The move was welcomed by the state’s credit unions. “It’s an issue that’s been extremely important to our association and its members,” says Michael Lieberman, VP of governmental affairs for the New York Credit Union Association.

The announcement was the culmination of several months of work, he added. It fits with state efforts to promote medical marijuana and industrial hemp as industries in New York.

More than 60 farms and businesses have research permits under the state’s Industrial Hemp Agricultural Research Pilot program. Eighteen New York companies have registered to process industrial hemp.

State figures show that some 3,500 acres of farmland were approved for hemp research across the state this year. That is up 75 percent from last season’s 2,000 acres.

In 2017, New York State launched a 

$5 million Industrial Hemp Processors Grant Fund to improve hemp processing and support business development. The program helps cover capital costs related to industrial-hemp processing including new construction and the purchase of equipment, the state says.

In January, the state also invested $650,000 through the Regional Economic Development Councils to establish a 

$3.17 million industrial-hemp processing facility in the Greater Binghamton area. Southern Tier Hemp, the company leading this effort, develops, manufactures, and sells hemp-based health products using a proprietary method of extraction.

According to Lieberman, the DFS’s announced new policy will make it easier for financial institutions to establish relationships with companies involved in medical marijuana and industrial hemp industries because they needn’t fear state prosecution. “Providing they are doing what they are supposed to be doing,” he quickly adds.

In making the announcement, state officials stressed that the relaxed policy applies only to businesses that are in full compliance with state laws and made it clear banks and credit unions have a responsibility to check on that.

“The DFS guidance provides that any institution that seeks to provide financial services to entities that are or wish to be engaged in the growing or cultivation of industrial hemp should assess and verify the eligibility and authority of the entity for participation in a research program, as authorized under the New York Agriculture and Markets Law,” the state said in a release. “As with any other lending activity, DFS’s guidance says that banking institutions should establish and conduct appropriate underwriting and customer due diligence, including verification of eligibility of a research program and other requirements of federal and New York State law.”

Marijuana remains a controlled substance under federal law, creating complications for some financial institutions. That situation prompted a cooler response to the DFS’s changed policy from Michael P. Smith, president and CEO of the New York Bankers Association.

“The decision whether or not to accept any business customer — including medical marijuana-related businesses — rests with each individual New York State-chartered financial institution, based on its own risk assessment and business plan. In this regard, federal law continues to classify marijuana as illegal to produce, possess or dispense,” he said in a statement. “As a result, New York banks have historically been reluctant to enter this line of business.”

Lieberman doesn’t disagree. “Ultimately this is a federal issue that will require federal regulation,” he says. 

“We don’t have a position on whether marijuana should be legal. We do believe where it is legal, credit unions should be able to serve the industry without fear of prosecution,” he adds.         

KeyCorp (NYSE: KEY) — parent of KeyBank, which ranks 2nd in deposit market share in the 16-county Central New York area — reported that its second quarter net income from continuing operations rose to $464 million, or 44 cents a share, from $393 million, or 36 cents, in the year-ago period. 

This quarter’s earnings-per-share figure topped the consensus analyst estimate of 42 cents, according to Zacks Equity Research.

“Second quarter results were strong, driven by broad-based growth and momentum in our commercial and consumer businesses. Continued loan growth, higher fees, and expense discipline drove positive operating leverage for the quarter,” Beth Mooney, chairman and CEO of the Cleveland, Ohio–based banking company, said in Key’s July 19 earnings report. 

Key’s taxable-equivalent net interest income totaled $987 million in this year’s second quarter, unchanged from a year earlier. The banking company posted a net interest margin of 3.19 percent, down from 3.30 percent in the year-ago quarter. 

This quarter’s net interest income results included $28 million of “purchase-accounting accretion,” a decline of 

$72 million from the second quarter of 2017. Excluding purchase-accounting accretion, taxable-equivalent net interest income increased by $72 million in the year’s second quarter, and the net interest margin rose by 0.13 percent, Key said. This reflected the benefit from higher interest rates and higher earning asset balances.

Key posted noninterest income of 

$660 million in the second quarter of 2018, up slightly from $653 million in the year-ago quarter. The banking company said growth was led by a rise in investment banking and debt-placement fees, related to strength in advisory fees, including benefit from the acquisition of Cain Brothers. Mortgage-servicing fees also increased, led by portfolio growth and increases in special servicing fees. Other income rose compared to the year-ago quarter, largely due to a gain on the sale of the Key Insurance and Benefits Services unit. These increases were partially offset by a decline in operating lease income and other leasing gains, driven by a $42 million lease residual loss in the second quarter of 2018. Trust and investment services income also fell, due to the sale of Key Insurance and Benefits Services.

Key’s noninterest expense dipped to $993 million in the second quarter from $995 million in the year-ago period. Growth from acquisitions and investments, including Cain Brothers and HelloWallet, as well as the addition of “client-facing bankers” and continued investment in the residential mortgage business, contributed to both personnel and nonpersonnel expense in the latest quarter, Key explained. Efficiency-related expenses of $22 million (mostly severance costs) and $5 million of costs related to the sale of Key Insurance and Benefits Services also affected the current quarter’s results. Key said it also benefited from merger-related cost savings in this year’s second quarter, because in last year’s second quarter, the banking company incurred $44 million of merger-related charges and a $20 million charitable contribution.

KeyCorp’s average loans were $88.6 billion in the second quarter of 2018, up by $2.1 billion from a year prior, “reflecting broad-based growth in commercial and industrial loans, partially offset by a decline in commercial real estate balances related to higher paydowns,” the company noted.

KeyCorp provides deposit, lending, cash management, insurance, and investment services in 15 states through a network of about 1,200 KeyBank branches and more than 1,500 ATMs. Its roots trace back 190 years to Albany, New York.

M&T Bank Corp. (NYSE: MTB) chief financial officer (CFO) Darren King says the Buffalo–based banking company, which ranks No. 1 in deposit market share in the 16-county Central New York region, is always looking for acquisitions where it can make a return but is finding fewer opportunities at this time.

“What seems to be the case in banking right now is everyone wants to be a buyer and no one wants to be a seller,” King said on a July 18 earnings conference call with investors and analysts. “So, I think there’s a lots of interest in partnerships, but I think everyone’s thinking that they’re the buyer, not the seller. I think that’s why you’re seeing some slower activity than you might expect given some of the changes that have come out recently with the regulations.”

King said that M&T’s approach to mergers hasn’t altered since Rene Jones succeeded the late Robert Wilmers as CEO and chairman in late December of last year.

“Rene is at the helm now, but was certainly an architect of a lot of the acquisitions we’ve done in the past. I’m pretty positive that his thought process didn’t change as his title changed. But our thoughts on acquisitions haven’t really changed,” King explained. “We always start with the returns…We think about returns when we’re investing in loans, when we’re investing in technology, when we’re investing in other institutions. That’s really the primary driver. If we think there’s a combination that makes sense where we can create value for those sets of shareholders and we’ve got a willing seller, then we’re interested in talking to those folks.”

M&T Bank completed its last acquisition in late 2015 when it finally received the green light from regulators to purchase Hudson City Bancorp of New Jersey after a more than three-year delay due to problems with M&T’s money laundering compliance program. But M&T was restricted by the Federal Reserve from pursuing further acquisitions until mid-2017.

On the conference call, King also discussed M&T Bank’s second-quarter earnings results. M&T generated net income of $493 million this quarter, up 29 percent from $381 million in the year-ago period. Its net income available to common shareholders totaled $473 million in the second quarter, up 31 percent from $361 million a year prior. The banking company produced earnings per share of $3.26 in the latest quarter, up 39 percent from $2.35 in the second quarter of 2017.

“M&T’s results for the second quarter represent a continuation of the trends we’ve been seeing for the past several quarters,” King told analysts and investors. “These include continued growth in net interest income, which was up nearly 8 percent compared with last year’s second quarter, expenses that remain well-controlled, notwithstanding the steps we’re taking to redirect savings from the lower tax rate into higher compensation for certain employees, a credit environment that remains stable with further declines in non-accrual loans, and a net charge off ratio at just 16 basis points for the quarter.”

M&T Bank posted net operating earnings per common share of $3.29 in the second quarter, up from $2.38 in the second quarter of 2017. That beat the consensus analyst’s estimate of $3.17, according to Zacks Equity Research. M&T’s net operating income for the second quarter of 2018 was $498 million, up from $386 million in the year-earlier period.

M&T Bank operates branches in New York, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia, and the District of Columbia. Trust-related services are provided by M&T’s Wilmington Trust-affiliated companies and by M&T Bank. 

M&T had total assets of $118.4 billion as of June 30, 2018.