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10 Bank Stocks Bringing Home the Bacon (Mmm... Bacon)

10. First Financial Bancorp

Shares of First Financial Bancorp (FFBC) of Cincinnati closed at $16.05 last Friday, down 10% year-to-date. Based on the company's regular quarterly payout of 12 cents and its most recently announced variable quarterly dividend of 15 cents, the shares have a dividend yield of 6.73%.

The company has a temporary policy in place, to pay out 100% of quarterly earnings, "to provide an enhanced return to our shareholders until capital deployment opportunities arise that provide long-term incremental benefits to shareholder value."

First Financial Bancorp's year-to-date ROA was 1.05% as of Sept. 30, and its five-year average ROA (again, with the most recent "year" being the first three quarters of 2011) was 1.68%.

Following on CEO Claude Davis's plans to deploy excess capital, First Financial in September completed its acquisition of 16 Ohio branches from Liberty Savings Bank, FSB, for roughly $22 million.

The company also has also agreed to purchase 22 branches in Indiana from Flagstar Bank, which will bring First Financial's total number of branches to roughly 140, in Ohio, Indiana and Kentucky.

Third-quarter net income was $15.6 million, or 27 cents a share, compared to $16 million, or 27 cents a share, the previous quarter, and $15.6 million, or 27 cents a year earlier. Results for the most recent quarter included $3.4 million in non-recurring acquisition-related expenses.

Sterne Agee analyst Kenneth James on Nov 7 reiterated his neutral rating for First Financial Bancorp, saying that the shares were "likely are near the top of the range as the ~$17 level has proven resistance eight times in eight months." James added that the company's temporary policy of paying out 100% of earnings was a "bank sector anomaly," and that a dividend yield ranging between 6.5% and 7.0% "appears reasonable for a commercial bank with a REIT-like payout (policy duration uncertain)."

The shares trade for 13 times the consensus 2012 EPS estimate of $1.22 a share, among analysts polled by FactSet, and 1.4 times tangible book value, according to SNL.

Two out of eight analysts covering First financial Bancorp rate the shares a buy, while the remaining six analysts all have neutral ratings..
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