BUFFALO, N.Y., Jan. 12, 2012 (GLOBE NEWSWIRE) -- As First Niagara Bank, N.A. continues to advance toward completion of the acquisition of HSBC Bank USA, N.A. branches in Upstate New York and Connecticut in the second quarter of this year, the company today announced it has reached an agreement with KeyCorp (NYSE:KEY) for its wholly-owned subsidiary KeyBank N.A. to purchase 37 HSBC locations and assume approximately $2.4 billion in deposits and approximately $400 million in loans in the Buffalo and Rochester markets. Under the terms of the agreement, Key will pay First Niagara a deposit premium of 4.6%, or approximately $110 million, based on August 2011 deposit balances. Key's purchase includes all 26 HSBC locations slated for divestiture under First Niagara's November 2011 agreement with the Department of Justice (DOJ).

As announced in July 2011, when First Niagara completes its acquisition of the HSBC branches, the regional bank will have an enhanced leadership position in the Northeast, with more than 400 locations, $30 billion in total deposits, $38 billion in assets and more than 6,000 employees serving consumers, business and communities across New York, Pennsylvania, Connecticut and Massachusetts. The transaction will also provide First Niagara with number-one retail market share across Upstate New York, virtually doubling its number of branches in New York State to more than 200, stretching from Buffalo to Albany and down through the Hudson Valley.

"We're delivering on the plan we shared when we announced the HSBC-branch acquisition last year, in spite of the very challenging operating environment. The outcome will be another significant and positive step toward realizing our vision for establishing a regional leadership position in the northeast," First Niagara President and Chief Executive Officer John R. Koelmel said. "We expect to be a best-in-class operator, with enhanced breadth, depth and efficiency across our multi-state regional banking network."

Under the agreement announced today, KeyBank will purchase the following HSBC Upstate New York branches:

Department of Justice Required Divestitures

26 HSBC Branches in Erie, Niagara and Orleans Counties

Erie County 5556 Main St Williamsville 14221
Erie County 2344 Niagara Falls Blvd Tonawanda 14150
Erie County 6525 Transit Rd East Amherst 14051
Erie County 366 Kenmore Ave Buffalo 14223
Erie County 3107 Bailey Ave Buffalo 14215
Erie County 2635 Main St Buffalo 14214
Erie County 201 Amherst St Buffalo 14207
Erie County 4455 Transit Rd Williamsville 14221
Erie County 5151 Broadway Depew 14043
Erie County 703 Ridge Rd Lackawanna 14218
Erie County 306 West Ferry St Buffalo 14213
Erie County 2345 Union Rd West Seneca 14224
Erie County 1017 Broadway Buffalo 14212
Erie County 1107 Lovejoy St Buffalo 14206
Erie County 9094 Erie Rd Angola 14006
Erie County 8591 Main St Eden 14057
Erie County 4191 North Buffalo St Orchard Park 14127
Erie County 11 Main St Hamburg 14075
Niagara County 2952 Saunders Settlement Rd Sanborn 14132
Niagara County 8301 Niagara Falls Blvd Niagara Falls 14304
Niagara County 721 Center St Lewiston 14092
Niagara County 150 Main St Lockport 14094
Niagara County 5740 South Transit Rd Lockport 14904
Niagara County 8683 Main St Barker 14012
Niagara County Main St & Park Ave Middleport 14105
Orleans County 514 Main St Medina 14103


Additional Divestitures

11 HSBC branches in Monroe County

Monroe County 12 Courtney Drive Fairport 14450
Monroe County 3177 Latta Rd Rochester 14612
Monroe County 3636 Dewey Ave Greece 14616
Monroe County 980 Ridge Road East Webster 14580
Monroe County 184 South Union St Spencerport 14559
Monroe County 1005 Elmgrove Rd Rochester 14624
Monroe County 525 Titus Ave Rochester 14617
Monroe County 3230 Chili Ave Rochester 14624
Monroe County 1475 Mt Hope Ave Rochester 14620
Monroe County 1848 Empire Blvd Baytowne 14580
Monroe County 825 Fairport Road E Rochester 14445


There will be no changes to any HSBC or First Niagara customer accounts until after the transaction is completed, and the banks will continue to collaborate to ensure a smooth transition for the businesses and individuals they serve. Personnel associated with the branches to be sold will join Key upon completion of the divestitures.

First Niagara's completion of the HSBC acquisition remains subject to receipt of regulatory approval and satisfaction of other customary closing conditions. The divestitures to KeyBank will be completed subsequent to the closing of First Niagara's transaction, subject to receipt of regulatory approval and satisfaction of other customary closing conditions.

First Niagara was advised by the investment banking firm of Sandler O'Neill & Partners, L.P., as well as Goldman Sachs & Co., and the law firm of Pepper Hamilton LLP., as well as Sullivan Cromwell LLP.

[Editor's Note: Source of Market Share Data: First Niagara. Excludes home office deposits (branches in excess of $300 million)]

About First Niagara

First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is a multi-state community-oriented bank that currently has approximately $31 billion in assets, $19 billion in deposits, 333 branches and 5,000 employees providing financial services to individuals, families and businesses across Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more information, visit www.firstniagara.com.

Forward-Looking Statements

Certain statements in this document are "forward

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