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5 Regional Banks With Solid Revenue Growth

Stocks in this article: BAC C WFSL SIVB UMPQ FNFG PBCT

2. First Niagara Financial

Shares of First Niagara Financial (FNFG) have shed 36% year-to-date.

The Buffalo, New York-based regional bank reported a third quarter income of $56.98 million or 19 cents per share, missing the 26-cent estimate of the consensus.

The third-quarter results compared to earnings of $13.6 million, or 5 cents a share, in the second quarter, when First Niagara recorded $57.7 million in acquisition, integration and restructuring expenses, and $45.6 million, or 22 cents a share, in the third quarter of 2010. compared to $45.6 million or 22 cents in the year-ago quarter.

First Niagara said that excluding non-operating items, its third-quarter net operating income was $73.6 million, or 25 cents a share, increasing from $71.2 million, or 25 cents a share, the previous quarter, and $46.9 million, or 23 cents a share, a year earler.

Pre-provision net revenue rose 59% to $132.11 million versus $83 million in the year-ago-quarter. Total loans and leases averaged $16.2 billion in the third quarter of 2011, increasing by $311 million, or an annualized 8%, on a sequential basis.

First Niagara's third-quarter provision for loan losses was $14.5 million, declining from $17.3 million in the second quarter, but rising from $11 million in the third quarter of 2010. The company also grew its loan loss reserves by $5.7 million to $112.7 million as of Sept. 30, bucking the earnings-padding reserve release trend for most regional banks.

The bank agreed in July to purchase 195 branches in Upstate New York and Connecticut from HSBC (HBC) for roughly $1 billion, in a deal that is expected to be completed in early 2012.

The company expects to raise between $750 million and $800 million in common equity before closing on the HSBC deal, which has depressed shares in recent months.

The stock trades at a dividend yield of more than 7% and a forward price-to-earnings ratio of 7.8.

Seven analysts rate the stock a buy or outperform and 4 analysts have a hold rating on the stock.

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