KeyCorp CEO Says Pacific Crest Deal About Tech BankingCraig Giammona
KeyCorp’s purchase of Pacific Crest Securities LLC will give the Cleveland-based lender a foothold in technology investment banking, Chief Executive Officer Beth Mooney said.
“We think it’s a real significant addition to our corporate-banking platform,” Mooney said today in a phone interview. “The influence of technology has cut across all industries.”
KeyCorp, Ohio’s second-biggest lender, has been in discussions with Pacific Crest since September, Chris Gorman, president of KeyCorp’s corporate bank, said in the phone interview. Portland, Oregon-based Pacific Crest, which focuses on technology investment banking, has 170 employees and generated $86 million in revenue in the 12 months ending March 31, KeyCorp said. Terms weren’t announced and the deal is expected to be completed in the third quarter, KeyCorp said in a statement reporting second-quarter results.
Net income attributable to common shareholders rose 7.4 percent in the quarter to $219 million, or 24 cents a share, from $204 million, or 22 cents, a year earlier, KeyCorp said today in the statement.
Commercial, financial and agricultural lending increased 13 percent in the quarter and noninterest income, which includes investment banking, advanced 6.1 percent, the bank said. Net interest margin, the difference between what a bank pays for deposits and charges for loans, fell to 2.98 percent from 3.00 in the first quarter.
KeyCorp slid 3.5 percent to $13.69 at 12:50 p.m. in New York trading, the most intraday since May 14. The shares have gained 2.1 percent this year, compared with the 1.9 percent advance of the KBW Bank Index.
Fifth Third Bancorp, Ohio’s largest lender, dropped 5.4 percent, the worst performer on the 24-company index, after reporting second-quarter profit that missed analysts’ estimates. It’s the biggest intraday decline in more than two years for Cincinnati-based Fifth Third.
Banks reporting earnings this week are under pressure from investors concerned about growth prospects amid record-low interest rates, Mooney said.
“I’m not going to say we’re not disappointed, but we live for more than one day,” Mooney said.