Hoping to capitalize on some high-growth markets, Cleveland-based KeyCorp plans to expand its branch network in Denver, Salt Lake City, Seattle, and Portland, Ore., this fall, a top executive in the region said.
KeyCorp says it will invest the proceeds of its pending $210 million branch sale in New York's Long Island into new branches in the western markets and restructuring existing ones so they are better tailored to specific neighborhoods.
Jim Peoples, who was picked earlier this month to head Key's Seattle district, said the company is evaluating its branch network in the four cities, determining which areas warrant new branches. Key may also close some branches in less-profitable areas and add services such as personal finance professionals or corporate lenders at other offices, he said.
"We haven't cast (the plan) in concrete," Mr. Peoples said. "We're going to see what gives us the best coverage."
KeyCorp already has a strong foothold in all four markets. In Seattle, the $80 billion-asset company holds the No. 4 market position behind Charlotte, N.C.-based Bank of America Corp., Washington Mutual Inc. of Seattle, and Minneapolis's US Bancorp. KeyCorp is No. 5 in both Portland and Utah, and is the eleventh-largest depository in Colorado.
Mr. Peoples has already tested Key's western growth strategy in the Denver area, where he previously served as district president. During his two and a half in that post, he expanded Key's branch network from 27 to 40 locations and almost tripled the number of ATMs in the market to 120.
"We needed to cover the map better," he said, adding that Key typically builds branches in "young, relatively wealthy" areas.
While Key added branches in the Denver area, it limited services in some existing branches. Others were beefed up to include employees who sell securities or manage specialty lending, Mr. Peoples said.
In the second phase of Key's Denver expansion, which begins this fall, the company plans to add three or four more branches, including one large downtown location in its new market headquarters building.
In Seattle and Portland, Mr. Peoples plans to follow a similar growth path. In Seattle, Key has already transferred some of its corporate lenders from its Seattle branches to suburban Bellevue to enhance services there. Key may also add additional branches in Bellevue while paring back in Tacoma, which is south of Seattle.
Mr. Peoples said he would be coordinating his market's strategy closely with expansion in Portland. Key expects to add branches in urban and suburban areas of both Portland and Salt Lake City, Mr. Peoples said.
Analysts say Key is smart to build out West, even though competition with market leaders can be tough. "There are more opportunities there, stronger growth dynamics," said Joseph C. Duwan, a bank analyst at Keefe, Bruyette & Woods in New York. "Generally they're a top 5 competitor, therefore I think they have the chance to grow."