First Niagara: Financial Winner

First Niagara said that the operating results excluded a pre-tax adjustment of $16 million "to accelerate premium amortization on its Collateralized Mortgage Obligations (CMO) portfolio," as well as $3.7 million in restructuring charges.

Excluding the effect of the CMO adjustment, First Niagara said that its net interest margin (NIM) narrowed by eight basis points during the fourth quarter to 3.46%, "driven by the continued downward re-pricing of loans and securities."

But net interest income only declined slightly to $268.6 million in the fourth quarter from $269.6 million in the third quarter, as average loans grew 1.9% sequentially.

The company said in its 2013 guidance that the margin would narrow by another five to eight basis points during the first quarter, with smaller declines in subsequent quarters.

Guggenheim Securities analyst David Darst has a neutral rating on First Niagara, and said in a note following the company's earnings announcement that "we believe earnings will lift in 2H13 from lower intangible amortization and fee income growth."

Darst's price target for First Niagara's stock is $8.50. The analyst estimates the company will earn 78 cents a share this year, with EPS rising to 82 cents in 2014.

FNFG data by YCharts

Interested in more on First Niagara Financial Group? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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