First Niagara buying 57 branches from PNC
By STEPHEN BERNARD
AP Business Writer
(AP:NEW YORK) First Niagara Financial Group Inc., parent of First Niagara Bank, said Tuesday it will acquire $4.2 billion in deposits and 57 branches in western Pennsylvania from National City Bank, a unit of PNC Financial Services Group Inc.
First Niagara will pay a deposit premium of 1.3 percent.
The acquisition is Lockport, N.Y.-based First Niagara's first expansion beyond its footprint in upstate New York.
In addition to the branches and deposits, First Niagara will receive $3.2 billion in cash and $839 million of performing business and consumer loans as part of the deal.
Pittsburgh-based PNC Financial was forced to sell the branches in western Pennsylvania as part of an agreement with regulators when it acquired National City last fall because of its market share concentration in the region.
The acquisition will significantly bolster First Niagara's operations. First Niagara had $5.9 billion in deposits and $9.3 billion in assets as of Dec. 31.
First Niagara will add more than 400,000 customer accounts as part of the acquisition.
"This transaction enables us to strategically expand our franchise, leverage our strong financial position and enhance shareholder value," John Koelmel, First Niagara's president and chief executive, said in a statement.
First Niagara projects the acquisition will increase earnings per share by 20 percent in 2010. Analysts polled by Thomson Reuters, on average, forecast earnings of 73 cents per share for 2010.
First Niagara said it will retain about 500 employees western Pennsylvania, most of which work in the branches acquired. In addition, First Niagara plans to add 50 to 75 new jobs in and around Pittsburgh to support the new operations. First Niagara said it will add another 100 to 125 jobs in New York to support its new branch network.
The deal is expected to close in September.
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