SYRACUSE — A year after completing the acquisition, KeyBank’s top regional official in Central New York says he “would characterize our conversion a success.”

Cleveland, Ohio–based KeyCorp (NYSE: KEY) completed its acquisition of Buffalo–based First Niagara Financial Group on July 29, 2016.

KeyCorp is the parent company of KeyBank, while First Niagara Financial Group was the parent company of First Niagara Bank.

The process of converting First Niagara Bank branches to KeyBank branches is “by and large” complete, says Stephen Fournier, Central New York market president of KeyBank.

The bank had been dealing with an issue surrounding electronic commercial payments of commercial clients, but Fournier called it a “minor” problem.

He spoke with CNYBJ on July 14 at the KeyBank office at 201 S. Warren St. in Syracuse.

When asked what were the easiest and hardest parts of the conversion process, Fournier said the easiest part was not having to change “our clients’ account numbers.”

“We didn’t have to reissue debit cards or anything like that, so that was probably the easiest part,” says Fournier.

As for the “difficult part,” some First Niagara Bank customers had some trouble after the conversion in logging on to KeyBank’s online-banking website.

“And in response to that, we sent out $100 to anybody that couldn’t sign on within the first 24 hours,” he says.

He also noted that KeyBank had the online-banking service issue rectified within a few weeks.

Fournier said he believes the majority of KeyBank clients “were pleased” with the banking company’s communication about the process both before and after the conversion.

Expanded footprint

As market president following the acquisition, Fournier now oversees a 16-county area that stretches from Pennsylvania to the Canadian border.

“We added Broome … Tioga, Tompkins,” he says. 

KeyBank has “no plans” to close or open any new branches after having expanded its footprint with the First Niagara acquisition from 54 branches to a net of 75 branches. 

The company closed some branches during the fourth quarter of 2016 and opened branches in markets such as the Southern Tier and Utica, where KeyBank didn’t previously operate.

“We expanded our presence in Utica. We expanded our presence in Auburn. We acquired a presence in Tompkins County, so we feel like we’re well positioned in the counties that we’re in and in the communities that we reside, so we feel pretty good about the presence right now,” says Fournier. 

KeyBank closed branches that, “in some cases,” were “literally across the street from each other,” says Matthew Pitts, communications manager for KeyBank’s Western New York region. Pitts joined Fournier for the CNYBJ interview on July 14.

HelloWallet acquisition

Fournier also discussed KeyCorp’s July 3 acquisition of HelloWallet, a personal-finance software platform, from Chicago, Illinois–based Morningstar, Inc.

Financial terms of the transaction were not disclosed. 

The HelloWallet platform provides clients with tools that can help them make more confident financial decisions. The platform provides KeyBank with an understanding of each individual client’s financial circumstances and goals that “drive every interaction with clients,” according to a KeyBank news release.

The platform gives a user a financial-wellness score out of 100 points and that score compares you to your peers. 

“It enables you to see how you are progressing against your peer group and how financially stable you are personally,” says Fournier.

Second quarter profit

KeyCorp (NYSE: KEY) on July 20 reported second quarter net income from continuing operations attributable to Key common shareholders of $393 million, or 36 cents per common share

That’s more than double the $193 million, or 23 cents a share, it reported in the second quarter of 2016. 

During the second quarter of 2017, Key’s results included a number of “notable” items, including a gain related to its merchant-services business; the finalization of purchase accounting; merger-related charges; and a charitable contribution.

These items had a pre-tax net benefit of $43 million, or 2 cents per common share, the banking company said.

Key’s adjusted earnings per share of 34 cents met analysts’ expectations, according to a Zacks Investment Research survey of 12 analysts.           

The New York State Department of financial Services (DFS) recently provided New York State-chartered credit unions with guidance on the use of temporary facilities.

The facilities can include mobile service units, tents, booths, tables, or similar stations, Maria Vullo, financial services superintendent, said in a June 28 DFS news release.

Credit unions seeking to establish temporary facilities to provide “limited” services may provide such services on notice to DFS without requiring a prior application with DFS. 

Those services do not include certain monetary transactions, such as signing up new members, according to the DFS.

Under the new guidance, credit unions must provide DFS a schedule listing upcoming times and locations of the temporary facilities.

They also must provide the number and title of qualified individuals offering the services at any temporary facility located in New York, along with any further information that DFS may require. 

“Temporary facilities can be useful tools for New York State-chartered credit unions to better service their existing members, attract new members, and extend the provision of financial products and services to underserved communities in New York State in an efficient manner,” Vullo said in the release. “The department remains committed to assisting the continued expansion of New York State-chartered financial institutions that offer vital resources to local communities and contribute to regional economic growth while providing strong state-based consumer protection through regulatory oversight by DFS.”

DFS developed the new guidance after it learned “that there may be a question” as to whether state-chartered credit unions are required to seek the department’s approval if they use temporary mobile-service units, tents, booths, tables or similar temporary facilities located in New York.

Credit unions would use those temporary facilities to sign up new members; receive loan and credit card applications; and/or advise members and potential members about the products and services offered by the credit union, provided they do not include or involve any wire-transfer transactions; accepting or contracting for deposit-type liabilities, withdrawals, dispersing, remitting or transmitting funds; issuing ATM, debit or credit cards; processing or executing any form of loan or financing; or accepting any payments.

The credit union must provide the department with information regarding the security procedures for the protection of confidential information and data. 

In addition, the credit union is required to obtain any permit or authorization that may be required from any city or local governmental agency for operation or use of the temporary facility and “conspicuously display” the name and signage of the credit union on the temporary facility, according to DFS.

As with all other activities of state-chartered institutions, DFS requires that all services be conducted in accordance with all applicable New York State and federal laws and regulations, all of which will be subject to DFS examination.