First Niagara Financial Group Inc.'s first-quarter net income dipped 0.5% as the bank announced a $300 million stock offering, with much of the proceeds aimed at repurchasing $184 million in preferred stock issued to the Treasury Department under the capital purchase program.
Officials at many banks have said in recent weeks that they want to repay Troubled Asset Relief Program money as soon as possible to avoid the restrictions that come with the funds.
Analysts have said First Niagara, which is based in western New York and has a $1.6 billion market value, stands out as a regional bank that can emerge from the financial crisis bigger and better. The company outperformed much of the banking sector by managing to post higher net income for 2008.
It has been expanding into Pittsburgh and other areas of western Pennsylvania, recently acquiring 57 National City branches sold as part of the company's purchase by PNC Financial Services Group Inc.
Meanwhile, First Niagara posted first-quarter net income of $18.7 million, or 14 cents a share, compared with $18.8 million, or 18 cents a share. Excluding items including acquisition costs, earnings fell to 16 cents from 19 cents, matching analysts' mean estimate.
The company said Monday while it is seeing the effects of the overall economic deterioration, credit trends continued to hold up "relatively well."
Net charge-offs surged to 0.44% from 0.13% a year earlier, but nonperforming loans rose to 0.81% from 0.53% on a single commercial real-estate deal First Niagara said it believes is well secured. Credit-loss provisions rose to $8.8 million from $3.1 million.
First Niagara's shares closed Friday at $13.50 and haven't traded premarket. The stock has lost 17% so far this year.