By ALLISSA KLINE
akline@bizjournals.com | 716-541-1612

KeyCorp announced last week that it has paid $70 million to the federal government to repurchase the warrant issued to the U.S. Treasury Department as part of the its Troubled Asset Relief Program, or TARP.

The payment and retrieval of the warrant - which gave the government the right to buy 35 million shares of KeyCorp common stock priced at $10.64 per share - means the government no longer has any TARP investments in the bank.

"We are pleased to have this repurchase completed," KeyCorp Chairman and CEO Henry Meyer III said in a release. "We are pleased that the repurchase of the warrant will limit future shareholder dilution."

The agreement to repurchase the warrant comes three weeks after the Cleveland-based parent of KeyBank N.A. repaid the government $2.5 billion it borrowed in late 2008 during the financial crisis. Meyer is set to step down as the bank's top executive in May.

KeyBank is the fourth-largest bank in Western New York. It plans to open four new branches in Amherst and Niagara Falls. Earlier this week, it announced first-quarter net income earnings of $184 million, or 21 cents per share, up from a net income loss of $98 million, or 11 cents per share, a year ago.