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First Niagara Beats on EPS

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Editor's note: A previous version of this article was not clear about the timing of First Niagara'' dividend reduction. The Fool regrets the error.

First Niagara Financial Group (Nasdaq: FNFG  ) reported earnings  for its third quarter this morning, and despite a slight beat on EPS expectations, its stock has been relatively flat so far. With analysts expecting $0.18 in earnings per share, the bank checked in with $0.19, primarily driven by strong lending numbers, which showed a 17% increase in commercial loans over the prior quarter.

What I was watching
In addition to the standard metrics referenced above, I was also watching for continued integration of the branches purchased this year from HSBC (NYSE: HBC  ) . With a larger geographic footprint, the bank has access to a lot of new markets. Unfortunately, total deposits were down slightly to a total of $27.7 billion, but the difference was not significant enough to cause major alarm.

What to expect going forward
In December of last year, First Niagara cut its dividend, so on a year-over-year basis investors are looking at a smaller quarterly check. That cut was made in part to build its capital levels after the acquisition of the branches from HSBC. Nevertheless, it seems committed to returning its dividend to its once-lofty peak, though I don't know if that is something that will happen next quarter or later. 

First Niagara is just another opportunity among the crowded sector that is regional banks. In fact, some of the best opportunities over the next few years can be found there, including one small, under-the-radar bank. It's been called one of the stocks only the smartest investors are buying. You can learn about it, and more, in our exclusive free report. Just click here to keep reading.

Fool contributor Robert Eberhard has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 19, 2012, at 1:39 PM, jeffreys wrote:

    Robert, the change to First Niagara's dividend was back in December 2011. No change in the dividend was announced with earnings today. I work with the bank and wanted to point this out for you and your readers. Thank you.

  • Report this Comment On October 19, 2012, at 2:39 PM, XMFTheGuruEbby wrote:

    We are aware. I did not mean to imply that the dividend cut occurred during this quarter. Just a horrible personal editing job prior to submission. I am working on getting it corrected and thanks for your comment!


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