Victor Riley: keeper of the keys.

• Author: Gerhart, Clifford
• Position: Chairman, president and chief executive officer of KeyCorp - Interview

In this interview by assistant editor Clifford Gerhart, the chairman, president and chief executive officer of KeyCorp discusses national banking trends, Key Bank policies and Alaska's future.

In the last 20 years, Victor Riley has overseen the expansion of the bank holding company KeyCorp from $1.2 billion in assets and 89 offices to more than $23 billion in assets and more than 650 offices. Riley, who has been in banking since 1955, joined the firm in 1964 and became chief executive officer in 1973. He is a member of the board of the Federal Reserve Bank of New York and serves on the Interstate Banking Commission for the state of New York.

Headquartered in Albany, N.Y., KeyCorp has banks in New York, Maine, Alaska, Oregon, Washington, Utah, Idaho and Wyoming. The bank entered the Alaska market by acquiring Alaska Pacific Bancorp of Anchorage in 1985 and is now the third largest bank in the state. In 1991, Key Bank acquired Goldome Savings Bank of Buffalo, N.Y., and in 1992 signed a preliminary agreement to acquire Puget Sound Bancorp of Tacoma, Wash. With the acquisition of Puget Sound, KeyCorp's asset mix will be 54 percent in the East and 46 percent in the West.

Q. All of your bank's indicators for performance nationally were up in 1991. For example, net income for KeyCorp was up 26 percent. What policies made that possible during a recession?

A: It's important to remember the kind of bank we are. Our balance sheet shows 53 percent in consumer lending, old-fashioned installment loans and mortgages. There were a good many variable rate loans. You can maintain a reasonable yield with them.

We're in areas where there aren't many financial institutions. People still need loans for cars, farm equipment, things like that. This recession we've got now is something people in our areas read about in the paper.

We make small loans. Our average commercial loan is $1.55 million. We're lending to middle America, where there is still growth. In the '80s, growth came from small business. There hasn't been any increase in the number of employees in manufacturing or farming. Employment growth is coming from small business. In our area, small business is still growing strong.

And in our areas, people don't forget to pay the bank on their consumer loans. Good banking is not only making loans, it's how good those loans are. We're still making loans and not charging them off.

Q: I understand your bank has a policy different from that of most banks of moving...