Do not invest more money than you can afford to lose.
Jobs could be on the line if the Cleveland-based Key Bank acquires western New York-based First Niagara Bank, and local lawmakers are expressing skepticism on the deal.
First Niagara, with $39 billion in assets and $29 billion in deposits, was the worst-performer in the KBW Bank Index a year ago before it was removed from the 24-company group.
There had been a few of this speculation last month, and now the Wall Street Journal is reporting that KeyCorp is in advanced talks to buy First Niagara Financial Group. Its shares are up nearly 2 percent in premarket trading before the market opens.
In Buffalo, both banks have about 50 branches each.
The combination will create a leading regional bank with enhanced scale to serve 3 million clients across diverse markets in the Northeast, mid-Atlantic, Midwest and Pacific Northwest. That’s the number of First Niagara branches that are within two miles of a KeyBank branch – about 40 percent of KeyBank’s current network – according to a mapping analysis by the Times Union. KeyCorp now has about 1,000 branches in 12 states, according to Bloomberg Intelligence.
Three members of the First Niagara board of directors are expected to join the KeyCorp board. First Niagara says the deal will benefit its shareholders and customers.
Earlier on Thursday, New York Community Bancorp said it had agreed to buy Lake Success, New York-based Astoria Financial Corp for about $2 billion.
Hunsicker noted that the company’s third-quarter conference call (October 23) confirmed her thoughts that First Niagara is a “likely sale candidate”, as the company’s core systems development work has been delayed. At December 31, 2012, the Company had $27.7 billion of deposits.
The deal will give Key a larger presence in New York and expand in Pennsylvania, Massachusetts, and Connecticut.
