The KBW Bank Index ( I:BKX) was down slightly to close at 54.83. The index was down 2.4% last week. With first-quarter results for banks being decidedly mixed so far, KBW analyst Frederick Cannon in a note to clients on Sunday said in a note to clients that "U.S. home price appreciation should drive higher bank stock prices despite near-term mortgage banking earnings pressure," and that "we find a strong correlation between home prices and bank stock prices," he wrote.
First Niagara of Buffalo, N.Y., on Friday reported first-quarter earnings available to common shareholders of $59.7 million, or 17 cents a share, compared to $53.6 million, or 15 cents a share in the fourth quarter, and $58.5 million, or 19 cents a share, in the first quarter of 2012. The first-quarter results were lowered by $6.3 million, or a penny a share, in expenses related to the departure of former CEO John Koelmel and another executive. The fourth-quarter results included $3.7 million in restructuring charges and a "$16 million accelerated CMO premium amortization adjustment," according to the company. On an adjusted basis, first-quarter net interest income was $266.1 million, declining slightly from $268.6 million in the fourth quarter, reflecting the lower number of days in the first quarter. First Niagara's net interest margin contracted by three basis points during the first quarter, to 3.39%. A major highlight for First Niagara was a 13th consecutive quarter of double-digit annualized growth of commercial loans. Average commercial loans in the first quarter were $12.2 billion, increasing from $11.7 billion the previous quarter, and $10.2 billion a year earlier. First Niagara on March 19 announced the abrupt resignation of CEO John Koelmel, who had led the company through an aggressive expansion over the past several years through acquisitions and branch purchases. The company's total assets increased to $36.8 billion as of Dec. 31 from $8.1 billion five years earlier; its branch count grew to 431 at the end of last year from 114 at the end of 2008. First Niagara's interim CEO is Gary Crosby. The company's board of directors is conducting a search for a permanent successor to Koelmel.