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SECURITIES AND EXCHANGE COMMISSIONFORM 8-KCurrent report filingFiling Date: 2011-07-21 Period of Report: 2011-07-21SEC Accession No. 0001171843-11-002080(HTML Version on secdatabase.com)FILERFIRST NIAGARA FINANCIAL GROUP INCCIK:1051741 IRS No.: 161545669 State of Incorp.:DE Fiscal Year End: 1231Type: 8-K Act: 34 File No.: 000-23975 Film No.: 11979035SIC: 6036 Savings institutions, not federally charteredMailing Address6950 SOUTH TRANSIT ROADPO BOX 514LOCKPORT NY 14095Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This DocumentBusiness Address6950 SOUTH TRANSIT ROADPO BOX 514LOCKPORT NY 140957166257500
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 8-KCURRENT REPORTPursuant to Section 13 OR 15(d) ofThe Securities Exchange Act of 1934Date of Report (Date of earliest event reported) July 21, 2011First Niagara Financial Group, Inc.(Exact name of registrant as specified in its charter)Delaware(State or other jurisdictionof incorporation)000-2397542-1556195(Commission File Number)(IRS Employer Identification No.)726 Exchange Street, Suite 618, Buffalo, NY14210(Address of principal executive offices)(Zip Code)Registrant's telephone number, including area code: (716) 819-5500Not Applicable(Former name or former address, if changed since last report)Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any ofthe following provisions:[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))Item 2.02. Results of Operations and Financial Condition.On July 21, 2011, First Niagara Financial Group, Inc. issued a press release which disclosed earnings results for the quarter ended June 30,2011.A copy of the press release is included as exhibit 99.1 to this reportItem 9.01. Financial Statements and Exhibits.(a) Not Applicable.(b) Not Applicable.(c) Not Applicable.(d) Exhibits.Exhibit No.DescriptionCopyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
99.1Press release dated July 21, 2011SIGNATUREPursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed onits behalf by the undersigned hereunto duly authorized.First Niagara Financial Group, Inc.(Registrant)/s/ GREGORY W. NORWOODJuly 21, 2011(Date)Gregory W. NorwoodChief Financial Officer(Duly authorized representative)Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
EXHIBIT 99.1First Niagara Profit Up on Organic Growth and Successful Entry Into New England in the Second Quarter of2011Second Quarter 2011 Highlights: NewAlliance conversion completed with positive customer momentum Operating EPS of 0.25 up 14% over the prior-year quarter Operating earnings up 43% and 59% over sequential and prior-year quarters Merger and restructuring expenses of 0.20 resulted in GAAP EPS of 0.05 Double-digit organic growth in commercial lending continues, with three year CAGR of 20% Credit quality remains exceptionalBUFFALO, N.Y., July 21, 2011 (GLOBE NEWSWIRE) -- Continued growth across all of First Niagara FinancialGroup, Inc.'s (Nasdaq:FNFG) established regions, combined with entry into New England through its AprilNewAlliance Bancshares merger, drove higher revenue and operating earnings in the second quarter of 2011. Thecompany again delivered a strong performance with the benefit of superior growth and asset quality trends."While our New England team successfully completed the NewAlliance conversion, seamlessly converting 350,000customer accounts in Connecticut and Massachusetts, our continuing focus on our customers and all of the markets weserve again resulted in very strong loan and deposit growth," President and Chief Executive Officer John R. Koelmelsaid. "Even as we expect economic and regulatory headwinds to continue to buffet the industry at large, we areconfident in continuing to deliver strong results by executing effectively and with discipline."First Niagara posted non-GAAP operating earnings of 71.2 million, or 0.25 per diluted share, in the second quarterof 2011, compared to 49.8 million, or 0.24, in the linked quarter, and 44.9 million or 0.22 in the second quarter of2010.Total revenue of 291.3 million increased 66.4 million, or 29.5%, over the first quarter of 2011, including 62.6million related to the NewAlliance acquisition. That performance included 16.7% annualized organic growth incommercial loans and 22.0% annualized growth in core deposits, excluding average acquired NewAlliance balances.On a GAAP basis, second quarter 2011 net income was 13.6 million, or 0.05 per diluted share, compared to 44.9million or 0.22 in the linked quarter and 20.0 million or 0.10 in the second quarter of 2010. GAAP net income andEPS, particularly during the second quarters of 2011 and 2010, reflect significant acquisition, integration andrestructuring expenses.Operating Results (Non-GAAP)Q2 2011 Q1 2011 Q2 2010Net interest income 230.4 172.9 154.8Provision for credit losses17.312.911.0Noninterest income60.952.146.1Noninterest expense166.7137.9121.6Net operating income before non-operating items 71.2 49.844.9Weighted average diluted shares outstanding282.4206.6204.4Operating earnings per diluted share 0.25 0.24 0.22 71.2 49.8 44.957.64.924.9Net income 13.6 44.9 20.0Weighted average diluted shares outstanding282.4206.6204.4Earnings per diluted share 0.05 0.22 0.10Reported Results (GAAP)Net income before non-operating itemsNon-operating items(a)All amounts in millions except earnings per diluted share. The Non-GAAP/Operating Results table above summarizedthe company's operating results excluding certain non-operating items.Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
(a) Amounts are shown net of tax and represent non-recurring expenses related to acquisition, integration andrestructuring."Our ability to grow commercial loans organically at double-digit rates, and at 20 percent compound annual growthover the last three years, demonstrates the strength of our franchise," Chief Financial Officer Gregory W. Norwoodsaid. "This trend underscores that we are well positioned, even in these uncertain times, to consistently grow thenumber of businesses and households First Niagara serves. We will continue to manage our business and balance sheetto make ample credit available in the communities we serve, manage credit costs at historically low levels andmaintain a strong capital position, thus creating value for our customers and shareholders."Successful NewAlliance ConversionFirst Niagara successfully completed its NewAlliance acquisition on April 15, fully converting and integrating systemsand operations in New England during the second quarter. The company's unique ability to simultaneously close andconvert its acquisitions allows for total focus on serving existing and new customers' banking needs from day one. Asof June 30, after converting about 350,000 customer accounts, overall deposit retention was 96% and core depositretention was 97%, both exceeding the company's expectations.In connection with its New England entry in the second quarter, the company's insurance subsidiary, First NiagaraRisk Management, acquired Pierson & Smith, a Norwalk, Connecticut insurance brokerage, consulting and third partyadministration firm. First Niagara Risk Management is a top-50 U.S. insurance broker, and the company hasconsistently sought top-performing independent firms to complement its entry into new markets. Pierson & Smith isFirst Niagara's 19th insurance acquisition, and it follows three agency deals in Pennsylvania in 2010 after the bankbegan operations there.Organic Loan Growth Remains Very StrongFirst Niagara's exceptional lending growth is a direct result of ongoing investments to add capacity and product depthto its relationship banking model. Average total loans and leases in the second quarter of 2011, excluding thoseacquired in the NewAlliance transaction, grew by 248.4 million, or 9.4%, annualized, compared to the linkedquarter.Second quarter 2011 average commercial lending balance growth remained robust, increasing 292.6 million, or16.7%, annualized, compared to the linked quarter, excluding loans acquired in the NewAlliance transaction.Home equity and residential loan growth in the second quarter of 2011, excluding those acquired in the NewAlliancetransaction, was consistent with soft consumer demand, though quarter-end balances reflect an increase in activity latein the period. Excluding acquired loans, average home equity balances in the second quarter increased 2.5 million, or0.7% annualized, compared to the first quarter of 2011, and average residential mortgages declined 35.5 million, or8.2%, annualized.Industry Leading Credit Quality ContinuesFirst Niagara's asset quality ratios continued to outperform industry averages and remained consistent with thecompany's recent performance. Second quarter 2011 net charge-offs were 7.5 million, representing 0.20% of FirstNiagara's average loans annualized, or 0.38% excluding all loans acquired at fair value. This compares to 8.1 millionin the linked quarter or 0.31% of average loans annualized, or 0.41% excluding all loans acquired at fair value.First Niagara's second quarter 2011 provision for credit losses was 17.3 million. As in recent quarters, the provisionexceeded net charge-offs as the company increased its level of allowance consistent with the growth and changing mixof its loan portfolio.Second quarter 2011 nonperforming loans were 82.5 million, representing 0.51% of total loans, or 0.93% excludingloans acquired at fair value. Nonperforming loans represented 0.75% of total loans in the first quarter of 2011, or0.98% excluding all loans acquired at fair value.Core Deposit Growth ContinuesAverage core deposits for the second quarter of 2011 were 13.5 billion, increasing 3.7 billion from the first quarterof 2011, reflecting the closing of the NewAlliance acquisition. Average core deposits in the second quarter of 2011,excluding those acquired in the NewAlliance acquisition, increased 539 million or 22.0% annualized over the linkedquarter. Average core deposits increased to 75.7% of total deposits in the second quarter of 2011, compared to 75.1%in the linked quarter.Average total deposits in the second quarter reflected growth in money market deposits, partially offset by lowerbusiness demand balances and deliberate reductions in higher-cost CD balances of approximately 169 million,Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
excluding those acquired in the NewAlliance transaction, as the company remained focused on more profitablecustomer relationships.Net Interest Income Up SignificantlyAs expected given the NewAlliance acquisition, net interest margin decreased to 3.65% in the second quarter of2011. Second quarter net interest income grew by 57.6 million to 230.4 million, compared to the linked firstquarter, reflective of the addition of 899 million in average net interest-earning assets primarily associated with theNewAlliance acquisition.Noninterest Income and Expense Reflect NewAlliance TransactionSecond quarter noninterest income of 60.9 million, was up 8.8 million compared to the first quarter of2011. Excluding NewAlliance, second quarter 2011 noninterest income was down 0.3 million from the linkedquarter, primarily due to the exceptional performance of First Niagara's Capital Markets business in the first quarter of2011. Entry into New England will offer a substantive opportunity to provide financial services products to anexpanded customer base.Operating (non-GAAP) noninterest expense for the second quarter was 166.7 million, reflecting the NewAllianceacquisition. Excluding NewAlliance, noninterest expense was relatively flat.Reported (GAAP) noninterest expense for the current quarter totaled 255.1 million. It included 88.5 million in nonoperating expenses from the NewAlliance acquisition, as well as previously announced restructuring and repositioninginitiatives to redeploy current resources to drive improved operating leverage, including branch closures andconsolidations, leveraging the company's scale in back-office services and making more efficient use of facilities as itcontinues to recruit talent and build its workforce to support First Niagara's expansion.Capital Management InitiativesDuring the second quarter of 2011, the company repurchased 8.7 million shares of its common stock at a total cost ofapproximately 121 million. Current buyback authorization allows for the repurchase of an additional 12.3 millionshares.At June 30, 2011 the company's estimated consolidated Total Risk Based capital and Tier 1 Common Risk Basedcapital ratios were 12.65% and 11.36%, respectively. First Niagara remains well above current regulatory guidelinesfor well capitalized institutions.About First NiagaraFirst Niagara Financial Group, Inc., through its wholly owned subsidiary First Niagara Bank, N.A., has 31 billion inassets, 19 billion in deposits, 346 branches and approximately 5,000 employees, as of June 30, 2011. First Niagara isa community-oriented bank providing financial services to individuals, families and businesses across Upstate NewYork, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.fnfg.com.Investor CallA conference call will be held at 11 a.m. Eastern Time on Thursday, July 21, 2011 to discuss the company's financialresults and business strategy. Those wishing to participate in the call may dial toll-free 1-877-709-8150. A replay ofthe call will be available until August 4, 2011 by dialing 1-877-660-6853, Account # 240, Conference ID # 374802.Non-GAAP Measures - The Company believes that non-GAAP financial measures provide a meaningful comparisonof the underlying operational performance of the company, and facilitate investors' assessments of business andperformance trends in comparison to others in the financial services industry. In addition, the company believes theexclusion of these non-operating items enables management to perform a more effective evaluation and comparison ofthe company's results and to assess performance in relation to the company's ongoing operations.Forward-Looking Statements - This press release contains forward-looking statements with respect to the financialcondition and results of operations of First Niagara Financial Group, Inc. including, without limitations, statementsrelating to the earnings outlook of the company. These forward-looking statements involve certain risks anduncertainties. Factors that may cause actual results to differ materially from those contemplated by such forwardlooking 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 innon-performing loans that could result from an economic downturn; (4) changes in legislation or regulatoryrequirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration ofacquired businesses; and (7) increased risk associated with an increase in commercial real estate and business loansand non-performing loans.Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
First Niagara Financial Group, Inc.Summary of Quarterly Financial Data (unaudited)2011June 30,2010March 31, December 31, September 30,June 30,March 31,SELECTED FINANCIAL DATA(Amounts in thousands)Cash and cash equivalents e for ,876,925Held to 65051,14126,95537,97750,09276,57435,168Real ,556,7856,405,2904,882,475Residential real 91,588,317Home 16,169,225 0,12695,35494,53290,40989,48816,062,197 10,611,117Investment securities:FHLB and FRB common stockLoans held for saleLoans and leases:Commercial:Total commercial loansOther consumerTotal loans and leases107,028Allowance for credit losses10,388,0609,978,9529,874,1117,283,550Bank owned life insuranceLoans and leases, ses and 347491,888390,673382,600350,708362,503262,838 30,889,646 21,439,84521,083,853Goodwill and other intangiblesOther assetsTotal assets20,871,540 20,518,359 14,968,078Deposits:Savings 039932,698Interest-bearing 0431,057,349Money market 5043,825,794Noninterest-bearing 0041,301,730Certificates of 842,676,89018,900,495 13,455,82313,148,84413,395,183 13,758,1749,794,461Total deposits Short-term 8201,034,236Long-term 85,36726,896,811 18,664,81318,318,783Other liabilitiesTotal liabilitiesStockholders' equityTotal liabilities and stockholders' equity3,992,8352,775,0322,765,070 30,889,646 21,439,84521,083,853Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document18,064,979 17,744,894 12,561,4562,806,5612,773,4652,406,62220,871,540 20,518,359 14,968,078
Total interest-earning assets 27,560,036 19,278,62018,922,19918,604,341 18,234,177 13,326,36423,762,504 16,309,84216,052,81315,923,102 15,554,727 10,974,359Total interest-bearing liabilitiesNet interest-earning assets ,005Tangible equity (1) ,275Unrealized gain (loss) on securities 102,75463,89370,690131,572117,42242,970Total loans serviced for others 14Legacy loans (3) )(40,925) 16,169,225 quired loans (4)Credit related discount on acquired loans(5)Total LoansASSET QUALITY DATA(Amounts in thousands)Nonperforming loans:Commercial real estate 42,88137,34644,06549,27147,64844,149Commercial ntial real tal classified Total criticized 19134,86962,94258,09756,71648,221-- 18,79427,02721,60718,93219,39718,857 6587,135Residential real estate1776623895516456Home equity829781809196358162Other 7911,946Net charge-offs to average loans n to average loans (annualized)0.38%0.49%0.53%0.43%0.45%0.73%Total nonperforming loans to loans0.51%0.75%0.85%0.93%0.74%1.05%Total nonperforming assets to assets0.31%0.41%0.46%0.49%0.40%0.57%Home equityOther consumerTotal nonperforming loansReal estate ownedTotal nonperforming assets Acquired loans 90 days past due still accruing(8) Accruing troubled debt restructurings (TDR)Net loan charge-offs (recoveries):Commercial real estateCommercial businessTotal net loan charge-offs ASSET QUALITY RATIOSCopyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
Allowance to loans0.66%0.93%0.91%0.93%0.90%1.21%Allowance to nonperforming loans129.7%124.6%106.8%100.4%121.6%114.9%Texas ratio (9)10.12%8.51%8.94%8.85%7.43%5.41%Tier 1 risk based capital12.04%13.32%13.54%14.25%14.27%17.54%Tier 1 common capital (10)11.36%12.56%12.76%13.42%13.43%17.39%Total risk based 21%8.14%8.37%8.75%--CAPITALConsolidated:Leverage ratio(11)Tangible capital 16.08%7.44%8.20%8.27%8.63%8.62%10.51%Tier 1 risk based capital11.62%11.23%11.06%11.88%11.59%13.08%Total risk based 92%6.64%6.97%7.10%------------7.55%Equity to assetsTangible common equity to tangible assets (1)First Niagara Bank, N.A.:Leverage ratio (11)Tangible capital(11)First Niagara Financial Group, Inc.Summary of Quarterly Financial Data earEndedFourthThirdSecondFirstJune uarterSELECTED OPERATIONS DATA(Amounts in thousands)Interest incomeInterest expenseNet interest incomeProvision for credit lossesNet interest income after provision 486,254 277,370 208,88482,94946,93336,016403,305 230,437 172,86830,20717,30712,900373,098 213,130 159,968745,588 205,320 200,636 195,129 144,503147,83437,77239,35740,37130,334597,754 167,548 161,279 154,758 114,16948,63113,50011,00011,00013,131549,123 154,048 150,279 143,758 101,038Noninterest income:Banking 16,007Insurance 76812,163Wealth management 74186,61554,11249,50546,05036,948Mortgage bankingOther incomeTotal noninterest incomeCopyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
Noninterest expense:Salaries and 8148,237Occupancy and 29,907Technology and 11,4038,649Marketing and 32Professional Amortization of 247FDIC Merger and acquisition integration 32Repositioning charges12,71211,6561,056----------Other ,405523,328 139,334 132,609 158,20393,182Total noninterest expense400,291 255,141 145,150Income before income taxesIncome taxesNet income 6813,55044,918140,35345,85545,59620,00328,899First Niagara Financial Group,Inc.Summary of Quarterly FinancialData (unaudited) rthThirdSecondFirstJune uarterSELECTED AVERAGE BALANCES(Amounts in thousands)Interest-earning assets:Securities, at amortized cost9,315,723 1,8055,453,217Real 5436,455,9586,273,2244,795,700Residential real 61,853,0181,900,4711,645,693Home ,222269,090270,416260,953187,2729,376,270 10,283,166 10,040,1939,808,8937,333,115235,63687,000Loans and leases (12)Commercial:Total commercial loansOther consumerTotal loans and leasesOther interest-earning assetsTotal interest-earning assets12,819,932 15,084,648 5022,428,249 25,953,407 18,863,301 16,741,604 18,701,661 18,145,612 17,166,334 12,873,332Goodwill and other 07,9581,101,0441,110,565933,279Other ight 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
Total assets 25,130,303 29,097,025 21,119,506 18,862,294 21,009,144 20,458,790 19,348,088 14,544,571Interest-bearing liabilities:Savings accounts ,7921,242,052917,397Interest-bearing 6551,734,4631,675,7051,034,659Money market 3034,881,1094,725,4413,689,294Certificates of 563,822,6204,007,4312,823,804Borrowed 3,833,7112,991,5982,233,362Total interest-bearing liabilities19,266,859 22,327,225 16,205,973 14,239,237 16,010,917 15,532,695 14,642,227 10,698,516Noninterest-bearing depositsOther noninterest-bearingliabilitiesTotal ,019271,918306,253303,199277,838198,85821,819,186 25,257,924 18,342,240 16,178,915 18,190,879 17,650,293 16,648,918 12,142,939Stockholders' 52,808,4972,699,1702,401,632Total liabilities and stockholders'equity 25,130,303 29,097,025 21,119,506 18,862,294 21,009,144 20,458,790 19,348,088 14,544,571Net interest-earning assets ,1072,174,816Total core deposits11,689,051 2,0516,886,915Total deposits15,496,481 17,886,275 13,080,134 12,476,782 13,253,220 13,513,383 13,379,4829,710,719Tangible equity 710,3071,707,4531,588,6051,468,353First Niagara Financial Group, Inc.Summary of Quarterly Financial Data (unaudited)(Cont'd)Reported Press Release hThirdSecondFirstJune uarterSTOCK AND RELATED PER SHARE DATA(Shares in thousands)Earnings per share:Basic0.240.050.220.700.220.220.100.16Diluted 0.240.050.220.700.220.220.100.16Cash dividends0.320.160.160.570.150.140.140.14133.33% 320.00%72.73%81.43%68.18%63.64% vidend payout ratioDividend yield (annualized)Market price (NASDAQ: Low 13.2013.5813.9813.9811.6512.5314.23Copyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
Book value per share 8.147.96Tangible book value per share (1) (13)Weighted average common sharesoutstanding(13):Basic244,018 281,496 206,124200,274 205,901 205,821 203,962 185,121Diluted244,914 282,420 206,644200,596 206,229 206,058 204,402 185,585309,090 209,432209,112 209,059 209,040 188,719Common shares 0.59%5.05%7.98%Return on average rn on average tangible equity 0,07911,946Net charge-offs to average loans 6%Provision to average loans Treasury sharesSELECTED RATIOS(Annualized where appropriate)Return on average assetsCommon equity:Return on average equityReturn on average tangible equity(1)Total equity:Noninterest income as a percentage of netrevenueEfficiency ratio - Consolidated- Banking segment(14)Net loan charge-offs Personnel FTENumber of branchesFirst Niagara Financial Group, Inc.Summary of Quarterly Financial Data ear EndedFourthThirdSecondFirstJune uarterSELECTED AVERAGE YIELDS/RATESCopyright 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document
(Tax equivalent basis)Interest-earning assets:Securities, at amortized cost3.71%3.63%3.83%3.51%3.45%3.50%3.54%3.56%Real .03%5.14%5.45%5.39%5.40%5.68%5.30%Residential real estate4.70%4.56%
First Niagara Financial Group, Inc. (Exact name of registrant as specified in its charter) Delaware 000-23975 42-1556195 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 726 Exchange Street, Suite 618, Buffalo, NY 14210 (Address of principal executive offices) (Zip Code)
