Two local banks announce a merger valued at over $7 billion. Both NBT and Alliance banks say their ledgers are healthy, but cited future concerns in their decision. Our Andrew Sorensen tells us how pressure from federal regulations played a role and what customers can look forward to as the banks move forward.

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NEW YORK STATE -- Customers of NBT and Alliance banks can soon expect to see a lot more of each other. The two banks announced a merger Monday that the banks' CEOs portrayed as two community banks continuing to grow despite the tough economy.

"We have grown significantly from a little over $500 million in 2000 to $1.4 billion, never distracted with some of the things that others were throughout the 2008 and 2009 period," Alliance Financial Corporation President and CEO Jack Webb explained.

"Together, these two banks will represent about a $7.5 billion in asset banking organization with a real strong presence throughout Upstate New York and particularly Central New York," NBT Bancorp Inc. President and CEO Martin Dietrich said.

They expect to clear the regulatory hurdles by the second quarter of 2013, at which point Alliance customers will see their banks branches become NBT's.

The banks say one of their reasons for merging is that federal regulations put in place after the financial crisis are too expensive for small banks to compete.

"The smaller organizations have less scale with which to spread those costs over. There's going to be more mergers of smaller banks because it's difficult for them to be in a position to bear the burden of these extra compliance costs," Dietrich said.

Both banks see a lot of opportunity in expanding their footprints and utilizing each other's ATMs, as well as increasing commercial services.

"There will be an opportunity to do some additional commercial real estate that we have not pursued because it just wasn't going to be big enough for us to build administrative staff to support that," said Webb.

With Alliance branches changing their names, many people are wondering about Alliance Bank Stadium in Syracuse. NBT CEO Martin Dietrich doesn't have a yes or no answer on that just yet.

"We intend to continue to support the types of activities that they engaged in to help make them successful," he said.

But beyond that, the banks don't expect service to change much. They do, however, expect some layoffs of managerial, behind-the-scenes jobs that have not been determined. They say the move is overall for the best for both companies as they expect a bump of about eight percent in their collective stock price.

If you'd like more investor information on the merger, NBT has set up a site at nbtbancorp.com.