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Key CEO sees 2018 as 'year of growth' in First Niagara markets

Just over a year ago, First Niagara Bank branches switched to KeyBank signs and logos, converting a branch network and client base spread across four states.

Now, Key's CEO and chairman, Beth E. Mooney, looks forward to the bank building on what it absorbed from First Niagara.

"I think 2017 was about making sure we came together, we did things right," said Mooney, who was in Buffalo on Tuesday as part of a visit to upstate markets. "We retained clients – that was critically important. We built the culture and we got everything working in the right direction."

Next year, she said, will be "the year of growth."

KeyBank officials have praised the impact of the First Niagara deal on Key's operations, an acquisition that turned Key into the No. 13 U.S. based commercial bank. Buffalo is Key's second-biggest market, behind only its home base of Cleveland, and is home to its Northeast regional headquarters.

Larkinville is home to KeyBank's Northeast regional headquarters. (News file photo)

Part of that growth is expected to come from the business lines Key picked up from First Niagara in the deal, such as residential mortgages,  indirect automobile sales and insurance. Mooney also cited the bank's expanded market share and larger and broader teams.

"There's no aspiration to be successful that doesn't include growth," Mooney said.

Mooney views the mortgage business, which is based at Key's operations in Amherst, as a significant growth opportunity, by expanding it across Key's broader footprint. The bank has increased its number of mortgage loan originators across Key's territory. The loans they generate will be processed here, creating more work for its Buffalo-area employees.

Indirect auto lending – which are loans made to consumers through car dealers – "has been a nice growth story for us" and is being rolled out to Key customers, she said. Insurance is a business line that Key continues to "get our arms around" and is a plus for its private bank customers, she said.

Key's deposit market share in the Buffalo Niagara has climbed to just over 15 percent, putting it at No. 2 behind M&T Bank. Mooney said Key has grown deposits in each former First Niagara market since the branch conversion.

Mooney declined to reveal figures, but said Key was "very pleased" with its customer retention rate since the conversion. Gary Quenneville, Key's upstate New York regional executive, said he felt Key's retention of First Niagara employees in the branches was influential.

"Once folks know where their banker is going to be, they get pretty comfortable with these types of transition," Quenneville said.

Key has grown into a higher-profile bank in the Buffalo area over the past year, with more branches and employees than in the past. Local perceptions of the bank changed, too, said Quenneville, who joined Key in 1985.

KeyBank officials Buford Sears (left), Beth Mooney and Gary Quenneville. (John Hickey/Buffalo News)

"It carries a lot more responsibility in terms of how the community looks at us, the expectations, and the considerations we have to make given the size of our bank, the size of the employee base, volunteerism," he said. "There's a lot of pieces that you really are looked at very differently."

Key is still working with community groups to identify where to locate an additional East Side branch that Key pledged to open. The bank has also made more philanthropic commitments, such as donating funds to help cover the cost of moving Women and Children's Hospital to the John R. Oishei Children's Hospital on the Buffalo Niagara Medical Campus.

Buford Sears, who joined Key from First Niagara, said Key has made a positive impact through gestures like holding its shareholders meeting in Buffalo this year. "The company has the same sort of culture that First Niagara did," Sears said. "It's a say-what-you-mean, mean-what-you-say kind of culture. I think that plays very well here in Buffalo and Western New York, also."

While Key is benefiting from operations it acquired from First Niagara, Key also brings more products to former First Niagara customers, said Sears, Key's Buffalo region market president.

"On the commercial [lending] side, First Niagara was sort of the little train that could," Sears said. "We sort of fought above our weight in terms of our market share. The challenge was how to translate an above fighting weight market share into share wallet. That's how you really make money in our business and drive value for your shareholders.

"That was where First Niagara was challenged," he said. "First Niagara did not have a well-developed, full product set it could cross-sell to customers once it had them in the door. That's what KeyCorp has in abundance."

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