WASHINGTON (dpa-AFX) - Banking services company KeyCorp (KEY) said Thursday its subsidiary KeyBank National Association has agreed to acquire 37 retail banking branches owned by HSBC Bank NA in Buffalo and Rochester, New York. The branches are being sold by First Niagara Bank, N.A. in connection with their acquisition of HSBC's upstate New York banking franchise.
Under the terms of the purchase and assumption agreement, KeyBank said it will pay a 4.6% premium on deposits, or nearly $110 million based on current deposit balances.
Cleveland, Ohio-based Keycorp said the transaction will strengthen its ability to grow its presence, acquire customers and provide service to consumer, business banking and wealth management clients in these markets.
KeyCorp said the deposits associated with these branches total about $2.4 billion, while loans total about $400 million.
According to KeyCorp, the assumed deposits consist mainly of transaction and savings accounts. The loans to be purchased consist entirely of in-market performing loans, largely residential real estate loans. KeyCorp said the agreement excludes all commercial loans and deposits for clients with annual revenue greater than $30 million.
The company expects to close the transaction late in the second quarter 2012, subject to customary conditions. It also said it will offer employment to substantially all of the HSBC employees at the acquired branches.
KeyCorp CEO Beth Mooney said, 'This transaction is an exciting opportunity to strengthen our franchise in these attractive markets and, at the same time, build long-term shareholder value.'
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