Share this article

print logo

KeyBank branch acquisitions on track; Takeover of 26 offices in area set to close July 13

KeyCorp's purchase of 37 retail bank branches in Buffalo and Rochester from First Niagara Financial Group and HSBC Bank USA is on track to close July 13, followed by a weekend conversion, bank leaders said.

"We do feel good about it. We've done our homework, and we're ready," Beth Mooney, the bank's chairwoman and CEO, said in an interview, hours before a "town hall" meeting with Key and HSBC employees on Thursday.

The Cleveland-based bank is acquiring 26 branches in the Buffalo area and 11 in the Rochester area that are being divested by Buffalo-based First Niagara after its own purchase of 195 HSBC branches across the state.

The acquisition will add about $2.4 billion in deposits and $400 million in loans to KeyBank's local presence, giving it 99 branches in the two markets.

Key will also gain its first ATMs that can take check deposits without an envelope by scanning an image of the check.

First Niagara was ordered by the U.S. Justice Department to sell the Buffalo branches as a condition of antitrust approval, while the Rochester branches are locations it didn't want or need, but Key did.

"Western New York and Rochester are attractive markets for us," Mooney said in a separate news release. "We look forward to welcoming HSBC customers and employees to the KeyBank family as we continue to make local investments through our lending, civic and community support, and volunteerism."

HSBC's branches will close at 3 p.m. July 13, with KeyBank offices closing an hour later. The bank has already mailed "welcome kits" to HSBC customers with information about their accounts and the conversion.

Key also is bulking up its branch and call center staff for the conversion weekend and for several weeks afterward to respond to questions and customer needs. Branch hours will also be extended on Tuesdays, Thursdays and Saturdays for "a period of time after conversion," said Bill Koehler, president of Key Community Bank.

"Everything is proceeding according to plan, and we are excited about the reaction we've received from customers, employees and the community," Koehler said in a news release. "We've been working very closely with HSBC to ensure a smooth customer conversion."

Executives said Thursday that one of their biggest struggles with the multifaceted deal has been customer confusion over which bank they are going to and what they need to do. Besides Key, First Niagara is also selling HSBC offices to Community Bank System and Financial Institutions' Five Star Bank, with different closing dates.

But retention of HSBC's branch employees has been "very, very good," and will help make the process smoother for customers, said Gary Quenneville, Key's Western New York district president. "They're thrilled to be coming to Key. They're very anxious and excited," he said.