CLEVELAND, Ohio — KeyBank has plans to invest $16.5 billion over the next five years in the communities it serves under its “national community-benefits plan.”
The plan addresses concerns that the Washington, D.C.–based National Community Reinvestment Coalition (NCRC) and NCRC member organizations expressed concern with KeyCorp’s pending acquisition of Buffalo–based First Niagara Financial Group (NASDAQ: FNFG), which is scheduled for the third quarter of 2016.
That’s according to a report on the plan for which First Niagara provided a link in its news release issued Friday.
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Cleveland, Ohio–based KeyCorp (NYSE: KEY) is the parent company of KeyBank, while First Niagara Financial Group is the parent company of First Niagara Bank.
The plan covers a time period beginning Jan. 1, 2017, the report says.
The investment initiative covers KeyBank’s 23 markets, including Syracuse and the Upstate, or “overlap,” markets that include First Niagara Bank branches.
Of the $16.5 billion, KeyBank expects to invest about 35 percent of that amount in the combined First Niagara/KeyBank footprint.
The footprint includes the five current overlap markets and four additional markets that will be new to KeyBank.
The new markets include Philadelphia (and Allentown) and Pittsburgh in Pennsylvania; Hartford, Connecticut (including eight branches in Springfield, Massachusetts); and New Haven, Connecticut, according to the report.
Investments
KeyBank will make the investments in mortgage and consumer loans; small-business lending; community-development lending; and investment and philanthropy.
The investments will focus on “underserved and low- to moderate-income communities throughout its footprint,” according to the news release.
They will include $5 billion in mortgage lending in low- to moderate-income communities and borrowers.
In addition, $2.5 billion in small business and farm lending, targeted to low- to moderate-income urban and rural communities.
KeyBank will also invest $8.8 billion in community-development lending and “investment commitments.”
It’ll also develop a $3 million “innovation fund” to support the development of banking services for underserved communities and populations, according to its news release.
Additionally, the KeyBank Foundation is committing $175 million in philanthropic investments for education and workforce development.
The investments will also focus on the “stabilization” of urban neighborhoods and rural communities through “local capacity building, affordable housing and building technical assistance to execute locally,” according to the news release.
KeyBank contends the plan will “stimulate substantial job and economic growth” in these communities.
KeyBank has also “committed to being a leader” in reducing neighborhood blight as well as maintenance and disposition of foreclosed properties.
The banking company worked with the NCRC to develop its community-benefits plan. The coalition includes more than 80 community organizations.
“The $16.5 [billion] national community-benefits plan underscores KeyBank’s approach to responsible banking and citizenship,” Beth Mooney, KeyCorp chairman and CEO, said in the banking company’s news release. “For us, balancing mission and margin is about a commitment that goes above and beyond what is required. It is simply the right thing to do, and it is good business. As evidence of that balance and our ongoing commitment to shareholders, we remain confident in and committed to meeting the growth and financial objectives of the KeyBank/First Niagara acquisition.”
