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First Niagara Among Largest

Moves to 38th on list in the second quarter

September 01, 2010
 

First Niagara Financial Group’s $1.15 billion takeover of NewAlliance Bancshares catapulted the Buffalobased regional bank to the 38th-largest bank in the second quarter.

The merger, announced earlier this month, gives Buffalo a pair of banks on the list of the nation’s 50 biggest banks, joining M&T Bank at No. 23.

First Niagara’s jump was the biggest move on research firm SNL Financial’s list of the 50 biggest U. S. banks and thrifts by assets released Tuesday. First Niagara ranked No. 46 in the first quarter. Its acquisition of New Haven, Conn.-based NewAlliance will increase its balance sheet by 42 percent, SNL Financial noted.

The combination also allows First Niagara to expand its presence into Connecticut and Massachusetts. Currently, it serves upstate New York and western and eastern Pennsylvania. The deal is expected to close in the second quarter of next year.

First Niagara’s latest deal helped it edge closer to M&T, which maintained its ranking at No. 23 with $68.2 million in assets.

Otherwise, mergers and acquisitions have been relatively quiet in the banking industry recently. That follows a volatile period in late 2008 into early 2009 during the financial crisis that prompted mammoth takeovers of struggling banks and a slew of bank failures. Such giants as Washington Mutual and Wachovia disappeared from the landscape.

“There is still some activity, but it’s among the smaller banks that wouldn’t affect the Top 50,” said Christine Barry,

research director at Aite Group.

The rest of the rankings looked eerily similar to the previous quarter, with the Top 11 a carbon copy of the first quarter.

Banking heavyweights Bank of America Corp. and JPMorgan Chase & Co. led the list at No. 1 and No. 2, respectively. Both also earned the distinction of being the only banks with more than $2 trillion in assets.

Citigroup Inc. and Wells Fargo & Co. followed in third and fourth places, respectively.

Commerce Bancshares, based in Kansas City, Mo., moved back on the list after missing the cut the past two quarters. It supplanted San Juan, Puerto Rico-based First BanCorp., which is working to raise capital and shed risk from its portfolio as part of a June agreement with regulators.

In the second quarter, the U. S. banking industry recorded its highest quarterly earnings in nearly three years, the Federal Deposit Insurance Corp. said.

But the number of troubled institutions grew by more than 50, and total lending by the banks declined by $107.5 billion, or 1.4 percent from the previous quarter.