Key Bank replaces shrunken First Niagara this weekend

KeyCorp, a Cleveland, Ohio-based company that ranks 13th among U.S. banks, enters the Philadelphia-area banking market this weekend, as it converts 300 First Niagara offices around the Northeast, including the 40 surviving former Harleysville National branches in this area, into its larger KeyBank network, which will now include 1,400 branches across the northern U.S.

Key agreed to buy Buffalo-based First Niagara for $4.1 billion last fall. First Niagara branches will close at 3 Friday and reopen Tuesday under the KeyBank sign. Customers can keep their old First Niagara account numbers and checks.

To cut costs and help justify the expense of the acquisition, Key closed 70 First Niagara branches and 36 of its own branches and consolidated customers to nearby locations as part of the deal, including offices in Horsham, Pottstown and Royersford. Key says it offered all First Niagara workers jobs at Key, including staff from the shuttered branches.

First Niagara ran the franchise for six years, and shrank steadily amid layoffs and branch closings, since it bought the ailing former Harleysville National Bank at a banking-crisis-discount price in 2009.

First Niagara shrank Harleysville's former network of 62 offices in the region to just 40, including 21 in Montgomery County, with most of the rest in neighboring Chester and Bucks counties, and a single branch in Northeast Philadelphia.

First Niagara lost half its former market share in Montgomery County, falling to just 5 percent of deposits from 2009-16, according to FDIC data.  Across the region its deposits shrank from $3.2 billion just before the 2010 sale to $2.3 billion as of June 30.