UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 16, 2015
(Exact name of registrant as specified in charter)
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Ohio |
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001-11302 |
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34-6542451 |
(State or other jurisdiction
of incorporation) |
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Commission
File Number |
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(I.R.S. Employer
Identification No.) |
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127 Public Square, Cleveland, Ohio |
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44114-1306 |
(Address of principal executive offices) |
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(Zip Code) |
(216) 689-3000
Registrants telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and
Financial Condition.
On July 16, 2015, KeyCorp issued a press release announcing its financial results for the three- and
six-month periods ended June 30, 2015 (the Press Release), and posted on its website its second quarter 2015 Supplemental Information Package (the Supplemental Information Package). The Press Release and Supplemental
Information Package are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively.
The information in the preceding paragraph, as
well as Exhibit 99.1 and Exhibit 99.2 referenced therein, shall not be deemed filed for purposes of the Securities Exchange Act of 1934, as amended (the Exchange Act), nor shall it be incorporated by reference in any filing
under the Securities Act of 1933, as amended (the Securities Act).
KeyCorps Consolidated Balance Sheets and
Consolidated Statements of Income (collectively, the Financial Statements), included as part of the Press Release, are filed as Exhibit 99.3 to this report. Exhibit 99.3 is deemed filed for purposes of Section 18 of the
Exchange Act and, therefore, may be incorporated by reference in filings under the Securities Act.
Item 9.01
Financial Statements and Exhibits.
The following exhibits are furnished, or filed in the case of Exhibit 99.3, herewith:
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99.1 |
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Press Release, dated July 16, 2015, announcing financial results for the three- and six-month periods ended June 30, 2015. |
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99.2 |
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Supplemental Information Package reviewed during the conference call and webcast. |
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99.3 |
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Financial Statements. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
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KEYCORP |
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(Registrant) |
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Date: July 16, 2015 |
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/s/ Douglas M. Schosser |
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By: |
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Douglas M. Schosser |
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Chief Accounting Officer |
Exhibit 99.1
NEWS
FOR IMMEDIATE RELEASE
KEYCORP REPORTS SECOND QUARTER 2015
NET INCOME OF $230 MILLION, OR $.27 PER COMMON SHARE
Positive operating leverage
Revenue up 4% from prior year, reflecting growth in fee income and loans
Continued growth in commercial loans and record investment banking and debt placement fees
affirms strength of business model
Credit quality remains strong, with net loan charge-offs to average loans of .25%
Disciplined capital management: quarterly common share dividend
increased 15% and continued share repurchases
CLEVELAND, July 16, 2015 KeyCorp (NYSE: KEY) today announced second quarter net income from continuing operations attributable to
Key common shareholders of $230 million, or $.27 per common share, compared to $222 million, or $.26 per common share, for the first quarter of 2015, and $242 million, or $.27 per common share, for the second quarter of 2014.
For the six months ended June 30, 2015, net income from continuing operations attributable to Key common shareholders was $452 million,
or $.52 per common share, compared to $474 million, or $.53 per common share, for the same period one year ago.
Second quarter
results reflect our continued success in executing our strategy and driving growth across our company, said Chairman and Chief Executive Officer Beth Mooney. We generated positive operating leverage and added new and expanded
relationships in both our Community Bank and Corporate Bank.
Revenue benefited from positive trends in our core fee-based
businesses, including investment banking and debt placement fees, which had a record quarter and was up 42% from the prior year. We also had momentum in trust and investment services and cards and payments income. Average loans continued to grow,
driven by commercial, financial and agricultural loans, which were up 10% from one year ago, continued Mooney.
Credit quality
remained strong, with a net charge-offs to average loans ratio of .25%, well below our targeted range, said Mooney.
We
continue to be disciplined in the way we manage our capital. In the second quarter, our Board of Directors increased our quarterly common share dividend by 15% and we repurchased $129 million of common shares, added Mooney. We expect our
2015 estimated payout ratio to remain among the highest in our peer group.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
2
SECOND QUARTER 2015 FINANCIAL RESULTS, from continuing operations
Compared to Second Quarter of 2014
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Average loans up 4.3%, driven by 9.7% growth in commercial, financial and agricultural loans |
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Average deposits, excluding deposits in foreign office, up 5.7% due to strength in commercial mortgage servicing and inflows from commercial and consumer clients |
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Net interest income (taxable-equivalent) up $12 million, as higher earning asset balances offset lower earning asset yields |
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Noninterest income up $33 million due to a record quarter for investment banking and debt placement fees and growth in other core fee-based businesses |
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Noninterest expense up $24 million primarily attributable to performance-based compensation and the third quarter 2014 acquisition of Pacific Crest Securities |
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The provision for credit losses was $41 million in the second quarter of 2015, compared to $12 million in the year-ago quarter |
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Asset quality remained strong, with net loan charge-offs to average loans of .25%, up from .22% in the year-ago quarter and remaining well below our targeted range of .40% to .60% |
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Disciplined capital management, repurchasing $129 million of common shares during the second quarter of 2015 |
Compared to First Quarter of 2015
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Average loans up .8%, primarily driven by a 2.5% increase in commercial, financial and agricultural loans |
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Average deposits, excluding deposits in foreign office, up 2.1% primarily attributable to strength in commercial mortgage servicing and inflows from commercial and consumer clients |
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Net interest income (taxable-equivalent) up $14 million due to higher earning asset balances and day count |
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Noninterest income up $51 million, primarily due to a record quarter for investment banking and debt placement fees and growth in other core fee-based businesses |
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Noninterest expense up $42 million, primarily driven by performance-based compensation, seasonal trends, and higher business services and professional fees |
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The provision for credit losses was $41 million in the second quarter of 2015, compared to $35 million in the prior quarter |
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Strong asset quality, with net loan charge-offs to average loans of .25%, compared to .20% in the first quarter of 2015 and remaining well below our targeted range of .40% to .60% |
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Disciplined capital management, maintaining a solid capital position with a Common Equity Tier 1 ratio of 10.69% compared to 10.64% in the prior quarter |
Selected Financial Highlights
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dollars in millions, except per share data |
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Change 2Q15 vs. |
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2Q15 |
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1Q15 |
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2Q14 |
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1Q15 |
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2Q14 |
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Income (loss) from continuing operations attributable to Key common shareholders |
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$ |
230 |
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$ |
222 |
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$ |
242 |
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3.6 |
% |
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(5.0 |
)% |
Income (loss) from continuing operations attributable to Key common shareholders per common share assuming dilution |
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.27 |
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.26 |
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.27 |
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3.8 |
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Return on average total assets from continuing operations |
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1.03 |
% |
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1.03 |
% |
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1.14 |
% |
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N/A |
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N/A |
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Common Equity Tier 1 (a) |
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10.69 |
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10.64 |
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N/A |
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N/A |
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N/A |
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Tier 1 common equity (a) |
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N/A |
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N/A |
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11.25 |
% |
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N/A |
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N/A |
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Book value at period end |
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$ |
12.21 |
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$ |
12.12 |
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$ |
11.65 |
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.7 |
% |
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4.8 |
% |
Net interest margin (TE) from continuing operations |
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2.88 |
% |
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2.91 |
% |
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2.98 |
% |
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N/A |
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N/A |
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(a) |
The table entitled GAAP to Non-GAAP Reconciliations in the attached financial supplement presents the computations of certain financial measures related to Common Equity Tier 1 (compliance date
of January 1, 2015, under the Regulatory Capital Rules) and Tier 1 common equity (prior to January 1, 2015). The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for
period-to-period comparisons. For further information on the Regulatory Capital Rules, see the Capital section of this release. |
TE = Taxable Equivalent, N/A = Not Applicable
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
3
INCOME STATEMENT HIGHLIGHTS
Revenue
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dollars in millions |
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Change 2Q15 vs. |
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2Q15 |
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1Q15 |
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2Q14 |
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1Q15 |
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2Q14 |
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Net interest income (TE) |
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$ |
591 |
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$ |
577 |
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$ |
579 |
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2.4 |
% |
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2.1 |
% |
Noninterest income |
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488 |
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437 |
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455 |
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11.7 |
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7.3 |
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Total revenue |
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$ |
1,079 |
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$ |
1,014 |
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$ |
1,034 |
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6.4 |
% |
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4.4 |
% |
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TE = Taxable Equivalent
Taxable-equivalent net interest income was $591 million for the second quarter of 2015, and the net interest margin was 2.88%. These results
compare to taxable-equivalent net interest income of $579 million and a net interest margin of 2.98% for the second quarter of 2014. The increase in net interest income reflects higher earning asset balances mitigated by lower earning asset yields,
which also drove the decline in the net interest margin.
Compared to the first quarter of 2015, taxable-equivalent net interest income
increased by $14 million, and the net interest margin declined by three basis points. The increase in net interest income was primarily attributable to higher earning asset balances and day count in the second quarter of 2015. The decline in the net
interest margin reflects higher levels of excess liquidity driven by commercial deposit growth and slightly lower earning asset yields.
Noninterest
Income
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dollars in millions |
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Change 2Q15 vs. |
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2Q15 |
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1Q15 |
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2Q14 |
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1Q15 |
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2Q14 |
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Trust and investment services income |
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$ |
111 |
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$ |
109 |
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$ |
94 |
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1.8 |
% |
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18.1 |
% |
Investment banking and debt placement fees |
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141 |
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68 |
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99 |
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107.4 |
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42.4 |
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Service charges on deposit accounts |
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63 |
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61 |
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66 |
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3.3 |
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(4.5 |
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Operating lease income and other leasing gains |
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24 |
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19 |
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35 |
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26.3 |
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(31.4 |
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Corporate services income |
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43 |
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43 |
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41 |
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4.9 |
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Cards and payments income |
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47 |
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42 |
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43 |
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11.9 |
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9.3 |
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Corporate-owned life insurance income |
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30 |
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31 |
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28 |
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(3.2 |
) |
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7.1 |
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Consumer mortgage income |
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4 |
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3 |
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2 |
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33.3 |
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100.0 |
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Mortgage servicing fees |
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9 |
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13 |
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11 |
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(30.8 |
) |
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(18.2 |
) |
Net gains (losses) from principal investing |
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11 |
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29 |
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27 |
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(62.1 |
) |
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(59.3 |
) |
Other income |
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5 |
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19 |
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9 |
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(73.7 |
) |
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(44.4 |
) |
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Total noninterest income |
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$ |
488 |
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$ |
437 |
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$ |
455 |
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11.7 |
% |
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7.3 |
% |
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Keys noninterest income was $488 million for the second quarter of 2015, compared to $455 million for
the year-ago quarter. Results for the second quarter of 2015 reflect a record quarter for investment banking and debt placement fees, which increased $42 million year-over-year. This increase was primarily driven by strength in financial advisory
fees and loan syndications. Investment banking and debt placement fees also benefited from the third quarter 2014 acquisition of Pacific Crest Securities. Trust and investment services income increased $17 million, primarily due to the impact of the
Pacific Crest Securities acquisition as well as strength in Keys Retail and Private Banking businesses. Additionally, cards and payments income increased $4 million. Partially offsetting these increases was a $16 million decrease in net gains
from principal investing and lower operating lease income and other leasing gains, which benefited from a $17 million gain from the early termination of a leveraged lease in the second quarter of 2014.
Compared to the first quarter of 2015, noninterest income increased by $51 million. The largest driver of this increase was the growth in
investment banking and debt placement fees, which increased by $73 million due to strength in financial advisory fees and loan syndications. Additionally, cards and payments income increased $5 million predominantly due to credit and debit card
growth. Compared to the first quarter of 2015, the growth in the second quarter of 2015 was partially offset by $18 million of lower net gains from principal investing and a $14 million decline in other income.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
4
Noninterest Expense
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dollars in millions |
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Change 2Q15 vs. |
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2Q15 |
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1Q15 |
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2Q14 |
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1Q15 |
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2Q14 |
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Personnel expense |
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$ |
408 |
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$ |
389 |
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$ |
389 |
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4.9 |
% |
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4.9 |
% |
Nonpersonnel expense |
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303 |
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280 |
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298 |
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8.2 |
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1.7 |
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Total noninterest expense |
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$ |
711 |
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$ |
669 |
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$ |
687 |
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6.3 |
% |
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3.5 |
% |
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Keys noninterest expense was $711 million for the second quarter of 2015, compared to $687 million in
the second quarter of last year. This increase was primarily due to higher performance-based compensation and the third quarter 2014 acquisition of Pacific Crest Securities.
Compared to the first quarter of 2015, noninterest expense increased by $42 million. This increase was primarily driven by performance-based
compensation, normal seasonal trends, and higher business services and professional fees.
BALANCE SHEET HIGHLIGHTS
In the second quarter of 2015, Key had average assets of $93.9 billion compared to $91.1 billion in the second quarter of 2014 and $91.9
billion in the first quarter of 2015. Growth in Keys securities available for sale portfolio during the second quarter of 2015 resulted from higher levels of liquidity, driven by deposit growth and long-term debt issuance. In the second
quarter of 2015, Key issued $1.75 billion in bank-level long-term debt, which benefited its liquidity coverage ratio and credit ratings profile.
Average Loans
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dollars in millions |
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Change 6-30-15 vs. |
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6-30-15 |
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3-31-15 |
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6-30-14 |
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3-31-15 |
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6-30-14 |
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Commercial, financial and agricultural (a) |
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$ |
29,017 |
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$ |
28,321 |
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$ |
26,444 |
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2.5 |
% |
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9.7 |
% |
Other commercial loans |
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13,161 |
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13,304 |
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13,186 |
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(1.1 |
) |
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(.2 |
) |
Total home equity loans |
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10,510 |
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10,576 |
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10,627 |
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(.6 |
) |
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(1.1 |
) |
Other consumer loans |
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5,290 |
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5,311 |
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5,354 |
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(.4 |
) |
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(1.2 |
) |
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Total loans |
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$ |
57,978 |
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$ |
57,512 |
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$ |
55,611 |
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|
.8 |
% |
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4.3 |
% |
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(a) |
Commercial, financial and agricultural average loan balances include $88 million, $87 million, and $95 million of assets from commercial credit cards at June 30, 2015, March 31, 2015, and June 30,
2014, respectively. |
Average loans were $58.0 billion for the second quarter of 2015, an increase of $2.4 billion compared
to the second quarter of 2014. The loan growth occurred primarily in the commercial, financial and agricultural portfolio, which increased $2.6 billion and was broad-based across Keys commercial lines of business. Consumer loans remained
relatively stable as modest increases across Keys core consumer loan portfolio were offset by run-off in Keys consumer exit portfolios.
Compared to the first quarter of 2015, average loans increased by $466 million, driven by commercial, financial and agricultural loans, which
increased by $696 million.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
5
Average Deposits
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dollars in millions |
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Change 6-30-15 vs. |
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6-30-15 |
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3-31-15 |
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6-30-14 |
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3-31-15 |
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|
6-30-14 |
|
Non-time deposits (a) |
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$ |
65,109 |
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$ |
63,606 |
|
|
$ |
60,066 |
|
|
|
2.4 |
% |
|
|
8.4 |
% |
Certificates of deposit ($100,000 or more) |
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|
2,010 |
|
|
|
2,017 |
|
|
|
2,808 |
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(.3 |
) |
|
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(28.4 |
) |
Other time deposits |
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3,136 |
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|
|
3,217 |
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|
|
3,587 |
|
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(2.5 |
) |
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(12.6 |
) |
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Total deposits |
|
$ |
70,255 |
|
|
$ |
68,840 |
|
|
$ |
66,461 |
|
|
|
2.1 |
% |
|
|
5.7 |
% |
|
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Cost of total deposits (a) |
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|
.15 |
% |
|
|
.15 |
% |
|
|
.18 |
% |
|
|
N/A |
|
|
|
N/A |
|
(a) |
Excludes deposits in foreign office. |
N/A = Not Applicable
Average deposits, excluding deposits in foreign office, totaled $70.3 billion for the second quarter of 2015, an increase of $3.8 billion
compared to the year-ago quarter. Noninterest-bearing deposits increased by $3.3 billion, and NOW and money market deposit accounts increased by $1.8 billion, reflecting continued growth in the commercial mortgage servicing business and inflows from
commercial and consumer clients. These increases were partially offset by a decline in certificates of deposit.
Compared to the first
quarter of 2015, average deposits, excluding deposits in foreign office, increased by $1.4 billion. The increase was driven by NOW and money market deposit accounts which increased $1.2 billion, and noninterest-bearing deposits which increased $325
million. Higher escrow deposits from Keys commercial mortgage servicing business and inflows related to both commercial and consumer clients drove the linked-quarter increase.
ASSET QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in millions |
|
|
|
|
|
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Net loan charge-offs |
|
$ |
36 |
|
|
$ |
28 |
|
|
$ |
30 |
|
|
|
28.6 |
% |
|
|
20.0 |
% |
Net loan charge-offs to average total loans |
|
|
.25 |
% |
|
|
.20 |
% |
|
|
.22 |
% |
|
|
N/A |
|
|
|
N/A |
|
Nonperforming loans at period end (a) |
|
$ |
419 |
|
|
$ |
437 |
|
|
$ |
396 |
|
|
|
(4.1 |
)% |
|
|
5.8 |
% |
Nonperforming assets at period end |
|
|
440 |
|
|
|
457 |
|
|
|
410 |
|
|
|
(3.7 |
) |
|
|
7.3 |
|
Allowance for loan and lease losses |
|
|
796 |
|
|
|
794 |
|
|
|
814 |
|
|
|
.3 |
|
|
|
(2.2 |
) |
Allowance for loan and lease losses to nonperforming loans |
|
|
190.0 |
% |
|
|
181.7 |
% |
|
|
205.6 |
% |
|
|
N/A |
|
|
|
N/A |
|
Provision for credit losses |
|
|
41 |
|
|
|
35 |
|
|
|
12 |
|
|
|
17.1 |
% |
|
|
241.7 |
% |
(a) |
Loan balances exclude $12 million, $12 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, and June 30, 2014, respectively. |
N/A = Not Applicable
Keys provision for
credit losses was $41 million for the second quarter of 2015, compared to $12 million for the second quarter of 2014 and $35 million for the first quarter of 2015. Keys allowance for loan and lease losses was $796 million, or 1.37% of total
period-end loans, at June 30, 2015, compared to 1.46% at June 30, 2014, and 1.37% at March 31, 2015.
Net loan charge-offs
for the second quarter of 2015 totaled $36 million, or .25% of average total loans. These results compare to $30 million, or .22%, for the second quarter of 2014, and $28 million, or .20%, for the first quarter of 2015.
At June 30, 2015, Keys nonperforming loans totaled $419 million and represented .72% of period-end portfolio loans, compared to
.71% at June 30, 2014, and .75% at March 31, 2015. Nonperforming assets at June 30, 2015 totaled $440 million and represented .75% of period-end portfolio loans and OREO and other nonperforming assets, compared to .74% at
June 30, 2014, and .79% at March 31, 2015.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
6
CAPITAL
Keys estimated risk-based capital ratios included in the following table continued to exceed all well-capitalized regulatory
benchmarks at June 30, 2015.
Capital Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Common Equity Tier 1 (a), (b) |
|
|
10.69 |
% |
|
|
10.64 |
% |
|
|
N/A |
|
Tier 1 common equity (b) |
|
|
N/A |
|
|
|
N/A |
|
|
|
11.25 |
% |
Tier 1 risk-based capital (a) |
|
|
11.10 |
% |
|
|
11.04 |
% |
|
|
11.99 |
|
Total risk based capital (a) |
|
|
12.63 |
|
|
|
12.79 |
|
|
|
14.14 |
|
Tangible common equity to tangible assets (b) |
|
|
9.86 |
|
|
|
9.92 |
|
|
|
10.15 |
|
Leverage (a) |
|
|
10.73 |
|
|
|
10.91 |
|
|
|
11.24 |
|
(a) |
6-30-15 ratio is estimated. |
(b) |
The table entitled GAAP to Non-GAAP Reconciliations in the attached financial supplement presents the computations of certain financial measures related to Common Equity Tier 1 (compliance date
of January 1, 2015, under the Regulatory Capital Rules) and Tier 1 common equity (prior to January 1, 2015). The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for
period-to-period comparisons. See below for further information on the Regulatory Capital Rules. |
As shown in the preceding
table, at June 30, 2015, Keys estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 10.69% and 11.10%, respectively. In addition, the tangible common equity ratio was 9.86% at June 30, 2015.
In October 2013, federal banking regulators published the final Basel III capital framework for U.S. banking organizations (the
Regulatory Capital Rules). The mandatory compliance date for Key as a standardized approach banking organization began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Keys
estimated Common Equity Tier 1 as calculated under the fully phased-in Regulatory Capital Rules was 10.58% at June 30, 2015. This estimate exceeds the fully phased-in required minimum Common Equity Tier 1 and Capital Conservation Buffer of
7.00%.
Summary of Changes in Common Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in thousands |
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Shares outstanding at beginning of period |
|
|
850,920 |
|
|
|
859,403 |
|
|
|
884,869 |
|
|
|
(1.0 |
)% |
|
|
(3.8 |
)% |
Common shares repurchased |
|
|
(8,794 |
) |
|
|
(14,087 |
) |
|
|
(7,824 |
) |
|
|
(37.6 |
) |
|
|
12.4 |
|
Shares reissued (returned) under employee benefit plans |
|
|
1,482 |
|
|
|
5,571 |
|
|
|
(222 |
) |
|
|
(73.4 |
) |
|
|
N/M |
|
Common shares exchanged for Series A Preferred Stock |
|
|
|
|
|
|
33 |
|
|
|
|
|
|
|
N/M |
|
|
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at end of period |
|
|
843,608 |
|
|
|
850,920 |
|
|
|
876,823 |
|
|
|
(.9 |
)% |
|
|
(3.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As previously reported, Keys 2015 capital plan includes common share repurchases of up to $725 million,
which are expected to be executed through the second quarter of 2016. During the second quarter of 2015, Key completed $129 million of common share repurchases, including repurchases to offset issuances of common shares under employee compensation
plans.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
7
LINE OF BUSINESS RESULTS
The following table shows the contribution made by each major business segment to Keys taxable-equivalent revenue from continuing
operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.
Major Business Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in millions |
|
|
|
|
|
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Revenue from continuing operations (TE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
$ |
559 |
|
|
$ |
549 |
|
|
$ |
553 |
|
|
|
1.8 |
% |
|
|
1.1 |
% |
Key Corporate Bank |
|
|
477 |
|
|
|
401 |
|
|
|
395 |
|
|
|
19.0 |
|
|
|
20.8 |
|
Other Segments |
|
|
44 |
|
|
|
66 |
|
|
|
87 |
|
|
|
(33.3 |
) |
|
|
(49.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
|
1,080 |
|
|
|
1,016 |
|
|
|
1,035 |
|
|
|
6.3 |
|
|
|
4.3 |
|
Reconciling Items |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
N/M |
|
|
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,079 |
|
|
$ |
1,014 |
|
|
$ |
1,034 |
|
|
|
6.4 |
% |
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
$ |
65 |
|
|
$ |
50 |
|
|
$ |
53 |
|
|
|
30.0 |
% |
|
|
22.6 |
% |
Key Corporate Bank |
|
|
135 |
|
|
|
127 |
|
|
|
135 |
|
|
|
6.3 |
|
|
|
|
|
Other Segments |
|
|
31 |
|
|
|
44 |
|
|
|
54 |
|
|
|
(29.5 |
) |
|
|
(42.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments |
|
|
231 |
|
|
|
221 |
|
|
|
242 |
|
|
|
4.5 |
|
|
|
(4.5 |
) |
Reconciling Items |
|
|
4 |
|
|
|
7 |
|
|
|
5 |
|
|
|
(42.9 |
) |
|
|
(20.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
235 |
|
|
$ |
228 |
|
|
$ |
247 |
|
|
|
3.1 |
% |
|
|
(4.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE = Taxable Equivalent, N/M = Not Meaningful
Key Community Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in millions |
|
|
|
|
|
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Summary of operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (TE) |
|
$ |
362 |
|
|
$ |
358 |
|
|
$ |
361 |
|
|
|
1.1 |
% |
|
|
.3 |
% |
Noninterest income |
|
|
197 |
|
|
|
191 |
|
|
|
192 |
|
|
|
3.1 |
|
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue (TE) |
|
|
559 |
|
|
|
549 |
|
|
|
553 |
|
|
|
1.8 |
|
|
|
1.1 |
|
Provision for credit losses |
|
|
7 |
|
|
|
29 |
|
|
|
25 |
|
|
|
(75.9 |
) |
|
|
(72.0 |
) |
Noninterest expense |
|
|
449 |
|
|
|
441 |
|
|
|
443 |
|
|
|
1.8 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes (TE) |
|
|
103 |
|
|
|
79 |
|
|
|
85 |
|
|
|
30.4 |
|
|
|
21.2 |
|
Allocated income taxes (benefit) and TE adjustments |
|
|
38 |
|
|
|
29 |
|
|
|
32 |
|
|
|
31.0 |
|
|
|
18.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Key |
|
$ |
65 |
|
|
$ |
50 |
|
|
$ |
53 |
|
|
|
30.0 |
% |
|
|
22.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
30,707 |
|
|
$ |
30,662 |
|
|
$ |
30,034 |
|
|
|
.1 |
% |
|
|
2.2 |
% |
Total assets |
|
|
32,758 |
|
|
|
32,716 |
|
|
|
32,132 |
|
|
|
.1 |
|
|
|
1.9 |
|
Deposits |
|
|
50,766 |
|
|
|
50,417 |
|
|
|
50,232 |
|
|
|
.7 |
|
|
|
1.1 |
|
|
|
|
|
|
|
Assets under management at period end |
|
$ |
38,399 |
|
|
$ |
39,281 |
|
|
$ |
39,632 |
|
|
|
(2.2 |
)% |
|
|
(3.1 |
)% |
TE = Taxable Equivalent
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
8
Additional Key Community Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in millions |
|
|
|
|
|
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment services income |
|
$ |
76 |
|
|
$ |
75 |
|
|
$ |
71 |
|
|
|
1.3 |
% |
|
|
7.0 |
% |
Service charges on deposit accounts |
|
|
52 |
|
|
|
51 |
|
|
|
55 |
|
|
|
2.0 |
|
|
|
(5.5 |
) |
Cards and payments income |
|
|
43 |
|
|
|
38 |
|
|
|
38 |
|
|
|
13.2 |
|
|
|
13.2 |
|
Other noninterest income |
|
|
26 |
|
|
|
27 |
|
|
|
28 |
|
|
|
(3.7 |
) |
|
|
(7.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
$ |
197 |
|
|
$ |
191 |
|
|
$ |
192 |
|
|
|
3.1 |
% |
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average deposit balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts |
|
$ |
28,284 |
|
|
$ |
27,873 |
|
|
$ |
27,578 |
|
|
|
1.5 |
% |
|
|
2.6 |
% |
Savings deposits |
|
|
2,385 |
|
|
|
2,377 |
|
|
|
2,483 |
|
|
|
.3 |
|
|
|
(3.9 |
) |
Certificates of deposit ($100,000 or more) |
|
|
1,547 |
|
|
|
1,558 |
|
|
|
2,169 |
|
|
|
(.7 |
) |
|
|
(28.7 |
) |
Other time deposits |
|
|
3,132 |
|
|
|
3,211 |
|
|
|
3,580 |
|
|
|
(2.5 |
) |
|
|
(12.5 |
) |
Deposits in foreign office |
|
|
299 |
|
|
|
333 |
|
|
|
294 |
|
|
|
(10.2 |
) |
|
|
1.7 |
|
Noninterest-bearing deposits |
|
|
15,119 |
|
|
|
15,065 |
|
|
|
14,128 |
|
|
|
.4 |
|
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
$ |
50,766 |
|
|
$ |
50,417 |
|
|
$ |
50,232 |
|
|
|
.7 |
% |
|
|
1.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average balance |
|
$ |
10,266 |
|
|
$ |
10,316 |
|
|
$ |
10,321 |
|
|
|
|
|
|
|
|
|
Weighted-average loan-to-value ratio (at date of origination) |
|
|
71 |
% |
|
|
71 |
% |
|
|
71 |
% |
|
|
|
|
|
|
|
|
Percent first lien positions |
|
|
60 |
|
|
|
60 |
|
|
|
59 |
|
|
|
|
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branches |
|
|
989 |
|
|
|
992 |
|
|
|
1,009 |
|
|
|
|
|
|
|
|
|
Automated teller machines |
|
|
1,280 |
|
|
|
1,287 |
|
|
|
1,311 |
|
|
|
|
|
|
|
|
|
Key Community Bank Summary of Operations
|
|
|
Net income increased to $65 million, up 22.6% from prior year |
|
|
|
Commercial, financial, and agricultural loan growth of $692 million, or 5.9% from prior year |
|
|
|
Average deposits (excluding certificates of deposit and other time deposits) up $1.6 billion, or 3.6% from the prior year |
Key Community Bank recorded net income attributable to Key of $65 million for the second quarter of 2015, compared to net income attributable
to Key of $53 million for the year-ago quarter.
Taxable-equivalent net interest income increased by $1 million, or .3%, from the second
quarter of 2014. Average loans and leases increased 2.2% due to commercial, financial, and agricultural loan growth of $692 million, or 5.9%, while average deposits increased 1.1% from one year ago.
Noninterest income increased by $5 million, or 2.6%, from the year-ago quarter. Year-over-year improvement reflected core business growth,
including trust and investment services income and cards and payments income, which each increased $5 million, partially offset by a $3 million decrease in service charges on deposit accounts.
The provision for credit losses was $7 million in the second quarter of 2015, compared to $25 million for the same period one year ago.
Noninterest expense increased by $6 million, or 1.4%, from the year-ago quarter, including increases in personnel expense of $2 million and
nonpersonnel expense of $4 million, driven by higher marketing and sales-related expenses.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
9
Key Corporate Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in millions |
|
|
|
|
|
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Summary of operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (TE) |
|
$ |
227 |
|
|
$ |
213 |
|
|
$ |
210 |
|
|
|
6.6 |
% |
|
|
8.1 |
% |
Noninterest income |
|
|
250 |
|
|
|
188 |
|
|
|
185 |
|
|
|
33.0 |
|
|
|
35.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue (TE) |
|
|
477 |
|
|
|
401 |
|
|
|
395 |
|
|
|
19.0 |
|
|
|
20.8 |
|
Provision for credit losses |
|
|
38 |
|
|
|
8 |
|
|
|
(4 |
) |
|
|
375.0 |
|
|
|
N/M |
|
Noninterest expense |
|
|
252 |
|
|
|
216 |
|
|
|
207 |
|
|
|
16.7 |
|
|
|
21.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes (TE) |
|
|
187 |
|
|
|
177 |
|
|
|
192 |
|
|
|
5.6 |
|
|
|
(2.6 |
) |
Allocated income taxes and TE adjustments |
|
|
52 |
|
|
|
50 |
|
|
|
54 |
|
|
|
4.0 |
|
|
|
(3.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
135 |
|
|
|
127 |
|
|
|
138 |
|
|
|
6.3 |
|
|
|
(2.2 |
)% |
Less: Net income (loss) attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
N/M |
|
|
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Key |
|
$ |
135 |
|
|
$ |
127 |
|
|
$ |
135 |
|
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
25,298 |
|
|
$ |
24,722 |
|
|
$ |
22,886 |
|
|
|
2.3 |
% |
|
|
10.5 |
% |
Loans held for sale |
|
|
1,234 |
|
|
|
775 |
|
|
|
429 |
|
|
|
59.2 |
|
|
|
187.6 |
|
Total assets |
|
|
31,228 |
|
|
|
30,297 |
|
|
|
28,007 |
|
|
|
3.1 |
|
|
|
11.5 |
|
Deposits |
|
|
19,708 |
|
|
|
18,567 |
|
|
|
16,357 |
|
|
|
6.1 |
|
|
|
20.5 |
|
|
|
|
|
|
|
Assets under management at period end |
|
|
|
|
|
|
|
|
|
$ |
37 |
|
|
|
N/M |
|
|
|
N/M |
|
TE = Taxable Equivalent, N/M = Not Meaningful
Additional Key Corporate Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in millions |
|
|
|
|
|
|
|
|
|
|
Change 2Q15 vs. |
|
|
|
2Q15 |
|
|
1Q15 |
|
|
2Q14 |
|
|
1Q15 |
|
|
2Q14 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment services income |
|
$ |
35 |
|
|
$ |
34 |
|
|
$ |
23 |
|
|
|
2.9 |
% |
|
|
52.2 |
% |
Investment banking and debt placement fees |
|
|
139 |
|
|
|
68 |
|
|
|
97 |
|
|
|
104.4 |
|
|
|
43.3 |
|
Operating lease income and other leasing gains |
|
|
18 |
|
|
|
14 |
|
|
|
11 |
|
|
|
28.6 |
|
|
|
63.6 |
|
|
|
|
|
|
|
Corporate services income |
|
|
33 |
|
|
|
32 |
|
|
|
30 |
|
|
|
3.1 |
|
|
|
10.0 |
|
Service charges on deposit accounts |
|
|
11 |
|
|
|
10 |
|
|
|
11 |
|
|
|
10.0 |
|
|
|
|
|
Cards and payments income |
|
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
|
|
|
|
|
33.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments and services income |
|
|
48 |
|
|
|
46 |
|
|
|
44 |
|
|
|
4.3 |
|
|
|
9.1 |
|
|
|
|
|
|
|
Mortgage servicing fees |
|
|
9 |
|
|
|
13 |
|
|
|
11 |
|
|
|
(30.8 |
) |
|
|
(18.2 |
) |
Other noninterest income |
|
|
1 |
|
|
|
13 |
|
|
|
(1 |
) |
|
|
(92.3 |
) |
|
|
N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
$ |
250 |
|
|
$ |
188 |
|
|
$ |
185 |
|
|
|
33.0 |
% |
|
|
35.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not Meaningful
Key
Corporate Bank Summary of Operations
|
|
|
Record high quarter for investment banking and debt placement fees |
|
|
|
Revenue up 20.8% from the prior year |
|
|
|
Average loan and lease balances up 10.5% from the prior year |
|
|
|
Average deposits up 20.5% from the prior year |
Key Corporate Bank recorded net income
attributable to Key of $135 million for the second quarter of 2015, unchanged from the same period one year ago.
Taxable-equivalent net
interest income increased by $17 million, or 8.1%, compared to the second quarter of 2014. Average earning assets increased $2.6 billion, or 10.3%, from the year-ago quarter, primarily driven by loan growth in commercial, financial and agricultural
and real estate commercial mortgage loans. This
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
10
growth in earning assets drove an increase of $10 million in earning asset spread. Average deposit balances increased $3.4 billion, or 20.5%, from the year-ago quarter, driven by commercial
mortgage servicing deposits and other commercial client inflows. This growth in deposit balances drove an increase of $13 million in deposit and borrowing spread.
Noninterest income was up $65 million, or 35.1% from the prior year. This growth was primarily due to a record high quarter for investment
banking and debt placement fees, which increased $42 million or 43.3%, driven by strength in financial advisory fees and loan syndications. Trust and investment services income increased $12 million, mostly due to the Pacific Crest Securities
acquisition. Operating lease income and other leasing gains also increased $7 million, or 63.6%.
The provision for credit losses was an
expense of $38 million for the second quarter of 2015, compared to a credit of $4 million for the same period one year ago.
Noninterest
expense increased by $45 million, or 21.7%, from the second quarter of 2014. This increase was due to performance-based compensation and expenses related to the third quarter 2014 acquisition of Pacific Crest Securities.
Other Segments
Other Segments consist of
Corporate Treasury, Keys Principal Investing unit and various exit portfolios. Other Segments generated net income attributable to Key of $31 million for the second quarter of 2015, compared to net income attributable to Key of $54 million for
the same period last year. These results were primarily due to $16 million in lower net gains on principal investing and $19 million in lower operating lease income and other leasing gains, partially offset by a $3 million increase in
corporate-owned life insurance income and lower personnel expense.
*****
KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nations largest bank-based financial services
companies, Key had assets of approximately $94.6 billion at June 30, 2015.
Key provides deposit, lending, cash management and investment services to
individuals and small and mid-sized businesses in 12 states under the name KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and
private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is
Member FDIC.
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
11
|
|
|
CONTACTS: |
|
|
ANALYSTS |
|
MEDIA |
Vernon L. Patterson |
|
Jack Sparks |
216.689.0520 |
|
720.904.4554 |
Vernon_Patterson@KeyBank.com |
|
Jack_Sparks@KeyBank.com |
|
|
Twitter: @keybank_news |
Kelly L. Dillon |
|
|
216.689.3133 |
|
|
Kelly_L_Dillon@KeyBank.com |
|
|
|
|
Melanie S. Misconish |
|
|
216.689.4545 |
|
|
Melanie_S_Misconish@KeyBank.com |
|
|
INVESTOR |
|
KEY MEDIA |
RELATIONS: www.key.com/ir |
|
NEWSROOM: www.key.com/newsroom |
This earnings release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as goal, objective, plan,
expect, assume, anticipate, intend, project, believe, estimate, or other words of similar meaning. Forward-looking statements provide our current expectations or
forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially
from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Keys actual results to differ from those described in the
forward-looking statements can be found in KeyCorps Form 10-K for the year ended December 31, 2014, which has been filed with the Securities and Exchange Commission (the SEC) and is available on Keys website
(www.key.com/ir) and on the SECs website (www.sec.gov). These factors may include, among others: deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a reversal of the
U.S. economic recovery due to financial, political, or other shocks, and the extensive and increasing regulation of the U.S. financial services industry. Any forward-looking statements made by us or on our behalf speak only as of the date they are
made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.
Notes to Editors:
A live Internet broadcast of
KeyCorps conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts questions can be accessed through the Investor Relations section at https://www.key.com/ir
at 9:00 a.m. ET, on Thursday, July 16, 2015. An audio replay of the call will be available through July 23, 2015.
For up-to-date company
information, media contacts, and facts and figures about Keys lines of business, visit our Media Newsroom at https://www.key.com/newsroom.
*****
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
12
KeyCorp
Second Quarter 2015
Financial Supplement
|
|
|
Page |
|
|
13 |
|
Financial Highlights |
15 |
|
GAAP to Non-GAAP Reconciliation |
18 |
|
Consolidated Balance Sheets |
19 |
|
Consolidated Statements of Income |
20 |
|
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations |
22 |
|
Noninterest Expense |
22 |
|
Personnel Expense |
23 |
|
Loan Composition |
23 |
|
Loans Held for Sale Composition |
23 |
|
Summary of Changes in Loans Held for Sale |
24 |
|
Exit Loan Portfolio From Continuing Operations |
24 |
|
Asset Quality Statistics From Continuing Operations |
25 |
|
Summary of Loan and Lease Loss Experience From Continuing Operations |
26 |
|
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations |
27 |
|
Summary of Changes in Nonperforming Loans From Continuing Operations |
27 |
|
Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations |
28 |
|
Line of Business Results |
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
13
Financial Highlights
(dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Summary of operations |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (TE) |
|
$ |
591 |
|
|
$ |
577 |
|
|
$ |
579 |
|
Noninterest income |
|
|
488 |
|
|
|
437 |
|
|
|
455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue (TE) |
|
|
1,079 |
|
|
|
1,014 |
|
|
|
1,034 |
|
Provision for credit losses |
|
|
41 |
|
|
|
35 |
|
|
|
12 |
|
Noninterest expense |
|
|
711 |
|
|
|
669 |
|
|
|
687 |
|
Income (loss) from continuing operations attributable to Key |
|
|
235 |
|
|
|
228 |
|
|
|
247 |
|
Income (loss) from discontinued operations, net of taxes (a) |
|
|
3 |
|
|
|
5 |
|
|
|
(28 |
) |
Net income (loss) attributable to Key |
|
|
238 |
|
|
|
233 |
|
|
|
219 |
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
230 |
|
|
$ |
222 |
|
|
$ |
242 |
|
Income (loss) from discontinued operations, net of taxes (a) |
|
|
3 |
|
|
|
5 |
|
|
|
(28 |
) |
Net income (loss) attributable to Key common shareholders |
|
|
233 |
|
|
|
227 |
|
|
|
214 |
|
|
|
|
|
Per common share |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
.27 |
|
|
$ |
.26 |
|
|
$ |
.28 |
|
Income (loss) from discontinued operations, net of taxes (a) |
|
|
|
|
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders (b) |
|
|
.28 |
|
|
|
.27 |
|
|
|
.24 |
|
Income (loss) from continuing operations attributable to Key common shareholders assuming dilution |
|
|
.27 |
|
|
|
.26 |
|
|
|
.27 |
|
Income (loss) from discontinued operations, net of taxes assuming
dilution (a) |
|
|
|
|
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders assuming dilution
(b) |
|
|
.27 |
|
|
|
.26 |
|
|
|
.24 |
|
|
|
|
|
Cash dividends paid |
|
|
.075 |
|
|
|
.065 |
|
|
|
.065 |
|
Book value at period end |
|
|
12.21 |
|
|
|
12.12 |
|
|
|
11.65 |
|
Tangible book value at period end |
|
|
10.92 |
|
|
|
10.84 |
|
|
|
10.50 |
|
Market price at period end |
|
|
15.02 |
|
|
|
14.16 |
|
|
|
14.33 |
|
|
|
|
|
Performance ratios |
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
1.03 |
% |
|
|
1.03 |
% |
|
|
1.14 |
% |
Return on average common equity |
|
|
8.96 |
|
|
|
8.76 |
|
|
|
9.55 |
|
Return on average tangible common equity (c) |
|
|
10.01 |
|
|
|
9.80 |
|
|
|
10.60 |
|
Net interest margin (TE) |
|
|
2.88 |
|
|
|
2.91 |
|
|
|
2.98 |
|
Cash efficiency ratio (c) |
|
|
65.1 |
|
|
|
65.1 |
|
|
|
65.6 |
|
|
|
|
|
From consolidated operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
1.02 |
% |
|
|
1.03 |
% |
|
|
.96 |
% |
Return on average common equity |
|
|
9.07 |
|
|
|
8.96 |
|
|
|
8.44 |
|
Return on average tangible common equity (c) |
|
|
10.14 |
|
|
|
10.02 |
|
|
|
9.37 |
|
Net interest margin (TE) |
|
|
2.85 |
|
|
|
2.88 |
|
|
|
2.94 |
|
Loan to deposit (d) |
|
|
87.3 |
|
|
|
86.9 |
|
|
|
87.1 |
|
|
|
|
|
Capital ratios at period end |
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity to assets |
|
|
11.19 |
% |
|
|
11.26 |
% |
|
|
11.44 |
% |
Key common shareholders equity to assets |
|
|
10.89 |
|
|
|
10.95 |
|
|
|
11.13 |
|
Tangible common equity to tangible assets (c) |
|
|
9.86 |
|
|
|
9.92 |
|
|
|
10.15 |
|
Common Equity Tier 1 (c), (e) |
|
|
10.69 |
|
|
|
10.64 |
|
|
|
N/A |
|
Tier 1 common equity (c) |
|
|
N/A |
|
|
|
N/A |
|
|
|
11.25 |
|
Tier 1 risk-based capital (e) |
|
|
11.10 |
|
|
|
11.04 |
|
|
|
11.99 |
|
Total risk-based capital (e) |
|
|
12.63 |
|
|
|
12.79 |
|
|
|
14.14 |
|
Leverage (e) |
|
|
10.73 |
|
|
|
10.91 |
|
|
|
11.24 |
|
|
|
|
|
Asset quality from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs |
|
$ |
36 |
|
|
$ |
28 |
|
|
$ |
30 |
|
Net loan charge-offs to average loans |
|
|
.25 |
% |
|
|
.20 |
% |
|
|
.22 |
% |
Allowance for loan and lease losses |
|
$ |
796 |
|
|
$ |
794 |
|
|
$ |
814 |
|
Allowance for credit losses |
|
|
841 |
|
|
|
835 |
|
|
|
851 |
|
Allowance for loan and lease losses to period-end loans |
|
|
1.37 |
% |
|
|
1.37 |
% |
|
|
1.46 |
% |
Allowance for credit losses to period-end loans |
|
|
1.44 |
|
|
|
1.44 |
|
|
|
1.53 |
|
Allowance for loan and lease losses to nonperforming loans |
|
|
190.0 |
|
|
|
181.7 |
|
|
|
205.6 |
|
Allowance for credit losses to nonperforming loans |
|
|
200.7 |
|
|
|
191.1 |
|
|
|
214.9 |
|
Nonperforming loans at period end (f) |
|
$ |
419 |
|
|
$ |
437 |
|
|
$ |
396 |
|
Nonperforming assets at period end |
|
|
440 |
|
|
|
457 |
|
|
|
410 |
|
Nonperforming loans to period-end portfolio loans |
|
|
.72 |
% |
|
|
.75 |
% |
|
|
.71 |
% |
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets |
|
|
.75 |
|
|
|
.79 |
|
|
|
.74 |
|
|
|
|
|
Trust and brokerage assets |
|
|
|
|
|
|
|
|
|
|
|
|
Assets under management |
|
$ |
38,399 |
|
|
$ |
39,281 |
|
|
$ |
39,669 |
|
Nonmanaged and brokerage assets |
|
|
48,789 |
|
|
|
49,508 |
|
|
|
48,728 |
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
|
Average full-time equivalent employees |
|
|
13,455 |
|
|
|
13,591 |
|
|
|
13,867 |
|
Branches |
|
|
989 |
|
|
|
992 |
|
|
|
1,009 |
|
|
|
|
|
Taxable-equivalent adjustment |
|
$ |
7 |
|
|
$ |
6 |
|
|
$ |
6 |
|
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
14
Financial Highlights (continued)
(dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
6-30-14 |
|
Summary of operations |
|
|
|
|
|
|
|
|
Net interest income (TE) |
|
$ |
1,168 |
|
|
$ |
1,148 |
|
Noninterest income |
|
|
925 |
|
|
|
890 |
|
|
|
|
|
|
|
|
|
|
Total revenue (TE) |
|
|
2,093 |
|
|
|
2,038 |
|
Provision for credit losses |
|
|
76 |
|
|
|
16 |
|
Noninterest expense |
|
|
1,380 |
|
|
|
1,351 |
|
Income (loss) from continuing operations attributable to Key |
|
|
463 |
|
|
|
485 |
|
Income (loss) from discontinued operations, net of taxes (a) |
|
|
8 |
|
|
|
(24 |
) |
Net income (loss) attributable to Key |
|
|
471 |
|
|
|
461 |
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
452 |
|
|
$ |
474 |
|
Income (loss) from discontinued operations, net of taxes (a) |
|
|
8 |
|
|
|
(24 |
) |
Net income (loss) attributable to Key common shareholders |
|
|
460 |
|
|
|
450 |
|
|
|
|
Per common share |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
.53 |
|
|
$ |
.54 |
|
Income (loss) from discontinued operations, net of taxes (a) |
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders (b) |
|
|
.54 |
|
|
|
.51 |
|
Income (loss) from continuing operations attributable to Key common shareholders assuming dilution |
|
|
.52 |
|
|
|
.53 |
|
Income (loss) from discontinued operations, net of taxes assuming
dilution (a) |
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders assuming dilution
(b) |
|
|
.53 |
|
|
|
.51 |
|
|
|
|
Cash dividends paid |
|
|
.14 |
|
|
|
.12 |
|
|
|
|
Performance ratios |
|
|
|
|
|
|
|
|
From continuing operations: |
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
1.03 |
% |
|
|
1.13 |
% |
Return on average common equity |
|
|
8.86 |
|
|
|
9.44 |
|
Return on average tangible common equity (c) |
|
|
9.91 |
|
|
|
10.49 |
|
Net interest margin (TE) |
|
|
2.89 |
|
|
|
2.99 |
|
Cash efficiency ratio (c) |
|
|
65.1 |
|
|
|
65.4 |
|
|
|
|
From consolidated operations: |
|
|
|
|
|
|
|
|
Return on average total assets |
|
|
1.02 |
% |
|
|
1.03 |
% |
Return on average common equity |
|
|
9.01 |
|
|
|
8.96 |
|
|
|
|
Return on average tangible common equity (c) |
|
|
10.08 |
|
|
|
9.96 |
|
Net interest margin (TE) |
|
|
2.86 |
|
|
|
2.95 |
|
|
|
|
Asset quality from continuing operations |
|
|
|
|
|
|
|
|
Net loan charge-offs |
|
$ |
64 |
|
|
$ |
50 |
|
Net loan charge-offs to average total loans |
|
|
.22 |
% |
|
|
.18 |
% |
|
|
|
Other data |
|
|
|
|
|
|
|
|
Average full-time equivalent employees |
|
|
13,512 |
|
|
|
13,961 |
|
|
|
|
Taxable-equivalent adjustment |
|
$ |
13 |
|
|
$ |
12 |
|
(a) |
In April 2009, management decided to wind down the operations of Austin Capital Management, Ltd., a subsidiary that specialized in managing hedge fund investments for institutional customers. In September 2009,
management decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank National Association. In February 2013, Key decided to sell its investment subsidiary,
Victory Capital Management, and its broker-dealer affiliate, Victory Capital Advisors, to a private equity fund. As a result of these decisions, Key has accounted for these businesses as discontinued operations. |
(b) |
Earnings per share may not foot due to rounding. |
(c) |
The following table entitled GAAP to Non-GAAP Reconciliations presents the computations of certain financial measures related to tangible common equity, Common Equity Tier 1
(compliance date of January 1, 2015, under the Regulatory Capital Rules) Tier 1 common equity (prior to January 1, 2015), and cash efficiency. The table reconciles the GAAP performance measures to the corresponding
non-GAAP measures, which provides a basis for period-to-period comparisons. For further information on the Regulatory Capital Rules, see the Capital section of this release. |
(d) |
Represents period-end consolidated total loans and loans held for sale (excluding education loans in the securitization trusts for periods prior to September 30, 2014) divided by period-end consolidated total
deposits (excluding deposits in foreign office). |
(e) |
6-30-15 ratio is estimated. |
(f) |
Loan balances exclude $12 million, $12 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, and June 30, 2014, respectively. |
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
15
GAAP to Non-GAAP Reconciliations
(dollars in millions)
The table below presents
certain non-GAAP financial measures related to tangible common equity, return on tangible common equity, Common Equity Tier 1, Tier 1 common equity, pre-provision net revenue, and
cash efficiency ratio.
The tangible common equity ratio and the return on tangible common equity ratio have been a focus for some investors,
and management believes these ratios may assist investors in analyzing Keys capital position without regard to the effects of intangible assets and preferred stock. Traditionally, the banking regulators have assessed bank and bank holding
company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations. In October 2013, the federal banking regulators published the final Basel III capital framework
for U.S. banking organizations (the Regulatory Capital Rules). The Regulatory Capital Rules require higher and better-quality capital and introduces a new capital measure, Common Equity Tier 1, a non-GAAP financial measure.
The mandatory compliance date for Key as a standardized approach banking organization began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Prior to January 1, 2015, the Federal Reserve
focused its assessment of capital adequacy on a component of Tier 1 risk-based capital known as Tier 1 common equity, also a non-GAAP financial measure.
Common Equity Tier 1 is not formally defined by GAAP and is considered to be a non-GAAP financial measure. Since analysts and banking regulators may assess
Keys capital adequacy using tangible common equity and Common Equity Tier 1, management believes it is useful to enable investors to assess Keys capital adequacy on these same bases. The table also reconciles the GAAP performance
measures to the corresponding non-GAAP measures.
The table also shows the computation for pre-provision net revenue, which is not formally defined by
GAAP. Management believes that eliminating the effects of the provision for loan and lease losses makes it easier to analyze the results by presenting them on a more comparable basis.
The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash
efficiency ratio performance measure removes the impact of Keys intangible asset amortization from the calculation. Management believes this ratio provides greater consistency and comparability between Keys results and those of its peer
banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis.
Non-GAAP financial measures
have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be
considered in isolation, or as a substitute for analyses of results as reported under GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Tangible common equity to tangible assets at period end |
|
|
|
|
|
|
|
|
|
Key shareholders equity (GAAP) |
|
$ |
10,590 |
|
|
$ |
10,603 |
|
|
$ |
10,504 |
|
Less: Intangible assets (a) |
|
|
1,085 |
|
|
|
1,088 |
|
|
|
1,008 |
|
Preferred Stock, Series A (b) |
|
|
281 |
|
|
|
281 |
|
|
|
282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity (non-GAAP) |
|
$ |
9,224 |
|
|
$ |
9,234 |
|
|
$ |
9,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
|
$ |
94,606 |
|
|
$ |
94,206 |
|
|
$ |
91,798 |
|
Less: Intangible assets (a) |
|
|
1,085 |
|
|
|
1,088 |
|
|
|
1,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets (non-GAAP) |
|
$ |
93,521 |
|
|
$ |
93,118 |
|
|
$ |
90,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets ratio (non-GAAP) |
|
|
9.86 |
% |
|
|
9.92 |
% |
|
|
10.15 |
% |
Common Equity Tier 1 at period end |
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity (GAAP) |
|
$ |
10,590 |
|
|
$ |
10,603 |
|
|
|
|
|
Less: Preferred Stock, Series A (b) |
|
|
281 |
|
|
|
281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 capital before adjustments and deductions |
|
|
10,309 |
|
|
|
10,322 |
|
|
|
|
|
Less: Goodwill, net of deferred taxes |
|
|
1,036 |
|
|
|
1,036 |
|
|
|
|
|
Intangible assets, net of deferred taxes |
|
|
33 |
|
|
|
36 |
|
|
|
|
|
Deferred tax assets |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes |
|
|
1 |
|
|
|
52 |
|
|
|
|
|
Accumulated gain (loss) on cash flow hedges, net of deferred taxes |
|
|
(21 |
) |
|
|
(8 |
) |
|
|
|
|
Amounts recorded in accumulated other comprehensive income (loss), net of deferred taxes |
|
|
(362 |
) |
|
|
(364 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Equity Tier 1 capital (c) |
|
$ |
9,621 |
|
|
$ |
9,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net risk-weighted assets (regulatory) (c) |
|
$ |
89,995 |
|
|
$ |
89,967 |
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 ratio (non-GAAP) (c) |
|
|
10.69 |
% |
|
|
10.64 |
% |
|
|
|
|
Tier 1 common equity at period end |
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity (GAAP) |
|
|
|
|
|
|
|
|
|
$ |
10,504 |
|
Qualifying capital securities |
|
|
|
|
|
|
|
|
|
|
339 |
|
Less: Goodwill |
|
|
|
|
|
|
|
|
|
|
979 |
|
Accumulated other comprehensive income (loss) (d) |
|
|
|
|
|
|
|
|
|
|
(328 |
) |
Other assets (e) |
|
|
|
|
|
|
|
|
|
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Tier 1 capital (regulatory) |
|
|
|
|
|
|
|
|
|
|
10,106 |
|
Less: Qualifying capital securities |
|
|
|
|
|
|
|
|
|
|
339 |
|
Preferred Stock, Series A (b) |
|
|
|
|
|
|
|
|
|
|
282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Tier 1 common equity (non-GAAP) |
|
|
|
|
|
|
|
|
|
$ |
9,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net risk-weighted assets (regulatory) |
|
|
|
|
|
|
|
|
|
$ |
84,287 |
|
Tier 1 common equity ratio (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
11.25 |
% |
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
16
GAAP to Non-GAAP Reconciliations (continued)
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Pre-provision net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
584 |
|
|
$ |
571 |
|
|
$ |
573 |
|
Plus: Taxable-equivalent adjustment |
|
|
7 |
|
|
|
6 |
|
|
|
6 |
|
Noninterest income (GAAP) |
|
|
488 |
|
|
|
437 |
|
|
|
455 |
|
Less: Noninterest expense (GAAP) |
|
|
711 |
|
|
|
669 |
|
|
|
687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net revenue from continuing operations (non-GAAP) |
|
$ |
368 |
|
|
$ |
345 |
|
|
$ |
347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible common equity |
|
|
|
|
|
|
|
|
|
|
|
|
Average Key shareholders equity (GAAP) |
|
$ |
10,590 |
|
|
$ |
10,570 |
|
|
$ |
10,459 |
|
Less: Intangible assets (average) (f) |
|
|
1,086 |
|
|
|
1,089 |
|
|
|
1,010 |
|
Preferred Stock, Series A (average) |
|
|
290 |
|
|
|
290 |
|
|
|
291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible common equity (non-GAAP) |
|
$ |
9,214 |
|
|
$ |
9,191 |
|
|
$ |
9,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible common equity from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) |
|
$ |
230 |
|
|
$ |
222 |
|
|
$ |
242 |
|
Average tangible common equity (non-GAAP) |
|
|
9,214 |
|
|
|
9,191 |
|
|
|
9,158 |
|
|
|
|
|
Return on average tangible common equity from continuing operations (non-GAAP) |
|
|
10.01 |
% |
|
|
9.80 |
% |
|
|
10.60 |
% |
|
|
|
|
Return on average tangible common equity consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Key common shareholders (GAAP) |
|
$ |
233 |
|
|
$ |
227 |
|
|
$ |
214 |
|
Average tangible common equity (non-GAAP) |
|
|
9,214 |
|
|
|
9,191 |
|
|
|
9,158 |
|
|
|
|
|
Return on average tangible common equity consolidated (non-GAAP) |
|
|
10.14 |
% |
|
|
10.02 |
% |
|
|
9.37 |
% |
|
|
|
|
Cash efficiency ratio |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense (GAAP) |
|
$ |
711 |
|
|
$ |
669 |
|
|
$ |
687 |
|
Less: Intangible asset amortization (GAAP) |
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted noninterest expense (non-GAAP) |
|
$ |
702 |
|
|
$ |
660 |
|
|
$ |
678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
584 |
|
|
$ |
571 |
|
|
$ |
573 |
|
Plus: Taxable-equivalent adjustment |
|
|
7 |
|
|
|
6 |
|
|
|
6 |
|
Noninterest income (GAAP) |
|
|
488 |
|
|
|
437 |
|
|
|
455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total taxable-equivalent revenue (non-GAAP) |
|
$ |
1,079 |
|
|
$ |
1,014 |
|
|
$ |
1,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency ratio (non-GAAP) |
|
|
65.1 |
% |
|
|
65.1 |
% |
|
|
65.6 |
% |
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
6-30-15 |
|
|
|
|
|
|
|
Common Equity Tier 1 under the Regulatory Capital Rules (estimates) |
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 under current regulatory rules |
|
$ |
9,621 |
|
|
|
|
|
|
|
|
|
Adjustments from current regulatory rules to the Regulatory Capital Rules: |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets and other assets (g) |
|
|
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 anticipated under the Regulatory Capital Rules (h) |
|
$ |
9,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net risk-weighted assets under current regulatory rules |
|
$ |
89,995 |
|
|
|
|
|
|
|
|
|
Adjustments from current regulatory rules to the Regulatory Capital Rules: |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage servicing assets (i) |
|
|
494 |
|
|
|
|
|
|
|
|
|
Deferred tax assets (i) |
|
|
22 |
|
|
|
|
|
|
|
|
|
Significant investments (i) |
|
|
|
|
|
|
|
|
|
|
|
|
Other assets (j) |
|
|
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-weighted assets anticipated under the Regulatory Capital Rules
(h) |
|
$ |
90,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 ratio under the Regulatory Capital Rules (h) |
|
|
10.58 |
% |
|
|
|
|
|
|
|
|
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
17
GAAP to Non-GAAP Reconciliations (continued)
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
6-30-14 |
|
Pre-provision net revenue |
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
1,155 |
|
|
$ |
1,136 |
|
Plus: Taxable-equivalent adjustment |
|
|
13 |
|
|
|
12 |
|
Noninterest income (GAAP) |
|
|
925 |
|
|
|
890 |
|
Less: Noninterest expense (GAAP) |
|
|
1,380 |
|
|
|
1,351 |
|
|
|
|
|
|
|
|
|
|
Pre-provision net revenue from continuing operations (non-GAAP) |
|
$ |
713 |
|
|
$ |
687 |
|
|
|
|
|
|
|
|
|
|
Average tangible common equity |
|
|
|
|
|
|
|
|
Average Key shareholders equity (GAAP) |
|
$ |
10,580 |
|
|
$ |
10,415 |
|
Less: Intangible assets (average) (k) |
|
|
1,088 |
|
|
|
1,011 |
|
Preferred Stock, Series A (average) |
|
|
290 |
|
|
|
291 |
|
|
|
|
|
|
|
|
|
|
Average tangible common equity (non-GAAP) |
|
$ |
9,202 |
|
|
$ |
9,113 |
|
|
|
|
|
|
|
|
|
|
Return on average tangible common equity from continuing operations |
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) |
|
$ |
452 |
|
|
$ |
474 |
|
Average tangible common equity (non-GAAP) |
|
|
9,202 |
|
|
|
9,113 |
|
|
|
|
Return on average tangible common equity from continuing operations (non-GAAP) |
|
|
9.91 |
% |
|
|
10.49 |
% |
|
|
|
Return on average tangible common equity consolidated |
|
|
|
|
|
|
|
|
Net income (loss) attributable to Key common shareholders (GAAP) |
|
$ |
460 |
|
|
$ |
450 |
|
Average tangible common equity (non-GAAP) |
|
|
9,202 |
|
|
|
9,113 |
|
|
|
|
Return on average tangible common equity consolidated (non-GAAP) |
|
|
10.08 |
% |
|
|
9.96 |
% |
|
|
|
Cash efficiency ratio |
|
|
|
|
|
|
|
|
Noninterest expense (GAAP) |
|
$ |
1,380 |
|
|
$ |
1,351 |
|
Less: Intangible asset amortization (GAAP) |
|
|
18 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
Adjusted noninterest expense (non-GAAP) |
|
$ |
1,362 |
|
|
$ |
1,332 |
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
1,155 |
|
|
$ |
1,136 |
|
Plus: Taxable-equivalent adjustment |
|
|
13 |
|
|
|
12 |
|
Noninterest income (GAAP) |
|
|
925 |
|
|
|
890 |
|
|
|
|
|
|
|
|
|
|
Total taxable-equivalent revenue (non-GAAP) |
|
$ |
2,093 |
|
|
$ |
2,038 |
|
|
|
|
|
|
|
|
|
|
Cash efficiency ratio (non-GAAP) |
|
|
65.1 |
% |
|
|
65.4 |
% |
(a) |
For the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, intangible assets exclude $55 million, $61 million, and $79 million, respectively, of period-end purchased credit card
receivables. |
(b) |
Net of capital surplus. |
(c) |
6-30-15 amount is estimated. |
(d) |
Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash flow hedges, and amounts resulting from the
application of the applicable accounting guidance for defined benefit and other postretirement plans. |
(e) |
Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed intangible assets (excluding goodwill) and deductible portions of nonfinancial equity investments. There were no disallowed
deferred tax assets at June 30, 2014. |
(f) |
For the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, average intangible assets exclude $58 million, $64 million, and $82 million, respectively, of average purchased credit
card receivables. |
(g) |
Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as the deductible portion of purchased credit card receivables. |
(h) |
The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies Regulatory Capital Rules (as fully phased-in on January 1, 2019); Key is subject to the
Regulatory Capital Rules under the standardized approach. |
(i) |
Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250%. |
(j) |
Under the fully implemented rule, certain deferred tax assets and intangible assets subject to the transition provision are no longer required to be risk-weighted because they are deducted directly from capital.
|
(k) |
For the six months ended June 30, 2015, and June 30, 2014, average intangible assets exclude $61 million, and $85 million, respectively, of average purchased credit card receivables. |
GAAP = U.S. generally accepted accounting principles
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
18
Consolidated Balance Sheets
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
58,264 |
|
|
$ |
57,953 |
|
|
$ |
55,600 |
|
Loans held for sale |
|
|
835 |
|
|
|
1,649 |
|
|
|
435 |
|
Securities available for sale |
|
|
14,244 |
|
|
|
13,120 |
|
|
|
12,224 |
|
Held-to-maturity securities |
|
|
5,022 |
|
|
|
5,005 |
|
|
|
5,233 |
|
Trading account assets |
|
|
674 |
|
|
|
789 |
|
|
|
890 |
|
Short-term investments |
|
|
3,222 |
|
|
|
3,378 |
|
|
|
3,176 |
|
Other investments |
|
|
703 |
|
|
|
730 |
|
|
|
899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total earning assets |
|
|
82,964 |
|
|
|
82,624 |
|
|
|
78,457 |
|
Allowance for loan and lease losses |
|
|
(796 |
) |
|
|
(794 |
) |
|
|
(814 |
) |
Cash and due from banks |
|
|
693 |
|
|
|
506 |
|
|
|
604 |
|
Premises and equipment |
|
|
788 |
|
|
|
806 |
|
|
|
844 |
|
Operating lease assets |
|
|
296 |
|
|
|
306 |
|
|
|
306 |
|
Goodwill |
|
|
1,057 |
|
|
|
1,057 |
|
|
|
979 |
|
Other intangible assets |
|
|
83 |
|
|
|
92 |
|
|
|
108 |
|
Corporate-owned life insurance |
|
|
3,502 |
|
|
|
3,488 |
|
|
|
3,438 |
|
Derivative assets |
|
|
536 |
|
|
|
731 |
|
|
|
549 |
|
Accrued income and other assets |
|
|
3,314 |
|
|
|
3,144 |
|
|
|
3,090 |
|
Discontinued assets |
|
|
2,169 |
|
|
|
2,246 |
|
|
|
4,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
94,606 |
|
|
$ |
94,206 |
|
|
$ |
91,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits in domestic offices: |
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts |
|
$ |
36,024 |
|
|
$ |
35,623 |
|
|
$ |
33,637 |
|
Savings deposits |
|
|
2,370 |
|
|
|
2,413 |
|
|
|
2,450 |
|
Certificates of deposit ($100,000 or more) |
|
|
2,032 |
|
|
|
1,982 |
|
|
|
2,743 |
|
Other time deposits |
|
|
3,105 |
|
|
|
3,182 |
|
|
|
3,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
43,531 |
|
|
|
43,200 |
|
|
|
42,335 |
|
Noninterest-bearing deposits |
|
|
26,640 |
|
|
|
27,948 |
|
|
|
24,781 |
|
Deposits in foreign office interest-bearing |
|
|
498 |
|
|
|
474 |
|
|
|
683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
|
70,669 |
|
|
|
71,622 |
|
|
|
67,799 |
|
Federal funds purchased and securities sold under repurchase agreements |
|
|
444 |
|
|
|
517 |
|
|
|
1,213 |
|
Bank notes and other short-term borrowings |
|
|
528 |
|
|
|
608 |
|
|
|
521 |
|
Derivative liabilities |
|
|
560 |
|
|
|
825 |
|
|
|
451 |
|
Accrued expense and other liabilities |
|
|
1,537 |
|
|
|
1,308 |
|
|
|
1,400 |
|
Long-term debt |
|
|
10,267 |
|
|
|
8,713 |
|
|
|
8,213 |
|
Discontinued liabilities |
|
|
|
|
|
|
|
|
|
|
1,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
84,005 |
|
|
|
83,593 |
|
|
|
81,277 |
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, Series A |
|
|
290 |
|
|
|
290 |
|
|
|
291 |
|
Common shares |
|
|
1,017 |
|
|
|
1,017 |
|
|
|
1,017 |
|
Capital surplus |
|
|
3,898 |
|
|
|
3,910 |
|
|
|
3,987 |
|
Retained earnings |
|
|
8,614 |
|
|
|
8,445 |
|
|
|
7,950 |
|
Treasury stock, at cost |
|
|
(2,884 |
) |
|
|
(2,780 |
) |
|
|
(2,452 |
) |
Accumulated other comprehensive income (loss) |
|
|
(345 |
) |
|
|
(279 |
) |
|
|
(289 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity |
|
|
10,590 |
|
|
|
10,603 |
|
|
|
10,504 |
|
Noncontrolling interests |
|
|
11 |
|
|
|
10 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
10,601 |
|
|
|
10,613 |
|
|
|
10,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
94,606 |
|
|
$ |
94,206 |
|
|
$ |
91,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (000) |
|
|
843,608 |
|
|
|
850,920 |
|
|
|
876,823 |
|
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
19
Consolidated Statements of Income
(dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
6-30-15 |
|
|
6-30-14 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
532 |
|
|
$ |
523 |
|
|
$ |
526 |
|
|
$ |
1,055 |
|
|
$ |
1,045 |
|
Loans held for sale |
|
|
12 |
|
|
|
7 |
|
|
|
5 |
|
|
|
19 |
|
|
|
9 |
|
Securities available for sale |
|
|
72 |
|
|
|
70 |
|
|
|
71 |
|
|
|
142 |
|
|
|
143 |
|
Held-to-maturity securities |
|
|
24 |
|
|
|
24 |
|
|
|
23 |
|
|
|
48 |
|
|
|
45 |
|
Trading account assets |
|
|
5 |
|
|
|
5 |
|
|
|
7 |
|
|
|
10 |
|
|
|
13 |
|
Short-term investments |
|
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
4 |
|
|
|
2 |
|
Other investments |
|
|
5 |
|
|
|
5 |
|
|
|
6 |
|
|
|
10 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
652 |
|
|
|
636 |
|
|
|
639 |
|
|
|
1,288 |
|
|
|
1,269 |
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
26 |
|
|
|
26 |
|
|
|
31 |
|
|
|
52 |
|
|
|
63 |
|
Federal funds purchased and securities sold under repurchase agreements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Bank notes and other short-term borrowings |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
4 |
|
Long-term debt |
|
|
40 |
|
|
|
37 |
|
|
|
33 |
|
|
|
77 |
|
|
|
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
68 |
|
|
|
65 |
|
|
|
66 |
|
|
|
133 |
|
|
|
133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
584 |
|
|
|
571 |
|
|
|
573 |
|
|
|
1,155 |
|
|
|
1,136 |
|
Provision for credit losses |
|
|
41 |
|
|
|
35 |
|
|
|
12 |
|
|
|
76 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for credit losses |
|
|
543 |
|
|
|
536 |
|
|
|
561 |
|
|
|
1,079 |
|
|
|
1,120 |
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment services income |
|
|
111 |
|
|
|
109 |
|
|
|
94 |
|
|
|
220 |
|
|
|
192 |
|
Investment banking and debt placement fees |
|
|
141 |
|
|
|
68 |
|
|
|
99 |
|
|
|
209 |
|
|
|
183 |
|
Service charges on deposit accounts |
|
|
63 |
|
|
|
61 |
|
|
|
66 |
|
|
|
124 |
|
|
|
129 |
|
Operating lease income and other leasing gains |
|
|
24 |
|
|
|
19 |
|
|
|
35 |
|
|
|
43 |
|
|
|
64 |
|
Corporate services income |
|
|
43 |
|
|
|
43 |
|
|
|
41 |
|
|
|
86 |
|
|
|
83 |
|
Cards and payments income |
|
|
47 |
|
|
|
42 |
|
|
|
43 |
|
|
|
89 |
|
|
|
81 |
|
Corporate-owned life insurance income |
|
|
30 |
|
|
|
31 |
|
|
|
28 |
|
|
|
61 |
|
|
|
54 |
|
Consumer mortgage income |
|
|
4 |
|
|
|
3 |
|
|
|
2 |
|
|
|
7 |
|
|
|
4 |
|
Mortgage servicing fees |
|
|
9 |
|
|
|
13 |
|
|
|
11 |
|
|
|
22 |
|
|
|
26 |
|
Net gains (losses) from principal investing |
|
|
11 |
|
|
|
29 |
|
|
|
27 |
|
|
|
40 |
|
|
|
51 |
|
Other income (a) |
|
|
5 |
|
|
|
19 |
|
|
|
9 |
|
|
|
24 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
488 |
|
|
|
437 |
|
|
|
455 |
|
|
|
925 |
|
|
|
890 |
|
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel |
|
|
408 |
|
|
|
389 |
|
|
|
389 |
|
|
|
797 |
|
|
|
777 |
|
Net occupancy |
|
|
66 |
|
|
|
65 |
|
|
|
68 |
|
|
|
131 |
|
|
|
132 |
|
Computer processing |
|
|
42 |
|
|
|
38 |
|
|
|
41 |
|
|
|
80 |
|
|
|
79 |
|
Business services and professional fees |
|
|
42 |
|
|
|
33 |
|
|
|
41 |
|
|
|
75 |
|
|
|
82 |
|
Equipment |
|
|
22 |
|
|
|
22 |
|
|
|
24 |
|
|
|
44 |
|
|
|
48 |
|
Operating lease expense |
|
|
12 |
|
|
|
11 |
|
|
|
10 |
|
|
|
23 |
|
|
|
20 |
|
Marketing |
|
|
15 |
|
|
|
8 |
|
|
|
13 |
|
|
|
23 |
|
|
|
18 |
|
FDIC assessment |
|
|
8 |
|
|
|
8 |
|
|
|
6 |
|
|
|
16 |
|
|
|
12 |
|
Intangible asset amortization |
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
18 |
|
|
|
19 |
|
OREO expense, net |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
Other expense |
|
|
86 |
|
|
|
84 |
|
|
|
85 |
|
|
|
170 |
|
|
|
162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
|
711 |
|
|
|
669 |
|
|
|
687 |
|
|
|
1,380 |
|
|
|
1,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes |
|
|
320 |
|
|
|
304 |
|
|
|
329 |
|
|
|
624 |
|
|
|
659 |
|
Income taxes |
|
|
84 |
|
|
|
74 |
|
|
|
76 |
|
|
|
158 |
|
|
|
168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
236 |
|
|
|
230 |
|
|
|
253 |
|
|
|
466 |
|
|
|
491 |
|
Income (loss) from discontinued operations, net of taxes |
|
|
3 |
|
|
|
5 |
|
|
|
(28 |
) |
|
|
8 |
|
|
|
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
239 |
|
|
|
235 |
|
|
|
225 |
|
|
|
474 |
|
|
|
467 |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
1 |
|
|
|
2 |
|
|
|
6 |
|
|
|
3 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Key |
|
$ |
238 |
|
|
$ |
233 |
|
|
$ |
219 |
|
|
$ |
471 |
|
|
$ |
461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
230 |
|
|
$ |
222 |
|
|
$ |
242 |
|
|
$ |
452 |
|
|
$ |
474 |
|
Net income (loss) attributable to Key common shareholders |
|
|
233 |
|
|
|
227 |
|
|
|
214 |
|
|
|
460 |
|
|
|
450 |
|
|
|
|
|
|
|
Per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
.27 |
|
|
$ |
.26 |
|
|
$ |
.28 |
|
|
$ |
.53 |
|
|
$ |
.54 |
|
Income (loss) from discontinued operations, net of taxes |
|
|
|
|
|
|
.01 |
|
|
|
(.03 |
) |
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders (b) |
|
|
.28 |
|
|
|
.27 |
|
|
|
.24 |
|
|
|
.54 |
|
|
|
.51 |
|
|
|
|
|
|
|
Per common share assuming dilution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
.27 |
|
|
$ |
.26 |
|
|
$ |
.27 |
|
|
$ |
.52 |
|
|
$ |
.53 |
|
Income (loss) from discontinued operations, net of taxes |
|
|
|
|
|
|
.01 |
|
|
|
(.03 |
) |
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders (b) |
|
|
.27 |
|
|
|
.26 |
|
|
|
.24 |
|
|
|
.53 |
|
|
|
.51 |
|
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
.075 |
|
|
$ |
.065 |
|
|
$ |
.065 |
|
|
$ |
.14 |
|
|
$ |
.12 |
|
|
|
|
|
|
|
Weighted-average common shares outstanding (000) |
|
|
839,454 |
|
|
|
848,580 |
|
|
|
875,298 |
|
|
|
843,992 |
|
|
|
879,986 |
|
Effect of convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
20,602 |
|
|
|
|
|
|
|
|
|
Effect of common share options and other stock awards |
|
|
6,858 |
|
|
|
8,542 |
|
|
|
6,237 |
|
|
|
7,695 |
|
|
|
6,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares and potential common shares outstanding
(000) (c) |
|
|
846,312 |
|
|
|
857,122 |
|
|
|
902,137 |
|
|
|
851,687 |
|
|
|
886,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
For each of the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, net securities gains (losses) totaled less than $1 million. For the three months ended June 30, 2015, and
June 30, 2014, Key did not have any impairment losses related to securities. For the three months ended March 31, 2015, impairment losses related to securities totaled less than $1 million. |
(b) |
Earnings per share may not foot due to rounding. |
(c) |
Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable. |
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
20
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From
Continuing Operations
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2015 |
|
|
First Quarter 2015 |
|
|
Second Quarter 2014 |
|
|
|
Average Balance |
|
|
Interest (a) |
|
|
Yield/Rate (a) |
|
|
Average Balance |
|
|
Interest (a) |
|
|
Yield/Rate (a) |
|
|
Average Balance |
|
|
Interest (a) |
|
|
Yield/Rate (a) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (b), (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural (d) |
|
$ |
29,017 |
|
|
$ |
233 |
|
|
|
3.23 |
% |
|
$ |
28,321 |
|
|
$ |
223 |
|
|
|
3.18 |
% |
|
$ |
26,444 |
|
|
$ |
219 |
|
|
|
3.31 |
% |
Real estate commercial mortgage |
|
|
7,981 |
|
|
|
74 |
|
|
|
3.70 |
|
|
|
8,095 |
|
|
|
73 |
|
|
|
3.67 |
|
|
|
7,880 |
|
|
|
74 |
|
|
|
3.79 |
|
Real estate construction |
|
|
1,199 |
|
|
|
11 |
|
|
|
3.60 |
|
|
|
1,139 |
|
|
|
11 |
|
|
|
3.90 |
|
|
|
1,049 |
|
|
|
11 |
|
|
|
4.03 |
|
Commercial lease financing |
|
|
3,981 |
|
|
|
36 |
|
|
|
3.58 |
|
|
|
4,070 |
|
|
|
36 |
|
|
|
3.57 |
|
|
|
4,257 |
|
|
|
38 |
|
|
|
3.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
42,178 |
|
|
|
354 |
|
|
|
3.36 |
|
|
|
41,625 |
|
|
|
343 |
|
|
|
3.33 |
|
|
|
39,630 |
|
|
|
342 |
|
|
|
3.45 |
|
Real estate residential mortgage |
|
|
2,237 |
|
|
|
23 |
|
|
|
4.22 |
|
|
|
2,229 |
|
|
|
24 |
|
|
|
4.26 |
|
|
|
2,189 |
|
|
|
24 |
|
|
|
4.41 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
|
10,266 |
|
|
|
99 |
|
|
|
3.89 |
|
|
|
10,316 |
|
|
|
99 |
|
|
|
3.89 |
|
|
|
10,321 |
|
|
|
100 |
|
|
|
3.92 |
|
Other |
|
|
244 |
|
|
|
5 |
|
|
|
7.86 |
|
|
|
260 |
|
|
|
5 |
|
|
|
7.82 |
|
|
|
306 |
|
|
|
6 |
|
|
|
7.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total home equity loans |
|
|
10,510 |
|
|
|
104 |
|
|
|
3.98 |
|
|
|
10,576 |
|
|
|
104 |
|
|
|
3.99 |
|
|
|
10,627 |
|
|
|
106 |
|
|
|
4.03 |
|
Consumer other Key Community Bank |
|
|
1,571 |
|
|
|
26 |
|
|
|
6.52 |
|
|
|
1,546 |
|
|
|
25 |
|
|
|
6.66 |
|
|
|
1,479 |
|
|
|
26 |
|
|
|
6.97 |
|
Credit cards |
|
|
737 |
|
|
|
19 |
|
|
|
10.57 |
|
|
|
732 |
|
|
|
20 |
|
|
|
11.01 |
|
|
|
702 |
|
|
|
18 |
|
|
|
10.39 |
|
Consumer other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
|
702 |
|
|
|
11 |
|
|
|
6.30 |
|
|
|
755 |
|
|
|
12 |
|
|
|
6.35 |
|
|
|
926 |
|
|
|
15 |
|
|
|
6.18 |
|
Other |
|
|
43 |
|
|
|
1 |
|
|
|
7.77 |
|
|
|
49 |
|
|
|
1 |
|
|
|
7.32 |
|
|
|
58 |
|
|
|
1 |
|
|
|
8.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer other |
|
|
745 |
|
|
|
12 |
|
|
|
6.38 |
|
|
|
804 |
|
|
|
13 |
|
|
|
6.41 |
|
|
|
984 |
|
|
|
16 |
|
|
|
6.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
15,800 |
|
|
|
184 |
|
|
|
4.69 |
|
|
|
15,887 |
|
|
|
186 |
|
|
|
4.74 |
|
|
|
15,981 |
|
|
|
190 |
|
|
|
4.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
57,978 |
|
|
|
538 |
|
|
|
3.72 |
|
|
|
57,512 |
|
|
|
529 |
|
|
|
3.72 |
|
|
|
55,611 |
|
|
|
532 |
|
|
|
3.83 |
|
Loans held for sale |
|
|
1,263 |
|
|
|
12 |
|
|
|
3.91 |
|
|
|
795 |
|
|
|
7 |
|
|
|
3.33 |
|
|
|
458 |
|
|
|
5 |
|
|
|
4.14 |
|
Securities available for sale (b), (e) |
|
|
13,360 |
|
|
|
73 |
|
|
|
2.17 |
|
|
|
13,087 |
|
|
|
70 |
|
|
|
2.17 |
|
|
|
12,408 |
|
|
|
71 |
|
|
|
2.30 |
|
Held-to-maturity securities (b) |
|
|
4,965 |
|
|
|
24 |
|
|
|
1.91 |
|
|
|
4,947 |
|
|
|
24 |
|
|
|
1.93 |
|
|
|
4,973 |
|
|
|
23 |
|
|
|
1.87 |
|
Trading account assets |
|
|
805 |
|
|
|
5 |
|
|
|
2.55 |
|
|
|
717 |
|
|
|
5 |
|
|
|
2.80 |
|
|
|
985 |
|
|
|
7 |
|
|
|
2.80 |
|
Short-term investments |
|
|
3,228 |
|
|
|
2 |
|
|
|
.26 |
|
|
|
2,399 |
|
|
|
2 |
|
|
|
.27 |
|
|
|
2,475 |
|
|
|
1 |
|
|
|
.17 |
|
Other investments (e) |
|
|
713 |
|
|
|
5 |
|
|
|
2.48 |
|
|
|
742 |
|
|
|
5 |
|
|
|
2.79 |
|
|
|
888 |
|
|
|
6 |
|
|
|
2.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total earning assets |
|
|
82,312 |
|
|
|
659 |
|
|
|
3.21 |
|
|
|
80,199 |
|
|
|
642 |
|
|
|
3.23 |
|
|
|
77,798 |
|
|
|
645 |
|
|
|
3.31 |
|
Allowance for loan and lease losses |
|
|
(793 |
) |
|
|
|
|
|
|
|
|
|
|
(793 |
) |
|
|
|
|
|
|
|
|
|
|
(824 |
) |
|
|
|
|
|
|
|
|
Accrued income and other assets |
|
|
10,140 |
|
|
|
|
|
|
|
|
|
|
|
10,223 |
|
|
|
|
|
|
|
|
|
|
|
9,767 |
|
|
|
|
|
|
|
|
|
Discontinued assets |
|
|
2,194 |
|
|
|
|
|
|
|
|
|
|
|
2,271 |
|
|
|
|
|
|
|
|
|
|
|
4,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
93,853 |
|
|
|
|
|
|
|
|
|
|
$ |
91,900 |
|
|
|
|
|
|
|
|
|
|
$ |
91,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts |
|
$ |
36,122 |
|
|
|
14 |
|
|
|
.16 |
|
|
$ |
34,952 |
|
|
|
13 |
|
|
|
.15 |
|
|
$ |
34,283 |
|
|
|
11 |
|
|
|
.14 |
|
Savings deposits |
|
|
2,393 |
|
|
|
|
|
|
|
.02 |
|
|
|
2,385 |
|
|
|
|
|
|
|
.02 |
|
|
|
2,493 |
|
|
|
|
|
|
|
.03 |
|
Certificates of deposit ($100,000 or more) (f) |
|
|
2,010 |
|
|
|
6 |
|
|
|
1.25 |
|
|
|
2,017 |
|
|
|
7 |
|
|
|
1.30 |
|
|
|
2,808 |
|
|
|
10 |
|
|
|
1.39 |
|
Other time deposits |
|
|
3,136 |
|
|
|
5 |
|
|
|
.70 |
|
|
|
3,217 |
|
|
|
6 |
|
|
|
.72 |
|
|
|
3,587 |
|
|
|
9 |
|
|
|
.98 |
|
Deposits in foreign office |
|
|
583 |
|
|
|
1 |
|
|
|
.23 |
|
|
|
529 |
|
|
|
|
|
|
|
.22 |
|
|
|
662 |
|
|
|
1 |
|
|
|
.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
44,244 |
|
|
|
26 |
|
|
|
.24 |
|
|
|
43,100 |
|
|
|
26 |
|
|
|
.24 |
|
|
|
43,833 |
|
|
|
31 |
|
|
|
.28 |
|
Federal funds purchased and securities sold under repurchase agreements |
|
|
557 |
|
|
|
|
|
|
|
.02 |
|
|
|
720 |
|
|
|
|
|
|
|
.03 |
|
|
|
1,470 |
|
|
|
|
|
|
|
.19 |
|
Bank notes and other short-term borrowings |
|
|
657 |
|
|
|
2 |
|
|
|
1.39 |
|
|
|
506 |
|
|
|
2 |
|
|
|
1.56 |
|
|
|
545 |
|
|
|
2 |
|
|
|
1.54 |
|
Long-term debt (f), (g) |
|
|
6,968 |
|
|
|
40 |
|
|
|
2.30 |
|
|
|
6,126 |
|
|
|
37 |
|
|
|
2.52 |
|
|
|
5,476 |
|
|
|
33 |
|
|
|
2.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
|
|
52,426 |
|
|
|
68 |
|
|
|
.52 |
|
|
|
50,452 |
|
|
|
65 |
|
|
|
.52 |
|
|
|
51,324 |
|
|
|
66 |
|
|
|
.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
26,594 |
|
|
|
|
|
|
|
|
|
|
|
26,269 |
|
|
|
|
|
|
|
|
|
|
|
23,290 |
|
|
|
|
|
|
|
|
|
Accrued expense and other liabilities |
|
|
2,039 |
|
|
|
|
|
|
|
|
|
|
|
2,327 |
|
|
|
|
|
|
|
|
|
|
|
1,654 |
|
|
|
|
|
|
|
|
|
Discontinued liabilities (g) |
|
|
2,194 |
|
|
|
|
|
|
|
|
|
|
|
2,271 |
|
|
|
|
|
|
|
|
|
|
|
4,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
83,253 |
|
|
|
|
|
|
|
|
|
|
|
81,319 |
|
|
|
|
|
|
|
|
|
|
|
80,609 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity |
|
|
10,590 |
|
|
|
|
|
|
|
|
|
|
|
10,570 |
|
|
|
|
|
|
|
|
|
|
|
10,459 |
|
|
|
|
|
|
|
|
|
Noncontrolling interests |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
10,600 |
|
|
|
|
|
|
|
|
|
|
|
10,581 |
|
|
|
|
|
|
|
|
|
|
|
10,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
93,853 |
|
|
|
|
|
|
|
|
|
|
$ |
91,900 |
|
|
|
|
|
|
|
|
|
|
$ |
91,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread (TE) |
|
|
|
|
|
|
|
|
|
|
2.69 |
% |
|
|
|
|
|
|
|
|
|
|
2.71 |
% |
|
|
|
|
|
|
|
|
|
|
2.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (TE) and net interest margin (TE) |
|
|
|
|
|
|
591 |
|
|
|
2.88 |
% |
|
|
|
|
|
|
577 |
|
|
|
2.91 |
% |
|
|
|
|
|
|
579 |
|
|
|
2.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE adjustment (b) |
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income, GAAP basis |
|
|
|
|
|
$ |
584 |
|
|
|
|
|
|
|
|
|
|
$ |
571 |
|
|
|
|
|
|
|
|
|
|
$ |
573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology. |
(b) |
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 35%. |
(c) |
For purposes of these computations, nonaccrual loans are included in average loan balances. |
(d) |
Commercial, financial and agricultural average balances include $88 million, $87 million, and $95 million of assets from commercial credit cards for the three months ended June 30, 2015, March 31, 2015,
and June 30, 2014, respectively. |
(e) |
Yield is calculated on the basis of amortized cost. |
(f) |
Rate calculation excludes basis adjustments related to fair value hedges. |
(g) |
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations. |
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
21
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From
Continuing Operations
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2015 |
|
|
Six months ended June 30, 2014 |
|
|
|
Average Balance |
|
|
Interest (a) |
|
|
Yield/Rate (a) |
|
|
Average Balance |
|
|
Interest (a) |
|
|
Yield/Rate (a) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (b), (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural (d) |
|
$ |
28,671 |
|
|
$ |
456 |
|
|
|
3.21 |
% |
|
$ |
25,920 |
|
|
$ |
425 |
|
|
|
3.30 |
% |
Real estate commercial mortgage |
|
|
8,038 |
|
|
|
147 |
|
|
|
3.68 |
|
|
|
7,844 |
|
|
|
148 |
|
|
|
3.82 |
|
Real estate construction |
|
|
1,169 |
|
|
|
22 |
|
|
|
3.75 |
|
|
|
1,069 |
|
|
|
23 |
|
|
|
4.29 |
|
Commercial lease financing |
|
|
4,025 |
|
|
|
72 |
|
|
|
3.57 |
|
|
|
4,348 |
|
|
|
80 |
|
|
|
3.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
41,903 |
|
|
|
697 |
|
|
|
3.35 |
|
|
|
39,181 |
|
|
|
676 |
|
|
|
3.47 |
|
Real estate residential mortgage |
|
|
2,233 |
|
|
|
47 |
|
|
|
4.24 |
|
|
|
2,188 |
|
|
|
48 |
|
|
|
4.42 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
|
10,291 |
|
|
|
198 |
|
|
|
3.89 |
|
|
|
10,313 |
|
|
|
200 |
|
|
|
3.92 |
|
Other |
|
|
252 |
|
|
|
10 |
|
|
|
7.84 |
|
|
|
315 |
|
|
|
12 |
|
|
|
7.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total home equity loans |
|
|
10,543 |
|
|
|
208 |
|
|
|
3.99 |
|
|
|
10,628 |
|
|
|
212 |
|
|
|
4.03 |
|
Consumer other Key Community Bank |
|
|
1,558 |
|
|
|
51 |
|
|
|
6.59 |
|
|
|
1,459 |
|
|
|
51 |
|
|
|
7.01 |
|
Credit cards |
|
|
735 |
|
|
|
39 |
|
|
|
10.79 |
|
|
|
702 |
|
|
|
38 |
|
|
|
10.83 |
|
Consumer other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
|
728 |
|
|
|
23 |
|
|
|
6.32 |
|
|
|
961 |
|
|
|
30 |
|
|
|
6.18 |
|
Other |
|
|
46 |
|
|
|
2 |
|
|
|
7.54 |
|
|
|
62 |
|
|
|
2 |
|
|
|
7.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer other |
|
|
774 |
|
|
|
25 |
|
|
|
6.40 |
|
|
|
1,023 |
|
|
|
32 |
|
|
|
6.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
15,843 |
|
|
|
370 |
|
|
|
4.71 |
|
|
|
16,000 |
|
|
|
381 |
|
|
|
4.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
57,746 |
|
|
|
1,067 |
|
|
|
3.72 |
|
|
|
55,181 |
|
|
|
1,057 |
|
|
|
3.86 |
|
Loans held for sale |
|
|
1,030 |
|
|
|
19 |
|
|
|
3.68 |
|
|
|
452 |
|
|
|
9 |
|
|
|
3.75 |
|
Securities available for sale (b), (e) |
|
|
13,225 |
|
|
|
143 |
|
|
|
2.17 |
|
|
|
12,378 |
|
|
|
143 |
|
|
|
2.31 |
|
Held-to-maturity securities (b) |
|
|
4,956 |
|
|
|
48 |
|
|
|
1.92 |
|
|
|
4,870 |
|
|
|
45 |
|
|
|
1.86 |
|
Trading account assets |
|
|
762 |
|
|
|
10 |
|
|
|
2.67 |
|
|
|
983 |
|
|
|
13 |
|
|
|
2.66 |
|
Short-term investments |
|
|
2,816 |
|
|
|
4 |
|
|
|
.26 |
|
|
|
2,480 |
|
|
|
2 |
|
|
|
.17 |
|
Other investments (e) |
|
|
727 |
|
|
|
10 |
|
|
|
2.64 |
|
|
|
912 |
|
|
|
12 |
|
|
|
2.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total earning assets |
|
|
81,262 |
|
|
|
1,301 |
|
|
|
3.22 |
|
|
|
77,256 |
|
|
|
1,281 |
|
|
|
3.32 |
|
Allowance for loan and lease losses |
|
|
(793 |
) |
|
|
|
|
|
|
|
|
|
|
(833 |
) |
|
|
|
|
|
|
|
|
Accrued income and other assets |
|
|
10,181 |
|
|
|
|
|
|
|
|
|
|
|
9,779 |
|
|
|
|
|
|
|
|
|
Discontinued assets |
|
|
2,232 |
|
|
|
|
|
|
|
|
|
|
|
4,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
92,882 |
|
|
|
|
|
|
|
|
|
|
$ |
90,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts |
|
$ |
35,540 |
|
|
|
27 |
|
|
|
.15 |
|
|
$ |
34,174 |
|
|
|
23 |
|
|
|
.14 |
|
Savings deposits |
|
|
2,389 |
|
|
|
|
|
|
|
.02 |
|
|
|
2,484 |
|
|
|
|
|
|
|
.03 |
|
Certificates of deposit ($100,000 or more) (f) |
|
|
2,014 |
|
|
|
13 |
|
|
|
1.28 |
|
|
|
2,783 |
|
|
|
20 |
|
|
|
1.45 |
|
Other time deposits |
|
|
3,176 |
|
|
|
11 |
|
|
|
.71 |
|
|
|
3,633 |
|
|
|
19 |
|
|
|
1.02 |
|
Deposits in foreign office |
|
|
556 |
|
|
|
1 |
|
|
|
.23 |
|
|
|
661 |
|
|
|
1 |
|
|
|
.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
43,675 |
|
|
|
52 |
|
|
|
.24 |
|
|
|
43,735 |
|
|
|
63 |
|
|
|
.29 |
|
Federal funds purchased and securities sold under repurchase agreements |
|
|
638 |
|
|
|
|
|
|
|
.03 |
|
|
|
1,470 |
|
|
|
1 |
|
|
|
.18 |
|
Bank notes and other short-term borrowings |
|
|
582 |
|
|
|
4 |
|
|
|
1.46 |
|
|
|
565 |
|
|
|
4 |
|
|
|
1.59 |
|
Long-term debt (f), (g) |
|
|
6,550 |
|
|
|
77 |
|
|
|
2.40 |
|
|
|
5,323 |
|
|
|
65 |
|
|
|
2.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
|
|
51,445 |
|
|
|
133 |
|
|
|
.52 |
|
|
|
51,093 |
|
|
|
133 |
|
|
|
.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
26,432 |
|
|
|
|
|
|
|
|
|
|
|
22,976 |
|
|
|
|
|
|
|
|
|
Accrued expense and other liabilities |
|
|
2,182 |
|
|
|
|
|
|
|
|
|
|
|
1,702 |
|
|
|
|
|
|
|
|
|
Discontinued liabilities (g) |
|
|
2,232 |
|
|
|
|
|
|
|
|
|
|
|
4,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
82,291 |
|
|
|
|
|
|
|
|
|
|
|
80,188 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity |
|
|
10,580 |
|
|
|
|
|
|
|
|
|
|
|
10,415 |
|
|
|
|
|
|
|
|
|
Noncontrolling interests |
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
10,591 |
|
|
|
|
|
|
|
|
|
|
|
10,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
92,882 |
|
|
|
|
|
|
|
|
|
|
$ |
90,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread (TE) |
|
|
|
|
|
|
|
|
|
|
2.70 |
% |
|
|
|
|
|
|
|
|
|
|
2.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (TE) and net interest margin (TE) |
|
|
|
|
|
|
1,168 |
|
|
|
2.89 |
% |
|
|
|
|
|
|
1,148 |
|
|
|
2.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE adjustment (b) |
|
|
|
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income, GAAP basis |
|
|
|
|
|
$ |
1,155 |
|
|
|
|
|
|
|
|
|
|
$ |
1,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology. |
(b) |
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 35%. |
(c) |
For purposes of these computations, nonaccrual loans are included in average loan balances. |
(d) |
Commercial, financial and agricultural average balances include $88 million and $95 million of assets from commercial credit cards for the six months ended June 30, 2015, and June 30, 2014, respectively.
|
(e) |
Yield is calculated on the basis of amortized cost. |
(f) |
Rate calculation excludes basis adjustments related to fair value hedges. |
(g) |
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations. |
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
22
Noninterest Expense
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
6-30-15 |
|
|
6-30-14 |
|
Personnel (a) |
|
$ |
408 |
|
|
$ |
389 |
|
|
$ |
389 |
|
|
$ |
797 |
|
|
$ |
777 |
|
Net occupancy |
|
|
66 |
|
|
|
65 |
|
|
|
68 |
|
|
|
131 |
|
|
|
132 |
|
Computer processing |
|
|
42 |
|
|
|
38 |
|
|
|
41 |
|
|
|
80 |
|
|
|
79 |
|
Business services and professional fees |
|
|
42 |
|
|
|
33 |
|
|
|
41 |
|
|
|
75 |
|
|
|
82 |
|
Equipment |
|
|
22 |
|
|
|
22 |
|
|
|
24 |
|
|
|
44 |
|
|
|
48 |
|
Operating lease expense |
|
|
12 |
|
|
|
11 |
|
|
|
10 |
|
|
|
23 |
|
|
|
20 |
|
Marketing |
|
|
15 |
|
|
|
8 |
|
|
|
13 |
|
|
|
23 |
|
|
|
18 |
|
FDIC assessment |
|
|
8 |
|
|
|
8 |
|
|
|
6 |
|
|
|
16 |
|
|
|
12 |
|
Intangible asset amortization |
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
18 |
|
|
|
19 |
|
OREO expense, net |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
Other expense |
|
|
86 |
|
|
|
84 |
|
|
|
85 |
|
|
|
170 |
|
|
|
162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
$ |
711 |
|
|
$ |
669 |
|
|
$ |
687 |
|
|
$ |
1,380 |
|
|
$ |
1,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average full-time equivalent employees (b) |
|
|
13,455 |
|
|
|
13,591 |
|
|
|
13,867 |
|
|
|
13,512 |
|
|
|
13,961 |
|
(a) |
Additional detail provided in table below. |
(b) |
The number of average full-time equivalent employees has not been adjusted for discontinued operations. |
Personnel Expense
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
6-30-15 |
|
|
6-30-14 |
|
Salaries |
|
$ |
229 |
|
|
$ |
218 |
|
|
$ |
224 |
|
|
$ |
447 |
|
|
$ |
444 |
|
Technology contract labor, net |
|
|
10 |
|
|
|
10 |
|
|
|
14 |
|
|
|
20 |
|
|
|
31 |
|
Incentive and stock-based compensation |
|
|
109 |
|
|
|
83 |
|
|
|
91 |
|
|
|
192 |
|
|
|
174 |
|
Employee benefits |
|
|
55 |
|
|
|
72 |
|
|
|
50 |
|
|
|
127 |
|
|
|
113 |
|
Severance |
|
|
5 |
|
|
|
6 |
|
|
|
10 |
|
|
|
11 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total personnel expense |
|
$ |
408 |
|
|
$ |
389 |
|
|
$ |
389 |
|
|
$ |
797 |
|
|
$ |
777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
23
Loan Composition
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change 6-30-15 vs. |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Commercial, financial and agricultural (a) |
|
$ |
29,285 |
|
|
$ |
28,783 |
|
|
$ |
26,327 |
|
|
|
1.7 |
% |
|
|
11.2 |
% |
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage |
|
|
7,874 |
|
|
|
8,162 |
|
|
|
7,946 |
|
|
|
(3.5 |
) |
|
|
(.9 |
) |
Construction |
|
|
1,254 |
|
|
|
1,142 |
|
|
|
1,047 |
|
|
|
9.8 |
|
|
|
19.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real estate loans |
|
|
9,128 |
|
|
|
9,304 |
|
|
|
8,993 |
|
|
|
(1.9 |
) |
|
|
1.5 |
|
Commercial lease financing (b) |
|
|
4,010 |
|
|
|
4,064 |
|
|
|
4,241 |
|
|
|
(1.3 |
) |
|
|
(5.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
42,423 |
|
|
|
42,151 |
|
|
|
39,561 |
|
|
|
.6 |
|
|
|
7.2 |
|
Residential prime loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate residential mortgage |
|
|
2,252 |
|
|
|
2,231 |
|
|
|
2,189 |
|
|
|
.9 |
|
|
|
2.9 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
|
10,296 |
|
|
|
10,270 |
|
|
|
10,379 |
|
|
|
.3 |
|
|
|
(.8 |
) |
Other |
|
|
236 |
|
|
|
253 |
|
|
|
300 |
|
|
|
(6.7 |
) |
|
|
(21.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total home equity loans |
|
|
10,532 |
|
|
|
10,523 |
|
|
|
10,679 |
|
|
|
.1 |
|
|
|
(1.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential prime loans |
|
|
12,784 |
|
|
|
12,754 |
|
|
|
12,868 |
|
|
|
.2 |
|
|
|
(.7 |
) |
Consumer other Key Community Bank |
|
|
1,595 |
|
|
|
1,547 |
|
|
|
1,514 |
|
|
|
3.1 |
|
|
|
5.4 |
|
Credit cards |
|
|
753 |
|
|
|
727 |
|
|
|
718 |
|
|
|
3.6 |
|
|
|
4.9 |
|
Consumer other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
|
673 |
|
|
|
730 |
|
|
|
888 |
|
|
|
(7.8 |
) |
|
|
(24.2 |
) |
Other |
|
|
36 |
|
|
|
44 |
|
|
|
51 |
|
|
|
(18.2 |
) |
|
|
(29.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer other |
|
|
709 |
|
|
|
774 |
|
|
|
939 |
|
|
|
(8.4 |
) |
|
|
(24.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
15,841 |
|
|
|
15,802 |
|
|
|
16,039 |
|
|
|
.2 |
|
|
|
(1.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans (c), (d) |
|
$ |
58,264 |
|
|
$ |
57,953 |
|
|
$ |
55,600 |
|
|
|
.5 |
% |
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Held for Sale Composition
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change 6-30-15 vs. |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Commercial, financial and agricultural |
|
$ |
217 |
|
|
$ |
183 |
|
|
$ |
181 |
|
|
|
18.6 |
% |
|
|
19.9 |
% |
Real estate commercial mortgage |
|
|
576 |
|
|
|
1,408 |
|
|
|
221 |
|
|
|
(59.1 |
) |
|
|
160.6 |
|
Commercial lease financing |
|
|
7 |
|
|
|
14 |
|
|
|
10 |
|
|
|
(50.0 |
) |
|
|
(30.0 |
) |
Real estate residential mortgage |
|
|
35 |
|
|
|
44 |
|
|
|
23 |
|
|
|
(20.5 |
) |
|
|
52.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans held for sale (e) |
|
$ |
835 |
|
|
$ |
1,649 |
|
|
$ |
435 |
|
|
|
(49.4 |
)% |
|
|
92.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Changes in Loans Held for Sale
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q15 |
|
|
1Q15 |
|
|
4Q14 |
|
|
3Q14 |
|
|
2Q14 |
|
Balance at beginning of period |
|
$ |
1,649 |
|
|
$ |
734 |
|
|
$ |
784 |
|
|
$ |
435 |
|
|
$ |
401 |
|
New originations |
|
|
1,650 |
|
|
|
2,130 |
|
|
|
2,465 |
|
|
|
1,593 |
|
|
|
978 |
|
Transfers from (to) held to maturity, net |
|
|
6 |
|
|
|
10 |
|
|
|
2 |
|
|
|
|
|
|
|
(8 |
) |
Loan sales |
|
|
(2,466 |
) |
|
|
(1,204 |
) |
|
|
(2,516 |
) |
|
|
(1,243 |
) |
|
|
(934 |
) |
Loan draws (payments), net |
|
|
(4 |
) |
|
|
(21 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period (e) |
|
$ |
835 |
|
|
$ |
1,649 |
|
|
$ |
734 |
|
|
$ |
784 |
|
|
$ |
435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Loan balances include $89 million, $87 million, and $94 million of commercial credit card balances at June 30, 2015, March 31, 2015, and June 30, 2014, respectively. |
(b) |
Commercial lease financing includes receivables held as collateral for a secured borrowing of $191 million, $230 million, and $375 million at June 30, 2015, March 31, 2015, and June 30, 2014,
respectively. Principal reductions are based on the cash payments received from these related receivables. |
(c) |
At June 30, 2015, total loans include purchased loans of $125 million, of which $12 million were purchased credit impaired. At March 31, 2015, total loans include purchased loans of $130 million, of which $12
million were purchased credit impaired. At June 30, 2014, total loans include purchased loans of $151 million, of which $15 million were purchased credit impaired. |
(d) |
Total loans exclude loans of $2 billion at June 30, 2015, $2.2 billion at March 31, 2015, and $4.2 billion at June 30, 2014, related to the discontinued operations of the education lending business.
|
(e) |
Total loans held for sale exclude loans held for sale of $179 million at June 30, 2015, related to the discontinued operations of the education lending business. |
N/M = Not Meaningful
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
24
Exit Loan Portfolio From Continuing Operations
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Outstanding |
|
|
Change 6-30-15 vs. 3-31-15 |
|
|
Net Loan Charge-offs |
|
|
Balance on Nonperforming Status |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
|
2Q15 |
|
|
1Q15(c) |
|
|
6-30-15 |
|
|
3-31-15 |
|
Residential properties homebuilder |
|
$ |
6 |
|
|
$ |
6 |
|
|
|
|
|
|
|
|
|
|
$ |
1 |
|
|
$ |
8 |
|
|
$ |
8 |
|
Marine and RV floor plan |
|
|
2 |
|
|
|
6 |
|
|
$ |
(4 |
) |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
5 |
|
Commercial lease financing (a) |
|
|
831 |
|
|
|
877 |
|
|
|
(46 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
839 |
|
|
|
889 |
|
|
|
(50 |
) |
|
|
|
|
|
|
|
|
|
|
9 |
|
|
|
13 |
|
Home equity Other |
|
|
236 |
|
|
|
253 |
|
|
|
(17 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
8 |
|
|
|
9 |
|
Marine |
|
|
673 |
|
|
|
730 |
|
|
|
(57 |
) |
|
|
3 |
|
|
|
2 |
|
|
|
8 |
|
|
|
9 |
|
RV and other consumer |
|
|
47 |
|
|
|
50 |
|
|
|
(3 |
) |
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
956 |
|
|
|
1,033 |
|
|
|
(77 |
) |
|
|
4 |
|
|
|
3 |
|
|
|
17 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total exit loans in loan portfolio |
|
$ |
1,795 |
|
|
$ |
1,922 |
|
|
$ |
(127 |
) |
|
$ |
4 |
|
|
$ |
3 |
|
|
$ |
26 |
|
|
$ |
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations education lending business (not included in exit loans above) (b) |
|
$ |
1,962 |
|
|
$ |
2,219 |
|
|
$ |
(257 |
) |
|
$ |
2 |
|
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
8 |
|
(a) |
Includes (1) the business aviation, commercial vehicle, office products, construction, and industrial leases; (2) Canadian lease financing portfolios; (3) European lease financing portfolios; and
(4) all remaining balances related to lease in, lease out; sale in, lease out; service contract leases; and qualified technological equipment leases. |
(b) |
Excludes loans held for sale of $179 million at June 30, 2015. |
(c) |
Credit amounts indicate recoveries exceeded charge-offs. |
Asset Quality Statistics From
Continuing Operations
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q15 |
|
|
1Q15 |
|
|
4Q14 |
|
|
3Q14 |
|
|
2Q14 |
|
Net loan charge-offs |
|
$ |
36 |
|
|
$ |
28 |
|
|
$ |
32 |
|
|
$ |
31 |
|
|
$ |
30 |
|
Net loan charge-offs to average total loans |
|
|
.25 |
% |
|
|
.20 |
% |
|
|
.22 |
% |
|
|
.22 |
% |
|
|
.22 |
% |
Allowance for loan and lease losses |
|
$ |
796 |
|
|
$ |
794 |
|
|
$ |
794 |
|
|
$ |
804 |
|
|
$ |
814 |
|
Allowance for credit losses (a) |
|
|
841 |
|
|
|
835 |
|
|
|
829 |
|
|
|
839 |
|
|
|
851 |
|
Allowance for loan and lease losses to period-end loans |
|
|
1.37 |
% |
|
|
1.37 |
% |
|
|
1.38 |
% |
|
|
1.43 |
% |
|
|
1.46 |
% |
Allowance for credit losses to period-end loans |
|
|
1.44 |
|
|
|
1.44 |
|
|
|
1.44 |
|
|
|
1.49 |
|
|
|
1.53 |
|
Allowance for loan and lease losses to nonperforming loans |
|
|
190.0 |
|
|
|
181.7 |
|
|
|
190.0 |
|
|
|
200.5 |
|
|
|
205.6 |
|
Allowance for credit losses to nonperforming loans |
|
|
200.7 |
|
|
|
191.1 |
|
|
|
198.3 |
|
|
|
209.2 |
|
|
|
214.9 |
|
Nonperforming loans at period end (b) |
|
$ |
419 |
|
|
$ |
437 |
|
|
$ |
418 |
|
|
$ |
401 |
|
|
$ |
396 |
|
Nonperforming assets at period end |
|
|
440 |
|
|
|
457 |
|
|
|
436 |
|
|
|
418 |
|
|
|
410 |
|
Nonperforming loans to period-end portfolio loans |
|
|
.72 |
% |
|
|
.75 |
% |
|
|
.73 |
% |
|
|
.71 |
% |
|
|
.71 |
% |
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets |
|
|
.75 |
|
|
|
.79 |
|
|
|
.76 |
|
|
|
.74 |
|
|
|
.74 |
|
(a) |
Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related unfunded commitments. |
(b) |
Loan balances exclude $12 million, $12 million, $13 million, $14 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, December 31,
2014, September 30, 2014, and June 30, 2014, respectively. |
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
25
Summary of Loan and Lease Loss Experience From Continuing Operations
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
6-30-15 |
|
|
6-30-14 |
|
Average loans outstanding |
|
$ |
57,978 |
|
|
$ |
57,512 |
|
|
$ |
55,611 |
|
|
$ |
57,746 |
|
|
$ |
55,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses at beginning of period |
|
$ |
794 |
|
|
$ |
794 |
|
|
$ |
834 |
|
|
$ |
794 |
|
|
$ |
848 |
|
Loans charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural |
|
|
21 |
|
|
|
12 |
|
|
|
11 |
|
|
|
33 |
|
|
|
23 |
|
|
|
|
|
|
|
Real estate commercial mortgage |
|
|
|
|
|
|
2 |
|
|
|
1 |
|
|
|
2 |
|
|
|
3 |
|
Real estate construction |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real estate loans |
|
|
|
|
|
|
3 |
|
|
|
1 |
|
|
|
3 |
|
|
|
5 |
|
Commercial lease financing |
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
3 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
22 |
|
|
|
17 |
|
|
|
14 |
|
|
|
39 |
|
|
|
33 |
|
Real estate residential mortgage |
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
3 |
|
|
|
5 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
|
8 |
|
|
|
7 |
|
|
|
10 |
|
|
|
15 |
|
|
|
20 |
|
Other |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
3 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total home equity loans |
|
|
10 |
|
|
|
8 |
|
|
|
13 |
|
|
|
18 |
|
|
|
26 |
|
Consumer other Key Community Bank |
|
|
6 |
|
|
|
6 |
|
|
|
8 |
|
|
|
12 |
|
|
|
16 |
|
Credit cards |
|
|
8 |
|
|
|
8 |
|
|
|
12 |
|
|
|
16 |
|
|
|
18 |
|
Consumer other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
|
5 |
|
|
|
5 |
|
|
|
7 |
|
|
|
10 |
|
|
|
14 |
|
Other |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer other |
|
|
5 |
|
|
|
6 |
|
|
|
7 |
|
|
|
11 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
30 |
|
|
|
30 |
|
|
|
42 |
|
|
|
60 |
|
|
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans charged off |
|
|
52 |
|
|
|
47 |
|
|
|
56 |
|
|
|
99 |
|
|
|
113 |
|
Recoveries: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural |
|
|
6 |
|
|
|
5 |
|
|
|
11 |
|
|
|
11 |
|
|
|
21 |
|
|
|
|
|
|
|
Real estate commercial mortgage |
|
|
|
|
|
|
2 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
Real estate construction |
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real estate loans |
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
3 |
|
|
|
17 |
|
Commercial lease financing |
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
|
|
5 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
8 |
|
|
|
11 |
|
|
|
17 |
|
|
|
19 |
|
|
|
44 |
|
Real estate residential mortgage |
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
4 |
|
Other |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total home equity loans |
|
|
2 |
|
|
|
3 |
|
|
|
3 |
|
|
|
5 |
|
|
|
7 |
|
Consumer other Key Community Bank |
|
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
4 |
|
|
|
3 |
|
Credit cards |
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
Consumer other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
|
2 |
|
|
|
3 |
|
|
|
2 |
|
|
|
5 |
|
|
|
5 |
|
Other |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer other |
|
|
2 |
|
|
|
3 |
|
|
|
3 |
|
|
|
5 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
8 |
|
|
|
8 |
|
|
|
9 |
|
|
|
16 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recoveries |
|
|
16 |
|
|
|
19 |
|
|
|
26 |
|
|
|
35 |
|
|
|
63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs |
|
|
(36 |
) |
|
|
(28 |
) |
|
|
(30 |
) |
|
|
(64 |
) |
|
|
(50 |
) |
Provision (credit) for loan and lease losses |
|
|
37 |
|
|
|
29 |
|
|
|
10 |
|
|
|
66 |
|
|
|
16 |
|
Foreign currency translation adjustment |
|
|
1 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses at end of period |
|
$ |
796 |
|
|
$ |
794 |
|
|
$ |
814 |
|
|
$ |
796 |
|
|
$ |
814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability for credit losses on lending-related commitments at beginning of period |
|
$ |
41 |
|
|
$ |
35 |
|
|
$ |
35 |
|
|
$ |
35 |
|
|
$ |
37 |
|
Provision (credit) for losses on lending-related commitments |
|
|
4 |
|
|
|
6 |
|
|
|
2 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability for credit losses on lending-related commitments at end of period
(a) |
|
$ |
45 |
|
|
$ |
41 |
|
|
$ |
37 |
|
|
$ |
45 |
|
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance for credit losses at end of period |
|
$ |
841 |
|
|
$ |
835 |
|
|
$ |
851 |
|
|
$ |
841 |
|
|
$ |
851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs to average total loans |
|
|
.25 |
% |
|
|
.20 |
% |
|
|
.22 |
% |
|
|
.22 |
% |
|
|
.18 |
% |
Allowance for loan and lease losses to period-end loans |
|
|
1.37 |
|
|
|
1.37 |
|
|
|
1.46 |
|
|
|
1.37 |
|
|
|
1.46 |
|
Allowance for credit losses to period-end loans |
|
|
1.44 |
|
|
|
1.44 |
|
|
|
1.53 |
|
|
|
1.44 |
|
|
|
1.53 |
|
Allowance for loan and lease losses to nonperforming loans |
|
|
190.0 |
|
|
|
181.7 |
|
|
|
205.6 |
|
|
|
190.0 |
|
|
|
205.6 |
|
Allowance for credit losses to nonperforming loans |
|
|
200.7 |
|
|
|
191.1 |
|
|
|
214.9 |
|
|
|
200.7 |
|
|
|
214.9 |
|
Discontinued operations education lending business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans charged off |
|
$ |
6 |
|
|
$ |
10 |
|
|
$ |
11 |
|
|
$ |
16 |
|
|
$ |
24 |
|
Recoveries |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs |
|
$ |
(2 |
) |
|
$ |
(6 |
) |
|
$ |
(7 |
) |
|
$ |
(8 |
) |
|
$ |
(16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Included in accrued expense and other liabilities on the balance sheet. |
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
26
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
12-31-14 |
|
|
9-30-14 |
|
|
6-30-14 |
|
Commercial, financial and agricultural |
|
$ |
100 |
|
|
$ |
98 |
|
|
$ |
59 |
|
|
$ |
47 |
|
|
$ |
37 |
|
Real estate commercial mortgage |
|
|
26 |
|
|
|
30 |
|
|
|
34 |
|
|
|
41 |
|
|
|
38 |
|
Real estate construction |
|
|
12 |
|
|
|
12 |
|
|
|
13 |
|
|
|
14 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real estate loans |
|
|
38 |
|
|
|
42 |
|
|
|
47 |
|
|
|
55 |
|
|
|
47 |
|
Commercial lease financing |
|
|
18 |
|
|
|
20 |
|
|
|
18 |
|
|
|
14 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans |
|
|
156 |
|
|
|
160 |
|
|
|
124 |
|
|
|
116 |
|
|
|
99 |
|
Real estate residential mortgage |
|
|
67 |
|
|
|
72 |
|
|
|
79 |
|
|
|
81 |
|
|
|
89 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank |
|
|
176 |
|
|
|
182 |
|
|
|
185 |
|
|
|
174 |
|
|
|
178 |
|
Other |
|
|
8 |
|
|
|
9 |
|
|
|
10 |
|
|
|
10 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total home equity loans |
|
|
184 |
|
|
|
191 |
|
|
|
195 |
|
|
|
184 |
|
|
|
189 |
|
Consumer other Key Community Bank |
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
Credit cards |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
Consumer other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
|
8 |
|
|
|
9 |
|
|
|
15 |
|
|
|
16 |
|
|
|
15 |
|
Other |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer other |
|
|
9 |
|
|
|
10 |
|
|
|
16 |
|
|
|
17 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans |
|
|
263 |
|
|
|
277 |
|
|
|
294 |
|
|
|
285 |
|
|
|
297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans (a) |
|
|
419 |
|
|
|
437 |
|
|
|
418 |
|
|
|
401 |
|
|
|
396 |
|
Nonperforming loans held for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
OREO |
|
|
20 |
|
|
|
20 |
|
|
|
18 |
|
|
|
16 |
|
|
|
12 |
|
Other nonperforming assets |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets |
|
$ |
440 |
|
|
$ |
457 |
|
|
$ |
436 |
|
|
$ |
418 |
|
|
$ |
410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing loans past due 90 days or more |
|
$ |
66 |
|
|
$ |
111 |
|
|
$ |
96 |
|
|
$ |
71 |
|
|
$ |
83 |
|
Accruing loans past due 30 through 89 days |
|
|
181 |
|
|
|
216 |
|
|
|
235 |
|
|
|
340 |
|
|
|
274 |
|
Restructured loans accruing and nonaccruing (b) |
|
|
300 |
|
|
|
268 |
|
|
|
270 |
|
|
|
264 |
|
|
|
266 |
|
Restructured loans included in nonperforming loans (b) |
|
|
170 |
|
|
|
141 |
|
|
|
157 |
|
|
|
137 |
|
|
|
142 |
|
Nonperforming assets from discontinued operations education lending business |
|
|
6 |
|
|
|
8 |
|
|
|
11 |
|
|
|
9 |
|
|
|
19 |
|
Nonperforming loans to period-end portfolio loans |
|
|
.72 |
% |
|
|
.75 |
% |
|
|
.73 |
% |
|
|
.71 |
% |
|
|
.71 |
% |
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets |
|
|
.75 |
|
|
|
.79 |
|
|
|
.76 |
|
|
|
.74 |
|
|
|
.74 |
|
(a) |
Loan balances exclude $12 million, $12 million, $13 million, $14 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, December 31,
2014, September 30, 2014, and June 30, 2014, respectively. |
(b) |
Restructured loans (i.e., troubled debt restructurings) are those for which Key, for reasons related to a borrowers financial difficulties, grants a concession to the borrower that it would not otherwise consider.
These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance. |
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
27
Summary of Changes in Nonperforming Loans From Continuing Operations
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q15 |
|
|
1Q15 |
|
|
4Q14 |
|
|
3Q14 |
|
|
2Q14 |
|
Balance at beginning of period |
|
$ |
437 |
|
|
$ |
418 |
|
|
$ |
401 |
|
|
$ |
396 |
|
|
$ |
449 |
|
Loans placed on nonaccrual status |
|
|
92 |
|
|
|
123 |
|
|
|
103 |
|
|
|
109 |
|
|
|
79 |
|
Charge-offs |
|
|
(52 |
) |
|
|
(47 |
) |
|
|
(49 |
) |
|
|
(49 |
) |
|
|
(56 |
) |
Loans sold |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
(21 |
) |
Payments |
|
|
(25 |
) |
|
|
(9 |
) |
|
|
(17 |
) |
|
|
(13 |
) |
|
|
(17 |
) |
Transfers to OREO |
|
|
(5 |
) |
|
|
(7 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
|
|
(4 |
) |
Loans returned to accrual status |
|
|
(28 |
) |
|
|
(41 |
) |
|
|
(12 |
) |
|
|
(35 |
) |
|
|
(34 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period (a) |
|
$ |
419 |
|
|
$ |
437 |
|
|
$ |
418 |
|
|
$ |
401 |
|
|
$ |
396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Loan balances exclude $12 million, $12 million, $13 million, $14 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, December 31,
2014, September 30, 2014, and June 30, 2014, respectively. |
Summary of Changes in Other Real Estate Owned,
Net of Allowance, From Continuing Operations
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q15 |
|
|
1Q15 |
|
|
4Q14 |
|
|
3Q14 |
|
|
2Q14 |
|
Balance at beginning of period |
|
$ |
20 |
|
|
$ |
18 |
|
|
$ |
16 |
|
|
$ |
12 |
|
|
$ |
12 |
|
Properties acquired nonperforming loans |
|
|
5 |
|
|
|
7 |
|
|
|
6 |
|
|
|
7 |
|
|
|
4 |
|
Valuation adjustments |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Properties sold |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
|
|
|
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|
|
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|
|
|
|
|
|
Balance at end of period |
|
$ |
20 |
|
|
$ |
20 |
|
|
$ |
18 |
|
|
$ |
16 |
|
|
$ |
12 |
|
|
|
|
|
|
|
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|
KeyCorp Reports Second Quarter 2015 Profit
July 16, 2015
Page
28
Line of Business Results
(dollars in millions)
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Percent change 2Q15 vs. |
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|
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2Q15 |
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1Q15 |
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|
4Q14 |
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3Q14 |
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2Q14 |
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1Q15 |
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2Q14 |
|
Key Community Bank |
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Summary of operations |
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Total revenue (TE) |
|
$ |
559 |
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|
$ |
549 |
|
|
$ |
558 |
|
|
$ |
558 |
|
|
$ |
553 |
|
|
|
1.8 |
% |
|
|
1.1 |
% |
Provision for credit losses |
|
|
7 |
|
|
|
29 |
|
|
|
12 |
|
|
|
27 |
|
|
|
25 |
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(75.9 |
) |
|
|
(72.0 |
) |
Noninterest expense |
|
|
449 |
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|
441 |
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|
448 |
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|
|
440 |
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|
|
443 |
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|
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1.8 |
|
|
|
1.4 |
|
Net income (loss) attributable to Key |
|
|
65 |
|
|
|
50 |
|
|
|
61 |
|
|
|
57 |
|
|
|
53 |
|
|
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30.0 |
|
|
|
22.6 |
|
Average loans and leases |
|
|
30,707 |
|
|
|
30,662 |
|
|
|
30,478 |
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|
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30,103 |
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|
|
30,034 |
|
|
|
.1 |
|
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|
2.2 |
|
Average deposits |
|
|
50,766 |
|
|
|
50,417 |
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|
|
50,850 |
|
|
|
50,302 |
|
|
|
50,232 |
|
|
|
.7 |
|
|
|
1.1 |
|
Net loan charge-offs |
|
|
20 |
|
|
|
28 |
|
|
|
28 |
|
|
|
28 |
|
|
|
33 |
|
|
|
(28.6 |
) |
|
|
(39.4 |
) |
Net loan charge-offs to average total loans |
|
|
.26 |
% |
|
|
.37 |
% |
|
|
.36 |
% |
|
|
.37 |
% |
|
|
.44 |
% |
|
|
N/A |
|
|
|
N/A |
|
Nonperforming assets at period end |
|
$ |
305 |
|
|
$ |
328 |
|
|
$ |
340 |
|
|
$ |
338 |
|
|
$ |
331 |
|
|
|
(7.0 |
) |
|
|
(7.9 |
) |
Return on average allocated equity |
|
|
9.75 |
% |
|
|
7.41 |
% |
|
|
9.00 |
% |
|
|
8.44 |
% |
|
|
7.83 |
% |
|
|
N/A |
|
|
|
N/A |
|
Average full-time equivalent employees |
|
|
7,400 |
|
|
|
7,452 |
|
|
|
7,414 |
|
|
|
7,573 |
|
|
|
7,569 |
|
|
|
(.7 |
) |
|
|
(2.2 |
) |
|
|
|
|
|
|
|
|
Key Corporate Bank |
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|
Summary of operations |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue (TE) |
|
$ |
477 |
|
|
$ |
401 |
|
|
$ |
460 |
|
|
$ |
400 |
|
|
$ |
395 |
|
|
|
19.0 |
% |
|
|
20.8 |
% |
Provision for credit losses |
|
|
38 |
|
|
|
8 |
|
|
|
4 |
|
|
|
(3 |
) |
|
|
(4 |
) |
|
|
375.0 |
|
|
|
N/M |
|
Noninterest expense |
|
|
252 |
|
|
|
216 |
|
|
|
245 |
|
|
|
215 |
|
|
|
207 |
|
|
|
16.7 |
|
|
|
21.7 |
|
Net income (loss) attributable to Key |
|
|
135 |
|
|
|
127 |
|
|
|
151 |
|
|
|
136 |
|
|
|
135 |
|
|
|
6.3 |
|
|
|
|
|
Average loans and leases |
|
|
25,298 |
|
|
|
24,722 |
|
|
|
23,798 |
|
|
|
23,215 |
|
|
|
22,886 |
|
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|
2.3 |
|
|
|
10.5 |
|
Average loans held for sale |
|
|
1,234 |
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|
|
775 |
|
|
|
855 |
|
|
|
481 |
|
|
|
429 |
|
|
|
59.2 |
|
|
|
187.6 |
|
Average deposits |
|
|
19,708 |
|
|
|
18,567 |
|
|
|
18,356 |
|
|
|
17,600 |
|
|
|
16,357 |
|
|
|
6.1 |
|
|
|
20.5 |
|
Net loan charge-offs |
|
|
12 |
|
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
N/M |
|
|
|
N/M |
|
Net loan charge-offs to average total loans |
|
|
.19 |
% |
|
|
(.07 |
)% |
|
|
(.05 |
)% |
|
|
(.02 |
)% |
|
|
(.04 |
)% |
|
|
N/A |
|
|
|
N/A |
|
Nonperforming assets at period end |
|
$ |
105 |
|
|
$ |
93 |
|
|
$ |
41 |
|
|
$ |
20 |
|
|
$ |
22 |
|
|
|
12.9 |
|
|
|
377.3 |
|
Return on average allocated equity |
|
|
30.15 |
% |
|
|
27.66 |
% |
|
|
34.17 |
% |
|
|
32.08 |
% |
|
|
35.72 |
% |
|
|
N/A |
|
|
|
N/A |
|
Average full-time equivalent employees |
|
|
2,058 |
|
|
|
2,057 |
|
|
|
2,043 |
|
|
|
1,998 |
|
|
|
1,940 |
|
|
|
|
|
|
|
6.1 |
|
TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful
KeyCorp Second Quarter 2015 Earnings Review July 16, 2015 Beth E. Mooney Chairman and Chief Executive Officer Don Kimble Chief Financial Officer Exhibit 99.2 |
2 FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION DISCLOSURE This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
statements do not relate strictly to historical or current facts.
Forward-looking statements usually can be identified by the use of words such as goal, objective, plan, expect, assume, anticipate, intend, project, believe,
estimate, or other words of similar meaning. Forward-looking statements provide managements current expectations or forecasts of future events, circumstances, results or aspirations. Forward-looking
statements, by their nature, are subject to assumptions, risks, and
uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause actual results to
differ from those described in forward-looking statements include,
but are not limited to: (1) deterioration of commercial real estate market fundamentals; (2) declining asset prices; (3) adverse changes in credit quality trends; (4) our concentrated credit exposure in commercial, financial, and agricultural
loans; (5) defaults by our loan counterparties or clients; (6) the
extensive and increasing regulation of the U.S. financial services industry; (7) changes in accounting policies, standards, and interpretations; (8) increasing capital and liquidity standards under applicable regulatory rules; (9)
unanticipated changes in our liquidity position, including but not
limited to, changes in the cost of liquidity, our ability to enter the financial markets and to secure alternative funding sources; (10) our ability to receive dividends from our subsidiary, KeyBank; (11) downgrades in our credit ratings or those
of KeyBank; (12) operational or risk management failures by us or
critical third-parties; (13) breaches of security or failures of our technology systems due to technological or other factors and cybersecurity threats; (14) negative outcomes from claims or litigation; (15) the occurrence of natural
or man-made disasters or conflicts or terrorist attacks; (16) a
reversal of the U.S. economic recovery due to financial, political or other shocks; (17) our ability to anticipate interest rate changes and manage interest rate risk; (18) deterioration of economic conditions in the geographic regions
where we operate; (19) the soundness of other financial institutions;
(20) our ability to attract and retain talented executives and employees and to manage our reputational risks; (21) our ability to timely and effectively implement our strategic initiatives; (22) increased competitive pressure due to
industry consolidation; (23) unanticipated adverse effects of strategic
partnerships or acquisitions and dispositions of assets or businesses; and (24) our ability to develop and effectively use the quantitative models we rely upon in our business planning.
We provide greater detail regarding these factors in our 2014 Form 10-K and
subsequent filings, which are available online at www.key.com/ir and
www.sec.gov. Any forward-looking statements made by us or on our behalf speak only
as of the date they are made, and Key does not undertake any obligation
to update any forward-looking statement to reflect the impact of subsequent events or circumstances. This presentation also includes certain non-GAAP financial measures related to tangible common equity, Common Equity Tier 1, Tier 1 common equity, pre-provision net revenue, and cash efficiency ratio. Management believes these ratios may assist
investors, analysts and regulators in analyzing Keys financials.
Although Key has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components, they have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of
results under GAAP. For more information on these calculations and to
view the reconciliations to the most comparable GAAP measures, please refer to the Appendix of this presentation and to page 95 of our Form 10-Q dated March 31, 2015. |
3 Generated positive operating leverage Revenue up 4% from 2Q14, benefitting from growth in fee income and loans - Record quarter for investment banking and debt placement: $141 MM, up 42% - Trust and investment services up 18% - Cards and payments up 9% Expense growth from prior year reflects higher performance-based compensation and the 3Q14 acquisition of Pacific Crest Securities Asset quality remains strong - NCOs represented 25 bps of average loans in 2Q15, below targeted range - NPLs remain at a low level: 72 bps of period-end loans Remaining disciplined with structure and relationship focus Strong Risk Management Strong Risk Management Repurchased $129 million of common shares in 2Q15 (a) Increased quarterly common share dividend by 15% in 2Q15 Total 2015 payout estimated to be among the highest in our peer group for third consecutive year Positive Operating Leverage Positive Operating Leverage Investor Highlights 2Q15 Disciplined Capital Management Disciplined Capital Management (a) Common share repurchase amount includes repurchases to offset issuances of common shares under our employee compensation plans
|
4 Financial Review * * * * * * * * * * * * * * * * |
5 Financial Highlights TE = Taxable equivalent, EOP = End of Period (a) From continuing operations (b) Year-over-year average balance growth (c) From consolidated operations (d) 6-30-15 ratios are estimated (e) Non-GAAP measure: see Appendix for reconciliation EPS assuming dilution $ .27 $ .26 $ .28 $ .23 $ .27 Cash efficiency ratio (e) 65.1 % 65.1 % 64.4 % 69.7 % 65.6 % Net interest margin (TE) 2.88 2.91 2.94 2.96 2.98 Return on average total assets 1.03 1.03 1.12 .92 1.14 Total loans and leases 4 % 5 % 5 % 5 % 6 % CF&A loans 10 12 12 11 13 Deposits (excl. foreign deposits) 6 5 2 4 2 Common Equity Tier 1 (d), (e) 10.7 % 10.6 % - - - Tier 1 common equity (e) - - 11.2 % 11.3 % 11.3 % Tier 1 risk-based capital (d) 11.1 11.0 11.9 12.0 12.0 Tangible common equity to tangible assets (e) 9.9 9.9 9.9 10.3 10.2 NCOs to average loans .25 % .20 % .22 % .22 % .22 % NPLs to EOP portfolio loans .72 .75 .73 .71 .71 Allowance for loan losses to EOP loans 1.37 1.37 1.38 1.43 1.46 Balance Sheet Growth (a), (b) Balance Sheet Growth (a), (b) Capital (c) Capital (c) Asset Quality (a) Asset Quality (a) Financial Performance (a) Metrics 2Q15 1Q15 4Q14 3Q14 2Q14 |
$21.0 $23.0 $25.0 $27.0 $29.0 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 6 Average total loans up 4% in 2Q15 from prior year, driven by CF&A up 10% Average total loans up in both the Community Bank and the Corporate Bank Loan growth continues to be driven primarily by CF&A loans Total commitments continue to grow with utilization relatively stable Loan Growth $ in billions Highlights Highlights Average Commercial, Financial & Agricultural Loans Average Commercial, Financial & Agricultural Loans Average Loans Average Loans Exit Portfolios Home Equity & Other Total Commercial $ in billions $55.6 $26.4 $29.0 $58.0 |
7 Improving Deposit Mix Highlights Highlights Funding Cost Funding Cost Deposit cost continues to improve compared to prior year Transaction deposit balances up 9% from 2Q14 Deposit growth of 6% from 2Q14 and 2% from 1Q15 reflects: Strength in commercial mortgage servicing Inflows from both commercial and consumer clients Average Deposits (a) Average Deposits (a) $ in billions Note: Transaction deposits include noninterest-bearing, as well as NOW and MMDA
(a) Excludes deposits in foreign office Cost of total deposits (a) Interest-bearing liability cost CDs and other time deposits Savings Noninterest-bearing NOW and MMDA .18% .15% .52% .52% .00% .20% .40% .60% .80% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 $66.5 $70.3 |
$579
$591 2.98% 2.88% 2.00% 2.50% 3.00% 3.50% 4.00% $500 $540 $580 $620 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 8 Net Interest Income and Margin TE = Taxable equivalent Highlights Highlights Net Interest Income & Net Interest Margin Trend (TE) Net Interest Income & Net Interest Margin Trend (TE) Net interest income up $12 MM, or 2%, from the prior year, reflecting higher earning asset balances mitigated by lower earning asset yields NII up $14 MM, or 2%, from the prior quarter, primarily due to higher earning asset balances and more days in the second quarter of 2015 Issued $1.75 B bank-level long-term debt in 2Q15, benefitting LCR and credit ratings profile Maintaining moderate asset sensitive position Naturally asset sensitive balance sheet flows: approximately 70% of loans variable rate High quality investment portfolio with average life of 3.8 years Flexibility to quickly adjust interest rate risk position Net interest income (TE) NIM (TE) $ in millions; continuing operations NIM Change (bps): vs. 1Q15 Higher levels of liquidity (.02) Lower earning asset yields (.01) Total Change (.03) |
23% 29% 13% 9% 9% 2% 5% 10% Trust & Investment Services Investment Banking & Debt Placement Deposit Service Charges Cards & Payments Corporate Services Mortgage Fees Operating Lease Income Other 9 Noninterest Income Highlights Highlights Noninterest Income Noninterest Income Noninterest income up 7% from prior year, driven by strength in core businesses: Record quarter for investment banking and debt placement fees; $141 MM, up 42% Trust and investment services 18% higher Cards and payments up 9% Noninterest income up 12% from prior quarter Investment banking and debt placement fees more than doubled Cards and payments income up 12% 2Q15 growth more than offset lower gains from principal investing (compared to prior year and prior quarter) and a $17 MM gain from the early termination of a leveraged lease in 2Q14 2Q15 Noninterest Income Diversity 2Q15 Noninterest Income Diversity $ in millions; continuing operations (a) Other includes corporate-owned life insurance, principal investing, etc. $150 $225 $300 $375 $450 $525 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Leveraged lease termination gains $455 (a) $488 |
$400 $500 $600 $700 $800 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 10 Focused Expense Management Noninterest Expense Noninterest Expense $ in millions Highlights Highlights $687 2Q15 noninterest expense up 3% from prior year, primarily attributed to: Performance-based compensation Costs associated with the 3Q14 acquisition of Pacific Crest 2Q15 included $10 MM of costs associated with continuous improvement and efficiency efforts Expense growth of 6% from 1Q15 driven by: Performance-based compensation Seasonal trends Annual merit increases Increased day count Higher marketing spend Lower employee benefits expense Business services and professional fees (a) Non-GAAP measure: see Appendix for reconciliation (b) 3Q12 excludes one-time gains of $54 million related to the redemption of trust preferred securities
Cash Efficiency Ratio
(a), (b) Cash Efficiency Ratio (a), (b) Cash efficiency ratio, excl. costs for continuous improvement efforts $711 |
$30
$36 $12 $41 .22% .25% .00% .20% .40% .60% $0 $10 $20 $30 $40 $50 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 .71% .72% 0.40% 0.80% 1.20% 1.60% $0 $200 $400 $600 $800 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 11 Nonperforming Assets Nonperforming Assets Net Charge-offs & Provision for Credit Losses Net Charge-offs & Provision for Credit Losses NPLs NPLs to period-end loans NCOs Provision for credit losses NCOs to average loans $ in millions $ in millions NPLs held for sale, OREO & other NPAs Strong Asset Quality Highlights Highlights Net loan charge-offs remain below targeted range, at 25 basis points of average loans Nonperforming loans represented 72 basis points of period-end loans Allowance for loan and lease losses represented 1.37% of period-end loans: 190% coverage of nonperforming loans Allowance for Loan and Lease Losses Allowance for Loan and Lease Losses Allowance for loan and lease losses to NPLs Allowance for loan and lease losses $ in millions $814 $796 206% 190% 110% 135% 160% 185% 210% $600 $700 $800 $900 $1,000 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 $410 $440 |
12 Disciplined capital management Increased quarterly common share dividend by 15% Repurchased $129 MM of common shares in 2Q15 Tier 1 Common Equity (a) Tier 1 Common Equity (a) Tangible Common Equity to Tangible Assets (a) Tangible Common Equity to Tangible Assets (a) Strong Capital Highlights Highlights Book Value per Share Book Value per Share Note: Common share repurchase amounts include repurchases to offset issuances of common shares under our employee compensation plans
(a) Non-GAAP measure: see Appendix for reconciliations (b) 6-30-15 ratio is estimated (c) The Regulatory Capital Rules, effective January 1, 2015 for Key, introduced a new capital measure, Common Equity Tier 1
$11.65 $12.21 $9.00 $10.00 $11.00 $12.00 $13.00 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 11.25% 10.69% 6.00% 8.00% 10.00% 12.00% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 10.15% 9.86% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Common Equity Tier 1 (a), (b), (c) Common Equity Tier 1 (a), (b), (c) |
Outlook and
Expectations Average Loans
Mid-single digit growth vs. FY 2014 Net Interest Income Up low single-digits without the benefit of higher rates NIM: down from FY 2014, reflecting continued elevated levels of liquidity; relatively
stable with 2Q15 reported level
Noninterest Income Mid-single digit growth compared to 2014 Expense Relatively stable with 2014 Efficiency / Productivity Positive operating leverage Asset Quality Net charge-offs to average loans below targeted range of 40 60 bps Provision expected to approximate net charge-offs Capital Disciplined management of capital including dividends and share repurchases 13 Guidance ranges: relatively stable: +/- 2%; low single-digit: <5%; mid-single digit: 4% - 6%; low double-digit: 10% - 13% FY 2015 FY 2015 |
14 Appendix * * * * * * * * * * * * * * * * |
Progress on
Targets for Success (a)
Continuing operations, unless otherwise noted
(b) Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits (excluding
deposits in foreign office) (c)
Excludes intangible asset amortization; non-GAAP measure: see Appendix for
reconciliation 15
Balance Sheet Efficiency Balance Sheet Efficiency Moderate Risk Profile Moderate Risk Profile High Quality, Diverse Revenue Streams High Quality, Diverse Revenue Streams Positive Operating Leverage Positive Operating Leverage Disciplined Capital Management Disciplined Capital Management Metrics (a) 2Q15 1Q15 Targets Loan to deposit ratio (b) Loan to deposit ratio (b) NCOs to average loans NCOs to average loans Provision for credit losses
to average loans Provision for credit losses
to average loans Net interest margin Net interest margin Noninterest income to total revenue Noninterest income to total revenue Cash efficiency ratio (c) Cash efficiency ratio (c) Return on average assets Return on average assets 87% 87% .25% .20% 65.1% 65.1% 1.03% 1.03% .28% .25% 2.88% 2.91% 45% 43% 90% -100% 40 - 60 bps LT: >3.50% LT: <60% 1.00% -1.25% >40% |
50% 55% 60% 65% 70% 2Q15 Business Growth, Net of Investments Expense Savings Rising Rate Benefit Long-term Target: <60% 16 Efficiency Ratio: Driving to 60% and Below Business plans and macroeconomic environment provide path to an efficiency
ratio below 60% Cash Efficiency Ratio (a) Outlook Cash Efficiency Ratio (a) Outlook (a) Non-GAAP measure: see Appendix for reconciliation (b) Assumes implied forward curve 2-3 year outlook: 60% Long-term, committed to moving below 60% (b) |
Oil &
Gas Longstanding history, expertise and relationships
17 Strong Portfolio Characteristics Strong Portfolio Characteristics >10 years of experience in energy lending with >20 specialists dedicated to oil & gas Focused on middle market companies, aligned with our relationship strategy Portfolio regularly stress tested Primarily secured by proven reserves Total Loans Outstanding, 6/30/15 >40% of clients 2015 production is hedged Relationships contribute to noninterest income; ~5% of FY14 investment banking and debt placement fees Net charge-offs lower than overall portfolio Allowance reflects estimated impact of current oil prices Oil & Gas: 2% Other: 98% Oil & Gas Outstanding Balances, 6/30/15 Oilfield Services Upstream: 60%, $0.6 B Midstream: 30%, $0.3 B Downstream: 10%, $0.1 B $0.1 B Oil & Gas $1.0 B |
18 Average Total Investment Securities Average Total Investment Securities Highlights Highlights Average AFS securities $ in billions High Quality Investment Portfolio Portfolio composed primarily of GNMA and GSE- backed MBS and CMOs Continue to position portfolio for upcoming regulatory liquidity requirements: 2015 average balance growth reflects actions taken to increase liquidity reserves Growth and reinvestment of portfolio cash flows have been predominantly in GNMA securities (~47% of total portfolio was GNMA at 6/30/15) Securities cash flows of $1.1 billion in 2Q15, up slightly from $1 billion in 1Q15 Average portfolio life at 6/30/15 of 3.8 years, compared to 3.5 years at 3/31/15 Securities to Total Assets (b) Securities to Total Assets (b) (a) Yield is calculated on the basis of amortized cost (b) Includes end of period held-to-maturity and available-for-sale securities
Average yield (a) Average HTM securities 2.10% .00% 1.00% 2.00% 3.00% 4.00% 5.00% $0.0 $5.0 $10.0 $15.0 $20.0 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 19% 20% 10% 14% 18% 22% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 $17.4 2.17% $18.3 |
Interest
Rate Risk Management Naturally Asset Sensitive Balance Sheet
Naturally Asset Sensitive Balance Sheet
Actively Managing Rate Risk
Actively Managing Rate Risk
High quality Fixed rate agency MBS and CMOs Average maturity: 3.8 years GNMAs total 47% of total portfolio Reinvesting cash flows into GNMAs $11 $17 $7 $7 Size of swap portfolio Modeled asset sensitivity ~3% 0% ~7% $7 Flexibility to Adjust Rate Sensitivity with Swaps (c) Loan Portfolio Variable: 70% Fixed: 30% Deposits (a) Flexibility to adjust rate sensitivity for changes in balance sheet growth/mix as well as interest rate outlook Debt hedges A/LM hedges Investment Portfolio Noninterest- bearing: 38% Interest- bearing, non- time: 55% CDs: 7% Maintaining moderate asset sensitive position of ~3% (b) - Assumes 200 basis point increase in short-term rates over a 12-month period Utilize swaps for debt hedging and asset liability management - Fairly even pace of A/LM swap maturities 6/30/15 Swaps ($ in B) 6/30/15 Notional Amt. Wtd. Avg. Maturity (Yrs.) Receive Rate Pay Rate A/L Management $ 10.5 2.6 1.0% .2% Debt 6.8 3.5 2.1 .2 $ 17.3 1.5% .2% 2Q15 $18 B AFS: $13 B HTM: $5 B Balance sheet has relatively short duration and is more impacted by the short-end of the curve $17 B 19 Actively managing a naturally asset sensitive balance sheet Note: Loan, deposit and investment portfolio balances reflect quarterly average balances
(a) Excludes deposits in foreign office (b) Preliminary estimate (c) May not foot due to rounding 2Q15 2Q15 |
20 Asset Quality Trends Criticized Outstandings (a) to Period-end Total Loans Criticized Outstandings (a) to Period-end Total Loans Delinquencies to Period-end Total Loans Delinquencies to Period-end Total Loans (a) Loan and lease outstandings (b) From continuing operations 30 89 days delinquent 90+ days delinquent .49% .31% .15% .11% .00% .25% .50% .75% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 2.7% 3.1% 0.0% 1.0% 2.0% 3.0% 4.0% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Metric (b) 2Q15 1Q15 4Q14 3Q14 2Q14 Delinquencies to EOP total loans: 30-89 days .31 % .37 % .41 % .61 % .49 % Delinquencies to EOP total loans: 90+ days .11 .19 .17 .13 .15 NPLs to EOP portfolio loans .72 .75 .73 .71 .71 NPAs to EOP portfolio loans + OREO + Other NPAs .75 .79 .76 .74 .74 Allowance for loan losses to period-end loans 1.37 1.37 1.38 1.43 1.46 Allowance for loan losses to NPLs 189.8 181.7 190.0 200.5 205.6 Continuing operations Continuing operations |
Period- end loans Average loans Net loan charge- offs Net loan charge-offs (b) / average loans (%) Nonperforming loans (c) Ending allowance (d) Allowance / period-end loans (d) (%) Allowance / NPLs (%) 6/30/15 2Q15 2Q15 2Q15 6/30/15 6/30/15 6/30/15 6/30/15 Commercial, financial and agricultural $ 29,285 $ 29,017 $ 15 .21% $ 100
$
418 1.43
418.00% Commercial real estate: Commercial Mortgage 7,874 7,981 - - 26 144 1.83 553.85 Construction 1,254 1,199 (1) (.33) 12 31 2.47 258.33 Commercial lease financing 4,010 3,981 - - 18 53 1.32 294.44 Real estate residential mortgage 2,252 2,237 - - 67 20 .89 29.85 Home equity 10,532 10,510 8 .31 184 61 .58 33.15 Credit cards 753 737 7 3.81 2 31 4.12 N/M Consumer other Key Community Bank 1,595 1,571 4 1.02 1 21 1.32 N/M Consumer other Exit Portfolio 709 745 3 1.62 9 17 2.40 188.89 Continuing total (e) $ 58,264 $ 57,978 $ 36 .25% $ 419
$
796 1.37 189.98% Discontinued operations 1,962 2,168 2 .37 6 22 1.12 366.67 Consolidated total $ 60,226 $ 60,146 $ 38 .25% $ 425
$
818 1.36 192.47% Credit Quality by Portfolio Credit Quality by Portfolio Credit Quality $ in millions 21 (a) 6-30-15 ending loan balance includes $89 million of commercial credit card balances; 6-30-15 average loan balance includes $88
million of assets from commercial credit cards
(b) Net loan charge-off amounts are annualized in calculation (c) 6-30-15 NPL amount excludes $12 million of purchased credit impaired loans
(d) 6-30-15 allowance by portfolio is estimated (e) 6-30-15 ending loan balance includes purchased loans of $125 million, of which $12 million were purchased credit impaired
N/M = Not meaningful (a) |
Vintage
(% of Loans) Loan
Balances Average Loan Size ($) Average FICO Average LTV % of Loans LTV>90% 2012 and later 2011 2010 2009 2008 and prior Loans and lines First lien $ 6,207 $ 64,383 770 67% .5% 55 % 4 % 3% 3% 35 % Second lien 4,089 51,618 765 76 3.4 37 4 3 4 52 Community Bank $ 10,296 58,741 768 71 1.6 48 4 3 3 42 Exit portfolio 236 19,156 729 80 29.0 - - - - 100 Total home equity portfolio $ 10,532 Nonaccrual loans and lines First lien $ 102
$ 65,179
723 72% 1.3% 12 % 3 % 3% 5% 77 % Second lien 74 47,054 712 80 1.3 5 2 2 4 87 Community Bank $ 176
56,140 718 76 1.3 9 3 2 5 81 Exit portfolio 8 22,626 702 75 24.0 - - - - 100 Total home equity nonaccruals $ 184
Second quarter net charge-offs (NCOs)
Community Bank $ 7
20 % 1 % 2% 5% 72 % % of average loans .27 % Exit Portfolio $ 1
- - - - - % of average loans 1.64 % (a) Average LTVs are at origination; current average LTVs for Community Bank total home equity loans and lines is approximately 68%,
compared to 70% at the end of the first quarter of 2015
Home Equity Portfolio 6/30/15
Home Equity Portfolio 6/30/15
$ in millions, except average loan size
Home Equity Portfolio Highlights Highlights High quality portfolio Community bank loans and lines: 98% of total portfolio; branch- originated 60% first lien position Average FICO score of 768 Average LTV at origination: 71% $3.9 billion of the total portfolio are fixed rate loans that require principal and interest payments; $6.6 billion are lines $1.3 billion in lines outstanding (12% of the total portfolio) come to end of draw period in the next four years Proactive communication and client outreach initiated near end of draw period 22 (a) |
Balance
Outstanding Change
Net Loan Charge-offs
Balance on Nonperforming Status 6-30-15 3-31-15 6-30-15 vs. 3-31-15 2Q15 1Q15 (b) 6-30-15 3-31-15 Residential properties homebuilder $ 6 $ 6 $ - - $ 1 $ 8 $ 8 Marine and RV floor plan 2 6 (4) - - 1 5 Commercial lease financing (a) 831 877 (46) - (1) - - Total commercial loans 839 889 (50) - - 9 13 Home equity Other 236 253 (17) $ 1 - 8 9 Marine 673 730 (57) 3 2 8 9 RV and other consumer 47 50 (3) - 1 1 1 Total consumer loans 956 1,033 (77) 4 3 17 19 Total exit loans in loan portfolio 1,795 1,922 $ (127) $ 4 $ 3 $ 26 $ 32 Discontinued operations education lending business (not included in exit loans above) (c) $ 1,962 $ 2,219 $ (257) $ 2 $ 6 $ 6 $ 8 $2,560 $1,859 $0 $1,000 $2,000 $3,000 $4,000 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 $ in millions; average balances (a) Includes (1) the business aviation, commercial vehicle, office products, construction and industrial leases; (2) Canadian lease financing portfolios; (3) European lease financing portfolios; and (4) all remaining balances related to lease in, lease out; sale in, lease out; service contract
leases; and qualified technological equipment leases.
(b) Credit amounts indicate recoveries exceeded charge-offs (c) Excludes loans held for sale of $179 million at June 30, 2015. $ in millions Exit Loan Portfolio Exit Loan Portfolio Exit Loan Portfolio 23 |
Three
months ended 6-30-15
3-31-15 12-31-14 9-30-14 6-30-14 Tangible common equity to tangible assets at period end Key shareholders equity (GAAP) $ 10,590 $ 10,603 $ 10,530 $ 10,486 $ 10,504 Less: Intangible assets (a) 1,085 1,088 1,090 1,105 1,008 Preferred Stock, Series A (b) 281 281 282 282 282 Tangible common equity (non-GAAP) $ 9,224 $ 9,234 $ 9,158 $ 9,099 $ 9,214 Total assets (GAAP) $ 94,606 $ 94,206 $ 93,821 $ 89,784 $ 91,798 Less: Intangible assets (a) 1,085 1,088 1,090 1,105 1,008 Tangible assets (non-GAAP) $ 93,521 $ 93,118 $ 92,731 $ 88,679 $ 90,790 Tangible common equity to tangible assets ratio (non-GAAP) 9.86 % 9.92 % 9.88 % 10.26 % 10.15 % Common Equity Tier 1 at period end Key shareholders equity (GAAP) $ 10,590 $ 10,603 - - - Less: Preferred Stock, Series A (b) 281 281 - - - Common Equity Tier 1 capital before adjustments and deductions 10,309 10,322 - - - Less: Goodwill, net of deferred taxes 1,036 1,036 - - - Intangible assets, net of deferred taxes 33 36 - - - Deferred tax assets 1 1 - - - Net unrealized gains (losses) on available-for-sale securities, net of
deferred taxes 1 52 - - - Accumulated gain (loss) on cash flow hedges, net of deferred taxes (21) (8) - - - Amounts recorded in accumulated other comprehensive income (loss), net of deferred taxes (362) (364) - - - Total Common Equity Tier 1 capital (c) $ 9,621 $ 9,569 - - - Net risk-weighted assets (regulatory) (c) $ 89,995 $ 89,967 - - - Common Equity Tier 1 ratio (non-GAAP) (c) 10.69 % 10.64 % - - - Tier 1 common equity at period end Key shareholders equity (GAAP) - - $ 10,530 $ 10,486 $ 10,504 Qualifying capital securities - - 339 340 339 Less: Goodwill - - 1,057 1,051 979 Accumulated other comprehensive income (loss) (d) - - (395) (366) (328) Other assets (e) - - 83 110 86 Total Tier 1 capital (regulatory) - - 10,124 10,031 10,106 Less: Qualifying capital securities - - 339 340 339 Preferred Stock, Series A (b) - - 282 282 282 Total Tier 1 common equity (non-GAAP) - - $ 9,503 $ 9,409 $ 9,485 Net risk-weighted assets (regulatory) - - $ 85,100 $ 83,547 $ 84,287 Tier 1 common equity ratio (non-GAAP) - - 11.17 % 11.26 % 11.25 % GAAP to Non-GAAP Reconciliation $ in millions 24 a) Three months ended 6/30/15, 3/31/15, 12/31/14, 9/30/14, and 6/30/14 exclude $55 million, $61 million, $68 million, $72 million, and $79 million, respectively, of period-end purchased credit card receivable intangible assets b) Net of capital surplus c) 6-30-15 amount is estimated d) Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net
gains or losses on cash flow hedges, and amounts resulting from the
application of the applicable accounting guidance for defined benefit and other postretirement plans e) Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed intangible assets (excluding goodwill) and
deductible portions of nonfinancial
equity investments. There were no disallowed deferred tax assets at December 31, 2014, September 30, 2014, and June 30, 2014. |
Three
months ended 6-30-15
3-31-15 12-31-14 9-30-14 6-30-14 Pre-provision net revenue Net interest income (GAAP) $ 584 $ 571 $ 582 $ 575 $ 573 Plus: Taxable-equivalent adjustment 7 6 6 6 6 Noninterest income (GAAP) 488 437 490 417 455 Less: Noninterest expense (GAAP) 711 669 704 706 687 Pre-provision net revenue from continuing operations (non-GAAP) $ 368 $ 345 $ 374 $ 292 $ 343 Average tangible common equity Average Key shareholders equity (GAAP) $ 10,590 $ 10,570 $ 10,562 $ 10,473 $ 10,459 Less: Intangible assets (average) (a) 1,086 1,089 1,096 1,037 1,010 Preferred Stock, Series A (average) 290 290 291 291 291 Average tangible common equity (non-GAAP) $ 9,214 $ 9,191 $ 9,175 $ 9,145 $ 9,158 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 230 $ 222 $ 246 $ 197 $ 242 Average tangible common equity (non-GAAP) 9,214 9,191 9,175 9,145 9,158 Return on average tangible common equity from continuing operations (non-GAAP)
10.01 % 9.80 % 10.64 % 8.55 % 10.60 % Return on average tangible common equity consolidated Net income (loss) attributable to Key common shareholders (GAAP) $ 233 $ 227 $ 248 $ 180 $ 214 Average tangible common equity (non-GAAP) 9,214 9,191 9,175 9,145 9,158 Return on average tangible common equity consolidated (non-GAAP) 10.14 % 10.02 % 10.72 % 7.81 % 9.37 % Cash efficiency ratio Noninterest expense (GAAP) $ 711 $ 669 $ 704 $ 706 $ 687 Less: Intangible asset amortization (GAAP) 9 9 10 10 9 Adjusted noninterest expense (non-GAAP) $ 702 $ 660 $ 694 $ 696 $ 678 Net interest income (GAAP) $ 584 $ 571 $ 582 $ 575 $ 573 Plus: Taxable-equivalent adjustment 7 6 6 6 6 Noninterest income (GAAP) 488 437 490 417 455 Total taxable-equivalent revenue (non-GAAP) $ 1,079 $ 1,014 $ 1,078 $ 998 $ 1,034 Cash efficiency ratio (non-GAAP) 65.1 % 65.1 % 64.4 % 69.7 % 65.6 % GAAP to Non-GAAP Reconciliation (continued) $ in millions (a) Three months ended 6/30/15, 3/31/15, 12/31/14, 9/30/14 and 6/30/14 exclude $58 million, $64 million, $69 million, $76 million, and $82 million,
respectively, of average purchased credit card receivable
intangible assets 25 |
KeyCorp & Subsidiaries $ in billions Quarter ended June 30, 2015 Common Equity Tier 1 under current regulatory rules $ 9.6
Adjustments from current regulatory rules to the Regulatory Capital Rules: Deferred tax assets and other assets (b) (.1) Common Equity Tier 1 anticipated under the Regulatory Capital Rules (c) $ 9.6
Net risk-weighted assets under current regulatory rules
$
90.0 Adjustments from
current regulatory rules to the Regulatory Capital Rules:
Mortgage servicing assets (d) .5 Deferred tax assets (d) - Significant investments (d) - Other assets (e) - Total risk-weighted assets anticipated under the Regulatory Capital Rules (c) $ 90.5
Common Equity Tier 1 under the Regulatory Capital
Rules 10.6 % (a) Common Equity Tier 1 capital is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts
and bank regulatory agencies to assess the capital position of financial
services companies. Management reviews Common Equity Tier 1 along with other measures of capital as part of its financial analyses (b) Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as the deductible
portion of purchased credit card receivables
(c) The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies Regulatory Capital Rules (as fully phased-in on January 1, 2019); Key is subject to the Regulatory Capital Rules under the standardized approach
(d) Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250% under the fully implemented final
rule (e)
Under the fully implemented rule, certain deferred tax assets and intangible assets
subject to the transition provision are no longer required to be
risk-weighted because they are deducted directly from capital.
Table may not foot due to rounding
26 Common Equity Tier 1 Under the Regulatory Capital Rules (estimated) (a) |
Exhibit 99.3
Consolidated Balance Sheets
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
58,264 |
|
|
$ |
57,953 |
|
|
$ |
55,600 |
|
Loans held for sale |
|
|
835 |
|
|
|
1,649 |
|
|
|
435 |
|
Securities available for sale |
|
|
14,244 |
|
|
|
13,120 |
|
|
|
12,224 |
|
Held-to-maturity securities |
|
|
5,022 |
|
|
|
5,005 |
|
|
|
5,233 |
|
Trading account assets |
|
|
674 |
|
|
|
789 |
|
|
|
890 |
|
Short-term investments |
|
|
3,222 |
|
|
|
3,378 |
|
|
|
3,176 |
|
Other investments |
|
|
703 |
|
|
|
730 |
|
|
|
899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total earning assets |
|
|
82,964 |
|
|
|
82,624 |
|
|
|
78,457 |
|
Allowance for loan and lease losses |
|
|
(796 |
) |
|
|
(794 |
) |
|
|
(814 |
) |
Cash and due from banks |
|
|
693 |
|
|
|
506 |
|
|
|
604 |
|
Premises and equipment |
|
|
788 |
|
|
|
806 |
|
|
|
844 |
|
Operating lease assets |
|
|
296 |
|
|
|
306 |
|
|
|
306 |
|
Goodwill |
|
|
1,057 |
|
|
|
1,057 |
|
|
|
979 |
|
Other intangible assets |
|
|
83 |
|
|
|
92 |
|
|
|
108 |
|
Corporate-owned life insurance |
|
|
3,502 |
|
|
|
3,488 |
|
|
|
3,438 |
|
Derivative assets |
|
|
536 |
|
|
|
731 |
|
|
|
549 |
|
Accrued income and other assets |
|
|
3,314 |
|
|
|
3,144 |
|
|
|
3,090 |
|
Discontinued assets |
|
|
2,169 |
|
|
|
2,246 |
|
|
|
4,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
94,606 |
|
|
$ |
94,206 |
|
|
$ |
91,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits in domestic offices: |
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts |
|
$ |
36,024 |
|
|
$ |
35,623 |
|
|
$ |
33,637 |
|
Savings deposits |
|
|
2,370 |
|
|
|
2,413 |
|
|
|
2,450 |
|
Certificates of deposit ($100,000 or more) |
|
|
2,032 |
|
|
|
1,982 |
|
|
|
2,743 |
|
Other time deposits |
|
|
3,105 |
|
|
|
3,182 |
|
|
|
3,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing deposits |
|
|
43,531 |
|
|
|
43,200 |
|
|
|
42,335 |
|
Noninterest-bearing deposits |
|
|
26,640 |
|
|
|
27,948 |
|
|
|
24,781 |
|
Deposits in foreign office interest-bearing |
|
|
498 |
|
|
|
474 |
|
|
|
683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
|
70,669 |
|
|
|
71,622 |
|
|
|
67,799 |
|
Federal funds purchased and securities sold under repurchase agreements |
|
|
444 |
|
|
|
517 |
|
|
|
1,213 |
|
Bank notes and other short-term borrowings |
|
|
528 |
|
|
|
608 |
|
|
|
521 |
|
Derivative liabilities |
|
|
560 |
|
|
|
825 |
|
|
|
451 |
|
Accrued expense and other liabilities |
|
|
1,537 |
|
|
|
1,308 |
|
|
|
1,400 |
|
Long-term debt |
|
|
10,267 |
|
|
|
8,713 |
|
|
|
8,213 |
|
Discontinued liabilities |
|
|
|
|
|
|
|
|
|
|
1,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
84,005 |
|
|
|
83,593 |
|
|
|
81,277 |
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, Series A |
|
|
290 |
|
|
|
290 |
|
|
|
291 |
|
Common shares |
|
|
1,017 |
|
|
|
1,017 |
|
|
|
1,017 |
|
Capital surplus |
|
|
3,898 |
|
|
|
3,910 |
|
|
|
3,987 |
|
Retained earnings |
|
|
8,614 |
|
|
|
8,445 |
|
|
|
7,950 |
|
Treasury stock, at cost |
|
|
(2,884 |
) |
|
|
(2,780 |
) |
|
|
(2,452 |
) |
Accumulated other comprehensive income (loss) |
|
|
(345 |
) |
|
|
(279 |
) |
|
|
(289 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders equity |
|
|
10,590 |
|
|
|
10,603 |
|
|
|
10,504 |
|
Noncontrolling interests |
|
|
11 |
|
|
|
10 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
10,601 |
|
|
|
10,613 |
|
|
|
10,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
94,606 |
|
|
$ |
94,206 |
|
|
$ |
91,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (000) |
|
|
843,608 |
|
|
|
850,920 |
|
|
|
876,823 |
|
Consolidated Statements of Income
(dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
6-30-15 |
|
|
3-31-15 |
|
|
6-30-14 |
|
|
6-30-15 |
|
|
6-30-14 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
532 |
|
|
$ |
523 |
|
|
$ |
526 |
|
|
$ |
1,055 |
|
|
$ |
1,045 |
|
Loans held for sale |
|
|
12 |
|
|
|
7 |
|
|
|
5 |
|
|
|
19 |
|
|
|
9 |
|
Securities available for sale |
|
|
72 |
|
|
|
70 |
|
|
|
71 |
|
|
|
142 |
|
|
|
143 |
|
Held-to-maturity securities |
|
|
24 |
|
|
|
24 |
|
|
|
23 |
|
|
|
48 |
|
|
|
45 |
|
Trading account assets |
|
|
5 |
|
|
|
5 |
|
|
|
7 |
|
|
|
10 |
|
|
|
13 |
|
Short-term investments |
|
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
4 |
|
|
|
2 |
|
Other investments |
|
|
5 |
|
|
|
5 |
|
|
|
6 |
|
|
|
10 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
652 |
|
|
|
636 |
|
|
|
639 |
|
|
|
1,288 |
|
|
|
1,269 |
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
26 |
|
|
|
26 |
|
|
|
31 |
|
|
|
52 |
|
|
|
63 |
|
Federal funds purchased and securities sold under repurchase agreements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Bank notes and other short-term borrowings |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
4 |
|
Long-term debt |
|
|
40 |
|
|
|
37 |
|
|
|
33 |
|
|
|
77 |
|
|
|
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
68 |
|
|
|
65 |
|
|
|
66 |
|
|
|
133 |
|
|
|
133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
584 |
|
|
|
571 |
|
|
|
573 |
|
|
|
1,155 |
|
|
|
1,136 |
|
Provision for credit losses |
|
|
41 |
|
|
|
35 |
|
|
|
12 |
|
|
|
76 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for credit losses |
|
|
543 |
|
|
|
536 |
|
|
|
561 |
|
|
|
1,079 |
|
|
|
1,120 |
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment services income |
|
|
111 |
|
|
|
109 |
|
|
|
94 |
|
|
|
220 |
|
|
|
192 |
|
Investment banking and debt placement fees |
|
|
141 |
|
|
|
68 |
|
|
|
99 |
|
|
|
209 |
|
|
|
183 |
|
Service charges on deposit accounts |
|
|
63 |
|
|
|
61 |
|
|
|
66 |
|
|
|
124 |
|
|
|
129 |
|
Operating lease income and other leasing gains |
|
|
24 |
|
|
|
19 |
|
|
|
35 |
|
|
|
43 |
|
|
|
64 |
|
Corporate services income |
|
|
43 |
|
|
|
43 |
|
|
|
41 |
|
|
|
86 |
|
|
|
83 |
|
Cards and payments income |
|
|
47 |
|
|
|
42 |
|
|
|
43 |
|
|
|
89 |
|
|
|
81 |
|
Corporate-owned life insurance income |
|
|
30 |
|
|
|
31 |
|
|
|
28 |
|
|
|
61 |
|
|
|
54 |
|
Consumer mortgage income |
|
|
4 |
|
|
|
3 |
|
|
|
2 |
|
|
|
7 |
|
|
|
4 |
|
Mortgage servicing fees |
|
|
9 |
|
|
|
13 |
|
|
|
11 |
|
|
|
22 |
|
|
|
26 |
|
Net gains (losses) from principal investing |
|
|
11 |
|
|
|
29 |
|
|
|
27 |
|
|
|
40 |
|
|
|
51 |
|
Other income (a) |
|
|
5 |
|
|
|
19 |
|
|
|
9 |
|
|
|
24 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
488 |
|
|
|
437 |
|
|
|
455 |
|
|
|
925 |
|
|
|
890 |
|
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel |
|
|
408 |
|
|
|
389 |
|
|
|
389 |
|
|
|
797 |
|
|
|
777 |
|
Net occupancy |
|
|
66 |
|
|
|
65 |
|
|
|
68 |
|
|
|
131 |
|
|
|
132 |
|
Computer processing |
|
|
42 |
|
|
|
38 |
|
|
|
41 |
|
|
|
80 |
|
|
|
79 |
|
Business services and professional fees |
|
|
42 |
|
|
|
33 |
|
|
|
41 |
|
|
|
75 |
|
|
|
82 |
|
Equipment |
|
|
22 |
|
|
|
22 |
|
|
|
24 |
|
|
|
44 |
|
|
|
48 |
|
Operating lease expense |
|
|
12 |
|
|
|
11 |
|
|
|
10 |
|
|
|
23 |
|
|
|
20 |
|
Marketing |
|
|
15 |
|
|
|
8 |
|
|
|
13 |
|
|
|
23 |
|
|
|
18 |
|
FDIC assessment |
|
|
8 |
|
|
|
8 |
|
|
|
6 |
|
|
|
16 |
|
|
|
12 |
|
Intangible asset amortization |
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
18 |
|
|
|
19 |
|
OREO expense, net |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
Other expense |
|
|
86 |
|
|
|
84 |
|
|
|
85 |
|
|
|
170 |
|
|
|
162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
|
711 |
|
|
|
669 |
|
|
|
687 |
|
|
|
1,380 |
|
|
|
1,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes |
|
|
320 |
|
|
|
304 |
|
|
|
329 |
|
|
|
624 |
|
|
|
659 |
|
Income taxes |
|
|
84 |
|
|
|
74 |
|
|
|
76 |
|
|
|
158 |
|
|
|
168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
236 |
|
|
|
230 |
|
|
|
253 |
|
|
|
466 |
|
|
|
491 |
|
Income (loss) from discontinued operations, net of taxes |
|
|
3 |
|
|
|
5 |
|
|
|
(28 |
) |
|
|
8 |
|
|
|
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
239 |
|
|
|
235 |
|
|
|
225 |
|
|
|
474 |
|
|
|
467 |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
1 |
|
|
|
2 |
|
|
|
6 |
|
|
|
3 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Key |
|
$ |
238 |
|
|
$ |
233 |
|
|
$ |
219 |
|
|
$ |
471 |
|
|
$ |
461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
230 |
|
|
$ |
222 |
|
|
$ |
242 |
|
|
$ |
452 |
|
|
$ |
474 |
|
Net income (loss) attributable to Key common shareholders |
|
|
233 |
|
|
|
227 |
|
|
|
214 |
|
|
|
460 |
|
|
|
450 |
|
|
|
|
|
|
|
Per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
.27 |
|
|
$ |
.26 |
|
|
$ |
.28 |
|
|
$ |
.53 |
|
|
$ |
.54 |
|
Income (loss) from discontinued operations, net of taxes |
|
|
|
|
|
|
.01 |
|
|
|
(.03 |
) |
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders (b) |
|
|
.28 |
|
|
|
.27 |
|
|
|
.24 |
|
|
|
.54 |
|
|
|
.51 |
|
|
|
|
|
|
|
Per common share assuming dilution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders |
|
$ |
.27 |
|
|
$ |
.26 |
|
|
$ |
.27 |
|
|
$ |
.52 |
|
|
$ |
.53 |
|
Income (loss) from discontinued operations, net of taxes |
|
|
|
|
|
|
.01 |
|
|
|
(.03 |
) |
|
|
.01 |
|
|
|
(.03 |
) |
Net income (loss) attributable to Key common shareholders (b) |
|
|
.27 |
|
|
|
.26 |
|
|
|
.24 |
|
|
|
.53 |
|
|
|
.51 |
|
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
.075 |
|
|
$ |
.065 |
|
|
$ |
.065 |
|
|
$ |
.14 |
|
|
$ |
.12 |
|
|
|
|
|
|
|
Weighted-average common shares outstanding (000) |
|
|
839,454 |
|
|
|
848,580 |
|
|
|
875,298 |
|
|
|
843,992 |
|
|
|
879,986 |
|
Weighted-average common shares and potential common shares outstanding
(000) (c) |
|
|
846,312 |
|
|
|
857,122 |
|
|
|
902,137 |
|
|
|
851,687 |
|
|
|
886,684 |
|
(a) |
For each of the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, net securities gains (losses) totaled less than $1 million. For the three months ended June 30, 2015, and
June 30, 2014, Key did not have any impairment losses related to securities. For the three months ended March 31, 2015, impairment losses related to securities totaled less than $1 million. |
(b) |
Earnings per share may not foot due to rounding. |
(c) |
Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable. |
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