KeyBank

KeyBank: A Journey Through Time

Imagine a bank with roots stretching back over two centuries, evolving from a small savings institution to one of the largest regional banks in the United States. That’s KeyBank, an American financial giant headquartered in Cleveland, Ohio. Organized under KeyCorp, it was formed from the 1994 merger of Society Corporation and KeyCorp, making it a powerhouse in its own right.

The Birth of KeyBank

How did this journey begin? It all started with Commercial Bank of Albany in 1825 and Cleveland’s Society for Savings in 1849. Society For Savings, founded by Samuel H. Mather, was a mutual savings bank that built Cleveland’s first skyscraper, the 10-story Society for Savings Building on Public Square in 1867.

From Mutual to Public

Society Corporation converted from a mutual to a public company in 1958 and grew quickly through acquisitions. One of its most significant acquisitions was Central National Bank in 1986, which helped establish it as a large regional bank.

The KeyCorp Merger

What happened when Society Corporation merged with KeyBank’s parent company in 1994? This merger briefly made Key the 10th largest US bank. Under this new entity, KeyBank operates over 1,000 branches and 40,000 ATMs across the Midwest and Northeast United States, Pacific Northwest, Alaska, Colorado, Texas, and Utah.

Victor J. Riley Jr.: A Visionary Leader

Victor J. Riley Jr., who became president and CEO of First Commercial in 1973, renamed it Key Bank Inc. in 1979. He expanded through acquisitions, initially targeting upstate New York before shifting focus to the Pacific Northwest. This strategy quintupled Key’s assets from $3 billion to $15 billion between 1985 and 1990.

The Vision for Growth

How did KeyBank manage to grow so significantly? By acquiring the assets of two failed thrifts and acquiring Tacoma-based Puget Sound Bancorp for $807.2 million in 1992, KeyBank amassed nearly 700 banking offices. This allowed it to avoid regional economic downturns by lending primarily to customers in its served areas.

The Merger with Society Corporation

In 1994, the merger between society National Bank and KeyBank created a $58 billion banking behemoth with little geographic overlap. Gillespie’s vision for the bank’s future became more prominent after this merger. Riley decided to stay the course of smaller acquisitions but talks between the banks and news reports swirled of a possible merger in 1993. Both banks needed a merger to improve prospects, and Key had succession issues due to Riley’s lack of an obvious successor.

A New Era Begins

What happened after the merger? The deal created a $58 billion banking behemoth with little geographic overlap and plugged many perceived holes for both partners. Society’s technology expertise and infrastructure made it an ideal partner, while Key’s brand was more recognizable.

The Leadership Transition

Gillespie took over as president and COO in 1995, planning to retire Riley as CEO in 1995. However, he accelerated his departure and stepped down in September 1995, allowing Gillespie to become CEO and chairman. Gillespie attempted to turn Key into a financial services powerhouse by acquiring several companies, including McDonald & Co. for $653 million in 1998.

A New Era of Leadership

How did KeyBank navigate the challenges of the early 2000s? Gillespie initiated nine significant acquisitions between 1995 and 2001 but faced criticism that he was ‘burning the furniture’ to cover up poor performance. He resigned as CEO on February 1, 2001, and was replaced by Henry Meyer.

The Financial Crisis and Beyond

Key received a $2.5 billion bailout in October 2008 during the financial crisis. KeyCorp acquired First Niagara Bank for $4.1 billion in 2016, strengthening its presence in Upstate New York and New England.

A Female Pioneer

Who was the first female Chairman and CEO of a top 20 bank? Beth E. Mooney was named as such in 2011, making history for KeyBank. The company also acquired mortgage servicing rights from Bank of America in 2013 and participated in the construction debt financing syndicate behind the Balko Wind Project in 2015.

Future Innovations

In 2019, KeyBank opened its first tellerless branch in Boulder, Colorado. Christopher Gorman was appointed as president that same year. In 2021, KeyBank originated 52,366 mortgages worth $25 billion.

KeyBank’s journey is a testament to resilience and innovation. From its humble beginnings in 1825 to becoming one of the largest regional banks, it has consistently adapted and grown. As we look towards the future, KeyBank continues to evolve, driven by visionary leadership and a commitment to serving its communities.