Regional Bank - Cramer is hot on it

Lockport, N.Y.-based First Niagara Financial Group knows how to take advantage of a good deal. The bank bought $4.2 billion in deposits and $839 million in solid loans for just $54 million when antitrust officials forced PNC to sell when it was acquiring National City. The deal, which grew FNFG’s deposits 70% and its branches 50%, is expected to increase 2010 earnings by 20 cents a share. First Niagara is expanding into Eastern Pennsylvania through its purchase of Harleysville National, giving it almost 4% of the state’s banking business. This company’s acquisitions will bring down its tangible common equity ratio a bit lower than Cramer would like – to 5% from 9% – but he likes the 7% dividend yield. That’s a nice payout for investors until another great deal comes along.

regional back is buying up other banks good yeild. Debating on holding this or sellling to get more diversified.

These include First Niagara (FNFG), People's United Financial (PBCT), NewAlliance (NAL) and Glacier (GBCI). Increasingly I believe the FDIC will call on these banks to acquire others with bad commercial real estate precisely because they are brimming with capital. The objections to entities buying collapsing banks has to do with weak capitalization structure, particularly when it comes to private equity.

Speculative

In this segment, Cramer turned to the financial sector and recommended First Niagara Financial Group (FNFG), a regional bank in upstate New York that's making all the right moves. ("Mad Money Recap," 4-24-09)

moving in an up trending

From a recent Mad Money show:"You might think this one can escape the morass, but I'm sticking to my guns and I'm not going to pull the trigger."

Local company, waiting for a merger

"Thomas Kahn, a partner at Kahn Brothers, a New York investment firm, takes a different financial tack, favoring well-capitalized thrift institutions that could be taken over as the banking industry consolidates."

FINANCIAL RECOVERY