NEW YORK ( TheStreet) -- For long-term shareholders of First Niagara Financial Group (FNFG), the company's deal to purchase 195 branches from HSBC (HBC) has been a very rough ride, but the shares are attractively priced for investors looking for a solid growth and income play.
First, the bad news: The Buffalo lender late Wednesday priced a $450 million common equity offering at $8.50 a share, and also priced a $350 million preferred offering with a very high coupon of 8.625%. While the dilution to common equity was lower than the original capital raise in the range of $750 million to $800 million the company announced back in August, First Niagara also cut the quarterly dividend on its common shares in half to 8 cents.
The shares were down 2% in early trading Thursday to $8.82.
Sterne Agee analyst Matthew Kelley -- who said in a report on Oct. 20 that the 64 cent annual dividend
- The bank holding company with the highest dividend yield among the index components is New York Community Bancorp (NYB) of Westbury, N.Y., with a yield of 8.47%, based on a 25-cent quarterly payout and Wednesday's closing price of $11.80. The company's third-quarter payout ratio was over 90%, on earnings of 27 cents a share.
- Next is People's United Financial (PBCT), with a dividend yield of 4.98%, based on Wednesday's close of $12.66 and a quarterly payout of 16 cents. The Bridgeport, Conn., lender's third-quarter payout ratio was over 100%, with earnings of 15 cents a share, but People's United was very strongly capitalized as of Sept. 30, with a Tier 1 common equity ratio of 17.00%, according to SNL Financial.
- M&T Bank (MTB), which like First Niagara is headquartered in Buffalo, N.Y., has a dividend yield of 3.75%, based on Wednesday's close at $74.64 and a quarterly payout of 70 cents. The third-quarter payout ratio was 53%, based on EPS of $1.32.
- Among the "big four" U.S. banks, JPMorgan Chase (JPM) has the highest dividend yield of 2.94%, based on Wednesday's close at $34.00 and a 25-cent quarterly payout. The third-quarter payout ratio was less than 25%, with EPS of $1.02.
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