KeyCorp, First Niagara Shareholders Approve Merger

Consumer banking

Key's Mooney: CRA Investment 'Core' to Niagara Deal

In an interview with American Banker, KeyCorp Chief Executive Beth Mooney discusses why the bank struck a $16.5 billion agreement to expand low- and moderate-income lending, and details of the negotiations involved.

By John Heltman

March 18
M&A

Why Banks Should Sell a Deal Before Announcing It

Bankers need to let investors know in advance what types of deals they are willing to pursue, along with the financial parameters. Doing so is a critical step in managing shareholder expectations at a time when consolidation is heating up.

By Jackie Stewart

February 8
M&A

Was the Blessing of Excess Capital a Curse for KeyCorp?

While executives are eager to put excess capital to work, the sell-off of KeyCorp stock following the announcement of the First Niagara deal shows investors will react swiftly and severely when it appears a buyer has overpaid.

By Jackie Stewart

October 30

Shareholders of KeyCorp in Cleveland and First Niagara Financial Group in Buffalo, N.Y., have approved Key's deal to acquire First Niagara.

Based on preliminary results, more than 90% of the votes cast by KeyCorp's shareholders supported the $4.1 billion deal, Chairman and Chief Executive Beth Mooney said during a special meeting Wednesday. Investors in First Niagara, which hosted a separate meeting Wednesday, also backed the deal, with more than 90% of the votes cast in favor, KeyCorp said in a press release.

KeyCorp announced the deal for the $39.9 billion-asset First Niagara in October. The deal met resistance from some KeyCorp investors who were spooked by its terms, including 12% tangible-book-value dilution that could take years to recoup. During the special meeting, a representative for a longtime KeyCorp shareholder questioned whether the deal was financially sound given that both companies' stocks have fallen since the announcement.

Mooney attributed the decline in her company's share price to "extreme volatility in the stock market," and said the $93 billion-asset company had performed in line with other banks.

Sen. Charles Schumer, D-N.Y., and some consumer groups have also opposed the deal. KeyCorp announced Friday that starting next year it would direct $16.5 billion in lending toward low- and moderate-income communities over five years.

Jackie Stewart

Executive Editor, American Banker Magazine

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