KeyBank’s consumer mortgage business keeps booming

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KeyBank’s consumer mortgage business, which has a strong connection to Buffalo, continues to boom.

Key reported $3.7 billion in consumer mortgage originations during the second quarter, up 23% from $3 billion in the first quarter.

“It’s a real bright spot,” said Chris Gorman, chairman and CEO of Cleveland-based Key, as the bank released its earnings on Tuesday. Gorman said he is confident Key’s originations for 2021 will surpass last year’s total of $8.3 billion.

Key has a mortgage operations hub in Amherst Commerce Park on Ridge Lea Road, which Gorman calls the “epicenter” of Key’s mortgage business. Key picked up the mortgage business segment as part of its purchase of First Niagara Bank in 2016, and has built out that business across its 15-state territory.

Key has extended its lease with Benderson Development at Ridge Lea Road. The bank is transferring some workers there after agreeing to sell an operations building in Pendleton to Benderson.

“We’re going to continue to staff up in Buffalo,” Gorman said. “Because of the ecosystem that’s always been in Buffalo, there’s a lot of really great knowledge workers in Buffalo. It’s a great place to hire and to have employees.” (Key does not disclose its workforce numbers for Western New York.)

About 55% of Key’s consumer mortgage activity in the quarter was related to home purchases, while 45% stemmed from refinancing. Gorman called that a “good balance.”

“Most people are skewed toward refi because it’s an easier business to get,” he said. “But it’s also the more volatile business.

“The really sustainable piece is to have to those relationships with the realtors and the closing community and the legal community and get the purchase work,” he said.

While the latest data from the Mortgage Bankers Association pointed to a slowdown in new activity, Gorman said he sees Key’s mortgage business growing.

“We’re going to be able to continue to garner [market] share,” he said. “We will continue to take share from people.”

Gorman in an interview commented on other topics related to banking and the economy:

The economy: “I feel good about it. I spend a lot of time talking to customers. … Other than labor and supply chain disruptions, most people’s businesses are really doing well. I’m optimistic.”

Branch closings: Key closed 54 branches during the second quarter, including eight in Western New York. Key will close an additional 14 branches during the current quarter, none in the Buffalo area.

Published by The Buffalo News

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