CLEVELAND, Oct. 21, 2020 /PRNewswire/ -- KeyCorp (NYSE:
KEY) today announced net income from continuing operations
attributable to Key common shareholders of $397 million, or $.41 per diluted common share for the third
quarter of 2020. This compared to $159
million, or $.16 per diluted
common share, for the second quarter of 2020 and $383 million, or $.38 per diluted common share, for the third
quarter of 2019, which included $.10
per diluted common share related to notable items.
Key's third quarter results reflect continued momentum in our
businesses, strong credit discipline and investments we have made
to strengthen our franchise. Our success also demonstrates
the resiliency and dedication of our team in serving our clients
and supporting our communities.
In the third quarter, revenue increased 3% from the prior
year, driven by strong balance sheet growth and higher fee
income. Average loans and deposits were both up double-digits
from the same period last year, reflecting the impact from the
Paycheck Protection Program, as well as strong loan originations
from consumer mortgage and Laurel Road. Noninterest income
benefitted from higher cards and payments activity and growth in
consumer mortgage fees.
During the quarter, expense levels reflected higher variable
costs from production-related incentives and cards and payments
activity, as well as elevated pandemic-related costs associated
with keeping our teammates and clients safe. Through our
continuous improvement efforts, we are maintaining our focus on
expenses – improving our efficiency while continuing to invest for
growth, including our digital capabilities across our
franchise.
Importantly, we remain committed to strong risk management
practices and being disciplined with our capital. Our Common
Equity Tier 1 ratio ended the quarter at 9.5%, up 40 basis points
from the prior quarter, and at the upper end of our targeted
range.
Despite the challenges presented by the pandemic, low
interest rates and economic uncertainty, we are confident that Key
is well-positioned to navigate the current environment while
concurrently assisting in the recovery phase and investing in our
bright future.
- Chris Gorman, Chairman
and CEO
Selected Financial
Highlights
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dollars in
millions, except per share data
|
|
|
|
|
Change 3Q20
vs.
|
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
397
|
|
$
|
159
|
|
$
|
383
|
|
|
149.7
|
%
|
3.7
|
%
|
Income (loss) from
continuing operations attributable to Key common shareholders
per common share — assuming dilution
|
.41
|
|
.16
|
|
.38
|
|
|
156.3
|
|
7.9
|
|
Return on average
tangible common equity from continuing operations
(a)
|
12.19
|
%
|
4.96
|
%
|
12.38
|
%
|
|
N/A
|
|
N/A
|
|
Return on average
total assets from continuing operations
|
1.00
|
|
.45
|
|
1.14
|
|
|
N/A
|
|
N/A
|
|
Common Equity Tier 1
ratio (b)
|
9.5
|
|
9.1
|
|
9.5
|
|
|
N/A
|
|
N/A
|
|
Book value at period
end
|
$
|
16.25
|
|
$
|
16.07
|
|
$
|
15.44
|
|
|
1.1
|
%
|
5.2
|
%
|
Net interest margin
(TE) from continuing operations
|
2.62
|
%
|
2.76
|
%
|
3.00
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The table entitled
"GAAP to Non-GAAP Reconciliations" in the attached financial
supplement presents the computations of certain financial measures
related to "Return on average tangible common equity from
continuing operations." The table reconciles the GAAP performance
measures to the corresponding non-GAAP measures, which provides a
basis for period-to-period comparisons.
|
(b)
|
9/30/20 ratio is
estimated.
|
TE = Taxable
Equivalent, N/A = Not Applicable
|
INCOME STATEMENT
HIGHLIGHTS
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Revenue
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|
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|
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|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Net interest income
(TE)
|
$
|
1,006
|
|
$
|
1,025
|
|
$
|
980
|
|
|
(1.9)
|
%
|
2.7
|
%
|
Noninterest
income
|
681
|
|
692
|
|
650
|
|
|
(1.6)
|
|
4.8
|
|
Total
revenue
|
$
|
1,687
|
|
$
|
1,717
|
|
$
|
1,630
|
|
|
(1.7)
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%
|
3.5
|
%
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent
|
Taxable-equivalent net interest income was $1.0 billion for the third quarter of 2020,
compared to taxable-equivalent net interest income of $980 million for the third quarter of 2019. The
increase in net interest income reflects higher earning asset
balances partially offset by a lower net interest margin. The net
interest margin was impacted by lower interest rates and a change
in balance sheet mix, including elevated levels of liquidity and
Key's participation in the Paycheck Protection Program
("PPP").
Compared to the second quarter of 2020, taxable-equivalent net
interest income decreased by $19
million, primarily reflecting lower loan balances. The lower
net interest margin was driven by a shift in balance sheet mix,
reflecting continued elevated levels of liquidity.
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Trust and investment
services income
|
$
|
128
|
|
$
|
123
|
|
$
|
118
|
|
|
4.1
|
%
|
8.5
|
%
|
Investment banking
and debt placement fees
|
146
|
|
156
|
|
176
|
|
|
(6.4)
|
|
(17.0)
|
|
Service charges on
deposit accounts
|
77
|
|
68
|
|
86
|
|
|
13.2
|
|
(10.5)
|
|
Operating lease
income and other leasing gains
|
38
|
|
60
|
|
42
|
|
|
(36.7)
|
|
(9.5)
|
|
Corporate services
income
|
51
|
|
52
|
|
63
|
|
|
(1.9)
|
|
(19.0)
|
|
Cards and payments
income
|
114
|
|
91
|
|
69
|
|
|
25.3
|
|
65.2
|
|
Corporate-owned life
insurance income
|
30
|
|
35
|
|
32
|
|
|
(14.3)
|
|
(6.3)
|
|
Consumer mortgage
income
|
51
|
|
62
|
|
16
|
|
|
(17.7)
|
|
218.8
|
|
Commercial mortgage
servicing fees
|
18
|
|
12
|
|
21
|
|
|
50.0
|
|
(14.3)
|
|
Other
income
|
28
|
|
33
|
|
27
|
|
|
(15.2)
|
|
3.7
|
|
Total noninterest
income
|
$
|
681
|
|
$
|
692
|
|
$
|
650
|
|
|
(1.6)
|
%
|
4.8
|
%
|
|
|
|
|
|
|
|
Compared to the third quarter of 2019, noninterest income
increased by $31 million, primarily
driven by a $45 million increase in
cards and payments income related to higher prepaid card activity.
Additionally, consumer mortgage income increased $35 million from the year-ago period, driven by
strong loan originations and related fees. These increases were
partially offset by a $30 million
decline in investment banking and debt placement fees, primarily
driven by lower loan syndication and M&A fees.
Compared to the second quarter of 2020, noninterest income
decreased by $11 million. The largest
driver of the quarterly decrease was a $22
million decline in operating lease income, related to gains
on the sale of leveraged leases in the prior quarter. Investment
banking and debt placement fees and consumer mortgage income
delivered solid results, but both declined versus the prior
quarter. Partially offsetting these declines was a $23 million increase in cards and payments income
related to higher prepaid card activity and a $9 million increase in service charges on deposit
accounts.
Noninterest
Expense
|
|
|
|
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|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Personnel
expense
|
$
|
588
|
|
$
|
572
|
|
$
|
547
|
|
|
2.8
|
%
|
7.5
|
%
|
Nonpersonnel
expense
|
449
|
|
441
|
|
392
|
|
|
1.8
|
|
14.5
|
|
Total noninterest
expense
|
$
|
1,037
|
|
$
|
1,013
|
|
$
|
939
|
|
|
2.4
|
%
|
10.4
|
%
|
|
|
|
|
|
|
|
Key's noninterest expense was $1.0
billion for the third quarter of 2020, an increase of
$98 million from the year-ago period.
The increase is primarily related to higher payments-related
expenses from prepaid card activity incurred in the current period,
as well as COVID-19-related costs related to steps that the company
has taken to ensure the health and safety of teammates. Personnel
costs increased by $41 million,
reflecting higher production-related incentives, merit increases
and employee benefits costs.
Compared to the second quarter of 2020, noninterest expense
increased $24 million. The increase
was largely due to payments-related costs (in other expense), as
well as higher employee benefits costs, which drove an increase in
personnel costs quarter over quarter.
BALANCE SHEET
HIGHLIGHTS
|
|
|
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Average
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Commercial and
industrial (a)
|
$
|
57,067
|
|
$
|
60,480
|
|
$
|
48,322
|
|
|
(5.6)
|
%
|
18.1
|
%
|
Other commercial
loans
|
19,677
|
|
19,850
|
|
19,016
|
|
|
(.9)
|
|
3.5
|
|
Total consumer
loans
|
28,175
|
|
27,611
|
|
24,618
|
|
|
2.0
|
|
14.4
|
|
Total loans
|
$
|
104,919
|
|
$
|
107,941
|
|
$
|
91,956
|
|
|
(2.8)
|
%
|
14.1
|
%
|
|
|
|
|
|
|
|
|
|
(a)
|
Commercial and
industrial average loan balances include $129 million, $135
million, and $144 million of assets from commercial credit cards at
September 30, 2020, June 30, 2020, and September 30,
2019, respectively.
|
Average loans were $104.9 billion
for the third quarter of 2020, an increase of $13.0 billion compared to the third quarter of
2019. Commercial loans increased $9.4
billion, reflecting growth from PPP, as well as core
broad-based growth in commercial and industrial loans and increased
utilization versus the year-ago period. Consumer loans increased
$3.6 billion, driven by strength from
Laurel Road and Key's consumer mortgage business.
Compared to the second quarter of 2020, average loans decreased
by $3.0 billion. Commercial loans
declined as clients paid down elevated line draws from earlier in
the year, partly offset by growth in PPP average balances. Consumer
loans continue to reflect strength from Laurel Road, as well as
Key's consumer mortgage business.
Average
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Non-time
deposits
|
$
|
127,347
|
|
$
|
118,694
|
|
$
|
97,205
|
|
|
7.3
|
%
|
31.0
|
%
|
Certificates of
deposit ($100,000 or more)
|
3,862
|
|
4,950
|
|
7,625
|
|
|
(22.0)
|
|
(49.4)
|
|
Other time
deposits
|
3,735
|
|
4,333
|
|
5,449
|
|
|
(13.8)
|
|
(31.5)
|
|
Total
deposits
|
$
|
134,944
|
|
$
|
127,977
|
|
$
|
110,279
|
|
|
5.4
|
%
|
22.4
|
%
|
|
|
|
|
|
|
|
Cost of total
deposits
|
.16
|
%
|
.30
|
%
|
.82
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
N/A = Not
Applicable
|
Average deposits totaled $134.9
billion for the third quarter of 2020, an increase of
$24.7 billion compared to the
year-ago quarter, reflecting growth from consumer and commercial
relationships, partially offset by a decline in time deposits as a
result of lower interest rates.
Compared to the second quarter of 2020, average deposits
increased by $7.0 billion, primarily
driven by broad-based commercial growth as well as growth from
consumer stimulus payments and lower consumer spending. This growth
was offset by a continued decline in time deposits.
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Net loan
charge-offs
|
$
|
128
|
|
$
|
96
|
|
$
|
196
|
|
|
33.3
|
%
|
(34.7)
|
%
|
Net loan charge-offs
to average total loans
|
.49
|
%
|
.36
|
%
|
.85
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming loans
at period end
|
$
|
834
|
|
$
|
760
|
|
$
|
585
|
|
|
9.7
|
|
42.6
|
|
Nonperforming assets
at period end
|
1,003
|
|
951
|
|
711
|
|
|
5.5
|
|
41.1
|
|
Allowance for loan
and lease losses
|
1,730
|
|
1,708
|
|
893
|
|
|
1.3
|
|
93.7
|
|
Allowance for credit
losses
|
1,938
|
|
1,906
|
|
958
|
|
|
1.7
|
|
102.3
|
|
Allowance for loan
and lease losses to nonperforming loans
|
207.4
|
%
|
224.7
|
%
|
152.6
|
%
|
|
N/A
|
|
N/A
|
|
Allowance for credit
losses to nonperforming loans
|
232.4
|
|
250.8
|
|
163.8
|
|
|
N/A
|
|
N/A
|
|
Provision for credit
losses
|
$
|
160
|
|
$
|
482
|
|
$
|
200
|
|
|
(66.8)
|
%
|
(20.0)
|
%
|
|
|
|
|
|
|
|
|
N/A = Not
Applicable
|
Key's provision for credit losses was $160 million for the third quarter of 2020,
compared to $200 million for the
third quarter of 2019 (which included $123
million related to a previously-disclosed fraud loss), and
$482 million for the second quarter
of 2020. The provision for credit losses reflects the adoption of a
new accounting standard, often referred to as Current Expected
Credit Losses ("CECL"), beginning in the first quarter of 2020.
This framework requires that management estimate credit losses over
the full remaining expected life and consider expected future
changes in macroeconomic conditions.
The provision for credit losses exceeded net charge-offs by
$32 million. Net loan charge-offs for
the third quarter of 2020 totaled $128
million, or .49% of average total loans. These results
compare to $196 million, or .85%, for
the third quarter of 2019 (which included $123 million related to a previously-disclosed
fraud loss) and $96 million, or .36%,
for the second quarter of 2020. Key's allowance for credit losses
was $1.9 billion, or 1.88% of total
period-end loans at September 30, 2020, compared to 1.03% at
September 30, 2019, and 1.80% at June 30, 2020.
At September 30, 2020, Key's nonperforming loans totaled
$834 million, which represented .81%
of period-end portfolio loans. These results compare to .63% at
September 30, 2019, and .72% at June 30, 2020.
Nonperforming assets at September 30, 2020, totaled
$1.0 billion, and represented .97% of
period-end portfolio loans and OREO and other nonperforming assets.
These results compare to .77% at September 30, 2019, and .89%
at June 30, 2020.
CAPITAL
Key's estimated risk-based capital ratios included in the
following table continued to exceed all "well-capitalized"
regulatory benchmarks at September 30, 2020.
Capital
Ratios
|
|
|
|
|
|
|
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
Common Equity Tier 1
(a)
|
9.5
|
%
|
9.1
|
%
|
9.5
|
%
|
Tier 1 risk-based
capital (a)
|
10.9
|
|
10.5
|
|
10.9
|
|
Total risk based
capital (a)
|
13.3
|
|
12.8
|
|
12.9
|
|
Tangible common
equity to tangible assets (b)
|
7.8
|
|
7.6
|
|
8.6
|
|
Leverage
(a)
|
8.7
|
|
8.8
|
|
9.9
|
|
|
|
|
|
|
|
(a)
|
9/30/2020 ratio is
estimated and reflects Key's election to adopt the CECL optional
transition provision.
|
(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." The table reconciles the GAAP
performance measures to the corresponding non-GAAP measures, which
provides a basis for period-to-period comparisons.
|
Key's capital position remained strong in the third quarter of
2020. As shown in the preceding table, at September 30, 2020,
Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital
ratios stood at 9.5% and 10.9%, respectively. Key's tangible common
equity ratio was 7.8% at September 30, 2020.
Key has elected the CECL phase-in option provided by regulatory
guidance which delays for two years the estimated impact of CECL on
regulatory capital and phases it in over three years beginning in
2022. On a fully phased-in basis, Key's Common Equity Tier 1 ratio
would be reduced by 31 basis points.
Summary of Changes
in Common Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
in
thousands
|
|
|
|
|
Change 3Q20
vs.
|
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Shares outstanding at
beginning of period
|
975,947
|
|
975,319
|
|
1,003,114
|
|
|
.1
|
%
|
(2.7)
|
%
|
Open market
repurchases and return of shares under employee
compensation plans
|
(1)
|
|
(19)
|
|
(15,076)
|
|
|
(94.7)
|
|
(100.0)
|
|
Shares issued under
employee compensation plans (net of cancellations)
|
259
|
|
647
|
|
500
|
|
|
(60.0)
|
|
(48.2)
|
|
|
Shares outstanding at
end of period
|
976,205
|
|
975,947
|
|
988,538
|
|
|
—
|
|
(1.2)
|
%
|
|
|
|
|
|
|
|
|
Consistent with Key's 2020 Capital Plan, during the third
quarter of 2020, Key declared a dividend of $.185 per common share. Per Key's announcement on March 17, 2020, share repurchase activity has
been temporarily suspended in response to the COVID-19
pandemic.
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 3Q20
vs.
|
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Revenue from
continuing operations (TE)
|
|
|
|
|
|
|
Consumer
Bank
|
$
|
871
|
|
$
|
841
|
|
$
|
833
|
|
|
3.6
|
%
|
4.6
|
%
|
Commercial
Bank
|
804
|
|
857
|
|
780
|
|
|
(6.2)
|
|
3.1
|
|
Other
(a)
|
12
|
|
19
|
|
17
|
|
|
(36.8)
|
|
(29.4)
|
|
Total
|
$
|
1,687
|
|
$
|
1,717
|
|
$
|
1,630
|
|
|
(1.7)
|
%
|
3.5
|
%
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
|
|
|
|
|
Consumer
Bank
|
$
|
241
|
|
$
|
91
|
|
$
|
196
|
|
|
164.8
|
%
|
23.0
|
%
|
Commercial
Bank
|
160
|
|
101
|
|
301
|
|
|
58.4
|
|
(46.8)
|
|
Other
(a)
|
23
|
|
(7)
|
|
(84)
|
|
|
N/M
|
|
N/M
|
|
Total
|
$
|
424
|
|
$
|
185
|
|
$
|
413
|
|
|
129.2
|
%
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Other includes other
segments that consists of corporate treasury, our principal
investing unit, and various exit portfolios as well as reconciling
items which primarily represents the unallocated portion of
nonearning assets of corporate support functions. Charges related
to the funding of these assets are part of net interest income and
are allocated to the business segments through noninterest expense.
Reconciling items also includes intercompany eliminations and
certain items that are not allocated to the business segments
because they do not reflect their normal operations.
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Consumer
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
604
|
|
$
|
594
|
|
$
|
595
|
|
|
1.7
|
%
|
1.5
|
%
|
Noninterest
income
|
267
|
|
247
|
|
238
|
|
|
8.1
|
|
12.2
|
|
Total revenue
(TE)
|
871
|
|
841
|
|
833
|
|
|
3.6
|
|
4.6
|
|
Provision for credit
losses
|
(16)
|
|
167
|
|
48
|
|
|
N/M
|
|
N/M
|
|
Noninterest
expense
|
571
|
|
555
|
|
529
|
|
|
2.9
|
|
7.9
|
|
Income (loss) before
income taxes (TE)
|
316
|
|
119
|
|
256
|
|
|
165.5
|
|
23.4
|
|
Allocated income
taxes (benefit) and TE adjustments
|
75
|
|
28
|
|
60
|
|
|
167.9
|
|
25.0
|
|
Net income (loss)
attributable to Key
|
$
|
241
|
|
$
|
91
|
|
$
|
196
|
|
|
164.8
|
%
|
23.0
|
%
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans and
leases
|
$
|
41,471
|
|
$
|
39,197
|
|
$
|
32,760
|
|
|
5.8
|
%
|
26.6
|
%
|
Total
assets
|
44,888
|
|
44,088
|
|
36,397
|
|
|
1.8
|
|
23.3
|
|
Deposits
|
83,175
|
|
79,502
|
|
72,995
|
|
|
4.6
|
|
13.9
|
|
|
|
|
|
|
|
|
Assets under
management at period end
|
$
|
41,312
|
|
$
|
39,722
|
|
$
|
39,416
|
|
|
4.0
|
%
|
4.8
|
%
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent
|
Additional
Consumer Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Noninterest
income
|
|
|
|
|
|
|
Trust and investment
services income
|
$
|
100
|
|
$
|
87
|
|
$
|
90
|
|
|
14.9
|
%
|
11.1
|
%
|
Service charges on
deposit accounts
|
44
|
|
38
|
|
58
|
|
|
15.8
|
|
(24.1)
|
|
Cards and payments
income
|
55
|
|
47
|
|
52
|
|
|
17.0
|
|
5.8
|
|
Consumer mortgage
income
|
51
|
|
62
|
|
16
|
|
|
(17.7)
|
|
218.8
|
|
Other noninterest
income
|
17
|
|
13
|
|
22
|
|
|
30.8
|
|
(22.7)
|
|
Total noninterest
income
|
$
|
267
|
|
$
|
247
|
|
$
|
238
|
|
|
8.1
|
%
|
12.2
|
%
|
|
|
|
|
|
|
|
Average deposit
balances
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
52,550
|
|
$
|
49,152
|
|
$
|
43,638
|
|
|
6.9
|
%
|
20.4
|
%
|
Savings
deposits
|
5,169
|
|
4,817
|
|
4,406
|
|
|
7.3
|
|
17.3
|
|
Certificates of
deposit ($100,000 or more)
|
3,550
|
|
4,520
|
|
6,488
|
|
|
(21.5)
|
|
(45.3)
|
|
Other time
deposits
|
3,701
|
|
4,296
|
|
5,430
|
|
|
(13.9)
|
|
(31.8)
|
|
Noninterest-bearing
deposits
|
18,205
|
|
16,717
|
|
13,033
|
|
|
8.9
|
|
39.7
|
|
Total
deposits
|
$
|
83,175
|
|
$
|
79,502
|
|
$
|
72,995
|
|
|
4.6
|
%
|
13.9
|
%
|
|
|
|
|
|
|
|
Home equity
loans
|
|
|
|
|
|
|
Average
balance
|
$
|
9,528
|
|
$
|
9,893
|
|
$
|
10,413
|
|
|
|
|
Combined
weighted-average loan-to-value ratio (at date of
origination)
|
70
|
%
|
70
|
%
|
70
|
%
|
|
|
|
Percent first lien
positions
|
64
|
|
63
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
Branches
|
1,077
|
|
1,077
|
|
1,101
|
|
|
|
|
Automated teller
machines
|
1,388
|
|
1,394
|
|
1,422
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Bank Summary of Operations (3Q20 vs. 3Q19)
- Net income attributable to Key of $241
million for the third quarter of 2020, compared to
$196 million for the year-ago
quarter
- Taxable-equivalent net interest income increased by
$9 million, or 1.5%, compared to the
third quarter of 2019, as a result of strong balance sheet growth,
partially offset by the lower interest rate environment
- Average loans and leases increased $8.7
billion, or 26.6%, driven by benefit from the PPP, as well
as growth from consumer mortgage and Laurel Road
- Average deposits increased $10.2
billion, or 13.9%, from the third quarter of 2019, driven by
consumer stimulus payments and relationship growth
- Provision for credit losses decreased $64 million compared to the third quarter of
2019, due to lower net charge-offs and a reduced allowance, driven
by improved macroeconomic factors and continued strength in client
credit quality
- Noninterest income increased $29
million, or 12.2%, from the year ago quarter, driven by
strength in consumer mortgage income and higher trust and
investment services income, partially offset by lower consumer
spend activity
- Noninterest expense increased $42
million, or 7.9%, from the year ago quarter driven by higher
variable expenses from production-related incentives and higher
loan volumes
Commercial
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
421
|
|
$
|
452
|
|
$
|
399
|
|
|
(6.9)
|
%
|
5.5
|
%
|
Noninterest
income
|
383
|
|
405
|
|
381
|
|
|
(5.4)
|
|
.5
|
|
Total revenue
(TE)
|
804
|
|
857
|
|
780
|
|
|
(6.2)
|
|
3.1
|
|
Provision for credit
losses
|
163
|
|
314
|
|
32
|
|
|
(48.1)
|
|
409.4
|
|
Noninterest
expense
|
443
|
|
438
|
|
378
|
|
|
1.1
|
|
17.2
|
|
Income (loss) before
income taxes (TE)
|
198
|
|
105
|
|
370
|
|
|
88.6
|
|
(46.5)
|
|
Allocated income
taxes and TE adjustments
|
38
|
|
4
|
|
69
|
|
|
850.0
|
|
(44.9)
|
|
Net income (loss)
attributable to Key
|
$
|
160
|
|
$
|
101
|
|
$
|
301
|
|
|
58.4
|
%
|
(46.8)
|
%
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans and
leases
|
$
|
62,925
|
|
$
|
68,038
|
|
$
|
58,215
|
|
|
(7.5)
|
%
|
8.1
|
%
|
Loans held for
sale
|
1,383
|
|
2,012
|
|
1,325
|
|
|
(31.3)
|
|
4.4
|
|
Total
assets
|
72,613
|
|
76,974
|
|
66,549
|
|
|
(5.7)
|
|
9.1
|
|
Deposits
|
51,238
|
|
47,685
|
|
36,204
|
|
|
7.5
|
%
|
41.5
|
%
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Additional
Commercial Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
|
2Q20
|
3Q19
|
Noninterest
income
|
|
|
|
|
|
|
Trust and investment
services income
|
$
|
28
|
|
$
|
36
|
|
$
|
28
|
|
|
(22.2)
|
%
|
—
|
|
Investment banking
and debt placement fees
|
146
|
|
156
|
|
176
|
|
|
(6.4)
|
|
(17.0)
|
%
|
Operating lease
income and other leasing gains
|
38
|
|
46
|
|
40
|
|
|
(17.4)
|
|
(5.0)
|
|
|
|
|
|
|
|
|
Corporate services
income
|
44
|
|
45
|
|
56
|
|
|
(2.2)
|
|
(21.4)
|
|
Service charges on
deposit accounts
|
32
|
|
30
|
|
27
|
|
|
6.7
|
|
18.5
|
|
Cards and payments
income
|
59
|
|
44
|
|
16
|
|
|
34.1
|
|
268.8
|
|
Payments and services
income
|
135
|
|
119
|
|
99
|
|
|
13.4
|
|
36.4
|
|
|
|
|
|
|
|
|
Commercial mortgage
servicing fees
|
18
|
|
12
|
|
20
|
|
|
50.0
|
|
(10.0)
|
|
Other noninterest
income
|
18
|
|
36
|
|
18
|
|
|
(50.0)
|
|
—
|
|
Total noninterest
income
|
$
|
383
|
|
$
|
405
|
|
$
|
381
|
|
|
(5.4)
|
%
|
.5
|
%
|
|
|
|
|
|
|
|
|
N/M = Not
Meaningful
|
Commercial Bank Summary of Operations (3Q20 vs. 3Q19)
- Net income attributable to Key of $160
million for the third quarter of 2020, compared to
$301 million for the year-ago
quarter
- Taxable-equivalent net interest income increased by
$22 million, or 5.5%, compared to the
third quarter of 2019, with balance sheet growth partially offset
by the lower interest rate environment
- Average loan and lease balances increased $4.7 billion, or 8.1%, compared to the third
quarter of 2019 driven by growth in commercial and industrial loans
from line draws and PPP loans
- Average deposit balances increased $15
billion, or 41.5%, compared to the third quarter of 2019,
driven by growth in targeted relationships and the impact of
government programs
- Provision for credit losses increased $131 million compared to the third quarter of
2019, driven by an increase in net charge-offs and higher reserve
levels
- Noninterest income increased $2
million, from the third quarter of 2019, as higher cards and
payments income related to prepaid card revenue was partially
offset by declines in investment banking and corporate services
income
- Noninterest expense increased by $65
million, or 17.2%, from the third quarter of 2019 driven by
elevated variable expenses related to prepaid card
*******************************************
KeyCorp's roots trace back 190 years to Albany, New York. Headquartered in
Cleveland, Ohio, Key is one of the
nation's largest bank-based financial services companies, with
assets of approximately $170.5
billion at September 30, 2020.
Key provides deposit, lending, cash management, and investment
services to individuals and businesses in 15 states under the name
KeyBank National Association through a network of more than 1,000
branches and approximately 1,400 ATMs. Key also provides a broad
range of sophisticated corporate and investment banking products,
such as merger and acquisition advice, public and private debt and
equity, syndications and derivatives to middle market companies in
selected industries throughout the United
States under the KeyBanc Capital Markets trade name. For
more information, visit https://www.key.com/. KeyBank is Member
FDIC.
INVESTOR
RELATIONS:
|
KEY MEDIA
NEWSROOM:
|
www.key.com/ir
|
www.key.com/newsroom
|
This earnings
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements do not relate strictly to historical or current
facts. Forward-looking statements usually can be identified
by the use of words such as "goal," "objective," "plan," "expect,"
"assume," "anticipate," "intend," "project," "believe," "estimate,"
or other words of similar meaning. Forward-looking statements
provide our current expectations or forecasts of future events,
circumstances, results, or aspirations. Forward-looking statements,
by their nature, are subject to assumptions, risks and
uncertainties, many of which are outside of our control. Our actual
results may differ materially from those set forth in our
forward-looking statements. There is no assurance that any list of
risks and uncertainties or risk factors is complete. Factors
that could cause 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, 2019, as well
as in KeyCorp's subsequent SEC filings, all of which have been or
will be filed with the Securities and Exchange Commission (the
"SEC") and are or will be 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 regulation of the U.S. financial services
industry. In addition to the aforementioned factors, the COVID–19
global pandemic is adversely affecting us, our clients, and
third–party service providers, among others, and its impact may
adversely affect our business and results of operations over a
period of time. 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 Wednesday, October 21,
2020. A replay of the call will be available through
November 4, 2020.
For up-to-date company information, media contacts, and facts
and figures about Key's lines of business, visit our Media Newsroom
at https://www.key.com/newsroom.
*****
KeyCorp
Third Quarter
2020
Financial
Supplement
|
|
|
Page
|
|
13
|
Financial
Highlights
|
14
|
GAAP to Non-GAAP
Reconciliation
|
16
|
Consolidated Balance
Sheets
|
17
|
Consolidated
Statements of Income
|
18
|
Consolidated Average
Balance Sheets, and Net Interest Income and Yields/Rates From
Continuing Operations
|
20
|
Noninterest
Expense
|
20
|
Personnel
Expense
|
21
|
Loan
Composition
|
21
|
Loans Held for Sale
Composition
|
21
|
Summary of Changes in
Loans Held for Sale
|
22
|
Summary of Loan and
Lease Loss Experience From Continuing Operations
|
23
|
Asset Quality
Statistics From Continuing Operations
|
23
|
Summary of
Nonperforming Assets and Past Due Loans From Continuing
Operations
|
23
|
Summary of Changes in
Nonperforming Loans From Continuing Operations
|
24
|
Line of Business
Results
|
Financial
Highlights
|
(dollars in millions,
except per share amounts)
|
|
|
Three months
ended
|
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
Summary of
operations
|
|
|
|
|
Net interest income
(TE)
|
$
|
1,006
|
|
$
|
1,025
|
|
$
|
980
|
|
|
Noninterest
income
|
681
|
|
692
|
|
650
|
|
|
Total
revenue (TE)
|
1,687
|
|
1,717
|
|
1,630
|
|
|
Provision for credit
losses
|
160
|
|
482
|
|
200
|
|
|
Noninterest
expense
|
1,037
|
|
1,013
|
|
939
|
|
|
Income (loss) from
continuing operations attributable to Key
|
424
|
|
185
|
|
413
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
4
|
|
2
|
|
3
|
|
|
Net income (loss)
attributable to Key
|
428
|
|
187
|
|
416
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
397
|
|
159
|
|
383
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
4
|
|
2
|
|
3
|
|
|
Net income (loss)
attributable to Key common shareholders
|
401
|
|
161
|
|
386
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.41
|
|
$
|
.16
|
|
$
|
.39
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders (a)
|
.41
|
|
.17
|
|
.39
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.41
|
|
.16
|
|
.38
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming
dilution
|
—
|
|
—
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(a)
|
.41
|
|
.17
|
|
.39
|
|
|
|
|
|
|
|
Cash dividends
declared
|
.185
|
|
.185
|
|
.185
|
|
|
Book value at period
end
|
16.25
|
|
16.07
|
|
15.44
|
|
|
Tangible book value
at period end
|
13.32
|
|
13.12
|
|
12.48
|
|
|
Market price at
period end
|
11.93
|
|
12.18
|
|
17.84
|
|
|
|
|
|
|
Performance
ratios
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
Return on average
total assets
|
1.00
|
%
|
.45
|
%
|
1.14
|
%
|
|
Return on average
common equity
|
9.98
|
|
4.05
|
|
9.99
|
|
|
Return on average
tangible common equity (b)
|
12.19
|
|
4.96
|
|
12.38
|
|
|
Net interest margin
(TE)
|
2.62
|
|
2.76
|
|
3.00
|
|
|
Cash efficiency ratio
(b)
|
60.6
|
|
57.9
|
|
56.0
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
Return on average
total assets
|
1.00
|
%
|
.46
|
%
|
1.14
|
%
|
|
Return on average
common equity
|
10.08
|
|
4.10
|
|
10.07
|
|
|
Return on average
tangible common equity (b)
|
12.31
|
|
5.02
|
|
12.48
|
|
|
Net interest margin
(TE)
|
2.62
|
|
2.76
|
|
2.98
|
|
|
Loan to deposit
(c)
|
77.2
|
|
80.4
|
|
85.3
|
|
|
|
|
|
|
Capital ratios at
period end
|
|
|
|
|
Key shareholders'
equity to assets
|
10.4
|
%
|
10.2
|
%
|
11.7
|
%
|
|
Key common
shareholders' equity to assets
|
9.3
|
|
9.2
|
|
10.4
|
|
|
Tangible common
equity to tangible assets (b)
|
7.8
|
|
7.6
|
|
8.6
|
|
|
Common Equity Tier 1
(d)
|
9.5
|
|
9.1
|
|
9.5
|
|
|
Tier 1 risk-based
capital (d)
|
10.9
|
|
10.5
|
|
10.9
|
|
|
Total risk-based
capital (d)
|
13.3
|
|
12.8
|
|
12.9
|
|
|
Leverage
(d)
|
8.7
|
|
8.8
|
|
9.9
|
|
|
|
|
|
|
Asset quality —
from continuing operations
|
|
|
|
|
Net loan
charge-offs
|
$
|
128
|
|
$
|
96
|
|
$
|
196
|
|
|
Net loan charge-offs
to average loans
|
.49
|
%
|
.36
|
%
|
.85
|
%
|
|
Allowance for loan
and lease losses
|
$
|
1,730
|
|
$
|
1,708
|
|
$
|
893
|
|
|
Allowance for credit
losses
|
1,938
|
|
1,906
|
|
958
|
|
|
Allowance for loan
and lease losses to period-end loans
|
1.68
|
%
|
1.61
|
%
|
.96
|
%
|
|
Allowance for credit
losses to period-end loans
|
1.88
|
|
1.80
|
|
1.03
|
|
|
Allowance for loan
and lease losses to nonperforming loans (e)
|
207.4
|
|
224.7
|
|
152.6
|
|
|
Allowance for credit
losses to nonperforming loans (e)
|
232.4
|
|
250.8
|
|
163.8
|
|
|
Nonperforming loans
at period-end (e)
|
$
|
834
|
|
$
|
760
|
|
$
|
585
|
|
|
Nonperforming assets
at period-end (e)
|
1,003
|
|
951
|
|
711
|
|
|
Nonperforming loans
to period-end portfolio loans (e)
|
.81
|
%
|
.72
|
%
|
.63
|
%
|
|
Nonperforming assets
to period-end portfolio loans plus OREO and other nonperforming
assets (e)
|
.97
|
|
.89
|
|
.77
|
|
|
|
|
|
|
Trust
assets
|
|
|
|
|
Assets under
management
|
$
|
41,312
|
|
$
|
39,722
|
|
$
|
39,416
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
Average full-time
equivalent employees
|
17,097
|
|
16,646
|
|
16,898
|
|
|
Branches
|
1,077
|
|
1,077
|
|
1,101
|
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
$
|
6
|
|
$
|
7
|
|
$
|
8
|
|
|
|
Financial
Highlights (continued)
|
(dollars in millions,
except per share amounts)
|
|
|
Nine months
ended
|
|
|
9/30/2020
|
9/30/2019
|
Summary of
operations
|
|
Net interest income
(TE)
|
$
|
3,020
|
|
$
|
2,954
|
|
|
Noninterest
income
|
1,850
|
|
1,808
|
|
|
Total revenue
(TE)
|
4,870
|
|
4,762
|
|
|
Provision for credit
losses
|
1,001
|
|
336
|
|
|
Noninterest
expense
|
2,981
|
|
2,921
|
|
|
Income (loss) from
continuing operations attributable to Key
|
754
|
|
1,242
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
7
|
|
6
|
|
|
Net income (loss)
attributable to Key
|
761
|
|
1,248
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
674
|
|
$
|
1,172
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
7
|
|
6
|
|
|
Net income (loss)
attributable to Key common shareholders
|
681
|
|
1,178
|
|
|
|
|
|
Per common
share
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.70
|
|
$
|
1.17
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
.01
|
|
.01
|
|
|
Net income (loss)
attributable to Key common shareholders (a)
|
.70
|
|
1.18
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.69
|
|
1.16
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming
dilution
|
.01
|
|
.01
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(a)
|
.70
|
|
1.17
|
|
|
|
|
|
|
Cash dividends
paid
|
.555
|
|
.525
|
|
|
|
|
|
Performance
ratios
|
|
From continuing
operations:
|
|
|
|
Return on average
total assets
|
.63
|
%
|
1.17
|
%
|
|
Return on average
common equity
|
5.75
|
|
10.62
|
|
|
Return on average
tangible common equity (b)
|
7.06
|
|
13.23
|
|
|
Net interest margin
(TE)
|
2.78
|
|
3.06
|
|
|
Cash efficiency ratio
(b)
|
60.2
|
|
59.9
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
Return on average
total assets
|
.63
|
%
|
1.16
|
%
|
|
Return on average
common equity
|
5.81
|
|
10.68
|
|
|
Return on average
tangible common equity (b)
|
7.13
|
|
13.30
|
|
|
Net interest margin
(TE)
|
2.78
|
|
3.05
|
|
|
|
|
|
Asset quality —
from continuing operations
|
|
Net loan
charge-offs
|
$
|
308
|
|
$
|
325
|
|
|
Net loan charge-offs
to average total loans
|
.40
|
%
|
.48
|
%
|
|
|
|
|
Other
data
|
|
Average full-time
equivalent employees
|
16,758
|
|
17,217
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
21
|
|
24
|
|
|
|
(a)
|
Earnings per share
may not foot due to rounding.
|
(b)
|
The following table
entitled "GAAP to Non-GAAP Reconciliations" presents the
computations of certain financial measures related to "tangible
common equity" 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.
|
(c)
|
Represents period-end
consolidated total loans and loans held for sale divided by
period-end consolidated total deposits.
|
(d)
|
September 30,
2020, ratio is estimated and reflects Key's election to adopt the
CECL optional transition provision.
|
GAAP to Non-GAAP
Reconciliations
(dollars in millions)
|
The table below
presents certain non-GAAP financial measures related to "tangible
common equity," "return on average tangible common equity,"
"pre-provision net revenue," and "cash efficiency ratio" and
certain ratios excluding notable items.
|
|
Notable items include
certain revenue or expense items that may occur in a reporting
period which management does not consider indicative of ongoing
financial performance. Management believes it is useful to consider
certain financial metrics with and without notable items, in order
to enable a better understanding of company results, increase
comparability of period-to-period results, and to evaluate and
forecast those results.
|
|
The tangible common
equity ratio and the return on average tangible common equity ratio
have been a focus for some investors, and management believes these
ratios may assist investors in analyzing Key's capital position
without regard to the effects of intangible assets and preferred
stock.
|
|
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.
|
|
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. Management
believes this ratio provide greater consistency and comparability
between Key's results and those of its peer banks. Additionally,
this ratio is used by analysts and investors as they develop
earnings forecasts and peer bank analysis.
|
|
Non-GAAP financial
measures have inherent limitations, are not required to be
uniformly applied, and are not audited. Although these non-GAAP
financial measures are frequently used by investors to evaluate a
company, they have limitations as analytical tools, and should not
be considered in isolation, or as a substitute for analyses of
results as reported under GAAP.
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Tangible common
equity to tangible assets at period-end
|
|
|
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
|
17,722
|
|
$
|
17,542
|
|
$
|
17,116
|
|
|
|
|
Less: Intangible
assets (a)
|
2,862
|
|
2,877
|
|
2,928
|
|
|
|
|
Preferred
Stock (b)
|
1,856
|
|
1,856
|
|
1,856
|
|
|
|
|
Tangible common equity
(non-GAAP)
|
$
|
13,004
|
|
$
|
12,809
|
|
$
|
12,332
|
|
|
|
|
Total assets
(GAAP)
|
$
|
170,540
|
|
$
|
171,192
|
|
$
|
146,691
|
|
|
|
|
Less: Intangible
assets (a)
|
2,862
|
|
2,877
|
|
2,928
|
|
|
|
|
Tangible assets
(non-GAAP)
|
$
|
167,678
|
|
$
|
168,315
|
|
$
|
143,763
|
|
|
|
|
Tangible common equity
to tangible assets ratio (non-GAAP)
|
7.8
|
%
|
7.6
|
%
|
8.6
|
%
|
|
|
|
Pre-provision net
revenue
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
1,000
|
|
$
|
1,018
|
|
$
|
972
|
|
|
$
|
2,999
|
|
$
|
2,930
|
|
Plus:
Taxable-equivalent adjustment
|
6
|
|
7
|
|
8
|
|
|
21
|
|
24
|
|
Noninterest
income
|
681
|
|
692
|
|
650
|
|
|
1,850
|
|
1,808
|
|
Less: Noninterest
expense
|
1,037
|
|
1,013
|
|
939
|
|
|
2,981
|
|
2,921
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
$
|
650
|
|
$
|
704
|
|
$
|
691
|
|
|
$
|
1,889
|
|
$
|
1,841
|
|
Average tangible
common equity
|
|
|
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
$
|
17,730
|
|
$
|
17,688
|
|
$
|
17,113
|
|
|
$
|
17,545
|
|
$
|
16,454
|
|
Less: Intangible
assets (average) (c)
|
2,870
|
|
2,886
|
|
2,942
|
|
|
2,886
|
|
2,905
|
|
Preferred stock
(average)
|
1,900
|
|
1,900
|
|
1,900
|
|
|
1,900
|
|
1,705
|
|
Average tangible
common equity (non-GAAP)
|
$
|
12,960
|
|
$
|
12,902
|
|
$
|
12,271
|
|
|
$
|
12,759
|
|
$
|
11,844
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
|
|
|
Net income (loss) from
continuing operations attributable to Key common
shareholders (GAAP)
|
$
|
397
|
|
$
|
159
|
|
$
|
383
|
|
|
$
|
674
|
|
$
|
1,172
|
|
Plus: Notable items,
after tax (d)
|
—
|
|
—
|
|
94
|
|
|
—
|
|
154
|
|
Net income (loss) from
continuing operations attributable to Key common
shareholders excluding notable items
(non-GAAP)
|
$
|
397
|
|
$
|
159
|
|
$
|
477
|
|
|
$
|
674
|
|
$
|
1,326
|
|
Average tangible
common equity (non-GAAP)
|
12,960
|
|
12,902
|
|
12,271
|
|
|
12,759
|
|
11,844
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations (non-
GAAP)
|
12.19
|
%
|
4.96
|
%
|
12.38
|
%
|
|
7.06
|
%
|
13.23
|
%
|
Return on average
tangible common equity from continuing operations excluding
notable items (non-GAAP)
|
12.19
|
%
|
4.96
|
%
|
15.42
|
%
|
|
7.06
|
%
|
14.97
|
%
|
Return on average
tangible common equity consolidated
|
|
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
|
401
|
|
$
|
161
|
|
$
|
386
|
|
|
$
|
681
|
|
$
|
1,178
|
|
Average tangible
common equity (non-GAAP)
|
12,960
|
|
12,902
|
|
12,271
|
|
|
12,759
|
|
11,844
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
12.31
|
%
|
5.02
|
%
|
12.48
|
%
|
|
7.13
|
%
|
13.30
|
%
|
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
Three months
ended
|
|
Nine months
ended
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Cash efficiency
ratio
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
1,037
|
|
$
|
1,013
|
|
$
|
939
|
|
|
$
|
2,981
|
|
$
|
2,921
|
|
Less: Intangible asset
amortization
|
15
|
|
18
|
|
26
|
|
|
50
|
|
70
|
|
Adjusted noninterest
expense (non-GAAP)
|
$
|
1,022
|
|
$
|
995
|
|
$
|
913
|
|
|
$
|
2,931
|
|
$
|
2,851
|
|
Less: Notable items
(d)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
78
|
|
Adjusted noninterest
expense excluding notable items (non-GAAP)
|
$
|
1,022
|
|
$
|
995
|
|
$
|
913
|
|
|
$
|
2,931
|
|
$
|
2,773
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
|
1,000
|
|
$
|
1,018
|
|
$
|
972
|
|
|
$
|
2,999
|
|
$
|
2,930
|
|
Plus:
Taxable-equivalent adjustment
|
6
|
|
7
|
|
8
|
|
|
21
|
|
24
|
|
Noninterest
income
|
681
|
|
692
|
|
650
|
|
|
1,850
|
|
1,808
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
$
|
1,687
|
|
$
|
1,717
|
|
$
|
1,630
|
|
|
$
|
4,870
|
|
$
|
4,762
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
60.6
|
%
|
57.9
|
%
|
56.0
|
%
|
|
60.2
|
%
|
59.9
|
%
|
|
|
|
|
|
|
|
Cash efficiency ratio
excluding notable items (non-GAAP)
|
60.6
|
%
|
57.9
|
%
|
56.0
|
%
|
|
60.2
|
%
|
58.2
|
%
|
|
|
(a)
|
For the three months
ended September 30, 2020, June 30, 2020, and
September 30, 2019, intangible assets exclude $5 million, $5
million, and $9 million, respectively, of period-end purchased
credit card receivables.
|
(b)
|
Net of capital
surplus.
|
(c)
|
For the three months
ended September 30, 2020, June 30, 2020, and
September 30, 2019, average intangible assets exclude $5
million, $6 million, and $9 million, respectively, of average
purchased credit card receivables. For the nine months ended
September 30, 2020, and September 30, 2019, average intangible
assets exclude $6 million and $11 million, respectively, of average
purchase credit card receivables.
|
(d)
|
Additional detail
provided in Notable Items table on page 24 of this
release.
|
GAAP = U.S. generally
accepted accounting principles
|
Consolidated
Balance Sheets
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
Assets
|
|
|
|
|
Loans
|
$
|
103,081
|
|
$
|
106,159
|
|
$
|
92,760
|
|
|
Loans held for
sale
|
1,724
|
|
2,007
|
|
1,598
|
|
|
Securities available
for sale
|
26,895
|
|
23,600
|
|
22,378
|
|
|
Held-to-maturity
securities
|
8,384
|
|
9,075
|
|
10,490
|
|
|
Trading account
assets
|
733
|
|
645
|
|
963
|
|
|
Short-term
investments
|
14,148
|
|
14,036
|
|
3,351
|
|
|
Other
investments
|
620
|
|
655
|
|
620
|
|
|
|
Total earning
assets
|
155,585
|
|
156,177
|
|
132,160
|
|
|
Allowance for loan
and lease losses
|
(1,730)
|
|
(1,708)
|
|
(893)
|
|
|
Cash and due from
banks
|
956
|
|
1,059
|
|
636
|
|
|
Premises and
equipment
|
765
|
|
776
|
|
815
|
|
|
Goodwill
|
2,664
|
|
2,664
|
|
2,664
|
|
|
Other intangible
assets
|
203
|
|
218
|
|
272
|
|
|
Corporate-owned life
insurance
|
4,274
|
|
4,251
|
|
4,216
|
|
|
Accrued income and
other assets
|
7,084
|
|
6,976
|
|
5,881
|
|
|
Discontinued
assets
|
739
|
|
779
|
|
940
|
|
|
|
Total
assets
|
$
|
170,540
|
|
171,192
|
|
146,691
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits in domestic
offices:
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
80,791
|
|
$
|
78,853
|
|
$
|
65,604
|
|
|
|
Savings
deposits
|
5,585
|
|
5,371
|
|
4,668
|
|
|
|
Certificates of
deposit ($100,000 or more)
|
3,345
|
|
4,476
|
|
7,194
|
|
|
|
Other time
deposits
|
3,450
|
|
4,011
|
|
5,300
|
|
|
|
Total
interest-bearing deposits
|
93,171
|
|
92,711
|
|
82,766
|
|
|
|
Noninterest-bearing
deposits
|
43,575
|
|
42,802
|
|
28,883
|
|
|
|
Total
deposits
|
136,746
|
|
135,513
|
|
111,649
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
213
|
|
267
|
|
182
|
|
|
Bank notes and other
short-term borrowings
|
818
|
|
1,716
|
|
700
|
|
|
Accrued expense and
other liabilities
|
2,356
|
|
2,420
|
|
2,574
|
|
|
Long-term
debt
|
12,685
|
|
13,734
|
|
14,470
|
|
|
|
Total
liabilities
|
152,818
|
|
153,650
|
|
129,575
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Preferred
stock
|
1,900
|
|
1,900
|
|
1,900
|
|
|
Common
shares
|
1,257
|
|
1,257
|
|
1,257
|
|
|
Capital
surplus
|
6,263
|
|
6,240
|
|
6,287
|
|
|
Retained
earnings
|
12,375
|
|
12,154
|
|
12,209
|
|
|
Treasury stock, at
cost
|
(4,940)
|
|
(4,945)
|
|
(4,696)
|
|
|
Accumulated other
comprehensive income (loss)
|
867
|
|
936
|
|
159
|
|
|
|
Key shareholders'
equity
|
17,722
|
|
17,542
|
|
17,116
|
|
|
Noncontrolling
interests
|
—
|
|
—
|
|
—
|
|
|
|
Total
equity
|
17,722
|
|
17,542
|
|
17,116
|
|
Total liabilities
and equity
|
$
|
170,540
|
|
$
|
171,192
|
|
$
|
146,691
|
|
|
|
|
|
|
|
Common shares
outstanding (000)
|
976,205
|
|
975,947
|
|
988,538
|
|
Consolidated
Statements of Income
|
(dollars in millions,
except per share amounts)
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Interest
income
|
|
|
|
|
|
|
|
Loans
|
$
|
927
|
|
$
|
980
|
|
$
|
1,073
|
|
|
$
|
2,933
|
|
$
|
3,221
|
|
|
Loans held for
sale
|
18
|
|
21
|
|
18
|
|
|
58
|
|
46
|
|
|
Securities available
for sale
|
115
|
|
121
|
|
136
|
|
|
365
|
|
400
|
|
|
Held-to-maturity
securities
|
53
|
|
56
|
|
64
|
|
|
171
|
|
199
|
|
|
Trading account
assets
|
3
|
|
5
|
|
7
|
|
|
16
|
|
24
|
|
|
Short-term
investments
|
1
|
|
7
|
|
16
|
|
|
14
|
|
49
|
|
|
Other
investments
|
2
|
|
—
|
|
3
|
|
|
3
|
|
11
|
|
|
|
Total interest
income
|
1,119
|
|
1,190
|
|
1,317
|
|
|
3,560
|
|
3,950
|
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
54
|
|
96
|
|
227
|
|
|
319
|
|
652
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
—
|
|
—
|
|
—
|
|
|
6
|
|
1
|
|
|
Bank notes and other
short-term borrowings
|
1
|
|
5
|
|
4
|
|
|
11
|
|
13
|
|
|
Long-term
debt
|
64
|
|
71
|
|
114
|
|
|
225
|
|
354
|
|
|
|
Total interest
expense
|
119
|
|
172
|
|
345
|
|
|
561
|
|
1020
|
|
Net interest
income
|
1,000
|
|
1,018
|
|
972
|
|
|
2,999
|
|
2,930
|
|
Provision for credit
losses
|
160
|
|
482
|
|
200
|
|
|
1,001
|
|
336
|
|
Net interest income
after provision for credit losses
|
840
|
|
536
|
|
772
|
|
|
1,998
|
|
2,594
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Trust and investment
services income
|
128
|
|
123
|
|
118
|
|
|
384
|
|
355
|
|
|
Investment banking
and debt placement fees
|
146
|
|
156
|
|
176
|
|
|
418
|
|
449
|
|
|
Service charges on
deposit accounts
|
77
|
|
68
|
|
86
|
|
|
229
|
|
251
|
|
|
Operating lease
income and other leasing gains
|
38
|
|
60
|
|
42
|
|
|
128
|
|
123
|
|
|
Corporate services
income
|
51
|
|
52
|
|
63
|
|
|
165
|
|
171
|
|
|
Cards and payments
income
|
114
|
|
91
|
|
69
|
|
|
271
|
|
208
|
|
|
Corporate-owned life
insurance income
|
30
|
|
35
|
|
32
|
|
|
101
|
|
97
|
|
|
Consumer mortgage
income
|
51
|
|
62
|
|
16
|
|
|
133
|
|
42
|
|
|
Commercial mortgage
servicing fees
|
18
|
|
12
|
|
21
|
|
|
48
|
|
58
|
|
|
Other
income
|
28
|
|
33
|
|
27
|
|
|
(27)
|
|
54
|
|
|
|
Total noninterest
income
|
681
|
|
692
|
|
650
|
|
|
1,850
|
|
1,808
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Personnel
|
588
|
|
572
|
|
547
|
|
|
1,675
|
|
1,699
|
|
|
Net
occupancy
|
76
|
|
71
|
|
72
|
|
|
223
|
|
217
|
|
|
Computer
processing
|
59
|
|
56
|
|
53
|
|
|
170
|
|
163
|
|
|
Business services and
professional fees
|
49
|
|
49
|
|
43
|
|
|
142
|
|
132
|
|
|
Equipment
|
25
|
|
25
|
|
27
|
|
|
74
|
|
75
|
|
|
Operating lease
expense
|
33
|
|
34
|
|
33
|
|
|
103
|
|
91
|
|
|
Marketing
|
22
|
|
24
|
|
26
|
|
|
67
|
|
69
|
|
|
FDIC
assessment
|
6
|
|
8
|
|
7
|
|
|
23
|
|
23
|
|
|
Intangible asset
amortization
|
15
|
|
18
|
|
26
|
|
|
50
|
|
70
|
|
|
OREO expense,
net
|
(1)
|
|
6
|
|
3
|
|
|
8
|
|
10
|
|
|
Other
expense
|
165
|
|
150
|
|
102
|
|
|
446
|
|
372
|
|
|
|
Total noninterest
expense
|
1,037
|
|
1,013
|
|
939
|
|
|
2,981
|
|
2,921
|
|
Income (loss) from
continuing operations before income taxes
|
484
|
|
215
|
|
483
|
|
|
867
|
|
1,481
|
|
|
Income
taxes
|
60
|
|
30
|
|
70
|
|
|
113
|
|
239
|
|
Income (loss) from
continuing operations
|
424
|
|
185
|
|
413
|
|
|
754
|
|
1,242
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
4
|
|
2
|
|
3
|
|
|
7
|
|
6
|
|
Net income
(loss)
|
428
|
|
187
|
|
416
|
|
|
761
|
|
1,248
|
|
|
Less: Net
income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Net income (loss)
attributable to Key
|
$
|
428
|
|
$
|
187
|
|
$
|
416
|
|
|
$
|
761
|
|
$
|
1,248
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
397
|
|
$
|
159
|
|
$
|
383
|
|
|
$
|
674
|
|
$
|
1,172
|
|
Net income (loss)
attributable to Key common shareholders
|
401
|
|
161
|
|
386
|
|
|
681
|
|
1,178
|
|
Per common
share
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.41
|
|
$
|
.16
|
|
$
|
.39
|
|
|
$
|
.70
|
|
$
|
1.17
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
|
.01
|
|
.01
|
|
Net income (loss)
attributable to Key common shareholders (a)
|
.41
|
|
.17
|
|
.39
|
|
|
.70
|
|
1.18
|
|
Per common share —
assuming dilution
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.41
|
|
$
|
.16
|
|
$
|
.38
|
|
|
$
|
.69
|
|
$
|
1.16
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
|
.01
|
|
.01
|
|
Net income (loss)
attributable to Key common
shareholders (a)
|
.41
|
|
.17
|
|
.39
|
|
|
.70
|
|
1.17
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
.185
|
|
$
|
.185
|
|
$
|
.185
|
|
|
$
|
.555
|
|
$
|
.525
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (000)
|
967,804
|
|
967,147
|
|
988,319
|
|
|
967,632
|
|
998,268
|
|
|
Effect of common
share options and other stock awards
|
6,184
|
|
4,994
|
|
10,009
|
|
|
6,648
|
|
9,632
|
|
Weighted-average
common shares and potential common shares outstanding
(000) (b)
|
973,988
|
|
972,141
|
|
998,328
|
|
|
974,280
|
|
1,007,900
|
|
|
|
(a)
|
Earnings per share
may not foot due to rounding.
|
(b)
|
Assumes conversion of
common share options and other stock awards, as
applicable.
|
Consolidated
Average Balance Sheets, and Net Interest Income and Yields/Rates
From Continuing Operations
|
(dollars in
millions)
|
|
|
Third Quarter
2020
|
|
Second Quarter
2020
|
|
Third Quarter
2019
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
|
Balance
|
Interest
(a)
|
Rate
(a)
|
|
Balance
|
Interest
(a)
|
Rate
(a)
|
|
Balance
|
Interest
(a)
|
Rate
(a)
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (b),
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial (d)
|
$
|
57,067
|
|
$
|
474
|
|
3.31
|
%
|
|
$
|
60,480
|
|
$
|
518
|
|
3.44
|
%
|
|
$
|
48,322
|
|
$
|
543
|
|
4.46
|
%
|
|
Real estate —
commercial mortgage
|
13,202
|
|
117
|
|
3.54
|
|
|
13,510
|
|
128
|
|
3.80
|
|
|
13,056
|
|
163
|
|
4.95
|
|
|
Real estate —
construction
|
1,987
|
|
18
|
|
3.57
|
|
|
1,756
|
|
17
|
|
3.97
|
|
|
1,463
|
|
19
|
|
5.22
|
|
|
Commercial lease
financing
|
4,488
|
|
35
|
|
3.10
|
|
|
4,584
|
|
33
|
|
2.96
|
|
|
4,497
|
|
42
|
|
3.68
|
|
|
Total commercial
loans
|
76,744
|
|
644
|
|
3.34
|
|
|
80,330
|
|
696
|
|
3.49
|
|
|
67,338
|
|
767
|
|
4.52
|
|
|
Real estate —
residential mortgage
|
8,398
|
|
73
|
|
3.46
|
|
|
7,783
|
|
69
|
|
3.57
|
|
|
6,256
|
|
62
|
|
3.97
|
|
|
Home equity
loans
|
9,580
|
|
91
|
|
3.82
|
|
|
9,949
|
|
97
|
|
3.89
|
|
|
10,488
|
|
132
|
|
4.97
|
|
|
Consumer direct
loans
|
4,403
|
|
56
|
|
5.07
|
|
|
4,152
|
|
55
|
|
5.24
|
|
|
2,548
|
|
45
|
|
6.99
|
|
|
Credit
cards
|
967
|
|
25
|
|
10.24
|
|
|
983
|
|
25
|
|
10.22
|
|
|
1,100
|
|
32
|
|
11.59
|
|
|
Consumer indirect
loans
|
4,827
|
|
44
|
|
3.66
|
|
|
4,744
|
|
45
|
|
3.82
|
|
|
4,226
|
|
43
|
|
4.10
|
|
|
Total consumer
loans
|
28,175
|
|
289
|
|
4.10
|
|
|
27,611
|
|
291
|
|
4.22
|
|
|
24,618
|
|
314
|
|
5.07
|
|
|
Total loans
|
104,919
|
|
933
|
|
3.55
|
|
|
107,941
|
|
987
|
|
3.67
|
|
|
91,956
|
|
1,081
|
|
4.67
|
|
|
Loans held for
sale
|
1,924
|
|
18
|
|
3.61
|
|
|
2,463
|
|
21
|
|
3.50
|
|
|
1,558
|
|
18
|
|
4.65
|
|
|
Securities available
for sale (b), (e)
|
24,941
|
|
115
|
|
1.90
|
|
|
20,749
|
|
121
|
|
2.43
|
|
|
21,867
|
|
136
|
|
2.52
|
|
|
Held-to-maturity
securities (b)
|
8,677
|
|
53
|
|
2.44
|
|
|
9,331
|
|
56
|
|
2.43
|
|
|
10,684
|
|
64
|
|
2.41
|
|
|
Trading account
assets
|
686
|
|
3
|
|
2.08
|
|
|
760
|
|
5
|
|
2.43
|
|
|
884
|
|
7
|
|
3.00
|
|
|
Short-term
investments
|
12,525
|
|
1
|
|
.04
|
|
|
7,892
|
|
7
|
|
0.31
|
|
|
2,861
|
|
16
|
|
2.19
|
|
|
Other investments
(e)
|
640
|
|
2
|
|
1.49
|
|
|
672
|
|
—
|
|
.29
|
|
|
624
|
|
3
|
|
1.82
|
|
|
Total earning
assets
|
154,312
|
|
1,125
|
|
2.93
|
|
|
149,808
|
|
1,197
|
|
3.22
|
|
|
130,434
|
|
1,325
|
|
4.05
|
|
|
Allowance for loan
and lease losses
|
(1,696)
|
|
|
|
|
(1,413)
|
|
|
|
|
(881)
|
|
|
|
|
Accrued income and
other assets
|
16,195
|
|
|
|
|
15,704
|
|
|
|
|
14,605
|
|
|
|
|
Discontinued
assets
|
752
|
|
|
|
|
793
|
|
|
|
|
957
|
|
|
|
|
Total
assets
|
$
|
169,563
|
|
|
|
|
$
|
164,892
|
|
|
|
|
$
|
145,115
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
80,175
|
|
26
|
|
.13
|
|
|
$
|
75,297
|
|
56
|
|
.30
|
|
|
$
|
64,595
|
|
154
|
|
.94
|
|
|
Savings
deposits
|
5,478
|
|
1
|
|
.04
|
|
|
5,130
|
|
—
|
|
.04
|
|
|
4,709
|
|
1
|
|
.10
|
|
|
Certificates of
deposit ($100,000 or more)
|
3,862
|
|
16
|
|
1.60
|
|
|
4,950
|
|
24
|
|
1.93
|
|
|
7,625
|
|
45
|
|
2.37
|
|
|
Other time
deposits
|
3,735
|
|
11
|
|
1.17
|
|
|
4,333
|
|
16
|
|
1.52
|
|
|
5,449
|
|
27
|
|
1.96
|
|
|
Total interest-bearing
deposits
|
93,250
|
|
54
|
|
.23
|
|
|
89,710
|
|
96
|
|
.43
|
|
|
82,378
|
|
227
|
|
1.09
|
|
|
Federal funds
purchased and securities sold
under repurchase agreements
|
225
|
|
—
|
|
.05
|
|
|
242
|
|
—
|
|
.03
|
|
|
187
|
|
—
|
|
.50
|
|
|
Bank notes and other
short-term borrowings
|
761
|
|
1
|
|
.68
|
|
|
2,869
|
|
5
|
|
.57
|
|
|
626
|
|
4
|
|
2.04
|
|
|
Long-term debt
(f), (g)
|
12,801
|
|
64
|
|
2.12
|
|
|
12,954
|
|
71
|
|
2.30
|
|
|
13,347
|
|
114
|
|
3.51
|
|
|
Total interest-bearing
liabilities
|
107,037
|
|
119
|
|
.45
|
|
|
105,775
|
|
172
|
|
.66
|
|
|
96,538
|
|
345
|
|
1.42
|
|
|
Noninterest-bearing
deposits
|
41,694
|
|
|
|
|
38,267
|
|
|
|
|
27,901
|
|
|
|
|
Accrued expense and
other liabilities
|
2,350
|
|
|
|
|
2,369
|
|
|
|
|
2,605
|
|
|
|
|
Discontinued
liabilities (g)
|
752
|
|
|
|
|
793
|
|
|
|
|
957
|
|
|
|
|
Total
liabilities
|
151,833
|
|
|
|
|
147,204
|
|
|
|
|
128,001
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
17,730
|
|
|
|
|
17,688
|
|
|
|
|
17,113
|
|
|
|
|
Noncontrolling
interests
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
Total
equity
|
17,730
|
|
|
|
|
17,688
|
|
|
|
|
17,114
|
|
|
|
|
Total liabilities
and equity
|
$
|
169,563
|
|
|
|
|
$
|
164,892
|
|
|
|
|
$
|
145,115
|
|
|
|
Interest rate spread
(TE)
|
|
|
2.48
|
%
|
|
|
|
2.56
|
%
|
|
|
|
2.63
|
%
|
Net interest income
(TE) and net interest margin (TE)
|
|
1,006
|
|
2.62
|
%
|
|
|
1,025
|
|
2.76
|
%
|
|
|
980
|
|
3.00
|
%
|
TE adjustment
(b)
|
|
6
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
Net interest income,
GAAP basis
|
|
$
|
1,000
|
|
|
|
|
$
|
1,018
|
|
|
|
|
$
|
972
|
|
|
|
|
(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 21% for the three months ended September 30, 2020,
June 30, 2020, and September 30,
2019.
|
(c)
|
For purposes of these
computations, nonaccrual loans are included in average loan
balances.
|
(d)
|
Commercial and
industrial average balances include $129 million, $135 million, and
$144 million of assets from commercial credit cards for the three
months ended September 30, 2020, June 30, 2020, and
September 30, 2019, 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)
|
|
|
Nine months ended
September 30, 2020
|
|
Nine months ended
September 30, 2019
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
|
Balance
|
Interest
(a)
|
Rate
(a)
|
|
Balance
|
Interest
(a)
|
Rate
(a)
|
Assets
|
|
|
|
|
|
|
|
|
Loans: (b),
(c)
|
|
|
|
|
|
|
|
|
Commercial and
industrial (d)
|
$
|
55,676
|
|
$
|
1,500
|
|
3.60
|
%
|
|
$
|
47,191
|
|
$
|
1,622
|
|
4.59
|
%
|
|
Real estate —
commercial mortgage
|
13,419
|
|
400
|
|
3.98
|
|
|
13,744
|
|
517
|
|
5.03
|
|
|
Real estate —
construction
|
1,804
|
|
55
|
|
4.06
|
|
|
1,482
|
|
60
|
|
5.37
|
|
|
Commercial lease
financing
|
4,546
|
|
107
|
|
3.15
|
|
|
4,490
|
|
124
|
|
3.66
|
|
|
Total commercial
loans
|
75,445
|
|
2,062
|
|
3.65
|
|
|
66,907
|
|
2,323
|
|
4.64
|
|
|
Real estate —
residential mortgage
|
7,801
|
|
210
|
|
3.59
|
|
|
5,866
|
|
176
|
|
4.00
|
|
|
Home equity
loans
|
9,894
|
|
301
|
|
4.07
|
|
|
10,726
|
|
404
|
|
5.03
|
|
|
Consumer direct
loans
|
4,089
|
|
165
|
|
5.38
|
|
|
2,256
|
|
125
|
|
7.42
|
|
|
Credit
cards
|
1,010
|
|
81
|
|
10.68
|
|
|
1,099
|
|
95
|
|
11.55
|
|
|
Consumer indirect
loans
|
4,779
|
|
135
|
|
3.78
|
|
|
3,951
|
|
122
|
|
4.13
|
|
|
Total consumer
loans
|
27,573
|
|
892
|
|
4.32
|
|
|
23,898
|
|
922
|
|
5.15
|
|
|
Total loans
|
103,018
|
|
2,954
|
|
3.83
|
|
|
90,805
|
|
3,245
|
|
4.77
|
|
|
Loans held for
sale
|
2,090
|
|
58
|
|
3.68
|
|
|
1,329
|
|
46
|
|
4.64
|
|
|
Securities available
for sale (b), (e)
|
22,297
|
|
365
|
|
2.25
|
|
|
21,059
|
|
400
|
|
2.52
|
|
|
Held-to-maturity
securities (b)
|
9,274
|
|
171
|
|
2.46
|
|
|
11,035
|
|
199
|
|
2.41
|
|
|
Trading account
assets
|
837
|
|
16
|
|
2.55
|
|
|
988
|
|
24
|
|
3.22
|
|
|
Short-term
investments
|
7,412
|
|
14
|
|
.24
|
|
|
2,930
|
|
49
|
|
2.23
|
|
|
Other investments
(e)
|
642
|
|
3
|
|
.72
|
|
|
639
|
|
11
|
|
2.18
|
|
|
Total earning
assets
|
145,570
|
|
3,581
|
|
3.30
|
|
|
128,785
|
|
3,974
|
|
4.12
|
|
|
Allowance for loan
and lease losses
|
(1403)
|
|
|
|
|
(880)
|
|
|
|
|
Accrued income and
other assets
|
15,579
|
|
|
|
|
14,414
|
|
|
|
|
Discontinued
assets
|
794
|
|
|
|
|
1,010
|
|
|
|
|
Total
assets
|
$
|
160,540
|
|
|
|
|
$
|
143,329
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
74,087
|
|
194
|
|
.35
|
|
|
$
|
62,827
|
|
431
|
|
.92
|
|
|
Savings
deposits
|
5,089
|
|
2
|
|
.04
|
|
|
4,767
|
|
3
|
|
.09
|
|
|
Certificates of
deposit ($100,000 or more)
|
5,036
|
|
74
|
|
1.96
|
|
|
8,046
|
|
140
|
|
2.33
|
|
|
Other time
deposits
|
4,321
|
|
49
|
|
1.53
|
|
|
5,506
|
|
78
|
|
1.90
|
|
|
Total interest-bearing
deposits
|
88,533
|
|
319
|
|
.48
|
|
|
81,146
|
|
652
|
|
1.07
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
821
|
|
6
|
|
.95
|
|
|
262
|
|
1
|
|
.63
|
|
|
Bank notes and other
short-term borrowings
|
1,674
|
|
11
|
|
.87
|
|
|
706
|
|
13
|
|
2.43
|
|
|
Long-term debt
(f), (g)
|
12,733
|
|
225
|
|
2.45
|
|
|
13,241
|
|
354
|
|
3.62
|
|
|
Total interest-bearing
liabilities
|
103,761
|
|
561
|
|
.73
|
|
|
95,355
|
|
1020
|
|
1.43
|
|
|
Noninterest-bearing
deposits
|
35,922
|
|
|
|
|
28,016
|
|
|
|
|
Accrued expense and
other liabilities
|
2,518
|
|
|
|
|
2,493
|
|
|
|
|
Discontinued
liabilities (g)
|
794
|
|
|
|
|
1,010
|
|
|
|
|
Total
liabilities
|
142,995
|
|
|
|
|
126,874
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
17,545
|
|
|
|
|
16,454
|
|
|
|
|
Noncontrolling
interests
|
—
|
|
|
|
|
1
|
|
|
|
|
Total
equity
|
17,545
|
|
|
|
|
16,455
|
|
|
|
|
Total liabilities
and equity
|
$
|
160,540
|
|
|
|
|
$
|
143,329
|
|
|
|
Interest rate spread
(TE)
|
|
|
2.57
|
%
|
|
|
|
2.69
|
%
|
Net interest income
(TE) and net interest margin (TE)
|
|
3,020
|
2.78
|
%
|
|
|
2,954
|
|
3.06
|
%
|
TE adjustment
(b)
|
|
21
|
|
|
|
24
|
|
|
|
Net interest income,
GAAP basis
|
|
$
|
2,999
|
|
|
|
|
$
|
2,930
|
|
|
|
|
(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 21% for the nine months ended September 30, 2020, and
September 30, 2019, respectively.
|
(c)
|
For purposes of these
computations, nonaccrual loans are included in average loan
balances.
|
(d)
|
Commercial and
industrial average balances include $137 million and $139 million
of assets from commercial credit cards for the nine months ended
September 30, 2020, and September 30, 2019,
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
|
|
Nine months
ended
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Personnel
(a)
|
$
|
588
|
|
$
|
572
|
|
$
|
547
|
|
|
$
|
1,675
|
|
$
|
1,699
|
|
Net
occupancy
|
76
|
|
71
|
|
72
|
|
|
223
|
|
217
|
|
Computer
processing
|
59
|
|
56
|
|
53
|
|
|
170
|
|
163
|
|
Business services and
professional fees
|
49
|
|
49
|
|
43
|
|
|
142
|
|
132
|
|
Equipment
|
25
|
|
25
|
|
27
|
|
|
74
|
|
75
|
|
Operating lease
expense
|
33
|
|
34
|
|
33
|
|
|
103
|
|
91
|
|
Marketing
|
22
|
|
24
|
|
26
|
|
|
67
|
|
69
|
|
FDIC
assessment
|
6
|
|
8
|
|
7
|
|
|
23
|
|
23
|
|
Intangible asset
amortization
|
15
|
|
18
|
|
26
|
|
|
50
|
|
70
|
|
OREO expense,
net
|
(1)
|
|
6
|
|
3
|
|
|
8
|
|
10
|
|
Other
expense
|
165
|
|
150
|
|
102
|
|
|
446
|
|
372
|
|
Total noninterest
expense
|
$
|
1,037
|
|
$
|
1,013
|
|
$
|
939
|
|
|
$
|
2,981
|
|
$
|
2,921
|
|
Average full-time
equivalent employees (b)
|
17,097
|
|
16,646
|
|
16,898
|
|
|
16,758
|
|
17,217
|
|
|
|
(a)
|
Additional detail
provided in Personnel Expense table below.
|
(b)
|
The number of average
full-time equivalent employees has not been adjusted for
discontinued operations.
|
Personnel
Expense
|
(in
millions)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Salaries and contract
labor
|
$
|
339
|
|
$
|
332
|
|
$
|
314
|
|
|
$
|
987
|
|
$
|
956
|
|
Incentive and
stock-based compensation
|
155
|
|
162
|
|
143
|
|
|
419
|
|
430
|
|
Employee
benefits
|
93
|
|
76
|
|
87
|
|
|
261
|
|
263
|
|
Severance
|
1
|
|
2
|
|
3
|
|
|
8
|
|
50
|
|
Total personnel
expense
|
$
|
588
|
|
$
|
572
|
|
$
|
547
|
|
|
$
|
1,675
|
|
$
|
1,699
|
|
Loan
Composition
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Percent change
9/30/2020 vs
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
6/30/2020
|
9/30/2019
|
Commercial and
industrial (a)
|
$
|
55,025
|
|
$
|
58,297
|
|
$
|
48,362
|
|
|
(5.6)
|
%
|
13.8
|
%
|
Commercial real
estate:
|
|
|
|
|
|
|
Commercial
mortgage
|
13,059
|
|
13,465
|
|
13,167
|
|
|
(3.0)
|
|
(.8)
|
|
Construction
|
1,947
|
|
1,919
|
|
1,480
|
|
|
1.5
|
|
31.6
|
|
Total commercial real
estate loans
|
15,006
|
|
15,384
|
|
14,647
|
|
|
(2.5)
|
|
2.5
|
|
Commercial lease
financing (b)
|
4,450
|
|
4,524
|
|
4,470
|
|
|
(1.6)
|
|
(.4)
|
|
Total commercial
loans
|
74,481
|
|
78,205
|
|
67,479
|
|
|
(4.8)
|
|
10.4
|
|
Residential — prime
loans:
|
|
|
|
|
|
|
Real estate —
residential mortgage
|
8,715
|
|
8,149
|
|
6,527
|
|
|
6.9
|
|
33.5
|
|
Home equity
loans
|
9,488
|
|
9,782
|
|
10,456
|
|
|
(3.0)
|
|
(9.3)
|
|
Total residential —
prime loans
|
18,203
|
|
17,931
|
|
16,983
|
|
|
1.5
|
|
7.2
|
|
Consumer direct
loans
|
4,395
|
|
4,327
|
|
2,789
|
|
|
1.6
|
|
57.6
|
|
Credit
cards
|
970
|
|
974
|
|
1,105
|
|
|
(.4)
|
|
(12.2)
|
|
Consumer indirect
loans
|
5,032
|
|
4,722
|
|
4,404
|
|
|
6.6
|
|
14.3
|
|
Total consumer
loans
|
28,600
|
|
27,954
|
|
25,281
|
|
|
2.3
|
|
13.1
|
|
Total loans (c),
(d)
|
$
|
103,081
|
|
$
|
106,159
|
|
$
|
92,760
|
|
|
(2.9)
|
%
|
11.1
|
%
|
|
|
(a)
|
Loan balances include
$128 million, $132 million, and $147 million of commercial credit
card balances at September 30, 2020, June 30, 2020, and
September 30, 2019, respectively.
|
(b)
|
Commercial lease
financing includes receivables held as collateral for a secured
borrowing of $18 million, $18 million, and $10 million at
September 30, 2020, June 30, 2020, and September 30,
2019, respectively. Principal reductions are based on the cash
payments received from these related receivables.
|
(c)
|
Total loans exclude
loans of $743 million at September 30, 2020, $780 million at
June 30, 2020, and $915 million at September 30, 2019,
related to the discontinued operations of the education lending
business.
|
(d)
|
Accrued interest of
$235 million, $225 million, and $257 million at September 30,
2020, June 30, 2020, and September 30, 2019,
respectively, presented in "other assets" on the Consolidated
Balance Sheets is excluded from the amortized cost basis disclosed
in this table.
|
Loans Held for
Sale Composition
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
9/30/2020 vs
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
6/30/2020
|
9/30/2019
|
Commercial and
industrial
|
$
|
336
|
|
$
|
419
|
|
$
|
195
|
|
|
(19.8)
|
%
|
72.3
|
%
|
Real estate —
commercial mortgage
|
1,031
|
|
1,107
|
|
1,123
|
|
|
(6.9)
|
|
(8.2)
|
|
Commercial lease
financing
|
1
|
|
—
|
|
100
|
|
|
N/M
|
|
(99.0)
|
|
Real estate —
residential mortgage
|
288
|
|
250
|
|
120
|
|
|
15.2
|
|
140.0
|
|
Consumer direct
loans
|
68
|
|
231
|
|
60
|
|
|
(70.6)
|
|
13.3
|
|
Total loans held for
sale (a)
|
$
|
1,724
|
|
$
|
2,007
|
|
$
|
1,598
|
|
|
(14.1)
|
%
|
7.9
|
%
|
|
|
(a)
|
Total loans held for
sale include Real estate — residential mortgage loans held for sale
at fair value of $288 million at September 30, 2020, $250
million at June 30, 2020, and $120 million at
September 30, 2019.
|
Summary of Changes
in Loans Held for Sale
|
(in
millions)
|
|
|
|
|
|
|
|
3Q20
|
2Q20
|
1Q20
|
4Q19
|
3Q19
|
Balance at beginning
of period
|
$
|
2,007
|
|
$
|
2,143
|
|
$
|
1,334
|
|
$
|
1,598
|
|
$
|
1,790
|
|
New
originations
|
3,282
|
|
3,621
|
|
3,333
|
|
3,659
|
|
3,222
|
|
Transfers from (to)
held to maturity, net
|
75
|
|
(15)
|
|
200
|
|
26
|
|
237
|
|
Loan sales
|
(3,583)
|
|
(3,679)
|
|
(2,649)
|
|
(3,933)
|
|
(3,602)
|
|
Loan draws (payments),
net
|
(57)
|
|
(61)
|
|
(77)
|
|
(18)
|
|
(49)
|
|
Valuation
adjustments
|
—
|
|
(2)
|
|
2
|
|
2
|
|
—
|
|
Balance at end of
period (a)
|
$
|
1,724
|
|
$
|
2,007
|
|
$
|
2,143
|
|
$
|
1,334
|
|
$
|
1,598
|
|
|
|
(a)
|
Total loans held for
sale include Real estate — residential mortgage loans held for sale
at fair value of $288 million at September 30, 2020, $250
million at June 30, 2020, $152 million at March 31, 2020,
$140 million at December 31, 2019, and $120 million at
September 30, 2019.
|
Summary of Loan
and Lease Loss Experience From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Average loans
outstanding
|
$
|
104,919
|
|
$
|
107,941
|
|
$
|
91,956
|
|
|
$
|
103,018
|
|
$
|
90,805
|
|
Allowance for loan
and lease losses at the end of the prior period
|
$
|
1,708
|
|
$
|
1359
|
|
$
|
890
|
|
|
$
|
900
|
|
$
|
883
|
|
Cumulative effect
from change in accounting principle (a)
|
—
|
|
—
|
|
—
|
|
|
204
|
|
—
|
|
Allowance for loan
and lease losses at the beginning of the period
|
1,708
|
|
1,359
|
|
890
|
|
|
1,104
|
|
883
|
|
Loans charged
off:
|
|
|
|
|
|
|
Commercial and
industrial
|
101
|
|
71
|
|
176
|
|
|
232
|
|
242
|
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
13
|
|
2
|
|
—
|
|
|
18
|
|
6
|
|
Real estate —
construction
|
—
|
|
—
|
|
—
|
|
|
—
|
|
4
|
|
Total
commercial real estate loans
|
13
|
|
2
|
|
—
|
|
|
18
|
|
10
|
|
Commercial lease
financing
|
10
|
|
4
|
|
1
|
|
|
16
|
|
25
|
|
Total
commercial loans
|
124
|
|
77
|
|
177
|
|
|
266
|
|
277
|
|
Real estate —
residential mortgage
|
—
|
|
2
|
|
1
|
|
|
2
|
|
3
|
|
Home equity
loans
|
4
|
|
2
|
|
6
|
|
|
10
|
|
16
|
|
Consumer direct
loans
|
8
|
|
10
|
|
10
|
|
|
30
|
|
30
|
|
Credit
cards
|
9
|
|
12
|
|
11
|
|
|
32
|
|
34
|
|
Consumer indirect
loans
|
6
|
|
7
|
|
8
|
|
|
22
|
|
24
|
|
Total
consumer loans
|
27
|
|
33
|
|
36
|
|
|
96
|
|
107
|
|
Total
loans charged off
|
151
|
|
110
|
|
213
|
|
|
362
|
|
384
|
|
Recoveries:
|
|
|
|
|
|
|
Commercial and
industrial
|
9
|
|
5
|
|
6
|
|
|
19
|
|
22
|
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
2
|
|
—
|
|
—
|
|
|
3
|
|
2
|
|
Total
commercial real estate loans
|
2
|
|
—
|
|
—
|
|
|
3
|
|
2
|
|
Commercial lease
financing
|
—
|
|
1
|
|
1
|
|
|
1
|
|
4
|
|
Total
commercial loans
|
11
|
|
6
|
|
7
|
|
|
23
|
|
28
|
|
Real estate —
residential mortgage
|
1
|
|
—
|
|
—
|
|
|
1
|
|
1
|
|
Home equity
loans
|
3
|
|
1
|
|
2
|
|
|
6
|
|
6
|
|
Consumer direct
loans
|
2
|
|
2
|
|
2
|
|
|
6
|
|
5
|
|
Credit
cards
|
2
|
|
2
|
|
2
|
|
|
6
|
|
6
|
|
Consumer indirect
loans
|
4
|
|
3
|
|
4
|
|
|
12
|
|
13
|
|
Total
consumer loans
|
12
|
|
8
|
|
10
|
|
|
31
|
|
31
|
|
Total
recoveries
|
23
|
|
14
|
|
17
|
|
|
54
|
|
59
|
|
Net loan
charge-offs
|
(128)
|
|
(96)
|
|
(196)
|
|
|
(308)
|
|
(325)
|
|
Provision (credit)
for loan and lease losses
|
150
|
|
445
|
|
199
|
|
|
934
|
|
335
|
|
Allowance for loan
and lease losses at end of period
|
$
|
1,730
|
|
$
|
1,708
|
|
$
|
893
|
|
|
$
|
1,730
|
|
$
|
893
|
|
|
|
|
|
|
|
|
Liability for credit
losses on lending-related commitments at the end of the prior
period
|
$
|
198
|
|
$
|
161
|
|
$
|
64
|
|
|
$
|
68
|
|
$
|
64
|
|
Liability for credit
losses on contingent guarantees at the end of the prior
period
|
—
|
|
—
|
|
—
|
|
|
7
|
|
—
|
|
Cumulative effect from
change in accounting principle (a), (b)
|
—
|
|
—
|
|
—
|
|
|
66
|
|
—
|
|
Liability for credit
losses on lending-related commitments at beginning of
period
|
198
|
|
161
|
|
64
|
|
|
141
|
|
64
|
|
Provision (credit) for
losses on lending-related commitments
|
10
|
|
37
|
|
1
|
|
|
67
|
|
1
|
|
Liability for credit
losses on lending-related commitments at end of period
(c)
|
$
|
208
|
|
$
|
198
|
|
$
|
65
|
|
|
$
|
208
|
|
$
|
65
|
|
|
|
|
|
|
|
|
Total allowance for
credit losses at end of period
|
$
|
1,938
|
|
$
|
1,906
|
|
$
|
958
|
|
|
$
|
1,938
|
|
$
|
958
|
|
|
|
|
|
|
|
|
Net loan charge-offs
to average total loans
|
.49
|
%
|
.36
|
%
|
.85
|
%
|
|
.40
|
%
|
.48
|
%
|
Allowance for loan
and lease losses to period-end loans
|
1.68
|
|
1.61
|
|
.96
|
|
|
1.68
|
|
.96
|
|
Allowance for credit
losses to period-end loans
|
1.88
|
|
1.80
|
|
1.03
|
|
|
1.88
|
|
1.03
|
|
Allowance for loan
and lease losses to nonperforming loans
|
207.4
|
|
224.7
|
|
152.6
|
|
|
207.4
|
|
152.6
|
|
Allowance for credit
losses to nonperforming loans
|
232.4
|
|
250.8
|
|
163.8
|
|
|
232.4
|
|
163.8
|
|
|
|
|
|
|
|
|
Discontinued
operations — education lending business:
|
|
|
|
|
|
|
Loans charged
off
|
—
|
|
$
|
2
|
|
$
|
1
|
|
|
$
|
4
|
|
$
|
9
|
|
Recoveries
|
—
|
|
2
|
|
1
|
|
|
3
|
|
3
|
|
Net loan
charge-offs
|
—
|
|
—
|
|
—
|
|
|
$
|
(1)
|
|
$
|
(6)
|
|
|
|
(a)
|
The cumulative effect
from change in accounting principle relates to the January 1, 2020,
adoption of ASU 2016-13.
|
(b)
|
The nine months ended
September 30, 2020, amount excludes $4 million related to the
provision for other financial assets.
|
(c)
|
Included in "Accrued
expense and other liabilities" on the balance sheet.
|
Asset Quality
Statistics From Continuing Operations
|
(dollars in
millions)
|
|
3Q20
|
2Q20
|
1Q20
|
4Q19
|
3Q19
|
Net loan
charge-offs
|
$
|
128
|
|
$
|
96
|
|
$
|
84
|
|
$
|
99
|
|
$
|
196
|
|
Net loan charge-offs
to average total loans
|
.49
|
%
|
.36
|
%
|
.35
|
%
|
.42
|
%
|
.85
|
%
|
Allowance for loan
and lease losses
|
$
|
1,730
|
|
$
|
1,708
|
|
$
|
1,359
|
|
$
|
900
|
|
$
|
893
|
|
Allowance for credit
losses (a)
|
1,938
|
|
1,906
|
|
1,520
|
|
968
|
|
958
|
|
Allowance for loan
and lease losses to period-end loans
|
1.68
|
%
|
1.61
|
%
|
1.32
|
%
|
.95
|
%
|
.96
|
%
|
Allowance for credit
losses to period-end loans
|
1.88
|
|
1.80
|
|
1.47
|
|
1.02
|
|
1.03
|
|
Allowance for loan
and lease losses to nonperforming loans
|
207.4
|
|
224.7
|
|
215.0
|
|
156.0
|
|
152.6
|
|
Allowance for credit
losses to nonperforming loans
|
232.4
|
|
250.8
|
|
240.5
|
|
167.8
|
|
163.8
|
|
Nonperforming loans
at period end
|
$
|
834
|
|
$
|
760
|
|
$
|
632
|
|
$
|
577
|
|
$
|
585
|
|
Nonperforming assets
at period end
|
1,003
|
|
951
|
|
844
|
|
715
|
|
711
|
|
Nonperforming loans
to period-end portfolio loans
|
.81
|
%
|
.72
|
%
|
.61
|
%
|
.61
|
%
|
.63
|
%
|
Nonperforming assets
to period-end portfolio loans plus OREO and other
nonperforming assets
|
.97
|
|
.89
|
|
.82
|
|
.75
|
|
.77
|
|
|
|
(a)
|
Includes the
allowance for loan and lease losses plus the liability for credit
losses on lending-related commitments.
|
Summary of
Nonperforming Assets and Past Due Loans From Continuing
Operations
|
(dollars in
millions)
|
|
9/30/2020
|
6/30/2020
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
Commercial and
industrial
|
$
|
459
|
|
$
|
404
|
|
$
|
277
|
|
$
|
264
|
|
$
|
238
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
104
|
|
91
|
|
87
|
|
83
|
|
92
|
|
Real estate —
construction
|
1
|
|
1
|
|
2
|
|
2
|
|
2
|
|
Total commercial real
estate loans
|
105
|
|
92
|
|
89
|
|
85
|
|
94
|
|
Commercial lease
financing
|
6
|
|
9
|
|
5
|
|
6
|
|
7
|
|
Total commercial
loans
|
570
|
|
505
|
|
371
|
|
355
|
|
339
|
|
Real estate —
residential mortgage
|
96
|
|
89
|
|
89
|
|
48
|
|
42
|
|
Home equity
loans
|
146
|
|
141
|
|
143
|
|
145
|
|
179
|
|
Consumer direct
loans
|
3
|
|
3
|
|
4
|
|
4
|
|
3
|
|
Credit
cards
|
2
|
|
2
|
|
3
|
|
3
|
|
2
|
|
Consumer indirect
loans
|
17
|
|
20
|
|
22
|
|
22
|
|
20
|
|
Total consumer
loans
|
264
|
|
255
|
|
261
|
|
222
|
|
246
|
|
Total
nonperforming loans
|
834
|
|
760
|
|
632
|
|
577
|
|
585
|
|
OREO
|
105
|
|
112
|
|
119
|
|
35
|
|
39
|
|
Nonperforming loans
held for sale
|
61
|
|
75
|
|
89
|
|
94
|
|
78
|
|
Other nonperforming
assets
|
3
|
|
4
|
|
4
|
|
9
|
|
9
|
|
Total
nonperforming assets
|
$
|
1,003
|
|
$
|
951
|
|
$
|
844
|
|
$
|
715
|
|
$
|
711
|
|
Accruing loans past
due 90 days or more
|
73
|
|
87
|
|
128
|
|
97
|
|
54
|
|
Accruing loans past
due 30 through 89 days
|
336
|
|
419
|
|
393
|
|
329
|
|
366
|
|
Restructured loans —
accruing and nonaccruing (a)
|
306
|
|
310
|
|
340
|
|
347
|
|
347
|
|
Restructured loans
included in nonperforming loans (a)
|
168
|
|
166
|
|
172
|
|
183
|
|
176
|
|
Nonperforming assets
from discontinued operations — education lending
business
|
6
|
|
7
|
|
7
|
|
7
|
|
7
|
|
Nonperforming loans
to period-end portfolio loans
|
.81
|
%
|
.72
|
%
|
.61
|
%
|
.61
|
%
|
.63
|
%
|
Nonperforming assets
to period-end portfolio loans plus OREO and other
nonperforming assets
|
.97
|
|
.89
|
|
.82
|
|
.75
|
|
.77
|
|
|
|
(a)
|
Restructured loans
(i.e., troubled debt restructuring) 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)
|
|
3Q20
|
2Q20
|
1Q20
|
4Q19
|
3Q19
|
Balance at beginning
of period
|
$
|
760
|
|
$
|
632
|
|
$
|
577
|
|
$
|
585
|
|
$
|
561
|
|
Loans placed on
nonaccrual status (a)
|
387
|
|
293
|
|
219
|
|
268
|
|
271
|
|
Charge-offs
|
(150)
|
|
(111)
|
|
(100)
|
|
(114)
|
|
(91)
|
|
Loans sold
|
(6)
|
|
(5)
|
|
(4)
|
|
(1)
|
|
—
|
|
Payments
|
(83)
|
|
(29)
|
|
(31)
|
|
(59)
|
|
(37)
|
|
Transfers to
OREO
|
—
|
|
—
|
|
(3)
|
|
(3)
|
|
(4)
|
|
Transfers to
nonperforming loans held for sale
|
—
|
|
—
|
|
—
|
|
(47)
|
|
(78)
|
|
Loans returned to
accrual status
|
(74)
|
|
(20)
|
|
(26)
|
|
(52)
|
|
(37)
|
|
Balance at end of
period
|
$
|
834
|
|
$
|
760
|
|
$
|
632
|
|
$
|
577
|
|
$
|
585
|
|
|
|
(a)
|
Purchase credit
impaired (PCI) loans meeting nonperforming criteria were
historically excluded from Key's nonperforming disclosures. As a
result of CECL implementation on January 1, 2020, PCI loans became
purchased credit deteriorated (PCD) loans. PCD loans that met the
definition of nonperforming are now included in nonperforming
disclosures, resulting in a $45 million increase in nonperforming
loans in the first quarter of 2020.
|
Line of Business
Results
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage change
3Q20 vs.
|
|
3Q20
|
2Q20
|
1Q20
|
4Q19
|
3Q19
|
|
2Q20
|
3Q19
|
Consumer
Bank
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
|
871
|
|
$
|
841
|
|
$
|
820
|
|
$
|
825
|
|
$
|
833
|
|
|
3.6
|
%
|
4.6
|
%
|
Provision for credit
losses
|
(16)
|
|
167
|
|
140
|
|
55
|
|
48
|
|
|
N/M
|
|
N/M
|
|
Noninterest
expense
|
571
|
|
555
|
|
542
|
|
550
|
|
529
|
|
|
2.9
|
|
7.9
|
|
Net income (loss)
attributable to Key
|
241
|
|
91
|
|
105
|
|
168
|
|
196
|
|
|
164.8
|
|
23.0
|
|
Average loans and
leases
|
41,471
|
|
39,197
|
|
35,197
|
|
34,148
|
|
32,760
|
|
|
5.8
|
|
26.6
|
|
Average
deposits
|
83,175
|
|
79,502
|
|
73,320
|
|
73,561
|
|
72,995
|
|
|
4.6
|
|
13.9
|
|
Net loan
charge-offs
|
23
|
|
39
|
|
43
|
|
43
|
|
40
|
|
|
(41.0)
|
|
(42.5)
|
|
Net loan charge-offs
to average total loans
|
.22
|
%
|
.40
|
%
|
.49
|
%
|
.50
|
%
|
.48
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming assets
at period end
|
$
|
332
|
|
$
|
342
|
|
$
|
306
|
|
$
|
354
|
|
$
|
354
|
|
|
(2.9)
|
|
(6.2)
|
|
Return on average
allocated equity
|
27.03
|
%
|
10.45
|
%
|
12.26
|
%
|
19.64
|
%
|
23.22
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Commercial
Bank
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
|
804
|
|
$
|
857
|
|
$
|
630
|
|
$
|
771
|
|
$
|
780
|
|
|
(6.2)
|
%
|
3.1
|
%
|
Provision for credit
losses
|
163
|
|
314
|
|
218
|
|
38
|
|
32
|
|
|
(48.1)
|
|
409.4
|
|
Noninterest
expense
|
443
|
|
438
|
|
358
|
|
393
|
|
378
|
|
|
1.1
|
|
17.2
|
|
Net income (loss)
attributable to Key
|
160
|
|
101
|
|
63
|
|
311
|
|
301
|
|
|
58.4
|
|
(46.8)
|
|
Average loans and
leases
|
62,925
|
|
68,038
|
|
60,082
|
|
58,535
|
|
58,215
|
|
|
(7.5)
|
|
8.1
|
|
Average loans held
for sale
|
1,383
|
|
2,012
|
|
1,607
|
|
1,465
|
|
1,325
|
|
|
(31.3)
|
|
4.4
|
|
Average
deposits
|
51,238
|
|
47,685
|
|
36,256
|
|
38,224
|
|
36,204
|
|
|
7.5
|
|
41.5
|
|
Net loan
charge-offs
|
104
|
|
57
|
|
40
|
|
39
|
|
35
|
|
|
82.5
|
|
197.1
|
|
Net loan charge-offs
to average total loans
|
.66
|
%
|
.34
|
%
|
.27
|
%
|
.26
|
%
|
.24
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming assets
at period end
|
$
|
616
|
|
$
|
407
|
|
$
|
402
|
|
$
|
351
|
|
$
|
351
|
|
|
51.4
|
|
75.5
|
|
Return on average
allocated equity
|
12.57
|
%
|
8.41
|
%
|
5.40
|
%
|
26.40
|
%
|
26.18
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent, N/A = Not Applicable, N/M = Not Meaningful
|
Notable
Items
|
(in
millions)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
9/30/2020
|
6/30/2020
|
9/30/2019
|
|
9/30/2020
|
9/30/2019
|
Provision for credit
losses
|
—
|
|
—
|
|
$
|
(123)
|
|
|
—
|
|
$
|
(123)
|
|
|
|
|
|
|
|
|
Efficiency initiative
expenses
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(76)
|
|
Laurel Road
acquisition expenses
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(2)
|
|
Total notable
items
|
—
|
|
—
|
|
(123)
|
|
|
—
|
|
(201)
|
|
Income
taxes
|
—
|
|
—
|
|
(29)
|
|
|
—
|
|
(47)
|
|
Total notable items,
after tax
|
—
|
|
—
|
|
$
|
(94)
|
|
|
—
|
|
$
|
(154)
|
|
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SOURCE KeyCorp