NEW YORK (TheStreet) -- KeyCorp (KEY - Get Report) stock is falling 6.09% to $12.57 on heavy trading volume on Friday morning after the company agreed to acquire First Niagara Financial Group (FNFG) in a cash and stock transaction valued at $4.1 billion.

First Niagara Financial stock is rising 0.43% this morning to $10.43, also on heavy trading volume.

First Niagara Financial shareholders will receive 0.68 KeyCorp shares and $2.30 in cash per share.

"This transformational opportunity will bring compelling and complementary capabilities to our shared three million clients, while driving meaningful synergies and enhancing shareholder value," KeyCorp CEO Beth Mooney said in a statement.

The combined bank will have about $135 billion in assets with $99.8 billion in deposits, $83.6 billion in loans and 1,366 branches, making it the 13th largest commercial bank in the U.S.

Annual synergies are expected to be more than $400 million after the closing, which is expected in the third quarter of 2016.

The transaction is subject to regulatory and shareholder approval, but has been approved by the boards of both companies.

So far today, 25.72 million shares of KeyCorp have exchanged hands, compared with its average daily volume of 10.53 million shares.

About 20.29 million shares of First Niagara Financial have been traded today, compared with its average daily volume of 3.16 million shares.

Separately, TheStreet Ratings team rates KEYCORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate KEYCORP (KEY) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, increase in stock price during the past year and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • KEYCORP has improved earnings per share by 13.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KEYCORP increased its bottom line by earning $1.04 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus $1.04).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 17.7% when compared to the same quarter one year prior, going from $186.00 million to $219.00 million.
  • After a year of stock price fluctuations, the net result is that KEY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for KEYCORP is currently very high, coming in at 89.83%. Regardless of KEY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 19.36% trails the industry average.
  • You can view the full analysis from the report here: KEY