CLEVELAND, Jan. 19, 2017
/PRNewswire/ -- KeyCorp (NYSE: KEY) today announced fourth
quarter net income from continuing operations attributable to Key
common shareholders of $213 million,
or $.20 per common share, compared to
$165 million, or $.16 per common share, for the third quarter of
2016, and $224 million, or
$.27 per common share, for the fourth
quarter of 2015. During the fourth quarter of 2016, Key incurred
merger-related charges totaling $198
million, or $.11 per common
share, compared to $207 million, or
$.14 per common share, in the third
quarter of 2016. Excluding merger-related charges, earnings per
common share were $.31 for the fourth
quarter of 2016 and $.30 for the
third quarter of 2016. Merger-related charges were $6 million in the fourth quarter of 2015.
"Key's fourth quarter results reflect continued momentum in our
core businesses and the successful integration of the largest
acquisition in our company's history," said Chairman and Chief
Executive Officer Beth Mooney.
"Excluding merger-related charges, we generated positive operating
leverage for the quarter, our return on tangible common equity was
12.5%, and our cash efficiency ratio declined to 63.3%, reflecting
solid performance across Key's businesses and early progress on
merger synergies."
"We continued to see positive trends in the Community Bank and
Corporate Bank this quarter, with both segments contributing to our
overall revenue growth. Noninterest income increased as we
continued to do more with our clients and see results from our
investments," Mooney continued. "We had our strongest quarter ever
in investment banking and debt placement fees, and for the full
year generated $482 million in fees,
marking another record year, with results up 8% from last
year."
"The contribution from our First Niagara acquisition and quality
of our new team members continue to exceed our expectations," added
Mooney. "As we continue to realize cost savings and begin to see
traction on revenue opportunities, we remain confident in reaching
our financial targets."
Selected Financial
Highlights
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|
dollars in
millions, except per share data
|
|
|
|
|
Change 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
213
|
|
$
|
165
|
|
$
|
224
|
|
|
29.1
|
%
|
(4.9)%
|
|
Income (loss)
from continuing operations attributable to Key common shareholders
per common share — assuming
dilution
|
.20
|
|
.16
|
|
.27
|
|
|
25.0
|
|
(25.9)
|
|
Return on average
total assets from continuing operations
|
.69
|
%
|
.55
|
%
|
.97
|
%
|
|
N/A
|
|
N/A
|
|
Common Equity
Tier 1 ratio (non-GAAP) (a), (b)
|
9.59
|
|
9.56
|
|
10.94
|
|
|
N/A
|
|
N/A
|
|
Book value at period
end
|
$
|
12.58
|
|
$
|
12.78
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|
$
|
12.51
|
|
|
(1.6)
|
%
|
.6
|
%
|
Net interest margin
(TE) from continuing operations
|
3.12
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%
|
2.85
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%
|
2.87
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%
|
|
N/A
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|
N/A
|
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(a)
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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." 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.
|
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(b)
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12-31-16 ratio is
estimated.
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|
TE = Taxable
Equivalent, N/A = Not Applicable
|
INCOME STATEMENT
HIGHLIGHTS
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Net interest
income
|
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|
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dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Net interest income
(TE)
|
$
|
948
|
|
$
|
788
|
|
$
|
610
|
|
|
20.3
|
%
|
55.4
|
%
|
Merger-related
charges
|
—
|
|
(6)
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|
—
|
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|
N/M
|
|
N/M
|
|
Total net interest
income excluding merger-related charges
|
$
|
948
|
|
$
|
794
|
|
$
|
610
|
|
|
19.4
|
%
|
55.4
|
%
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent
|
Fourth quarter 2016 net interest income included $92 million of purchase accounting accretion
related to the acquisition of First Niagara, including $34 million related to refinement of third
quarter 2016 purchase accounting estimates.
Taxable-equivalent net interest income was $948 million for the fourth quarter of 2016, and
the net interest margin was 3.12%, compared to taxable-equivalent
net interest income of $610 million
and a net interest margin of 2.87% for the fourth quarter of 2015,
reflecting the benefit from the First Niagara acquisition and
ongoing business activity.
Compared to the third quarter of 2016, taxable-equivalent net
interest income increased by $160
million, and the net interest margin increased by 27 basis
points. The increases in both net interest income and the net
interest margin reflect the benefit from a full-quarter impact of
the First Niagara acquisition and refinement of third quarter 2016
purchase accounting estimates. The net interest margin also
benefited from the redeployment of excess liquidity into investment
securities.
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Trust and investment
services income
|
$
|
123
|
|
$
|
122
|
|
$
|
105
|
|
|
.8
|
%
|
17.1
|
%
|
Investment banking
and debt placement fees
|
157
|
|
156
|
|
127
|
|
|
.6
|
|
23.6
|
|
Service charges on
deposit accounts
|
84
|
|
85
|
|
64
|
|
|
(1.2)
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|
31.3
|
|
Operating lease
income and other leasing gains
|
21
|
|
6
|
|
15
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|
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250.0
|
|
40.0
|
|
Corporate services
income
|
61
|
|
51
|
|
55
|
|
|
19.6
|
|
10.9
|
|
Cards and payments
income
|
69
|
|
66
|
|
47
|
|
|
4.5
|
|
46.8
|
|
Corporate-owned life
insurance income
|
40
|
|
29
|
|
36
|
|
|
37.9
|
|
11.1
|
|
Consumer mortgage
income
|
6
|
|
6
|
|
2
|
|
|
—
|
|
200.0
|
|
Mortgage servicing
fees
|
20
|
|
15
|
|
15
|
|
|
33.3
|
|
33.3
|
|
Net gains (losses)
from principal investing
|
4
|
|
5
|
|
—
|
|
|
(20.0)
|
|
N/M
|
|
Other
income
|
33
|
|
8
|
|
19
|
|
|
312.5
|
|
73.7
|
|
Total noninterest
income
|
$
|
618
|
|
$
|
549
|
|
$
|
485
|
|
|
12.6
|
%
|
27.4
|
%
|
Merger-related
charges
|
9
|
|
(12)
|
|
—
|
|
|
N/M
|
|
N/M
|
|
Total noninterest
income excluding merger-related charges
|
$
|
609
|
|
$
|
561
|
|
$
|
485
|
|
|
8.6
|
%
|
25.6
|
%
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
Fourth quarter 2016 reported noninterest income includes a
benefit of $9 million associated with
merger-related charges that includes adjustments to purchase
accounting, compared to charges of $12
million in the third quarter of 2016.
Key's noninterest income was $618
million for the fourth quarter of 2016, compared to
$485 million for the year-ago
quarter. The increase was driven by the acquisition of First
Niagara, as well as continued positive momentum in Key's core
businesses. Investment banking and debt placement fees, cards and
payments income, service charges on deposit accounts, and other
income all contributed to the growth.
Compared to the third quarter of 2016, noninterest income
increased by $69 million. The
increase included a full-quarter impact of the First Niagara
acquisition as well as adjustments to purchase accounting that have
been recorded as merger-related charges. Operating lease income and
other leasing gains increased $15
million, with prior quarter results impacted by lease
residual losses. Additionally, corporate-owned life insurance
income increased $11 million,
reflecting normal seasonality. Other income was impacted by
merger-related charges, which contributed $19 million to the linked quarter increase.
Noninterest
Expense
|
|
|
|
|
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|
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|
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dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Personnel
expense
|
$
|
648
|
|
$
|
594
|
|
$
|
429
|
|
|
9.1
|
%
|
51.0
|
%
|
Nonpersonnel
expense
|
572
|
|
488
|
|
307
|
|
|
17.2
|
|
86.3
|
|
Total noninterest
expense
|
$
|
1,220
|
|
$
|
1,082
|
|
$
|
736
|
|
|
12.8
|
|
65.8
|
|
|
|
|
|
|
|
|
Merger-related
charges
|
207
|
|
189
|
|
6
|
|
|
9.5
|
|
N/M
|
|
Total noninterest expense
excluding merger-related charges
|
$
|
1,013
|
|
$
|
893
|
|
$
|
730
|
|
|
13.4
|
%
|
38.8
|
%
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
Key's noninterest expense was $1.2
billion for the fourth quarter of 2016, which included
$207 million of merger-related
charges, as well as a pension settlement charge of $18 million. The merger-related charges were
primarily made up of $80 million in
personnel expense related to systems conversions, as well as
fully-dedicated personnel for merger and integration efforts. The
remaining $127 million of
merger-related charges were nonpersonnel expense, largely
recognized in net occupancy, computer processing, business services
and professional fees, and marketing expense. In the third quarter
of 2016, noninterest expense included $189
million of merger-related charges, while $6 million of merger-related charges were
incurred in the fourth quarter of 2015.
Excluding merger-related charges, noninterest expense was
$283 million higher than the fourth
quarter of last year. The increase from the prior year, reflected
in both personnel and nonpersonnel expense, was largely driven by
the acquisition of First Niagara, as well as higher incentive and
stock-based compensation. Additionally, Key incurred $14 million in an increased pension settlement
charge, and intangible asset amortization increased $18 million.
Compared to the third quarter of 2016, excluding merger-related
charges, noninterest expense increased by $120 million. The increase, reflected in both
personnel and nonpersonnel expense, was largely driven by an extra
month of impact from First Niagara, as well as a pension settlement
charge of $18 million during the
fourth quarter. Incentive and stock-based compensation also
increased, primarily related to stock-based compensation plans,
reflecting the impact of Key's higher share price. In the fourth
quarter of 2016, intangible asset amortization increased
$14 million.
BALANCE SHEET HIGHLIGHTS
In the fourth quarter of 2016, Key had average assets of
$136 billion compared to $96.1 billion in the fourth quarter of 2015 and
$125.1 billion in the third quarter
of 2016, primarily reflecting the acquisition of First Niagara.
Average securities available-for-sale and held-to-maturity
securities totaled $29.3 billion in
the fourth quarter of 2016, compared to $19.1 billion in the fourth quarter of 2015 and
$24.2 billion in the third quarter of
2016. The increase compared to both the year-ago quarter and
prior quarter primarily reflects the impact of the First Niagara
acquisition and the redeployment of excess liquidity into the
investment portfolio.
Average
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Commercial, financial
and agricultural (a)
|
$
|
39,495
|
|
$
|
37,318
|
|
$
|
30,884
|
|
|
5.8
|
%
|
27.9
|
%
|
Other commercial
loans
|
21,617
|
|
19,110
|
|
12,996
|
|
|
13.1
|
|
66.3
|
|
Home equity
loans
|
12,812
|
|
11,968
|
|
10,418
|
|
|
7.1
|
|
23.0
|
|
Other consumer
loans
|
11,436
|
|
9,301
|
|
5,278
|
|
|
23.0
|
|
116.7
|
|
Total
loans
|
$
|
85,360
|
|
$
|
77,697
|
|
$
|
59,576
|
|
|
9.9
|
%
|
43.3
|
%
|
|
|
|
|
|
|
|
(a)
|
Commercial, financial
and agricultural average loan balances include $119 million, $107
million, and $87 million of assets from commercial credit cards at
December 31, 2016, September 30, 2016, and December 31, 2015,
respectively.
|
During the fourth quarter, Key adjusted the fair value mark on
the First Niagara acquired loan portfolio from $686 million to $548 million.
Average loans were $85.4 billion
for the fourth quarter of 2016, an increase of $25.8 billion compared to the fourth quarter of
2015, primarily reflecting the impact of the First Niagara
acquisition and growth in commercial, financial and agricultural
loans.
Compared to the third quarter of 2016, average loans increased
by $7.7 billion, with the change
reflecting the full-quarter impact of the First Niagara
acquisition, September branch divestitures, and the exit of
acquired non-relationship commercial loans. On a period-end basis,
Key's loan portfolio increased $510
million, driven by growth in commercial, financial and
agricultural loans and improvement in the fair value mark on the
acquired portfolio.
Average
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Non-time deposits
(a)
|
$
|
94,414
|
|
$
|
85,683
|
|
$
|
66,270
|
|
|
10.2
|
%
|
42.5
|
%
|
Certificates of
deposit ($100,000 or more)
|
5,428
|
|
4,204
|
|
2,150
|
|
|
29.1
|
|
152.5
|
|
Other time
deposits
|
4,849
|
|
5,031
|
|
3,047
|
|
|
(3.6)
|
|
59.1
|
|
|
Total
deposits
|
$
|
104,691
|
|
$
|
94,918
|
|
$
|
71,467
|
|
|
10.3
|
%
|
46.5
|
%
|
|
|
|
|
|
|
|
|
Cost of total
deposits (a)
|
.22
|
%
|
.21
|
%
|
.15
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes deposits in
foreign office.
|
|
N/A = Not
Applicable
|
Average deposits, excluding deposits in foreign office, totaled
$104.7 billion for the fourth quarter
of 2016, an increase of $33.2 billion
compared to the year-ago quarter, primarily reflecting the
acquisition of First Niagara and higher interest-bearing deposits
resulting from core deposit growth in Key's retail banking
franchise and growth in escrow deposits from the commercial
mortgage servicing business.
Compared to the third quarter of 2016, average deposits
increased by $9.8 billion, reflecting
the full-quarter impact of the First Niagara acquisition, core
deposit growth in Key's retail banking franchise, and deposit
inflows from Key's commercial clients.
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Net loan
charge-offs
|
$
|
72
|
|
$
|
44
|
|
$
|
37
|
|
|
63.6
|
%
|
94.6
|
%
|
Net loan charge-offs
to average total loans
|
.34
|
%
|
.23
|
%
|
.25
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming loans
at period end (a)
|
$
|
625
|
|
$
|
723
|
|
$
|
387
|
|
|
(13.6)
|
|
61.5
|
|
Nonperforming assets
at period end (a)
|
676
|
|
760
|
|
403
|
|
|
(11.1)
|
|
67.7
|
|
Allowance for loan
and lease losses
|
858
|
|
865
|
|
796
|
|
|
(.8)
|
|
7.8
|
|
Allowance for loan
and lease losses to nonperforming loans (a)
|
137.3
|
%
|
119.6
|
%
|
205.7
|
%
|
|
N/A
|
|
N/A
|
|
Provision for credit
losses
|
$
|
66
|
|
$
|
59
|
|
$
|
45
|
|
|
11.9
|
%
|
46.7
|
%
|
|
|
|
|
|
|
|
(a)
|
Nonperforming loan
balances exclude $865 million, $959 million, and $11 million of
purchased credit impaired loans at December 31, 2016,
September 30, 2016, and December 31, 2015,
respectively.
|
|
|
N/A = Not
Applicable
|
Key's provision for credit losses was $66
million for the fourth quarter of 2016, compared to
$45 million for the fourth quarter of
2015 and $59 million for the third
quarter of 2016. Key's allowance for loan and lease losses
was $858 million, or 1.00% of total
period-end loans, at December 31, 2016, compared to 1.33% at
December 31, 2015, and 1.01% at September 30, 2016.
Net loan charge-offs for the fourth quarter of 2016 totaled
$72 million, or .34% of average total
loans, reflecting regulatory guidance on consumer bankruptcies and
conforming First Niagara charge-off policies to Key. These results
compare to $37 million, or .25%, for
the fourth quarter of 2015, and $44
million, or .23%, for the third quarter of 2016.
At December 31, 2016, Key's nonperforming loans totaled
$625 million, which represented .73%
of period-end portfolio loans. These results compare to .65% at
December 31, 2015, and .85% at September 30, 2016.
Nonperforming assets at December 31, 2016, totaled
$676 million, and represented .79% of
period-end portfolio loans and OREO and other nonperforming assets.
These results compare to .67% at December 31, 2015, and .89%
at September 30, 2016.
CAPITAL
Key's estimated risk-based capital ratios included in the
following table continued to exceed all "well-capitalized"
regulatory benchmarks at December 31, 2016.
Capital
Ratios
|
|
|
|
|
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
Common Equity Tier 1
(a), (b)
|
9.59
|
%
|
9.56
|
%
|
10.94
|
%
|
Tier 1 risk-based
capital (a)
|
10.95
|
|
10.53
|
|
11.35
|
|
Total risk based
capital (a)
|
12.92
|
|
12.63
|
|
12.97
|
|
Tangible common
equity to tangible assets (b)
|
8.09
|
|
8.27
|
|
9.98
|
|
Leverage
(a)
|
9.89
|
|
10.22
|
|
10.72
|
|
|
|
|
|
(a)
|
12/31/2016 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 "tangible common equity" and "Common Equity Tier 1." 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 December 31, 2016,
Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital
ratios stood at 9.59% and 10.95%, respectively. In addition,
the tangible common equity ratio was 8.09% at December 31,
2016.
As a "standardized approach" banking organization, Key's
mandatory compliance with the final Basel III capital framework for
U.S. banking organizations (the "Regulatory Capital Rules") began
on January 1, 2015, subject to
transitional provisions extending to January
1, 2019. Key's estimated Common Equity Tier 1 ratio as
calculated under the fully phased-in Regulatory Capital Rules was
9.47% at December 31, 2016. 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 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Shares outstanding at
beginning of period
|
1,082,055
|
|
842,703
|
|
835,285
|
|
|
28.4
|
%
|
29.5
|
%
|
Common shares
repurchased
|
(4,380)
|
|
(5,240)
|
|
—
|
|
|
(16.4)
|
|
N/M
|
|
Shares reissued
(returned) under employee benefit plans
|
1,642
|
|
4,857
|
|
466
|
|
|
(66.2)
|
|
252.4
|
|
Common shares issued to
acquire First Niagara
|
(3)
|
|
239,735
|
|
—
|
|
|
N/M
|
|
N/M
|
|
|
Shares outstanding at
end of period
|
1,079,314
|
|
1,082,055
|
|
835,751
|
|
|
(.3)%
|
|
29.1
|
%
|
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
During the fourth quarter of 2016, Key completed $68 million of common share repurchases,
including repurchases to offset issuances of common shares under
our employee compensation plans, in accordance with Key's 2016
Capital Plan.
LINE OF BUSINESS RESULTS
The following table shows the contribution made by each major
business segment to Key's 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 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Revenue from
continuing operations (TE)
|
|
|
|
|
|
|
Key Community
Bank
|
$
|
901
|
|
$
|
779
|
|
$
|
588
|
|
|
15.7
|
%
|
53.2
|
%
|
Key Corporate
Bank
|
630
|
|
554
|
|
479
|
|
|
13.7
|
|
31.5
|
|
Other
Segments
|
40
|
|
17
|
|
31
|
|
|
135.3
|
|
29.0
|
|
|
Total
segments
|
1,571
|
|
1,350
|
|
1,098
|
|
|
16.4
|
|
43.1
|
|
Reconciling
Items
|
(5)
|
|
(13)
|
|
(3)
|
|
|
N/M
|
|
N/M
|
|
|
Total
|
$
|
1,566
|
|
$
|
1,337
|
|
$
|
1,095
|
|
|
17.1
|
%
|
43.0
|
%
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
|
|
|
|
|
Key Community
Bank
|
$
|
115
|
|
$
|
104
|
|
$
|
70
|
|
|
10.6
|
%
|
64.3
|
%
|
Key Corporate
Bank
|
221
|
|
159
|
|
142
|
|
|
39.0
|
|
55.6
|
|
Other
Segments
|
29
|
|
16
|
|
25
|
|
|
81.3
|
|
16.0
|
|
|
Total
segments
|
365
|
|
279
|
|
237
|
|
|
30.8
|
|
54.0
|
|
Reconciling Items
(a)
|
(132)
|
|
(108)
|
|
(7)
|
|
|
N/M
|
|
N/M
|
|
|
Total
|
$
|
233
|
|
$
|
171
|
|
$
|
230
|
|
|
36.3
|
%
|
1.3
|
%
|
|
|
|
|
|
|
|
|
(a)
|
Reconciling items
consists primarily of the unallocated portion of merger-related
charges and items not allocated to the business segments because
they do not reflect their normal operations.
|
|
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Key Community
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
628
|
|
$
|
530
|
|
$
|
388
|
|
|
18.5
|
%
|
61.9
|
%
|
Noninterest
income
|
273
|
|
249
|
|
200
|
|
|
9.6
|
|
36.5
|
|
|
Total revenue
(TE)
|
901
|
|
779
|
|
588
|
|
|
15.7
|
|
53.2
|
|
Provision for credit
losses
|
44
|
|
37
|
|
20
|
|
|
18.9
|
|
120.0
|
|
Noninterest
expense
|
673
|
|
577
|
|
456
|
|
|
16.6
|
|
47.6
|
|
|
Income (loss) before
income taxes (TE)
|
184
|
|
165
|
|
112
|
|
|
11.5
|
|
64.3
|
|
Allocated income
taxes (benefit) and TE adjustments
|
69
|
|
61
|
|
42
|
|
|
13.1
|
|
64.3
|
|
|
Net income (loss)
attributable to Key
|
$
|
115
|
|
$
|
104
|
|
$
|
70
|
|
|
10.6
|
%
|
64.3
|
%
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans and
leases
|
$
|
47,032
|
|
$
|
41,548
|
|
$
|
30,925
|
|
|
13.2
|
%
|
52.1
|
%
|
Total
assets
|
50,940
|
|
44,219
|
|
33,056
|
|
|
15.2
|
|
54.1
|
|
Deposits
|
79,357
|
|
69,397
|
|
52,219
|
|
|
14.4
|
|
52.0
|
|
|
|
|
|
|
|
|
|
Assets under
management at period end
|
$
|
36,592
|
|
$
|
36,752
|
|
$
|
33,983
|
|
|
(.4)
|
%
|
7.7
|
%
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent
|
Additional Key
Community Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Noninterest
income
|
|
|
|
|
|
|
Trust and investment
services income
|
$
|
88
|
|
$
|
86
|
|
$
|
73
|
|
|
2.3
|
%
|
20.5
|
%
|
Service charges on
deposit accounts
|
71
|
|
70
|
|
54
|
|
|
1.4
|
|
31.5
|
|
Cards and payments
income
|
59
|
|
55
|
|
44
|
|
|
7.3
|
|
34.1
|
|
Other noninterest
income
|
55
|
|
38
|
|
29
|
|
|
44.7
|
|
89.7
|
|
|
Total noninterest
income
|
$
|
273
|
|
$
|
249
|
|
$
|
200
|
|
|
9.6
|
%
|
36.5
|
%
|
|
|
|
|
|
|
|
|
Average deposit
balances
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
44,368
|
|
$
|
38,417
|
|
$
|
28,862
|
|
|
15.5
|
%
|
53.7
|
%
|
Savings
deposits
|
5,326
|
|
4,369
|
|
2,330
|
|
|
21.9
|
|
128.6
|
|
Certificates of
deposit ($100,000 or more)
|
3,658
|
|
2,607
|
|
1,686
|
|
|
40.3
|
|
117.0
|
|
Other time
deposits
|
4,836
|
|
4,943
|
|
3,045
|
|
|
(2.2)
|
|
58.8
|
|
Deposits in foreign
office
|
—
|
|
—
|
|
208
|
|
|
N/M
|
|
N/M
|
|
Noninterest-bearing
deposits
|
21,169
|
|
19,061
|
|
16,088
|
|
|
11.1
|
|
31.6
|
|
|
Total
deposits
|
$
|
79,357
|
|
$
|
69,397
|
|
$
|
52,219
|
|
|
14.4
|
%
|
52.0
|
%
|
|
|
|
|
|
|
|
|
Home equity
loans
|
|
|
|
|
|
|
Average
balance
|
$
|
12,560
|
|
$
|
11,703
|
|
$
|
10,203
|
|
|
|
|
Combined
weighted-average loan-to-value ratio (at date of
origination)
|
71
|
%
|
70
|
%
|
71
|
%
|
|
|
|
Percent first lien
positions
|
57
|
|
55
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
Branches
|
1,217
|
|
1,322
|
|
966
|
|
|
|
|
Automated teller
machines
|
1,593
|
|
1,701
|
|
1,256
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
Key Community Bank Summary of Operations (4Q16 vs.
4Q15)
- Positive operating leverage from prior year
- Net income increased $45 million,
or 64.3% from prior year
- Average commercial, financial, and agricultural loans increased
$4.9 billion, or 38.6% from the prior
year
- Average deposits increased $27.1
billion, or 52% from the prior year
Key Community Bank recorded net income attributable to Key of
$115 million for the fourth quarter
of 2016, compared to $70 million for
the year-ago quarter, benefiting from momentum in Key's core
businesses, as well as the impact of the First Niagara
acquisition.
Taxable-equivalent net interest income increased by $240 million, or 61.9%, from the fourth quarter
of 2015. The increase is primarily attributable to the acquisition
of First Niagara. Average loans and leases increased $16.1 billion, or 52.1%, largely driven by a
$4.9 billion, or 38.6% increase in
commercial, financial, and agricultural loans. Additionally,
average deposits increased $27.1
billion, or 52% from one year ago.
Noninterest income increased $73
million, or 36.5%, from the year-ago quarter, with positive
trends in cards and payments income and service charges on deposit
accounts.
The provision for credit losses increased by $24 million, or 120%, from the fourth quarter of
2015, primarily related to the acquisition of First Niagara,
which was partially offset by enhancements to the approach utilized
to determine the consumer allowance for loan and lease losses in
the fourth quarter of 2016. Net loan charge-offs increased
$19 million, primarily related to the
acquisition of First Niagara.
Noninterest expense increased by $217
million, or 47.6%, from the year-ago quarter, largely driven
by the acquisition of First Niagara, as well as core business
activity and investments. Personnel expense increased $73 million while non-personnel expense increased
by $144 million, including higher
intangible amortization expense and higher FDIC assessment
expense.
Key Corporate
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
332
|
|
$
|
276
|
|
$
|
224
|
|
|
20.3
|
%
|
48.2
|
%
|
Noninterest
income
|
298
|
|
278
|
|
255
|
|
|
7.2
|
|
16.9
|
|
|
Total revenue
(TE)
|
630
|
|
554
|
|
479
|
|
|
13.7
|
|
31.5
|
|
Provision for credit
losses
|
21
|
|
25
|
|
26
|
|
|
(16.0)
|
|
(19.2)
|
|
Noninterest
expense
|
325
|
|
307
|
|
257
|
|
|
5.9
|
|
26.5
|
|
|
Income (loss) before
income taxes (TE)
|
284
|
|
222
|
|
196
|
|
|
27.9
|
|
44.9
|
|
Allocated income
taxes and TE adjustments
|
63
|
|
63
|
|
51
|
|
|
—
|
|
23.5
|
|
|
Net income
(loss)
|
221
|
|
159
|
|
145
|
|
|
39.0
|
|
52.4
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
3
|
|
|
N/M
|
|
N/M
|
|
|
Net income (loss)
attributable to Key
|
$
|
221
|
|
$
|
159
|
|
$
|
142
|
|
|
39.0
|
%
|
55.6
|
%
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans and
leases
|
$
|
36,769
|
|
$
|
34,561
|
|
$
|
26,981
|
|
|
6.4
|
%
|
36.3
|
%
|
Loans held for
sale
|
1,223
|
|
1,103
|
|
820
|
|
|
10.9
|
|
49.1
|
|
Total
assets
|
43,209
|
|
40,581
|
|
32,639
|
|
|
6.5
|
|
32.4
|
|
Deposits
|
23,173
|
|
22,708
|
|
19,080
|
|
|
2.0
|
%
|
21.5
|
%
|
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Additional Key
Corporate Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 4Q16
vs.
|
|
|
4Q16
|
3Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Noninterest
income
|
|
|
|
|
|
|
Trust and investment
services income
|
$
|
35
|
|
$
|
36
|
|
$
|
32
|
|
|
(2.8)
|
%
|
9.4
|
%
|
Investment banking
and debt placement fees
|
154
|
|
153
|
|
125
|
|
|
.7
|
|
23.2
|
|
Operating lease
income and other leasing gains
|
19
|
|
10
|
|
13
|
|
|
90.0
|
|
46.2
|
|
|
|
|
|
|
|
|
|
Corporate services
income
|
43
|
|
36
|
|
44
|
|
|
19.4
|
|
(2.3)
|
|
Service charges on
deposit accounts
|
13
|
|
15
|
|
10
|
|
|
(13.3)
|
|
30.0
|
|
Cards and payments
income
|
10
|
|
11
|
|
3
|
|
|
(9.1)
|
|
233.3
|
|
|
Payments and services
income
|
66
|
|
62
|
|
57
|
|
|
6.5
|
|
15.8
|
|
|
|
|
|
|
|
|
|
Mortgage servicing
fees
|
18
|
|
13
|
|
15
|
|
|
38.5
|
|
20.0
|
|
Other noninterest
income
|
6
|
|
4
|
|
13
|
|
|
50.0
|
|
(53.8)
|
|
|
Total noninterest
income
|
$
|
298
|
|
$
|
278
|
|
$
|
255
|
|
|
7.2
|
%
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Corporate Bank Summary of Operations (4Q16 vs.
4Q15)
- Record quarter and year for investment banking and debt
placement fees
- Net income increased $79 million,
or 55.6% from the prior year
- Average loans and leases increased $9.8
billion, or 36.3% from the prior year
- Average deposits increased $4.1
billion, or 21.5% from the prior year
Key Corporate Bank recorded net income attributable to Key of
$221 million for the fourth quarter
of 2016, compared to $142 million for
the same period one year ago, reflecting the impact of the First
Niagara acquisition as well as positive trends in Key's core
businesses.
Taxable-equivalent net interest income increased by $108 million, or 48.2%, compared to the fourth
quarter of 2015. Average loan and lease balances increased
$9.8 billion, or 36.3%, from the
year-ago quarter, primarily driven by the First Niagara acquisition
as well as growth in commercial, financial and agricultural loans.
Average deposit balances increased $4.1
billion, or 21.5%, from the year-ago quarter, mostly driven
by the First Niagara acquisition, as well as growth in commercial
escrow deposits.
Noninterest income increased $43
million, or 16.9%, from the prior year. This growth
was mostly due to investment banking and debt placement fees, which
increased $29 million, or 23.2%,
cards and payments income which increased $7
million, and operating lease income and other leasing gains
which increased $6 million.
The provision for credit losses decreased $5 million, or 19.2%, compared to the fourth
quarter of 2015.
Noninterest expense increased by $68
million, or 26.5%, from the fourth quarter of 2015. The
increase from the prior year, reflected in both personnel and
nonpersonnel expense, was largely driven by the acquisition of
First Niagara, higher performance-based compensation and various
other items, including operating lease and cards and payments
expenses.
Key Corporate Bank also continued to benefit from a higher
volume of low income housing and energy tax credits.
Other Segments
Other Segments consist of Corporate Treasury, Key's Principal
Investing unit, and various exit portfolios. Other Segments
generated net income attributable to Key of $29 million for the fourth quarter of 2016,
compared to $25 million for the same
period last year, largely due to higher net gains from principal
investing.
*****
KeyCorp's roots trace back 190 years to Albany, New York. Headquartered in
Cleveland, Ohio, Key is one of the
nation's largest bank-based financial services companies, with
assets of approximately $136.5 billion at December 31,
2016.
Key provides deposit, lending, cash management, insurance, and
investment services to individuals and businesses in 15 states
under the name KeyBank National Association through a network of
more than 1,200 branches and more than 1,500 ATMs. 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.
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 Key's actual results to differ from those
described in the forward-looking statements can be found in
KeyCorp's Form 10-K for the year ended December 31, 2015, as well
as in KeyCorp's subsequent SEC filings, all of which have been
filed with the Securities and Exchange Commission (the "SEC") and
are available on Key's website (www.key.com/ir) and on the SEC's
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 KeyCorp's 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, January 19, 2017. An audio replay
of the call will be available through January 29, 2017.
Financial
Highlights
|
(dollars in millions,
except per share amounts)
|
|
|
|
Three months
ended
|
|
|
|
12/31/2016
|
|
9/30/2016
|
|
12/31/2015
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
948
|
|
|
$
|
788
|
|
|
$
|
610
|
|
|
Noninterest
income
|
618
|
|
|
549
|
|
|
485
|
|
|
|
Total revenue
(TE)
|
1,566
|
|
|
1,337
|
|
|
1,095
|
|
|
Provision for credit
losses
|
66
|
|
|
59
|
|
|
45
|
|
|
Noninterest
expense
|
1,220
|
|
|
1,082
|
|
|
736
|
|
|
Income (loss) from
continuing operations attributable to Key
|
233
|
|
|
171
|
|
|
230
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
(4)
|
|
|
1
|
|
|
(4)
|
|
|
Net income (loss)
attributable to Key
|
229
|
|
|
172
|
|
|
226
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
213
|
|
|
165
|
|
|
224
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
(4)
|
|
|
1
|
|
|
(4)
|
|
|
Net income (loss)
attributable to Key common shareholders
|
209
|
|
|
166
|
|
|
220
|
|
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.20
|
|
|
$
|
.17
|
|
|
$
|
.27
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
—
|
|
|
—
|
|
|
(.01)
|
|
|
Net income (loss)
attributable to Key common shareholders (b)
|
.20
|
|
|
.17
|
|
|
.27
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.20
|
|
|
.16
|
|
|
.27
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming dilution
(a)
|
—
|
|
|
—
|
|
|
(.01)
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(b)
|
.19
|
|
|
.17
|
|
|
.26
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
.085
|
|
|
.085
|
|
|
.075
|
|
|
Book value at period
end
|
12.58
|
|
|
12.78
|
|
|
12.51
|
|
|
Tangible book value
at period end
|
9.99
|
|
|
10.14
|
|
|
11.22
|
|
|
Market price at
period end
|
18.27
|
|
|
12.17
|
|
|
13.19
|
|
|
|
|
|
|
|
|
|
Performance
ratios
|
|
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
|
|
Return on average
total assets
|
.69
|
%
|
|
.55
|
%
|
|
.97
|
%
|
|
Return on average
common equity
|
6.22
|
|
|
5.09
|
|
|
8.51
|
|
|
Return on average
tangible common equity (c)
|
7.88
|
|
|
6.16
|
|
|
9.50
|
|
|
Net interest margin
(TE)
|
3.12
|
|
|
2.85
|
|
|
2.87
|
|
|
Cash efficiency ratio
(c)
|
76.2
|
|
|
80.0
|
|
|
66.4
|
|
|
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
|
|
Return on average
total assets
|
.67
|
%
|
|
.55
|
%
|
|
.93
|
%
|
|
Return on average
common equity
|
6.10
|
|
|
5.12
|
|
|
8.36
|
|
|
Return on average
tangible common equity (c)
|
7.73
|
|
|
6.20
|
|
|
9.33
|
|
|
Net interest margin
(TE)
|
3.09
|
|
|
2.83
|
|
|
2.84
|
|
|
Loan to deposit
(d)
|
85.2
|
|
|
84.7
|
|
|
87.8
|
|
|
|
|
|
|
|
|
|
Capital ratios at
period end
|
|
|
|
|
|
|
Key shareholders'
equity to assets
|
11.17
|
%
|
|
11.04
|
%
|
|
11.30
|
%
|
|
Key common
shareholders' equity to assets
|
9.95
|
|
|
10.18
|
|
|
10.99
|
|
|
Tangible common
equity to tangible assets (c)
|
8.09
|
|
|
8.27
|
|
|
9.98
|
|
|
Common Equity Tier 1
(c), (e)
|
9.59
|
|
|
9.56
|
|
|
10.94
|
|
|
Tier 1 risk-based
capital (e)
|
10.95
|
|
|
10.53
|
|
|
11.35
|
|
|
Total risk-based
capital (e)
|
12.92
|
|
|
12.63
|
|
|
12.97
|
|
|
Leverage
(e)
|
9.89
|
|
|
10.22
|
|
|
10.72
|
|
|
|
|
|
|
|
|
|
Asset quality —
from continuing operations
|
|
|
|
|
|
|
Net loan
charge-offs
|
$
|
72
|
|
|
$
|
44
|
|
|
$
|
37
|
|
|
Net loan charge-offs
to average loans
|
.34
|
%
|
|
.23
|
%
|
|
.25
|
%
|
|
Allowance for loan
and lease losses
|
$
|
858
|
|
|
$
|
865
|
|
|
$
|
796
|
|
|
Allowance for credit
losses
|
913
|
|
|
918
|
|
|
852
|
|
|
Allowance for loan
and lease losses to period-end loans
|
1.00
|
%
|
|
1.01
|
%
|
|
1.33
|
%
|
|
Allowance for credit
losses to period-end loans
|
1.06
|
|
|
1.07
|
|
|
1.42
|
|
|
Allowance for loan
and lease losses to nonperforming loans (f)
|
137.3
|
|
|
119.6
|
|
|
205.7
|
|
|
Allowance for credit
losses to nonperforming loans (f)
|
146.1
|
|
|
127.0
|
|
|
220.2
|
|
|
Nonperforming loans
at period end (f)
|
$
|
625
|
|
|
$
|
723
|
|
|
$
|
387
|
|
|
Nonperforming assets
at period end (f)
|
676
|
|
|
760
|
|
|
403
|
|
|
Nonperforming loans
to period-end portfolio loans (f)
|
.73
|
%
|
|
.85
|
%
|
|
.65
|
%
|
|
Nonperforming assets
to period-end portfolio loans plus OREO and other nonperforming
assets (f)
|
.79
|
|
|
.89
|
|
|
.67
|
|
|
|
|
|
|
|
|
|
Trust and
brokerage assets
|
|
|
|
|
|
|
Assets under
management
|
$
|
36,592
|
|
|
$
|
36,752
|
|
|
$
|
33,983
|
|
|
Nonmanaged and
brokerage assets
|
45,358
|
|
|
45,338
|
|
|
47,681
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
Average full-time
equivalent employees
|
18,849
|
|
|
17,079
|
|
|
13,359
|
|
|
Branches
|
1,217
|
|
|
1,322
|
|
|
966
|
|
|
|
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Financial
Highlights (continued)
|
(dollars in millions,
except per share amounts)
|
|
|
|
Twelve months
ended
|
|
|
|
12/31/2016
|
|
12/31/2015
|
Summary of
operations
|
|
|
|
|
Net interest income
(TE)
|
$
|
2,953
|
|
|
$
|
2,348
|
|
|
Noninterest
income
|
2,071
|
|
|
1,880
|
|
|
|
Total revenue
(TE)
|
5,024
|
|
|
4,256
|
|
|
Provision for credit
losses
|
266
|
|
|
166
|
|
|
Noninterest
expense
|
3,756
|
|
|
2,840
|
|
|
Income (loss) from
continuing operations attributable to Key
|
790
|
|
|
915
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
1
|
|
|
1
|
|
|
Net income (loss)
attributable to Key
|
791
|
|
|
916
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
753
|
|
|
$
|
892
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
1
|
|
|
1
|
|
|
Net income (loss)
attributable to Key common shareholders
|
754
|
|
|
893
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.81
|
|
|
$
|
1.06
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
—
|
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders (b)
|
.81
|
|
|
1.06
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.80
|
|
|
1.05
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming dilution
(a)
|
—
|
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(b)
|
.80
|
|
|
1.05
|
|
|
|
|
|
|
|
|
Cash dividends
paid
|
.330
|
|
|
.290
|
|
|
|
|
|
|
|
Performance
ratios
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
Return on average
total assets
|
.70
|
%
|
|
.99
|
%
|
|
Return on average
common equity
|
6.26
|
|
|
8.63
|
|
|
Return on average
tangible common equity (c)
|
7.39
|
|
|
9.64
|
|
|
Net interest margin
(TE)
|
2.92
|
|
|
2.88
|
|
|
Cash efficiency ratio
(c)
|
73.7
|
|
|
65.9
|
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
Return on average
total assets
|
.69
|
%
|
|
.97
|
%
|
|
Return on average
common equity
|
6.27
|
|
|
8.64
|
|
|
Return on average
tangible common equity(c)
|
7.40
|
|
|
9.65
|
|
|
Net interest margin
(TE)
|
2.91
|
|
|
2.85
|
|
|
|
|
|
|
|
Asset quality —
from continuing operations
|
|
|
|
|
Net loan
charge-offs
|
205
|
|
|
142
|
|
|
Net loan charge-offs
to average total loans
|
.29
|
%
|
|
.24
|
%
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
Average full-time
equivalent employees
|
15,700
|
|
|
13,483
|
|
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
34
|
|
|
28
|
|
(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," 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 divided by
period-end consolidated total deposits (excluding deposits in
foreign office).
|
|
|
(e)
|
12/31/2016 ratio is
estimated.
|
|
|
(f)
|
Nonperforming loan
balances exclude, $865 million, $959 million, and $11 million of
purchased credit impaired loans at December 31, 2016,
September 30, 2016, and December 31, 2015,
respectively.
|
|
|
TE = Taxable
Equivalent, GAAP = U.S. generally accepted accounting
principles
|
GAAP to Non-GAAP
Reconciliations
(dollars in millions)
The table below presents certain non-GAAP financial measures
related to "tangible common equity," "return on average tangible
common equity," "Common Equity Tier 1," "pre-provision net
revenue," certain financial measures excluding merger-related
charges, and "cash efficiency ratio."
The tangible common equity ratio and the return on average
tangible common equity ratio have been a focus for some investors,
and management believes these ratios may assist investors in
analyzing Key's 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 introduced 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.
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 Key's capital adequacy using
tangible common equity and Common Equity Tier 1, management
believes it is useful to enable investors to assess Key's 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 credit
losses makes it easier to analyze the results by presenting them on
a more comparable basis.
As previously disclosed, Key completed its purchase of First
Niagara on August 1, 2016. The
definitive agreement and plan of merger to acquire First Niagara
was originally announced on October
30, 2015. As a result of this transaction, Key has
recognized merger-related charges. The table below shows the
computation of merger-related charges, noninterest expense
excluding merger-related charges, earnings per common share
excluding merger-related charges, return on average tangible common
equity excluding merger-related charges, return on average assets
from continuing operations excluding merger-related charges, and
pre-provision net revenue excluding merger-related charges.
Management believes that eliminating the effects of the
merger-related charges 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 Key's intangible asset amortization from the
calculation. The table below also shows the computation for
the cash efficiency ratio excluding merger-related charges.
Management believes these ratios provide greater consistency and
comparability between Key's results and those of its peer
banks. Additionally, these ratios are 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
|
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
Tangible common
equity to tangible assets at period end
|
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
|
15,240
|
|
$
|
14,996
|
|
$
|
10,746
|
|
|
Less:
|
Intangible
assets (a)
|
2,788
|
|
2,855
|
|
1,080
|
|
|
|
Preferred Stock
(b)
|
1,640
|
|
1,150
|
|
281
|
|
|
|
Tangible common
equity (non-GAAP)
|
$
|
10,812
|
|
$
|
10,991
|
|
$
|
9,385
|
|
|
|
|
|
|
|
|
|
Total assets
(GAAP)
|
$
|
136,453
|
|
$
|
135,805
|
|
$
|
95,131
|
|
|
Less:
|
Intangible
assets (a)
|
2,788
|
|
2,855
|
|
1,080
|
|
|
|
Tangible assets
(non-GAAP)
|
$
|
133,665
|
|
$
|
132,950
|
|
$
|
94,051
|
|
|
|
|
|
|
|
|
|
Tangible common
equity to tangible assets ratio (non-GAAP)
|
8.09
|
%
|
8.27
|
%
|
9.98
|
%
|
|
|
|
|
|
|
|
Common Equity Tier
1 at period end
|
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
|
15,240
|
|
$
|
14,996
|
|
$
|
10,746
|
|
|
Less:
|
Preferred Stock
(b)
|
1,640
|
|
1,150
|
|
281
|
|
|
|
Common Equity Tier 1
capital before adjustments and deductions
|
13,600
|
|
13,846
|
|
10,465
|
|
|
Less:
|
Goodwill, net of
deferred taxes
|
2,416
|
|
2,450
|
|
1,034
|
|
|
|
Intangible assets,
net of deferred taxes
|
159
|
|
216
|
|
26
|
|
|
|
Deferred tax
assets
|
6
|
|
6
|
|
1
|
|
|
|
Net unrealized gains
(losses) on available-for-sale securities, net of deferred
taxes
|
(185)
|
|
101
|
|
(58)
|
|
|
|
Accumulated gains
(losses) on cash flow hedges, net of deferred taxes
|
(53)
|
|
39
|
|
(20)
|
|
|
|
Amounts in
accumulated other comprehensive income (loss) attributed
to
|
|
|
|
|
|
|
pension and
postretirement benefit costs, net of deferred taxes
|
(339)
|
|
(359)
|
|
(365)
|
|
|
|
Total Common Equity
Tier 1 capital (c)
|
$
|
11,596
|
|
$
|
11,393
|
|
$
|
9,847
|
|
|
|
|
|
|
|
|
|
Net risk-weighted
assets (regulatory) (c)
|
$
|
120,887
|
|
$
|
119,120
|
|
$
|
89,980
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
ratio (non-GAAP) (c)
|
9.59
|
%
|
9.56
|
%
|
10.94
|
%
|
|
|
|
|
|
|
|
Pre-provision net
revenue
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
938
|
|
$
|
780
|
|
$
|
602
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
10
|
|
8
|
|
8
|
|
|
|
Noninterest
income
|
618
|
|
549
|
|
485
|
|
|
Less:
|
Noninterest
expense
|
1,220
|
|
1,082
|
|
736
|
|
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
$
|
346
|
|
$
|
255
|
|
$
|
359
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
Three months
ended
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
Average tangible
common equity
|
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
$
|
14,901
|
|
$
|
13,552
|
|
$
|
10,731
|
|
|
Less:
|
Intangible assets
(average) (d)
|
2,874
|
|
2,255
|
|
1,082
|
|
|
|
Preferred Stock
(average)
|
1,274
|
|
648
|
|
290
|
|
|
|
Average tangible
common equity (non-GAAP)
|
$
|
10,753
|
|
$
|
10,649
|
|
$
|
9,359
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
(GAAP)
|
$
|
213
|
|
$
|
165
|
|
$
|
224
|
|
|
Average tangible
common equity (non-GAAP)
|
10,753
|
|
10,649
|
|
9,359
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
(non-GAAP)
|
7.88
|
%
|
6.16
|
%
|
9.50
|
%
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
|
209
|
|
$
|
166
|
|
$
|
220
|
|
|
Average tangible
common equity (non-GAAP)
|
10,753
|
|
10,649
|
|
9,359
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
7.73
|
%
|
6.20
|
%
|
9.33
|
%
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations excluding
merger-related charges
|
|
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
(GAAP)
|
$
|
213
|
|
$
|
165
|
|
$
|
224
|
|
|
Merger-related
charges, after tax
|
124
|
|
132
|
|
4
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
excluding
|
|
|
|
|
|
merger-related
charges (non-GAAP)
|
$
|
337
|
|
$
|
297
|
|
$
|
228
|
|
|
|
|
|
|
|
|
Average tangible
common equity (non-GAAP)
|
$
|
10,753
|
|
$
|
10,649
|
|
$
|
9,359
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations excluding
merger-related
|
|
|
|
|
|
charges
(non-GAAP)
|
12.47
|
%
|
11.10
|
%
|
9.67
|
%
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated excluding merger-related
charges
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
|
209
|
|
$
|
166
|
|
$
|
220
|
|
|
Merger-related
charges, after tax
|
124
|
|
132
|
|
4
|
|
|
Net income (loss)
attributable to Key common shareholders excluding merger-related
charges (non-GAAP)
|
$
|
333
|
|
$
|
298
|
|
$
|
224
|
|
|
|
|
|
|
|
|
Average tangible
common equity (non-GAAP)
|
$
|
10,753
|
|
$
|
10,649
|
|
$
|
9,359
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated excluding merger-related
charges (non-GAAP)
|
12.32
|
%
|
11.13
|
%
|
9.50
|
%
|
|
|
|
|
|
|
Noninterest
expense excluding merger-related charges
|
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
1,220
|
|
$
|
1,082
|
|
$
|
736
|
|
|
Less:
|
Merger-related
charges
|
207
|
|
189
|
|
6
|
|
|
|
Noninterest expense
excluding merger-related charges (non-GAAP)
|
$
|
1,013
|
|
$
|
893
|
|
$
|
730
|
|
|
|
|
|
|
|
Earnings per
common share (EPS) excluding merger-related charges
|
|
|
|
|
EPS from continuing
operations attributable to Key common shareholders — assuming
dilution
|
$
|
.20
|
|
$
|
.16
|
|
$
|
.27
|
|
|
Add:
|
EPS impact of
merger-related charges
|
.11
|
|
.14
|
|
—
|
|
|
|
EPS from continuing
operations attributable to Key common shareholders
|
|
|
|
|
|
excluding
merger-related charges (non-GAAP)
|
$
|
.31
|
|
$
|
.30
|
|
$
|
.27
|
|
|
|
|
|
|
|
Cash efficiency
ratio
|
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
1,220
|
|
$
|
1,082
|
|
$
|
736
|
|
|
Less:
|
Intangible asset
amortization
|
27
|
|
13
|
|
9
|
|
|
|
Adjusted noninterest
expense (non-GAAP)
|
1,193
|
|
1,069
|
|
727
|
|
|
Less:
|
Merger-related
charges
|
207
|
|
189
|
|
6
|
|
|
|
Adjusted noninterest
expense excluding merger-related charges (non-GAAP)
|
$
|
986
|
|
$
|
880
|
|
$
|
721
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
938
|
|
$
|
780
|
|
$
|
602
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
10
|
|
8
|
|
8
|
|
|
|
Noninterest
income
|
618
|
|
549
|
|
485
|
|
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
1,566
|
|
1,337
|
|
1,095
|
|
|
Add:
|
Merger-related
charges
|
(9)
|
|
18
|
|
—
|
|
|
|
Adjusted noninterest
income excluding merger-related charges (non-GAAP)
|
$
|
1,557
|
|
$
|
1,355
|
|
$
|
1,095
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
76.2
|
%
|
80.0
|
%
|
66.4
|
%
|
|
|
|
|
|
|
|
Cash efficiency ratio
excluding merger-related charges (non-GAAP)
|
63.3
|
%
|
64.9
|
%
|
65.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
Three months
ended
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
Return on average
total assets from continuing operations excluding merger-related
charges
|
|
|
|
|
Income from
continuing operations attributable to Key (GAAP)
|
$
|
233
|
|
$
|
171
|
|
$
|
230
|
|
|
Add:
|
Merger-related
charges, after tax
|
124
|
|
132
|
|
4
|
|
|
|
Income from
continuing operations attributable to Key excluding
merger-related
|
|
|
|
|
|
charges, after tax
(non-GAAP)
|
$
|
357
|
|
$
|
303
|
|
$
|
234
|
|
|
|
|
|
|
|
|
Average total assets
from continuing operations (GAAP)
|
$
|
134,428
|
|
$
|
123,469
|
|
$
|
94,117
|
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding
merger-related
|
|
|
|
|
|
charges
(non-GAAP)
|
1.06
|
%
|
.98
|
%
|
.99
|
%
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
12/31/2016
|
|
|
Common Equity Tier
1 under the Regulatory Capital Rules ("RCR")
(estimates)
|
|
|
|
|
Common Equity Tier 1
under current RCR
|
$
|
11,596
|
|
|
|
|
Adjustments from
current RCR to the fully phased-in RCR:
|
|
|
|
|
|
Deferred tax assets
and other intangible assets (e)
|
(110)
|
|
|
|
|
|
Common Equity Tier 1
anticipated under the fully phased-in RCR (f)
|
$
|
11,486
|
|
|
|
|
|
|
|
|
|
|
Net risk-weighted
assets under current RCR
|
$
|
120,887
|
|
|
|
|
Adjustments from
current RCR to the fully phased-in RCR:
|
|
|
|
|
|
Mortgage servicing
assets (g)
|
576
|
|
|
|
|
|
Volcker
funds
|
(185)
|
|
|
|
|
|
All other
assets
|
(2)
|
|
|
|
|
|
Total risk-weighted
assets anticipated under the fully phased-in RCR
(f)
|
$
|
121,276
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
ratio under the fully phased-in RCR (f)
|
9.47
|
%
|
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
Twelve months
ended
|
|
|
|
12/31/2016
|
12/31/2015
|
Pre-provision net
revenue excluding merger-related charges
|
|
|
|
Net interest income
(GAAP)
|
$
|
2,919
|
|
$
|
2,348
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
34
|
|
28
|
|
|
|
Noninterest income
(GAAP)
|
2,071
|
|
1,880
|
|
|
Less:
|
Noninterest expense
(GAAP)
|
3,756
|
|
2,840
|
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
$
|
1,268
|
|
$
|
1,416
|
|
|
Less:
|
Merger-related
charges
|
474
|
|
6
|
|
|
Pre-provision net
revenue from continuing operations excluding merger-related charges
(non-GAAP)
|
$
|
1,742
|
|
$
|
1,422
|
|
|
|
|
|
|
Average tangible
common equity
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
$
|
12,647
|
|
$
|
10,626
|
|
|
Less:
|
Intangible assets
(average) (h)
|
1,825
|
|
1,085
|
|
|
|
Preferred Stock
(average)
|
627
|
|
290
|
|
|
|
Average tangible
common equity (non-GAAP)
|
$
|
10,195
|
|
$
|
9,251
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
(GAAP)
|
$
|
753
|
|
$
|
892
|
|
|
Average tangible
common equity (non-GAAP)
|
10,195
|
|
9,251
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
(non-GAAP)
|
7.39
|
%
|
9.64
|
%
|
|
|
|
|
|
Return on average
tangible common equity consolidated
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
|
754
|
|
$
|
893
|
|
|
Average tangible
common equity (non-GAAP)
|
10,195
|
|
9,251
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
7.40
|
%
|
9.65
|
%
|
|
|
|
|
|
Cash efficiency
ratio
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
3,756
|
|
$
|
2,840
|
|
|
Less:
|
Intangible asset
amortization (GAAP)
|
55
|
|
36
|
|
|
|
Adjusted noninterest
expense (non-GAAP)
|
3,701
|
|
2,804
|
|
|
Less:
|
Merger-related
charges
|
465
|
|
6
|
|
|
|
Adjusted noninterest
expense excluding merger-related charges (non-GAAP)
|
$
|
3,236
|
|
$
|
2,798
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
2,919
|
|
$
|
2,348
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
34
|
|
28
|
|
|
|
Noninterest income
(GAAP)
|
2,071
|
|
1,880
|
|
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
5,024
|
|
4,256
|
|
|
Plus:
|
Merger-related
charges
|
9
|
|
—
|
|
|
|
Adjusted noninterest
income excluding merger-related charges (non-GAAP)
|
$
|
5,033
|
|
$
|
4,256
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
73.7
|
%
|
65.9
|
%
|
|
|
|
|
|
|
Cash efficiency ratio
excluding merger-related charges (non-GAAP)
|
64.3
|
%
|
65.9
|
%
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding merger-related
charges
|
|
|
|
Income from
continuing operations attributable to Key (GAAP)
|
$
|
790
|
|
$
|
915
|
|
|
Plus:
|
Merger-related
charges, after tax
|
299
|
|
4
|
|
|
|
Income from
continuing operations attributable to Key excluding
merger-related
|
|
|
|
|
charges, after tax
(non-GAAP)
|
$
|
1,089
|
|
$
|
919
|
|
|
|
|
|
|
|
Average total assets
from continuing operations (GAAP)
|
$
|
112,537
|
|
$
|
94,117
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding
merger-related
|
|
|
|
|
charges
(non-GAAP)
|
.97
|
%
|
.98
|
%
|
(a)
|
For the three months
ended December 31, 2016, September 30, 2016, and
December 31, 2015, intangible assets exclude $42 million, $51
million, and $45 million, respectively, of period-end purchased
credit card receivables.
|
|
|
(b)
|
Net of capital
surplus.
|
|
|
(c)
|
12/31/16 amount is
estimated.
|
|
|
(d)
|
For the three months
ended December 31, 2016, September 30, 2016, and
December 31, 2015, average intangible assets exclude $46
million, $47 million, and $47 million, respectively, of average
purchased credit card receivables.
|
|
|
(e)
|
Includes the deferred
tax assets subject to future taxable income for realization,
primarily tax credit carryforwards, as well as intangible assets
(other than goodwill and mortgage servicing assets) subject to the
transition provisions of the final rule.
|
|
|
(f)
|
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."
|
|
|
(g)
|
Item is included in
the 10%/15% exceptions bucket calculation and is risk-weighted at
250%.
|
|
|
(h)
|
For the twelve months
ended December 31, 2016, and December 31, 2015, average
intangible assets exclude $43 million and $55 million,
respectively, of average purchased credit card
receivables.
|
|
|
GAAP = U.S. generally
accepted accounting principles
|
Consolidated
Balance Sheets
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
Assets
|
|
|
|
|
Loans
|
$
|
86,038
|
|
$
|
85,528
|
|
$
|
59,876
|
|
|
Loans held for
sale
|
1,104
|
|
1,137
|
|
639
|
|
|
Securities available
for sale
|
20,212
|
|
20,540
|
|
14,218
|
|
|
Held-to-maturity
securities
|
10,232
|
|
8,995
|
|
4,897
|
|
|
Trading account
assets
|
867
|
|
926
|
|
788
|
|
|
Short-term
investments
|
2,775
|
|
3,216
|
|
2,707
|
|
|
Other
investments
|
738
|
|
747
|
|
655
|
|
|
|
Total earning
assets
|
121,966
|
|
121,089
|
|
83,780
|
|
|
Allowance for loan
and lease losses
|
(858)
|
|
(865)
|
|
(796)
|
|
|
Cash and due from
banks
|
677
|
|
749
|
|
607
|
|
|
Premises and
equipment
|
978
|
|
1,023
|
|
779
|
|
|
Operating lease
assets
|
540
|
|
430
|
|
340
|
|
|
Goodwill
|
2,446
|
|
2,480
|
|
1,060
|
|
|
Other intangible
assets
|
384
|
|
426
|
|
65
|
|
|
Corporate-owned life
insurance
|
4,068
|
|
4,035
|
|
3,541
|
|
|
Derivative
assets
|
803
|
|
1,304
|
|
619
|
|
|
Accrued income and
other assets
|
3,864
|
|
3,480
|
|
3,290
|
|
|
Discontinued
assets
|
1,585
|
|
1,654
|
|
1,846
|
|
|
|
Total
assets
|
$
|
136,453
|
|
$
|
135,805
|
|
$
|
95,131
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits in domestic
offices:
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
54,590
|
|
$
|
56,432
|
|
$
|
37,089
|
|
|
|
Savings
deposits
|
6,491
|
|
5,335
|
|
2,341
|
|
|
|
Certificates of
deposit ($100,000 or more)
|
5,483
|
|
4,601
|
|
2,392
|
|
|
|
Other time
deposits
|
4,698
|
|
5,793
|
|
3,127
|
|
|
|
Total
interest-bearing deposits
|
71,262
|
|
72,161
|
|
44,949
|
|
|
|
Noninterest-bearing
deposits
|
32,825
|
|
32,024
|
|
26,097
|
|
|
Deposits in foreign
office — interest-bearing
|
—
|
|
—
|
|
—
|
|
|
|
Total
deposits
|
104,087
|
|
104,185
|
|
71,046
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
1,502
|
|
602
|
|
372
|
|
|
Bank notes and other
short-term borrowings
|
808
|
|
809
|
|
533
|
|
|
Derivative
liabilities
|
636
|
|
850
|
|
632
|
|
|
Accrued expense and
other liabilities
|
1,796
|
|
1,739
|
|
1,605
|
|
|
Long-term
debt
|
12,384
|
|
12,622
|
|
10,184
|
|
|
|
Total
liabilities
|
121,213
|
|
120,807
|
|
84,372
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Preferred
stock
|
1,665
|
|
1,165
|
|
290
|
|
|
Common
shares
|
1,257
|
|
1,257
|
|
1,017
|
|
|
Capital
surplus
|
6,385
|
|
6,359
|
|
3,922
|
|
|
Retained
earnings
|
9,378
|
|
9,260
|
|
8,922
|
|
|
Treasury stock, at
cost
|
(2,904)
|
|
(2,863)
|
|
(3,000)
|
|
|
Accumulated other
comprehensive income (loss)
|
(541)
|
|
(182)
|
|
(405)
|
|
|
|
Key shareholders'
equity
|
15,240
|
|
14,996
|
|
10,746
|
|
|
Noncontrolling
interests
|
—
|
|
2
|
|
13
|
|
|
|
Total
equity
|
15,240
|
|
14,998
|
|
10,759
|
|
Total liabilities
and equity
|
$
|
136,453
|
|
$
|
135,805
|
|
$
|
95,131
|
|
|
|
|
|
|
|
Common shares
outstanding (000)
|
1,079,314
|
|
1,082,055
|
|
835,751
|
|
Consolidated
Statements of Income
|
(dollars in millions,
except per share amounts)
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
|
12/31/2016
|
12/31/2015
|
Interest
income
|
|
|
|
|
|
|
|
Loans
|
$
|
898
|
|
$
|
746
|
|
$
|
552
|
|
|
$
|
2,773
|
|
$
|
2,149
|
|
|
Loans held for
sale
|
11
|
|
10
|
|
8
|
|
|
34
|
|
37
|
|
|
Securities available
for sale
|
92
|
|
88
|
|
76
|
|
|
329
|
|
293
|
|
|
Held-to-maturity
securities
|
44
|
|
30
|
|
24
|
|
|
122
|
|
96
|
|
|
Trading account
assets
|
6
|
|
4
|
|
6
|
|
|
23
|
|
21
|
|
|
Short-term
investments
|
5
|
|
7
|
|
3
|
|
|
22
|
|
8
|
|
|
Other
investments
|
6
|
|
5
|
|
4
|
|
|
16
|
|
18
|
|
|
|
Total interest
income
|
1,062
|
|
890
|
|
673
|
|
|
3,319
|
|
2,622
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
57
|
|
49
|
|
26
|
|
|
171
|
|
105
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
1
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
|
Bank notes and other
short-term borrowings
|
3
|
|
2
|
|
3
|
|
|
10
|
|
9
|
|
|
Long-term
debt
|
63
|
|
59
|
|
42
|
|
|
218
|
|
160
|
|
|
|
Total interest
expense
|
124
|
|
110
|
|
71
|
|
|
400
|
|
274
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
938
|
|
780
|
|
602
|
|
|
2,919
|
|
2,348
|
|
Provision for credit
losses
|
66
|
|
59
|
|
45
|
|
|
266
|
|
166
|
|
Net interest income
after provision for credit losses
|
872
|
|
721
|
|
557
|
|
|
2,653
|
|
2,182
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Trust and investment
services income
|
123
|
|
122
|
|
105
|
|
|
464
|
|
433
|
|
|
Investment banking
and debt placement fees
|
157
|
|
156
|
|
127
|
|
|
482
|
|
445
|
|
|
Service charges on
deposit accounts
|
84
|
|
85
|
|
64
|
|
|
302
|
|
256
|
|
|
Operating lease
income and other leasing gains
|
21
|
|
6
|
|
15
|
|
|
62
|
|
73
|
|
|
Corporate services
income
|
61
|
|
51
|
|
55
|
|
|
215
|
|
198
|
|
|
Cards and payments
income
|
69
|
|
66
|
|
47
|
|
|
233
|
|
183
|
|
|
Corporate-owned life
insurance income
|
40
|
|
29
|
|
36
|
|
|
125
|
|
127
|
|
|
Consumer mortgage
income
|
6
|
|
6
|
|
2
|
|
|
17
|
|
12
|
|
|
Mortgage servicing
fees
|
20
|
|
15
|
|
15
|
|
|
57
|
|
48
|
|
|
Net gains (losses)
from principal investing
|
4
|
|
5
|
|
—
|
|
|
20
|
|
51
|
|
|
Other income
(a), (b)
|
33
|
|
8
|
|
19
|
|
|
94
|
|
54
|
|
|
|
Total noninterest
income
|
618
|
|
549
|
|
485
|
|
|
2,071
|
|
1,880
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Personnel
|
648
|
|
594
|
|
429
|
|
|
2,073
|
|
1,652
|
|
|
Net
occupancy
|
112
|
|
73
|
|
64
|
|
|
305
|
|
255
|
|
|
Computer
processing
|
97
|
|
70
|
|
43
|
|
|
255
|
|
164
|
|
|
Business services and
professional fees
|
78
|
|
76
|
|
44
|
|
|
235
|
|
159
|
|
|
Equipment
|
30
|
|
26
|
|
22
|
|
|
98
|
|
88
|
|
|
Operating lease
expense
|
17
|
|
15
|
|
13
|
|
|
59
|
|
47
|
|
|
Marketing
|
35
|
|
32
|
|
17
|
|
|
101
|
|
57
|
|
|
FDIC
assessment
|
23
|
|
21
|
|
8
|
|
|
61
|
|
32
|
|
|
Intangible asset
amortization
|
27
|
|
13
|
|
9
|
|
|
55
|
|
36
|
|
|
OREO expense,
net
|
3
|
|
3
|
|
1
|
|
|
9
|
|
6
|
|
|
Other
expense
|
150
|
|
159
|
|
86
|
|
|
505
|
|
344
|
|
|
|
Total noninterest
expense
|
1,220
|
|
1,082
|
|
736
|
|
|
3,756
|
|
2,840
|
|
Income (loss) from
continuing operations before income taxes
|
270
|
|
188
|
|
306
|
|
|
968
|
|
1,222
|
|
|
Income
taxes
|
38
|
|
16
|
|
73
|
|
|
179
|
|
303
|
|
Income (loss) from
continuing operations
|
232
|
|
172
|
|
233
|
|
|
789
|
|
919
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
(4)
|
|
1
|
|
(4)
|
|
|
1
|
|
1
|
|
Net income
(loss)
|
228
|
|
173
|
|
229
|
|
|
790
|
|
920
|
|
|
Less: Net
income (loss) attributable to noncontrolling interests
|
(1)
|
|
1
|
|
3
|
|
|
(1)
|
|
4
|
|
Net income (loss)
attributable to Key
|
$
|
229
|
|
$
|
172
|
|
$
|
226
|
|
|
$
|
791
|
|
$
|
916
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
213
|
|
$
|
165
|
|
$
|
224
|
|
|
$
|
753
|
|
$
|
892
|
|
Net income (loss)
attributable to Key common shareholders
|
209
|
|
166
|
|
220
|
|
|
754
|
|
893
|
|
|
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.20
|
|
$
|
.17
|
|
$
|
.27
|
|
|
$
|
.81
|
|
$
|
1.06
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
(.01)
|
|
|
—
|
|
—
|
|
Net income (loss)
attributable to Key common shareholders
(c)
|
.20
|
|
.17
|
|
.27
|
|
|
.81
|
|
1.06
|
|
|
|
|
|
|
|
|
|
|
Per common share —
assuming dilution
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.20
|
|
$
|
.16
|
|
$
|
.27
|
|
|
$
|
.80
|
|
$
|
1.05
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
(.01)
|
|
|
—
|
|
—
|
|
Net income (loss)
attributable to Key common shareholders
(c)
|
.19
|
|
.17
|
|
.26
|
|
|
.80
|
|
1.05
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
.085
|
|
$
|
.085
|
|
$
|
.075
|
|
|
$
|
.33
|
|
$
|
.29
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (000)
|
1,067,771
|
|
982,080
|
|
828,206
|
|
|
927,816
|
|
836,846
|
|
|
Effect of common
share options and other stock awards
|
15,946
|
|
12,580
|
|
7,733
|
|
|
10,720
|
|
7,643
|
|
Weighted-average
common shares and potential common shares outstanding (000)
(d)
|
1,083,717
|
|
994,660
|
|
835,939
|
|
|
938,536
|
|
844,489
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For the three months
ended December 31, 2016, net securities gains totaled $6 million.
For the three months ended September 30, 2016, net securities
losses totaled $6 million. For the three months ended December 31,
2015, net securities gains totaled less than $1 million. For the
three months ended December 31, 2016, September 30, 2016, and
December 31,2015, Key did not have any impairment losses related to
securities.
|
|
|
(b)
|
For the twelve months
ended December 31, 2016 and December 31, 2015, net securities gains
(losses) totaled less than $1 million. For the twelve months ended
December 31, 2016, and December 31,2015, Key did not have any
impairment losses related to securities.
|
|
|
(c)
|
Earnings per share
may not foot due to rounding.
|
|
|
(d)
|
Assumes conversion of
common share options and other stock awards and/or convertible
preferred stock, as applicable.
|
Consolidated
Average Balance Sheets, and Net Interest Income and Yields/Rates
From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
2016
|
|
Third Quarter
2016
|
|
Fourth Quarter
2015
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
Balance
|
Interest
(a)
|
Yield/Rate
(a)
|
|
Balance
|
Interest
(a)
|
Yield/Rate
(a)
|
|
Balance
|
Interest
(a)
|
Yield/Rate
(a)
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (b),
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial
and agricultural (d)
|
$
|
39,495
|
|
$
|
365
|
|
3.68
|
%
|
|
$
|
37,318
|
|
$
|
317
|
|
3.38
|
%
|
%
|
$
|
30,884
|
|
$
|
253
|
|
3.25
|
%
|
|
Real estate —
commercial mortgage
|
14,771
|
|
168
|
|
4.50
|
|
|
12,879
|
|
126
|
|
3.91
|
|
|
8,019
|
|
75
|
|
3.70
|
|
|
Real estate —
construction
|
2,222
|
|
37
|
|
6.72
|
|
|
1,723
|
|
21
|
|
4.67
|
|
|
1,067
|
|
10
|
|
3.65
|
|
|
Commercial lease
financing
|
4,624
|
|
50
|
|
4.34
|
|
|
4,508
|
|
38
|
|
3.33
|
|
|
3,910
|
|
36
|
|
3.68
|
|
|
|
Total commercial
loans
|
61,112
|
|
620
|
|
4.04
|
|
|
56,428
|
|
502
|
|
3.54
|
|
|
43,880
|
|
374
|
|
3.38
|
|
|
Real estate —
residential mortgage
|
5,554
|
|
57
|
|
4.17
|
|
|
4,453
|
|
45
|
|
3.96
|
|
|
2,252
|
|
24
|
|
4.18
|
|
|
Home equity
loans
|
12,812
|
|
129
|
|
3.99
|
|
|
11,968
|
|
122
|
|
4.07
|
|
|
10,418
|
|
105
|
|
3.97
|
|
|
Consumer direct
loans
|
1,785
|
|
31
|
|
6.84
|
|
|
1,666
|
|
30
|
|
7.20
|
|
|
1,605
|
|
26
|
|
6.50
|
|
|
Credit
cards
|
1,088
|
|
29
|
|
10.78
|
|
|
996
|
|
27
|
|
10.80
|
|
|
780
|
|
21
|
|
10.66
|
|
|
Consumer indirect
loans
|
3,009
|
|
42
|
|
5.50
|
|
|
2,186
|
|
28
|
|
5.23
|
|
|
641
|
|
10
|
|
6.45
|
|
|
|
Total consumer
loans
|
24,248
|
|
288
|
|
4.73
|
|
|
21,269
|
|
252
|
|
4.73
|
|
|
15,696
|
|
186
|
|
4.69
|
|
|
|
Total
loans
|
85,360
|
|
908
|
|
4.24
|
|
|
77,697
|
|
754
|
|
3.86
|
|
|
59,576
|
|
560
|
|
3.72
|
|
|
Loans held for
sale
|
1,323
|
|
11
|
|
3.39
|
|
|
1,152
|
|
10
|
|
3.48
|
|
|
841
|
|
8
|
|
4.13
|
|
|
Securities available
for sale (b), (e)
|
20,145
|
|
92
|
|
1.82
|
|
|
17,972
|
|
88
|
|
1.99
|
|
|
14,168
|
|
76
|
|
2.13
|
|
|
Held-to-maturity
securities (b)
|
9,121
|
|
44
|
|
1.95
|
|
|
6,250
|
|
30
|
|
1.86
|
|
|
4,908
|
|
24
|
|
1.99
|
|
|
Trading account
assets
|
892
|
|
6
|
|
2.54
|
|
|
860
|
|
4
|
|
2.12
|
|
|
822
|
|
6
|
|
3.31
|
|
|
Short-term
investments
|
3,717
|
|
5
|
|
.49
|
|
|
5,911
|
|
7
|
|
.48
|
|
|
3,483
|
|
3
|
|
.28
|
|
|
Other investments
(e)
|
741
|
|
6
|
|
3.23
|
|
|
717
|
|
5
|
|
2.74
|
|
|
674
|
|
4
|
|
2.71
|
|
|
|
Total earning
assets
|
121,299
|
|
1,072
|
|
3.52
|
|
|
110,559
|
|
898
|
|
3.24
|
|
|
84,472
|
|
681
|
|
3.21
|
|
|
Allowance for loan
and lease losses
|
(855)
|
|
|
|
|
(847)
|
|
|
|
|
(790)
|
|
|
|
|
Accrued income and
other assets
|
13,984
|
|
|
|
|
13,757
|
|
|
|
|
10,435
|
|
|
|
|
Discontinued
assets
|
1,610
|
|
|
|
|
1,676
|
|
|
|
|
1,947
|
|
|
|
|
|
Total
assets
|
$
|
136,038
|
|
|
|
|
$
|
125,145
|
|
|
|
|
$
|
96,064
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
55,444
|
|
31
|
|
.22
|
|
|
$
|
51,318
|
|
25
|
|
.20
|
|
|
$
|
37,640
|
|
14
|
|
.15
|
|
|
Savings
deposits
|
6,546
|
|
2
|
|
.10
|
|
|
4,521
|
|
1
|
|
.07
|
|
|
2,338
|
|
—
|
|
.02
|
|
|
Certificates of
deposit ($100,000 or more) (f)
|
5,428
|
|
15
|
|
1.11
|
|
|
4,204
|
|
12
|
|
1.15
|
|
|
2,150
|
|
7
|
|
1.31
|
|
|
Other time
deposits
|
4,849
|
|
9
|
|
.77
|
|
|
5,031
|
|
11
|
|
.85
|
|
|
3,047
|
|
5
|
|
.72
|
|
|
Deposits in foreign
office
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
354
|
|
—
|
|
.24
|
|
|
|
Total
interest-bearing deposits
|
72,267
|
|
57
|
|
.32
|
|
|
65,074
|
|
49
|
|
.30
|
|
|
45,529
|
|
26
|
|
.24
|
|
|
Federal funds
purchased and securities
sold under repurchase
agreements
|
592
|
|
1
|
|
.11
|
|
|
578
|
|
—
|
|
.16
|
|
|
392
|
|
—
|
|
.02
|
|
|
Bank notes and other
short-term borrowings
|
934
|
|
3
|
|
1.11
|
|
|
1,186
|
|
2
|
|
.91
|
|
|
556
|
|
3
|
|
1.65
|
|
|
Long-term debt
(f), (g)
|
10,914
|
|
63
|
|
2.38
|
|
|
10,415
|
|
59
|
|
2.31
|
|
|
8,316
|
|
42
|
|
2.05
|
|
|
|
Total
interest-bearing liabilities
|
84,707
|
|
124
|
|
.58
|
|
|
77,253
|
|
110
|
|
.57
|
|
|
54,793
|
|
71
|
|
.52
|
|
|
Noninterest-bearing
deposits
|
32,424
|
|
|
|
|
29,844
|
|
|
|
|
26,292
|
|
|
|
|
Accrued expense and
other liabilities
|
2,394
|
|
|
|
|
2,818
|
|
|
|
|
2,289
|
|
|
|
|
Discontinued
liabilities (g)
|
1,610
|
|
|
|
|
1,676
|
|
|
|
|
1,947
|
|
|
|
|
|
Total
liabilities
|
121,135
|
|
|
|
|
111,591
|
|
|
|
|
85,321
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
14,901
|
|
|
|
|
13,552
|
|
|
|
|
10,731
|
|
|
|
|
Noncontrolling
interests
|
2
|
|
|
|
|
2
|
|
|
|
|
12
|
|
|
|
|
|
Total
equity
|
14,903
|
|
|
|
|
13,554
|
|
|
|
|
10,743
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
136,038
|
|
|
|
|
$
|
125,145
|
|
|
|
|
$
|
96,064
|
|
|
|
Interest rate spread
(TE)
|
|
|
2.94
|
%
|
|
|
|
2.67
|
%
|
|
|
|
2.69
|
%
|
Net interest income
(TE) and net interest margin (TE)
|
|
948
|
|
3.12
|
%
|
|
|
788
|
|
2.85
|
%
|
|
|
610
|
|
2.87
|
%
|
TE adjustment
(b)
|
|
10
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
|
Net interest income,
GAAP basis
|
|
$
|
938
|
|
|
|
|
$
|
780
|
|
|
|
|
$
|
602
|
|
|
(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 $119 million, $107
million, and $87 million of assets from commercial credit cards for
the three months ended December 31, 2016, September 30,
2016, and December 31, 2015, 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 Key's matched
funds transfer pricing methodology to discontinued
operations.
|
|
|
TE = Taxable
Equivalent, GAAP = U.S. generally accepted accounting
principles
|
Consolidated
Average Balance Sheets, and Net Interest Income and
Yields/Rates From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, 2016
|
|
Twelve months
ended December 31, 2015
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
|
Balance
|
Interest
(a)
|
Yield/Rate
(a)
|
|
Balance
|
Interest
(a)
|
Yield/ Rate
(a)
|
Assets
|
|
|
|
|
|
|
|
|
Loans: (b),
(c)
|
|
|
|
|
|
|
|
|
Commercial, financial
and agricultural (d)
|
$
|
35,276
|
|
$
|
1,215
|
|
3.45
|
%
|
|
$
|
29,658
|
|
$
|
953
|
|
3.21
|
%
|
|
Real estate —
commercial mortgage
|
11,063
|
|
451
|
|
4.07
|
|
|
8,020
|
|
295
|
|
3.68
|
|
|
Real estate —
construction
|
1,460
|
|
76
|
|
5.22
|
|
|
1,143
|
|
43
|
|
3.73
|
|
|
Commercial lease
financing
|
4,261
|
|
161
|
|
3.78
|
|
|
3,976
|
|
143
|
|
3.60
|
|
|
|
Total commercial
loans
|
52,060
|
|
1,903
|
|
3.66
|
|
|
42,797
|
|
1,434
|
|
3.35
|
|
|
Real estate —
residential mortgage
|
3,632
|
|
148
|
|
4.09
|
|
|
2,244
|
|
95
|
|
4.21
|
|
|
Home equity
loans
|
11,286
|
|
456
|
|
4.04
|
|
|
10,503
|
|
418
|
|
3.98
|
|
|
Consumer direct
loans
|
1,661
|
|
113
|
|
6.79
|
|
|
1,580
|
|
103
|
|
6.54
|
|
|
Credit
cards
|
916
|
|
98
|
|
10.73
|
|
|
752
|
|
81
|
|
10.76
|
|
|
Consumer indirect
loans
|
1,593
|
|
89
|
|
5.58
|
|
|
718
|
|
46
|
|
6.43
|
|
|
Total consumer
loans
|
19,088
|
|
904
|
|
4.74
|
|
|
15,797
|
|
743
|
|
4.70
|
|
|
Total
loans
|
71,148
|
|
2,807
|
|
3.95
|
|
|
58,594
|
|
2,177
|
|
3.71
|
|
|
Loans held for
sale
|
979
|
|
34
|
|
3.51
|
|
|
959
|
|
37
|
|
3.85
|
|
|
Securities available
for sale (b), (e)
|
16,661
|
|
329
|
|
1.98
|
|
|
13,720
|
|
293
|
|
2.14
|
|
|
Held-to-maturity
securities (b)
|
6,275
|
|
122
|
|
1.94
|
|
|
4,936
|
|
96
|
|
1.95
|
|
|
Trading account
assets
|
884
|
|
23
|
|
2.59
|
|
|
761
|
|
21
|
|
2.80
|
|
|
Short-term
investments
|
4,656
|
|
22
|
|
.47
|
|
|
2,843
|
|
8
|
|
.27
|
|
|
Other investments
(e)
|
679
|
|
16
|
|
2.37
|
|
|
706
|
|
18
|
|
2.63
|
|
|
Total earning
assets
|
101,282
|
|
3,353
|
|
3.31
|
|
|
82,519
|
|
2,650
|
|
3.21
|
|
|
Allowance for loan
and lease losses
|
(835)
|
|
|
|
|
(791)
|
|
|
|
|
Accrued income and
other assets
|
12,090
|
|
|
|
|
10,298
|
|
|
|
|
Discontinued
assets
|
1,707
|
|
|
|
|
2,132
|
|
|
|
|
Total
assets
|
$
|
114,244
|
|
|
|
|
$
|
94,158
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
46,079
|
|
87
|
|
.19
|
|
|
$
|
36,258
|
|
56
|
|
.15
|
|
|
Savings
deposits
|
3,957
|
|
3
|
|
.07
|
|
|
2,372
|
|
—
|
|
.02
|
|
|
Certificates of
deposit ($100,000 or more) (f)
|
3,911
|
|
48
|
|
1.22
|
|
|
2,041
|
|
26
|
|
1.28
|
|
|
Other time
deposits
|
4,088
|
|
33
|
|
.81
|
|
|
3,115
|
|
22
|
|
.71
|
|
|
Deposits in foreign
office
|
—
|
|
—
|
|
—
|
|
|
489
|
|
1
|
|
.23
|
|
|
|
Total
interest-bearing deposits
|
58,035
|
|
171
|
|
.30
|
|
|
44,275
|
|
105
|
|
.24
|
|
|
Federal funds
purchased and securities
sold under repurchase
agreements
|
487
|
|
1
|
|
.10
|
|
|
632
|
|
—
|
|
.04
|
|
|
Bank notes and other
short-term borrowings
|
852
|
|
10
|
|
1.18
|
|
|
572
|
|
9
|
|
1.52
|
|
|
Long-term debt
(f), (g)
|
9,802
|
|
218
|
|
2.29
|
|
|
7,332
|
|
160
|
|
2.24
|
|
|
|
Total
interest-bearing liabilities
|
69,176
|
|
400
|
|
.58
|
|
|
52,811
|
|
274
|
|
.52
|
|
|
Noninterest-bearing
deposits
|
28,317
|
|
|
|
|
26,355
|
|
|
|
|
Accrued expense and
other liabilities
|
2,393
|
|
|
|
|
2,222
|
|
|
|
|
Discontinued
liabilities (g)
|
1,706
|
|
|
|
|
2,132
|
|
|
|
|
Total
liabilities
|
101,592
|
|
|
|
|
83,520
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
12,647
|
|
|
|
|
10,626
|
|
|
|
|
Noncontrolling
interests
|
5
|
|
|
|
|
12
|
|
|
|
|
Total
equity
|
12,652
|
|
|
|
|
10,638
|
|
|
|
|
Total liabilities
and equity
|
$
|
114,244
|
|
|
|
|
$
|
94,158
|
|
|
|
Interest rate spread
(TE)
|
|
|
2.73
|
%
|
|
|
|
2.69
|
%
|
Net interest income
(TE) and net interest margin (TE)
|
|
2,953
|
2.92
|
%
|
|
|
2,376
|
|
2.88
|
%
|
TE adjustment
(b)
|
|
34
|
|
|
|
28
|
|
|
|
Net interest income,
GAAP basis
|
|
$
|
2,919
|
|
|
|
|
$
|
2,348
|
|
|
(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 $99 million and $88
million of assets from commercial credit cards for the twelve
months ended December 31, 2016, and December 31, 2015,
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 Key's matched
funds transfer pricing methodology to discontinued
operations.
|
|
TE = Taxable
Equivalent, GAAP = U.S. generally accepted accounting
principles
|
Noninterest
Expense
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
12/31/2016
|
|
9/30/2016
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2015
|
Personnel(a)
|
$
|
648
|
|
|
$
|
594
|
|
|
$
|
429
|
|
|
$
|
2,073
|
|
|
$
|
1,652
|
|
Net
occupancy
|
112
|
|
|
73
|
|
|
64
|
|
|
305
|
|
|
255
|
|
Computer
processing
|
97
|
|
|
70
|
|
|
43
|
|
|
255
|
|
|
164
|
|
Business services and
professional fees
|
78
|
|
|
76
|
|
|
44
|
|
|
235
|
|
|
159
|
|
Equipment
|
30
|
|
|
26
|
|
|
22
|
|
|
98
|
|
|
88
|
|
Operating lease
expense
|
17
|
|
|
15
|
|
|
13
|
|
|
59
|
|
|
47
|
|
Marketing
|
35
|
|
|
32
|
|
|
17
|
|
|
101
|
|
|
57
|
|
FDIC
assessment
|
23
|
|
|
21
|
|
|
8
|
|
|
61
|
|
|
32
|
|
Intangible asset
amortization
|
27
|
|
|
13
|
|
|
9
|
|
|
55
|
|
|
36
|
|
OREO expense,
net
|
3
|
|
|
3
|
|
|
1
|
|
|
9
|
|
|
6
|
|
Other
expense
|
150
|
|
|
159
|
|
|
86
|
|
|
505
|
|
|
344
|
|
Total noninterest
expense
|
$
|
1,220
|
|
|
$
|
1,082
|
|
|
$
|
736
|
|
|
$
|
3,756
|
|
|
$
|
2,840
|
|
Merger-related
charges(b)
|
207
|
|
|
189
|
|
|
6
|
|
|
465
|
|
|
6
|
|
Total noninterest
expense excluding merger-related charges
|
$
|
1,013
|
|
|
$
|
893
|
|
|
$
|
730
|
|
|
$
|
3,291
|
|
|
$
|
2,834
|
|
Average full-time
equivalent employees(c)
|
18,849
|
|
|
17,079
|
|
|
13,359
|
|
|
15,700
|
|
|
13,483
|
|
(a)
|
Additional detail
provided in Personnel Expense table below.
|
|
|
(b)
|
Additional detail
provide in Merger-Related Charges table below.
|
|
|
(c)
|
The number of average
full-time equivalent employees has not been adjusted for
discontinued operations.
|
Personnel
Expense
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
12/31/2016
|
|
9/30/2016
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2015
|
Salaries and contract
labor
|
$
|
352
|
|
|
$
|
329
|
|
|
$
|
244
|
|
|
$
|
1,191
|
|
|
$
|
958
|
|
Incentive and
stock-based compensation
|
185
|
|
|
162
|
|
|
115
|
|
|
537
|
|
|
410
|
|
Employee
benefits
|
98
|
|
|
73
|
|
|
64
|
|
|
297
|
|
|
266
|
|
Severance
|
13
|
|
|
30
|
|
|
6
|
|
|
48
|
|
|
18
|
|
Total personnel
expense
|
$
|
648
|
|
|
$
|
594
|
|
|
$
|
429
|
|
|
$
|
2,073
|
|
|
$
|
1,652
|
|
Merger-related
charges
|
80
|
|
|
97
|
|
|
—
|
|
|
228
|
|
|
—
|
|
Total personnel
expense excluding merger-related charges
|
$
|
568
|
|
|
$
|
497
|
|
|
$
|
429
|
|
|
$
|
1,845
|
|
|
$
|
1,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-Related
Charges
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
12/31/2016
|
|
9/30/2016
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2015
|
Net interest
income
|
—
|
|
|
$
|
(6)
|
|
|
—
|
|
|
$
|
(6)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease
income and other leasing gains
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
Other
income
|
$
|
9
|
|
|
(10)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Noninterest
income
|
9
|
|
|
(12)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
(a)
|
80
|
|
|
97
|
|
|
—
|
|
|
228
|
|
|
—
|
|
Net
occupancy
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
Business services and
professional fees
|
22
|
|
|
32
|
|
|
$
|
5
|
|
|
66
|
|
|
$
|
5
|
|
Computer
processing
|
38
|
|
|
15
|
|
|
—
|
|
|
53
|
|
|
—
|
|
Marketing
|
13
|
|
|
9
|
|
|
—
|
|
|
26
|
|
|
—
|
|
Other nonpersonnel
expense
|
25
|
|
|
36
|
|
|
1
|
|
|
63
|
|
|
1
|
|
Noninterest
expense
|
207
|
|
|
189
|
|
|
6
|
|
|
465
|
|
|
6
|
|
Total merger-related
charges
|
$
|
198
|
|
|
$
|
207
|
|
|
$
|
6
|
|
|
$
|
474
|
|
|
$
|
6
|
|
(a)
|
Personnel expense
includes severance, technology development related to systems
conversion, and fully-dedicated personnel for merger and
integration efforts.
|
Loan
Composition
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change 12/31/16 vs.
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
|
9/30/2016
|
12/31/2015
|
Commercial, financial
and agricultural (a)
|
$
|
39,768
|
|
$
|
39,433
|
|
$
|
31,240
|
|
|
.8
|
%
|
27.3
|
%
|
Commercial real
estate:
|
|
|
|
|
|
|
|
Commercial
mortgage
|
15,111
|
|
14,979
|
|
7,959
|
|
|
.9
|
|
89.9
|
|
|
Construction
|
2,345
|
|
2,189
|
|
1,053
|
|
|
7.1
|
|
122.7
|
|
|
Total commercial real
estate loans
|
17,456
|
|
17,168
|
|
9,012
|
|
|
1.7
|
|
93.7
|
|
Commercial lease
financing (b)
|
4,685
|
|
4,783
|
|
4,020
|
|
|
(2.0)
|
|
16.5
|
|
|
Total commercial
loans
|
61,909
|
|
61,384
|
|
44,272
|
|
|
.9
|
|
39.8
|
|
Residential — prime
loans:
|
|
|
|
|
|
|
|
Real estate —
residential mortgage
|
5,547
|
|
5,509
|
|
2,242
|
|
|
.7
|
|
147.4
|
|
|
Home equity
loans
|
12,674
|
|
12,757
|
|
10,335
|
|
|
(.7)
|
|
22.6
|
|
Total residential —
prime loans
|
18,221
|
|
18,266
|
|
12,577
|
|
|
(.2)
|
|
44.9
|
|
Consumer direct
loans
|
1,788
|
|
1,764
|
|
1,600
|
|
|
1.4
|
|
11.8
|
|
Credit
cards
|
1,111
|
|
1,084
|
|
806
|
|
|
2.5
|
|
37.8
|
|
Consumer indirect
loans
|
3,009
|
|
3,030
|
|
621
|
|
|
(.7)
|
|
384.5
|
|
|
Total consumer
loans
|
24,129
|
|
24,144
|
|
15,604
|
|
|
(.1)
|
|
54.6
|
|
|
Total loans (c),
(d)
|
$
|
86,038
|
|
$
|
85,528
|
|
$
|
59,876
|
|
|
.6
|
%
|
43.7
|
%
|
(a)
|
Loan balances include
$116 million, $117 million, and $85 million of commercial credit
card balances at December 31, 2016, September 30, 2016,
and December 31, 2015, respectively.
|
|
|
|
|
(b)
|
Commercial lease
financing includes receivables held as collateral for a secured
borrowing of $68 million, $76 million, and $134 million at
December 31, 2016, September 30, 2016, and
December 31, 2015, respectively. Principal reductions are
based on the cash payments received from these related
receivables.
|
|
|
|
|
(c)
|
At December 31,
2016, total loans include purchased loans of $21.0 billion, of
which $865 million were purchased credit impaired. At
September 30, 2016, total loans include purchased loans of
$22.4 billion, of which $959 million were purchased credit
impaired. At December 31, 2015, total loans include purchased
loans of $114 million, of which $11 million were purchased credit
impaired.
|
|
|
|
|
(d)
|
Total loans exclude
loans of $1.6 billion at December 31, 2016, $1.6 billion at
September 30, 2016, and $1.8 billion at December 31,
2015, related to the discontinued operations of the education
lending business.
|
Loans Held for
Sale Composition
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change 12/31/16 vs.
|
|
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
|
9/30/2016
|
12/31/2015
|
Commercial, financial
and agricultural
|
$
|
19
|
|
$
|
56
|
|
$
|
76
|
|
|
(66.1)%
|
|
(75.0)%
|
|
Real estate —
commercial mortgage
|
1,022
|
|
1,016
|
|
532
|
|
|
.6
|
|
92.1
|
|
Commercial lease
financing
|
—
|
|
3
|
|
14
|
|
|
N/M
|
|
N/M
|
|
Real estate —
residential mortgage
|
62
|
|
62
|
|
17
|
|
|
—
|
|
264.7
|
|
Real estate —
construction
|
1
|
|
—
|
|
—
|
|
|
N/M
|
|
N/M
|
|
|
Total loans held for
sale (a)
|
$
|
1,104
|
|
$
|
1,137
|
|
$
|
639
|
|
|
(2.9)%
|
|
72.8
|
%
|
(a)
|
Total loans held for
sale include Real estate - residential mortgage loans held for sale
at fair value of $62 million at December 31, 2016 and
September 30, 2016.
|
|
|
N/M = Not
Meaningful
|
Summary of Changes
in Loans Held for Sale
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
Balance at beginning
of period
|
$
|
1,137
|
|
$
|
442
|
|
$
|
684
|
|
$
|
639
|
|
$
|
916
|
|
|
Purchases
|
—
|
|
48
|
|
—
|
|
—
|
|
—
|
|
|
New
originations
|
2,846
|
|
2,857
|
|
1,539
|
|
1,114
|
|
1,655
|
|
|
Transfers from (to)
held to maturity, net
|
11
|
|
2
|
|
22
|
|
—
|
|
22
|
|
|
Loan sales
|
(2,889)
|
|
(2,180)
|
|
(1,802)
|
|
(1,108)
|
|
(1,943)
|
|
|
Loan draws
(payments), net
|
(1)
|
|
(32)
|
|
(1)
|
|
39
|
|
(11)
|
|
Balance at end of
period (a)
|
$
|
1,104
|
|
$
|
1,137
|
|
$
|
442
|
|
$
|
684
|
|
$
|
639
|
|
(a)
|
Total loans held for
sale include Real estate — residential mortgage loans held for sale
at fair value of $62 million at December 31, 2016 and
September 30, 2016.
|
Asset Quality
Statistics From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
Net loan
charge-offs
|
$
|
72
|
|
$
|
44
|
|
$
|
43
|
|
$
|
46
|
|
$
|
37
|
|
Net loan charge-offs
to average total loans
|
.34
|
%
|
.23
|
%
|
.28
|
%
|
.31
|
%
|
.25
|
%
|
Allowance for loan
and lease losses
|
$
|
858
|
|
$
|
865
|
|
$
|
854
|
|
$
|
826
|
|
$
|
796
|
|
Allowance for credit
losses (a)
|
913
|
|
918
|
|
904
|
|
895
|
|
852
|
|
Allowance for loan
and lease losses to period-end loans
|
1.00
|
%
|
1.01
|
%
|
1.38
|
%
|
1.37
|
%
|
1.33
|
%
|
Allowance for credit
losses to period-end loans
|
1.06
|
|
1.07
|
|
1.46
|
|
1.48
|
|
1.42
|
|
Allowance for loan
and lease losses to nonperforming loans (b)
|
137.3
|
|
119.6
|
|
138.0
|
|
122.2
|
|
205.7
|
|
Allowance for credit
losses to nonperforming loans (b)
|
146.1
|
|
127.0
|
|
146.0
|
|
132.4
|
|
220.2
|
|
Nonperforming loans
at period end (b)
|
$
|
625
|
|
$
|
723
|
|
$
|
619
|
|
$
|
676
|
|
$
|
387
|
|
Nonperforming assets
at period end (b)
|
676
|
|
760
|
|
637
|
|
692
|
|
403
|
|
Nonperforming loans
to period-end portfolio loans (b)
|
.73
|
%
|
.85
|
%
|
1.00
|
%
|
1.12
|
%
|
.65
|
%
|
Nonperforming assets
to period-end portfolio loans plus
OREO and other
nonperforming assets (b)
|
.79
|
|
.89
|
|
1.03
|
|
1.14
|
|
.67
|
|
(a)
|
Includes the
allowance for loan and lease losses plus the liability for credit
losses on lending-related unfunded commitments.
|
|
|
(b)
|
Nonperforming loan
balances exclude $865 million, $959 million, $11 million, $11
million, and $11 million of purchased credit impaired loans at
December 31, 2016, September 30, 2016, June 30,
2016, March 31, 2016 , and December 31, 2015,
respectively.
|
|
|
Summary of Loan
and Lease Loss Experience From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
12/31/2016
|
9/30/2016
|
12/31/2015
|
|
12/31/2016
|
12/31/2015
|
Average loans
outstanding
|
$
|
85,360
|
|
$
|
77,697
|
|
$
|
59,576
|
|
|
$
|
71,148
|
|
$
|
58,594
|
|
Allowance for loan
and lease losses at beginning of period
|
$
|
865
|
|
$
|
854
|
|
$
|
790
|
|
|
$
|
796
|
|
$
|
794
|
|
Loans charged
off:
|
|
|
|
|
|
|
Commercial, financial
and agricultural
|
40
|
|
17
|
|
18
|
|
|
118
|
|
77
|
|
Real estate —
commercial mortgage
|
2
|
|
—
|
|
2
|
|
|
5
|
|
4
|
|
Real estate —
construction
|
—
|
|
9
|
|
—
|
|
|
9
|
|
1
|
|
Total commercial real
estate loans
|
2
|
|
9
|
|
2
|
|
|
14
|
|
5
|
|
Commercial lease
financing
|
1
|
|
5
|
|
6
|
|
|
12
|
|
11
|
|
Total commercial
loans
|
43
|
|
31
|
|
26
|
|
|
144
|
|
93
|
|
Real estate —
residential mortgage
|
—
|
|
1
|
|
2
|
|
|
4
|
|
6
|
|
Home equity
loans
|
8
|
|
5
|
|
7
|
|
|
30
|
|
32
|
|
Consumer direct
loans
|
9
|
|
6
|
|
6
|
|
|
27
|
|
24
|
|
Credit
cards
|
10
|
|
9
|
|
7
|
|
|
35
|
|
30
|
|
Consumer indirect
loans
|
12
|
|
3
|
|
3
|
|
|
21
|
|
18
|
|
Total consumer
loans
|
39
|
|
24
|
|
25
|
|
|
117
|
|
110
|
|
Total loans charged
off
|
82
|
|
55
|
|
51
|
|
|
261
|
|
203
|
|
Recoveries:
|
|
|
|
|
|
|
Commercial, financial
and agricultural
|
3
|
|
2
|
|
3
|
|
|
11
|
|
16
|
|
Real estate —
commercial mortgage
|
—
|
|
1
|
|
4
|
|
|
9
|
|
6
|
|
Real estate —
construction
|
—
|
|
1
|
|
—
|
|
|
2
|
|
1
|
|
Total commercial real
estate loans
|
—
|
|
2
|
|
4
|
|
|
11
|
|
7
|
|
Commercial lease
financing
|
1
|
|
—
|
|
—
|
|
|
3
|
|
7
|
|
Total commercial
loans
|
4
|
|
4
|
|
7
|
|
|
25
|
|
30
|
|
Real estate —
residential mortgage
|
(2)
|
|
1
|
|
2
|
|
|
1
|
|
3
|
|
Home equity
loans
|
4
|
|
3
|
|
2
|
|
|
14
|
|
11
|
|
Consumer direct
loans
|
1
|
|
1
|
|
1
|
|
|
5
|
|
6
|
|
Credit
cards
|
1
|
|
1
|
|
—
|
|
|
4
|
|
2
|
|
Consumer indirect
loans
|
2
|
|
1
|
|
2
|
|
|
7
|
|
9
|
|
Total consumer
loans
|
6
|
|
7
|
|
7
|
|
|
31
|
|
31
|
|
Total
recoveries
|
10
|
|
11
|
|
14
|
|
|
56
|
|
61
|
|
Net loan
charge-offs
|
(72)
|
|
(44)
|
|
(37)
|
|
|
(205)
|
|
(142)
|
|
Provision (credit)
for loan and lease losses
|
64
|
|
56
|
|
43
|
|
|
267
|
|
145
|
|
Foreign currency
translation adjustment
|
1
|
|
(1)
|
|
—
|
|
|
—
|
|
(1)
|
|
Allowance for loan
and lease losses at end of period
|
$
|
858
|
|
$
|
865
|
|
$
|
796
|
|
|
$
|
858
|
|
$
|
796
|
|
Liability for credit
losses on lending-related commitments at beginning of
period
|
$
|
53
|
|
$
|
50
|
|
$
|
54
|
|
|
$
|
56
|
|
$
|
35
|
|
Provision (credit)
for losses on lending-related commitments
|
2
|
|
3
|
|
2
|
|
|
(1)
|
|
21
|
|
Liability for credit
losses on lending-related commitments at end of period
(a)
|
$
|
55
|
|
$
|
53
|
|
$
|
56
|
|
|
$
|
55
|
|
$
|
56
|
|
Total allowance for
credit losses at end of period
|
$
|
913
|
|
$
|
918
|
|
$
|
852
|
|
|
$
|
913
|
|
$
|
852
|
|
Net loan charge-offs
to average total loans
|
.34
|
%
|
.23
|
%
|
.25
|
%
|
|
.29
|
%
|
.24
|
%
|
Allowance for loan
and lease losses to period-end loans
|
1.00
|
|
1.01
|
|
1.33
|
|
|
1.00
|
|
1.33
|
|
Allowance for credit
losses to period-end loans
|
1.06
|
|
1.07
|
|
1.42
|
|
|
1.06
|
|
1.42
|
|
Allowance for loan
and lease losses to nonperforming loans
|
137.3
|
|
119.6
|
|
205.7
|
|
|
137.3
|
|
205.7
|
|
Allowance for credit
losses to nonperforming loans
|
146.1
|
|
127.0
|
|
220.2
|
|
|
146.1
|
|
220.2
|
|
Discontinued
operations — education lending business:
|
|
|
|
|
|
|
Loans charged
off
|
$
|
7
|
|
$
|
6
|
|
$
|
10
|
|
|
$
|
28
|
|
$
|
35
|
|
Recoveries
|
3
|
|
3
|
|
3
|
|
|
11
|
|
13
|
|
Net loan
charge-offs
|
$
|
(4)
|
|
$
|
(3)
|
|
$
|
(7)
|
|
|
$
|
(17)
|
|
$
|
(22)
|
|
(a)
|
Included in "Accrued
expense and other liabilities" on the balance sheet.
|
|
|
Summary of
Nonperforming Assets and Past Due Loans From Continuing
Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
12/31/2016
|
9/30/2016
|
6/30/2016
|
3/31/2016
|
12/31/2015
|
Commercial, financial
and agricultural
|
$
|
297
|
|
$
|
335
|
|
$
|
321
|
|
$
|
380
|
|
$
|
82
|
|
Real estate —
commercial mortgage
|
26
|
|
32
|
|
14
|
|
16
|
|
19
|
|
Real estate —
construction
|
3
|
|
17
|
|
25
|
|
12
|
|
9
|
|
Total
commercial real estate loans
|
29
|
|
49
|
|
39
|
|
28
|
|
28
|
|
Commercial lease
financing
|
8
|
|
13
|
|
10
|
|
11
|
|
13
|
|
Total
commercial loans
|
334
|
|
397
|
|
370
|
|
419
|
|
123
|
|
Real estate —
residential mortgage
|
56
|
|
72
|
|
54
|
|
59
|
|
64
|
|
Home equity
loans
|
223
|
|
225
|
|
189
|
|
191
|
|
190
|
|
Consumer direct
loans
|
6
|
|
2
|
|
1
|
|
1
|
|
2
|
|
Credit
cards
|
2
|
|
3
|
|
2
|
|
2
|
|
2
|
|
Consumer indirect
loans
|
4
|
|
24
|
|
3
|
|
4
|
|
6
|
|
Total consumer
loans
|
291
|
|
326
|
|
249
|
|
257
|
|
264
|
|
Total nonperforming loans (a)
|
625
|
|
723
|
|
619
|
|
676
|
|
387
|
|
OREO
|
51
|
|
35
|
|
15
|
|
14
|
|
14
|
|
Other nonperforming
assets
|
—
|
|
2
|
|
3
|
|
2
|
|
2
|
|
Total nonperforming assets
(a)
|
$
|
676
|
|
$
|
760
|
|
$
|
637
|
|
$
|
692
|
|
$
|
403
|
|
Accruing loans past
due 90 days or more
|
$
|
87
|
|
$
|
49
|
|
$
|
70
|
|
$
|
70
|
|
$
|
72
|
|
Accruing loans past
due 30 through 89 days
|
404
|
|
317
|
|
203
|
|
237
|
|
208
|
|
Restructured loans —
accruing and nonaccruing (b)
|
280
|
|
304
|
|
277
|
|
283
|
|
280
|
|
Restructured loans
included in nonperforming loans (b)
|
141
|
|
149
|
|
133
|
|
151
|
|
159
|
|
Nonperforming assets
from discontinued operations —
education lending
business
|
5
|
|
5
|
|
5
|
|
6
|
|
7
|
|
Nonperforming loans
to period-end portfolio loans (a)
|
.73
|
%
|
.85
|
%
|
1.00
|
%
|
1.12
|
%
|
.65
|
%
|
Nonperforming assets
to period-end portfolio loans
plus OREO and other
nonperforming assets (a)
|
.79
|
|
.89
|
|
1.03
|
|
1.14
|
|
.67
|
|
|
|
(a)
|
Nonperforming loan
balances exclude $865 million, $959 million, $11 million, $11
million, and $11 million, of purchased credit impaired loans at
December 31, 2016, September 30, 2016, June 30, 2016,
March 31, 2016, and December 31, 2015,
respectively.
|
|
|
(b)
|
Restructured loans
(i.e., troubled debt restructurings) are those for which Key, for
reasons related to a borrower's 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.
|
Summary of Changes
in Nonperforming Loans From Continuing Operations
|
(in
millions)
|
|
|
|
|
|
|
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
Balance at beginning
of period
|
$
|
723
|
|
$
|
619
|
|
$
|
676
|
|
$
|
387
|
|
$
|
400
|
|
Loans placed on
nonaccrual status
|
170
|
|
78
|
|
124
|
|
406
|
|
81
|
|
Nonperforming loans
acquired from First Niagara (a)
|
(31)
|
|
150
|
|
—
|
|
—
|
|
—
|
|
Charge-offs
|
(81)
|
|
(53)
|
|
(64)
|
|
(60)
|
|
(51)
|
|
Loans sold
|
(9)
|
|
—
|
|
—
|
|
(11)
|
|
—
|
|
Payments
|
(30)
|
|
(32)
|
|
(75)
|
|
(8)
|
|
(21)
|
|
Transfers to
OREO
|
(21)
|
|
(5)
|
|
(6)
|
|
(4)
|
|
(4)
|
|
Transfers to other
nonperforming assets
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
|
Loans returned to
accrual status
|
(96)
|
|
(34)
|
|
(36)
|
|
(34)
|
|
(17)
|
|
Balance at end of
period (b)
|
$
|
625
|
|
$
|
723
|
|
$
|
619
|
|
$
|
676
|
|
$
|
387
|
|
|
|
(a)
|
During the fourth
quarter of 2016, Key adjusted the estimated fair value of the First
Niagara acquired loan portfolio recorded during the third quarter
of 2016, resulting in a $31 million decrease in the balance of
acquired nonperforming loans.
|
|
|
(b)
|
Nonperforming loan
balances exclude $865 million, $959 million, $11 million,
$11 million, and $11 million of purchased credit impaired loans at
December 31, 2016, September 30, 2016, June 30, 2016,
March 31, 2016, and December 31, 2015,
respectively.
|
Summary of Changes
in Other Real Estate Owned, Net of Allowance, From Continuing
Operations
|
(in
millions)
|
|
|
|
|
|
|
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
Balance at beginning
of period
|
$
|
35
|
|
$
|
15
|
|
$
|
14
|
|
$
|
14
|
|
$
|
17
|
|
Properties acquired —
First Niagara
|
—
|
|
19
|
|
—
|
|
—
|
|
—
|
|
Properties acquired —
nonperforming loans
|
21
|
|
5
|
|
6
|
|
4
|
|
4
|
|
Valuation
adjustments
|
(2)
|
|
(2)
|
|
(2)
|
|
(1)
|
|
(2)
|
|
Properties
sold
|
(3)
|
|
(2)
|
|
(3)
|
|
(3)
|
|
(5)
|
|
Balance at end of
period
|
$
|
51
|
|
$
|
35
|
|
$
|
15
|
|
$
|
14
|
|
$
|
14
|
|
Line of Business
Results
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
4Q16 vs.
|
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
|
3Q16
|
4Q15
|
Key Community
Bank
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
|
901
|
|
$
|
779
|
|
$
|
598
|
|
$
|
595
|
|
$
|
588
|
|
|
15.7
|
%
|
53.2
|
%
|
Provision for credit
losses
|
44
|
|
37
|
|
25
|
|
42
|
|
20
|
|
|
18.9
|
|
120.0
|
|
Noninterest
expense
|
673
|
|
577
|
|
444
|
|
436
|
|
456
|
|
|
16.6
|
|
47.6
|
|
Net income (loss)
attributable to Key
|
115
|
|
104
|
|
81
|
|
74
|
|
70
|
|
|
10.6
|
|
64.3
|
|
Average loans and
leases
|
47,032
|
|
41,548
|
|
30,936
|
|
30,789
|
|
30,925
|
|
|
13.2
|
|
52.1
|
|
Average
deposits
|
79,357
|
|
69,397
|
|
53,794
|
|
52,803
|
|
52,219
|
|
|
14.4
|
|
52.0
|
|
Net loan
charge-offs
|
42
|
|
31
|
|
17
|
|
23
|
|
23
|
|
|
35.5
|
|
82.6
|
|
Net loan charge-offs
to average total loans
|
.36
|
%
|
.30
|
%
|
.22
|
%
|
.30
|
%
|
.30
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming assets
at period end
|
$
|
394
|
|
$
|
430
|
|
$
|
300
|
|
$
|
303
|
|
$
|
303
|
|
|
(8.4)
|
|
30.0
|
|
Return on average
allocated equity
|
9.70
|
%
|
11.52
|
%
|
11.99
|
%
|
11.09
|
%
|
10.39
|
%
|
|
N/A
|
|
N/A
|
|
Average full-time
equivalent employees
|
11,173
|
9,796
|
7,331
|
7,376
|
7,390
|
|
14.1
|
|
51.2
|
|
|
|
|
|
|
|
|
|
|
Key Corporate
Bank
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
|
630
|
|
$
|
554
|
|
$
|
452
|
|
$
|
426
|
|
$
|
479
|
|
|
13.7
|
%
|
31.5
|
%
|
Provision for credit
losses
|
21
|
|
25
|
|
30
|
|
43
|
|
26
|
|
|
(16.0)
|
|
(19.2)
|
|
Noninterest
expense
|
325
|
|
307
|
|
259
|
|
237
|
|
257
|
|
|
5.9
|
|
26.5
|
|
Net income (loss)
attributable to Key
|
221
|
|
159
|
|
135
|
|
118
|
|
142
|
|
|
39.0
|
|
55.6
|
|
Average loans and
leases
|
36,769
|
|
34,561
|
|
28,607
|
|
27,722
|
|
26,981
|
|
|
6.4
|
|
36.3
|
|
Average loans held
for sale
|
1,223
|
|
1,103
|
|
591
|
|
811
|
|
820
|
|
|
10.9
|
|
49.1
|
|
Average
deposits
|
23,173
|
|
22,708
|
|
19,129
|
|
18,074
|
|
19,080
|
|
|
2.0
|
|
21.5
|
|
Net loan
charge-offs
|
26
|
|
12
|
|
27
|
|
18
|
|
12
|
|
|
116.7
|
|
116.7
|
|
Net loan charge-offs
to average total loans
|
.28
|
%
|
.14
|
%
|
.38
|
%
|
.26
|
%
|
.18
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming assets
at period end
|
$
|
241
|
|
$
|
313
|
|
$
|
319
|
|
$
|
372
|
|
$
|
74
|
|
|
(23.0)
|
|
225.7
|
|
Return on average
allocated equity
|
30.62
|
%
|
25.86
|
%
|
26.23
|
%
|
23.15
|
%
|
29.05
|
%
|
|
N/A
|
|
N/A
|
|
Average full-time
equivalent employees
|
2,394
|
2,331
|
2,138
|
2,126
|
2,113
|
|
2.7
|
|
13.3
|
|
|
|
TE = Taxable
Equivalent, N/A = Not Applicable, N/M = Not Meaningful
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/keycorp-reports-fourth-quarter-2016-net-income-of-213-million-or-20-per-common-share-earnings-per-common-share-of-31-excluding-11-of-merger-related-charges-300393478.html
SOURCE KeyCorp