Shareholders of First Niagara Financial Group and NewAlliance Bancshares overwhelmingly approved First Niagara's purchase of the Connecticut bank Monday, as First Niagara laid out plans for $1 billion in lending in New England.
More than 90 percent of First Niagara shares and more than 94 percent of NewAlliance shares represented at two simultaneous shareholders' meetings voted in support of the $1.5 billion deal, which was announced in August.
The approval means the banks are now just awaiting the go-ahead from federal and Connecticut regulators. If they approve, the deal will create a regional bank with $29 billion in assets, $18 billion in deposits, $14 billion in loans and 340 branches across upstate New York, Pennsylvania, Connecticut and Massachusetts.
The deal is expected to close in April 2011. First Niagara is also working with an executive search firm, Korn/Ferry International, to recruit a New England regional president, since NewAlliance's top two executives are not staying on.
"This was a formality. You can never take that for granted, but it's great to have that kind of support from shareholders," First Niagara President and Chief Executive Officer John R. Koelmel said, noting this was the first opportunity First Niagara shareholders have had to vote on a merger and affirm the bank's expansion in five years.
Buffalo-based First Niagara agreed in August to pay $1.5 billion in cash and stock to buy New Haven-based NewAlliance, parent of NewAlliance Bank, with $8.8 billion in assets and 88 branches in Connecticut and Massachusetts. That follows on the heels of its purchases of 57 branches in western Pennsylvania and Harleysville National Corp. in eastern Pennsylvania.
The NewAlliance deal has come under heavy fire in Connecticut from politicians, particularly New Haven Mayor John DeStefano and Connecticut Attorney General and Sen.-elect Richard Blumenthal.
In public statements and written comments filed with regulators, the two have objected to the deal and questioned First Niagara's commitment to Connecticut, the potential for hundreds of layoffs and a drop in local lending and decision-making. Together with New York City-based community activist Matthew Lee, they have also criticized the banks' lending to small businesses and low-income and minority borrowers.
In response, First Niagara has steadfastly maintained that the deal will benefit New Haven and the NewAlliance markets, noting that the combined bank will be much larger, with a broader product array and the capability to make more and larger loans than in the past. All branches and branch employees will remain. And executives have reiterated that decisions will be made locally.
First Niagara said it will invest more than $1 billion in the Community Reinvestment Act and other economic development efforts over the next five years, as it says it will continue NewAlliance's record in small-business lending, mortgage lending in low- and moderate-income census tracts and community development lending.
Finally, the banks for the first time detailed expectations for job cuts once the deal closes. Koelmel said officials had originally expected up to 250 back-office and support jobs to be cut after the deal, out of a total employment base of 1,200.
At the same time, though, officials said First Niagara plans to create 180 new jobs in the region next year, leaving a net loss of 50 positions, or 4 percent of NewAlliance's work force.