First Niagara declares healthy Q1 results, plans stock offering to repay TARP funds
13 Apr 2009
First Niagara Financial Group Inc. reported first-quarter profit of $18.7 million, on par with a year ago, and said it was planning a $300 million stock offering in part to repay the federal government for funds released through the Treasury Department.
Officials at many banks have said in recent weeks that they want to repay Troubled Asset Relief Program money as soon as possible to avoid the restrictions that come with the funds. Those that have already repaid the Treasury include the Signature Bank of New York ($120 million), Old National Bancorp of Indiana ($100 million), Iberiabank of Louisiana ($90 million), and Bank of Marin Bancorp of Novato, California ($28 million).
Net income in the same quarter of last year was $18.8 million. Earnings per share in the first quarter of 2009 were 14 cents compared to 18 cents a year ago.
The Pendleton-based company, the parent of First Niagara Bank, noted pre-tax expenses of $2.9 million to settle a service mark infringement matter, $1.7 million for service related to FNFG's purchase of National City Bank, and $2 million related to last year's deal to buy Great Lakes Bancorp. (See: PNC Financial sells 57 branches to First Niagara)
Analysts have said First Niagara, which is based in western New York and has a $1.6 billion market value, stands out as a regional bank that can emerge from the financial crisis bigger and better. The company outperformed much of the banking sector by managing to post higher net income for 2008.
First Niagara also said Monday that it expects to offer and sell approximately $300 million of common stock in a public offering through Keefe, Bruyette & Woods and Goldman, Sachs & Co. Last week it said that it had the option to issue a combination of common stock and debt to close the deal with PNC, in order to maintain strong capital levels.
Net proceeds gained from the stock sale would by used for the National City Bank deal, which includes 57 Western Pennsylvania branches, and to repay the $184 million in preferred stock issued to the US Treasury Department under the Capital Purchase Program as well as for general corporate purposes.
