KeyCorp, Ohio’s second-largest bank, said Beth Mooney will take over as chairman and chief executive officer when Henry L. Meyer retires in May, making her the first woman to lead one of the 20 biggest U.S. banks.
Mooney, 55, vice chairman of KeyCorp and head of community banking, was named president and chief operating officer effective immediately, the Cleveland-based lender said yesterday in a statement. She was named a member of the board and takes over as CEO on May 1. The stock slid 3.1 percent in New York, the biggest drop in the 24-company KBW Bank Index, on speculation that a takeover is less likely.
“Our industry has many capable, competent and accomplished women,” Mooney said in an interview. “I’m proud to be among them and being the one to go into this role, I will carry that mantle with a little extra responsibility to perform well for all of us.” Mooney said she doesn’t expect major changes to strategy or structure.
KeyCorp, which has yet to repay $2.5 billion in U.S. bailout funds, became profitable in the second quarter after eight straight losses. It has been the third-best performer in the KBW Bank Index this year, gaining 41 percent through yesterday, and declining 24 cents today to $7.61 at 10:07 a.m. in New York Stock Exchange composite trading.
Takeover Less Likely
The management switch was surprising and likely means the bank is no longer an acquisition target, said Gerard Cassidy, bank analyst with RBC Capital Markets in Portland, Maine, in a note to investors yesterday.
“We’ve rarely seen a new CEO sell out the bank in their first strategic transaction,” Cassidy wrote. “As such, Key’s takeover premium will likely go away and valuations will be weighted on the business fundamentals of the company.”
Mooney joined KeyCorp in 2006, after being chief financial officer of AmSouth Bancorp, which was bought by Regions Financial Corp. that year. She previously worked for financial companies including Citicorp Real Estate Inc. and Bank One Corp., according to the statement.
Meyer, 60, has been CEO since 2001. His retirement is part of the company’s succession planning, KeyCorp said.
Meyer began as a teller at the former Society National Bank in Cleveland and later helped oversee Society Corp.’s 1994 purchase of KeyCorp of Albany, New York. The transaction formed a bank with more than 900 branches across the northern tier of the U.S., from Maine to Alaska.
Meyer, who has been at KeyCorp or its predecessors for more than 38 years, cited the company’s turnaround and a sluggish economy as reasons for the timing of his retirement. The bank’s nonaccrual loans have declined for four consecutive quarters and net charge-offs have fallen for three straight, he said.
“The recovery is going to be slow for a little while, including all of 2011 and some of 2012,” Meyer said in an interview. “I thought about how old I am, and didn’t Key want a CEO who had a little longer timeframe in his or her mind.”
KeyCorp also said that board member Lauralee Martin, COO and CFO of Jones Lang LaSalle Inc., resigned effective immediately. Martin, who’s been on the board since 2003, stepped down because of the growing business relationship between the two companies.
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