Shareholders of KeyCorp, based in Albany, N.Y., and Society Corp., based in Cleveland, voted Wednesday morning to combine the two regional banks, creating the nation's 11th-largest bank holding company.
About 50 stockholders of KeyCorp, parent company of Key Bank of Utah and other banking subsidiaries, attended a meeting at KeyCorp headquarters that took just eight minutes. The outcome of mail-in balloting revealed that 88 percent of shareholders voted for the merger, according to KeyCorp chairman Victor J. Riley Jr."I think we've done . . . well," Riley said afterward.
Society's shareholders held a similar meeting Wednesday morning in Cleveland, where 74 percent of the outstanding shares were voted in favor of the merger, a Society spokeswoman said.
In Salt Lake City, KeyCorp chief economist Jeff Thredgold said the merger will have no immediate impact on Key Bank of Utah customers but will mean an expanded array of products will be available to them in the future.
"Society's strengths have been in investments and trusts, they have huge operations in those areas," he said. "Our strengths have been in consumer lending and small-business lending. Combining those across the board is very logical and makes for a good merger. From our standpoint, the deal takes a strong, successful franchise and makes it stronger."
He said the merger is expected to close March 1.
The deal already has been approved by the Federal Reserve Board in Washington and by regulators in Alaska, Colorado, Idaho, Maine, Oregon, Utah, Washington and Wyoming. Applications are still pending in New York and Arizona.
The new company would have assets exceeding $58 billion and about 1,400 offices in 18 states.
When first announced in October, the merger had a value of about $7.8 billion. KeyCorp shareholders will receive 1.205 common shares of the new company for each of their KeyCorp shares while Society shareholders will retain their current number of shares.
The new company will retain the KeyCorp name after the merger.
About 1,400 jobs held by current KeyCorp and Society employees will be lost in the merger, Riley said. About 55 percent of those positions are held by KeyCorp workers and 45 percent by Society employees, Riley said.
According to the merger agreement, Riley will be the new company's chief officer until his planned retirement in 1998. The combined bank will be based in Cleveland.
KeyCorp's stock was down $1.25 at $34.50 a share in early trading on the New York Stock Exchange, while Society's shares were off 25 cents at $29.50 a share on the NYSE.