National City
On April 7, 2009, First Niagara agreed to buy 57 National City branches in Western Pennsylvania from PNC Financial Services and officially took over those branches on September 8 after the signs were changed over from National City during Labor Day Weekend.
PNC, which had acquired National City in late 2008 with money from the $700 billion bailout plan after National City suffered losses in the subprime mortgage crisis, was required by the United States Department of Justice to sell 50 National City branches in the Pittsburgh area and 11 more branches in and around Erie to competitors, since the two banks had significant overlap in Western Pennsylvania--PNC and National City were number 1 and 2 in market share, respectively--and had potential antitrust issues in the area. (Even after the sale was completed, PNC retained a market-leading 46% share in the Pittsburgh market, with Citizens Financial Group in a distant second at 13%.) A dark horse candidate, the sale to First Niagara was considered a surprise, considering that PNC was also in negotiations with much larger banks such as JPMorgan Chase, Wells Fargo, Fifth Third Bank, KeyBank, Huntington Bancshares, and FNB Corporation for the branches. Fifth Third, Huntington, & FNB had existing branches in the market, while JPMorgan Chase's retail banking division & Key were in adjacent territories, and Wells Fargo was in the process of expanding its Eastern U.S. operations by way of its acquisition of Wachovia. Before the deal was announced, First Niagara was thought to be interested only in the Erie-area National City branches.
First Niagara, which had been eyeing at expanding into Pittsburgh for some time, was immediately ranked third in market share at 8%, ahead of the longer-established Dollar Bank and First Commonwealth Bank at six and five percent, respectively. First Niagara retained all National City employees at the acquired branches in the Pittsburgh and Erie areas, and established a regional office in Downtown Pittsburgh's 11 Stanwix Street tower.
First Niagara was outbid for the four branches in Crawford County, Pennsylvania that PNC had to divest. Of those four, one branch in Titusville was sold to Emclaire Financial Group while the other three (one in Conneaut Lake, the other two in Meadville, including the branch inside Wal-Mart) were sold to Marquette Savings Bank.
On August 4, 2009, First Niagara agreed to take over the automatic teller machines (ATMs) at 95 Sheetz locations throughout Western Pennsylvania, replacing M&T Bank, which doesn't have any bank branches in the region. The ATMs, which officially become First Niagara ATMs at the same time First Niagara took over the former National City branches, will be surcharge-free from First Niagara itself, though people using the ATMs may still be charged a foreign ATM fee from their primary financial institution if they charge such fees.
First Niagara has stated that it does have some "holes" in the Pittsburgh metropolitan area, with PNC still retaining 110 National City branches in the area and is completely absent from Beaver & Lawrence County. (Aside from the aforementioned Sheetz ATM deal, First Niagara didn't buy any National City branches in those areas since PNC was able to keep the National City branches as there were no existing PNC branches in the two counties.) First Niagara is looking at acquiring some former National City branches PNC will close due to close proximity to an existing PNC branch, since First Niagara does have the right of first refusal to buy any shuttered National City branches. First Niagara may also buy out a smaller local bank.
Read more about this topic: First Niagara Bank, 21st Century Growth
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