First Niagra Financial Group To Take Over New Alliance Bank

New Haven-based New Alliance Bank is being taken over by First Niagara Financial Group in Buffalo, New York. The deal will create one of the top 25 banks in the US, measured by assets. WNPR’s Harriet Jones reports.

The $1.5 billion deal sees First Niagara paying a 24% premium over Wednesday’s closing stock price for New Alliance. The combined entity, which will operate under the First Niagara name, will have $29 billion in assets, including $14 billion in loans.

New Haven will become the now-regional bank’s New England Headquarters. The bank will have more than 300 branches in New York, Massachusetts, Connecticut and Pennsylvania. It will be headed up by current First Niagara CEO John Koelmel, who says a role for New Alliance CEO Peyton Patterson is still being discussed.

New Alliance was created in 2004 as the mutual New Haven Savings Bank converted to a publicly traded company, and the bank has been considered a prime takeover target ever since. First Niagara meanwhile has been steadily increasing its regional pull, having taken over nine other small banks in the last decade. This deal marks its first push into New England. If it’s approved by shareholders, the transaction is expected to close in the second quarter of 2011.

For WNPR, I'm Harriet Jones.