Just over a month after completing its acquisition of more than 100 HSBC Bank USA branches, First Niagara Bank has seen a “dramatic increase” in business relationships and is hiring to handle the rise in demand.
On May 21, First Niagara, a subsidiary of First Niagara Financial Group in Buffalo, wrapped up the HSBC deal, adding $9.8 billion in deposits, $1.6 billion in performing loans and 1,200 employees across New York state and Connecticut.
Among the branches acquired were 25 in the Hudson Valley, including five in Westchester County and six in Fairfield County, Conn. A First Niagara branch in Shelton, Conn., was also consolidated due to its proximity to one of the newly acquired branches.
While the move was viewed by First Niagara executives as primarily being a consumer-oriented transaction, David Ring, who heads the bank”™s commercial-lending division, said it has also strengthened the bank”™s business banking practice.
“As far as new business generation, we”™ve had a dramatic increase in the pipeline of business that”™s come into the bank, both in small business and in business banking,” said Ring, who also serves as regional vice president for the Hudson Valley and New England. “Early returns are that the pipelines are growing very quickly.”
Of the $1.6 billion in loans acquired from HSBC, roughly 20 percent were commercial loans. A majority of the deposits acquired from HSBC belonged to consumer clients.
“The here and now is, it was primarily an acquisition of consumer customers with a nice portfolio of small-business and business-banking clients,” Ring said.
After the acquisition, First Niagara has $30 billion in deposits and $38 billion in assets spread among nearly 430 locations in Connecticut, New York, Pennsylvania and Massachusetts.
Of the bank”™s $18.8 billion in loans, roughly 60 percent are commercial loans, First Niagara representatives reported. Ring said the majority of the bank”™s commercial loans involve companies in northern New York state, adding that HSBC did not significantly develop its business-lending business in the Hudson Valley and Connecticut.
“There is a lot of upside opportunity on the business-banking side of the transaction because the bank has such a low market share in this market,” he said. Prior to the acquisition, First Niagara had one Hudson Valley branch and nine Fairfield County branches.
The first step, Ring said, is to ensure that the former HSBC clients absorbed by First Niagara are fully integrated, a process he said is made easier by the fact that First Niagara”™s Hudson Valley and Fairfield County commercial lending teams are each made up of former HSBC or First Niagara employees who previously worked in the region.
“The first month we”™ve really focused on our existing customers and on servicing them extremely well,” Ring said. “What we”™re seeing in the future is the additional staff we”™re going to add in that market will generate more and more loan business.”
While some issues were reported by former HSBC customers relating to difficulties accessing First Niagara”™s online banking platform and activating debit cards, Ring said those problems were limited to individual customers.
Michael Kriz, founder and president of Acclaro Inc. in Irvington, called the switch “uneventful.”
Acclaro, a translation services company with several locations worldwide, had been banking with HSBC”™s Nyack branch for about 10 years, Kriz said.
“It”™s been a couple of months now and so far, so good,” Kriz said. “They changed their emails but it”™s the same team.”
Kriz said that so far, First Niagara has made a stronger push to provide credit to businesses and clients that it absorbed from HSBC.
“I think what we saw with HSBC was, being a big, global bank there was less on-the-ground decision-making that could happen,” he said. “That was one of the limitations of the relationship before, whereas now it seems like the emphasis for First Niagara is enabling the people in the branch to make decisions” on loan applications and other financing areas.
First Niagara announced in June its Hudson Valley business-banking team would be led by Sara Tucker, who has 20 years of experience in the financial industry and was previously team leader for the upstate east division of HSBC”™s business-banking arm.
