Share this article

print logo

First Niagara used TARP to provide $814.7 million in loans

First Niagara Financial Group said Thursday that it lent four times as much money in the fourth quarter as it received from the federal government, in its first public disclosure aimed to demonstrate how it was using the Treasury investment.
The Lockport-based parent of First Niagara Bank, which received $184 million from Treasury's Troubled Asset Relief Program (TARP) in November, said it made $814.7 million in loans and lines of credit from October to December. That's up 18 percent from the third quarter.

The total included $43.1 million in mortgages, $168.8 million in commercial real estate credits, $37 million in consumer and home equity loans, $536.1 million in business loans, and $29.7 million in municipal financing.
CEO John R. Koelmel said the lending pace is continuing into 2009, though both the commercial mortgage and business lending markets have "softened" somewhat. He said the bank is benefiting from larger competitors shrinking their balance sheets and retrenching, forcing customers to look elsewhere.
The disclosure is not yet required by federal law or regulation, but was initiated voluntarily by the bank "to provide enhanced transparency" into how it was using taxpayer money, especially in light of accusations by politicians and others that banks were hording the taxpayer money instead of lending it as was originally intended.

"We want to be even more transparent than we otherwise are so people understand the facts," said Koelmel. "We just want to ensure our story is out there and we don't get swamped or caught up unduly in the ever-increasing barrage of political noise and chatter."
First Niagara said it would make this information publicly available each quarter for as long as it participates in the Capital Purchase Program under TARP.


There are no comments - be the first to comment