KeyCorp’s planned deal for First Niagara Financial Group has stirred concerns about the impact on local workers.
The two banks have not fully addressed those plans. But on Thursday, they provided reassurance about at least a portion of the local workforce.
Cleveland-based KeyCorp said it plans to keep mortgage operations in Buffalo after its proposed $4.1 billion acquisition of First Niagara Financial Group is completed. Key also said it will “leverage and expand” First Niagara’s mortgage capabilities upon completing the deal, which is targeted for the third quarter of 2016.
“Although it is too soon to know exactly how many jobs the Buffalo-based mortgage operations will entail, it is anticipated that initially approximately 300 employees will be needed to ensure all functions are covered,” the two banks said in a release.
That is equal to the number of jobs First Niagara currently has in its mortgage operations in Buffalo, said Jodi Johnston, a First Niagara spokeswoman.
Key said its mortgage origination is currently handled by KeyBank Mortgage loan officers across its 12-state footprint, as well as through a centralized tele-mortgage team. It relies on an outsourced provider, PHH Mortgage, for underwriting, fulfillment and portfolio management functions. First Niagara, in contrast, does not outsource any of its residential mortgage origination or servicing.
Key recently announced plans to bring its outsourced mortgage fulfillment operations into its organization.
Key said it plans to build underwriting, fulfillment and portfolio management platforms to support mortgage loan origination. And in connection with the acquisition, Key said it will bring residential loan servicing in-house through First Niagara’s residential banking unit. Key also plans to use First Niagara’s New Haven, Conn.-based mortgage fulfillment group, as well.
Decisions on organization structure and leadership appointments will be made later, the banks said.
“As KeyBank looks to combine companies, retaining the knowledge and experience of those employees within First Niagara’s operations is critical, and expanding our footprint will provide job opportunities in both fulfillment and servicing to support the additional transactional volume,” said Christopher Gorman, president of Key Corporate Bank, in a statement. Gorman is leading the two banks’ merger integration team.