Net income during the third quarter this year increased to $71.6 million at First Niagara Financial Group, the holding company for First Niagara Bank.
For the second quarter of 2013, net income to common shareholders was $63.6 million. During the third quarter last year, First Niagara reported net income available to common shareholders of $50.8 million that included $29.4 million in pre-tax acquisition and restructuring expenses incurred primarily in connection with the closing of the HSBC branch acquisition in May 2012.
According to a statement, average loans increased 10 percent annualized over the previous quarter. Commercial business and real estate loans increased 7 percent annualized over that time frame, and average commercial real estate loans increased 9 percent annualized to $7.6 billion compared with the second quarter of 2013. Commercial and industrial loans averaged $5.2 billion, representing a 4 percent annualized increase over the prior quarter. Average commercial loans in the company’s New England and Eastern Pennsylvania markets increased at double-digit annualized growth rates of 13 percent and 10 percent, respectively.
Average consumer loans increased 14 percent annualized, which the company attributed to growth in indirect auto loan balances, partially offset by a decrease in residential mortgage loans. Average indirect auto loan balances increased $280 million to $1.2 billion. During the third quarter, indirect auto originations totaled $379 million at an average customer FICO score of 753 and yielded 3.1 percent, net of dealer reserve. Average residential real estate loans declined by $32 million, or 4 percent annualized reflecting elevated prepayment levels. Home equity balances increased 3 percent annualized from the prior quarter.
Net interest income increased 3 percent in the third quarter compared with the prior quarter. Net interest margin was 3.4 percent, as compared with 3.36 percent in the second quarter of 2013. Noninterest income decreased $4.1 million or 4 percent from the prior quarter primarily due to lower mortgage banking revenues.
The provision for loan losses on originated loans totaled $25.4 million in the third quarter of 2013, including $12.5 million to support loan growth and $12.9 million to cover net charge-offs during the quarter. At Sept. 30, nonperforming originated loans comprised 0.89 percent of originated loans, which equaled a 13 basis point improvement from the prior quarter. Net charge-offs equaled 33 basis points of average originated loans, consistent with the second quarter.
