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Why Is First Niagara Financial Group Inc. (NASDAQ:FNFG) Making Noise?

First Niagara Financial Group Inc. (NASDAQ:FNFG) apparently is exploring a sale opportunity of the company or other strategic alternatives, and has hired leading firm JPMorgan Chase to guide it on possible solutions. DealReporter reported earlier that the bank had approached possible buyers, and listed Toronto-Dominion Bank (NYSE:TD), Huntington Bancshares Incorporated (NASDAQ:HBAN) and New York Community Bancorp, Inc. (NYSE:NYCB), among prospective suitors.

The performance

Going a bit in the past, First Niagara surprised all the market participants with its second quarter performance. The second quarter proved to be a strong quarter. Compared to 1Q, the company made notable improvements and surpassed the expectations on the bottom line. The company’s diluted earnings per share surged 25% to $0.15 per share versus $0.12 per share from last quarter.

The highlights

It is important to mention that these earnings surpassed analyst projections by $0.01. Moreover, First Niagara’s revenues which missed forecasts slightly were $349.7 million, a YOY decline of 1%. It can be termed as a turn around performance from the first quarter. There were numerous reasons that led to this positive turn around. The increase in net income available to company’s common shareholders can be attributed to a 5% growth in noninterest income and $11 million restructuring charges recorded in 1Q in from branch consolidations.

The metrics

First Niagara Financial Group Inc. (NASDAQ:FNFG) excelled on different metrics, particularly in segment of loan growth. The total loans surged 1% annualized to $23.2 billion in the reported period. This can be attributed to the robust performance in commercial real estate, which recorded a 9% increase. The commercial operation and commercial real estate segment loans surged to $14.1 billion. Also, the auto loans segment performed well in the second quarter.

Considering the rebound from the first quarter which proved to be a poor quarter, the equity of First Niagara has been snapped by volatility in the macro market equity index.

Published by Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email ([email protected]) or his Google+ page (https://plus.google.com/u/0/116608759701551457422).

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