First Niagara Branch Deal

First Niagara Financial Group Inc. in Lockport, N.Y., is selling four of its branches in the central part of the state to Elmira Savings Bank for about $14.4 million.

The $396 million-asset Elmira Savings would get $93 million of deposits and $9 million of consumer loans along with First Niagara's three Ithaca branches and its Moravia branch. Related Links Capital Region in New York Gaining Mass. Appeal Capital-Rich First Niagara Seeks GrowthElmira Savings would increase its deposits by 30%, expand its network of seven branches by more than 50%, and add new retail markets in Tompkins and Cayuga counties. Now it has only a loan center in Tompkins and has no operations in Cayuga.

John R. Koelmel, First Niagara's president and chief executive, said the sale would wrap up a "rightsizing" initiative that would reduce his company's branch count by 7.5% by the end of the year.

The $8 billion-asset First Niagara is also consolidating five branches and opening five this year as it focuses on markets with its "best growth opportunities," Mr. Koelmel said. First Niagara expects to have 110 at the end of this year, he said.

Legacy Bancorp Inc. of Pittsfield, Mass., announced July 25 that it had agreed to buy five First Niagara branches in the Albany area for about $10.6 million. Legacy would get $83.5 million of deposits but no loans.

Mr. Koelmel said the nine branches to be sold have less than 3% of First Niagara's deposits.

The Elmira Savings deal was announced Friday and is expected to close in the fourth quarter. Elmira would hire the 20 First Niagara employees in the acquired branches.