First Niagara earnings rise on strong deposit growth
First Niagara Financial Group, fresh off its first expansion outside the state, said its third-quarter net operating profits rose 15 percent, led by "robust‘ growth in core deposits and commercial loans but offset by losses on two large commercial loans.
The Lockport-based parent of First Niagara Bank reported net operating income of $27.3 million, up from $23.7 million a year ago. Per-share profits fell, however, to 19 cents from 22 cents because the bank has 40.4 million more shares outstanding after completing three stock offerings over the last year.
Results beat Wall Street analyst expectations by 2 cents per share.
The net operating profits don't include $16.4 million in one-time expenses, mostly due to the acquisition of 57 Western Pennsylvania branches from PNC Financial Services Group's National City Bank unit and its pending purchase of Harleysville National Corp. in the Philadelphia area.
Including those charges, net income fell 54 percent to $10.9 million, or 7 cents per share, from $23.7 million, or 22 cents per share, a year ago.
Net interest income from taking deposits and making loans jumped 41 percent to $98.9 million, but the bank set aside $15 million for loan losses, more than double the $6.5 million it reserved a year ago. Both quarters' reserve provisions exceeded loans written off as uncollectible by $500,000.
Fee and noninterest income rose 5 percent to $30.7 million, while operating expenses jumped 25 percent to $70.9 million.
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