When KeyCorp holds its annual shareholders meeting on Thursday in Cleveland, its chairman and CEO, Beth E. Mooney, will be in the spotlight.
American Banker last year named Mooney the “Most Powerful Woman in Banking” for the third consecutive year. She is guiding the bank through its planned deal for Buffalo-based First Niagara Financial Group, which will turn Key into the nation’s 13th largest bank. Federal regulators still need to approve the deal.
Cleveland may be Key’s home base, but Mooney stresses that Western New York – and New York State as a whole – will be essential to the bank’s future. The bank declared last week that Larkinville will become its Northeast regional headquarters and announced it will put its name on what is now First Niagara Center. Meanwhile, the KeyBank Foundation pledged $1.6 million for local nonprofits.
Mooney, who has served as chairman and CEO for five years, is an executive whom Western New Yorkers will get familiar with, as Key prepares to become the region’s No. 2 bank. In a visit to Larkinville, she talked about where Key is headed and how Buffalo fits into those plans:
Q: What business opportunities does Key get from acquiring First Niagara that it didn’t have on its own?
A: I think there’s a real opportunity here for what we can do for our customers and what we can do for our communities. When we look at the three business lines that KeyBank was not in, which would be mortgage – which is a real significant opportunity for us and a cornerstone of the Community Benefits Plan that we announced – auto lending and insurance, those are businesses that are new to Key that we are going to pick up and leverage.
Q: How significant is Western New York to Key’s plans?
A: This will be our second-largest market, outside of our headquarters in Cleveland, Ohio, across our entire franchise. And when we bring these two companies together, we’re going to have 30 percent of Key’s business in the state of New York. So I look at this as investing and leveraging our presence here. … This is a very, very important market to us. … I do think that sometimes it’s not something people fully appreciate, how meaningful this is to KeyBank, both this market and doing business in the state of New York.
Q: Eighteen First Niagara branches will be sold to Northwest Bancshares under an agreement with the Department of Justice. Will there be other branch sales or closings beyond those following the deal?
A: Our folks are in the process of looking at our branch footprint. But first and foremost was to get through the process of working with the Department of Justice on the divestiture. We’re pleased and proud to have that done and announced. So that was job one. And we do have people looking at our branch networks holistically.
Q: Does the U.S. economy look any more promising to you?
A: This has been a very tough environment for many companies. It’s a very slow-growth economy, and an extended period of low interest rates. I would not necessarily advocate building a business plan that would suggest either of those were going to change any time soon. I think some piece of the timing of this [acquisition] opportunity was the ability to capitalize on the ability to create a growth platform through bringing the companies together.
Q: There’s a lot of negativity about banks on the presidential campaign trail. Does that give you any concern, given Key is headed toward becoming the 13th largest in the country?
A: It is something that has never reversed itself since the 2008-2009 recession. What I’d like to think is, not all banks are the same. We should not be painted with one brush. I think strong regional banks such as KeyBank, evidenced by what we’re celebrating – $2.6 million worth of grants to students, to communities, to community groups, between Say Yes Buffalo to Mentoring Matters – what you see, is I think communities are benefited by strong regional banks. … When you ask most people, they may have a bad impression of banks, but they like their banker. And I think we’re a company made up of bankers that our customers like.
Q: What are you hearing from shareholders about the deal?
A: Obviously we had the special shareholder vote in March, and between both companies we got over 90 percent approval from our shareholders, which was a very positive sign of their support for, going forth and making good on, like I said, the promise to not just get bigger but get better.
Q: Any word from regulators on when approval might come?
A: I would tell you we feel like things are going well and that we still feel good that we will have a final agreement in the third quarter.
Q: Once you get approval, what is your timetable for integrating First Niagara’s operations into Key’s?
A: We are trying to work through getting to what we call ‘legal day one’ in the third quarter. Then, somewhere in the fourth quarter, we would merge our systems and have what we call ‘customer day one.’ Then as we go into (2017), we would be finalizing really, truly bringing our two companies together. And by the end of 2017, we think we will be complete and fully integrated.