This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

First Niagara: Branch Sale Winner

NEW YORK ( TheStreet) -- First Niagara Financial Group (FNFG - Get Report) was the winner on a mixed Thursday for financial names, with shares rising over 3% to close at $9.58.

The company announced an agreement to sell 37 branches to KeyCorp (KEY) for roughly $110 million. To address the Justice Department's concerns over First Niagara's market concentration following its upcoming purchase of 195 branches from HSBC (HBC), the company had previously agreed to divest 40 branches, and is planning to sell a total of 100 branches after the HSBC deal is completed.

The broad indexes were up slightly as investors shrugged off a couple of negative economic indicators. The Commerce Department reported that excluding retail sales in December rose just 0.1% from November, after a revised 0.4% increase the previous month. Economists polled by Thomson Reuters had expected retail sales to rise 0.3% in December. The Labor Department reported that first-time jobless claims for the week ended Jan. 6 totaled 390,000, which was the highest level in six weeks.

The KBW Bank Index (I:BKX) rose 0.5% to close at $43.60, with 19 of the 24 index components showing gains for the session.

First Niagara is scheduled to report its fourth-quarter results on Jan. 26, before the market opens. Analysts polled by Thomson Reuters expect the company to announce earnings of 24 cents a share, compared to operating EPS of 25 cents the previous quarter and 24 cents a year earlier.

FBR analyst Bob Ramsey said on Thursday that with the KeyCorp deal, First Niagara had laid out 2/3 of its planned branch sales, and that he expected "some news on the remaining deposit divestitures within two weeks when the company reports 4Q11 earnings."

Ramsey said the pricing for the branch sales to KEY was "at the higher end of the company's targeted range for an average deposit premium of 4% to 5%." The analyst called First Niagara "a highly profitable franchise which we expect to generate organic loan growth funded with a very low cost deposit base (51 bps). Shares trade at 9.8x our 2012 EPS estimate of $0.95, a discount to peers."
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FNFG $10.65 0.95%
RF $9.09 0.55%
RJF $50.33 -0.89%
AAPL $111.31 0.48%
FB $92.80 -1.29%


Chart of I:DJI
DOW 16,790.19 +13.76 0.08%
S&P 500 1,979.92 -7.13 -0.36%
NASDAQ 4,748.3610 -32.9030 -0.69%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs