 0.24
Earnings per diluted share 0.17 0.19 0.19 0.19 0.19 0.24
Weighted average shares outstanding - basic(2) 349,278 349,071 349,001 348,941 348,823 304,065
Weighted average shares outstanding - diluted(2) 349,999 349,663 349,371 348,941 349,069 304,341
Noninterest income as a percentage of net revenue(4) 25.13% 25.48% 26.43% 22.96% 22.39% 20.80%
Pre-tax, pre-provision income 117,776 125,281 129,333 136,645 127,774 123,672
Pre-tax, pre-provision income per diluted share 0.34 0.36 0.37 0.39 0.37 0.41
Pre-tax, pre-provision return on average assets 1.30% 1.37% 1.46% 1.51% 1.55% 1.55%
Net interest margin(3) 3.39% 3.42% 3.54% 3.37% 3.34% 3.48%
Interest yield on average loans(3) 4.25% 4.39% 4.47% 4.59% 4.62% 4.76%
Rate paid on interest-bearing liabilities(3) 0.44% 0.48% 0.51% 0.61% 0.79% 0.82%
Efficiency ratio 66.86% 65.24% 64.71% 60.63% 59.08% 59.61%
Effective tax rate 31.0% 27.0% 30.9% 33.5% 35.0% 34.7%
Return on average assets 0.74% 0.83% 0.83% 0.80% 0.85% 0.90%
Return on average equity 5.50% 6.06% 6.04% 5.95% 5.81% 6.82%
Return on average tangible equity(5) 11.62% 12.89% 13.11% 10.86% 9.24% 12.02%
Return on average common equity 5.24% 5.86% 5.83% 5.72% 5.79% 6.93%
Return on average tangible common equity(6) 12.05% 13.57% 13.86% 11.13% 9.63% 12.36%
Reconciliation of net interest income on operating basis to reported net interest income(1):
Total net interest income on operating basis (Non-GAAP) $ 266,130 $ 268,566 $ 269,605 $ 267,371 $ 242,371 $ 242,513
Additional premium amortization on securities portfolio -- (16,280) -- (8,358) -- --
Total reported net interest income (GAAP) 266,130 252,286 269,605 259,013 242,371 242,513
Reconciliation of noninterest income on operating basis to reported noninterest income(1):
Total noninterest income on operating basis (Non-GAAP) $ 89,312 $ 91,821 $ 96,866 $ 79,703 $ 69,908 $ 63,685
Gain on securities portfolio repositioning -- -- 5,337 15,895 -- --
Total reported noninterest income (GAAP) 89,312 91,821 102,203 95,598 69,908 63,685
Reconciliation of noninterest expense on operating basis to reported noninterest expense(1):
Total noninterest expense on operating basis (Non-GAAP) $ 237,666 $ 235,106 $ 237,138 $ 210,429 $ 184,505 $ 182,526
Merger and acquisition integration expenses -- 3,678 29,404 131,460 12,970 6,149
Restructuring charges -- -- -- 3,750 2,703 13,496
Total reported noninterest expense (GAAP) $ 237,666 $ 238,784 $ 266,542 $ 345,639 $ 200,178 $ 202,171
Reconciliation of net operating income to net income(1):
Net operating income (Non-GAAP) $ 67,285 $ 75,358 $ 74,027 $ 72,188 $ 70,053 $ 72,057
Nonoperating income and expenses, net of tax:
Additional premium amortization on securities portfolio -- 11,633 -- 5,558 -- --
Gain on securities portfolio repositioning -- -- (3,469) (10,331) -- --
Merger and acquisition integration expenses -- 2,628 19,112 85,448 8,431 4,256
Restructuring charges -- -- -- 2,437 1,757 9,340
Total nonoperating expenses, net of tax -- 14,261 15,643 83,112 10,188 13,596
Net income (GAAP) $ 67,285 $ 61,097 $ 58,384 $ (10,924) $ 59,865 $ 58,461
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) $ 59,738 $ 67,811 $ 66,480 $ 64,641 $ 64,938 $ 72,057
Nonoperating income and expenses, net of tax:
Additional premium amortization on securities portfolio -- 11,633 -- 5,558 -- --
Gain on securities portfolio repositioning -- -- (3,469) (10,331) -- --
Merger and acquisition integration expenses -- 2,628 19,112 85,448 8,431 4,256
Restructuring charges -- -- -- 2,437 1,757 9,340
Total nonoperating income and expenses, net of tax -- 14,261 15,643 83,112 10,188 13,596
Net income available to common stockholders (GAAP) $ 59,738 $ 53,550 $ 50,837 $ (18,471) $ 54,750 $ 58,461
Computation of pre-tax,pre-provision income:
Net interest income $ 266,130 $ 252,286 $ 269,605 $ 259,013 $ 242,371 $ 242,513
Noninterest income 89,312 91,821 102,203 95,598 69,908 63,685
Noninterest expense (237,666) (238,784) (266,542) (345,639) (200,178) (202,171)
Pre-tax, pre-provision income (GAAP) 117,776 105,323 105,266 8,972 112,101 104,027
Add back: non-operating premium amortization -- 16,280 -- 8,358 -- --
Add back: non-operating noninterest expenses (1) -- 3,678 29,404 135,210 15,673 19,645
Less: non-operating noninterest income (1) -- -- (5,337) (15,895) -- --
Pre-tax, pre-provision income (Non-GAAP)(1) $ 117,776 $ 125,281 $ 129,333 $ 136,645 $ 127,774 $ 123,672
(1 ) Net interest income, noninterest income and 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) Yields and rates calculated on a tax equivalent basis.
(4) Net revenue is comprised of net interest income and noninterest income.
(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)
2013 2012 2011
First Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter Quarter
Computation of Ending Tangible Common Equity:
Total stockholders' equity $ 4,946,673 $ 4,926,558 $ 4,915,421 $ 4,818,213 $ 4,875,446 $ 4,798,178
Less: Goodwill and other intangibles (2,567,681) (2,617,810) (2,626,625) (2,631,605) (1,796,394) (1,803,240)
Less: Preferred stockholders' equity (338,002) (338,002) (338,002) (338,002) (338,002) (338,002)
Tangible common equity $ 2,040,990 $ 1,970,746 $ 1,950,794 $ 1,848,606 $ 2,741,050 $ 2,656,936
Computation of Average Tangible Equity:
Total stockholders' equity $ 4,958,402 $ 4,945,132 $ 4,872,605 $ 4,879,791 $ 4,850,276 $ 4,188,800
Less: Goodwill and other intangibles (2,609,409) (2,619,322) (2,626,666) (2,206,682) (1,800,613) (1,809,690)
Tangible equity $ 2,348,993 $ 2,325,810 $ 2,245,939 $ 2,673,109 $ 3,049,663 $ 2,379,110
Computation of Average Tangible Common Equity:
Total stockholders' equity $ 4,958,402 $ 4,945,132 $ 4,872,605 $ 4,879,791 $ 4,850,276 $ 4,188,800
Less: Goodwill and other intangibles (2,609,409) (2,619,322) (2,626,666) (2,206,682) (1,800,613) (1,809,690)
Less: Preferred stockholders' equity (338,002) (338,002) (338,002) (338,002) (338,002) (66,226)
Tangible common equity $ 2,010,991 $ 1,987,808 $ 1,907,937 $ 2,335,107 $ 2,711,661 $ 2,312,884
Computation of Texas Ratio:
Nonperforming Assets $ 184,139 $ 182,838 $ 152,049 $ 139,704 $ 140,463 $ 94,280
Loans 90 days past due still accruing(1) 172,062 171,548 145,323 125,668 116,810 143,237
Sum of nonperforming assets and loans 90 days past due still accruing $ 356,201 $ 354,386 $ 297,372 $ 265,372 $ 257,273 $ 237,517
Tangible common equity $ 2,040,990 $ 1,970,746 $ 1,950,794 $ 1,848,606 $ 2,741,050 $ 2,656,936
Allowance for loan losses 172,002 162,522 149,933 138,516 126,746 120,100
Sum of tangible common equity and allowance for loan losses $ 2,212,992 $ 2,133,268 $ 2,100,727 $ 1,987,122 $ 2,867,796 $ 2,777,036
Sum of nonperforming assets and acquired loans 90 days past due still accruing/Sum of tangible common equity and allowance for loan losses 16.10% 16.61% 14.16% 13.35% 8.97% 8.55%
Computation of Tier 1 Common Capital:
Tier 1 capital $ 2,356,763 $ 2,264,679 $ 2,225,121 $ 2,128,702 $ 3,009,727 $ 2,962,031
Less: Qualifying restricted core capital elements (112,236) (112,025) (111,820) (111,630) (111,453) (111,284)
Less: Perpetual non-cumulative preferred stock (338,002) (338,002) (338,002) (338,002) (338,002) (338,002)
Tier 1 common capital (Non-GAAP) $ 1,906,525 $ 1,814,652 $ 1,775,299 $ 1,679,070 $ 2,560,272 $ 2,512,745
(1) 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.

CONTACT: First Niagara Contacts Investors: Ram Shankar Senior Vice President, Investor Relations (716) 270-8623 ram.shankar@fnfg.com News Media: David Lanzillo Senior Vice President, Corporate Communications (716) 819-5780 david.lanzillo@fnfg.comSource:First Niagara Financial Group, Inc.