CLEVELAND – KeyCorp’s presence is readily apparent here, its red logo aglow at night atop its headquarters towering over the city.
But talk to any high-ranking Key officials, and Buffalo is very much on their minds. They’re accustomed to making trips between the two Lake Erie cities and can talk about Larkinville like a local, as Key works to complete its acquisition of Buffalo-based First Niagara Financial Group.
Federal regulators have not signed off on the $3.7 billion deal yet, but Key officials are steadily working behind the scenes to prepare for that day.
“We’ve had the aspiration to be a top-performing regional bank and this really takes a major step forward for us,” said Donald Kimble, Key’s chief financial officer, in an interview with The Buffalo News after Thursday’s annual shareholders meeting.
Employees from Key and First Niagara have been developing the combination together, reporting their progress to leaders up the chain. Christopher Gorman is spearheading the effort, as Key’s merger integration executive.
“We have an integrated team, people from First Niagara and from Key working shoulder to shoulder as we build what we call the ‘New Key,’” Gorman said. “The New Key is frankly neither what the legacy First Niagara was nor what the legacy Key is. We’ve spent a lot of time working collaboratively together and we’re really pleased with the progress.”
How often do those employees get together?
“You can assume there are many people from each of our companies meeting every single day,” he said. “As you think about all the planning that goes into an integration, all the planning that goes into the strategic vision going forward, it involves a lot of people and people are talking and working together every single day.”
Beth Mooney, Key’s chairman and CEO, noted that Gorman had been running Key’s Corporate Bank, which she called “our principal growth engine of the past five years.”
“We took him out of what was a critical role for our company to give him this opportunity to build a team and that will get it right … but ultimately the real value will be the growth of our combined companies,” Mooney said.
Gorman said he has been impressed with the First Niagara employees’ “attitude, teamwork and talent.”
“It’s a team that was pulled together through a series of acquisitions and also a lot of hiring,” Gorman said. “We’ve been very favorably impressed with the team, especially their willingness to think about the business differently.”
Key hopes to complete the deal in the third quarter. Key last week disclosed it plans to rename First Niagara Center as Key Bank Center, and to make Larkinville its Northeast regional headquarters. But decisions about how big the local workforce will be after the deal is complete are yet to come, Mooney said.
“We’ve also said one of the guiding principles we’re using is, what can we leverage given that employee base, the highly attractive space that we will occupy in Buffalo, and across our franchise what work can also be done in Western New York? So we’re going through all those processes right now,” Mooney said.
“That really is going to be the guts of the work that will be done this summer, as we go into ‘customer day one’ in the fourth quarter,” she said. “A lot of that is still in the planning, mapping stages. So I’d tell you to stay tuned, and I am consistent in the belief that we shouldn’t front-run the process, because the process will guide us to the right places.”
During the shareholders meeting at One Cleveland Center, Mooney hailed the First Niagara deal’s potential for strengthening Key. The bank will “continue to be disciplined in managing our capital, which includes our expectations for over a 10 percent return on the capital investment for the First Niagara acquisition,” she said.
“During my five-year tenure as your CEO, I have never been more enthusiastic about the future of our company and the opportunities that lay before us,” Mooney said. “The integration of First Niagara is an important step for us, and I look forward to completing the transaction later this year.”