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Thursday, April 28, 2016

The Department of Justice today issued a statement today requiring 18 local First Niagara branches to be sold as terms of KeyCorp's acquisition of  the company -- including the East Avenue branch.

The department said that the divestitures will ensure that the transaction does not harm competition for retail banking services in the Greater Buffalo area.  As a result of the acquisition, KeyCorp will become the 13th largest bank in the nation, with about $135 billion in assets, $99.8 billion in deposits and more than 1000 branches across 15 states.

Under their agreement with the department, the companies have agreed to divest 13 branches in Erie County and 5 branches in Niagara County.  The divested assets will include the commercial loans associated with the divested branches.  The companies have also agreed to suspend existing, and not to enter into new, non-compete agreements with their small business and middle market relationship managers and their retail regional and branch managers, in the state of New York, for a period of 180 days following the consummation of their merger.  Further, the companies have agreed to sell or lease branches closed within two years of the consummation of the merger in the state of New York to other depository institutions.

“Americans value the convenience of retail bank branches,” said Principal Deputy Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division.  “Today’s agreement will ensure that customers in Buffalo and other New York markets will continue to enjoy the benefits of competition among banks with retail branch networks.”

The proposed merger is subject to the final approval of the Board of Governors of the Federal Reserve System.  The department said that it will advise the Federal Reserve Board that it will not challenge the merger provided that: the parties divest the branch offices, associated loans and deposits and the entire customer relationships associated with the divestiture branches; the parties commit to the Federal Reserve Board that they will comply with the agreement with the department; and the parties’ commitments to the department are included as a condition to any order the Federal Reserve Board enters allowing the transaction.

Other Niagara County branches required to be sold include one in Lewiston, one in North Tonawanda and a pair in Niagara Falls.

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