Dallas, Texas 05/07/2014 (FINANCIALSTRENDS) – First Niagara Financial Group Inc. (NASDAQ:FNFG) yesterday filed form 10-Q, Quarterly Report with the U.S. Securities and Exchange Commission. Earlier on April 24, 2014 the company announced its 1Q14 earnings and the stock is sliding since then. The stock plunged 6.27% since April 24, reflecting negative investor sentiment as the company reported 13.1% decline in its 1Q14 net income which was $51.9 million as compared to 1Q13. The downside in revenue and net income were mainly impacted by higher non-interest expenses, decline in non-interest income and increase in provision for credit losses. Moreover, the continuing deterioration in asset quality was also of concern.
Yesterday the stock declined further and closed at $8.55, 1.95% down from its previous close.
Equities research analysts at Zacks mentioned that First Niagara Financial Group Inc. (NASDAQ:FNFG)’s 1Q14 total revenue of $376.8 million were marginally above the Zacks consensus estimate of $363 million. However, 1Q14 revenue was down by 2.1% as compared to 1Q13 primarily due to lower non-interest income. Net interest income increased 2% and net interest margin was down by 6 basis points to 3.33% year over year. Non-interest income considerably declined 14.1% year over year to $76.7 million during 1Q14 because of significant fall in capital markets, mortgage banking and other income. Even non-interest expense increased 4.7% year over year to $248.7 million during 1Q14 given the increase in salaries and benefits, marketing and advertising expenses, technology and communication costs and professional services fees as well as integration expenses of merger and acquisition.
Credit Quality and Capital Position:
First Niagara Financial Group Inc. (NASDAQ:FNFG)’s credit quality continued to deteriorate as provision for credit losses increased to $24.8 million during 1Q14, 22.8% year over year. However, some strength was seen in company’s capital ratios as Tier 1 risk based capital ratio increased to 9.62% at the end of 1Q14 as compared to 9.45% at the end of 1Q13. Leverage ratio also increased to 7.28% at the end of 1Q14 from 6.92% at the end of 1Q13.
Currently Zacks maintain “hold” rating for the stock backed by the company’s robust capital position and rise in loans.