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10 Midwest Bank Stocks Finally Paying Off

6. First Financial Bancorp

Shares of First Financial Bancorp (FFBC) of Cincinnati closed at $17.42 Friday, returning 7% year-to-date, after a 5% decline during 2011.

With very strong capital ratios, First Financial's board has "authorized a 100% payout ratio that will consist of two parts: a recurring dividend based on our stated payout ratio of 40% - 60% of earnings; and a variable dividend that will equal the remainder of our quarterly earnings with the variable dividend "expected to continue until we have acquisitions or organic capital utilization rates that equal or exceed our capital generation rates."

Based on the regular quarterly dividend of 12 cents, plus the variable 19-cent dividend to be paid on April 2, 2012, to shareholders of record as of March 2, First Financial's dividend yield is 6.20%.

The company earned $66.7 million, or $1.14 a share, during 2011, increasing from $57.4 million, or 99 cents a share, in 2010.

KBW analyst Christopher McGratty rates First Financial "Market Perform," with a $17 price target, and said on March 5 that "FFBC is well-positioned to "accretively deploy its excess capital" through an acquisition, while remaining "a disciplined and patient buyer." The analyst added that "the company will continue to take advantage of organic growth opportunities as management indicated its loan pipelines remain healthy" during a recent presentation by First Financial CFO Frank Hall.

The shares trade for 1.7 times tangible book value, and for 14 times the consensus 2012 EPS estimate of $1.22. The consensus 2013 EPS estimate is $1.29.

Interested in more on First Financial Bancorp? See TheStreet Ratings' report card for this stock.

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