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KeyBank credits First Niagara deal for solid quarter

KeyCorp credited the First Niagara deal with helping deliver solid results in the second quarter.

"It was another strong quarter for Key, demonstrating the value of our First Niagara acquisition and the core momentum we have built in our company," said Beth Mooney, the bank's chairman and CEO, as the bank released its earnings on Thursday.

Cleveland-based Key reported net income attributable to shareholders of $393 million, more than double its total of $193 million a year ago. The bank had earnings per share of 36 cents, compared to 23 cents a year ago.

Mooney said Key has now achieved the $400 million in annualized cost savings it had projected with the First Niagara deal.

"I remain very confident in our ability to achieve the remaining $50 million in cost savings by early next year," she said.

The $50 million will include savings on vendor contracts and occupancy costs from non-branch office space, she said.

Key's non-interest expenses for the quarter included $44 million in merger-related charges, which consisted of $31 million in personnel expense and $13 million in non-personnel expenses including business services, professional fees and marketing costs. Mooney said those merger expenses will "continue to trend down."

Key did not disclose First Niagara customer attrition figures. But Christopher Gorman, Key's president of banking, said the bank has recorded deposit growth across its markets, and of the First Niagara customers who have left, about 70 percent of them were single-product or single-service customers.



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