KeyBank’s 2017 National Community Benefits Plan (hereafter referred to as “the Plan”) addresses concerns expressed by the National Community Reinvestment Coalition (NCRC) and NCRC member organizations, in light of KeyBank’s pending acquisition of First Niagara, scheduled for Q3 2016. The Plan keeps current and future clients, local residents, and the strength and stability of neighborhoods and communities, at the forefront. Successful execution of the Plan will result in significant community investment by KeyBank, as well as broadened access to relevant and effective products, solutions, and services for all members of the community, wherever KeyBank has a presence.
The Plan covers all 23 of KeyBank’s current markets, from Alaska to Maine, five of which, pre-acquisition, overlap with First Niagara: Buffalo/Niagara Falls, Rochester, Syracuse, Albany and Hudson Valley. In addition, the Plan covers four First Niagara markets that will be new to KeyBank, in: Philadelphia (and Allentown), Pennsylvania; Pittsburgh, Pennsylvania; Hartford, Connecticut (including eight branches in Springfield, Massachusetts); and New Haven, Connecticut.
Of the $16.5 billion, KeyBank expects to invest approximately 35 percent of that amount in the combined First Niagara/KeyBank footprint (i.e., the five current overlap markets and the four markets that will be new to KeyBank). The investments will be made in prescribed categories, including mortgage and consumer loans, small business lending, community development lending and investment, and philanthropy.
KeyBank’s approach to underserved communities is long-established and mature in many aspects. Post-merger, current First Niagara communities, especially those that are underserved, will receive greater support in many cases. This Plan becomes a part of KeyBank’s long-standing responsible approach to banking, citizenship, and operations.
KeyBank commits to a five-year goal of $5 billion in residential mortgage lending. KeyBank will build its mortgage business to both originate and service loans. The Plan proactively addresses uneven historical execution in the mortgage space and will drive higher performance, with the expectation to double KeyBank’s 2014 baseline mortgage production over a five-year period throughout the new merged footprint.
KeyBank commits to a five-year goal of $2.5 billion in small business/farm lending, targeting low- to moderate-income urban and rural LMI communities. KeyBank will look to increase its overall small business lending for the five-year period by 32 percent, over a 2014 baseline, in its footprint markets. KeyBank further expects to invest in local Community Development Financial Institutions (CDFI) funds, which will provide investments for small business training and capacity building.
KeyBank commits to a five-year goal of $8.8 billion in community development lending and investment commitments.
KeyBank will continue offering innovative and responsible retail products and services for the underserved and create a $3 million product innovation fund to develop new products for urban and rural LMI communities, with input from the community.
The KeyBank Foundation commits to a five-year goal of $175 million in philanthropic investments. To its established grant-making pillars of “Education” and “Workforce,” KeyBank Foundation will add a new pillar, titled “Neighbors,” to stabilize and revitalize urban neighborhoods and rural communities. Investments in the new pillar will include those that support local capacity building, affordable housing, and building of technical assistance for local businesses. The Foundation will continue its focus on service through volunteerism, with the intention of 500,000 employee volunteer hours in the next five years.
In addition to the commitments mentioned above, the Plan addresses a number of community concerns, including rural markets; KeyBank’s membership in the Federal Home Loan Bank of New York (FHLB-NY); community engagement, including the creation of a corporate responsibility officer role for each major market; and KeyBank’s approach to branch access and products for low-to-moderate income and rural communities.
To keep the Community Benefits Plan on schedule and accomplish the goals established therein, KeyBank will develop a national advisory council, to meet a minimum of twice a year, as well as local advisory councils, when and where appropriate. Fifty percent of the national council will be comprised of representatives from NCRC. A charter, yet to be written, will include specific language about the council’s duties to monitor, review, and measure success of the plan. KeyBank will work with NCRC to develop the charter by the second quarter of 2017.
As with everything KeyBank does, the Plan will be implemented with a lens on diversity and inclusion – an important commitment that KeyBank makes to its employees, shareholders, clients, and communities. Externally, KeyBank aspires to reflect the diverse communities where it operates and, internally, Key builds an inclusive culture that encompasses both the workforce and the workplace. Key actively and consistently builds aspirational goals, measures progress, and reports annually on diversity and inclusion successes and challenges.
The ability of KeyBank to meet the goals set forth within the Plan is subject to favorable market and regulatory conditions during the applicable time periods, as well as other assumptions, risks, and uncertainties, many of which are outside of the control of KeyBank.