First Niagara Financial has signed a definitive purchase agreement to acquire $4.2 billion of deposits and 57 Western Pennsylvania bank branches from National City Bank, a subsidiary of The PNC Financial Services, for a deposit premium of 1.3%.
In addition to $3.2 billion in cash, First Niagara will also receive approximately $839m of performing business and consumer loans.
According to First Niagara, this acquisition provides the company more than 400,000 customer accounts. Divestiture of these branches was a regulatory condition of PNC’s purchase of National City in December of 2008.
First Niagara anticipates that approximately 500 employees in Western Pennsylvania, most of whom work in the branches to be acquired, will join First Niagara. In addition, 50 to 75 new jobs will be created in and around Pittsburgh to support the newly acquired branches and lending teams. In addition, to support First Niagara’s new branch network in Pennsylvania, the company expects to add 100 to 125 positions in Upstate New York. The acquisition is expected to close in September 2009.
John Koelmel, First Niagara’s president and CEO, said: This transaction enables us to strategically expand our franchise, leverage our strong financial position and enhance shareholder value. We are also very pleased to be able to retain 500 jobs in the Western Pennsylvania market and add upwards of 200 new jobs there and in Upstate New York during these very challenging economic times. We will provide the same high quality, personalised financial services to the communities served by these branches, just as we’re doing across Upstate New York.
