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The current M&A cycle has its first cautionary tale in John Koelmel and his departure from First Niagara. The Buffalo bank expanded rapidly but erred in its deal for the HSBC branches.
March 20 -
The Buffalo, N.Y. company has struggled to gain traction from last year's purchase of more than 100 HSBC branches.
March 19 -
The upswing in acquisition announcements lately has been unaccompanied by the spiral of rising deal and trading multiples that attended waves of mergers in the past.
March 12
When a bank is sold, rivals inevitably see the ensuing tumult as an opportunity to hunt for disgruntled customers.
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Upstate New York cities like the Rochester and Syracuse rank among the most active for deals. Customer defections following a four-way split of HSBC’s old branch network in the region had
Elsewhere in the region, First Niagara’s (FNFG) John Koelmel, the man who led the purchase of the biggest chunk of HSBC’s network, lost his chief executive job
Branches holding one-fifth of deposits in the Syracuse market have a different owner now than they did on June 30, 2011.
In Rochester, the figure is 15%. In addition to First Niagara, buyers in the two metropolitan markets include KeyCorp (KEY), Community Bank System (CBU) and Financial Institutions Inc. (FISI); each bought parts of HSBC’s former portfolio from First Niagara. M&T has the largest share of deposits each market: 23.3% in Syracuse and 24% in Rochester.
(The markets used here are metropolitan statistical areas,
Among the roughly 80 markets across the country with more than $10 billion of deposits, Syracuse ranks second only to the Raleigh-Cary area in North Carolina in terms of turnover.
PNC Financial’s (PNC) acquisition of RBC Bank, including its headquarters branch in Raleigh, accounts for most of the deposits that moved to different banks there.
In the end, deals are a good-news, bad-news story for many incumbents. On the upside is the chance to woo customers. A big negative can invovle the entry of a tough, new competitor into the market.
M&T is itself a pending acquirer as a result of its agreement to buy Hudson City Bancorp (HCBK). The deal appears likely to make smaller waves in the markets involved than HSBC’s exit generated in upstate New York. Hudson City’s largest market share is in the Bridgeport-Stamford-Norwalk area of Connecticut, where it holds 3.8% of deposits.