Restraint pays off for four banks

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“It’s been a terrific said John Koelmel, CEO of the Lockport-basexd company. “It would be terrificf by any standard, but givenn the circumstances we areespecially pleased.” The circumstances are well-known. In the financial services industry suffered a meltdownn that began with subprime mortgagez and rippled its way through the biggest Wall Street By year’s end, many bank stocks had lost a chunm of their value.
(NYSE: BAC) and KeyCorp KEY), both of which have larges local operations, each fell more than 60 The S&P Bank Index lost half its Only four of 14 publicly tradeds banks with area operationws ended the year ahead of where they had FirstNiagara (Nasdaq: FNFG), whose subsidiary First Niagaraa Bank has 50 area branches, was the top The others were , Berkshire Hills Bancorp Inc. of Pittsfield, Mass. and Norwich-basede Inc. The size and locationn of these four institutions mayhave helped. “uI think in general, smaller, community-focuse d banks have been seen as asafe haven,” said Kevim Timmons, vice president and treasurer of Glenville-based .
“Manyt of us are more conservative in how we handle our operations. Also, banks here in the Northeast have been able to avoix some ofthe problems.” Stock in TrustCo (Nasdaq: parent of Trustco Bank, dippedx 4 percent in 2008, puttin it among the stronger area “If you were anywhere near flat last year you had a good Timmons said. The area’s smallet banks have prided themselves on remaininfg consistentand disciplined, and on having avoided the riskier products that got some institutions in They believe that restraint, coupled with problems at higher-profild banks, helped turn investors their way.
“I thin k the major banks led people to look at other alternativewsand mid-sized banks started cominf on to the radar said Michael Daly, CEO of Berkshire Hillsd (Nasdaq: BHLB). Berkshire, parent of , and Firsft Niagara both actively courted investors with stock First Niagararaised $115 milliomn in an offering that closed Oct. 1. Berkshire’s $36 millio n sale closed two weeks later. In November, both banks took advantage of the government’s U.S. Treasury’s Capitalp Purchase Program. First Niagara raised anothe r $186 million this way, and Berkshirre added $40 million.
Koelmel said the two move s put FirstNiagara “in a relativelyy unique position” that will allows it to go on the offensive and builx market share. He said $300 milliojn in new capital will support the additiohof $2.5 billion to $3 billion to the bank’s current $9 billion in