BUFFALO - First Niagara Financial Group Inc. recently reported net income available to common shareholders of $71.6 million or $0.20 per diluted share for the third quarter of 2013, highlighted by strong balance sheet growth, consistent credit quality and positive operating leverage.
"We delivered another quarter of strong earnings despite the challenges presented by the macro-economic and competitive environment," said Gary M. Crosby, interim president and chief executive officer. "We are very focused on maximizing returns and expect to continue to deliver industry-leading loan growth while maintaining our high underwriting standards. We will continue to diligently invest in opportunities that drive revenue production, achieve operating leverage and enhance risk mitigation capabilities to position us well for the future."
In the third quarter of 2013, First Niagara reported net income available to common shareholders of $71.6 million, or $0.20 per diluted share. In the third quarter of 2012, First Niagara reported net income available to common shareholders of $50.8 million, or $0.14 per diluted share, 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. For the second quarter of 2013, net income to common shareholders was $63.6 million, or $0.18 per diluted share.
Balance sheet growth remained strong as average loans increased 10 percent annualized compared to the prior quarter. Average commercial business and real estate loans increased 7 percent annualized over the prior quarter driven by a 9 percent increase in commercial real estate loans. Average consumer loans increased 14 percent annualized driven by continued growth in indirect auto loan balances, partially offset by a decline in residential mortgage loans. Average transaction deposit balances, which include interest-bearing and noninterest bearing checking accounts, increased an annualized 2 percent over the prior quarter and currently represent 35% of the company's deposit balances, up from 31 percent a year ago.
Operating revenues increased 1 percent in the third quarter of 2013 compared to the prior quarter. Net interest income increased 3 percent in the third quarter compared to the prior quarter. Net interest margin was 3.40 percent, as compared to 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, 2013, 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.
In the third quarter of 2013, the company continued to generate positive operating leverage, as operating revenues increased 1 percent and operating expenses decreased 2 percent relative to the second quarter.