The acquisition of NewAlliance Bancshares, Inc. in New Haven appears to be a long-term positive for the First Niagara Financial Group, Inc. as Fitch Ratings said Friday in affirming its rating of First Niagara’s financial outlook as ‘stable’.
The announcement of the 86 percent stock and 14 percent cash transaction of the $1.5-billion deal sent stocks for Buffalo-based First Niagara down on Thursday and Friday while NewAlliance stock rose.
First Niagara stock fell $0.60 per share to $12.18 when the deal was announced Thursday and the stock continue to drop through Friday morning to $11.68.
NewAlliance stock rose $1.65 per share to $13.00 after the deal was announced and dipped slightly through Friday morning to $12.56.
The deal, set to close in the second quarter of 2011, will create one of the top 25 biggest banks in the United States with a combined $29 billion in assets, spreading First Niagara’s market into Connecticut and Massachusetts.
Fitch Ratings said the deal gives First Niagara a healthy balance sheet with moderate credit risk. The company has a proven track record of acquiring banks with good operating results.
