7. First Niagara Financial Group

Shares of First Niagara Financial Group ( FNFG) of Buffalo, N.Y., closed at $13.73 Friday, returning 8% from a year earlier. Based on a quarterly payout of 16 cents, the shares have a dividend yield of 4.66%.

The company on April 15 completed its acquisition of NewAlliance Bancshares of New Haven, Conn., for roughly $1.5 billion in cash and stock, increasing First Niagara's total assets to about $30 billion, with over 300 branches in Connecticut, Massachusetts, Pennsylvania and Upstate New York.

First-quarter net income was $44.9 million, or 22 cents a share, increasing from $28.9 million, or 16 cents a share in the first quarter of 2010. The provision for credit losses declined slightly from a year earlier to $12.9 million.

Pre-provision net revenue for the first quarter was $86 million, increasing 30% from a year earlier, as the company grew its balance sheet 43%, mainly from its acquisitions of Harleysville National in April, 2010.

First Niagara's first quarter ROA was 0.85% and its dividend payout ratio was 73%. The payout ratio has ranged from 64% to 140% over the past year.

The consensus among analysts is for the company to earn a dollar a share in 2011. The shares trade for 12 times the consensus 2012 earnings estimate of $1.15 a share.

With HSBC ( HBC) recently indicating a desire to sell-off its Upstate New York retail branches, David Darst of Guggenheim said in a report on June 1 that First Niagara was looking at another "considerable opportunity" to expand, with other possible acquirers of the branches including M&T Bank ( MTB) KeyCorp ( KEY) TD Bank ( TD) and Capital One ( COF). Darst has a neutral rating on First Niagara, with a $14 price target.

The ten analysts covering First Niagara are evenly split between buy and hold ratings.

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