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First Niagara: Financial Winner

The shares trade for 1.6 times tangible book value, according to Thomson Reuters Bank Insight, and for 10 times the consensus 2013 earnings estimate of 79 cents, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 72 cents.

Based on a quarterly payout of eight cents, the shares have a dividend yield of 3.90%.

First Niagara is scheduled to announce its third-quarter earnings results on July 27. The consensus among analysts polled by Thomson Reuters is for the Buffalo, N.Y., lender to report third-quarter earnings of 18 cents, increasing from a five-cent loss during the second quarter, but down slightly from 19 cents during the third quarter of 2011.

During the second quarter, First Niagara completed its deal to acquire roughly 200 branches from HSBC (HBC), while divesting about 100 branches, leading to an $18.5 million net loss, including about $135 million in extraordinary expenses and restructuring charges.

Jefferies analyst Casey Haire rates First Niagara a "Buy," with a price target of $9.00, and said on Tuesday that "after a volatile 1H12, we expect 3Q results to mark FNFG's return to an uncontroversial and predictable Northeast commercial bank story.

"Management largely laid out the earnings picture for 2H12 (~$0.19/qtr)," Haire said, "which we view as reasonable, although fee guidance could prove conservative given strong momentum in mortgage banking."

"We continue to like FNFG as a multiple expansion story (10x 2013 EPS vs. 12x peer avg.) with manageable premium amortization risk and no deal risk," he said.

FNFG Chart FNFG data by YCharts

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

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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