It’s been nearly four years since KeyBank entered the Connecticut market through its $4.1 billion acquisition of First Niagara, and the man who led the integration says the deal has “accomplished everything we hoped it would.”
Christopher Gorman, who was the Ohio-based lender’s banking president at the time, was recently named CEO.
Key, which is the eighth largest bank operating in Connecticut by deposits, on Wednesday reported a $159-million profit for its second quarter, which was down from $403 million a year ago, due largely to loan loss set-asides necessitated by COVID-19, but the results mean Key has been profitable throughout the ongoing pandemic.
Following an investor earnings call, Gorman told HBJ in a phone interview that higher-ups at Key no longer discuss whether a part of the business is attributable to Key or First Niagara.
“In business, that’s when you know you’ve really achieved it, from a cultural perspective,” Gorman said.
KeyBank’s overall loan portfolio is about 75% commercial and 25% consumer, and bank officials told analysts Wednesday that they don’t expect much growth in the second half of this year on the former, and will instead rely mainly on their mortgage business and their consumer lending platform, called Laurel Road, which Key acquired from a Fairfield County bank in 2019.
A key customer demographic for Laurel Road is higher-income physicians and dentists, which can refinance their student loans there. Though Key’s consumer loan portfolio declined in Connecticut last year, Gorman said he expects the Laurel Road business, as well as the bank’s jumbo mortgage lending unit that’s based here, to increase it over time.
Growing its commercial portfolio in Connecticut remains a core goal for the market, Gorman said.
Another potential opportunity is migration into Connecticut from New York, due to the pandemic, he said.
The pandemic has also caused a spike in online loan generation.
“We think we’ve had five years of digital progress in the last five months,” Gorman said. “Our digital sales are up 100% year over year and the number of first-time digital users are up 3x.”
