Cleveland-based KeyCorp, the holding company for KeyBank, has announced an agreement to acquire Buffalo-based First Niagara Financial Group for $4.1 billion, creating the 13th largest commercial bank in the U.S.
First Niagara has five bank branches in Westchester County including locations in Bedford Hills, Yorktown Heights and Ossining.
In Connecticut’s Fairfield County, First Niagara currently has nine branches after closing five local branches early this year.
First Niagara had an aggressive entry into Fairfield County with its acquisition of NewAlliance Bank, picking up eight branches with more than $266 million in deposits in 2011 when it announced a deal with HSBC bank. By May 2012, more than 100 former HSBC offices reopened as First Niagara branches, with First Niagara adding 1,200 employees and 500,000 retail customers.
In 2014, First Niagara operated a total of 80 branches throughout the county and state.
According to KeyCorp, the per-share consideration is valued at $11.40 per share based on the closing price of KeyCorp common stock on Oct. 29.
First Niagara shareholders will receive 0.68 KeyCorp shares and $2.30 in cash for each First Niagara common share.
“I am confident the combination of First Niagara and Key will benefit our shareholders, customers and the communities we serve and will build off the great progress the First Niagara team has made,” Nathaniel D. Woodson, chairman of the First Niagara board of directors, said. “We believe this partnership provides significant value for our shareholders and allows them to participate in the upside potential of the combined Key and First Niagara.”
First Niagara, headquartered in Buffalo, has $39 billion in assets, $29 billion in deposits and 394 banking offices in New York, Pennsylvania, Connecticut and Massachusetts.
With approximately $135 billion of assets, the combined bank will be the 13th largest commercial bank headquartered in the U.S. and will have approximately $99.8 billion in deposits, $83.6 billion in loans and 1,366 branches across 15 states, according to KeyCorp.
Neither First Niagara or KeyBank have stated what will come of the Fairfield and Westchester County branches, though KeyBank did include plans to expand into Connecticut in its announcement.
KeyCorp expects the acquisition to be accretive to earnings per share in 2017.
“Key and First Niagara are a powerful combination, driven by a shared commitment to the clients and to the communities we serve,” KeyCorp Chairman and CEO Beth Mooney said. “This transformational opportunity will bring compelling and complementary capabilities to our shared three million clients, while driving meaningful synergies and enhancing shareholder value.”