First Niagara Financial Group said Monday that it expects to continue to grow in markets outside of upstate and Western New York but that expansion elsewhere still will yield benefits in Buffalo.

In particular, it will benefit the city's Larkin District, where the bank's headquarters is based in the Larkin at Exchange Building and where many of the new jobs are likely to be located.

"While we certainly expect to expand our presence in the rest of the franchise as we grow, what we do here in Western New York and across New York State is all the more important," said John R. Koelmel, president and CEO.

"This is the foundation from which we will continue to build. Larkinville is our corporate home, and Buffalo and Western New York will always be at the heart of our corporate success."

Koelmel spoke at a news conference as the bank formally announced plans -- reported earlier by The Buffalo News -- to create at least 500 new jobs in upstate New York, mostly in Western New York, over the next five years.

In the past two years, the bank added 500 jobs in upstate New York, easily exceeding its commitment to add 300 jobs when it received state tax benefits in September 2009. The bank also added 200 jobs in Pennsylvania and has retained 2,300 jobs it gained through acquisitions in Pennsylvania, Connecticut and Massachusetts.

The newest jobs are designed to support the company's growth strategy. The bank has tripled in size in just over two years from three acquisitions in Pennsylvania and New England.

It is now one of the top 25 U.S.-based banks, and Koelmel has made clear his intention to continue that growth, not only by opening additional branches but also by making other "fill-in" acquisitions within its new branch network.

Koelmel said the new jobs are needed for the bank's future expansion, not to support what has already occurred.

"We're building First Niagara for what we expect to be, not what we are today," he said. "As we continue to pursue our expectations and aspirations, we'll need to substantially increase the foundation we've built here in Western New York and across the state."

Koelmel said exactly how many of the new jobs would be in Western New York remained unclear but suggested the number could be 300 to 400, noting that two-thirds of the last batch of new jobs were here. Besides Buffalo and Pendleton, First Niagara has a major branch and operational presence in the Albany area.

Neither he nor Howard A. Zemsky, Larkin developer, would say where the jobs would be located, since the Larkin building itself is currently full. But Zemsky is redeveloping neighboring buildings, and both said more details would become available within weeks.

Koelmel said the new positions will include a combination of customer service, support, administrative and back-office roles, including in bank operations, loan processing and account management. They are expected to pay average annual wages and benefits of about $78,000 each, with some exceeding $100,000. "These are full-time, career-building functions," Koelmel said.

In exchange, the Empire State Development Corp., the state's economic development arm, awarded $5.7 million in tax credits to the bank under the state's new Excelsior Jobs Program. Those incentives, which equate to $11,400 per job, are directly tied to job creation and investment.

"This announcement is one of the most significant private-sector economic development projects in the City of Buffalo and Western New York in several years," said Leecia Eve, a Buffalo native and general counsel for Empire State Development. "First Niagara's success is a true testament to our region's tremendous assets ... and to all that can be accomplished with meaningful public-private partnership."

Additionally, the bank also benefits indirectly from federal tax credits and tax deductions that the Larkin building and the Larkin Development Group received through the Renewable Community program.

"This is absolutely outstanding, game-changing news for upstate New York and First Niagara," said Sen. Charles E. Schumer, D-N.Y., who said he played a key role in having the Larkin District designated as a "renewable community" in 2004. "These 500 jobs will create huge ripple effects across the state, sustaining middle-class families and providing new economic opportunities for New York."

The added jobs are the latest growth news to come from First Niagara, which has been on a tear throughout the financial crisis and subsequent national recession. The bank has taken advantage of opportunities and a strong capital position to quickly stake out a franchise that now stretches from Buffalo to Boston, and south through Philadelphia and Pittsburgh.

The bank now has $30 billion in assets, $18 billion in deposits, $14 billion in loans, 730,000 customers and 346 branches in four states. And it employs nearly 5,000 in all, including 2,500 in upstate New York, with 400 in the Larkin building and 1,300 across Western New York. The new job pledge will raise its upstate employment to more than 3,000 by 2016.

jepstein@buffnews.comnull