BUFFALO, N.Y., Jan. 20, 2012 (GLOBE NEWSWIRE) -- First Niagara Bank, N.A. announced today that it has reached agreements with Community Bank System, Inc. (NYSE:CBU) and Financial Institutions, Inc. (Nasdaq:FISI) subsidiary Five Star Bank to purchase a total of 27 First Niagara and HSBC Bank USA, N.A. branches in Upstate New York, $1.4 billion in deposits and $315 million in loans.
Combined with last week's announcement of the sale of 37 HSBC locations to KeyBank N.A., First Niagara now has completed agreements to sell a total of 64 branches with approximately $3.8 billion in deposits and $713 million in loans at a weighted average deposit premium of 4.2%. As a result, First Niagara continues to expect to onboard no more than $11.0 billion in deposits upon completion of its transaction with HSBC.
"Now having the targeted level of divestitures under contract, in addition to last month's capital raise of $1.1 billion, we are able to move forward to complete the conversion of the HSBC branches with even more pace and a sharper focus," said First Niagara President and Chief Executive Officer John R. Koelmel. "While both outcomes were more challenging than anticipated, given the difficult realities of today's market and economy, we have successfully positioned the company for even better days ahead."
When First Niagara completes its acquisition of the HSBC branches, the regional bank will have an enhanced leadership position in the Northeast, with nearly 430 locations, net of planned branch consolidations. The enhanced franchise will include $30 billion in total deposits, $38 billion in assets and more than 6,000 employees serving consumers, business and communities across New York, Pennsylvania, Connecticut and Massachusetts. The transaction will also provide First Niagara with number-one retail market share across Upstate New York, virtually doubling its number of branches in New York State to more than 200, including a leadership presence in Buffalo, Rochester, Syracuse, Binghamton, Albany and down the Hudson Valley.
"Making the pivot from completing the divestitures to creating real traction in the markets that we serve is an important next step," said Mark Rendulic, First Niagara Executive Vice President of Retail Banking. "The critical pieces of the puzzle are now in place, providing us with a leadership position across Upstate New York and a stronger Northeast regional footprint. We are very focused on and committed to winning in each of the markets we serve and thrilled with the talented HSBC financial professionals who will be joining our team. With the benefit of this transaction, we are now even better positioned to successfully meet the needs of our customers, helping them succeed while creating real economic stimulus in the communities we serve."
There will be no changes to any HSBC or First Niagara customer accounts until after the transaction is completed, and the banks will continue to collaborate to ensure a smooth transition for the businesses and individuals they serve. Personnel associated with the branches to be sold will join the acquiring banks upon completion of the divestitures.
First Niagara's completion of the HSBC acquisition remains subject to receipt of regulatory approval and satisfaction of other customary closing conditions. Divestitures are expected to be completed subsequent to the closing of First Niagara's HSBC-branch acquisition, subject to receipt of regulatory approvals and satisfaction of other customary closing conditions.
First Niagara was advised by the investment banking firm of Sandler O'Neill & Partners, L.P., as well as Goldman Sachs & Co., and the law firms of Pepper Hamilton LLP., as well as Sullivan Cromwell LLP.
[Note: Please see tables below for a list of divested branches. Click here for an updated map of the First Niagara branch network.]
About First Niagara
First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank that currently has approximately $31 billion in assets, $19 billion in deposits, more than 330 branches and 5,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.
Forward-Looking Statements
Certain statements in this document are "forward−looking statements" within the meaning of the Private Securities Litigation Reform Act. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, including risks, assumptions and uncertainties relating to the acquired branches, completion of the transaction, regulatory approvals for the transaction, integration of the acquired branches and related operations and any required or planned divestitures and the related process, actual results, performance or achievements may vary materially from those anticipated, estimated or projected. More information about the factors that could cause actual results to materially differ is contained in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Transaction Summary
Community Bank, N.A. | Five Star Bank N.A. | |
Deposits Assumed | ~$1.0 billion | ~$400 million |
Loans Assumed | ~$220 million | ~$95 million |
Branches Acquired | HSBC – 16 | HSBC – 4 |
First Niagara – 3 | First Niagara – 4 | |
Total - 19 | Total - 8 | |
Deposit Premium | 3.22% | 4.0% |
$31 million | $16 million |
First Niagara Financial Group, Inc.
Pro-forma Select Upstate New York Market Data
Following Completion of HSBC Branch Acquisition, Net of Divestitures and Consolidations
Market |
Retail Market Share * |
Position * |
Deposits ($billions) |
Branches In Market |
Buffalo | 29.3% | 1 | $5.1 | >60 |
Rochester | 14.9% | 1 | $1.9 | >20 |
Syracuse | 11.4% | 3 | $1.0 | ~20 |
Utica/Rome | 16.5% | 2 | $0.5 | >10 |
Albany | 17.1% | 1 | $2.4 | >30 |
Binghamton | 16.5% | 2 | $0.4 | >10 |
*Source: First Niagara
Excludes home office deposits (branches in excess of $300 million)
First Niagara Financial Group, Inc.
Branches to be Divested
16 HSBC Branches Divested to Community Bank
County | Address | City | Zip |
Wayne | 170 East Main St | Palmyra | 14522 |
Wayne | 100 Church St | Newark | 14512 |
Livingston | 68 Genesee St | Avon | 14414 |
Livingston | 4218 Lakeville Rd | Geneseo | 14454 |
Schuyler | 712 N. Franklin St) | Watkins Glen | 14891 |
Lewis | 7550 S. State St | Lowville | 13367 |
Jefferson | 1218 Arsenal St | Watertown | 13601 |
Jefferson | Route 12, Thomson Mall | Alexandria Bay | 13607 |
Jefferson | 26 E Church St | Adams | 13605 |
Jefferson | 120 Washington Street | Watertown | 13601 |
Oswego | 100 East First St. | Oswego | 13126 |
Oswego | 1 South First St. | Fulton | 13069 |
Clinton | 468 Route 3 | Plattsburgh | 12901 |
Erie | 24 North Buffalo St | Springville | 14141 |
Cattaraugus | 76 West Main St | Gowanda | 14070 |
Chautauqua | 70 E Main St | Westfield | 14787 |
3 First Niagara Branches Divested to Community Bank
County | Address | City | Zip |
Ontario | 699 Main St | Canandaigua | 14424 |
Ontario | 470 Exchange St | Geneva | 14456 |
Ontario | 811 Canandaigua Rd | Geneva | 14456 |
4 HSBC Branches Divested to Five Star Bank
County | Address | City | Zip |
Chemung | 309 S Main St | Horseheads | 14845 |
Chemung | 217 Prescott Ave | Elmira Heights | 14903 |
Chemung | 150 Lake St | Elmira | 14901 |
Orleans | 102 N Main St | Albion | 14411 |
4 First Niagara Branches Divested to Five Star Bank
County | Address | City | Zip |
Seneca | 1959 Routes 5 and 20 | Waterloo | 13165 |
Genesee | 401 W Main St | Batavia | 14020 |
Orleans | 327 Main St | Medina | 14103 |
Monroe | 2 West Ave | Brockport | 14420 |