Reprinted with permission from the Times Union
ALBANY — KeyCorp is planning to close 30 local branches after it completes its $4.1 billion acquisition of Buffalo-based First Niagara Bank in the next two months.
The first closures will happen in October, when 18 First Niagara branches will be shuttered. Another 12 KeyBank branches will also be closed, mostly in 2017.
Two local KeyBank branches are scheduled to close in 2017: the Copake branch at 179 County Route 7A and the Fairview Plaza branch at 160 Fairview Avenue in Hudson.
Apparently, First Niagara branches in Columbia County are scheduled to be closed.
KeyBank unveiled the closure list on Monday after U.S. Senator Charles Schumer announced he had brokered a deal over the weekend that would protect KeyBank and First Niagara branch employees from layoffs and limit the total number of layoffs in the state to 250 jobs.
The Schumer deal also calls for KeyBank to add 500 to 600 jobs in the state over the next five years and possibly add 300 to 400 jobs between 2019 to 2020 as it puts new headquarters in the Buffalo area for commercial insurance, auto lending, and mortgage banking, business lines it plans on expanding after the First Niagara deal closes.
Those expansions would allow KeyBank to meet another pledge to Schumer to keep the current employment level of the two banks in New York at 6,117 jobs through 2021.
“In the months and years to come, I look forward to making sure the terms of this plan, which is designed to save the maximum number of existing jobs, and create new ones, too, is lived up to. I also plan to work closely with KeyBank and community leaders to continue to grow the regional economy and add even more jobs at KeyBank’s Buffalo headquarters” Senator Schumer added.
Senator Schumer has been one of the most vocal critics of the First Niagara deal since it was first announced by the two banks last fall. Mr. Schumer and Governor Cuomo have been especially wary about the impact of the deal on western New York and Buffalo, where First Niagara is located. KeyBank, which traces its roots to Albany, is headquartered in Cleveland.
In a telephone interview Monday, KeyCorp CEO Beth Mooney said that the agreement with Senator Schumer is not legally binding, but an “understanding.”
She said that the job totals mirror KeyBank’s plans to add a significant amount of jobs in New York, including some that will be shifted from other states. She added that First Niagara outsourced much of its back office functions. Ms. Mooney said those contracts with third party vendors will be canceled after the deal closes, and KeyBank will “in-source” those jobs with new hires. She said the KeyBank back office platform is much more cost-efficient and will result in significant savings.
“The new KeyBank branch network will be one way we offer clients more capabilities and more convenient access to banking services,” Ms. Mooney said.
Ms. Mooney told the Times Union that she doesn’t expect that promising all branch workers jobs, even if their branches close, will hinder the bank’s cost structure. She said branches typically have about 25 percent turnover each year, and with the added business lines like mortgage banking and auto lending, the surviving branches will be busier than ever.
“We will offer branch associates roles in another branch,” Ms. Mooney said of the closures.
The Capital Region is one of KeyBank’s largest banking centers, with 300 branch employees and 800 total. There are also hundreds of local First Niagara employees in the region.