Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

First Niagara Financial Group Inc. (NASDAQ:FNFG)

Q1 2012 Earnings Call

April 19, 2012 10:00 am ET

Executives

John Koelmel – President, Chief Executive Officer

Greg Norwood – Chief Financial Officer

Analysts

John Pancari – Evercore Partners

Bob Ramsey – FBR

Casey Haire – Jefferies

Dave Rochester – Deutsche Bank

David Darst – Guggenheim

Damon Delmonte – KBW

Collyn Gilbert – Stifel Nicolaus

Matt Kelley – Sterne Agee

Jason O’Donnell – CD Brokerage

Russell Gunther – Bank of America Merrill Lynch

Operator

Welcome. We’d like to inform you that this presentation contains forward-looking information for First Niagara Financial Group Incorporated. Such information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involves significant risks and uncertainties. Actual results may differ materially from the results discussed on these forward-looking statements.

Now I’d like to welcome you and thank you for standing by and inform you that all lines have been placed on a listen-only mode until the question and answer session. This call is being recorded. If anyone has any objections, you may disconnect at this time.

I’d now like to turn the call over to your host, Mr. John Koelmel, President and Chief Executive Officer. Sir, you may begin.

John Koelmel

Thank you very much, Ed, and good morning everyone. Well, much attention has been paid to us over the last nine months because of the now-soon to be completed HSBC branch transaction. I’m proud to have an opportunity to kick off another quarterly call about our continuing string of very solid operating results.

While a quick drive-by may cause some to misconstrue the story, given the impacts of the carrying costs of financing the branch transaction as well as some loan loss provision lumpiness due to the vagaries of accounting for acquired portfolios, we’ve started the year by once again delivering very consistent high-quality operating earnings, results that reflect the cumulative outcomes of our steady and strong organic growth enhanced by the accretive benefit of expanding our footprint across the northeast region. More specifically, the commercial team continues to outperform in a really differentiating way. The retail business has created very positive momentum. Core credit trends remain solid and continue to distinguish us; and the entire organization is actively managing expenses in consideration of the revenue challenges facing the industry. Some of that is a very solid execution on the fundamentals, creating not only real earnings momentum but also increased franchise value.

Obviously many in our organization are working round the clock to ready us for completing the HSBC branch conversion beginning four weeks from tomorrow. We’re looking forward to delivering a terrific outcome for the more than 500,000 new households we’ll be serving, and with the addition of more than 1,200 new teammates, we’ll be even better equipped to empower all of our customers to thrive each and every day.

While the near term plate is very full, we’re also focused on what it takes to win over the longer term. That starts with optimizing our execution over the next 18 to 24 months to minimize the downside exposure from the continuing headwinds and then more fully engaging the team around our longer term business strategy. As we’ve said multiple times now over the past few months, we’re fully committed to efficiently and effectively running the business that we’ve already built and accumulating the capital we need to further move forward in the years that follow.

Briefly back to today and what we’ve delivered this quarter – our retail business has sharpened the focus on acquiring new consumer and small business relationships, and the results speak for themselves. Checking sales are at record levels across all markets, and that is translating to low-cost deposit growth as well as improved fee income. That’s being accomplished while at the same time the team and delivery system are being better positioned to more optimally execute on our strategic priorities. And just as with the continuing commercial success, it’s all about a best-in-class team committed to further strengthening our sales, service, product and marketing capabilities.

Obviously we’ll have an increasingly stronger position with the benefit of the HSBC branch deal. That transaction clearly deepens the upstate New York footprint that’s been the foundation of our success and it further affirms our confidence in not only the stability of our home geography but also the growth opportunities our legacy markets continue to provide. Just as importantly, the transaction further accelerates our overall retail implementation, enabling us to more fully leverage our core banking business with improved products and services, wealth management, credit cards, other consumer lending, and more.

As for the commercial team, they continue to knock it out of the park by delivering differentiating results, now nine consecutive quarters of double-digit growth. And it’s not just the rate of growth that continues to stand out but also how the team is making it happen. Whether it’s our ability to lead larger deals or further deepen relationships with additional products and services, fee income enhancements are increasingly beneficial as well. It’s a team that continues to strengthen as we add more talent to ensure we outperform and win an even greater share of the right opportunities in each of our markets in the years ahead.

And with the HSBC transaction only a month away, I have to conclude by further acknowledging our entire team that will again deliver on the promise for our new customers and communities. They’re incredibly energized and very engaged, and definitely some of the best in the business – a team committed to leveraging unparalleled teamwork and their shared passion for the benefit of the customers and communities we serve. That’s what defines a culture that will not only make our execution on this transaction the best yet but is also what makes First Niagara a special place to work. As this quarter’s outcomes again demonstrate, we have a team that’s definitely all-in and one that will continue to make good things happen across our markets for both the near and longer term.

With that, let me flip it to Greg who will take you through the results for the quarter.

Greg Norwood

Thanks John. Good morning. Thank you for joining us today. Again this quarter, we delivered on the fundamentals that differentiate our franchise - continued strong commercial loan growth and strong retail checking account acquisition. As we continue to drive our value proposition across our footprint, we have and will continue to invest judiciously in the franchise to deliver long-term value. To be clear, though, we are scratching and clawing to manage expenses at the same time.

Let me get right to the numbers on Page 3 of the earnings deck and give you a high-level drive-by of the quarter. Our operating net income available to common shareholders was $0.19 per diluted share versus $0.24 in the fourth quarter. Quarter-over-quarter, the $0.05 decline in per-share operating net income was driven by the impact of the financing race to complete the HSBC branch transaction. Total commercial loans, which include principally C&I and commercial real estate, grew 15% annualized. As John said, that’s nine consecutive quarters of double-digit organic commercial loan growth, and that’s hard to find anywhere.

On the deposit side of the business, checking account growth was also a very positive story. The efforts of our brand marketing campaign and our product redesign last fall are certainly paying off. The branch restructuring completed in January has also enabled us to redeploy resources to further our small business growth strategy. We feel very good about the momentum we already have generated in our retail business early in 2012.

Total revenues increased 2% over the linked quarter, driven by strong fee revenue. Capital markets revenue more than doubled over the prior three months and was once again a highlight for the quarter on the fee income side. Our middle market lending teams are definitely leveraging our expanded capital markets capabilities to better serve customers and grow fee income.

Net interest income was flat quarter-over-quarter while NIM for the quarter came in at 3.34%. The NIM was slightly lower than we anticipated in January but consistent with what we messaged in early March at the KBW conference in Boston. The NIM decline was partially mitigated by the increase in net earning assets and significantly lower deposit costs.

Turning to credit, this quarter we began providing more transparency around the acquired loan portfolio and the originated loan portfolio, given that roughly 40% of our total book is acquired. So originated loans include all loans that are not subject to fair value accounting and were, so to speak, originated under our watch. For the first quarter, our credit metrics for originated loans remained favorable relative to our peers We continued to deliver consistently strong credit results while most of the industry is still working through problems of the downturn that we avoided.

Our charge-offs and non-accruals remain below peer averages while up from the lows of the prior quarter. Our first quarter charge-off ratio of 34 basis points for originated loans was consistent with the 32 basis points we had in 2011. Our non-performing loan to loan ratio for originated loan stands at 1.09%, well below our peer averages. The acquired portfolios are also holding up well overall. The Harleysville portfolio, which was the fixer-upper of our three acquisitions, had two charge-offs this quarter relative to their original marks in April 2010 that increased the provision for the quarter by 4.4 million.

Turning to Slide 4, total originated loans increased 11% year-over-year. Two-thirds of this growth came from new customer acquisition and the remaining from deeper penetration in our existing customer base.

Turning to Slide 5, you can see a snapshot where the organic commercial loan growth comes from, both from a geography and a business perspective. Our commercial line utilizations remained unchanged while total line exposure increased an annualized 8% from the end of the prior quarter, which is a good precursor of our growth potential in an expanding economy. Our middle market segment continues to drive the bulk of the sequential growth, followed by commercial real estate and equipment financing.

From a geographic perspective, our New York and western Pennsylvania markets continue to perform very well. Additionally, we certainly have made the pivot in the eastern Pennsylvania markets where we are seeing a lot of traction lately. Our relatively new foothold in New England also continues to gain traction and future growth trends are supported by New England’s strong pipeline at quarter-end. Further, recent hires of some experienced relationship managers in New England will further drive volumes through 2012. Overall, our commercial pipelines at the end of the quarter continue to be robust, particularly in our newer markets.

Looking at our product side, our enhanced specialty vertical such as equipment financing, healthcare and syndications continue to provide additional touch points to our commercial customer base.

Looking at the economy, we are often asked about the proverbial green shoots recently reported and have they translated into loan demand. The answer is yes – we see a little growth. For context, this past January we conducted an annual business survey of CEOs across our footprint and the results indicated that many business leaders expect better times in 2012 and expect to invest in fixed asset acquisitions. However, just one-third of these companies plan to use a financial institution for their financing needs. This means there is still excess liquidity in the system, and while there is some growth in the economy, from a lending perspective the total pie will not be getting much bigger.

Moving to retail and the deposit story on Slide 6, during this quarter the number of new personal checking accounts increased 11%. Year-over-year, new checking accounts per branch grew nearly 30% with strong growth across all of our markets. Core customer acquisition has been the major focus of the retail management team. Additionally, personal checking account balances increased 15% annualized over the last quarter.

Core deposits, excluding money market deposits, increased 2% annualized over the prior quarter. Money market deposits declined this quarter by 247 million or 14% annualized. This decline was driven by our interest rate and treasury management strategies as we continue to move down deposit pricing and reduce excess liquidity.

From a business strategy perspective, in the third quarter last year we launched our new simplified checking product set called You First Checking. These products have been very well received by customers and we are seeing the benefits across our geography in balance and fee income generation.

From an operational perspective, we are driving better alignment between our compensation plans and our key performance metrics and investing in better analytics to provide real-time information to our front-line team and drive better product design and targeted marketing. What does this all mean? We will continue to drive checking account growth in 2012. This growth will serve as the platform to grow transactor-saver-borrower customer relationships, which is the strategic end game.

Additionally as I highlighted earlier, we are seeing some good traction in small business as the branch restructuring completed in January is already paying dividends. Small business loan applications and the pipeline to date, while modest in the grand scheme of things, exceeded our expectations. More importantly, our strategy for small business is to deploy a talented, dedicated sales force to take lending market share from our competition to drive low-cost deposit growth and to cross-sell deeply. Our net business checking account growth is on target to achieve 5% growth and expect to more than double loan production in 2012.

Let me next touch on Indirect Auto. As all of you know, we launched our Indirect Auto lending initiative this quarter. Let me recap what we told you last quarter and why this is a good news story for us now. First, this is really the only consumer loan category that is growing as consumers are still deleveraging their personal balance sheets. Next, this further accelerates our balance sheet rotation strategy. Finally, rarely do you get the opportunity to hire two successful teams that know the business and our markets so well. Hitting the ground running with intact front and back office teams makes this profitable much, much quicker than normal. Our growth goals and expectations include expansion of participating dealer base from the 500 today to over 1,500 by 2014. In 2012, we think the growth opportunity will generate roughly half a billion dollars in loan balances by year-end.

Next, I’d like to talk about our targeted customer segment. We are targeting the higher FICO segment but not the super-prime segment. Many of you may have heard that some of the largest participants in the market are offering customer rates with a 1% handle. That’s not what we’re going after.

Let me now briefly just cover mortgage and credit cards. On the mortgage side, the pipeline for mortgage refinancing remains strong. Additionally, our promotional campaign on home equity lines also will drive growth in that book. We continue to hire key leaders in our mortgage business and expect to hire about 20 more mortgage bankers in our footprint.

For our credit card platform, the HSBC transaction is a tremendous opportunity. We will be growing our account base by a factor of 10 and enhancing our operating platform and product capabilities significantly.

As this chart on Page 7 shows, our charge-offs and non-accruals in the originated book compare favorably to our peer group and in line with top quartile performers. When looking at our performance over the last several years, we have clearly been one of the very best. As the overall industry continues to normalize down, we expect our credit trends will moderate from our very low levels a bit as well. We will still differentiate ourselves against the overall industry’s performance.

Given the complexity surrounding acquisition accounting for loans, I will isolate the credit discussion first into loans we originate and then loans we acquired. Turning to Slide 8, this slide compares high-level credit metrics for the originated book to prior quarter. Net charge-offs on our originated portfolio totaled 8.6 million or 34 basis points of originated loans. While higher than our exceptionally low fourth quarter, first quarter charge-offs were consistent with the 32 basis points reported for all of 2011. The provision for originated loans was 15.5 million, which was 7 million more than charge-offs as we continue to provide for loan growth in our changing portfolio mix. The allowance for originated loans totaled 125.1 million or 1.19%, which is roughly about 6 million higher than last quarter end.

Non-performing loans increased 24 million sequentially to 114 million. The increase was driven by three C&I loans in our upstate New York footprint that totaled $20 million. These relationships have been adequately reserved for at quarter end. At March 31, non-performing loans comprised still a modest 1.09% of our originated loan portfolio, up from 91 basis points last quarter.

Barring these three credits, new non-performing loan formation was consistent with recent experience and loan migration trends remained steady during the quarter. In addition, overall levels of classified and criticized assets, including our past watch category, were up only slightly from the prior quarter.

Let me now address the acquired book, comprised of our Nat City, Harleysville and New Alliance acquired portfolios on Slide 9. At March 31, our acquired loans totaled 6.5 billion compared to 6.8 billion on December 31. Let me start by saying today we remain comfortable with the overall credit marks taken at the time of our acquisitions. We believed then and now that our economic valuation and structuring of the transactions around credit was solid, so this is more of an accounting story than a credit quality story. The accounting buckets do create a difficult path to follow, so let me put my accountant’s hat on and explain the numbers.

At the time of the Harleysville acquisition, pursuant to the then-new accounting rules, a number of low quality loans were individually reviewed for credit impairment. Harleysville was the only acquisition that had any loans individually marked, given the poor quality of the nature of some of their loans. Acquired loans that were not individually analyzed were pooled into groups of similar loans based on common characteristics such as geography, term, interest rate, collateral type, and each pool was analyzed for credit risk and mark to fair value. This requirement creates an individual credit mark for low-quality credits and valuation buckets for individual pools, neither of which are fungible and they cannot be comingled.

Of the remaining 6.5 billion acquired book today, only 37 million were individually marked credits and all were from Harleysville. Anticipated losses in excess of the credit mark recorded at acquisition are recognized immediately, which is what we did this quarter. By contrast, when there is an estimated benefit because the anticipated losses are less than the credit mark, this benefit is recognized over the remaining life of the loan as accretable yield, which is what we started to do last quarter. During the first quarter, charge-offs on these individually marked loans totaled 4.4 million. These loans represent fair value marks based on current information compared to our original mark in April 2010.

As I mentioned in our fourth quarter call, we identified certain pools, including some at Harleysville, where we had excess credit marks and transferred 35 million to accretable yield and recognized about 3.5 million in Q4, with the remaining to be recognized over the next three years or so. So as you can see, we incurred the losses all at once in the provision line but any improvements are recognized over time in interest income. Obviously, this accounting model confuses the total economic view of the assets, and this dichotomy in accounting is further exacerbated because it is done on a pool-by-pool basis and for each individually marked loan.

Bottom line – overall we remain comfortable with the economic marks on not only Harleysville but also Nat City and New Alliance. However, as I noted, since the credit marks are not fungible under the accounting bucket treatment, we may experience some lumpiness in the provision line expense over time.

Turning to Slide 10, let me turn to the income statement. Net interest income was essentially unchanged quarter-over-quarter at 242 million. Interest income generated on new loans and securities and continued benefits from our deposit re-pricing initiatives were offset by the combined effects of higher mortgage premium amortization, interest expense on the sub-debt issued last December and other borrowings, and refinancing of existing loans coupled with re-pricing variable rate loans both into lower yields.

Our first quarter net interest margin averaged 3.34%, slightly below the expectations we communicated back in January but consistent with guidance we gave in early March. Let me break down the key drivers of the NIM relative to the prior quarter. Earning assets yield declined 18 basis points quarter-over-quarter to 3.99%. Yields on investment securities declined 21 basis points from last quarter with over half the decline driven by mortgage premium amortization this quarter of $27 million, an increase of 4 million over the prior quarter. Loan yields declined 14 basis points sequentially due to lower yields on new originations and faster repayment of higher yielding loans. The good news – commercial loans spreads performed slightly better than our expectations despite the increased competition.

Looking at the liability side, deposit costs decreased 14 basis points quarter-over-quarter driven by the continued benefits of our aggressive re-pricing efforts last year. Interest costs on our wholesale borrowings increased 6 basis points due to the full impact of the sub-debt we issued in December as well as our internal liquidity risk management strategy to pledge less liquid collateral to fund the pre-buy purchases. Subsequent to the HSBC transaction, we will wind down these short-term positions as we re-price them with core deposits.

Given the volatility in interest rates today, coupled with an absolute inability to predict where rates may be headed, makes margin prediction counterproductive. The rather routine contradictory rhetoric from our policy makers regarding whether interest rates will go up in early 2013 or late 2014 creates a wide unpredictable range of possibilities. Case in point – a Bloomberg.com article issued earlier this month on the 10-year forecast at 21 different brokers, in this article 14 of the experts were still expecting to see some form of QEIII and the 10-year forecast ranges anywhere between 2 and 3%. This is a very wide range for the industry to navigate and has ramifications as it relates to prepayment fees, premium amortization, and loan pricing. No telling what the survey might tell today.

Let’s focus on the 10-year movement since mid-February, which has gone from a low of 1.92% to a high of 2.39% prior to ending yesterday at 1.97, near the lows. So as a bank management team, what does that mean for us? At First Niagara, we sharpen our focus on running the business in what we can control, which is acquiring good loan and deposit customers. Our focus internally is to maintain loan spreads and manage deposit and borrowing costs. It is to continue to drive volumes like we did in the first quarter and each of the previous eight quarters to help mitigate the effect of NIM compression.

To repeat and further augment a recent metaphor we heard, if the price of mozzarella cheese goes up, the margins on pizza have to come down, in which case not only do we work harder to sell more pizzas but we are also focused on the broader menu, which includes selling chicken wings, clam chowder, perogies and cheese steaks. That’s precisely what we’ve been doing – increasing the penetration we have in the customer’s wallet, retail or commercial, through our new products and service capabilities.

Now let me comment on the uncontrollables in the rate environment that we’ve all come to know and embrace. Looking at interest rates, mortgage-backed securities and CMO prepayment fees and the resulting premium amortization obviously will be dictated by market rates, and this is something we think about an analyze every day. Looking at competitive factors, as we noted in our fourth quarter call and in early March at the KBW conference, and as some peers have noted more recently, we also have seen a few anecdotal examples of irrational or goofy pricing and some unbelievable structures. We do not compete for these deals. Instead, we will continue to fight every day for the good customer with one of the best teams in the business.

Now let’s move to non-interest income – overall, a great quarter for fees, which were up 10%. At 5.6 million, mortgage banking revenues increased 7% quarter-over-quarter as closed mortgage volume approximated 470 million, in line with last quarter, and gain on sale margins improved about 30 basis points. Our Durbin mitigation efforts remained on track with what we have communicated earlier and we expect to recoup the 9 million we told you last year by fourth quarter this year, so our fourth quarter run rate should be a good jump-off point for 2013.

Let me move to Slide 11 to highlight our capital markets operations and then I will close with expenses. Capital markets had the best quarter since its beginning in late 2010. Revenues increased 138% to 6.5 million, driven by greater derivative sales transactions. During the quarter, we underwrote 56 derivative transactions that netted 5.8 million in fees compared to 2.5 or 33 transactions in last quarter. As Slide 12 shows, we broke into the top 15 in lead tables for middle market book runners, a meaningful achievement considering we only assembled our team in late 2010. The real statement about this is the experience and quality of the team. This doesn’t happen with a start-up team. Winning with talent proven again.

So why does this work? It’s about partnership between the relationship managers on the lending side and having the right capital markets experts. Some companies struggle with this concept. We don’t, and that’s a credit to our culture which further underscores what you heard from John about the strength of our talent and our culture. Certainly our capital markets capabilities support growing our middle market customer loan balances as well. We can retain and attract new lending customers easier than we could have without our capital markets capability product set and skilled employees. Finally, we have further built out our capabilities in this business by our recent hire of a commercial real estate syndication expert, and that team will actively drive additional opportunities for us.

Let me round out the P&L discussion by discussing operating expenses. Operating expenses excluding merger and restructuring charges were roughly 185 million for the first quarter, in line with our expectations. Salary and benefits increased an expected 9% over the prior quarter in large part due to the seasonal increases in payroll taxes and the full quarter’s impact of last year’s increase in technology teammates. Partially offsetting this increase was lower professional services expenses. The net of looking at expenses was that our operating efficiency ratio in the first quarter was essentially flat quarter-over-quarter at 59%. Reported GAAP expenses of 200.2 million include approximately 15 million in restructuring and HSBC merger-related costs.

As John noted, we will consummate the HSBC branch merger on May 18. From a financial perspective, the transaction remains accretive from Day 1 forward. From a modeling perspective, most sell-side earning models still assume an April 1 close. Moving the close date to May 18 will cost approximately $0.03 per dilution to those models because of the cost to carry the financing that is already in place.

As John noted, the HSBC opportunity is an exciting chapter for both our teammates and our customers. We have and are working full steam ahead to provide a seamless transition during the integration and conversion process. Personally, I have attended several welcome and integration events and the passion is deep and widespread among our new HSBC teammates. As we like to say, we are ready to rock and roll.

In closing, we continue to execute on all fundamentals. All of our teams continue to perform very well against the competition, both big and small, and we are certainly positioning ourselves with an eye towards the future. On the flipside, the unprecedented low and volatile interest rate environment continues to create obvious challenges for us and the industry, but we are not consumed with the market turmoil; rather, we will continue to run the franchise to balance near-term fundamental performance with long-term value creation for our shareholders. We will achieve this by remaining focused on the customer, investing prudently in our people and businesses, and continuing to deliver on the core banking fundamentals by harnessing our enhanced competitive position in our marketplace.

With that, Ed, we can begin the Q&A session.

Question and Answer Session

Operator

Thank you, sir. At this time, if you would like to ask a question, please press star, one on your touchtone phone. You’ll be prompted by our automated service to state your name to help with pronunciation. Again, that’s star, one to ask a question and star, two to withdraw your question.

Our first one comes from John Pancari. Sir, your line is open. State your company, please.

John Pancari – Evercore Partners

Good morning. Evercore Partners. Can you give us a little more color, at least trajectory-wise, in terms of the margin outlook? I know you mentioned that it’s counterproductive to really give too much detail there, but want to get an idea about some of the factors impacting it in terms of the pre-buy – obviously that continued to some of the pressure, when may we see a rebound out to that as well as incremental room around deposit costs. So if you can just give us a little more color and how we can think about where the margin is heading over the remainder of the year.

Greg Norwood

You’re all aware the volatility in the interest rate environment makes NIM projection much more unpredictable for the industry, and actually trying to predict rates and thus NIM remains counterproductive, as I said. Our balance sheet has many moving parts with the HSBC transaction, the pre-buy activity, paying off wholesale borrowings in our oversized investment portfolio. John, you mentioned the wholesale borrowings and pre-buy in particular.

As you saw this quarter from a pure math perspective, we, like everyone else, are putting on earnings assets – loans and securities – at yields and spreads that are dilutive to NIM. That’s not a bad thing; it’s the old volume versus rate play, and as long as we keep making new profitable loans and continue to engage our customers, we feel good about that and we feel good about that building long-term franchise value.

Our focus has always been and much more focused on managing net interest income, not NIM. I guess I would say my crystal ball is really no clearer than yours or anybody else’s, so it’s very difficult to predict into the uncertain future what we have ahead. What I will tell you is we are confident that we will continue to outperform on both the loan growth side as well as new checking account customers and grow the retail checking balances, both of which drive long-term value.

When you talk about the pre-buy and payoff wholesale borrowings, I think we’ve been pretty clear in the past around those factors; and frankly on the pre-buy in particular, we don’t really focus on that versus our overall investment book. So I guess I would conclude by saying we believe it’s very difficult to predict NIM into the future.

John Pancari – Evercore Partners

Okay, all right. And then separately on loan growth, can you give us a little more color about the progress you saw this quarter? It’s pretty good growth linked quarter. Where are you seeing the best demand in terms of types of loans, and is it mainly share gains—market share gains? Thanks.

Greg Norwood

Let me see if I can get them all in reverse order, John. Certainly we do see growth, as I mentioned, but our ability to take market share continues to be one of our strong assets. Secondly, I would say the middle market, the bread and butter of what we do, is really where the growth is. One of the things that’s been a real positive is we talked probably well over a year ago about re-dialing our financing products and making them more large product, more useful to more of our clients, and we’re seeing that pay off now. So the middle market is really where the growth is, but the newer products, be it equipment finance or particularly healthcare, are key contributors.

The growth is across all of the regions, as we mentioned. Certainly western PA is really doing a great job, and eastern PA we believe very strong in its ability throughout 2012.

John Pancari – Evercore Partners

Okay, thank you.

Operator

Our next question will come from Bob Ramsey. Your line is open. State your company, please.

Bob Ramsey – FBR

FBR. Morning. You mentioned that the focus really is on managing net interest income, given the difficulties with margin. Net interest income was more or less flat this quarter from last. Could you sort of talk about absent the benefits from HSBC, how you’re thinking about the trajectory of net interest income going forward?

Greg Norwood

Well that’s another way to think about where interest rates are going to be, because clearly the rate that new loans come on, and we will continue to grow, will impact. I see NII as moderating slightly up, and then with HSBC you’ll see greater impact. But again, it’s real difficult because one of the things that we will continue to do is grow good market share, and in a low rate environment that will increase NII but certainly have a drag on NIM.

Bob Ramsey – FBR

Okay. And then I guess I interpreted your comment about the timing of the HSBC deal flows in most sell-side models to mean that 2Q numbers may be a little bit high out there. How do you feel about the consensus range in the back half of the year once HSBC is already folded in?

Greg Norwood

Well again, when you start looking at the back half of the year in particular, and you’re looking at consensus and earnings, you really have to focus on NII and NIM. So again, it becomes very difficult to estimate, whether it be our crystal ball or Bob, frankly, yours or anyone else’s, is you really have to try to figure out are interest rates going to rise by the end of 2013 – the hawkish view – from the minority fed, or are they going to remain low – the majority view – from the dovish side. So it’s very difficult to predict what NIM’s going to be and thus what earnings would be when you get too far out in the future.

Bob Ramsey – FBR

Okay. And then maybe one smaller final question – you highlighted the Indirect Auto product. What are the loan yields like in that product today?

Greg Norwood

Well, let me start by reiterating – a lot of folks are really focusing on the super-prime, and I just can recall that from some of my prior employers, and that’s where you hear the stories about a 125 or a 150 handle on a super-prime credit. Again, that’s not what we’re going after. I would tell you from our early production the Indirect is looking early on like we’ll have a mid-3’s kind of handle on it. It ranges. It’s hard to predict what the overall balance would be and yield at the end of the year. We’re obviously comfortable with the $500 million number I gave you, but from a zip code perspective mid-3’s is a good place to be thinking about over the long term, certainly where competition and rates are today.

Bob Ramsey – FBR

Okay, thank you.

Operator

Our next question will come from Casey Haire. Your line is open. State your company, please.

Casey Haire – Jefferies

Jefferies. Hey, good morning guys. So just to follow up on pre-buy, so are you guys disclosing what the level of pre-buy activity was this quarter, and/or the yield?

Greg Norwood

Well, the pre-buy—at the end of this quarter, we had purchased about 2.7 billion in securities, which if you do the math is about 80% of the target of 3.5. When you look at this on a net-of-fees basis, the yields continue to be in the mid-330. So on that smaller pool, we continue to be comfortable with where we are and where we’re going.

Casey Haire – Jefferies

Okay. Got you. And then how is the allocation—like, some of the riskier—not riskier, but some of the credit segment, is that fully allocated, or is that still sort of a back half of the year story?

Greg Norwood

Well let me look at this way – from an asset allocation overall, it’s pretty much the same. I think we mentioned some asset classes got really tight, particularly, say, auto paper. So we’ve delayed some of that and didn’t chase it down in yield. Overall, again, the allocation is about the same. One of the things we have done is delay some of the lower credit quality assets we were looking at that you referred to, just because we wanted to be more judicial; but again, we continue to believe by the fourth quarter we’ll have the pie chart that we’ve talked about for some time now, and the allocation will track that very closely.

Casey Haire – Jefferies

Okay. And a couple questions on credit and the provision – I appreciate the color on the acquired portfolio. I guess if you could just expand upon that a little bit more – I mean, if you feel like you’ve got the book marked right, why would there still be volatility around some of the adjustments going forward? And then also, did I hear you correctly that you expect NCOs to sort of moderate, actually move up higher going forward?

Greg Norwood

Let me talk a little bit more first about your first question. You know, the ironic nature of this is sometimes accounting doesn’t really match economics all that well. Well, this is a case in point where they missed it pretty significantly. So when we say we’re comfortable with the economic mark, when we see these portfolios play out, we believe the mark we have will be the net economic drag over time that we anticipated back at the acquisition date. The structure of the accounting is very, very clear and rigid; so for example, if you think about just what we did in the fourth quarter and the third quarter, pool number 6 for whatever reason, we could have an excess in what we actually think the losses are going to be and that would create an element of accretable yield. Pool number 8, we could say we’re potentially short and that would create a provision adjustment, or it could be an individual loan where there is no pool concept at all, and if we look at that and our thinking is moderated or changed, then we have to record that adjustment at one time. You can’t offset it against another pool, and you have to take that in the provision line. So it’s really that structure in the accounting that takes what is a business perspective from an overall economic and carves it up into multiple buckets that are not transferrable and cannot be comingled, and that’s what causes the volatility.

On the net charge-off rate, I think we feel confident in the year-over-year perspective of staying in the mid-30’s. What I will tell you is in the NPLs, that’s where I said we could see a little bit moderation. If you think of our chart, the industry is coming down and we’ve been historically low for the past three or four years; and to see the two points moderate towards each other would be a reasonable expectation.

Casey Haire – Jefferies

Okay, great. And just last one – the capital markets income, obviously very strong this quarter. It sounds like as you go up market that this is going to continue to be a meaningful contributor. Is it sustainable at this level? Is it higher? Just a little bit more color on that would be appreciated.

Greg Norwood

Well, that’s a very interesting question and certainly one I have with our business leaders there. This was obviously a great quarter. I believe the skills and the products and, frankly, the strong relationship between and partnership between the experts and the relationship managers of the lenders, I think that’s a real positive that gives us confidence that, you know, is it going to be exactly this number quarter-over-quarter. I think that’s hard to predict. But when you think about what we’ve done there, I feel confident that this, as you said, will be a meaningful contributor to our fee income. It will be a meaningful contributor to our ability to grow loan balances for customers that need and want these types of services, and we will continue to look, as we did at the end of last year, about adding skills. Certainly adding the CRE syndication expert and a team around that is a way we will continue to drive growth. So I feel very confident over the long haul that you will see this be a meaningful contributor.

Casey Haire – Jefferies

Okay, thank you.

Operator

Our next question comes from Dave Rochester. Your line is open. State your company, please.

Dave Rochester – Deutsche Bank

Deutsche Bank. How are you doing guys? Could you just give some color on what your adjustments were, your CPR assumptions for the remainder of the year, and what the CPR was in the first quarter?

Greg Norwood

Well, we haven’t disclosed actual numbers and rates. What I will tell you is in the fourth quarter, we obviously increased the rates appreciably from where they were in the third quarter of last year, and those remain in the first quarter at the same elevated amounts. Certainly where rates go, and in particular the duration of that rate path, is something that is important, will be driven by the rate structure and what the Fed actually does or doesn’t do; and that is something, as I mentioned earlier, that we look at and analyze if not daily, pretty close to that between myself, Mike Harrington and his team, and it’s something we will continue to look at going forward.

Dave Rochester – Deutsche Bank

I guess the message was mid-quarter when you gave you update, that you might be sort of equalizing expected prepayments fees with what you had experienced in the fourth quarter, which I think you’ve disclosed at around 25%. So I was just curious if that’s ultimately what you had ended up doing.

Greg Norwood

Well, I’m not familiar with the 25% number you’re saying, but what I would say is, as we mentioned, the amortization impact in the first quarter was $4 million greater than what it was in the fourth quarter, and what we talked about in early March was if you look at the rate environment then, if that was to persist, that that would continue to put pressure and the duration of that would be as much of the question as anything. So we continue to look at that and focus on where we see that could go; but again, it kind of gets back to the crystal ball of what, Dave, you may have, what others may have, and how that actually plays out.

Dave Rochester – Deutsche Bank

Okay, thanks for that. And then just switching to the pre-buy again, I think you had said you were done with 2.7 billion of that, and I guess that includes the 1.25 billion from last quarter?

Greg Norwood

Yes. The total outstanding now would be roughly that 2.7 in change versus the 3.5, or 80% as of March 31.

Dave Rochester – Deutsche Bank

Okay, and just as a follow-up, I guess I saw securities up maybe about 2.8, 2.9 billion this quarter, and it looked like it was funded with borrowings. So I was just curious as to what the remainder of that increase was.

Greg Norwood

Well, the difference between 2.8 or 2.9, I wouldn’t get too caught up on. I think you’ll see also a change in some of the cash and cash balances. But I will tell you the large portion of the increase was certainly—almost all of it was the pre-buy.

Dave Rochester – Deutsche Bank

Okay, thanks guys.

Operator

Our next question comes from David Darst. Your line is open, sir. State your company, please.

David Darst – Guggenheim

Good morning – Guggenheim. So Greg, as far as asset growth at June 30, should we see just about 2.5 to 2.8 billion from the acquisition?

Greg Norwood

You’re talking about the loan assets?

David Darst – Guggenheim

Correct. So you should have about 2 billion coming over in loans, and then you’re going to buy another 700 million?

Greg Norwood

Well again, think of it this way – if you go back to the original deal, it was about 2 billion in loans across the consumer platform of mortgage and credit cards. When you net down the loans that will be part of the sale, the number is more like a $1.4 billion increase in loans.

David Darst – Guggenheim

And then you’ll have a remaining securities purchases around 700 million?

Greg Norwood

Well again, think of it this way – we’re acquiring roughly 11 billion in assets and the payoff of the wholesale borrowing gets us down to 6 billion. When you look at the loans and securities of 3.5, that’s what closes the gap.

David Darst – Guggenheim

Okay. And then can you go back over your mortgage strategy? What types of paper are you holding now, and should we expect to see that portfolio continue to run off and fund some of the commercial growth?

Greg Norwood

Well, I think you will see it continue to run off. We haven’t changed our treasury management around that book, and that is we’re not holding fixed rate product, either conforming or jumbo. Frankly, I think what you’ve seen and what we’ve heard out in the marketplace is some of the larger jumbos are basically laser-thin in the rates in the market, and people are holding those, I believe, I guess, for asset growth. In context, I will tell you in some markets we’re appreciably higher than where we see the competition on jumbo 30-year. So we’re not originating that paper. What we are originating is variable rate arms and smaller jumbos that we can get at our price point.

So overall, yes, the portfolio will come down. The second I would tell you is we’re not keeping long duration assets and we continue to price at what we think are good margins, hence the 30 basis point increase in gain on sale margin for the quarter.

David Darst – Guggenheim

Okay. John, looking at the FDIC data from June 30, it looks like a significant portion of the HSBC deposits that they’re retaining were moved to a location in Manhattan. Do you see that as an opportunity for deposit growth, and are there some lending relationships that HSBC’s maintaining in the market that you could pursue?

John Koelmel

You’re right, David, they re-domiciled some of those corporate or other larger accounts pre-the transaction. As to the commercial opportunities, they’ve been there over the years and we’re confident they will continue. We’re certainly respectful of the team HSBC has on the ground across the footprint, as with all of our competition; but our results speak for themselves and I remain very comfortable with the opportunity for us to take further share of the commercial market. Our focus, whether it’s upstate New York, western or eastern Pennsylvania, or New England is the same, and it’s to do just that. We typically compete against the larger players, HSBC historically and prospectively being one, so yeah – know that we’ll continue to actively work that, and I would agree, I think, with what’s implied in your question that there’s upside opportunity for us as a result.

David Darst – Guggenheim

Okay, great. Thank you.

Operator

The next question will come from Damon Delmonte. Sir, your line is open. State your company, please.

Damon Delmonte – KBW

Hi, good morning – KBW. With respect to the slide that showed the 1% decline in New England franchise, could you talk a little about what you’re seeing in that marketplace – maybe what the pipeline looks like and the outlook in the upcoming quarters?

Greg Norwood

Sure, thanks Damon. Certainly we’ve been building a team there and driving growth. one of the things that I mentioned is we do have a very strong pipeline there, so we see that turning into loan production over the rest of the year. And also, I think one of the things that we’ve been doing, like we’ve done in other footprints, is to continue to hire senior relationship managers. It was certainly a push of ours to have those people on the ground in the first quarter so we could drive volume and growth throughout the remainder of the year. So those are the two factors that I think give us confidence in a positive outlook going forward.

Damon Delmonte – KBW

Okay, that’s helpful. Thank you. And then just to sort of go back quickly on the Indirect Auto lending, you mentioned that you’re not going after the super-prime book. Could you give us an idea of what the FICO score range is that you are targeting?

Greg Norwood

We haven’t really disclosed the FICO range, and competitively I don’t think we want to, to let other people influence the market price there. But again, I think the thing I would tell you is it’s not the super-prime and it’s not the sub-prime. So what we’re really driving here, Damon, is we’ve got a very experienced team that’s been in this marketplace for decades, knows these dealers, and I think a testament to that capability is how fast we’ve been able to get this business up and running, both from a logistics but when you think about having 500 dealers signed up in your first quarter of operation, I think that’s a very strong indicator of our ability—or the ability of this team and the ability to drive it in our marketplace.

Damon Delmonte – KBW

Okay. And then you targeted 500 million of outstanding by the end of the year. What do you envision the overall component of the broader loan portfolio being over time?

Greg Norwood

Well, if you’re saying what percentage of the overall loan portfolio, that’d be hard for me to predict at this time over time. But I think—we’ve put in place what I think is strong, aggressive goals that everything so far is telling us the front of the house team is more than capable of hitting. So again, without trying to predict where we’d be in ’13 or ’14, I think you can take the positive nature of what we’re doing and the fact that we think we can get half a billion dollars in the first year of operation as a real positive sign for things going forward.

Damon Delmonte – KBW

Okay, great. And then just last question – jumping over to the P&L here, with the expenses with HSBC coming on during the second quarter, could you give us an idea of what your targeted expense base is going to be with the combined operations?

Greg Norwood

Well, maybe the best way to look at that on a net basis is the efficiency ratio, and that might tick up a couple of basis points or a few in the second quarter but then start to moderate back where we are. So maybe that’s a good way to think about it.

Damon Delmonte – KBW

Okay. No way to quantify a dollar amount, though – a ballpark?

Greg Norwood

Let us see if we can help you with you models relative to what you already have in there later on offline.

Damon Delmonte – KBW

Okay, fair enough. Thank you very much.

Operator

The next question will come from Collyn Gilbert. Your line is open. State your company, please.

Collyn Gilbert – Stifel Nicolaus

Thanks, good morning guys – Stifel Nicolaus. Just wanting to follow up maybe for a second on Damon’s question about some of the detail with HSBC. Just trying to gauge the revenue expense contribution. So okay, you guys are bringing over 3.5 billion of securities. The yield, I think, that you all had sort of laid out initially was 3.5%, I think if I have that correct. But I would imagine that’s come down a bit. Do you sort of have an updated revenue contribution or interest yield, or whatever you want to call it, on the assets that you’re bringing over?

Greg Norwood

Well Collyn, as I said, from a company perspective and how we run the business, we really look at this as one organization now and have for some time. You’re right – if you go back through some of what we talked about, is we have brought the securities yield down relative to where we were initially, and I mentioned what that was – around the mid-330 level. So when you think of where we are and where we’re going, we remain comfortable in the accretive nature from Day 1; but maybe again, if there’s some things we can help you with how we’ve disclosed things in the past to get your perspective clearer, Ram can help you help you with that for sure.

Collyn Gilbert – Stifel Nicolaus

Okay, okay. All right, thanks. And then just in terms of the growth that you’re seeing in you regions – I guess specifically just inquiring about eastern PA – have you guys seen yourselves move upscale in terms of the targeted lending relationship that you’re looking for in that market, versus maybe what legacy Harleysville did or even what you guys were all doing, say, a year or two ago?

Greg Norwood

Well certainly I think you’ve hit one of the key strategic values that we’ve brought to that geography versus where they were. One was to bring in commercial bankers with been there, done that experience that know the marketplace, know the companies, know the economic environment. And clearly as we’ve said, John, for years is the whole developing a commercial bank platform is to move up-market. So yes, that is what we’ve seen and planned on in eastern PA. Nothing’s changed from when we first looked at that. We’ve been doing it. I think, as we said, it was a fixer upper and over the second half of last year, we really got the full complement of the team that we wanted in place, the quality of folks that we’re used to having on our team, and that’s what we’re seeing in the beginning of this year – we’re seeing the benefits of that.

Collyn Gilbert – Stifel Nicolaus

Okay. Okay, that’s helpful. And then just one final question – Greg, just to kind of circle back with the comments on NIM outlook and trying to manage the net interest income and price volume gain – certainly get all that. How does that incorporate with your view on ROA, or do you have a view on sort of a ROA target? You know, you mentioned efficiency might uptick a little bit and then come back down, but just trying to wrap all this in and see how you’re managing kind of the profitability of the balance sheet.

Greg Norwood

Well certainly over the long term, I think we and others believe that banking is going to remain a profitable industry, and so our perspective of an ROA in a more normalized environment, I think is how some refer to it, of $1.20 is still where we think the industry will be as a zip code, and we think we’ll be very much a part of that and a leader in that.

When you’re looking at 2012 in particular, one of the things that we’re focused on is acquiring, be it commercial customers or deposit customers, the customers we think will determine long-term value. So in the short term, that puts a drag on the NIM which reflects a drag on the ROA. But again, the key here for us, and we think we’ve been successful in, is to acquire the right customers so that when we do a see a more pronounced pivot in the growth of the economy that those customers will grow, and we’ll grow along with them.

Collyn Gilbert – Stifel Nicolaus

Okay, thanks very much.

Operator

The next question will come from Matt Kelley. Sir, your line is open. State your company, please.

Matt Kelley – Sterne Agee

Yes, Sterne Agee. Just to kind of be clear, at June 30 earning assets will be up 1.4 billion on loans, 800 million on securities as a result of HSBC excluding anything kind of core Niagara. About $2.2 billion is the remaining earning asset pickup for period 6/30 – is that correct?

Greg Norwood

That sound about right.

Matt Kelley – Sterne Agee

Okay. And then on expenses, you guys provided a target of 1.4% of deposits. I don’t think you’ve backed off of that – it’s 154 million. Have you changed that at all on expenses from HSBC?

Greg Norwood

No, that’s still the right perspective.

Matt Kelley – Sterne Agee

Okay, and fee income of 80 basis points?

Greg Norwood

Yes.

Matt Kelley – Sterne Agee

Okay. And then the remaining 800 million of securities to buy, is there any change in the types of securities you’re buying compared to what you’ve already purchased – the 2.7 and the 3.3% yield you’ve already got on that?

Greg Norwood

The change won’t move appreciably, Matt. I mean, one of the things that I would just remind you, as we’ve said, is that we’re being a little slower into the certain asset classes. While we expect to be there by the end of the year, there will be a slight difference in the mix at June 30 versus 12/31. But think from June 30 to 12/31 that the mix will track the pie chart that we’ve disclosed and talked about for some time.

Matt Kelley – Sterne Agee

Okay. And just attempting on the margin a different way, if there’s no change in rates—I mean, if the curve and the absolute level of rates stays consistent to where we are right now, where would you see the margin just going directionally over the next couple of quarters as HSBC comes on?

Greg Norwood

Well even in your question, Matt, about no change in rates, I think you’d have to look at the context of what curve you’re using, spot versus forward, which type of forward, which point on the curve. So again, it’s very difficult and you can see over the last six months across any of the points on the curve, you can see up to 50% drops in the rates. So again, it’s still very difficult to peg an environment and to come up with what you think the impact might be.

Matt Kelley – Sterne Agee

I hear you. I’m just saying if the treasury curve and absolute level of rates stays the same for the next nine months, and prepayments are the same as the first quarter, give us some sense on the direction of the margin over the next couple of quarters as you bring on this big deal.

Greg Norwood

Certainly as you bring on the deal, it goes up relative to a static environment; but how much it goes up, obviously, would depend on how rates move from where they are today into the spot rate, say, for the fourth quarter.

Matt Kelley – Sterne Agee

Okay. And then just getting back to the expense discussion for a second, what is the CDI expense we should be using? Can you remind us of that again?

Greg Norwood

I don’t have that off the top of my head, Matt. I know we’ve talked about, so let me have Ram call you on that.

Matt Kelley – Sterne Agee

No change in that, correct?

Greg Norwood

No.

Matt Kelley – Sterne Agee

Okay, thank you.

Operator

Our next question will come from Jason O’Donnell. Your line is open. State your company, please.

Jason O’Donnell – CD Brokerage

Thanks, good morning. CD Brokerage. Greg, it looks like the average commercial loan yield came down about 20 basis points this quarter. Can you just give us some detail around the pricing you’re getting on, say, conventional 5-year fixed rate CRE and multi-family loans?

Greg Norwood

Well without getting into any particular asset class – you mentioned a couple there – but currently what we see is LIBOR is plus a 250-ish kind of benchmark. I said in our remarks I think the thing we’re pleased with and what we believe is an advantage for us is the spread compression – not the yield – but the spread compression is less than what we anticipated. As I mentioned, that’s one of the things we’re going to be focused on for the remainder of the year, is to grow loans but to guard the spread compression as much as we can while still getting the right customers.

Jason O’Donnell – CD Brokerage

Okay, that’s helpful. And then just given the nice growth that you’ve been experiencing in the business loans segment, can you talk about who you’re taking share from among the larger players in the middle market C&I side?

Greg Norwood

I guess I would say all of those that are in our footprint, whether it be BofA, PD North, Wells Fargo – you know, those would be the larger players, and certainly banks that are in our marketplace is how we are attacking it. And I would just say we don’t see anything, and sometimes it’s hard to track that says it’s any one particular competitor. The good news for us is we’re competing successfully against all of them, so it’s not like we’re knocking it out of the park against Competitor A or B and that’s the only dog we have in the fight. We’re basically being successful against big and small.

Jason O’Donnell – CD Brokerage

Okay, thank you.

Operator

Again at this time, if you’d like to ask a question, please press star, one. And our next question will come from Russell Gunther. Sir, your line is open. State your company, please.

Russell Gunther – Bank of America Merrill Lynch

Bank of America Merrill Lynch. Good morning, guys. Quick question – sort of clarification for me. You mentioned the May 18 close and conversion. Key was out this morning saying that the purchase and assumption agreement was expected to close in 3Q12. Is there any—we would have thought that would have happened kind of simultaneously. Is there anything to the timing differential?

Greg Norwood

Well from the beginning, Russ, we’ve talked about multiple closings – that we would close our acquisition first and then whether it be Key or the other ones, they would be staged as a direction conversion from HSBC, and in your example to the Key customer, and from HSBC to Five Star. So those are staged out after our transaction, and those are economically independent from our transaction. Certainly we are a key player in helping that transition and execution go smoothly, but all of the transactions are staged independently to convert from HSBC to a one-stop conversion to the ultimate buyer.

Russell Gunther – Bank of America Merrill Lynch

Okay, that’s helpful. Thanks for the refresh. And then so in terms of what we should look for generally in terms of balances from HSBC on the deposit side, it’s about 11 billion and on the loan side, you guys had remarked it’s about 1.4?

Greg Norwood

Well you got the deposit right. The loans in that 1.5 zip code, and then as we were saying the pre-buy, we have about another 800 or so relative to 331 balances.

Russell Gunther – Bank of America Merrill Lynch

Got it, okay. And then last one just on the margin – the impact of accretable yield this quarter?

Greg Norwood

It’s slightly less than it was last quarter. Let me have Ram catch up with you on that, Russ.

Russell Gunther – Bank of America Merrill Lynch

Okay, thanks guys.

Operator

At this time, I show no further questions.

John Koelmel

All right, well terrific. Ed, thanks very much for facilitating, and all that participated, we certainly appreciate your time and continuing interest. Have a great day. Enjoy the rest of the calls, and we’ll catch you again in another 90 days. Appreciate it.

Operator

At this time, that will conclude today’s conference. You may disconnect and thank you for your attendance.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: First Niagara Financial's CEO Discusses Q1 2012 Results - Earnings Call Transcript
This Transcript
All Transcripts