CLEVELAND, July 26, 2016 /PRNewswire/ -- KeyCorp (NYSE:
KEY) today announced second quarter net income from continuing
operations attributable to Key common shareholders of $193 million, or $.23 per common share, compared to $182 million, or $.22 per common share, for the first quarter of
2016, and $230 million, or
$.27 per common share, for the second
quarter of 2015. During the second quarter of 2016, Key incurred
merger-related expense totaling $45
million, or $.04 per common
share, compared to $24 million, or
$.02 per common share, in the first
quarter of 2016. Excluding merger-related expense, earnings
per common share were $.27 for the
second quarter of 2016 and $.24 for
the first quarter of 2016. No merger-related expense was incurred
in the second quarter of 2015.
"During the second quarter, we maintained positive momentum in
our core businesses and made significant progress on our upcoming
acquisition of First Niagara," said Chairman and Chief Executive
Officer Beth Mooney. "Excluding
merger-related expense, we generated positive operating leverage
relative to the year-ago period. Revenue was stable compared
with the same period last year and up 3% from last quarter, despite
lower interest rates and challenging market conditions.
Expenses continue to be well managed, which allows us to make
ongoing investments in our businesses. Credit quality remained
solid, with net charge-offs to average loans below our targeted
range."
"Additionally, we increased our dividend by 13% during the
quarter, and we were pleased to receive no objection from the
Federal Reserve to our 2016 capital plan. We look forward to
resuming share repurchases upon completion of our First Niagara
acquisition, and, subject to approval by our Board of Directors,
increasing the quarterly dividend to $.095 per common share next year," continued
Mooney.
"As we previously announced, we expect to close our First
Niagara acquisition on or about August 1. Significant
progress is being made as we move toward integration, including
plans for our combined branch network that were shared earlier this
month," added Mooney. "We are excited about the opportunity to
bring these two companies together and deliver on the financial
commitments we have made to our
shareholders."
SECOND QUARTER 2016 FINANCIAL RESULTS, from continuing
operations
Compared to Second Quarter of 2015
- Average loans up 5%, driven by 12% growth in commercial,
financial and agricultural loans
- Average deposits, excluding deposits in foreign office, up 5%
reflecting core deposit growth in Key's retail banking franchise,
growth in escrow deposits from the commercial mortgage servicing
business, and commercial deposit inflows
- Net interest income (taxable-equivalent) up $14 million, as higher earning asset balances and
yields were partially offset by lower reinvestment yields
- Noninterest income down $15
million due to lower investment banking and debt placement
fees, partially offset by an increase in other income and growth in
core fee-based businesses
- Noninterest expense, excluding merger-related expense of
$45 million, decreased $5 million, primarily attributable to lower
personnel expense, net occupancy expense, and business services and
professional fees partially offset by higher other and non-merger
related marketing expense
- Net loan charge-offs to average loans of .28%, up from .25% in
the year-ago quarter
Compared to First Quarter of 2016
- Average loans up 2%, primarily driven by a 3% increase in
commercial, financial and agricultural loans
- Average deposits up 3%, due to growth in escrow deposits in
Key's commercial mortgage servicing business, short-term inflows
from commercial clients, and an increase in certificates of deposit
and other time deposits
- Net interest income (taxable-equivalent) down $7 million driven by lower reinvestment yields
and lower loan fees, partially offset by higher earning asset
balances
- Noninterest income up $42
million, primarily due to an increase in investment banking
and debt placement fees and higher net gains on principal
investing
- Noninterest expense, excluding merger-related expense,
increased $27 million, primarily
driven by expense from certain real estate investments and higher
non-merger related marketing expense
- Net loan charge-offs to average loans of .28%, down from .31%
in the prior quarter
Selected Financial
Highlights
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dollars in
millions, except per share data
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Change 2Q16
vs.
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2Q16
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1Q16
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2Q15
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1Q16
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2Q15
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Income (loss) from
continuing operations attributable to Key common
shareholders
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$
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193
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$
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182
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$
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230
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6.0
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%
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(16.1)
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%
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Income (loss) from
continuing operations attributable to Key common shareholders
per common share — assuming
dilution
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.23
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.22
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.27
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4.5
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(14.8)
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Return on average
total assets from continuing operations
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.82
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%
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.80
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%
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1.03
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%
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N/A
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N/A
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Common Equity Tier 1
(a), (b)
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11.12
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11.07
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10.71
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N/A
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N/A
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Book value at period
end
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$
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13.08
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$
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12.79
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$
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12.21
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2.3
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%
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7.1
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%
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Net interest margin
(TE) from continuing operations
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2.76
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%
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2.89
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%
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2.88
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%
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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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6-30-16 ratio is
estimated.
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TE = Taxable
Equivalent, N/A = Not Applicable
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INCOME STATEMENT
HIGHLIGHTS
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Revenue
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dollars in
millions
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Change 2Q16
vs.
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2Q16
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1Q16
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2Q15
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1Q16
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2Q15
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|
Net interest income
(TE)
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$
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605
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$
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612
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$
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591
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(1.1)
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%
|
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2.4
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%
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Noninterest
income
|
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473
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431
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488
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9.7
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(3.1)
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Total revenue
(TE)
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$
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1,078
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$
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1,043
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$
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1,079
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3.4
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%
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(.1)
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%
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TE = Taxable
Equivalent
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Taxable-equivalent net interest income was $605 million for the second quarter of 2016, and
the net interest margin was 2.76%. These results compare to
taxable-equivalent net interest income of $591 million and a net interest margin of 2.88%
for the second quarter of 2015. The $14 million increase in net interest income
compared to the year-ago quarter reflects higher earning asset
balances and an increase in earning asset yields, largely the
result of Key's loan portfolio re-pricing to higher short-term
interest rates. The benefit to net interest income from these items
was partly offset by lower reinvestment yields in Key's securities
and derivatives portfolios. The 12 basis point decline in the
net interest margin reflects higher levels of liquidity, lower
reinvestment yields in the securities and derivatives portfolios,
and lower loan fees. Key's Federal Reserve account averaged
$5.6 billion during the second
quarter of 2016, which increased $2.3
billion compared to the second quarter of 2015 and reduced
the net interest margin by 7 basis points.
Compared to the first quarter of 2016, taxable-equivalent net
interest income decreased by $7
million, and the net interest margin decreased by 13 basis
points. The decrease in net interest income was primarily
attributable to lower reinvestment yields and a decline in loan
fees, which was partly offset by higher earning asset balances. The
13 basis point decline in net interest margin reflects higher
levels of liquidity, as well as lower reinvestment yields and a
decline in loan fees. Key's Federal Reserve account increased
$2.1 billion during the quarter,
driven by growth in short-term deposits from commercial clients,
which resulted in 7 basis points of the decline in the net interest
margin.
Noninterest
Income
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dollars in
millions
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Change 2Q16
vs.
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2Q16
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1Q16
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2Q15
|
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1Q16
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2Q15
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Trust and investment
services income
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$
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110
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$
|
109
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$
|
111
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.9
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%
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(.9)
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%
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Investment banking
and debt placement fees
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|
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98
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|
|
71
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141
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38.0
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(30.5)
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Service charges on
deposit accounts
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68
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|
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65
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|
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63
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4.6
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|
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7.9
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Operating lease
income and other leasing gains
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|
18
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|
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17
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|
24
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5.9
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(25.0)
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Corporate services
income
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53
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50
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43
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6.0
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23.3
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Cards and payments
income
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52
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|
46
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|
47
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13.0
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10.6
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Corporate-owned life
insurance income
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28
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28
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|
30
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—
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(6.7)
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Consumer mortgage
income
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|
3
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|
2
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|
4
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50.0
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(25.0)
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Mortgage servicing
fees
|
|
|
10
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|
|
12
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|
|
9
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(16.7)
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|
11.1
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Net gains (losses)
from principal investing
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|
11
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—
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11
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N/M
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—
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Other
income
|
|
|
22
|
|
|
31
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|
5
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(29.0)
|
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N/M
|
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|
Total noninterest
income
|
|
$
|
473
|
|
$
|
431
|
|
$
|
488
|
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9.7
|
%
|
|
(3.1)
|
%
|
|
|
|
|
|
|
|
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N/M = Not
Meaningful
|
Key's noninterest income was $473
million for the second quarter of 2016, compared to
$488 million for the year-ago
quarter. The decrease from the prior year was largely
attributable to lower investment banking and debt placement fees of
$43 million, reflecting challenging
market conditions, as well as $6
million of lower operating lease income and other leasing
gains. These declines were offset by an increase of $17 million in other income primarily related to
gains from certain real estate investments, along with continued
growth in some of Key's core fee-based businesses, including
corporate services and cards and payments.
Compared to the first quarter of 2016, noninterest income
increased by $42 million. The
primary driver of the increase was $27
million of higher investment banking and debt placement
fees, reflecting improved capital markets conditions. Core
fee-based businesses continued to perform well, as cards and
payments income increased $6 million
and corporate services income increased $3
million, along with $3 million
in increased service charges on deposit accounts compared to the
prior quarter. Net gains on principal investing also contributed
$11 million to the increase from the
prior quarter. Partially offsetting these increases was a decrease
of $9 million in other income.
Noninterest
Expense
|
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dollars in
millions
|
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|
Change 2Q16
vs.
|
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|
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|
2Q16
|
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1Q16
|
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2Q15
|
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1Q16
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2Q15
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|
Personnel
expense
|
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$
|
427
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$
|
404
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|
$
|
408
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5.7
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%
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|
4.7
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%
|
Nonpersonnel
expense
|
|
|
324
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|
|
299
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|
|
303
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|
|
8.4
|
|
|
6.9
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|
|
Total noninterest
expense
|
|
$
|
751
|
|
$
|
703
|
|
$
|
711
|
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|
6.8
|
|
|
5.6
|
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Merger-related
expense
|
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|
45
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|
24
|
|
|
—
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|
87.5
|
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N/M
|
|
|
Total noninterest
expense excluding merger-related expense (a)
|
|
$
|
706
|
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$
|
679
|
|
$
|
711
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|
4.0
|
%
|
|
(.7)
|
%
|
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(a)
|
Non-GAAP measure. See
the table entitled "GAAP to Non-GAAP Reconciliations" in this
financial supplement.
|
Key's noninterest expense was $751
million for the second quarter of 2016. Noninterest expense
included $45 million of
merger-related expense, primarily made up of $35 million in personnel expense related to
technology development for systems conversions and fully-dedicated
personnel for merger and integration efforts. The remaining
$10 million of merger-related expense
was nonpersonnel expense, largely recognized in business services
and professional fees and marketing. In the first quarter of 2016,
Key incurred $24 million of
merger-related expense, while no merger-related expense was
incurred in the second quarter of 2015.
Excluding merger-related expense, noninterest expense was
$5 million lower than the second
quarter of last year. The decrease is primarily attributable to
$16 million in lower personnel
expense related to lower performance-based compensation, along with
lower net occupancy expenses and business services and professional
fees. These decreases were partially offset by an increase in other
expense, reflecting the impact of certain real estate investments
and other miscellaneous items, along with increased non-merger
related marketing expense.
Compared to the first quarter of 2016, excluding merger-related
expense, noninterest expense increased by $27 million. The increase is primarily related to
$23 million of higher nonpersonnel
expense, including an increase in other expense reflecting the
impact of certain real estate investments and other miscellaneous
items. Additionally, Key incurred $8
million in higher non-merger related marketing expense and
$4 million in increased personnel
expense, related to higher performance-based compensation.
BALANCE SHEET HIGHLIGHTS
In the second quarter of 2016, Key had average assets of
$99.2 billion compared to
$93.9 billion in the second quarter
of 2015 and $96.3 billion in the
first quarter of 2016. The increase in average assets from both the
year-ago period and prior quarter reflect growth in average loan
balances as well as an increase in short-term investments related
to higher levels of liquidity.
Average
Loans
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|
dollars in
millions
|
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|
Change 2Q16
vs.
|
|
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|
2Q16
|
|
1Q16
|
|
2Q15
|
|
1Q16
|
|
2Q15
|
|
Commercial, financial
and agricultural (a)
|
|
$
|
32,630
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$
|
31,590
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|
$
|
29,017
|
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|
3.3
|
%
|
|
12.5
|
%
|
Other commercial
loans
|
|
|
13,222
|
|
|
13,111
|
|
|
13,161
|
|
|
.8
|
|
|
.5
|
|
Home equity
loans
|
|
|
10,098
|
|
|
10,240
|
|
|
10,510
|
|
|
(1.4)
|
|
|
(3.9)
|
|
Other consumer
loans
|
|
|
5,198
|
|
|
5,215
|
|
|
5,290
|
|
|
(.3)
|
|
|
(1.7)
|
|
|
Total
loans
|
|
$
|
61,148
|
|
$
|
60,156
|
|
$
|
57,978
|
|
|
1.6
|
%
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
(a)
|
Commercial, financial
and agricultural average loan balances include $87 million, $85
million, and $88 million of assets from commercial credit cards at
June 30, 2016, March 31, 2016, and June 30, 2015,
respectively.
|
Average loans were $61.1 billion
for the second quarter of 2016, an increase of $3.2 billion compared to the second quarter of
2015. The loan growth primarily occurred in the commercial,
financial and agricultural portfolio, which increased $3.6 billion and was spread across Key's
commercial lines of business. Consumer loans declined by
$504 million mostly due to paydowns
in Key's home equity loan portfolio and continued run-off in Key's
consumer exit portfolios.
Compared to the first quarter of 2016, average loans increased
by $992 million, driven by
commercial, financial and agricultural loans, which grew
$1 billion. Consumer loans
declined $159 million, largely the
result of a decline in home equity loans.
Average
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
|
2Q16
|
|
1Q16
|
|
2Q15
|
|
1Q16
|
|
2Q15
|
|
Non-time deposits
(a)
|
|
$
|
67,419
|
|
$
|
65,637
|
|
$
|
65,109
|
|
|
2.7
|
%
|
|
3.5
|
%
|
Certificates of
deposit ($100,000 or more)
|
|
|
3,233
|
|
|
2,761
|
|
|
2,010
|
|
|
17.1
|
|
|
60.8
|
|
Other time
deposits
|
|
|
3,252
|
|
|
3,200
|
|
|
3,136
|
|
|
1.6
|
|
|
3.7
|
|
|
Total
deposits
|
|
$
|
73,904
|
|
$
|
71,598
|
|
$
|
70,255
|
|
|
3.2
|
%
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of total
deposits (a)
|
|
|
.19
|
%
|
|
.17
|
%
|
|
.15
|
%
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes deposits in
foreign office.
|
|
N/A = Not
Applicable
|
Average deposits, excluding deposits in foreign office, totaled
$73.9 billion for the second quarter
of 2016, an increase of $3.6 billion
compared to the year-ago quarter. Interest-bearing deposits
increased $4.9 billion driven by a
$3.6 billion increase in NOW and
money market deposit accounts and a $1.3
billion increase in certificates of deposit and other time
deposits. The increase in average deposits from the year-ago
quarter reflects core deposit growth in Key's retail banking
franchise, growth in escrow deposits from the commercial mortgage
servicing business, and commercial deposit inflows. These increases
were partially offset by a $1.2
billion decline in noninterest-bearing deposits.
Compared to the first quarter of 2016, average deposits
increased by $2.3 billion. The
increase was driven by NOW and money market deposit accounts which
increased $2.0 billion, and
certificates of deposit and other time deposits which increased
$524 million. Higher escrow
deposits from Key's commercial mortgage servicing business,
short-term inflows from Key's commercial clients, and core deposit
growth in Key's retail banking franchise contributed to the
linked-quarter increase in NOW and money market deposit
accounts.
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Net loan
charge-offs
|
|
$
|
43
|
|
$
|
46
|
|
$
|
36
|
|
|
(6.5)
|
%
|
|
19.4
|
%
|
Net loan charge-offs
to average total loans
|
|
|
.28
|
%
|
|
.31
|
%
|
|
.25
|
%
|
|
N/A
|
|
|
N/A
|
|
Nonperforming loans
at period end (a)
|
|
$
|
619
|
|
$
|
676
|
|
$
|
419
|
|
|
(8.4)
|
%
|
|
47.7
|
%
|
Nonperforming assets
at period end (a)
|
|
|
637
|
|
|
692
|
|
|
440
|
|
|
(7.9)
|
|
|
44.8
|
|
Allowance for loan
and lease losses
|
|
|
854
|
|
|
826
|
|
|
796
|
|
|
3.4
|
|
|
7.3
|
|
Allowance for loan
and lease losses to nonperforming loans (a)
|
|
|
138.0
|
%
|
|
122.2
|
%
|
|
190.0
|
%
|
|
N/A
|
|
|
N/A
|
|
Provision for credit
losses
|
|
$
|
52
|
|
$
|
89
|
|
$
|
41
|
|
|
(41.6)
|
%
|
|
26.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Nonperforming loan
balances exclude $11 million, $11 million, and $12 million of
purchased credit impaired loans at June 30, 2016, March 31, 2016,
and June 30, 2015, respectively.
|
|
|
N/A = Not
Applicable
|
Key's provision for credit losses was $52
million for the second quarter of 2016, compared to
$41 million for the second quarter of
2015 and $89 million for the first
quarter of 2016. Key's allowance for loan and lease losses
was $854 million, or 1.38% of total
period-end loans, at June 30, 2016,
compared to 1.37% at June 30, 2015,
and 1.37% at March 31,
2016.
Net loan charge-offs for the second quarter of 2016 totaled
$43 million, or .28% of average total
loans. These results compare to $36
million, or .25%, for the second quarter of 2015, and
$46 million, or .31%, for the first
quarter of 2016.
At June 30, 2016, Key's
nonperforming loans totaled $619
million and represented 1.00% of period-end portfolio loans,
compared to .72% at June 30, 2015,
and 1.12% at March 31, 2016.
Nonperforming assets at June 30, 2016
totaled $637 million and represented
1.03% of period-end portfolio loans and OREO and other
nonperforming assets, compared to .75% at June 30, 2015, and 1.14% at March 31, 2016.
CAPITAL
Key's estimated risk-based capital ratios included in the
following table continued to exceed all "well-capitalized"
regulatory benchmarks at June 30,
2016.
Capital
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-16
|
|
|
3-31-16
|
|
|
6-30-15
|
|
Common Equity Tier 1
(a), (b)
|
|
11.12
|
%
|
|
11.07
|
%
|
|
10.71
|
|
Tier 1 risk-based
capital (a)
|
|
11.43
|
|
|
11.38
|
|
|
11.11
|
|
Total risk based
capital (a)
|
|
13.66
|
|
|
13.12
|
|
|
12.66
|
|
Tangible common
equity to tangible assets (b)
|
|
9.95
|
|
|
9.97
|
|
|
9.86
|
|
Leverage
(a)
|
|
10.58
|
|
|
10.73
|
|
|
10.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
6-30-16 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 June
30, 2016, Key's estimated Common Equity Tier 1 and Tier 1
risk-based capital ratios stood at 11.12% and 11.43%,
respectively. In addition, the tangible common equity ratio
was 9.95% at June 30, 2016.
In October 2013, federal banking
regulators published the final Basel III capital framework for U.S.
banking organizations (the "Regulatory Capital Rules"). The
mandatory compliance date for Key as a "standardized approach"
banking organization began on January 1,
2015, subject to transitional provisions extending to
January 1, 2019. Key's
estimated Common Equity Tier 1 ratio as calculated under the fully
phased-in Regulatory Capital Rules was 11.07% at June 30, 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 2Q16
vs.
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Shares outstanding at
beginning of period
|
|
|
842,290
|
|
|
835,751
|
|
|
850,920
|
|
|
.8
|
%
|
|
(1.0)
|
%
|
Common shares
repurchased
|
|
|
—
|
|
|
—
|
|
|
(8,794)
|
|
|
N/M
|
|
|
N/M
|
|
Shares reissued
(returned) under employee benefit plans
|
|
|
413
|
|
|
6,539
|
|
|
1,482
|
|
|
N/M
|
|
|
(72.1)
|
|
|
Shares outstanding at
end of period
|
|
|
842,703
|
|
|
842,290
|
|
|
843,608
|
|
|
—
|
|
|
(.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
As previously reported, Key's existing share repurchase program
is currently suspended due to the pending acquisition of First
Niagara Financial Group.
Key's 2016 capital plan, effective as of the third quarter of
2016, received no objection from the Federal Reserve during the
Comprehensive Capital Analysis and Review process and includes
common share repurchases of up to $350
million. This authorization includes repurchases to offset
issuances of common shares under our employee compensation plans.
Share repurchases are expected to be executed following the
completion of the pending acquisition of First Niagara Financial
Group and through the second quarter of 2017.
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 2Q16
vs.
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Revenue from
continuing operations (TE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community
Bank
|
|
$
|
598
|
|
$
|
595
|
|
$
|
560
|
|
|
.5
|
%
|
|
6.8
|
%
|
Key Corporate
Bank
|
|
|
452
|
|
|
426
|
|
|
478
|
|
|
6.1
|
|
|
(5.4)
|
|
Other
Segments
|
|
|
31
|
|
|
21
|
|
|
43
|
|
|
47.6
|
|
|
(27.9)
|
|
|
Total
segments
|
|
|
1,081
|
|
|
1,042
|
|
|
1,081
|
|
|
3.7
|
|
|
—
|
|
Reconciling
Items
|
|
|
(3)
|
|
|
1
|
|
|
(2)
|
|
|
N/M
|
|
|
N/M
|
|
|
Total
|
|
$
|
1,078
|
|
$
|
1,043
|
|
$
|
1,079
|
|
|
3.4
|
%
|
|
(.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Community
Bank
|
|
$
|
81
|
|
$
|
74
|
|
$
|
69
|
|
|
9.5
|
%
|
|
17.4
|
%
|
Key Corporate
Bank
|
|
|
135
|
|
|
118
|
|
|
131
|
|
|
14.4
|
|
|
3.1
|
|
Other
Segments
|
|
|
24
|
|
|
14
|
|
|
31
|
|
|
71.4
|
|
|
(22.6)
|
|
|
Total
segments
|
|
|
240
|
|
|
206
|
|
|
231
|
|
|
16.5
|
|
|
3.9
|
|
Reconciling
Items
|
|
|
(41)
|
|
|
(19)
|
|
|
4
|
|
|
N/M
|
|
|
N/M
|
|
|
Total
|
|
$
|
199
|
|
$
|
187
|
|
$
|
235
|
|
|
6.4
|
%
|
|
(15.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Key Community
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(TE)
|
|
$
|
391
|
|
$
|
399
|
|
$
|
362
|
|
|
(2.0)
|
%
|
|
8.0
|
%
|
Noninterest
income
|
|
|
207
|
|
|
196
|
|
|
198
|
|
|
5.6
|
|
|
4.5
|
|
|
Total revenue
(TE)
|
|
|
598
|
|
|
595
|
|
|
560
|
|
|
.5
|
|
|
6.8
|
|
Provision for credit
losses
|
|
|
25
|
|
|
42
|
|
|
3
|
|
|
(40.5)
|
|
|
733.3
|
|
Noninterest
expense
|
|
|
444
|
|
|
436
|
|
|
447
|
|
|
1.8
|
|
|
(.7)
|
|
|
Income (loss) before
income taxes (TE)
|
|
|
129
|
|
|
117
|
|
|
110
|
|
|
10.3
|
|
|
17.3
|
|
Allocated income
taxes (benefit) and TE adjustments
|
|
|
48
|
|
|
43
|
|
|
41
|
|
|
11.6
|
|
|
17.1
|
|
|
Net income (loss)
attributable to Key
|
|
$
|
81
|
|
$
|
74
|
|
$
|
69
|
|
|
9.5
|
%
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
leases
|
|
$
|
30,936
|
|
$
|
30,789
|
|
$
|
30,707
|
|
|
.5
|
%
|
|
.7
|
%
|
Total
assets
|
|
|
32,963
|
|
|
32,856
|
|
|
32,809
|
|
|
.3
|
|
|
.5
|
|
Deposits
|
|
|
53,794
|
|
|
52,803
|
|
|
50,765
|
|
|
1.9
|
|
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets under
management at period end
|
|
$
|
34,535
|
|
$
|
34,107
|
|
$
|
38,399
|
|
|
1.3
|
%
|
|
(10.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent
|
Additional Key
Community Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment
services income
|
|
$
|
73
|
|
$
|
73
|
|
$
|
76
|
|
|
—
|
|
|
(3.9)
|
%
|
Service charges on
deposit accounts
|
|
|
56
|
|
|
54
|
|
|
52
|
|
|
3.7
|
%
|
|
7.7
|
|
Cards and payments
income
|
|
|
46
|
|
|
43
|
|
|
43
|
|
|
7.0
|
|
|
7.0
|
|
Other noninterest
income
|
|
|
32
|
|
|
26
|
|
|
27
|
|
|
23.1
|
|
|
18.5
|
|
|
Total noninterest
income
|
|
$
|
207
|
|
$
|
196
|
|
$
|
198
|
|
|
5.6
|
%
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average deposit
balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
|
$
|
30,144
|
|
$
|
29,432
|
|
$
|
28,284
|
|
|
2.4
|
%
|
|
6.6
|
%
|
Savings
deposits
|
|
|
2,365
|
|
|
2,340
|
|
|
2,385
|
|
|
1.1
|
|
|
(.8)
|
|
Certificates of
deposit ($100,000 or more)
|
|
|
2,383
|
|
|
2,120
|
|
|
1,547
|
|
|
12.4
|
|
|
54.0
|
|
Other time
deposits
|
|
|
3,245
|
|
|
3,197
|
|
|
3,132
|
|
|
1.5
|
|
|
3.6
|
|
Deposits in foreign
office
|
|
|
—
|
|
|
—
|
|
|
299
|
|
|
N/M
|
|
|
N/M
|
|
Noninterest-bearing
deposits
|
|
|
15,657
|
|
|
15,714
|
|
|
15,118
|
|
|
(.4)
|
|
|
3.6
|
|
|
Total
deposits
|
|
$
|
53,794
|
|
$
|
52,803
|
|
$
|
50,765
|
|
|
1.9
|
%
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
balance
|
|
$
|
9,908
|
|
$
|
10,037
|
|
$
|
10,266
|
|
|
|
|
|
|
|
Combined
weighted-average loan-to-value ratio (at date of
origination)
|
|
|
71
|
%
|
|
71
|
%
|
|
71
|
%
|
|
|
|
|
|
|
Percent first lien
positions
|
|
|
61
|
|
|
61
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branches
|
|
|
949
|
|
|
961
|
|
|
989
|
|
|
|
|
|
|
|
Automated teller
machines
|
|
|
1,236
|
|
|
1,249
|
|
|
1,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
Key Community Bank Summary of Operations
- Positive operating leverage from prior year
- Net income increased to $81
million, 17.4% growth from prior year
- Commercial, financial, and agricultural average loan growth of
$675 million, or 5.4% from prior
year
- Average deposits up $3.0 billion,
or 6.0% from the prior year
Key Community Bank recorded net income attributable to Key of
$81 million for the second quarter of
2016, compared to $69 million for the
year-ago quarter.
Taxable-equivalent net interest income increased by $29 million, or 8.0%, from the second quarter of
2015 due to favorable deposit rates and balance growth. Average
deposits increased $3 billion, or
6.0%, from one year ago, and average loans and leases grew
$229 million, or .7%.
Commercial, financial and agricultural loans grew by $675 million, or 5.4%, from the prior year.
Noninterest income increased $9
million, or 4.5%, from the year-ago quarter. Service charges
on deposit accounts increased $4
million, and cards and payments income and investment
banking and debt placement fees each increased $3 million. These increases were partially offset
by market weakness affecting Key's Private Bank as well as lower
consumer mortgage income.
The provision for credit losses increased by $22 million from the second quarter of
2015. Net loan charge-offs decreased $3 million from the same period one year
ago.
Noninterest expense remained relatively stable, decreasing by
$3 million, or .7%, from the year-ago
quarter.
Key Corporate
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(TE)
|
|
$
|
222
|
|
$
|
218
|
|
$
|
228
|
|
|
1.8
|
%
|
|
(2.6)
|
%
|
Noninterest
income
|
|
|
230
|
|
|
208
|
|
|
250
|
|
|
10.6
|
|
|
(8.0)
|
|
|
Total revenue
(TE)
|
|
|
452
|
|
|
426
|
|
|
478
|
|
|
6.1
|
|
|
(5.4)
|
|
Provision for credit
losses
|
|
|
30
|
|
|
43
|
|
|
41
|
|
|
(30.2)
|
|
|
(26.8)
|
|
Noninterest
expense
|
|
|
259
|
|
|
237
|
|
|
256
|
|
|
9.3
|
|
|
1.2
|
|
|
Income (loss) before
income taxes (TE)
|
|
|
163
|
|
|
146
|
|
|
181
|
|
|
11.6
|
|
|
(9.9)
|
|
Allocated income
taxes and TE adjustments
|
|
|
29
|
|
|
28
|
|
|
50
|
|
|
3.6
|
|
|
(42.0)
|
|
|
Net income
(loss)
|
|
|
134
|
|
|
118
|
|
|
131
|
|
|
13.6
|
|
|
2.3
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
N/M
|
|
|
N/M
|
|
|
Net income (loss)
attributable to Key
|
|
$
|
135
|
|
$
|
118
|
|
$
|
131
|
|
|
14.4
|
%
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
leases
|
|
$
|
28,607
|
|
$
|
27,722
|
|
$
|
25,298
|
|
|
3.2
|
%
|
|
13.1
|
%
|
Loans held for
sale
|
|
|
591
|
|
|
811
|
|
|
1,234
|
|
|
(27.1)
|
|
|
(52.1)
|
|
Total
assets
|
|
|
33,909
|
|
|
33,413
|
|
|
31,173
|
|
|
1.5
|
|
|
8.8
|
|
Deposits
|
|
|
19,129
|
|
|
18,074
|
|
|
19,709
|
|
|
5.8
|
|
|
(2.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Additional Key
Corporate Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
|
Change 2Q16
vs.
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
2Q15
|
|
|
1Q16
|
|
|
2Q15
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment
services income
|
|
$
|
37
|
|
$
|
36
|
|
$
|
35
|
|
|
2.8
|
%
|
|
5.7
|
%
|
Investment banking
and debt placement fees
|
|
|
94
|
|
|
70
|
|
|
139
|
|
|
34.3
|
|
|
(32.4)
|
|
Operating lease
income and other leasing gains
|
|
|
15
|
|
|
13
|
|
|
18
|
|
|
15.4
|
|
|
(16.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate services
income
|
|
|
40
|
|
|
38
|
|
|
33
|
|
|
5.3
|
|
|
21.2
|
|
Service charges on
deposit accounts
|
|
|
12
|
|
|
11
|
|
|
11
|
|
|
9.1
|
|
|
9.1
|
|
Cards and payments
income
|
|
|
6
|
|
|
3
|
|
|
4
|
|
|
100.0
|
|
|
50.0
|
|
|
Payments and services
income
|
|
|
58
|
|
|
52
|
|
|
48
|
|
|
11.5
|
|
|
20.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage servicing
fees
|
|
|
10
|
|
|
12
|
|
|
9
|
|
|
(16.7)
|
|
|
11.1
|
|
Other noninterest
income
|
|
|
16
|
|
|
25
|
|
|
1
|
|
|
(36.0)
|
|
|
N/M
|
|
|
Total noninterest
income
|
|
$
|
230
|
|
$
|
208
|
|
$
|
250
|
|
|
10.6
|
%
|
|
(8.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Corporate Bank Summary of Operations
- Average loan and lease balances up $3.3
billion, or 13.1% from the prior year
- Net income increased to $135
million, 3.1% growth from the prior year
Key Corporate Bank recorded net income attributable to Key of
$135 million for the second quarter
of 2016, compared to $131 million for
the same period one year ago.
Taxable-equivalent net interest income decreased by $6 million, or 2.6%, compared to the second
quarter of 2015. Average loan and lease balances increased
$3.3 billion, or 13.1%, from the
year-ago quarter, primarily driven by growth in commercial,
financial and agricultural loans. This loan growth was offset
by spread compression due to higher funding costs and a decline in
loan fees due to lower refinance activity from the prior
year. Average deposit balances decreased $580 million, or 2.9%, from the year-ago quarter,
mostly driven by lower public deposits.
Noninterest income was down $20
million, or 8.0%, from the prior year. Investment
banking and debt placement fees declined $45
million, or 32.4%, due to challenging market conditions.
Other noninterest income increased $15
million from the year-ago quarter mostly due to gains from
certain real estate investments. Corporate services income
was up $7 million, or 21.2%, due to
growth in commitment fees and derivatives.
The provision for credit losses decreased $11 million, or 26.8%, compared to the second
quarter of 2015 as lower provisioning related to unfunded
commitments offset higher net loan charge-offs.
Noninterest expense increased by $3
million, or 1.2%, from the second quarter of 2015.
Increases in various other expense items, including operating lease
expense, were partially offset by lower personnel costs.
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 $24 million for the second quarter of 2016,
compared to $31 million for the same
period last year. This decline was largely attributable to
spread compression.
*****
KeyCorp was organized more than 160 years ago and is
headquartered in Cleveland,
Ohio. One of the nation's largest bank-based financial
services companies, Key had assets of approximately $101.2
billion at June 30, 2016.
Key provides deposit, lending, cash management and investment
services to individuals and small and mid-sized businesses in 12
states under the name KeyBank National Association. Key also
provides a broad range of sophisticated corporate and investment
banking products, such as merger and acquisition advice, public and
private debt and equity, syndications and derivatives to middle
market companies in selected industries throughout the United States under the KeyBanc Capital
Markets trade name. For more information, visit
https://www.key.com/. KeyBank is Member FDIC.
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 Tuesday, July 26,
2016. An audio replay of the call will be available through
August 2, 2016.
*****
Financial
Highlights
|
|
(dollars in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
6-30-16
|
|
|
3-31-16
|
|
|
6-30-15
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
605
|
|
|
$
|
612
|
|
|
$
|
591
|
|
|
Noninterest
income
|
|
473
|
|
|
|
431
|
|
|
|
488
|
|
|
|
Total revenue
(TE)
|
|
1,078
|
|
|
|
1,043
|
|
|
|
1,079
|
|
|
Provision for credit
losses
|
|
52
|
|
|
|
89
|
|
|
|
41
|
|
|
Noninterest
expense
|
|
751
|
|
|
|
703
|
|
|
|
711
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
199
|
|
|
|
187
|
|
|
|
235
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
|
3
|
|
|
|
1
|
|
|
|
3
|
|
|
Net income (loss)
attributable to Key
|
|
202
|
|
|
|
188
|
|
|
|
238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
|
193
|
|
|
|
182
|
|
|
|
230
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
|
3
|
|
|
|
1
|
|
|
|
3
|
|
|
Net income (loss)
attributable to Key common shareholders
|
|
196
|
|
|
|
183
|
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.23
|
|
|
$
|
.22
|
|
|
$
|
.27
|
|
|
Income (loss) from
discontinued operations, net of taxes
(a)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders
(b)
|
|
.23
|
|
|
|
.22
|
|
|
|
.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
|
.23
|
|
|
|
.22
|
|
|
|
.27
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming dilution
(a)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(b)
|
|
.23
|
|
|
|
.22
|
|
|
|
.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
paid
|
|
.085
|
|
|
|
.075
|
|
|
|
.075
|
|
|
Book value at period
end
|
|
13.08
|
|
|
|
12.79
|
|
|
|
12.21
|
|
|
Tangible book value
at period end
|
|
11.81
|
|
|
|
11.52
|
|
|
|
10.92
|
|
|
Market price at
period end
|
|
11.05
|
|
|
|
11.04
|
|
|
|
15.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
total assets
|
|
.82
|
%
|
|
|
.80
|
%
|
|
|
1.03
|
%
|
|
Return on average
common equity
|
|
7.15
|
|
|
|
6.86
|
|
|
|
8.96
|
|
|
Return on average
tangible common equity (c)
|
|
7.94
|
|
|
|
7.64
|
|
|
|
10.01
|
|
|
Net interest margin
(TE)
|
|
2.76
|
|
|
|
2.89
|
|
|
|
2.88
|
|
|
Cash efficiency
ratio (c)
|
|
69.0
|
|
|
|
66.6
|
|
|
|
65.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
total assets
|
|
.82
|
%
|
|
|
.79
|
%
|
|
|
1.02
|
%
|
|
Return on average
common equity
|
|
7.26
|
|
|
|
6.90
|
|
|
|
9.07
|
|
|
Return on average
tangible common equity (c)
|
|
8.06
|
|
|
|
7.68
|
|
|
|
10.14
|
|
|
Net interest margin
(TE)
|
|
2.74
|
|
|
|
2.83
|
|
|
|
2.85
|
|
|
Loan to deposit
(d)
|
|
85.3
|
|
|
|
85.7
|
|
|
|
87.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratios at
period end
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity to assets
|
|
11.18
|
%
|
|
|
11.25
|
%
|
|
|
11.19
|
%
|
|
Key common
shareholders' equity to assets
|
|
10.90
|
|
|
|
10.95
|
|
|
|
10.89
|
|
|
Tangible common
equity to tangible assets (c)
|
|
9.95
|
|
|
|
9.97
|
|
|
|
9.86
|
|
|
Common Equity Tier
1 (c), (e)
|
|
11.12
|
|
|
|
11.07
|
|
|
|
10.71
|
|
|
Tier 1 risk-based
capital (e)
|
|
11.43
|
|
|
|
11.38
|
|
|
|
11.11
|
|
|
Total risk-based
capital (e)
|
|
13.66
|
|
|
|
13.12
|
|
|
|
12.66
|
|
|
Leverage
(e)
|
|
10.58
|
|
|
|
10.73
|
|
|
|
10.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality —
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan
charge-offs
|
$
|
43
|
|
|
$
|
46
|
|
|
$
|
36
|
|
|
Net loan charge-offs
to average loans
|
|
.28
|
%
|
|
|
.31
|
%
|
|
|
.25
|
%
|
|
Allowance for loan
and lease losses
|
$
|
854
|
|
|
$
|
826
|
|
|
$
|
796
|
|
|
Allowance for credit
losses
|
|
904
|
|
|
|
895
|
|
|
|
841
|
|
|
Allowance for loan
and lease losses to period-end loans
|
|
1.38
|
%
|
|
|
1.37
|
%
|
|
|
1.37
|
%
|
|
Allowance for credit
losses to period-end loans
|
|
1.46
|
|
|
|
1.48
|
|
|
|
1.44
|
|
|
Allowance for loan
and lease losses to nonperforming loans
(f)
|
|
138.0
|
|
|
|
122.2
|
|
|
|
190.0
|
|
|
Allowance for credit
losses to nonperforming loans (f)
|
|
146.0
|
|
|
|
132.4
|
|
|
|
200.7
|
|
|
Nonperforming loans
at period end (f)
|
$
|
619
|
|
|
$
|
676
|
|
|
$
|
419
|
|
|
Nonperforming assets
at period end (f)
|
|
637
|
|
|
|
692
|
|
|
|
440
|
|
|
Nonperforming loans
to period-end portfolio loans (f)
|
|
1.00
|
%
|
|
|
1.12
|
%
|
|
|
.72
|
%
|
|
Nonperforming assets
to period-end portfolio loans plus OREO and other nonperforming
assets (f)
|
|
1.03
|
|
|
|
1.14
|
|
|
|
.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and
brokerage assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets under
management
|
$
|
34,535
|
|
|
$
|
34,107
|
|
|
$
|
38,399
|
|
|
Nonmanaged and
brokerage assets
|
|
52,102
|
|
|
|
49,474
|
|
|
|
48,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
|
|
|
|
|
|
Average full-time
equivalent employees
|
|
13,419
|
|
|
|
13,403
|
|
|
|
13,455
|
|
|
Branches
|
|
949
|
|
|
|
961
|
|
|
|
989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
7
|
|
Financial
Highlights (continued)
|
(dollars in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
|
|
6-30-16
|
|
|
6-30-15
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
1,217
|
|
|
$
|
1,168
|
|
|
Noninterest
income
|
|
904
|
|
|
|
925
|
|
|
|
Total revenue
(TE)
|
|
2,121
|
|
|
|
2,093
|
|
|
Provision for credit
losses
|
|
141
|
|
|
|
76
|
|
|
Noninterest
expense
|
|
1,454
|
|
|
|
1,380
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
386
|
|
|
|
463
|
|
|
Income (loss) from
discontinued operations, net of taxes
(a)
|
|
4
|
|
|
|
8
|
|
|
Net income (loss)
attributable to Key
|
|
390
|
|
|
|
471
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
375
|
|
|
$
|
452
|
|
|
Income (loss) from
discontinued operations, net of taxes
(a)
|
|
4
|
|
|
|
8
|
|
|
Net income (loss)
attributable to Key common shareholders
|
|
379
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.45
|
|
|
$
|
.53
|
|
|
Income (loss) from
discontinued operations, net of taxes
(a)
|
|
—
|
|
|
|
.01
|
|
|
Net income (loss)
attributable to Key common shareholders
(b)
|
|
.45
|
|
|
|
.54
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
|
.44
|
|
|
|
.52
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming dilution
(a)
|
|
—
|
|
|
|
.01
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(b)
|
|
.45
|
|
|
|
.53
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
paid
|
|
.16
|
|
|
|
.14
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
|
|
|
|
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
|
|
|
|
Return on average
total assets
|
|
.81
|
%
|
|
|
1.03
|
%
|
|
Return on average
common equity
|
|
7.01
|
|
|
|
8.86
|
|
|
Return on average
tangible common equity (c)
|
|
7.79
|
|
|
|
9.91
|
|
|
Net interest margin
(TE)
|
|
2.83
|
|
|
|
2.89
|
|
|
Cash efficiency
ratio (c)
|
|
67.8
|
|
|
|
65.1
|
|
|
|
|
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
|
|
|
|
Return on average
total assets
|
|
.80
|
%
|
|
|
1.02
|
%
|
|
Return on average
common equity
|
|
7.08
|
|
|
|
9.01
|
|
|
Return on average
tangible common equity (c)
|
|
7.87
|
|
|
|
10.08
|
|
|
Net interest margin
(TE)
|
|
2.80
|
|
|
|
2.86
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality —
from continuing operations
|
|
|
|
|
|
|
|
|
Net loan
charge-offs
|
$
|
89
|
|
|
$
|
64
|
|
|
Net loan charge-offs
to average total loans
|
|
.30
|
%
|
|
|
.22
|
%
|
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
|
|
Average full-time
equivalent employees
|
|
13,411
|
|
|
|
13,512
|
|
|
|
|
|
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
$
|
16
|
|
|
$
|
13
|
|
|
|
|
|
(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)
|
6-30-16 ratio is
estimated.
|
|
|
(f)
|
Nonperforming loan
balances exclude $11 million, $11 million, and $12 million of
purchased credit impaired loans at June 30, 2016, March 31, 2016,
and June 30, 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 tangible common
equity," "Common Equity Tier 1," "pre-provision net revenue,"
certain financial measures excluding merger-related expense, and
"cash efficiency ratio."
The tangible common equity ratio and the return on tangible
common equity ratio have been a focus for some investors, and
management believes these ratios may assist investors in analyzing
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.
On October 30, 2015, Key announced
that it entered into a definitive agreement and plan of merger to
acquire First Niagara Financial Group. As a result of this
pending transaction, Key has recognized merger-related
expense. The table below shows the computation for
noninterest expense excluding merger-related expense, earnings per
common share excluding merger-related expense, and return on
average assets from continuing operations excluding merger-related
expense. Management believes that eliminating the effects of
the merger-related expense 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 expense.
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
|
|
|
|
|
|
6-30-16
|
|
|
3-31-16
|
|
|
6-30-15
|
|
Tangible common
equity to tangible assets at period end
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
|
11,313
|
|
|
$
|
11,066
|
|
|
$
|
10,590
|
|
|
Less:
|
Intangible
assets (a)
|
|
1,074
|
|
|
|
1,077
|
|
|
|
1,085
|
|
|
|
Preferred Stock,
Series A (b)
|
|
281
|
|
|
|
281
|
|
|
|
281
|
|
|
|
Tangible common
equity (non-GAAP)
|
$
|
9,958
|
|
|
$
|
9,708
|
|
|
$
|
9,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
(GAAP)
|
$
|
101,150
|
|
|
$
|
98,402
|
|
|
$
|
94,606
|
|
|
Less:
|
Intangible
assets (a)
|
|
1,074
|
|
|
|
1,077
|
|
|
|
1,085
|
|
|
|
Tangible assets
(non-GAAP)
|
$
|
100,076
|
|
|
$
|
97,325
|
|
|
$
|
93,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common
equity to tangible assets ratio (non-GAAP)
|
|
9.95
|
%
|
|
|
9.97
|
%
|
|
|
9.86
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier
1 at period end
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
|
11,313
|
|
|
$
|
11,066
|
|
|
|
10,590
|
|
|
Less:
|
Preferred Stock,
Series A (b)
|
|
281
|
|
|
|
281
|
|
|
|
281
|
|
|
|
Common Equity Tier 1
capital before adjustments and deductions
|
|
11,032
|
|
|
|
10,785
|
|
|
|
10,309
|
|
|
Less:
|
Goodwill, net of
deferred taxes
|
|
1,033
|
|
|
|
1,033
|
|
|
|
1,034
|
|
|
|
Intangible assets,
net of deferred taxes
|
|
30
|
|
|
|
35
|
|
|
|
33
|
|
|
|
Deferred tax
assets
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
Net unrealized gains
(losses) on available-for-sale securities, net of deferred
taxes
|
|
129
|
|
|
|
70
|
|
|
|
—
|
|
|
|
Accumulated gains
(losses) on cash flow hedges, net of deferred
taxes
|
|
77
|
|
|
|
46
|
|
|
|
(20)
|
|
|
|
Amounts in
accumulated other comprehensive income (loss) attributed
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
pension and
postretirement benefit costs, net of deferred
taxes
|
|
(362)
|
|
|
|
(365)
|
|
|
|
(361)
|
|
|
|
Total Common Equity
Tier 1 capital (c)
|
$
|
10,124
|
|
|
$
|
9,965
|
|
|
|
9,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net risk-weighted
assets (regulatory) (c)
|
$
|
91,021
|
|
|
$
|
90,014
|
|
|
|
89,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
ratio (non-GAAP) (c)
|
|
11.12
|
%
|
|
|
11.07
|
%
|
|
|
10.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense excluding merger-related expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
751
|
|
|
$
|
703
|
|
|
$
|
711
|
|
|
Less:
|
Merger-related
expense
|
|
45
|
|
|
|
24
|
|
|
|
—
|
|
|
|
Noninterest expense
excluding merger-related expense (non-GAAP)
|
$
|
706
|
|
|
$
|
679
|
|
|
$
|
711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share (EPS) excluding merger-related
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from continuing
operations attributable to Key common shareholders ─
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assuming
dilution
|
$
|
.23
|
|
|
$
|
.22
|
|
|
$
|
.27
|
|
|
Add:
|
EPS impact of
merger-related expense
|
|
.04
|
|
|
|
.02
|
|
|
|
—
|
|
|
|
EPS from continuing
operations attributable to Key common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
excluding
merger-related expense (non-GAAP)
|
$
|
.27
|
|
|
$
|
.24
|
|
|
$
|
.27
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
6-30-16
|
|
|
3-31-16
|
|
|
6-30-15
|
|
Pre-provision net
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
597
|
|
|
$
|
604
|
|
|
$
|
584
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
|
8
|
|
|
|
8
|
|
|
|
7
|
|
|
|
Noninterest
income
|
|
473
|
|
|
|
431
|
|
|
|
488
|
|
|
Less:
|
Noninterest
expense
|
|
751
|
|
|
|
703
|
|
|
|
711
|
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
$
|
327
|
|
|
$
|
340
|
|
|
$
|
368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible
common equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
$
|
11,147
|
|
|
$
|
10,953
|
|
|
$
|
10,590
|
|
|
Less:
|
Intangible assets
(average) (d)
|
|
1,076
|
|
|
|
1,079
|
|
|
|
1,086
|
|
|
|
Preferred Stock,
Series A (average)
|
|
290
|
|
|
|
290
|
|
|
|
290
|
|
|
|
Average tangible
common equity (non-GAAP)
|
$
|
9,781
|
|
|
$
|
9,584
|
|
|
$
|
9,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
(GAAP)
|
$
|
193
|
|
|
$
|
182
|
|
|
$
|
230
|
|
|
Average tangible
common equity (non-GAAP)
|
|
9,781
|
|
|
|
9,584
|
|
|
|
9,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
(non-GAAP)
|
|
7.94
|
%
|
|
|
7.64
|
%
|
|
|
10.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
|
196
|
|
|
$
|
183
|
|
|
$
|
233
|
|
|
Average tangible
common equity (non-GAAP)
|
|
9,781
|
|
|
|
9,584
|
|
|
|
9,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
|
8.06
|
%
|
|
|
7.68
|
%
|
|
|
10.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency
ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
751
|
|
|
$
|
703
|
|
|
$
|
711
|
|
|
Less:
|
Intangible asset
amortization
|
|
7
|
|
|
|
8
|
|
|
|
9
|
|
|
|
Adjusted noninterest
expense (non-GAAP)
|
|
744
|
|
|
|
695
|
|
|
|
702
|
|
|
Less:
|
Merger-related
expense
|
|
45
|
|
|
|
24
|
|
|
|
—
|
|
|
|
Adjusted noninterest
expense excluding merger-related expense (non-GAAP)
|
$
|
699
|
|
|
$
|
671
|
|
|
$
|
702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
597
|
|
|
$
|
604
|
|
|
$
|
584
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
|
8
|
|
|
|
8
|
|
|
|
7
|
|
|
|
Noninterest
income
|
|
473
|
|
|
|
431
|
|
|
|
488
|
|
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
$
|
1,078
|
|
|
$
|
1,043
|
|
|
$
|
1,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
|
69.0
|
%
|
|
|
66.6
|
%
|
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
excluding merger-related expense (non-GAAP)
|
|
64.8
|
%
|
|
|
64.3
|
%
|
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding merger-related
expense
|
|
|
|
|
|
|
Income from
continuing operations attributable to Key (GAAP)
|
$
|
199
|
|
|
$
|
187
|
|
|
$
|
235
|
|
|
Add:
|
Merger-related
expense, after tax
|
|
28
|
|
|
|
15
|
|
|
|
—
|
|
|
|
Income from
continuing operations atrributable to Key excluding
merger-related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense, after tax (non-GAAP)
|
$
|
227
|
|
|
$
|
202
|
|
|
$
|
235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets
from continuing operations (GAAP)
|
$
|
97,413
|
|
|
$
|
94,477
|
|
|
$
|
91,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding
merger-related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
(non-GAAP)
|
|
.94
|
%
|
|
|
.86
|
%
|
|
|
1.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-16
|
|
|
|
|
|
|
|
|
Common Equity Tier
1 under the Regulatory Capital Rules ("RCR")
(estimates)
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
under current RCR
|
$
|
10,124
|
|
|
|
|
|
|
|
|
|
|
Adjustments from
current RCR to the fully phased-in RCR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
and other intangible assets (e)
|
|
(21)
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
anticipated under the fully phased-in RCR (f)
|
$
|
10,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net risk-weighted
assets under current RCR
|
$
|
91,021
|
|
|
|
|
|
|
|
|
|
|
Adjustments from
current RCR to the fully phased-in RCR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage servicing
assets (g)
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
Volcker
funds
|
|
(224)
|
|
|
|
|
|
|
|
|
|
|
|
All other
assets
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-weighted
assets anticipated under the fully phased-in RCR
(f)
|
$
|
91,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
ratio under the fully phased-in RCR (f)
|
|
11.07
|
%
|
|
|
|
|
|
|
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
|
|
|
|
|
|
6-30-16
|
|
|
6-30-15
|
|
Pre-provision net
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
|
|
|
|
$
|
1,201
|
|
|
$
|
1,155
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
|
|
|
|
|
16
|
|
|
|
13
|
|
|
|
Noninterest income
(GAAP)
|
|
|
|
|
|
904
|
|
|
|
925
|
|
|
Less:
|
Noninterest expense
(GAAP)
|
|
|
|
|
|
1,454
|
|
|
|
1,380
|
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
|
|
|
|
$
|
667
|
|
|
$
|
713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible
common equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
|
|
|
|
$
|
11,050
|
|
|
$
|
10,580
|
|
|
Less:
|
Intangible assets
(average) (h)
|
|
|
|
|
|
1,077
|
|
|
|
1,088
|
|
|
|
Preferred Stock,
Series A (average)
|
|
|
|
|
|
290
|
|
|
|
290
|
|
|
|
Average tangible
common equity (non-GAAP)
|
|
|
|
|
$
|
9,683
|
|
|
$
|
9,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
(GAAP)
|
|
|
|
|
$
|
375
|
|
|
$
|
452
|
|
|
Average tangible
common equity (non-GAAP)
|
|
|
|
|
|
9,683
|
|
|
|
9,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
(non-GAAP)
|
|
|
|
|
|
7.79
|
%
|
|
|
9.91
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
|
|
|
|
$
|
379
|
|
|
$
|
460
|
|
|
Average tangible
common equity (non-GAAP)
|
|
|
|
|
|
9,683
|
|
|
|
9,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
|
|
|
|
|
7.87
|
%
|
|
|
10.08
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency
ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
|
|
|
|
$
|
1,454
|
|
|
$
|
1,380
|
|
|
Less:
|
Intangible asset
amortization (GAAP)
|
|
|
|
|
|
15
|
|
|
|
18
|
|
|
|
Adjusted noninterest
expense (non-GAAP)
|
|
|
|
|
|
1,439
|
|
|
|
1,362
|
|
|
Less:
|
Merger-related
expense
|
|
|
|
|
|
69
|
|
|
|
—
|
|
|
|
Adjusted noninterest
expense excluding merger-related expense (non-GAAP)
|
|
|
|
|
$
|
1,370
|
|
|
$
|
1,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
|
|
|
|
$
|
1,201
|
|
|
$
|
1,155
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
|
|
|
|
|
16
|
|
|
|
13
|
|
|
|
Noninterest income
(GAAP)
|
|
|
|
|
|
904
|
|
|
|
925
|
|
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
|
|
|
|
$
|
2,121
|
|
|
$
|
2,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
|
|
|
|
|
67.8
|
%
|
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
excluding merger-related expense (non-GAAP)
|
|
|
|
|
|
64.6
|
%
|
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding merger-related
expense
|
|
|
|
|
|
|
Income from
continuing operations attributable to Key (GAAP)
|
|
|
|
|
$
|
386
|
|
|
$
|
463
|
|
|
Add:
|
Merger-related
expense, after tax
|
|
|
|
|
|
43
|
|
|
|
—
|
|
|
|
Income from
continuing operations atrributable to Key excluding
merger-related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense, after tax (non-GAAP)
|
|
|
|
|
$
|
429
|
|
|
$
|
463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets
from continuing operations (GAAP)
|
|
|
|
|
$
|
95,945
|
|
|
$
|
90,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding
merger-related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
(non-GAAP)
|
|
|
|
|
|
.90
|
%
|
|
|
1.03
|
%
|
(a)
|
For the three months
ended June 30, 2016, March 31, 2016, and June 30, 2015, intangible
assets exclude $36 million, $40 million, and $55 million,
respectively, of period-end purchased credit card
receivables.
|
|
|
(b)
|
Net of capital
surplus.
|
|
|
(c)
|
6-30-16 amount is
estimated.
|
|
|
(d)
|
For the three months
ended June 30, 2016, March 31, 2016, and June 30, 2015, average
intangible assets exclude $38 million, $42 million, and $58
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 six months
ended June 30, 2016, and June 30, 2015, average intangible assets
exclude $40 million and $61 million, respectively, of average
ending purchase credit card receivables.
|
|
|
GAAP = U.S. generally
accepted accounting principles
|
Consolidated
Balance Sheets
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-16
|
|
|
3-31-16
|
|
|
6-30-15
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
62,098
|
|
|
$
|
60,438
|
|
|
$
|
58,264
|
|
Loans held for
sale
|
|
|
442
|
|
|
|
684
|
|
|
|
835
|
|
Securities available
for sale
|
|
|
14,552
|
|
|
|
14,304
|
|
|
|
14,244
|
|
Held-to-maturity
securities
|
|
|
4,832
|
|
|
|
5,003
|
|
|
|
5,022
|
|
Trading account
assets
|
|
|
965
|
|
|
|
765
|
|
|
|
674
|
|
Short-term
investments
|
|
|
6,599
|
|
|
|
5,436
|
|
|
|
3,222
|
|
Other
investments
|
|
|
577
|
|
|
|
643
|
|
|
|
703
|
|
|
Total earning
assets
|
|
|
90,065
|
|
|
|
87,273
|
|
|
|
82,964
|
|
Allowance for loan
and lease losses
|
|
|
(854)
|
|
|
|
(826)
|
|
|
|
(796)
|
|
Cash and due from
banks
|
|
|
496
|
|
|
|
474
|
|
|
|
693
|
|
Premises and
equipment
|
|
|
742
|
|
|
|
750
|
|
|
|
788
|
|
Operating lease
assets
|
|
|
399
|
|
|
|
362
|
|
|
|
296
|
|
Goodwill
|
|
|
1,060
|
|
|
|
1,060
|
|
|
|
1,057
|
|
Other intangible
assets
|
|
|
50
|
|
|
|
57
|
|
|
|
83
|
|
Corporate-owned life
insurance
|
|
|
3,568
|
|
|
|
3,557
|
|
|
|
3,502
|
|
Derivative
assets
|
|
|
1,234
|
|
|
|
1,065
|
|
|
|
536
|
|
Accrued income and
other assets
|
|
|
2,673
|
|
|
|
2,849
|
|
|
|
3,312
|
|
Discontinued
assets
|
|
|
1,717
|
|
|
|
1,781
|
|
|
|
2,169
|
|
|
Total
assets
|
|
$
|
101,150
|
|
|
$
|
98,402
|
|
|
$
|
94,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits in domestic
offices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
|
$
|
40,195
|
|
|
$
|
38,946
|
|
|
$
|
36,024
|
|
|
Savings
deposits
|
|
|
2,355
|
|
|
|
2,385
|
|
|
|
2,370
|
|
|
Certificates of
deposit ($100,000 or more)
|
|
|
3,381
|
|
|
|
3,095
|
|
|
|
2,032
|
|
|
Other time
deposits
|
|
|
3,267
|
|
|
|
3,259
|
|
|
|
3,105
|
|
|
Total interest-bearing
deposits
|
|
|
49,198
|
|
|
|
47,685
|
|
|
|
43,531
|
|
|
Noninterest-bearing
deposits
|
|
|
26,127
|
|
|
|
25,697
|
|
|
|
26,640
|
|
Deposits in foreign
office — interest-bearing
|
|
|
—
|
|
|
|
—
|
|
|
|
498
|
|
|
Total
deposits
|
|
|
75,325
|
|
|
|
73,382
|
|
|
|
70,669
|
|
Federal funds
purchased and securities
sold under
repurchase agreements
|
|
|
360
|
|
|
|
374
|
|
|
|
444
|
|
Bank notes and other
short-term borrowings
|
|
|
687
|
|
|
|
615
|
|
|
|
528
|
|
Derivative
liabilities
|
|
|
746
|
|
|
|
790
|
|
|
|
560
|
|
Accrued expense and
other liabilities
|
|
|
1,326
|
|
|
|
1,410
|
|
|
|
1,537
|
|
Long-term
debt
|
|
|
11,388
|
|
|
|
10,760
|
|
|
|
10,265
|
|
|
Total
liabilities
|
|
|
89,832
|
|
|
|
87,331
|
|
|
|
84,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock,
Series A
|
|
|
290
|
|
|
|
290
|
|
|
|
290
|
|
Common
shares
|
|
|
1,017
|
|
|
|
1,017
|
|
|
|
1,017
|
|
Capital
surplus
|
|
|
3,835
|
|
|
|
3,818
|
|
|
|
3,898
|
|
Retained
earnings
|
|
|
9,166
|
|
|
|
9,042
|
|
|
|
8,614
|
|
Treasury stock, at
cost
|
|
|
(2,881)
|
|
|
|
(2,888)
|
|
|
|
(2,884)
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(114)
|
|
|
|
(213)
|
|
|
|
(345)
|
|
|
Key shareholders'
equity
|
|
|
11,313
|
|
|
|
11,066
|
|
|
|
10,590
|
|
Noncontrolling
interests
|
|
|
5
|
|
|
|
5
|
|
|
|
11
|
|
|
Total
equity
|
|
|
11,318
|
|
|
|
11,071
|
|
|
|
10,601
|
Total liabilities
and equity
|
|
$
|
101,150
|
|
|
$
|
98,402
|
|
|
$
|
94,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding (000)
|
|
|
842,703
|
|
|
|
842,290
|
|
|
|
843,608
|
Consolidated
Statements of Income
|
(dollars in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
|
6-30-16
|
|
|
6-30-15
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
567
|
|
$
|
562
|
|
$
|
532
|
|
|
$
|
1,129
|
|
|
$
|
1,055
|
|
Loans held for
sale
|
|
5
|
|
|
8
|
|
|
12
|
|
|
|
13
|
|
|
|
19
|
|
Securities available
for sale
|
|
74
|
|
|
75
|
|
|
72
|
|
|
|
149
|
|
|
|
142
|
|
Held-to-maturity
securities
|
|
24
|
|
|
24
|
|
|
24
|
|
|
|
48
|
|
|
|
48
|
|
Trading account
assets
|
|
6
|
|
|
7
|
|
|
5
|
|
|
|
13
|
|
|
|
10
|
|
Short-term
investments
|
|
6
|
|
|
4
|
|
|
2
|
|
|
|
10
|
|
|
|
4
|
|
Other
investments
|
|
2
|
|
|
3
|
|
|
5
|
|
|
|
5
|
|
|
|
10
|
|
|
Total interest
income
|
|
684
|
|
|
683
|
|
|
652
|
|
|
|
1,367
|
|
|
|
1,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
34
|
|
|
31
|
|
|
26
|
|
|
|
65
|
|
|
|
52
|
|
Bank notes and other
short-term borrowings
|
|
3
|
|
|
2
|
|
|
2
|
|
|
|
5
|
|
|
|
4
|
|
Long-term
debt
|
|
50
|
|
|
46
|
|
|
40
|
|
|
|
96
|
|
|
|
77
|
|
|
Total interest
expense
|
|
87
|
|
|
79
|
|
|
68
|
|
|
|
166
|
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
597
|
|
|
604
|
|
|
584
|
|
|
|
1,201
|
|
|
|
1,155
|
Provision for credit
losses
|
|
52
|
|
|
89
|
|
|
41
|
|
|
|
141
|
|
|
|
76
|
Net interest income
after provision for credit losses
|
|
545
|
|
|
515
|
|
|
543
|
|
|
|
1,060
|
|
|
|
1,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and investment
services income
|
|
110
|
|
|
109
|
|
|
111
|
|
|
|
219
|
|
|
|
220
|
|
Investment banking
and debt placement fees
|
|
98
|
|
|
71
|
|
|
141
|
|
|
|
169
|
|
|
|
209
|
|
Service charges on
deposit accounts
|
|
68
|
|
|
65
|
|
|
63
|
|
|
|
133
|
|
|
|
124
|
|
Operating lease
income and other leasing gains
|
|
18
|
|
|
17
|
|
|
24
|
|
|
|
35
|
|
|
|
43
|
|
Corporate services
income
|
|
53
|
|
|
50
|
|
|
43
|
|
|
|
103
|
|
|
|
86
|
|
Cards and payments
income
|
|
52
|
|
|
46
|
|
|
47
|
|
|
|
98
|
|
|
|
89
|
|
Corporate-owned life
insurance income
|
|
28
|
|
|
28
|
|
|
30
|
|
|
|
56
|
|
|
|
61
|
|
Consumer mortgage
income
|
|
3
|
|
|
2
|
|
|
4
|
|
|
|
5
|
|
|
|
7
|
|
Mortgage servicing
fees
|
|
10
|
|
|
12
|
|
|
9
|
|
|
|
22
|
|
|
|
22
|
|
Net gains (losses)
from principal investing
|
|
11
|
|
|
—
|
|
|
11
|
|
|
|
11
|
|
|
|
40
|
|
Other income
(a)
|
|
22
|
|
|
31
|
|
|
5
|
|
|
|
53
|
|
|
|
24
|
|
|
Total noninterest
income
|
|
473
|
|
|
431
|
|
|
488
|
|
|
|
904
|
|
|
|
925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
|
|
427
|
|
|
404
|
|
|
408
|
|
|
|
831
|
|
|
|
797
|
|
Net
occupancy
|
|
59
|
|
|
61
|
|
|
66
|
|
|
|
120
|
|
|
|
131
|
|
Computer
processing
|
|
45
|
|
|
43
|
|
|
42
|
|
|
|
88
|
|
|
|
80
|
|
Business services and
professional fees
|
|
40
|
|
|
41
|
|
|
42
|
|
|
|
81
|
|
|
|
75
|
|
Equipment
|
|
21
|
|
|
21
|
|
|
22
|
|
|
|
42
|
|
|
|
44
|
|
Operating lease
expense
|
|
14
|
|
|
13
|
|
|
12
|
|
|
|
27
|
|
|
|
23
|
|
Marketing
|
|
22
|
|
|
12
|
|
|
15
|
|
|
|
34
|
|
|
|
23
|
|
FDIC
assessment
|
|
8
|
|
|
9
|
|
|
8
|
|
|
|
17
|
|
|
|
16
|
|
Intangible asset
amortization
|
|
7
|
|
|
8
|
|
|
9
|
|
|
|
15
|
|
|
|
18
|
|
OREO expense,
net
|
|
2
|
|
|
1
|
|
|
1
|
|
|
|
3
|
|
|
|
3
|
|
Other
expense
|
|
106
|
|
|
90
|
|
|
86
|
|
|
|
196
|
|
|
|
170
|
|
|
Total noninterest
expense
|
|
751
|
|
|
703
|
|
|
711
|
|
|
|
1,454
|
|
|
|
1,380
|
Income (loss) from
continuing operations before income taxes
|
|
267
|
|
|
243
|
|
|
320
|
|
|
|
510
|
|
|
|
624
|
|
Income
taxes
|
|
69
|
|
|
56
|
|
|
84
|
|
|
|
125
|
|
|
|
158
|
Income (loss) from
continuing operations
|
|
198
|
|
|
187
|
|
|
236
|
|
|
|
385
|
|
|
|
466
|
|
Income (loss) from
discontinued operations, net of taxes
|
|
3
|
|
|
1
|
|
|
3
|
|
|
|
4
|
|
|
|
8
|
Net income
(loss)
|
|
201
|
|
|
188
|
|
|
239
|
|
|
|
389
|
|
|
|
474
|
|
Less: Net
income (loss) attributable to noncontrolling interests
|
|
(1)
|
|
|
—
|
|
|
1
|
|
|
|
(1)
|
|
|
|
3
|
Net income (loss)
attributable to Key
|
$
|
202
|
|
$
|
188
|
|
$
|
238
|
|
|
$
|
390
|
|
|
$
|
471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders
|
$
|
193
|
|
$
|
182
|
|
$
|
230
|
|
|
$
|
375
|
|
|
$
|
452
|
Net income (loss)
attributable to Key common shareholders
|
|
196
|
|
|
183
|
|
|
233
|
|
|
|
379
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.23
|
|
$
|
.22
|
|
$
|
.27
|
|
|
$
|
.45
|
|
|
$
|
.53
|
Income (loss) from
discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
.01
|
Net income (loss)
attributable to Key common shareholders
(b)
|
|
.23
|
|
|
.22
|
|
|
.28
|
|
|
|
.45
|
|
|
|
.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share —
assuming dilution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.23
|
|
$
|
.22
|
|
$
|
.27
|
|
|
$
|
.44
|
|
|
$
|
.52
|
Income (loss) from
discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
.01
|
Net income (loss)
attributable to Key common shareholders
(b)
|
|
.23
|
|
|
.22
|
|
|
.27
|
|
|
|
.45
|
|
|
|
.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
.085
|
|
$
|
.075
|
|
$
|
.075
|
|
|
$
|
.16
|
|
|
$
|
.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (000)
|
|
831,899
|
|
|
827,381
|
|
|
839,454
|
|
|
|
829,640
|
|
|
|
843,992
|
|
Effect of common
share options and other stock awards
|
|
6,597
|
|
|
7,679
|
|
|
6,858
|
|
|
|
7,138
|
|
|
|
7,695
|
Weighted-average
common shares and potential common shares outstanding (000)
(c)
|
|
838,496
|
|
|
835,060
|
|
|
846,312
|
|
|
|
836,778
|
|
|
|
851,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For the three months
ended June 30, 2016, March 31, 2016, and June 30, 2015, net
securities gains (losses) totaled less than $1 million. For the
three months ended June 30, 2016, March 31, 2016, and June 30,
2015, Key did not have any impairment losses related to
securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Earnings per share
may not foot due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Assumes conversion of
common share options and other stock awards and/or convertible
preferred stock, as applicable.
|
Consolidated
Average Balance Sheets, and Net Interest Income and Yields/Rates
From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
2016
|
|
|
First Quarter
2016
|
|
|
Second 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)
|
|
$
|
32,630
|
|
$
|
270
|
|
|
3.32
|
%
|
|
$
|
31,590
|
|
$
|
263
|
|
|
3.35
|
%
|
|
$
|
29,017
|
|
$
|
233
|
|
|
3.23
|
%
|
|
Real estate —
commercial mortgage
|
|
|
8,404
|
|
|
80
|
|
|
3.85
|
|
|
|
8,138
|
|
|
77
|
|
|
3.78
|
|
|
|
7,981
|
|
|
74
|
|
|
3.70
|
|
|
Real estate —
construction
|
|
|
869
|
|
|
8
|
|
|
3.78
|
|
|
|
1,016
|
|
|
10
|
|
|
4.11
|
|
|
|
1,199
|
|
|
11
|
|
|
3.60
|
|
|
Commercial lease
financing
|
|
|
3,949
|
|
|
37
|
|
|
3.77
|
|
|
|
3,957
|
|
|
36
|
|
|
3.65
|
|
|
|
3,981
|
|
|
36
|
|
|
3.58
|
|
|
|
Total commercial loans
|
|
|
45,852
|
|
|
395
|
|
|
3.47
|
|
|
|
44,701
|
|
|
386
|
|
|
3.47
|
|
|
|
42,178
|
|
|
354
|
|
|
3.36
|
|
|
Real estate —
residential mortgage
|
|
|
2,253
|
|
|
22
|
|
|
4.11
|
|
|
|
2,236
|
|
|
24
|
|
|
4.18
|
|
|
|
2,237
|
|
|
23
|
|
|
4.22
|
|
|
Home equity
loans
|
|
|
10,098
|
|
|
102
|
|
|
4.04
|
|
|
|
10,240
|
|
|
103
|
|
|
4.06
|
|
|
|
10,510
|
|
|
104
|
|
|
3.98
|
|
|
Consumer direct
loans
|
|
|
1,599
|
|
|
26
|
|
|
6.53
|
|
|
|
1,593
|
|
|
26
|
|
|
6.53
|
|
|
|
1,571
|
|
|
26
|
|
|
6.52
|
|
|
Credit
cards
|
|
|
792
|
|
|
21
|
|
|
10.58
|
|
|
|
784
|
|
|
21
|
|
|
10.72
|
|
|
|
737
|
|
|
19
|
|
|
10.57
|
|
|
Consumer indirect
loans
|
|
|
554
|
|
|
9
|
|
|
6.56
|
|
|
|
602
|
|
|
10
|
|
|
6.44
|
|
|
|
745
|
|
|
12
|
|
|
6.38
|
|
|
|
Total consumer loans
|
|
|
15,296
|
|
|
180
|
|
|
4.74
|
|
|
|
15,455
|
|
|
184
|
|
|
4.76
|
|
|
|
15,800
|
|
|
184
|
|
|
4.69
|
|
|
|
Total loans
|
|
|
61,148
|
|
|
575
|
|
|
3.78
|
|
|
|
60,156
|
|
|
570
|
|
|
3.80
|
|
|
|
57,978
|
|
|
538
|
|
|
3.72
|
|
|
Loans held for
sale
|
|
|
611
|
|
|
5
|
|
|
3.18
|
|
|
|
826
|
|
|
8
|
|
|
4.02
|
|
|
|
1,263
|
|
|
12
|
|
|
3.91
|
|
|
Securities available
for sale (b), (e)
|
|
|
14,268
|
|
|
74
|
|
|
2.08
|
|
|
|
14,207
|
|
|
75
|
|
|
2.12
|
|
|
|
13,360
|
|
|
73
|
|
|
2.17
|
|
|
Held-to-maturity
securities (b)
|
|
|
4,883
|
|
|
24
|
|
|
1.98
|
|
|
|
4,817
|
|
|
24
|
|
|
2.01
|
|
|
|
4,965
|
|
|
24
|
|
|
1.91
|
|
|
Trading account
assets
|
|
|
967
|
|
|
6
|
|
|
2.28
|
|
|
|
817
|
|
|
7
|
|
|
3.50
|
|
|
|
805
|
|
|
5
|
|
|
2.55
|
|
|
Short-term
investments
|
|
|
5,559
|
|
|
6
|
|
|
.45
|
|
|
|
3,432
|
|
|
4
|
|
|
.46
|
|
|
|
3,228
|
|
|
2
|
|
|
.26
|
|
|
Other investments
(e)
|
|
|
610
|
|
|
2
|
|
|
1.54
|
|
|
|
647
|
|
|
3
|
|
|
1.73
|
|
|
|
713
|
|
|
5
|
|
|
2.48
|
|
|
|
Total earning assets
|
|
|
88,046
|
|
|
692
|
|
|
3.16
|
|
|
|
84,902
|
|
|
691
|
|
|
3.27
|
|
|
|
82,312
|
|
|
659
|
|
|
3.21
|
|
|
Allowance for loan
and lease losses
|
|
|
(833)
|
|
|
|
|
|
|
|
|
|
(803)
|
|
|
|
|
|
|
|
|
|
(793)
|
|
|
|
|
|
|
|
|
Accrued income and
other assets
|
|
|
10,200
|
|
|
|
|
|
|
|
|
|
10,378
|
|
|
|
|
|
|
|
|
|
10,139
|
|
|
|
|
|
|
|
|
Discontinued
assets
|
|
|
1,738
|
|
|
|
|
|
|
|
|
|
1,804
|
|
|
|
|
|
|
|
|
|
2,194
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
99,151
|
|
|
|
|
|
|
|
|
$
|
96,281
|
|
|
|
|
|
|
|
|
$
|
93,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
|
$
|
39,687
|
|
|
16
|
|
|
.17
|
|
|
$
|
37,708
|
|
|
15
|
|
|
.16
|
|
|
$
|
36,122
|
|
|
14
|
|
|
.16
|
|
|
Savings
deposits
|
|
|
2,375
|
|
|
—
|
|
|
.02
|
|
|
|
2,349
|
|
|
—
|
|
|
.02
|
|
|
|
2,393
|
|
|
—
|
|
|
.02
|
|
|
Certificates of
deposit ($100,000 or more) (f)
|
|
|
3,233
|
|
|
11
|
|
|
1.39
|
|
|
|
2,761
|
|
|
10
|
|
|
1.37
|
|
|
|
2,010
|
|
|
6
|
|
|
1.25
|
|
|
Other time
deposits
|
|
|
3,252
|
|
|
7
|
|
|
.85
|
|
|
|
3,200
|
|
|
6
|
|
|
.79
|
|
|
|
3,136
|
|
|
5
|
|
|
.70
|
|
|
Deposits in foreign
office
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
583
|
|
|
1
|
|
|
.23
|
|
|
|
Total interest-bearing deposits
|
|
|
48,547
|
|
|
34
|
|
|
.29
|
|
|
|
46,018
|
|
|
31
|
|
|
.27
|
|
|
|
44,244
|
|
|
26
|
|
|
.24
|
|
|
Federal funds
purchased and securities
sold under
repurchase agreements
|
|
|
337
|
|
|
—
|
|
|
.01
|
|
|
|
437
|
|
|
—
|
|
|
.07
|
|
|
|
557
|
|
|
—
|
|
|
.02
|
|
|
Bank notes and other
short-term borrowings
|
|
|
694
|
|
|
3
|
|
|
1.39
|
|
|
|
591
|
|
|
2
|
|
|
1.63
|
|
|
|
657
|
|
|
2
|
|
|
1.39
|
|
|
Long-term debt
(f), (g)
|
|
|
9,294
|
|
|
50
|
|
|
2.25
|
|
|
|
8,566
|
|
|
46
|
|
|
2.19
|
|
|
|
6,967
|
|
|
40
|
|
|
2.30
|
|
|
|
Total interest-bearing liabilities
|
|
|
58,872
|
|
|
87
|
|
|
.60
|
|
|
|
55,612
|
|
|
79
|
|
|
.57
|
|
|
|
52,425
|
|
|
68
|
|
|
.52
|
|
|
Noninterest-bearing
deposits
|
|
|
25,357
|
|
|
|
|
|
|
|
|
|
25,580
|
|
|
|
|
|
|
|
|
|
26,594
|
|
|
|
|
|
|
|
|
Accrued expense and
other liabilities
|
|
|
2,032
|
|
|
|
|
|
|
|
|
|
2,322
|
|
|
|
|
|
|
|
|
|
2,039
|
|
|
|
|
|
|
|
|
Discontinued
liabilities (g)
|
|
|
1,738
|
|
|
|
|
|
|
|
|
|
1,804
|
|
|
|
|
|
|
|
|
|
2,194
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
87,999
|
|
|
|
|
|
|
|
|
|
85,318
|
|
|
|
|
|
|
|
|
|
83,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
|
|
11,147
|
|
|
|
|
|
|
|
|
|
10,953
|
|
|
|
|
|
|
|
|
|
10,590
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
5
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
11,152
|
|
|
|
|
|
|
|
|
|
10,963
|
|
|
|
|
|
|
|
|
|
10,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
99,151
|
|
|
|
|
|
|
|
|
$
|
96,281
|
|
|
|
|
|
|
|
|
$
|
93,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(TE)
|
|
|
|
|
|
|
|
|
2.56
|
%
|
|
|
|
|
|
|
|
|
2.70
|
%
|
|
|
|
|
|
|
|
|
2.69
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(TE) and net interest margin (TE)
|
|
|
|
|
|
605
|
|
|
2.76
|
%
|
|
|
|
|
|
612
|
|
|
2.89
|
%
|
|
|
|
|
|
591
|
|
|
2.88
|
%
|
TE adjustment
(b)
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
Net interest income,
GAAP basis
|
|
|
|
|
$
|
597
|
|
|
|
|
|
|
|
|
$
|
604
|
|
|
|
|
|
|
|
|
$
|
584
|
|
|
|
|
(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 $87 million, $85 million,
and $88 million of assets from commercial credit cards for the
three months ended June 30, 2016, March 31, 2016, and June 30,
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2016
|
|
|
Six months ended
June 30, 2015
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
Balance
|
|
Interest
|
(a)
|
Yield/Rate
|
(a)
|
|
Balance
|
|
Interest
|
(a)
|
Yield/
Rate
|
(a)
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (b),
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial
and agricultural (d)
|
$
|
32,110
|
|
$
|
533
|
|
|
3.33
|
%
|
|
$
|
28,671
|
|
$
|
456
|
|
|
3.21
|
%
|
|
Real estate —
commercial mortgage
|
|
8,271
|
|
|
157
|
|
|
3.81
|
|
|
|
8,038
|
|
|
147
|
|
|
3.68
|
|
|
Real estate —
construction
|
|
942
|
|
|
18
|
|
|
3.96
|
|
|
|
1,169
|
|
|
22
|
|
|
3.75
|
|
|
Commercial lease
financing
|
|
3,953
|
|
|
73
|
|
|
3.71
|
|
|
|
4,025
|
|
|
72
|
|
|
3.57
|
|
|
|
Total commercial loans
|
|
45,276
|
|
|
781
|
|
|
3.47
|
|
|
|
41,903
|
|
|
697
|
|
|
3.35
|
|
|
Real estate —
residential mortgage
|
|
2,245
|
|
|
46
|
|
|
4.15
|
|
|
|
2,233
|
|
|
47
|
|
|
4.24
|
|
|
Home equity
loans
|
|
10,169
|
|
|
205
|
|
|
4.05
|
|
|
|
10,543
|
|
|
208
|
|
|
3.99
|
|
|
Consumer direct
loans
|
|
1,596
|
|
|
52
|
|
|
6.53
|
|
|
|
1,558
|
|
|
51
|
|
|
6.57
|
|
|
Credit
cards
|
|
788
|
|
|
42
|
|
|
10.65
|
|
|
|
735
|
|
|
39
|
|
|
10.79
|
|
|
Consumer indirect
loans
|
|
578
|
|
|
19
|
|
|
6.50
|
|
|
|
774
|
|
|
25
|
|
|
6.40
|
|
|
Total consumer loans
|
|
15,376
|
|
|
364
|
|
|
4.75
|
|
|
|
15,843
|
|
|
370
|
|
|
4.71
|
|
|
Total loans
|
|
60,652
|
|
|
1,145
|
|
|
3.79
|
|
|
|
57,746
|
|
|
1,067
|
|
|
3.72
|
|
|
Loans held for
sale
|
|
718
|
|
|
13
|
|
|
3.66
|
|
|
|
1,030
|
|
|
19
|
|
|
3.68
|
|
|
Securities available
for sale (b), (e)
|
|
14,238
|
|
|
149
|
|
|
2.10
|
|
|
|
13,225
|
|
|
143
|
|
|
2.17
|
|
|
Held-to-maturity
securities (b)
|
|
4,850
|
|
|
48
|
|
|
2.00
|
|
|
|
4,956
|
|
|
48
|
|
|
1.92
|
|
|
Trading account
assets
|
|
892
|
|
|
13
|
|
|
2.83
|
|
|
|
762
|
|
|
10
|
|
|
2.67
|
|
|
Short-term
investments
|
|
4,495
|
|
|
10
|
|
|
.45
|
|
|
|
2,816
|
|
|
4
|
|
|
.26
|
|
|
Other investments
(e)
|
|
629
|
|
|
5
|
|
|
1.64
|
|
|
|
727
|
|
|
10
|
|
|
2.64
|
|
|
Total earning assets
|
|
86,474
|
|
|
1,383
|
|
|
3.21
|
|
|
|
81,262
|
|
|
1,301
|
|
|
3.22
|
|
|
Allowance for loan
and lease losses
|
|
(818)
|
|
|
|
|
|
|
|
|
|
(793)
|
|
|
|
|
|
|
|
|
Accrued income and
other assets
|
|
10,289
|
|
|
|
|
|
|
|
|
|
10,179
|
|
|
|
|
|
|
|
|
Discontinued
assets
|
|
1,771
|
|
|
|
|
|
|
|
|
|
2,232
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
97,716
|
|
|
|
|
|
|
|
|
$
|
92,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
38,698
|
|
|
31
|
|
|
.16
|
|
|
$
|
35,540
|
|
|
27
|
|
|
.15
|
|
|
Savings
deposits
|
|
2,362
|
|
|
—
|
|
|
.02
|
|
|
|
2,389
|
|
|
—
|
|
|
.02
|
|
|
Certificates of
deposit ($100,000 or more) (f)
|
|
2,997
|
|
|
21
|
|
|
1.38
|
|
|
|
2,014
|
|
|
13
|
|
|
1.28
|
|
|
Other time
deposits
|
|
3,226
|
|
|
13
|
|
|
.82
|
|
|
|
3,176
|
|
|
11
|
|
|
.71
|
|
|
Deposits in foreign
office
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
556
|
|
|
1
|
|
|
.23
|
|
|
|
Total interest-bearing deposits
|
|
47,283
|
|
|
65
|
|
|
.28
|
|
|
|
43,675
|
|
|
52
|
|
|
.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds
purchased and securities
sold under repurchase
agreements
|
|
387
|
|
|
—
|
|
|
.04
|
|
|
|
638
|
|
|
—
|
|
|
.03
|
|
|
Bank notes and other
short-term borrowings
|
|
643
|
|
|
5
|
|
|
1.50
|
|
|
|
582
|
|
|
4
|
|
|
1.46
|
|
|
Long-term debt
(f), (g)
|
|
8,930
|
|
|
96
|
|
|
2.22
|
|
|
|
6,548
|
|
|
77
|
|
|
2.40
|
|
|
|
Total interest-bearing liabilities
|
|
57,243
|
|
|
166
|
|
|
.59
|
|
|
|
51,443
|
|
|
133
|
|
|
.52
|
|
|
Noninterest-bearing
deposits
|
|
25,468
|
|
|
|
|
|
|
|
|
|
26,432
|
|
|
|
|
|
|
|
|
Accrued expense and
other liabilities
|
|
2,177
|
|
|
|
|
|
|
|
|
|
2,182
|
|
|
|
|
|
|
|
|
Discontinued
liabilities (g)
|
|
1,771
|
|
|
|
|
|
|
|
|
|
2,232
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
86,659
|
|
|
|
|
|
|
|
|
|
82,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
|
11,050
|
|
|
|
|
|
|
|
|
|
10,580
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
7
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
Total equity
|
|
11,057
|
|
|
|
|
|
|
|
|
|
10,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
$
|
97,716
|
|
|
|
|
|
|
|
|
$
|
92,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(TE)
|
|
|
|
|
|
|
|
2.62
|
%
|
|
|
|
|
|
|
|
|
2.70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(TE) and net interest margin (TE)
|
|
|
|
|
1,217
|
|
|
2.83
|
%
|
|
|
|
|
|
1,168
|
|
|
2.89
|
%
|
TE adjustment
(b)
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
Net interest income,
GAAP basis
|
|
|
|
$
|
1,201
|
|
|
|
|
|
|
|
|
$
|
1,155
|
|
|
|
|
(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 $86 million and $88
million of assets from commercial credit cards for the six months
ended June 30, 2016, and June 30, 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
|
|
Six months
ended
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
6-30-16
|
|
6-30-15
|
Personnel
(a)
|
$
|
427
|
|
$
|
404
|
|
$
|
408
|
|
$
|
831
|
|
$
|
797
|
Net
occupancy
|
|
59
|
|
|
61
|
|
|
66
|
|
|
120
|
|
|
131
|
Computer
processing
|
|
45
|
|
|
43
|
|
|
42
|
|
|
88
|
|
|
80
|
Business services and
professional fees
|
|
40
|
|
|
41
|
|
|
42
|
|
|
81
|
|
|
75
|
Equipment
|
|
21
|
|
|
21
|
|
|
22
|
|
|
42
|
|
|
44
|
Operating lease
expense
|
|
14
|
|
|
13
|
|
|
12
|
|
|
27
|
|
|
23
|
Marketing
|
|
22
|
|
|
12
|
|
|
15
|
|
|
34
|
|
|
23
|
FDIC
assessment
|
|
8
|
|
|
9
|
|
|
8
|
|
|
17
|
|
|
16
|
Intangible asset
amortization
|
|
7
|
|
|
8
|
|
|
9
|
|
|
15
|
|
|
18
|
OREO expense,
net
|
|
2
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
Other
expense
|
|
106
|
|
|
90
|
|
|
86
|
|
|
196
|
|
|
170
|
Total noninterest
expense
|
$
|
751
|
|
$
|
703
|
|
$
|
711
|
|
$
|
1,454
|
|
$
|
1,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-related
expense (b)
|
|
45
|
|
|
24
|
|
|
—
|
|
|
69
|
|
|
—
|
Total noninterest expense
excluding merger-related expense (c)
|
$
|
706
|
|
$
|
679
|
|
$
|
711
|
|
$
|
1,385
|
|
$
|
1,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average full-time
equivalent employees (d)
|
|
13,419
|
|
|
13,403
|
|
|
13,455
|
|
|
13,411
|
|
|
13,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Additional
detail provided in Personnel Expense table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Additional
detail provided in Merger-Related Expense table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Non-GAAP
measure. See the table entitled "GAAP to Non-GAAP
Reconciliations" in this financial supplement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) The number
of average full-time equivalent employees has not been adjusted for
discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
Expense
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
6-30-16
|
|
6-30-15
|
Salaries and contract
labor
|
$
|
266
|
|
$
|
244
|
|
$
|
239
|
|
$
|
510
|
|
$
|
467
|
Incentive and
stock-based compensation
|
|
101
|
|
|
89
|
|
|
109
|
|
|
190
|
|
|
192
|
Employee
benefits
|
|
58
|
|
|
68
|
|
|
55
|
|
|
126
|
|
|
127
|
Severance
|
|
2
|
|
|
3
|
|
|
5
|
|
|
5
|
|
|
11
|
Total personnel
expense
|
$
|
427
|
|
$
|
404
|
|
$
|
408
|
|
$
|
831
|
|
$
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-Related
Expense
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
6-30-16
|
|
6-30-15
|
Personnel
(a)
|
$
|
35
|
|
$
|
16
|
|
|
—
|
|
$
|
51
|
|
|
—
|
Business services and
professional fees
|
|
5
|
|
|
7
|
|
|
—
|
|
|
12
|
|
|
—
|
Marketing
|
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
—
|
Other nonpersonnel
expense
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
Total merger-related expense
(b)
|
$
|
45
|
|
$
|
24
|
|
|
—
|
|
$
|
69
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Personnel
expense includes technology development related to systems
conversion and fully-dedicated personnel for merger and integration
efforts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Non-GAAP
measure. See the table entitled "GAAP to Non-GAAP
Reconciliations" in this financial supplement.
|
Loan
Composition
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
6-30-16 vs.
|
|
|
|
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
3-31-16
|
|
6-30-15
|
|
Commercial, financial
and agricultural (a)
|
$
|
33,376
|
|
$
|
31,976
|
|
$
|
29,285
|
|
|
4.4
|
%
|
|
14.0
|
%
|
Commercial real
estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
mortgage
|
|
8,582
|
|
|
8,364
|
|
|
7,874
|
|
|
2.6
|
|
|
9.0
|
|
|
Construction
|
|
881
|
|
|
841
|
|
|
1,254
|
|
|
4.8
|
|
|
(29.7)
|
|
|
Total commercial real estate
loans
|
|
9,463
|
|
|
9,205
|
|
|
9,128
|
|
|
2.8
|
|
|
3.7
|
|
Commercial lease
financing (b)
|
|
3,988
|
|
|
3,934
|
|
|
4,010
|
|
|
1.4
|
|
|
(.5)
|
|
|
Total commercial
loans
|
|
46,827
|
|
|
45,115
|
|
|
42,423
|
|
|
3.8
|
|
|
10.4
|
|
Residential — prime
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate —
residential mortgage
|
|
2,285
|
|
|
2,234
|
|
|
2,252
|
|
|
2.3
|
|
|
1.5
|
|
|
Home equity
loans
|
|
10,062
|
|
|
10,149
|
|
|
10,532
|
|
|
(.9)
|
|
|
(4.5)
|
|
Total residential —
prime loans
|
|
12,347
|
|
|
12,383
|
|
|
12,784
|
|
|
(.3)
|
|
|
(3.4)
|
|
Consumer direct
loans
|
|
1,584
|
|
|
1,579
|
|
|
1,595
|
|
|
.3
|
|
|
(.7)
|
|
Credit
cards
|
|
813
|
|
|
782
|
|
|
753
|
|
|
4.0
|
|
|
8.0
|
|
Consumer indirect
loans
|
|
527
|
|
|
579
|
|
|
709
|
|
|
(9.0)
|
|
|
(25.7)
|
|
|
Total consumer
loans
|
|
15,271
|
|
|
15,323
|
|
|
15,841
|
|
|
(.3)
|
|
|
(3.6)
|
|
|
Total loans (c),
(d)
|
$
|
62,098
|
|
$
|
60,438
|
|
$
|
58,264
|
|
|
2.7
|
%
|
|
6.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Held for
Sale Composition
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
6-30-16 vs.
|
|
|
|
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
3-31-16
|
|
6-30-15
|
|
Commercial, financial
and agricultural
|
$
|
150
|
|
$
|
103
|
|
$
|
217
|
|
|
45.6
|
%
|
|
(30.9)
|
%
|
Real estate —
commercial mortgage
|
|
270
|
|
|
562
|
|
|
576
|
|
|
(52.0)
|
|
|
(53.1)
|
|
Commercial lease
financing
|
|
3
|
|
|
—
|
|
|
7
|
|
|
N/M
|
|
|
(57.1)
|
|
Real estate —
residential mortgage
|
|
19
|
|
|
19
|
|
|
35
|
|
|
—
|
|
|
(45.7)
|
|
|
Total loans held for
sale (e)
|
$
|
442
|
|
$
|
684
|
|
$
|
835
|
|
|
(35.4)
|
%
|
|
(47.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Changes
in Loans Held for Sale
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q15
|
|
Balance at beginning
of period
|
$
|
684
|
|
$
|
639
|
|
$
|
916
|
|
$
|
835
|
|
$
|
1,649
|
|
|
New
originations
|
|
1,539
|
|
|
1,114
|
|
|
1,655
|
|
|
1,673
|
|
|
1,650
|
|
|
Transfers from (to)
held to maturity, net
|
|
22
|
|
|
—
|
|
|
22
|
|
|
24
|
|
|
6
|
|
|
Loan sales
|
|
(1,802)
|
|
|
(1,108)
|
|
|
(1,943)
|
|
|
(1,616)
|
|
|
(2,466)
|
|
|
Loan draws
(payments), net
|
|
(1)
|
|
|
39
|
|
|
(11)
|
|
|
—
|
|
|
(4)
|
|
Balance at end of
period (e)
|
$
|
442
|
|
$
|
684
|
|
$
|
639
|
|
$
|
916
|
|
$
|
835
|
|
(a)
|
Loan balances include
$88 million, $85 million, and $89 million of commercial credit card
balances at June 30, 2016, March 31, 2016, and June 30, 2015,
respectively.
|
|
|
(b)
|
Commercial lease
financing includes receivables held as collateral for a secured
borrowing of $102 million, $115 million, and $191 million at June
30, 2016, March 31, 2016, and June 30, 2015, respectively.
Principal reductions are based on the cash payments received from
these related receivables.
|
|
|
(c)
|
At June 30, 2016,
total loans include purchased loans of $104 million, of which $11
million were purchased credit impaired. At March 31, 2016, total
loans include purchased loans of $109 million, of which $11 million
were purchased credit impaired. At June 30, 2015, total loans
include purchased loans of $125 million, of which $12 million were
purchased credit impaired.
|
|
|
(d)
|
Total loans exclude
loans of $1.7 billion at June 30, 2016, $1.8 billion at March 31,
2016, and $2 billion at June 30, 2015, related to the discontinued
operations of the education lending business.
|
|
|
(e)
|
Total loans held for
sale exclude loans held for sale of $179 million at June 30, 2015,
related to the discontinued operations of the education lending
business.
|
|
|
N/M = Not
Meaningful
|
Exit Loan
Portfolio From Continuing Operations
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Outstanding
|
|
Change
6-30-16
vs.
|
|
Net
Loan
Charge-offs
|
|
Balance
on
|
|
|
|
|
Nonperforming
Status
|
|
6-30-16
|
|
3-31-16
|
|
3-31-16
|
|
2Q16
|
|
|
1Q16
|
|
6-30-16
|
|
3-31-16
|
Residential
properties — homebuilder
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
$
|
4
|
|
$
|
3
|
Commercial lease
financing (a)
|
$
|
731
|
|
$
|
743
|
|
$
|
(12)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
—
|
|
|
—
|
Total commercial
loans
|
|
731
|
|
|
743
|
|
|
(12)
|
|
|
1
|
|
|
|
1
|
|
|
4
|
|
|
3
|
Home equity —
Other
|
|
183
|
|
|
195
|
|
|
(12)
|
|
|
1
|
|
|
|
1
|
|
|
7
|
|
|
7
|
Marine
|
|
496
|
|
|
544
|
|
|
(48)
|
|
|
3
|
|
|
|
2
|
|
|
3
|
|
|
4
|
RV and other
consumer
|
|
35
|
|
|
39
|
|
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
Total consumer
loans
|
|
714
|
|
|
778
|
|
|
(64)
|
|
|
4
|
|
|
|
3
|
|
|
10
|
|
|
11
|
Total exit loans in loan
portfolio
|
$
|
1,445
|
|
$
|
1,521
|
|
$
|
(76)
|
|
$
|
5
|
|
|
$
|
4
|
|
$
|
14
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations — education
lending
business (not included in exit loans above)
|
$
|
1,692
|
|
$
|
1,760
|
|
$
|
(68)
|
|
$
|
4
|
|
|
$
|
6
|
|
$
|
5
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes (1) the
business aviation, commercial vehicle, office products,
construction, and industrial leases; (2) Canadian lease financing
portfolios; (3) European lease financing portfolios; and (4) all
remaining balances related to lease in, lease out; sale in, lease
out; service contract leases; and qualified technological equipment
leases.
|
Asset Quality
Statistics From Continuing Operations
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q16
|
|
|
1Q16
|
|
|
4Q15
|
|
|
3Q15
|
|
|
2Q15
|
|
Net loan
charge-offs
|
$
|
43
|
|
$
|
46
|
|
$
|
37
|
|
$
|
41
|
|
$
|
36
|
|
Net loan charge-offs
to average total loans
|
|
.28
|
%
|
|
.31
|
%
|
|
.25
|
%
|
|
.27
|
%
|
|
.25
|
%
|
Allowance for loan
and lease losses
|
$
|
854
|
|
$
|
826
|
|
$
|
796
|
|
$
|
790
|
|
$
|
796
|
|
Allowance for credit
losses (a)
|
|
904
|
|
|
895
|
|
|
852
|
|
|
844
|
|
|
841
|
|
Allowance for loan
and lease losses to period-end loans
|
|
1.38
|
%
|
|
1.37
|
%
|
|
1.33
|
%
|
|
1.31
|
%
|
|
1.37
|
%
|
Allowance for credit
losses to period-end loans
|
|
1.46
|
|
|
1.48
|
|
|
1.42
|
|
|
1.40
|
|
|
1.44
|
|
Allowance for loan
and lease losses to nonperforming loans (b)
|
|
138.0
|
|
|
122.2
|
|
|
205.7
|
|
|
197.5
|
|
|
190.0
|
|
Allowance for credit
losses to nonperforming loans (b)
|
|
146.0
|
|
|
132.4
|
|
|
220.2
|
|
|
211.0
|
|
|
200.7
|
|
Nonperforming loans
at period end (b)
|
$
|
619
|
|
$
|
676
|
|
$
|
387
|
|
$
|
400
|
|
$
|
419
|
|
Nonperforming assets
at period end (b)
|
|
637
|
|
|
692
|
|
|
403
|
|
|
417
|
|
|
440
|
|
Nonperforming loans
to period-end portfolio loans (b)
|
|
1.00
|
%
|
|
1.12
|
%
|
|
.65
|
%
|
|
.67
|
%
|
|
.72
|
%
|
Nonperforming assets
to period-end portfolio loans plus
OREO and other
nonperforming assets (b)
|
|
1.03
|
|
|
1.14
|
|
|
.67
|
|
|
.69
|
|
|
.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $11 million, $11 million, $11 million, $12
million, and $12 million of purchased credit impaired loans
at June 30, 2016, March 31, 2016, December 31, 2015,
September 30, 2015, and June 30, 2015, respectively.
|
Summary of Loan
and Lease Loss Experience From Continuing
Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
6-30-16
|
|
3-31-16
|
|
6-30-15
|
|
6-30-16
|
|
6-30-15
|
|
Average loans
outstanding
|
$
|
61,148
|
|
$
|
60,156
|
|
$
|
57,978
|
|
$
|
60,652
|
|
$
|
57,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
and lease losses at beginning of period
|
$
|
826
|
|
$
|
796
|
|
$
|
794
|
|
$
|
796
|
|
$
|
794
|
|
Loans charged
off:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and
agricultural
|
|
35
|
|
|
26
|
|
|
21
|
|
|
61
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate — commercial
mortgage
|
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
2
|
|
Real estate —
construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total commercial real estate loans
|
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
3
|
|
Commercial lease
financing
|
|
3
|
|
|
3
|
|
|
1
|
|
|
6
|
|
|
3
|
|
Total commercial loans
|
|
40
|
|
|
30
|
|
|
22
|
|
|
70
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate — residential
mortgage
|
|
1
|
|
|
2
|
|
|
1
|
|
|
3
|
|
|
3
|
|
Home equity loans
|
|
7
|
|
|
10
|
|
|
10
|
|
|
17
|
|
|
18
|
|
Consumer direct
loans
|
|
6
|
|
|
6
|
|
|
6
|
|
|
12
|
|
|
12
|
|
Credit cards
|
|
8
|
|
|
8
|
|
|
8
|
|
|
16
|
|
|
16
|
|
Consumer indirect
loans
|
|
2
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
11
|
|
Total consumer loans
|
|
24
|
|
|
30
|
|
|
30
|
|
|
54
|
|
|
60
|
|
Total loans charged off
|
|
64
|
|
|
60
|
|
|
52
|
|
|
124
|
|
|
99
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and
agricultural
|
|
3
|
|
|
3
|
|
|
6
|
|
|
6
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate — commercial
mortgage
|
|
6
|
|
|
2
|
|
|
—
|
|
|
8
|
|
|
2
|
|
Real estate —
construction
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Total commercial real estate loans
|
|
6
|
|
|
3
|
|
|
1
|
|
|
9
|
|
|
3
|
|
Commercial lease
financing
|
|
2
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
5
|
|
Total commercial loans
|
|
11
|
|
|
6
|
|
|
8
|
|
|
17
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate — residential
mortgage
|
|
—
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
1
|
|
Home equity loans
|
|
4
|
|
|
3
|
|
|
2
|
|
|
7
|
|
|
5
|
|
Consumer direct
loans
|
|
2
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
Credit cards
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
1
|
|
Consumer indirect
loans
|
|
3
|
|
|
1
|
|
|
2
|
|
|
4
|
|
|
5
|
|
Total consumer loans
|
|
10
|
|
|
8
|
|
|
8
|
|
|
18
|
|
|
16
|
|
Total recoveries
|
|
21
|
|
|
14
|
|
|
16
|
|
|
35
|
|
|
35
|
|
Net loan
charge-offs
|
|
(43)
|
|
|
(46)
|
|
|
(36)
|
|
|
(89)
|
|
|
(64)
|
|
Provision (credit)
for loan and lease losses
|
|
71
|
|
|
76
|
|
|
37
|
|
|
147
|
|
|
66
|
|
Foreign currency
translation adjustment
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Allowance for loan
and lease losses at end of period
|
$
|
854
|
|
$
|
826
|
|
$
|
796
|
|
$
|
854
|
|
$
|
796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability for credit
losses on lending-related commitments at beginning of
period
|
$
|
69
|
|
$
|
56
|
|
$
|
41
|
|
$
|
56
|
|
$
|
35
|
|
Provision (credit)
for losses on lending-related commitments
|
|
(19)
|
|
|
13
|
|
|
4
|
|
|
(6)
|
|
|
10
|
|
Liability for credit
losses on lending-related commitments at end of period
(a)
|
$
|
50
|
|
$
|
69
|
|
$
|
45
|
|
$
|
50
|
|
$
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance for
credit losses at end of period
|
$
|
904
|
|
$
|
895
|
|
$
|
841
|
|
$
|
904
|
|
$
|
841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs
to average total loans
|
|
.28
|
%
|
|
.31
|
%
|
|
.25
|
%
|
|
.30
|
%
|
|
.22
|
%
|
Allowance for loan
and lease losses to period-end loans
|
|
1.38
|
|
|
1.37
|
|
|
1.37
|
|
|
1.38
|
|
|
1.37
|
|
Allowance for credit
losses to period-end loans
|
|
1.46
|
|
|
1.48
|
|
|
1.44
|
|
|
1.46
|
|
|
1.44
|
|
Allowance for loan
and lease losses to nonperforming loans
|
|
138.0
|
|
|
122.2
|
|
|
190.0
|
|
|
138.0
|
|
|
190.0
|
|
Allowance for credit
losses to nonperforming loans
|
|
146.0
|
|
|
132.4
|
|
|
200.7
|
|
|
146.0
|
|
|
200.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations — education lending business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans charged off
|
$
|
6
|
|
$
|
9
|
|
$
|
6
|
|
$
|
15
|
|
$
|
16
|
|
Recoveries
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
8
|
|
Net loan
charge-offs
|
$
|
(4)
|
|
$
|
(6)
|
|
$
|
(2)
|
|
$
|
(10)
|
|
$
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-30-16
|
|
3-31-16
|
|
12-31-15
|
|
9-30-15
|
|
6-30-15
|
|
Commercial, financial
and agricultural
|
$
|
321
|
|
$
|
380
|
|
$
|
82
|
|
$
|
89
|
|
$
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
|
14
|
|
|
16
|
|
|
19
|
|
|
23
|
|
|
26
|
|
Real estate —
construction
|
|
25
|
|
|
12
|
|
|
9
|
|
|
9
|
|
|
12
|
|
Total commercial real estate loans
|
|
39
|
|
|
28
|
|
|
28
|
|
|
32
|
|
|
38
|
|
Commercial lease
financing
|
|
10
|
|
|
11
|
|
|
13
|
|
|
21
|
|
|
18
|
|
Total commercial loans
|
|
370
|
|
|
419
|
|
|
123
|
|
|
142
|
|
|
156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate —
residential mortgage
|
|
54
|
|
|
59
|
|
|
64
|
|
|
67
|
|
|
67
|
|
Home equity
loans
|
|
189
|
|
|
191
|
|
|
190
|
|
|
181
|
|
|
184
|
|
Consumer direct
loans
|
|
1
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
Credit
cards
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Consumer indirect
loans
|
|
3
|
|
|
4
|
|
|
6
|
|
|
7
|
|
|
9
|
|
Total consumer loans
|
|
249
|
|
|
257
|
|
|
264
|
|
|
258
|
|
|
263
|
|
Total nonperforming loans (a)
|
|
619
|
|
|
676
|
|
|
387
|
|
|
400
|
|
|
419
|
|
OREO
|
|
15
|
|
|
14
|
|
|
14
|
|
|
17
|
|
|
20
|
|
Other nonperforming
assets
|
|
3
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
1
|
|
Total nonperforming assets
(a)
|
$
|
637
|
|
$
|
692
|
|
$
|
403
|
|
$
|
417
|
|
$
|
440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing loans past
due 90 days or more
|
$
|
70
|
|
$
|
70
|
|
$
|
72
|
|
$
|
54
|
|
$
|
66
|
|
Accruing loans past
due 30 through 89 days
|
|
203
|
|
|
237
|
|
|
208
|
|
|
271
|
|
|
181
|
|
Restructured loans —
accruing and nonaccruing (b)
|
|
277
|
|
|
283
|
|
|
280
|
|
|
287
|
|
|
300
|
|
Restructured loans
included in nonperforming loans (b)
|
|
133
|
|
|
151
|
|
|
159
|
|
|
160
|
|
|
170
|
|
Nonperforming assets
from discontinued operations —
education lending
business
|
|
5
|
|
|
6
|
|
|
7
|
|
|
8
|
|
|
6
|
|
Nonperforming loans
to period-end portfolio loans (a)
|
|
1.00
|
%
|
|
1.12
|
%
|
|
.65
|
%
|
|
.67
|
%
|
|
.72
|
%
|
Nonperforming assets
to period-end portfolio loans
plus OREO and other
nonperforming assets (a)
|
|
1.03
|
|
|
1.14
|
|
|
.67
|
|
|
.69
|
|
|
.75
|
|
(a)
|
Nonperforming loan
balances exclude $11 million, $11 million, $11 million, $12
million, and $12 million of purchased credit impaired loans at June
30, 2016, March 31, 2016, December 31, 2015, September 30, 2015,
and June 30, 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q15
|
Balance at beginning
of period
|
|
$
|
676
|
|
$
|
387
|
|
$
|
400
|
|
$
|
419
|
|
$
|
437
|
Loans placed on nonaccrual
status
|
|
|
124
|
|
|
406
|
|
|
81
|
|
|
81
|
|
|
92
|
Charge-offs
|
|
|
(64)
|
|
|
(60)
|
|
|
(51)
|
|
|
(53)
|
|
|
(52)
|
Loans sold
|
|
|
—
|
|
|
(11)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
Payments
|
|
|
(75)
|
|
|
(8)
|
|
|
(21)
|
|
|
(16)
|
|
|
(25)
|
Transfers to OREO
|
|
|
(6)
|
|
|
(4)
|
|
|
(4)
|
|
|
(4)
|
|
|
(5)
|
Transfers to other
nonperforming assets
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
—
|
Loans returned to accrual
status
|
|
|
(36)
|
|
|
(34)
|
|
|
(17)
|
|
|
(25)
|
|
|
(28)
|
Balance at end of
period (a)
|
|
$
|
619
|
|
$
|
676
|
|
$
|
387
|
|
$
|
400
|
|
$
|
419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Nonperforming loan balances exclude $11 million, $11 million, $11
million, $12 million, and $12 million of purchased credit impaired
loans at June 30, 2016, March 31, 2016, December 31, 2015,
September 30, 2015, and June 30, 2015, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Changes
in Other Real Estate Owned, Net of Allowance, From Continuing
Operations
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q15
|
Balance at beginning
of period
|
|
$
|
14
|
|
$
|
14
|
|
$
|
17
|
|
$
|
20
|
|
$
|
20
|
Properties acquired —
nonperforming loans
|
|
|
6
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
5
|
Valuation
adjustments
|
|
|
(2)
|
|
|
(1)
|
|
|
(2)
|
|
|
(2)
|
|
|
(1)
|
Properties sold
|
|
|
(3)
|
|
|
(3)
|
|
|
(5)
|
|
|
(5)
|
|
|
(4)
|
Balance at end of
period
|
|
$
|
15
|
|
$
|
14
|
|
$
|
14
|
|
$
|
17
|
|
$
|
20
|
Line of Business
Results
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
2Q16 vs.
|
|
|
|
2Q16
|
|
1Q16
|
|
4Q15
|
|
3Q15
|
|
2Q15
|
|
1Q16
|
|
2Q15
|
|
Key Community
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
|
$
|
598
|
|
$
|
595
|
|
$
|
588
|
|
$
|
579
|
|
$
|
560
|
|
|
.5
|
%
|
|
6.8
|
%
|
Provision for credit
losses
|
|
|
25
|
|
|
42
|
|
|
20
|
|
|
18
|
|
|
3
|
|
|
(40.5)
|
|
|
733.3
|
|
Noninterest
expense
|
|
|
444
|
|
|
436
|
|
|
456
|
|
|
444
|
|
|
447
|
|
|
1.8
|
|
|
(.7)
|
|
Net income (loss)
attributable to Key
|
|
|
81
|
|
|
74
|
|
|
70
|
|
|
74
|
|
|
69
|
|
|
9.5
|
|
|
17.4
|
|
Average loans and
leases
|
|
|
30,936
|
|
|
30,789
|
|
|
30,925
|
|
|
31,039
|
|
|
30,707
|
|
|
.5
|
|
|
.7
|
|
Average deposits
|
|
|
53,794
|
|
|
52,803
|
|
|
52,219
|
|
|
51,234
|
|
|
50,765
|
|
|
1.9
|
|
|
6.0
|
|
Net loan
charge-offs
|
|
|
17
|
|
|
23
|
|
|
23
|
|
|
21
|
|
|
20
|
|
|
(26.1)
|
|
|
(15.0)
|
|
Net loan charge-offs to
average total loans
|
|
|
.22
|
%
|
|
.30
|
%
|
|
.30
|
%
|
|
.27
|
%
|
|
.26
|
%
|
|
N/A
|
|
|
N/A
|
|
Nonperforming assets at
period end
|
|
$
|
300
|
|
$
|
303
|
|
$
|
303
|
|
$
|
306
|
|
$
|
305
|
|
|
(1.0)
|
|
|
(1.6)
|
|
Return on average allocated
equity
|
|
|
11.99
|
%
|
|
11.09
|
%
|
|
10.39
|
%
|
|
10.92
|
%
|
|
10.34
|
%
|
|
N/A
|
|
|
N/A
|
|
Average full-time equivalent
employees
|
|
|
7,331
|
|
|
7,376
|
|
|
7,390
|
|
|
7,476
|
|
|
7,574
|
|
|
(.6)
|
|
|
(3.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Corporate
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
|
$
|
452
|
|
$
|
426
|
|
$
|
479
|
|
$
|
454
|
|
$
|
478
|
|
|
6.1
|
%
|
|
(5.4)
|
%
|
Provision for credit
losses
|
|
|
30
|
|
|
43
|
|
|
26
|
|
|
30
|
|
|
41
|
|
|
(30.2)
|
|
|
(26.8)
|
|
Noninterest
expense
|
|
|
259
|
|
|
237
|
|
|
257
|
|
|
250
|
|
|
256
|
|
|
9.3
|
|
|
1.2
|
|
Net income (loss)
attributable to Key
|
|
|
135
|
|
|
118
|
|
|
142
|
|
|
136
|
|
|
131
|
|
|
14.4
|
|
|
3.1
|
|
Average loans and leases
|
|
|
28,607
|
|
|
27,722
|
|
|
26,981
|
|
|
26,425
|
|
|
25,298
|
|
|
3.2
|
|
|
13.1
|
|
Average loans held for sale
|
|
|
591
|
|
|
811
|
|
|
820
|
|
|
918
|
|
|
1,234
|
|
|
(27.1)
|
|
|
(52.1)
|
|
Average
deposits
|
|
|
19,129
|
|
|
18,074
|
|
|
19,080
|
|
|
18,809
|
|
|
19,709
|
|
|
5.8
|
|
|
(2.9)
|
|
Net loan
charge-offs
|
|
|
27
|
|
|
18
|
|
|
12
|
|
|
20
|
|
|
12
|
|
|
50.0
|
|
|
125.0
|
|
Net loan charge-offs to
average total loans
|
|
|
.38
|
%
|
|
.26
|
%
|
|
.18
|
%
|
|
.30
|
%
|
|
.19
|
%
|
|
N/A
|
|
|
N/A
|
|
Nonperforming assets at
period end
|
|
$
|
319
|
|
$
|
372
|
|
$
|
74
|
|
$
|
85
|
|
$
|
105
|
|
|
(14.2)
|
|
|
203.8
|
|
Return on average allocated
equity
|
|
|
26.23
|
%
|
|
23.15
|
%
|
|
29.05
|
%
|
|
28.29
|
%
|
|
29.24
|
%
|
|
N/A
|
|
|
N/A
|
|
Average full-time equivalent
employees
|
|
|
2,138
|
|
|
2,126
|
|
|
2,113
|
|
|
2,173
|
|
|
2,058
|
|
|
.6
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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-second-quarter-2016-net-income-of-193-million-or-23-per-common-share-earnings-per-common-share-of-27-excluding-04-of-merger-related-expense-300303914.html
SOURCE KeyCorp