What: Shares of First Niagara Financial Group (NASDAQ: FNFG) jumped more than 16% today on reports that the Buffalo-based bank hired JPMorgan to advise it on a possible sale.

So what: First Niagara's 394 branches are concentrated in the Northeast, making it an attractive acquisition for a number of larger banks in the area. Bloomberg identified New York Community Bancorp, Toronto-Dominion, and Huntington Bancshares as potential acquirers.

First Niagara has an attractive mix of low-cost customer deposits. The company last reported having $28.2 billion of deposits, which cost it an average of 0.23% per year. It also offers any acquirer the No. 2 position in its core market of Buffalo, New York, where the bank has deposit market share of 26%, according to data from the FDIC.

Now what: There's only one reason to put a company in play: First Niagara is ready to sell. The bank could be very attractive for banks that share its footprint. The company has been actively working toward a plan to improve its profitability, bringing its return on assets up to 1% by 2017 or 2018. But if First Niagara sells out to a larger bank and eliminates duplicate branches, its shareholders may be able to enjoy the proceeds of its improving profitability sooner rather than later.

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