KeyBank, based in Cleveland, is growing its commercial banking business in Southern California.

After building KeyBank’s West Coast presence in institutional banking, capital markets and equipment finance, Robert Besser – the newly designated commercial leader for the Southern California market – said that entering into the commercial banking space here is “the natural next step of expanding to the core middle market… given the size of the California economy, and particularly Southern California for middle market banking.”

Matt Hill, regional commercial leader for California, Washington and Alaska, added that Southern California’s business landscape aligns well with KeyBank’s platform, particularly transportation, logistics, consumer business, aerospace and defense and private equity. Hill specifically finds that KeyBank has an edge on sponsor deals.

“Where our larger peer banks pursue deals tends to be $20 million EBITDA (earnings before interest, taxes, depreciation, and amortization) and north before they get comfortable with sponsor deals. We get comfortable below that,” Hill said, adding that KeyBank may not necessarily go below $10 million EBITDA.

An important part of this strategy is taking advantage of the bank’s relationships with Small Business Investment Companies as well as working with KeyBank Capital Markets (KBCM), the investment banking platform, Hill and Besser said.

“KBCM without question is a differentiator when we talk about the strength of our platform,” Hill said. “That’s something we partner very closely with, and it allows us to provide a level of expertise to companies that maybe others don’t quite have the same level of depth and conversation.”

This move includes the hiring of local talent, both in and around L.A. With four recent additions to the team, Besser said this is just the “first wave” and that KeyBank is actively recruiting more local experienced bankers as well as an office space in L.A.

In addition to growing in SoCal’s middle market on the commercial side of things, KeyBank is poised for overall growth through Scotiabank’s $2.8 billion investment in the bank’s holding company, KeyCorp. The bank received $800 million of this investment in August with the remainder expected to come in during the first quarter of next year.