KeyBank National Association today announced that KeyBank and Laurel Road Bank have entered into a definitive agreement for the acquisition by Key of Laurel Road's digital lending business; Laurel Road's three bank branches located in southeast Connecticut are not part of this transaction.
Through the acquisition, Key will enhance its digital capabilities with state-of-the-art, customer-centric technology and will leverage Laurel Road's proven ability to attract and serve professional millennial clients.
Laurel Road, based in New York City, has built a best-in-class student loan refinancing platform, which launched in 2013 and has grown rapidly, totaling more than $4 billion in loan originations to date. The end-to-end consumer lending platform offers a streamlined, transparent experience with customized loan products. In 2018, the company introduced an innovative platform for mortgages using the same secure lending technology to offer home buyers and owners a streamlined experience, from application to payment. Laurel Road has leveraged its differentiated technology to earn a strong reputation for providing high-quality customer experiences and solutions to targeted customer segments – such as healthcare professionals, lawyers and graduate students.
In addition to its advanced technology and distinctive client experience, Laurel Road has created a broad network of affinity partners through which it is a preferred provider of its products. This expansive platform includes partners across trade associations, member groups, and employers and aligns closely with Key's approach to strategic partnerships.
"We are thrilled to have the opportunity to partner with Laurel Road and to continue expanding their business," said Vice Chair and President of Banking, Chris Gorman. "As we shared at our Investor Day in October, Key is focused on building targeted scale against discrete client segments through distinctive platforms. Laurel Road's model of focusing on advanced degree professionals is not only consistent with Key's approach but also complements our focus on specific sectors more broadly. We have invested significant resources in building our own strategic partnerships with fintech companies and we have yet to encounter a firm that so clearly matches our business and cultural approach to serving clients."
"We are excited to combine our technological expertise with Key's industry expertise," said Gary Lieberman, Founder and Chairman of Laurel Road Bank. "We could not have found a better strategic partner to help take Laurel Road to the next level and continue our mission of serving millennial customers with technology that meets them where they are in their financial journey. Together, we will work to create an innovative digital financial experience for all of our customer segments."
In addition to the technology and business platform, Key is eager to onboard the Laurel Road team. "The management team at Laurel Road is truly outstanding," said Gorman. "While operating within a bank regulatory environment, Laurel Road has been an innovator in online lending and experienced significant growth, a remarkable accomplishment under Gary's leadership." With the integration, approximately 140 Laurel Road employees will join Key. The employee teams will continue to be based in New York, Connecticut, and California.
The acquisition is subject to customary closing conditions, including regulatory approvals. Financial terms of the transaction have not been disclosed. KeyCorp was advised by Debevoise & Plimpton LLP. Laurel Road Bank was advised by RBC Capital Markets and Fried Frank.