The planned merger of KeyCorp and Society Corp., two major regional bank groups, to create the nation's 10th-largest banking company, won't have any impact on the operations of Key Bank of Utah, according to Ross E. Kendell, president and chief executive officer.
Because Society doesn't operate in Utah and there is no overlap in operations, the new company will be known as KeyCorp or a closely related name and there won't be a need to change signs, logos or other identifying items. Kendell said. Also, the merge won't result in the opening or closing of any branches.Kendell said the merger is very exciting, because it brings together two very financially strong companies, a change from the usual scenario that has one company being considerably stronger than the other.
Key Bank's presence in Utah began on Dec. 31, 1987, when the bank purchased Ogden-based Commercial Security Bank. Key Bank of Utah has 37 branches and 500 full-time employees and is operating at a higher profit, offers more customer services and has more branches than ever before, Kendell said.
The merger, subject to approval by shareholders and regulatory authorities, would give the new company combined assets of more than $58 billion and nearly 1,400 offices in 18 states from Maine to Alaska, bank officials reported.
Based in Albany, N.Y., KeyCorp has $32 billion in assets compared to $26 billion for Society. But the companies said headquarters for the new KeyCorp would be in Cleveland, where Society is based.
Under terms of an agreement signed by executives of both companies, KeyCorp shareholders will receive 1.205 common shares of the new company for each of their KeyCorp shares.
The transaction would have a total value of about $7.8 billion, based on KeyCorp's closing stock price Friday of $38.50 per share and Society's closing stock price of $32.50 per share.
KeyCorp's chief executive officer, Victor J. Riley Jr., 62, will become chairman and chief executive officer of the merged company until Dec. 31, 1995, when Society's president and chief executive officer, Robert W. Gillespie, 49, will take over.
"I cannot imagine any better answer than Bob Gillespie to the question of who is to be my successor," Riley said in a statement released by both companies.
Gillespie said the fusing of the two companies would improve services for customers, career opportunities for employees and return on investment for shareholders.
The companies said that through the merger they expected to realize annual savings of between $80 million and $105 million starting in 1995.
Kevin Timmons, a senior banking analyst for First Albany Corp., predicted that because the companies service different areas, there will be few layoffs of lower-level workers. Some corporate-level employees, however, could lose their jobs due to duplication of duties, he said.
The companies said they would take a one-time restructuring charge of $90 million to $110 million in the fourth quarter of 1993 to handle the costs of merging the two banking organizations.Comment on this story
KeyCorp currently operates in New York, Alaska, Colorado, Idaho, Maine, Oregon, Utah, Washington and Wyoming. Society has offices in Ohio, Florida, Indiana and Michigan.
Last year, KeyCorp made several major acquisitions, including the 40-branch network of First American Bankshares in New York state and Puget Sound Bancorp in Washington.
Society has also waged an aggressive campaign of bank acquisitions, buying Ameritrust, another Cleveland bank.
The Associated Press contributed to this article.