Days after HoldCo Asset Management called for his firing, KeyBank CEO Chris Gorman sought to illustrate that the activist investor and the executive are on the same page as to what the regional bank should be focused on.

“I think we and that particular investor are pretty closely aligned on the most important themes,” Gorman said Tuesday at the Goldman Sachs Financial Services Conference. Those include a “moratorium on doing bank deals” and returning capital to shareholders through buybacks, he said. 

HoldCo last week called for Gorman’s ouster and urged Key to adopt a “no acquisitions” policy. The activist investor accused Gorman of a “mystifying reluctance to deploy capital into buybacks,” and alleged double-speak on KeyBank’s interest in mergers and acquisitions. 

Gorman, speaking Tuesday, said the bank was “still digesting” HoldCo’s 57-page presentation published Friday. He sought to emphasize the bank’s areas of strength and focus, as well as recent improvements made.

“We have made a lot of changes over the last two or three years in terms of really making sure that we're buttoned down and tight, particularly from a finance perspective,” Gorman said. 

Key continues to invest in people and technology while keeping pace with financial targets, he said, although he also mentioned mulling where the bank can cut expenses, pointing to “huge opportunities” with artificial intelligence.

Gorman noted the bank’s current 12.5% return on tangible common equity is “not acceptable” and “needs to be higher.” Key aims to get that to 15% or above by the fourth quarter of 2027, and in the 16% to 19% range in the long term, according to a Tuesday presentation.   

The CEO also repeatedly pledged no interest in bank M&A.

“Let me start by being very specific: We are not interested in any depositories. We are looking at zero depositories. So I will repeat that: We have no interest in purchasing a depository,” he said.

“I think there'll be consolidation in our industry for a long time. We are not participating,” he added.

Comments he made to Bloomberg in November about a desire to expand in the Pacific Northwest were about growing organically, he asserted. Cleveland-based Key grows about 5% in the Pacific Northwest, in terms of households in retail banking, compared to about 2% or 3% growth nationwide, he said Tuesday.

As far as nonbank M&A, however, “that's an area where we would have an interest,” Gorman said.

That might include hiring individual bankers or lifting out teams, or buying boutique investment banks, he said. “What we find is when we get great professionals and we plug them into our platform, they can be more meaningful to their clients than they were wherever they used to be,” he said.

“We are, in fact, looking at some of those on the margin,” he said of possible acquisitions within that category. “It's not like they consume a lot of capital, but it certainly can help us continue to turbocharge our business.” 

In particular, as the wealth segment has grown, Gorman noted the appeal of acquiring a family office.

“What's unique now about family offices is, in many respects, they're looking a lot like private equity looked 10 years ago,” he said. “They're buying a lot of private businesses. And we, obviously, if we have $68 billion of [assets under management], and you can provide a lot of M&A advice, that's interesting to me.”

As it pursues an organic growth agenda, Key is also aiming to capitalize on the disruption that comes from bank M&A. “Basically, all customers are up for grabs, and that's free,” he said. “We're going to spend time focused on disruption.”

Fort Lauderdale, Florida-based HoldCo owns $142 million in KeyBank shares, or 0.7% of the company. 

The activist investor has been in the spotlight in recent months after demanding in July that Dallas-based regional Comerica sell itself. The lender agreed to sell to Fifth Third in October for $10.9 billion, but HoldCo wasn’t satisfied, accusing Comerica of ignoring a bid from another suitor, reported to be Regions. HoldCo has since sued both Comerica and Fifth Third over the “rushed” deal. 

Piper Sandler analyst Scott Siefers said Gorman’s M&A comments “should really clean up any lingering investor confusion,” he wrote in a Tuesday note.

Still, “unclear if the statements will satisfy the activist.” 

HoldCo didn’t immediately respond to a request for comment on Gorman’s remarks.