Key Bank will soon double its footprint in Westchester County and the Hudson Valley after acquiring the holding company for Union State Bank.
KeyCorp, the holding company for KeyBank N.A., and U.S.B. Holding Company Inc., the holding company for Union State Bank, a state-chartered commercial bank, signed a definitive agreement under which Key would acquire U.S.B. Holding.
Union State Bank has assets of approximately $3 billion, loans of $1.6 billion and $2 billion in deposits.
Key Bank currently has 32 branches throughout the lower Hudson Valley. After the acquisition, Key will add 31 more former Union State Bank branches in Rockland, Orange, Putnam, and Fairfield County, Conn.
“This is an important strategic acquisition that will significantly enhance our presence in attractive markets within and contiguous to our current operations,” said Beth Mooney, a KeyCorp vice chairwoman and head of Key Community Banking. “We believe our specialties in small business, middle-market banking, private banking and wealth management will be an excellent fit in these markets.”
Based on the July 26 closing price for KeyCorp common stock, the transaction would be valued at approximately $575 million. The consideration that a U.S.B. Holding Co. shareholder will receive is a combination that includes cash and KeyCorp common stock. Each share of U.S.B. Holding Co. common stock will be exchanged at the closing for .455 shares of KeyCorp common stock and $8.925 in cash. The actual value of the purchase consideration to be paid upon closing to each U.S.B. Holding Co. shareholder will vary based upon the market price of KeyCorp common shares. Options not exercised by the closing date will convert to KeyCorp options.
The transaction, which has been approved by the boards of directors of both companies, is expected to close within the next six months, subject to approval by U.S.B. Holding Co. shareholders and banking regulators.
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