When it announced it would be acquiring NewAlliance Bank, First Niagara Financial Group ignited a firestorm in NewAlliance’s base of New Haven, Conn., with local officials railing against the loss of a major, hometown institution.

But here in Massachusetts, First Niagara also represents a potentially tough new competitor for local banks to size up.

Buffalo, N.Y.-based First Niagara will take over a dozen NewAlliance branches in Massachusetts this year, and seemingly arrives with some disadvantages.

First Niagara has gotten its share of negative press from the takeover after New Haven and Connecticut officials decried the loss of a homegrown bank as bad for consumers, local businesses and the community. But in Massachusetts, the bank’s primary obstacle is its status as a larger, mostly unknown, out-of-state bank with a name that smacks of New York, not New England.

Image Is Everything

Local community banks are keeping a watchful eye out for when NewAlliance locations officially make the change over to First Niagara, as any bank acquisition opens a window to woo customers unsatisfied with the change.

“We’ll make ourselves a very convenient alternative,” said Dena Hall, spokeswoman for West Springfield-based United Bank. The inconvenience of switching accounts, credit cards and other products can make for a ripe opportunity to scoop up new clients, she said.

While United Bank can boast of its homegrown roots in contrast to First Niagara, Hall acknowledged that the much larger, $20.8 billion First Niagara has a good reputation in the industry – an assessment backed by industry analysts.

First Niagara’s executives are aware that many in NewAlliance’s footprint view the new bank as a “big, bad, out-of-town” institution, and they are fighting that image. Daniel Cantara, executive vice president of commercial business, touted First Niagara’s local focus and emphasis on philanthropic efforts, its big lending appetite and a structure that gives decision-making powers to local executives, not the Buffalo brass.

Meanwhile, First Niagara’s new foothold in central Massachusetts raises the question of whether it, like some would-be competitors, will use its latest acquisition as a jumping off point for more Massachusetts growth.

Such a strategy would certainly be consistent with recent history. Banks including Connecticut-based People’s United and Webster Bank have gradually built up branch networks in Massachusetts, both moving into the Boston area in 2010.

First Niagara, too, has grown aggressively in recent years. In 2009, First Niagara announced plans to buy Philadelphia-area Harleysville National Corp., as well as 57 western Pennsylvania branches from PNC Financial Services Group. Both of those areas are now thriving, Cantara said, and although New England may be different competitive and cultural terrain, good banking values are popular everywhere.

“Businesspeople are businesspeople, consumers are consumers,” he said.

Fertile Ground

Despite its recent flurry of acquisitions, analysts said they did not believe First Niagara would continue its recent habit of multiple, large purchases in the near future.

“Now’s the time for them to pause and reconsider where they’re at,” said Thomas Alonso, senior banking analyst with investment bank Macqaurie. First Niagara moved quickly in 2009 and 2010 because it sensed a good buying opportunity, but after moving into its new territory, the bank will now likely refine its business over the next few years instead of adding onto it.

Collyn Bement Gilbert, an analyst at national investment banking firm Stifel, Nicolaus & Co., also said the bank was likely to focus on pumping up its brand image in its new turf.

“I don’t think [First Niagara] is going to go on a mad rampage of acquiring banks,” she said.

The institution did well for itself in Pennsylvania, and its service and products had a “top-notch” reputation. That alone, Gilbert said, should go a long way toward reconciling New England customers to the newcomer.

At the end of the day, the most important thing for customers is having a bank that will service their needs – if it happens to be based in Buffalo, so be it, she said.

Cantara, however, confirmed First Niagara’s interest in growing further in Massachusetts. While it will keep an eye out for merger opportunities, for the moment the bank is planning to build upon NewAlliance’s current commercial banking operations. First Niagara is currently looking to hire more commercial lenders to stake out business toward the lucrative eastern Massachusetts and metro New York markets, which includes Fairfield County in Connecticut.

“We look at new England as a very fertile opportunity,” he said.

The name “First Niagara,” referring to a landmark widely associated with upstate New York, will stick for now, Cantara said. Market research has shown that residents outside New York tend to think of the moniker as reflective of the strength and power of the falls, rather than their specific location.

That being said, Cantara noted, the bank is willing to be flexible as it moves into new markets.

First Niagara has already begun fighting its outsider status by meeting with local and nonprofit leaders in its New England footprint. Cantara said the retail side of the business would soon implement a major public relations push to familiarize New Englanders with their newest banking option.

When the transition finally happens, he said, “We want it to be as much of a non-event as possible.”