KeyCorp (NYSE: KEY) has closed on its $4.1 billion acquisition of Buffalo–based First Niagara Financial Group, Inc. (NASDAQ: FNFG).
KeyCorp, the Cleveland, Ohio–based parent of KeyBank, expects systems and client conversion during the fourth quarter, the banking company said in a news release issued Friday afternoon.
The conversion process is subject to pending regulatory approval by the Office of the Comptroller of the Currency for the merger of First Niagara Bank into KeyBank, the banking company said.
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KeyCorp first announced the acquisition on Oct. 30, 2015.
It will include the addition of about 300 branches in New York, Pennsylvania, Connecticut, and Massachusetts, giving Key more than 1,200 branches throughout its 15 state footprint.
The merger will also add about $29 billion in deposits and total assets of $40 billion to KeyCorp, based on June 30, 2016 balances.
The Federal Reserve notified KeyCorp of its regulatory approval for the acquisition on July 12.
Customers will continue to use their First Niagara accounts and other banking services until the fourth quarter, when accounts are expected to convert to KeyBank.
KeyBank said it will “communicate directly” to First Niagara customers about conversion plans and timing.
Branches, jobs
KeyCorp on July 12 announced plans to close 18 Central New York branches of First Niagara Bank and KeyBank as it integrates the banks’ respective branch networks in its acquisition of First Niagara.
The 18 branches include 11 First Niagara offices and seven KeyBank locations, KeyCorp said in a news release.
Key said it plans to offer “roles” in the company to “all branch employees.”
Key has also agreed to limit upstate New York layoffs elsewhere in the firm to no more than 250, according to an agreement the banking company reached with the office of U.S. Senator Charles Schumer (D–N.Y.).
Included in the branch closings is the First Niagara office at 126 N. Salina St. in Syracuse (near Clinton Square), which will combine with the KeyBank location at 201 S. Warren St. in Syracuse, a few blocks away.
In another local closure, the First Niagara branch in Windsor will consolidate with the First Niagara office in downtown Binghamton.
In Central New York, some of the branch combinations are scheduled for October, while others are planned for sometime in 2017.
Similar consolidations are planned in the Buffalo, Rochester, Capital Region, and Hudson Valley markets in upstate New York and in the banks’ markets in Connecticut and Massachusetts.
Altogether, KeyCorp will consolidate 70 First Niagara and 36 KeyBank branches into existing offices. In “most” cases, the receiving branch is located less than one mile away from the closing branch, KeyCorp said.
The new KeyBank branch network will include 488 branches in upstate New York and in Connecticut, Massachusetts and Pennsylvania. It will be the “largest” bank-branch network in Syracuse, Buffalo, Rochester, and Albany, according to the Key release.
KeyBank will add a total of 304 First Niagara branches to its new network now that KeyCorp has completed the acquisition.
The banking company plans to reach “pre-merger employment levels” by 2021, consistent with expectations for business growth and investment, KeyCorp said.
KeyCorp’s Mooney also confirmed that Buffalo will serve as the company’s Northeast regional headquarters and that Key will “invest and grow” in New York.
That includes plans to expand its mortgage, auto lending, and insurance businesses.
KeyBank will add “at least” 500 to 600 new jobs in New York state over the next three years (2016-2018), and will likely add an additional 300 to 400 jobs over the following two years (2019-2020), according to a Schumer news release.
Contact Reinhardt at ereinhardt@cnybj.com
