KeyCorp set a big cost savings target from its deal for First Niagara Financial Group, and has now achieved it.
Key said it has reached $450 million in annual cost savings since completing its acquisition of First Niagara nearly two years ago. Key initially aimed for $400 million in cost savings, but later confirmed a higher target of $450 million.
"First Niagara is just part of Key, and that's a really nice feeling to say we're operating as one," Key CEO Beth Mooney said Thursday. "They're not thinking at the margin, 'Is this First Niagara, is this Key?' "
Key's profits rose 18 percent increase in the second quarter, to $464 million. The increase included a $78 million gain from Key selling its insurance and benefits services business to USI Insurance Services. USI has pledged to grow the insurance business in Buffalo, which Key picked up from First Niagara but chose not to keep.
"USI was a really, really good fit for the (employees)," Mooney said. "They were pleased to affiliate. That was a known name to them and a business model that they liked."
Key has also built up the residential mortgage business it acquired from First Niagara, and whose operations remain based in Amherst.
"We are mature and ready to go in a market that's gotten softer, so it is not growing as fast as I think we would have hoped," Mooney said. "But our capabilities are in place and we're looking forward to that being a meaningful part of our business model."
Key has added about 200 mortgage loan originators across its footprint over the past year and has completed its infrastructure investments for that business line.
In a conference call with analysts, Mooney didn't suggest any other big deals by Key were coming.
"While we believe First Niagara was a good use of our capital and has been additive to our franchise, we are focused on our organic growth strategy and preserving capital for that purpose," she said.
Separately, Demos Parneros, a member of Key's board of directors, has resigned. Parneros was fired as CEO of Barnes & Noble earlier this month for unspecified violations of company policies.