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First Niagara Makes Adjustment To Accelerate Collateralized Mortgage Obligation Premium Amortization

BUFFALO, N.Y., Jan. 16, 2013 (GLOBE NEWSWIRE) -- First Niagara Financial Group, Inc. (Nasdaq:FNFG) announced today that it will recognize a pre-tax adjustment of $16 million, or $0.03 per share, in 2012 to accelerate premium amortization on its Collateralized Mortgage Obligations (CMO) portfolio. The adjustment reduces the amount of unamortized premium on the CMO portfolio to reflect the impacts of the substantial level of prepayments received in recent months and the expected elevated levels of cash flows to be received for the foreseeable future.

Except for this adjustment, First Niagara expects to report non-GAAP operating earnings per share consistent with current consensus analyst expectations. Excluding any impacts of this adjustment, the net interest margin in the fourth quarter of 2012 is expected to be 3.42% (non-GAAP*).

Residential Mortgage Backed Securities Portfolio Summary

The table below summarizes key details pertaining to the company's residential mortgage backed securities portfolio:

       
  CMO MBS Total RMBS
Cost basis at December 31, 2012 $4.8 billion $0.8 billion $5.7 billion
Remaining unamortized premium $74 million $22 million $ 96 million
Unamortized premium as % of par 1.6% 2.7% 1.7%
Yield to maturity (excludes new purchases) 2.37% 2.95% 2.45%

*Non-GAAP net interest margin calculated to exclude accelerated premium amortization recognized in the fourth quarter of 2012

Investor Call on January 23, 2013

The company will announce its fourth-quarter and full-year 2012 financial results on Wednesday, January 23, 2013, followed by an investor call at 8:30 a.m. Eastern Time. Those wishing to participate in the call may dial toll-free 1-888-324-9650 with the passcode: FNFG. Presentation slides will be used during the earnings conference call and is available under the investor relations tab of the company's website at www.firstniagara.com. A replay of the call will be available until February 6, 2013 by dialing 1-888-566-0438, passcode: 15645. 

About First Niagara

First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank with approximately 430 branches, approximately $37 billion in assets, $28 billion in deposits, and approximately 6,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com .

Non-GAAP Measures - This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). The Company believes that non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the company, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. In addition, the company believes the exclusion of these non-operating items enables management to perform a more effective evaluation and comparison of the company's results and to assess performance in relation to the company's ongoing operations. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP disclosures are used in this news release, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document.

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