Beth E. Mooney, chairman and CEO of KeyCorp (NYSE: KEY), the parent of KeyBank, recently visited Portland for a “town hall” meeting with local employees, as Maine was the best-performing region for the bank last year. A lot of that, she says, came from expanding commercial customers.Though it has grown through mergers and has had […]
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Beth E. Mooney, chairman and CEO of KeyCorp (NYSE: KEY), the parent of KeyBank, recently visited Portland for a “town hall” meeting with local employees, as Maine was the best-performing region for the bank last year. A lot of that, she says, came from expanding commercial customers.
Though it has grown through mergers and has had different names along the way, Cleveland-based KeyBank's roots in Maine date back to 1826. Today, it is the 15th largest U.S. bank and second largest in Maine, with $93 billion in assets and 980 branches in 14 states. In Maine, the bank has $3 billion in assets and 50 branches. It has 13,000-plus employees, including 500 in Maine.
Despite its huge size, KeyBank plays to the hometown crowd by using a community bank model to give its presence in the state a local feel.
Mooney and KeyBank's Maine Market President Sterling Kozlowski recently sat down with Mainebiz to talk about KeyBank's plans in Maine and overall economic trends. Following is an edited transcript.
Mainebiz: Why did you choose a community bank model?
Beth E. Mooney: I joined Key about 10 years ago and it was my brainchild. Some large banks go to a market and every [function] reports somewhere else, so there's not a team on the ground with a local president. We are designed to be a local bank, so we are well positioned for markets like Maine because we do have the continuum of products for consumers and businesses of all sizes. Nobody's ready to go to the 'Amazon of banking' model. They still want to go to a branch and they want the confidence they're making the right decision. So we are investing heavily in digital, but also remodeling our branches and having the right complement of bankers to help clients.
MB: Are you adding any products?
BEM: We're looking at adding more mortgage capabilities both online and in our branches. We offer mortgages, but we're now providing them for another service provider. We're about to go back into mortgages, and we've added credit cards. We've beefed up our merchant abilities for small businesses.
MB: What is your biggest market sector in Maine?
Sterling Kozlowski: We're second in market share in consumer business in Maine. The impact of the Camden National merger [with Bank of Maine] remains to be seen. There's always a fallout in deposits post-merger, but I don't think the rankings will change. Our share numbers in the small business market are very soft, but we are helping small businesses get started and grow. In the commercial space we've seen tremendous growth in market share. At larger companies in Maine, we have over a 60% market share where we are a part of their banking relationship. We've helped more than a dozen large companies come to Key over the last couple of years. I wouldn't mention particular names, but these are the largest companies in Maine. That dozen represents a very large share of the market and a large growth area for us.
On the opposite side, we have a check-cashing program for people who are under- or unbanked. So an independent contractor or itinerant worker without a regular job or bank account typically gets charged 3% to cash a check, but we're able to cash it for 1% or less and help them with a financial education.
MB: What difference has the recession made to your business?
BEM: With the recession and the tech explosion more investments are in the mobile, online and digital space than building branches. There's been a long tail to this financial recession. Banks have focused on regaining growth, adding bankers, capabilities and products. In past recoveries, when the gross domestic product would go from 3% to 4% you'd see more expansionary behavior from companies. We are seeing a recovery, but companies will invest when they can see their way clear on the economics of expanding. And they will do so with a different degree of caution. This is the new normal.
