First Niagara Financial Group Earnings Call Insights: Prepayment Income and Pipeline Outlook
First Niagara Financial Group Inc (NASDAQ:FNFG) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Damon DelMonte – KBW: My first question deals with a comment you guys made about prepayment income from commercial loans being repaid during the quarter. Could you quantify what that was in the second quarter compared to the first quarter?
Gregory W. Norwood – SEVP and CFO: Sure. So, as you know, with loans paying off, many of them have prepayment penalties. So what we saw in the second quarter was a little over $2 million prepayment income reflected in NII and that’s compared to roughly $500,000 in the first quarter.
Damon DelMonte – KBW: And is there a way that you can kind of gauge that as we look into the back half of this year or is that just kind of see how it goes each quarter?
Gregory W. Norwood – SEVP and CFO: It’s hard to predict that because you’re predicting of all the loans in the customer competition which ones would be prepaid. So we estimated and it moves plus or minus based on those estimates.
Damon DelMonte – KBW: And then just kind of circle back on the commentary on expenses, so a large part of the movement this quarter had to do with variable rate compensation because of the growth on the fee income side of things. So you are basically saying you are going to have lower fee income in the third quarter and thus that will benefit your expense base in the third quarter. Is that correct?