Phil Muscato takes helm as market president for KeyBank

By GINO FANELLI

For the past six years, KeyBank’s Rochester market has been led by James Barger, who served as the face of the bank’s local expansion as it became one of the key players in Rochester’s financial landscape. That expansion was largely due to the 2016 acquisition of Buffalo’s First Niagara by Cleveland-based Key, which in turn led to the development of the $16.5 billion Community Benefits Plan, a 13-state philanthropic mission aimed at bettering the communities that Key serves. Barger, an integral part of flexing that resource locally, stepped down from his position last month for a new role as market president for the Connecticut and Massachusetts market.

Canandaigua native and former PGA pro Phil Muscato is filling Barger’s shoes as market president and commercial banking leader. Muscato began his 20-year career in finance after learning of his father’s diagnosis of lung cancer. He dropped his career as a teaching professional in Cape Cod to return to his hometown, eventually taking on a financial analyst role at Citibank.

“I had a very good friend of mine who was the head of HR for Citibank, and she said, ‘hey, you got a good personality and have a gold background; we think you’d be a good banker,’” Muscato said.

 Muscato came on board at Key shortly after Barger became local president, leaving his role at HSBC for KeyBank’s commercial team.

“It’s just been great ever since,” Muscato said. “We have more of a family atmosphere than any other place I’ve been.”

In 2016, KeyBank held 6.55 percent of the market in the Rochester metropolitan area, valued at about $1.4 billion in local deposits, making it the sixth largest banking institution in the area, according to the Federal Deposit Insurance Corp. In 2018, with First Niagara folded into its share of the market, KeyBank was the third largest in the region, behind M&T and JP Morgan, respectively, with 13.66 percent of the market and just under $2.6 billion in deposits.

“We’ve had so much, and success breeds success,” Muscato said. “And we’ve had so much success in every line of business, from our retail to our business bank and private bank and all of our affiliates. People just get amped up to keep up with the momentum we’ve built up here.”

The acquisition of First Niagara still stands for Muscato as the biggest driver for KeyBank locally, saying it “energized” KeyBank in the market. And the Community Benefits Plan was a paramount piece of immersing KeyBank into the Rochester community.

Officially rolled out in 2017, the five-year plan targeted philanthropic investments in five key sectors: $5 billion for residential mortgage lending; $2.5 billion for small business lending; $8.8 billion for community investment; $3 million for product development aimed at underserved rural and urban communities; and $175 million for philanthropy. In its first two years, the plan invested $211.4 million into the Rochester area. The benevolence included a $50,000 pledge to work co-op OWN Rochester last November; a $100,000 donation to the Ibero-American Action League and the Urban League of Rochester in May 2018; $32.5 million for  small business loans in low-to-moderate income communities; and $33.6 million in mortgage lending to low-to-moderate income residents

Corporate responsibility officer Kawanza Humphrey is in charge of choosing organizations to support, while Barger, as the face of KeyBank, handed out oversized checks and established a real local presence. For the past three years, it was tough to show up at a philanthropic event in Rochester and not run into Barger.

 “We need to be at these events,” Muscato said, and “advocate for these organizations, because these are the organizations we work with, and it’s important to be involved with them. Jim did an amazing job of that, and I had a lot of discussions about that, even when I was in a different role; you need to be out there, you need to be a face, you need to advocate.”

Muscato already has a good standing in philanthropic endeavors, serving with the American Heart Association, Junior Achievement, Heritage Christian Services and on the board of Canandaigua’s F.F. Thompson Hospital Foundation. That background means the Community Benefits Plan sits close to Muscato’s heart as a key role in establishing KeyBank as a true community driver.

“The word of our year has been collaboration, and … we’re really standing behind that,” Muscato said.

Especially important to Muscato is the $33.6 million in mortgages loaned to low-to-moderate income residents. His philosophy is that owning a home is invaluable not only to low-income residents but to building a better community as a whole.

 There’s a lot of work to be done on that front in Rochester. According to ACT Rochester’s 2013-17 Hard Facts report, 28 percent of black Rochesterians own a home, compared to 31 percent statewide and 42 percent nationally. Whites owned homes at a rate of 43 percent, compared to 64 percent statewide and 69 percent nationally.

 “There’s no better feeling than to be a homeowner, and we need to have programs in place to help people get there,” Muscato said. “The fact that KeyBank has dedicated resources to do that is helping the community.”

For Muscato, it’s a critical time for Rochester and KeyBank, as he sees an economy on the upswing. According to the 2017 census, the median household income in Rochester was $32,347, about half the state median for the same year, at $64,894. But Rochester’s median income grew 2 percent from 2016, compared to 1.2 percent for the entire state. Likewise, unemployment was down to 3.8 percent in June 2019, lower than the state’s 4 percent. They’re  trends that Muscato sees as adding up to a brighter economic future.

“Rochester’s a legacy market, but that doesn’t mean we can’t grow,” Muscato said. “We can advance what we’ve learned … lend money where applicable and help grow the economy here. We should be, I hope, in a pretty good position.”

gfanelli@bridgetowermedia.com/5857759692