CLEVELAND, April 19, 2018 /PRNewswire/ -- KeyCorp
(NYSE: KEY) today announced first quarter net income from
continuing operations attributable to Key common shareholders of
$402 million, or $.38 per common share, compared to $181 million, or $.17 per common share, for the fourth quarter of
2017 and $296 million, or
$.27 per common share, for the first
quarter of 2017. Key's reported results in the fourth quarter of
2017 included merger-related charges and the estimated impact of
tax reform and related actions, resulting in a net impact of
$.19 per common share. Key's results
in the first quarter of 2017 included merger-related charges,
resulting in an impact of $.05 per
common share.
"First quarter was a good start to the year, with continuing
momentum in our core businesses, as we grew and expanded
relationships with our targeted clients. Revenue increased over 3%
from the same period last year, driven by a higher net interest
income, solid loan growth and stronger fee income. The growth in
average loans this quarter was broad-based and primarily in
commercial and industrial balances, which were up in excess of 3%
linked quarter, as we continue to grow and expand our middle-market
relationships.
Our fee-based businesses continue to demonstrate our ability
to offer a full range of solutions to our clients, including
off-balance sheet financing alternatives that helped drive our
investment banking and debt placement business to a record first
quarter level. Expenses this quarter reflect expected seasonality,
the acceleration of certain technology costs, and investments.
Given our outlook for revenue growth and lower expenses for the
rest of this year, we expect to make meaningful progress toward our
long term efficiency ratio target of 54% to
56%."
-
Beth Mooney, Chairman and
CEO
Selected Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions, except per share data
|
|
|
|
|
Change 1Q18
vs.
|
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
402
|
|
$
|
181
|
|
$
|
296
|
|
|
122.1
|
%
|
35.8
|
%
|
Income (loss) from
continuing operations attributable to Key common shareholders
per
common share — assuming
dilution
|
.38
|
|
.17
|
|
.27
|
|
|
123.5
|
|
40.7
|
|
Return on average
tangible common equity from continuing operations
(a)
|
14.89
|
%
|
6.35
|
%
|
10.98
|
%
|
|
N/A
|
|
N/A
|
|
Return on average
total assets from continuing operations
|
1.25
|
|
.57
|
|
.99
|
|
|
N/A
|
|
N/A
|
|
Common Equity Tier 1
ratio (b)
|
10.03
|
|
10.16
|
|
9.91
|
|
|
N/A
|
|
N/A
|
|
Book value at period
end
|
$
|
13.07
|
|
$
|
13.09
|
|
$
|
12.71
|
|
|
(.2)
|
%
|
2.8
|
%
|
Net interest margin
(TE) from continuing operations
|
3.15
|
%
|
3.09
|
%
|
3.13
|
%
|
|
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)
|
3/31/2018 ratio is
estimated.
|
TE = Taxable
Equivalent, N/A = Not Applicable
|
INCOME STATEMENT
HIGHLIGHTS
|
|
|
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|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Net interest income
(TE)
|
$
|
952
|
|
$
|
952
|
|
$
|
929
|
|
|
—
|
|
2.5
|
%
|
Noninterest
income
|
601
|
|
656
|
|
577
|
|
|
(8.4)
|
%
|
4.2
|
|
Total
revenue
|
$
|
1,553
|
|
$
|
1,608
|
|
$
|
1,506
|
|
|
(3.4)
|
%
|
3.1
|
%
|
|
|
|
|
|
|
|
Taxable-equivalent net interest income was $952 million for the first quarter of 2018, and
the net interest margin was 3.15%, compared to taxable-equivalent
net interest income of $929 million
and a net interest margin of 3.13% for the first quarter of 2017,
reflecting the benefit from higher interest rates and low deposit
betas. First quarter 2018 net interest income included $33 million of purchase accounting accretion, a
decline of $20 million from the first
quarter of 2017.
Compared to the fourth quarter of 2017, taxable-equivalent net
interest income was stable, and the net interest margin increased
by six basis points. Both net interest income and the net interest
margin benefited from higher interest rates and Key's asset
sensitive balance sheet position, as well as an expected reduction
from elevated liquidity levels in the fourth quarter. These
benefits were offset by two fewer days in the first quarter of
2018, a lower taxable-equivalent adjustment resulting from the Tax
Cuts and Jobs Act, and a decline in purchase accounting
accretion.
Excluding purchase accounting accretion, taxable-equivalent net
interest income increased $43 million
from the first quarter of 2017 and increased $5 million compared to the fourth quarter of
2017.
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Trust and investment
services income
|
$
|
133
|
|
$
|
131
|
|
$
|
135
|
|
|
1.5
|
%
|
(1.5)
|
%
|
Investment banking
and debt placement fees
|
143
|
|
200
|
|
127
|
|
|
(28.5)
|
|
12.6
|
|
Service charges on
deposit accounts
|
89
|
|
89
|
|
87
|
|
|
—
|
|
2.3
|
|
Operating lease
income and other leasing gains
|
32
|
|
27
|
|
23
|
|
|
18.5
|
|
39.1
|
|
Corporate services
income
|
62
|
|
56
|
|
54
|
|
|
10.7
|
|
14.8
|
|
Cards and payments
income
|
62
|
|
77
|
|
65
|
|
|
(19.5)
|
|
(4.6)
|
|
Corporate-owned life
insurance income
|
32
|
|
37
|
|
30
|
|
|
(13.5)
|
|
6.7
|
|
Consumer mortgage
income
|
7
|
|
7
|
|
6
|
|
|
—
|
|
16.7
|
|
Mortgage servicing
fees
|
20
|
|
17
|
|
18
|
|
|
17.6
|
|
11.1
|
|
Other
income
|
21
|
|
15
|
|
32
|
|
|
40.0
|
|
(34.4)
|
|
Total noninterest
income
|
$
|
601
|
|
$
|
656
|
|
$
|
577
|
|
|
(8.4)
|
%
|
4.2
|
%
|
|
|
|
|
|
|
|
Key's noninterest income was $601
million for the first quarter of 2018, compared to
$577 million for the year-ago
quarter. In the first quarter of 2018, Key benefited from
investments in several fee-based businesses. The largest driver
year-over-year was an increase in investment banking and debt
placement fees, related to the Cain Brothers acquisition, as well
as strength across the company's capital markets platform. In the
first quarter of 2018, commercial mortgage banking and mergers and
acquisitions advisory fees contributed to the strong performance.
Operating lease income and other leasing gains also contributed to
the increase, up $9 million from the
year-ago period, driven by higher originations, and corporate
services income grew $8 million
related to higher loan and derivative trading income. These
increases were partially offset by a decline in other income.
Compared to the fourth quarter of 2017, noninterest income
decreased by $55 million. The decline
was largely due to seasonal impacts in several fee income
categories, including investment banking and debt placement fees,
cards and payments income, and corporate-owned life insurance.
Investment banking and debt placement fees declined from record
results in the fourth quarter of 2017, though still reported a
record first quarter for the business. These declines were
partially offset by increases in other income, as well as operating
lease income and other leasing gains related to higher
originations.
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Personnel
expense
|
$
|
594
|
|
$
|
608
|
|
$
|
556
|
|
|
(2.3)
|
%
|
6.8
|
%
|
Nonpersonnel
expense
|
412
|
|
490
|
|
457
|
|
|
(15.9)
|
|
(9.8)
|
|
Total noninterest
expense
|
$
|
1,006
|
|
$
|
1,098
|
|
$
|
1,013
|
|
|
(8.4)
|
|
(.7)
|
|
|
|
|
|
|
|
|
Notable items
(a)
|
—
|
|
85
|
|
81
|
|
|
N/M
|
N/M
|
Total noninterest
expense excluding notable items
|
$
|
1,006
|
|
$
|
1,013
|
|
$
|
932
|
|
|
(.7)
|
%
|
7.9
|
%
|
|
|
|
|
|
|
|
N/M = Not
meaningful
|
(a)
|
Notable items for the
fourth quarter of 2017 includes $56 million of merger-related
charges and $29 million of estimated impacts of tax reform and
related actions. Notable items for the first quarter of 2017
includes $81 million of merger-related charges. See the table
entitled "GAAP to Non-GAAP Reconciliations" in the attached
financial supplement which presents the computations of certain
financial measures related to "notable items."
|
Key's noninterest expense was $1
billion for the first quarter of 2018, compared to
$932 million, excluding notable items
in the year-ago period. The year-over-year increase was primarily
related to higher personnel costs, largely due to recent
acquisitions, as well as accelerated technology investments and
higher performance-based compensation. Higher marketing expense,
operating lease expense, and intangible amortization expense drove
the increase in nonpersonnel expense, but was partially offset by
lower occupancy and other expense.
Noninterest expense decreased $7
million from the fourth quarter of 2017, excluding notable
items in the prior period. Personnel expense reflected seasonally
high employee benefits expense, as well as the aforementioned
accelerated technology investments. These increases were more than
offset by lower incentive compensation compared to the prior
quarter, as well as lower nonpersonnel expense related to lower
business services and professional fees, a seasonal decline in
marketing expense, and a continued reduction in net occupancy
expense.
BALANCE SHEET HIGHLIGHTS
Average
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Commercial and
industrial (a)
|
$
|
42,733
|
|
$
|
41,289
|
|
$
|
40,002
|
|
|
3.5
|
%
|
6.8
|
%
|
Other commercial
loans
|
20,705
|
|
21,040
|
|
22,175
|
|
|
(1.6)
|
|
(6.6)
|
|
Home equity
loans
|
11,877
|
|
12,128
|
|
12,611
|
|
|
(2.1)
|
|
(5.8)
|
|
Other consumer
loans
|
11,612
|
|
11,549
|
|
11,345
|
|
|
.5
|
|
2.4
|
|
Total
loans
|
$
|
86,927
|
|
$
|
86,006
|
|
$
|
86,133
|
|
|
1.1
|
%
|
.9
|
%
|
|
|
|
|
|
|
|
(a)
|
Commercial and
industrial average loan balances include $120 million, $119
million, and $114 million of assets from commercial credit cards at
March 31, 2018, December 31, 2017, and March 31,
2017, respectively.
|
Average loans were $86.9 billion
for the first quarter of 2018, an increase of $794 million compared to the first quarter of
2017, reflecting broad-based growth in commercial and industrial
loans with middle-market clients, as well as strength in auto
lending, as the company expands into existing geographies and
dealer relationships. In addition, reductions in commercial real
estate loans over the past year reflect significantly higher debt
placements and paydowns.
Compared to the fourth quarter of 2017, average loans increased
by $921 million, largely the result
of growth in commercial and industrial loans. Key realized growth
across commercial client segments, with commercial and industrial
loans up 2% in the Community Bank and 5% in the Corporate Bank,
unannualized.
Average
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Non-time
deposits
|
$
|
90,719
|
|
$
|
92,251
|
|
$
|
91,745
|
|
|
(1.7)
|
%
|
(1.1)
|
%
|
Certificates of
deposit ($100,000 or more)
|
6,972
|
|
6,776
|
|
5,627
|
|
|
2.9
|
|
23.9
|
|
Other time
deposits
|
4,865
|
|
4,771
|
|
4,706
|
|
|
2.0
|
|
3.4
|
|
Total
deposits
|
$
|
102,556
|
|
$
|
103,798
|
|
$
|
102,078
|
|
|
(1.2)
|
%
|
.5
|
%
|
|
|
|
|
|
|
|
Cost of total
deposits
|
.36
|
%
|
.31
|
%
|
.23
|
%
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
Average deposits totaled $102.6
billion for the first quarter of 2018, an increase of
$478 million compared to the year-ago
quarter. Certificates of deposits and other time deposits increased
$1.5 billion, reflecting strength in
Key's retail banking franchise and growth from commercial
relationships. Additionally, consumer noninterest-bearing balances
grew 10% from the prior year. NOW and money-market deposit accounts
declined $792 million, partially
driven by a shift to higher-yielding deposit products and the
managed exit of certain higher cost corporate and public sector
deposits.
Compared to the fourth quarter of 2018, average deposits
decreased by $1.2 billion, driven by
a decline in noninterest-bearing deposits, which were elevated
during the fourth quarter of 2017 due to short-term escrows and
seasonal deposit inflows. This decline was partially offset by
growth in consumer noninterest-bearing deposits.
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Net loan
charge-offs
|
$
|
54
|
|
$
|
52
|
|
$
|
58
|
|
|
3.8
|
%
|
(6.9)
|
%
|
Net loan charge-offs
to average total loans
|
.25
|
%
|
.24
|
%
|
.27
|
%
|
|
N/A
|
N/A
|
Nonperforming loans
at period end (a)
|
$
|
541
|
|
$
|
503
|
|
$
|
573
|
|
|
7.6
|
|
(5.6)
|
|
Nonperforming assets
at period end (a)
|
569
|
|
534
|
|
623
|
|
|
6.6
|
|
(8.7)
|
|
Allowance for loan
and lease losses
|
881
|
|
877
|
|
870
|
|
|
.5
|
|
1.3
|
|
Allowance for loan
and lease losses to nonperforming loans (a)
|
162.8
|
%
|
174.4
|
%
|
151.8
|
%
|
|
N/A
|
N/A
|
Provision for credit
losses
|
$
|
61
|
|
$
|
49
|
|
$
|
63
|
|
|
24.5
|
%
|
(3.2)
|
%
|
|
|
|
|
|
|
|
(a)
|
Nonperforming loan
balances exclude $690 million, $738 million, and $812 million of
purchased credit impaired loans at March 31, 2018,
December 31, 2017, and March 31, 2017,
respectively.
|
N/A = Not
Applicable
|
Key's provision for credit losses was $61
million for the first quarter of 2018, compared to
$63 million for the first quarter of
2017 and $49 million for the fourth
quarter of 2017. Key's allowance for loan and lease losses was
$881 million, or 1.00% of total
period-end loans, at March 31, 2018, compared to 1.01% at
March 31, 2017, and 1.01% at December 31, 2017.
Net loan charge-offs for the first quarter of 2018 totaled
$54 million, or .25% of average total
loans. These results compare to $58
million, or .27%, for the first quarter of 2017, and
$52 million, or .24%, for the fourth
quarter of 2018.
At March 31, 2018, Key's nonperforming loans totaled
$541 million, which represented .61%
of period-end portfolio loans. These results compare to .67% at
March 31, 2017, and .58% at December 31, 2017.
Nonperforming assets at March 31, 2018, totaled $569 million, and represented .65% of period-end
portfolio loans and OREO and other nonperforming assets. These
results compare to .72% at March 31, 2017, and .62% at
December 31, 2017.
CAPITAL
Key's estimated risk-based capital ratios included in the
following table continued to exceed all "well-capitalized"
regulatory benchmarks at March 31, 2018.
Capital
Ratios
|
|
|
|
|
|
|
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
Common Equity Tier 1
(a)
|
10.03
|
%
|
10.16
|
%
|
9.91
|
%
|
Tier 1 risk-based
capital (a)
|
10.84
|
|
11.01
|
|
10.74
|
|
Total risk based
capital (a)
|
12.75
|
|
12.92
|
|
12.69
|
|
Tangible common
equity to tangible assets (b)
|
8.22
|
|
8.23
|
|
8.51
|
|
Leverage
(a)
|
9.84
|
|
9.73
|
|
9.81
|
|
|
|
|
|
(a)
|
3/31/2018 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." 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.
|
Key's capital position remained strong in the first quarter. As
shown in the preceding table, at March 31, 2018, Key's
estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios
stood at 10.03% and 10.84%, respectively. Key's tangible common
equity ratio was 8.22% at March 31, 2018.
As a "standardized approach" banking organization, Key's
mandatory compliance with the final Basel III capital framework for
U.S. banking organizations (the "Regulatory Capital Rules") began
on January 1, 2015, subject to
transitional provisions extending to January
1, 2019. Key's estimated Common Equity Tier 1 ratio as
calculated under the fully phased-in Regulatory Capital Rules was
9.88% at March 31, 2018. 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 1Q18
vs.
|
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Shares outstanding at
beginning of period
|
1,069,084
|
|
1,079,039
|
|
1,079,314
|
|
|
(.9)
|
%
|
(.9)
|
%
|
Open market
repurchases and return of shares under employee
compensation plans
|
(9,399)
|
|
(10,617)
|
|
(8,673)
|
|
|
(11.5)
|
|
8.4
|
|
Shares issued under
employee compensation plans (net of cancellations)
|
5,254
|
|
662
|
|
6,270
|
|
|
693.7
|
|
(16.2)
|
|
Common Shares exchanged
for Series A Preferred Stock
|
—
|
|
—
|
|
20,568
|
|
|
N/M
|
|
N/M
|
|
|
Shares outstanding at
end of period
|
1,064,939
|
|
1,069,084
|
|
1,097,479
|
|
|
(.4)
|
%
|
(3.0)
|
%
|
|
|
|
|
|
|
|
|
Consistent with Key's 2017 Capital Plan, during the first
quarter of 2018, Key declared a dividend of $.105 per common share, and completed
$199 million of common share
repurchases during the quarter. These repurchases included
$156 million of common share
repurchases in the open market and $43
million of share repurchases related to employee equity
compensation programs.
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 1Q18
vs.
|
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Revenue from
continuing operations (TE)
|
|
|
|
|
|
|
Key Community
Bank
|
$
|
973
|
|
$
|
972
|
|
$
|
905
|
|
|
.1
|
%
|
7.5
|
%
|
Key Corporate
Bank
|
559
|
|
605
|
|
578
|
|
|
(7.6)
|
|
(3.3)
|
|
Other
Segments
|
22
|
|
30
|
|
29
|
|
|
(26.7)
|
|
(24.1)
|
|
|
Total
segments
|
1,554
|
|
1,607
|
|
1,512
|
|
|
(3.3)
|
|
2.8
|
|
Reconciling
Items
|
(1)
|
|
1
|
|
(6)
|
|
|
N/M
|
|
N/M
|
|
|
Total
|
$
|
1,553
|
|
$
|
1,608
|
|
$
|
1,506
|
|
|
(3.4)
|
%
|
3.1
|
%
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
|
|
|
|
|
Key Community
Bank
|
$
|
196
|
|
$
|
151
|
|
$
|
147
|
|
|
29.8
|
%
|
33.3
|
%
|
Key Corporate
Bank
|
207
|
|
222
|
|
180
|
|
|
(6.8)
|
|
15.0
|
|
Other
Segments
|
19
|
|
50
|
|
21
|
|
|
(62.0)
|
|
(9.5)
|
|
|
Total
segments
|
422
|
|
423
|
|
348
|
|
|
(.2)
|
|
21.3
|
|
Reconciling Items
(a)
|
(6)
|
|
(228)
|
|
(24)
|
|
|
N/M
|
|
N/M
|
|
|
Total
|
$
|
416
|
|
$
|
195
|
|
$
|
324
|
|
|
113.3
|
%
|
28.4
|
%
|
|
|
|
|
|
|
|
|
(a)
|
Reconciling items
consists primarily of the unallocated portion of merger-related
charges, certain estimated impacts of tax reform, and items not
allocated to the business segments because they do not reflect
their normal operations.
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Key Community
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
688
|
|
$
|
674
|
|
$
|
628
|
|
|
2.1
|
%
|
9.6
|
%
|
Noninterest
income
|
285
|
|
298
|
|
277
|
|
|
(4.4)
|
|
2.9
|
|
Total revenue
(TE)
|
973
|
|
972
|
|
905
|
|
|
.1
|
|
7.5
|
|
Provision for credit
losses
|
48
|
|
57
|
|
46
|
|
|
(15.8)
|
|
4.3
|
|
Noninterest
expense
|
668
|
|
677
|
|
625
|
|
|
(1.3)
|
|
6.9
|
|
Income (loss) before
income taxes (TE)
|
257
|
|
238
|
|
234
|
|
|
8.0
|
|
9.8
|
|
Allocated income
taxes (benefit) and TE adjustments
|
61
|
|
87
|
|
87
|
|
|
(29.9)
|
|
(29.9)
|
|
Net income (loss)
attributable to Key
|
$
|
196
|
|
$
|
151
|
|
$
|
147
|
|
|
29.8
|
%
|
33.3
|
%
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans and
leases
|
$
|
47,680
|
|
$
|
47,405
|
|
$
|
47,085
|
|
|
.6
|
%
|
1.3
|
%
|
Total
assets
|
51,681
|
|
51,471
|
|
51,063
|
|
|
.4
|
|
1.2
|
|
Deposits
|
79,945
|
|
80,352
|
|
79,148
|
|
|
(.5)
|
|
1.0
|
|
|
|
|
|
|
|
|
Assets under
management at period end
|
$
|
39,003
|
|
$
|
39,588
|
|
$
|
37,417
|
|
|
(1.5)
|
%
|
4.2
|
%
|
|
|
|
|
|
|
|
Additional Key
Community Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Noninterest
income
|
|
|
|
|
|
|
Trust and investment
services income
|
$
|
104
|
|
$
|
98
|
|
$
|
98
|
|
|
6.1
|
%
|
6.1
|
%
|
Service charges on
deposit accounts
|
76
|
|
76
|
|
75
|
|
|
—
|
|
1.3
|
|
Cards and payments
income
|
51
|
|
67
|
|
55
|
|
|
(23.9)
|
|
(7.3)
|
|
Other noninterest
income
|
54
|
|
57
|
|
49
|
|
|
(5.3)
|
|
10.2
|
|
Total noninterest
income
|
$
|
285
|
|
$
|
298
|
|
$
|
277
|
|
|
(4.4)
|
%
|
2.9
|
%
|
|
|
|
|
|
|
|
Average deposit
balances
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
44,291
|
|
$
|
44,415
|
|
$
|
44,780
|
|
|
(.3)
|
%
|
(1.1)
|
%
|
Savings
deposits
|
5,056
|
|
5,090
|
|
5,268
|
|
|
(.7)
|
|
(4.0)
|
|
Certificates of
deposit ($100,000 or more)
|
4,961
|
|
4,628
|
|
3,879
|
|
|
7.2
|
|
27.9
|
|
Other time
deposits
|
4,856
|
|
4,765
|
|
4,692
|
|
|
1.9
|
|
3.5
|
|
Noninterest-bearing
deposits
|
20,781
|
|
21,454
|
|
20,529
|
|
|
(3.1)
|
|
1.2
|
|
Total
deposits
|
$
|
79,945
|
|
$
|
80,352
|
|
$
|
79,148
|
|
|
(.5)
|
%
|
1.0
|
%
|
|
|
|
|
|
|
|
Home equity
loans
|
|
|
|
|
|
|
Average
balance
|
$
|
11,763
|
|
$
|
12,005
|
|
$
|
12,456
|
|
|
|
|
Combined
weighted-average loan-to-value ratio (at date of
origination)
|
70
|
%
|
70
|
%
|
70
|
%
|
|
|
|
Percent first lien
positions
|
60
|
|
60
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
Branches
|
1,192
|
|
1,197
|
|
1,216
|
|
|
|
|
Automated teller
machines
|
1,569
|
|
1,572
|
|
1,594
|
|
|
|
|
|
|
|
|
|
|
|
Key Community Bank Summary of Operations (1Q18 vs.
1Q17)
- Positive operating leverage compared to prior year
- Net income increased $49 million,
or 33.3%, from prior year
- Average commercial and industrial loans increased $1.1 billion, or 6.1%, from the prior year
Key Community Bank recorded net income attributable to Key of
$196 million for the first quarter of
2018, compared to $147 million for
the year-ago quarter, benefiting from momentum in Key's core
businesses, First Niagara related synergies, and a lower tax rate
as a result of tax reform.
Taxable-equivalent net interest income increased by $60 million, or 9.6%, from the first quarter of
2017. The increase was primarily attributable to the benefit from
higher interest rates and growth in loans. Average loans and leases
increased $595 million, or 1.3%,
largely driven by a $1.1 billion, or
6.1%, increase in commercial and industrial loans. Additionally,
average deposits increased $797
million, or 1.0%, from one year ago.
Noninterest income increased $8
million, or 2.9%, from the year-ago quarter, driven by
higher assets under management from market growth, as well as
increases across several fee categories.
The provision for credit losses increased by $2 million, or 4.3%, from the first quarter of
2017. Net loan charge-offs were flat from the first quarter of
2017, as overall credit quality was stable.
Noninterest expense increased $43
million, or 6.9%, from the year-ago quarter. Personnel
expense increased $17 million,
primarily driven by recent acquisitions and ongoing investments,
including residential mortgage and HelloWallet. Nonpersonnel
expense increased by $26 million,
driven by technology development costs, marketing expenses, higher
volume-related expenses, and the impact of recent acquisitions,
including HelloWallet and merchant services.
Key Corporate
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Summary of
operations
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
|
272
|
|
$
|
284
|
|
$
|
304
|
|
|
(4.2)
|
%
|
(10.5)
|
%
|
Noninterest
income
|
287
|
|
321
|
|
274
|
|
|
(10.6)
|
|
4.7
|
|
Total revenue
(TE)
|
559
|
|
605
|
|
578
|
|
|
(7.6)
|
|
(3.3)
|
|
Provision for credit
losses
|
14
|
|
(6)
|
|
18
|
|
|
N/M
|
(22.2)
|
|
Noninterest
expense
|
314
|
|
354
|
|
304
|
|
|
(11.3)
|
|
3.3
|
|
Income (loss) before
income taxes (TE)
|
231
|
|
257
|
|
256
|
|
|
(10.1)
|
|
(9.8)
|
|
Allocated income
taxes and TE adjustments
|
24
|
|
35
|
|
76
|
|
|
(31.4)
|
|
(68.4)
|
|
Net income (loss)
attributable to Key
|
$
|
207
|
|
$
|
222
|
|
$
|
180
|
|
|
(6.8)
|
%
|
15.0
|
%
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans and
leases
|
$
|
38,260
|
|
$
|
37,460
|
|
$
|
37,688
|
|
|
2.1
|
%
|
1.5
|
%
|
Loans held for
sale
|
1,118
|
|
1,345
|
|
1,097
|
|
|
(16.9)
|
|
1.9
|
|
Total
assets
|
45,549
|
|
44,504
|
|
44,124
|
|
|
2.3
|
|
3.2
|
|
Deposits
|
20,815
|
|
21,558
|
|
21,002
|
|
|
(3.4)
|
|
(.9)
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent, N/M = Not Meaningful
|
Additional Key
Corporate Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dollars in
millions
|
|
|
|
|
Change 1Q18
vs.
|
|
1Q18
|
4Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Noninterest
income
|
|
|
|
|
|
|
Trust and investment
services income
|
$
|
29
|
|
$
|
33
|
|
$
|
37
|
|
|
(12.1)
|
%
|
(21.6)
|
%
|
Investment banking
and debt placement fees
|
141
|
|
195
|
|
124
|
|
|
(27.7)
|
|
13.7
|
|
Operating lease
income and other leasing gains
|
27
|
|
25
|
|
21
|
|
|
8.0
|
|
28.6
|
|
|
|
|
|
|
|
|
Corporate services
income
|
43
|
|
40
|
|
38
|
|
|
7.5
|
|
13.2
|
|
Service charges on
deposit accounts
|
13
|
|
13
|
|
12
|
|
|
—
|
|
8.3
|
|
Cards and payments
income
|
11
|
|
10
|
|
9
|
|
|
10.0
|
|
22.2
|
|
Payments and services
income
|
67
|
|
63
|
|
59
|
|
|
6.3
|
|
13.6
|
|
|
|
|
|
|
|
|
Mortgage servicing
fees
|
17
|
|
14
|
|
16
|
|
|
21.4
|
|
6.3
|
|
Other noninterest
income
|
6
|
|
(9)
|
|
17
|
|
|
N/M
|
|
(64.7)
|
|
Total noninterest
income
|
$
|
287
|
|
$
|
321
|
|
$
|
274
|
|
|
(10.6)
|
%
|
4.7
|
%
|
|
|
|
|
|
|
|
Key Corporate Bank Summary of Operations (1Q18 vs.
1Q17)
- Commercial and industrial loans up $1.7
billion, or 7.9%, from prior year
- Investment banking and debt placement fees up $17 million, or 14%, from prior year
- Net income up $27 million, or
15.0%, from prior year
Key Corporate Bank recorded net income attributable to Key of
$207 million for the first quarter of
2018, compared to $180 million for
the same period one year ago.
Taxable-equivalent net interest income decreased by $32 million, or 10.5%, compared to the first
quarter of 2017, $7 million of which
was related to lower purchase accounting accretion, with the
remaining due to lower spreads on earning assets. Average loan and
lease balances increased $572
million, or 1.5%, from the year-ago quarter, driven by
growth in commercial and industrial loans. Average deposit balances
decreased $187 million, or .9%, from
the year-ago quarter, driven by the managed exit of higher cost
corporate and public sector deposits.
Noninterest income was up $13
million, or 4.7%, from the prior year. This increase was
largely due to higher investment banking and debt placement fees,
which were up $17 million, related to
the acquisition of Cain Brothers, as well as continued growth in
the core Key franchise. Operating lease income and other leasing
gains increased $6 million due higher
originations, and corporate services income increased $5 million, mostly due to higher derivatives
revenue. These increases were partially offset by a decline in
other noninterest income of $11
million, related to lower gains from certain real estate
investments.
During the first quarter of 2018, the provision for credit
losses decreased $4 million, or
22.2%, and net loan charge-offs declined $3
million, compared to the first quarter of 2017, related to
improving credit quality in the overall portfolio.
Noninterest expense increased by $10
million, or 3.3%, from the first quarter of 2017. The
increase from the prior year was largely driven by higher operating
lease expense and intangible asset amortization.
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 $19 million for the first quarter of 2018,
compared to $21 million for the same
period last year.
*****
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 $137.0 billion at March 31,
2018.
Key provides deposit, lending, cash management, insurance, and
investment services to individuals and businesses in 15 states
under the name KeyBank National Association through a network of
approximately 1,200 branches and more than 1,500 ATMs. Key also
provides a broad range of sophisticated corporate and investment
banking products, such as merger and acquisition advice, public and
private debt and equity, syndications and derivatives to middle
market companies in selected industries throughout the United States under the KeyBanc Capital
Markets trade name. For more information, visit
https://www.key.com/. KeyBank is Member FDIC.
This earnings
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements do not relate strictly to historical or current
facts. Forward-looking statements usually can be identified
by the use of words such as "goal," "objective," "plan," "expect,"
"assume," "anticipate," "intend," "project," "believe," "estimate,"
or other words of similar meaning. Forward-looking statements
provide our current expectations or forecasts of future events,
circumstances, results, or aspirations. Forward-looking statements,
by their nature, are subject to assumptions, risks and
uncertainties, many of which are outside of our control. Our actual
results may differ materially from those set forth in our
forward-looking statements. There is no assurance that any list of
risks and uncertainties or risk factors is complete. Factors
that could cause Key's actual results to differ from those
described in the forward-looking statements can be found in
KeyCorp's Form 10-K for the year ended December 31, 2017, 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 regulation
of the U.S. financial services industry. Any forward-looking
statements made by us or on our behalf speak only as of the date
they are made and we do not undertake any obligation to update any
forward-looking statement to reflect the impact of subsequent
events or circumstances.
|
Notes to Editors:
A live Internet broadcast
of KeyCorp's conference call to discuss quarterly results and
currently anticipated earnings trends and to answer analysts'
questions can be accessed through the Investor Relations section at
https://www.key.com/ir at 9:00
a.m. ET, on Thursday, April 19, 2018. An audio
replay of the call will be available through April 29, 2018.
*****
Financial
Highlights
|
(dollars in millions,
except per share amounts)
|
|
|
|
Three months
ended
|
|
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Summary of
operations
|
|
|
|
|
Net interest income
(TE)
|
$
|
952
|
|
$
|
952
|
|
$
|
929
|
|
|
Noninterest
income
|
601
|
|
656
|
|
577
|
|
|
|
Total revenue
(TE)
|
1,553
|
|
1,608
|
|
1,506
|
|
|
Provision for credit
losses
|
61
|
|
49
|
|
63
|
|
|
Noninterest
expense
|
1,006
|
|
1,098
|
|
1,013
|
|
|
Income (loss) from
continuing operations attributable to Key
|
416
|
|
195
|
|
324
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
2
|
|
1
|
|
—
|
|
|
Net income (loss)
attributable to Key
|
418
|
|
196
|
|
324
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
402
|
|
181
|
|
296
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
2
|
|
1
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders
|
404
|
|
182
|
|
296
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.38
|
|
$
|
.17
|
|
$
|
.28
|
|
|
Income (loss) from
discontinued operations, net of taxes (a)
|
—
|
|
—
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders (b)
|
.38
|
|
.17
|
|
.28
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.38
|
|
.17
|
|
.27
|
|
|
Income (loss) from
discontinued operations, net of taxes — assuming dilution
(a)
|
—
|
|
—
|
|
—
|
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(b)
|
.38
|
|
.17
|
|
.27
|
|
|
|
|
|
|
|
|
Cash dividends
declared
|
.105
|
|
.105
|
|
.085
|
|
|
Book value at period
end
|
13.07
|
|
13.09
|
|
12.71
|
|
|
Tangible book value
at period end
|
10.35
|
|
10.35
|
|
10.21
|
|
|
Market price at
period end
|
19.55
|
|
20.17
|
|
17.78
|
|
|
|
|
|
|
|
Performance
ratios
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
Return on average
total assets
|
1.25
|
%
|
.57
|
%
|
.99
|
%
|
|
Return on average
common equity
|
11.76
|
|
5.04
|
|
8.76
|
|
|
Return on average
tangible common equity (c)
|
14.89
|
|
6.35
|
|
10.98
|
|
|
Net interest margin
(TE)
|
3.15
|
|
3.09
|
|
3.13
|
|
|
Cash efficiency ratio
(c)
|
62.9
|
|
66.7
|
|
65.8
|
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
Return on average
total assets
|
1.24
|
%
|
.57
|
%
|
.98
|
%
|
|
Return on average
common equity
|
11.82
|
|
5.07
|
|
8.76
|
|
|
Return on average
tangible common equity (c)
|
14.97
|
|
6.39
|
|
10.98
|
|
|
Net interest margin
(TE)
|
3.13
|
|
3.07
|
|
3.11
|
|
|
Loan to deposit
(d)
|
86.9
|
|
84.4
|
|
85.6
|
|
|
|
|
|
|
|
Capital ratios at
period end
|
|
|
|
|
Key shareholders'
equity to assets
|
10.90
|
%
|
10.91
|
%
|
11.14
|
%
|
|
Key common
shareholders' equity to assets
|
10.16
|
|
10.17
|
|
10.37
|
|
|
Tangible common
equity to tangible assets (c)
|
8.22
|
|
8.23
|
|
8.51
|
|
|
Common Equity Tier 1
(e)
|
10.03
|
|
10.16
|
|
9.91
|
|
|
Tier 1 risk-based
capital (e)
|
10.84
|
|
11.01
|
|
10.74
|
|
|
Total risk-based
capital (e)
|
12.75
|
|
12.92
|
|
12.69
|
|
|
Leverage
(e)
|
9.84
|
|
9.73
|
|
9.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Highlights (continued)
|
(dollars in
millions)
|
|
|
|
Three months
ended
|
|
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Asset quality —
from continuing operations
|
|
|
|
Net loan
charge-offs
|
$
|
54
|
|
$
|
52
|
|
$
|
58
|
|
Net loan charge-offs to
average loans
|
.25
|
%
|
.24
|
%
|
.27
|
%
|
Allowance for loan and
lease losses
|
$
|
881
|
|
$
|
877
|
|
$
|
870
|
|
Allowance for credit
losses
|
941
|
|
934
|
|
918
|
|
Allowance for loan and
lease losses to period-end loans
|
1.00
|
%
|
1.01
|
%
|
1.01
|
%
|
Allowance for credit
losses to period-end loans
|
1.07
|
|
1.08
|
|
1.07
|
|
Allowance for loan and
lease losses to nonperforming loans (f)
|
162.8
|
|
174.4
|
|
151.8
|
|
Allowance for credit
losses to nonperforming loans (f)
|
173.9
|
|
185.7
|
|
160.2
|
|
Nonperforming loans at
period end (f)
|
$
|
541
|
|
$
|
503
|
|
$
|
573
|
|
Nonperforming assets at
period end (f)
|
569
|
|
534
|
|
623
|
|
Nonperforming loans to
period-end portfolio loans (f)
|
.61
|
%
|
.58
|
%
|
.67
|
%
|
Nonperforming assets to
period-end portfolio loans plus OREO and other nonperforming assets
(f)
|
.65
|
|
.62
|
|
.72
|
|
|
|
|
|
|
|
Trust
assets
|
|
|
|
Assets under
management
|
$
|
39,003
|
|
$
|
39,588
|
|
$
|
37,417
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
Average full-time
equivalent employees
|
18,540
|
|
18,379
|
|
18,386
|
|
Branches
|
1,192
|
|
1,197
|
|
1,216
|
|
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
$
|
8
|
|
$
|
14
|
|
$
|
11
|
|
|
|
(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.
|
(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" 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.
|
(e)
|
March 31, 2018,
ratio is estimated.
|
(f)
|
Nonperforming loan
balances exclude $690 million, $738 million, and $812 million of
purchased credit impaired loans at March 31, 2018,
December 31, 2017, and March 31, 2017,
respectively.
|
GAAP to Non-GAAP
Reconciliations
(dollars in millions)
The table below presents certain non-GAAP financial measures
related to "tangible common equity," "return on average tangible
common equity," "Common Equity Tier 1," "pre-provision net
revenue," certain financial measures excluding merger-related
charges and/or other notable items, and "cash efficiency
ratio."
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
merger-related charges and/or other notable items, including the
impact of tax reform and related actions, 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. 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.
The table also shows the computation for pre-provision net
revenue, which is not formally defined by GAAP. Management believes
that eliminating the effects of the provision for credit losses
makes it easier to analyze the results by presenting them on a more
comparable basis.
As previously disclosed, we no longer recognize merger-related
charges beginning in the first quarter of 2018. Prior to that, Key
recognized merger-related charges as a result of its purchase of
First Niagara on August 1, 2016. The
definitive agreement and plan of merger to acquire First Niagara
was originally announced on October 30,
2015. As a result of this transaction, Key had recognized
merger-related charges. For the first and fourth quarters of 2017,
merger-related charges were included in the total for "notable
items." The table below shows the computation of earnings per share
excluding notable items, pre-provision net revenue excluding
notable items, return on average tangible common equity excluding
notable items, cash efficiency ratio excluding notable items, and
return on average assets from continuing operations excluding
notable items. Management believes that eliminating the effects of
the merger-related charges and other notable items makes it easier
to analyze the results by presenting them on a more comparable
basis.
The cash efficiency ratio is a ratio of two non-GAAP performance
measures. As such, there is no directly comparable GAAP performance
measure. The cash efficiency ratio performance measure removes the
impact of Key's intangible asset amortization from the calculation.
The table below also shows the computation for the cash efficiency
ratio excluding merger-related charges. Management believes these
ratios provide greater consistency and comparability between Key's
results and those of its peer banks. Additionally, these ratios are
used by analysts and investors as they develop earnings forecasts
and peer bank analysis.
Non-GAAP financial measures have inherent limitations, are not
required to be uniformly applied, and are not audited. Although
these non-GAAP financial measures are frequently used by investors
to evaluate a company, they have limitations as analytical tools,
and should not be considered in isolation, or as a substitute for
analyses of results as reported under GAAP.
|
Three months
ended
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Tangible common
equity to tangible assets at period-end
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
|
14,944
|
|
$
|
15,023
|
|
$
|
14,976
|
|
Less: Intangible
assets (a)
|
2,902
|
|
2,928
|
|
2,751
|
|
Preferred
Stock (b)
|
1,009
|
|
1,009
|
|
1,009
|
|
Tangible common
equity (non-GAAP)
|
$
|
11,033
|
|
$
|
11,086
|
|
$
|
11,216
|
|
Total assets
(GAAP)
|
$
|
137,049
|
|
$
|
137,698
|
|
$
|
134,476
|
|
Less: Intangible
assets (a)
|
2,902
|
|
2,928
|
|
2,751
|
|
Tangible assets
(non-GAAP)
|
$
|
134,147
|
|
$
|
134,770
|
|
$
|
131,725
|
|
Tangible common
equity to tangible assets ratio (non-GAAP)
|
8.22
|
%
|
8.23
|
%
|
8.51
|
%
|
Earnings per
common share (EPS) excluding notable items
|
|
|
|
EPS from continuing
operations attributable to Key common shareholders — assuming
dilution
|
$
|
.38
|
|
$
|
.17
|
|
$
|
.27
|
|
Plus: EPS impact of
notable items
|
—
|
|
.19
|
|
.05
|
|
EPS from continuing
operations attributable to Key common shareholders excluding
notable items (non-
GAAP)
|
$
|
.38
|
|
$
|
.36
|
|
$
|
.32
|
|
Notable
items
|
|
|
|
Merger-related
charges
|
—
|
|
$
|
(56)
|
|
$
|
(81)
|
|
Estimated impacts of
tax reform and related actions
|
—
|
|
(30)
|
|
—
|
|
Total
notable items
|
—
|
|
$
|
(86)
|
|
$
|
(81)
|
|
Income
taxes
|
—
|
|
(26)
|
|
(30)
|
|
Reevaluation of
certain tax related assets
|
—
|
|
147
|
|
—
|
|
Total notable
items, after tax
|
—
|
|
$
|
(207)
|
|
$
|
(51)
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
Three months
ended
|
|
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Pre-provision net
revenue
|
|
|
|
Net interest income
(GAAP)
|
$
|
944
|
|
$
|
938
|
|
$
|
918
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
8
|
|
14
|
|
11
|
|
|
|
Noninterest
income
|
601
|
|
656
|
|
577
|
|
|
Less:
|
Noninterest
expense
|
1,006
|
|
1,098
|
|
1,013
|
|
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
$
|
547
|
|
$
|
510
|
|
$
|
493
|
|
|
Plus:
|
Notable
items
|
—
|
|
86
|
|
81
|
|
|
|
Pre-provision net
revenue from continuing operations excluding notable items
(non-GAAP)
|
$
|
547
|
|
$
|
596
|
|
$
|
574
|
|
Average tangible
common equity
|
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
$
|
14,889
|
|
$
|
15,268
|
|
$
|
15,184
|
|
|
Less:
|
Intangible assets
(average) (c)
|
2,916
|
|
2,939
|
|
2,772
|
|
|
|
Preferred Stock
(average)
|
1,025
|
|
1,025
|
|
1,480
|
|
|
|
Average tangible
common equity (non-GAAP)
|
$
|
10,948
|
|
$
|
11,304
|
|
$
|
10,932
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
(GAAP)
|
$
|
402
|
|
$
|
181
|
|
$
|
296
|
|
|
Plus:
|
Notable items, after
tax
|
—
|
|
207
|
|
51
|
|
|
Net income (loss)
from continuing operations attributable to Key common shareholders
excluding notable
items (non-GAAP)
|
$
|
402
|
|
$
|
388
|
|
$
|
347
|
|
|
Average tangible
common equity (non-GAAP)
|
10,948
|
|
11,304
|
|
10,932
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
(non-GAAP)
|
14.89
|
%
|
6.35
|
%
|
10.98
|
%
|
|
Return on average
tangible common equity from continuing operations excluding notable
items (non-GAAP)
|
14.89
|
|
13.62
|
|
12.87
|
|
Return on average
tangible common equity consolidated
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
|
404
|
|
$
|
182
|
|
$
|
296
|
|
|
Average tangible
common equity (non-GAAP)
|
10,948
|
|
11,304
|
|
10,932
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
14.97
|
%
|
6.39
|
%
|
10.98
|
%
|
Cash efficiency
ratio
|
|
|
|
|
Noninterest expense
(GAAP)
|
$
|
1,006
|
|
$
|
1,098
|
|
$
|
1,013
|
|
|
Less:
|
Intangible asset
amortization
|
29
|
|
26
|
|
22
|
|
|
|
Adjusted noninterest
expense (non-GAAP)
|
977
|
|
1,072
|
|
991
|
|
|
Less:
|
Notable
items
|
—
|
|
85
|
|
81
|
|
|
|
Adjusted noninterest
expense excluding notable items (non-GAAP)
|
$
|
977
|
|
$
|
987
|
|
$
|
910
|
|
|
Net interest income
(GAAP)
|
$
|
944
|
|
$
|
938
|
|
$
|
918
|
|
|
Plus:
|
Taxable-equivalent
adjustment
|
8
|
|
14
|
|
11
|
|
|
|
Noninterest
income
|
601
|
|
656
|
|
577
|
|
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
1,553
|
|
1,608
|
|
1,506
|
|
|
Plus:
|
Notable
items
|
—
|
|
1
|
|
—
|
|
|
|
Adjusted total
taxable-equivalent revenue excluding notable items
(non-GAAP)
|
$
|
1,553
|
|
$
|
1,609
|
|
$
|
1,506
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
62.9
|
%
|
66.7
|
%
|
65.8
|
%
|
|
Cash efficiency ratio
excluding notable items (non-GAAP)
|
62.9
|
|
61.3
|
|
60.4
|
|
Return on average
total assets from continuing operations excluding notable
items
|
|
|
|
|
Income from
continuing operations attributable to Key (GAAP)
|
$
|
416
|
|
$
|
195
|
|
$
|
324
|
|
|
Plus:
|
Notable items, after
tax
|
—
|
|
207
|
|
51
|
|
|
|
Income from
continuing operations attributable to Key excluding notable items,
after tax (non-
GAAP)
|
$
|
416
|
|
$
|
402
|
|
$
|
375
|
|
|
|
|
|
|
|
|
Average total assets
from continuing operations (GAAP)
|
$
|
134,915
|
|
$
|
135,255
|
|
$
|
132,741
|
|
|
|
|
|
|
|
|
Return on average
total assets from continuing operations excluding notable items
(non-GAAP)
|
1.25
|
%
|
1.18
|
%
|
1.15
|
%
|
GAAP to Non-GAAP
Reconciliations (continued)
|
(dollars in
millions)
|
|
|
|
|
|
Three
months
ended
|
|
|
|
|
|
3/31/2018
|
Common Equity Tier
1 under the Regulatory Capital Rules ("RCR")
(estimates)
|
|
|
Common Equity Tier 1
under current RCR
|
|
|
$
|
12,165
|
|
|
Adjustments from
current RCR to the fully phased-in RCR:
|
|
|
|
|
|
Deferred tax assets
and other intangible assets (d)
|
|
|
(78)
|
|
|
|
Common Equity Tier 1
anticipated under the fully phased-in RCR (e)
|
|
$
|
12,087
|
|
|
|
|
|
|
|
|
Net risk-weighted
assets under current RCR
|
|
|
$
|
121,343
|
|
|
Adjustments from
current RCR to the fully phased-in RCR:
|
|
|
|
|
|
Mortgage servicing
assets (f)
|
|
|
700
|
|
|
|
Deferred tax
assets
|
|
|
318
|
|
|
|
All other
assets
|
|
|
(77)
|
|
|
|
Total risk-weighted
assets anticipated under the fully phased-in RCR
(e)
|
|
$
|
122,284
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
ratio under the fully phased-in RCR (e)
|
|
|
9.88
|
%
|
|
|
(a)
|
For the three months
ended March 31, 2018, December 31, 2017, and
March 31, 2017, intangible assets exclude $23 million, $26
million, and $38 million, respectively, of period-end purchased
credit card receivables.
|
(b)
|
Net of capital
surplus.
|
(c)
|
For the three months
ended March 31, 2018, December 31, 2017, and
March 31, 2017, average intangible assets exclude $24 million,
$28 million, and $40 million, respectively, of average purchased
credit card receivables.
|
(d)
|
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.
|
(e)
|
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."
|
(f)
|
Item is included in
the 10%/15% exceptions bucket calculation and is risk-weighted at
250%.
|
GAAP = U.S. generally
accepted accounting principles
|
Consolidated
Balance Sheets
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Assets
|
|
|
|
|
Loans
|
$
|
88,089
|
|
$
|
86,405
|
|
$
|
86,125
|
|
|
Loans held for
sale
|
1,667
|
|
1,107
|
|
1,384
|
|
|
Securities available
for sale
|
17,888
|
|
18,139
|
|
18,431
|
|
|
Held-to-maturity
securities
|
12,189
|
|
11,830
|
|
10,186
|
|
|
Trading account
assets
|
769
|
|
836
|
|
921
|
|
|
Short-term
investments
|
1,644
|
|
4,447
|
|
2,525
|
|
|
Other
investments
|
715
|
|
726
|
|
689
|
|
|
|
Total earning
assets
|
122,961
|
|
123,490
|
|
120,261
|
|
|
Allowance for loan
and lease losses
|
(881)
|
|
(877)
|
|
(870)
|
|
|
Cash and due from
banks
|
643
|
|
671
|
|
549
|
|
|
Premises and
equipment
|
916
|
|
930
|
|
935
|
|
|
Operating lease
assets
|
838
|
|
821
|
|
563
|
|
|
Goodwill
|
2,538
|
|
2,538
|
|
2,427
|
|
|
Other intangible
assets
|
387
|
|
416
|
|
362
|
|
|
Corporate-owned life
insurance
|
4,142
|
|
4,132
|
|
4,087
|
|
|
Accrued income and
other assets
|
4,216
|
|
4,237
|
|
4,642
|
|
|
Discontinued
assets
|
1,289
|
|
1,340
|
|
1,520
|
|
|
|
Total
assets
|
$
|
137,049
|
|
$
|
137,698
|
|
$
|
134,476
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits in domestic
offices:
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
54,606
|
|
$
|
53,627
|
|
$
|
55,095
|
|
|
|
Savings
deposits
|
6,321
|
|
6,296
|
|
6,306
|
|
|
|
Certificates of
deposit ($100,000 or more)
|
7,295
|
|
6,849
|
|
5,859
|
|
|
|
Other time
deposits
|
4,928
|
|
4,798
|
|
4,694
|
|
|
|
Total
interest-bearing deposits
|
73,150
|
|
71,570
|
|
71,954
|
|
|
|
Noninterest-bearing
deposits
|
31,601
|
|
33,665
|
|
32,028
|
|
|
|
Total
deposits
|
104,751
|
|
105,235
|
|
103,982
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
616
|
|
377
|
|
442
|
|
|
Bank notes and other
short-term borrowings
|
1,133
|
|
634
|
|
943
|
|
|
Accrued expense and
other liabilities
|
1,854
|
|
2,094
|
|
1,807
|
|
|
Long-term
debt
|
13,749
|
|
14,333
|
|
12,324
|
|
|
|
Total
liabilities
|
122,103
|
|
122,673
|
|
119,498
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Preferred
stock
|
1,025
|
|
1,025
|
|
1,025
|
|
|
Common
shares
|
1,257
|
|
1,257
|
|
1,257
|
|
|
Capital
surplus
|
6,289
|
|
6,335
|
|
6,287
|
|
|
Retained
earnings
|
10,624
|
|
10,335
|
|
9,584
|
|
|
Treasury stock, at
cost
|
(3,260)
|
|
(3,150)
|
|
(2,623)
|
|
|
Accumulated other
comprehensive income (loss)
|
(991)
|
|
(779)
|
|
(554)
|
|
|
|
Key shareholders'
equity
|
14,944
|
|
15,023
|
|
14,976
|
|
|
Noncontrolling
interests
|
2
|
|
2
|
|
2
|
|
|
|
Total
equity
|
14,946
|
|
15,025
|
|
14,978
|
|
Total liabilities
and equity
|
$
|
137,049
|
|
$
|
137,698
|
|
$
|
134,476
|
|
|
|
|
|
|
|
Common shares
outstanding (000)
|
1,064,939
|
|
1,069,084
|
|
1,097,479
|
|
Consolidated
Statements of Income
|
(dollars in millions,
except per share amounts)
|
|
|
|
Three months
ended
|
|
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Interest
income
|
|
|
|
|
Loans
|
$
|
940
|
|
$
|
924
|
|
$
|
877
|
|
|
Loans held for
sale
|
12
|
|
13
|
|
13
|
|
|
Securities available
for sale
|
95
|
|
93
|
|
95
|
|
|
Held-to-maturity
securities
|
69
|
|
61
|
|
51
|
|
|
Trading account
assets
|
7
|
|
6
|
|
7
|
|
|
Short-term
investments
|
8
|
|
12
|
|
3
|
|
|
Other
investments
|
6
|
|
5
|
|
4
|
|
|
|
Total interest
income
|
1,137
|
|
1,114
|
|
1,050
|
|
Interest
expense
|
|
|
|
|
Deposits
|
91
|
|
82
|
|
58
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
4
|
|
—
|
|
1
|
|
|
Bank notes and other
short-term borrowings
|
6
|
|
3
|
|
5
|
|
|
Long-term
debt
|
92
|
|
91
|
|
68
|
|
|
|
Total interest
expense
|
193
|
|
176
|
|
132
|
|
Net interest
income
|
944
|
|
938
|
|
918
|
|
Provision for credit
losses
|
61
|
|
49
|
|
63
|
|
Net interest income
after provision for credit losses
|
883
|
|
889
|
|
855
|
|
Noninterest
income
|
|
|
|
|
Trust and investment
services income
|
133
|
|
131
|
|
135
|
|
|
Investment banking
and debt placement fees
|
143
|
|
200
|
|
127
|
|
|
Service charges on
deposit accounts
|
89
|
|
89
|
|
87
|
|
|
Operating lease
income and other leasing gains
|
32
|
|
27
|
|
23
|
|
|
Corporate services
income
|
62
|
|
56
|
|
54
|
|
|
Cards and payments
income
|
62
|
|
77
|
|
65
|
|
|
Corporate-owned life
insurance income
|
32
|
|
37
|
|
30
|
|
|
Consumer mortgage
income
|
7
|
|
7
|
|
6
|
|
|
Mortgage servicing
fees
|
20
|
|
17
|
|
18
|
|
|
Other
income (a)
|
21
|
|
15
|
|
32
|
|
|
|
Total noninterest
income
|
601
|
|
656
|
|
577
|
|
Noninterest
expense
|
|
|
|
|
Personnel
|
594
|
|
608
|
|
556
|
|
|
Net
occupancy
|
78
|
|
92
|
|
87
|
|
|
Computer
processing
|
52
|
|
54
|
|
60
|
|
|
Business services and
professional fees
|
41
|
|
52
|
|
46
|
|
|
Equipment
|
26
|
|
31
|
|
27
|
|
|
Operating lease
expense
|
27
|
|
28
|
|
19
|
|
|
Marketing
|
25
|
|
35
|
|
21
|
|
|
FDIC
assessment
|
21
|
|
20
|
|
20
|
|
|
Intangible asset
amortization
|
29
|
|
26
|
|
22
|
|
|
OREO expense,
net
|
2
|
|
3
|
|
2
|
|
|
Other
expense
|
111
|
|
149
|
|
153
|
|
|
|
Total noninterest
expense
|
1,006
|
|
1,098
|
|
1,013
|
|
Income (loss) from
continuing operations before income taxes
|
478
|
|
447
|
|
419
|
|
|
Income
taxes
|
62
|
|
251
|
|
94
|
|
Income (loss) from
continuing operations
|
416
|
|
196
|
|
325
|
|
|
Income (loss) from
discontinued operations, net of taxes
|
2
|
|
1
|
|
—
|
|
Net income
(loss)
|
418
|
|
197
|
|
325
|
|
|
Less: Net
income (loss) attributable to noncontrolling interests
|
—
|
|
1
|
|
1
|
|
Net income (loss)
attributable to Key
|
$
|
418
|
|
$
|
196
|
|
$
|
324
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
402
|
|
$
|
181
|
|
$
|
296
|
|
Net income (loss)
attributable to Key common shareholders
|
404
|
|
182
|
|
296
|
|
Per common
share
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.38
|
|
$
|
.17
|
|
$
|
.28
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
Net income (loss)
attributable to Key common shareholders (b)
|
.38
|
|
.17
|
|
.28
|
|
Per common share —
assuming dilution
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
|
.38
|
|
$
|
.17
|
|
$
|
.27
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
Net income (loss)
attributable to Key common
shareholders (b)
|
.38
|
|
.17
|
|
.27
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
.105
|
|
$
|
.105
|
|
$
|
.085
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (000)
|
|
1,056,037
|
|
|
1,062,348
|
|
|
1,068,609
|
|
|
Effect of common
share options and other stock awards
|
15,749
|
|
16,982
|
|
17,931
|
|
Weighted-average
common shares and potential common shares outstanding
(000) (c)
|
1,071,786
|
|
1,079,330
|
|
1,086,540
|
|
|
|
|
|
|
|
(a)
|
For the three months
ended March 31, 2018, and December 31, 2017, net
securities gains (losses) totaled less than $1 million. For the
three months ended March 31, 2017, net securities gains
totaled $1 million. For the three months ended March 31, 2018,
December 31, 2017, and March 31, 2017, 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, as
applicable.
|
Consolidated
Average Balance Sheets, and Net Interest Income and Yields/Rates
From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
2018
|
|
Fourth Quarter
2017
|
|
First Quarter
2017
|
|
|
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)
|
$
|
42,733
|
|
$
|
434
|
|
4.11
|
%
|
|
$
|
41,289
|
|
$
|
417
|
|
4.01
|
%
|
|
$
|
40,002
|
|
$
|
373
|
|
3.77
|
%
|
|
Real estate —
commercial mortgage
|
14,085
|
|
165
|
|
4.76
|
|
|
14,386
|
|
167
|
|
4.60
|
|
|
15,187
|
|
164
|
|
4.39
|
|
|
Real estate —
construction
|
1,957
|
|
22
|
|
4.64
|
|
|
1,967
|
|
23
|
|
4.55
|
|
|
2,353
|
|
26
|
|
4.54
|
|
|
Commercial lease
financing
|
4,663
|
|
41
|
|
3.53
|
|
|
4,687
|
|
45
|
|
3.86
|
|
|
4,635
|
|
44
|
|
3.76
|
|
|
Total commercial
loans
|
63,438
|
|
662
|
|
4.23
|
|
|
62,329
|
|
652
|
|
4.15
|
|
|
62,177
|
|
607
|
|
3.95
|
|
|
Real estate —
residential mortgage
|
5,479
|
|
54
|
|
3.95
|
|
|
5,474
|
|
54
|
|
3.95
|
|
|
5,520
|
|
54
|
|
3.94
|
|
|
Home equity
loans
|
11,877
|
|
134
|
|
4.56
|
|
|
12,128
|
|
134
|
|
4.39
|
|
|
12,611
|
|
131
|
|
4.22
|
|
|
Consumer direct
loans
|
1,766
|
|
33
|
|
7.53
|
|
|
1,782
|
|
32
|
|
7.15
|
|
|
1,762
|
|
30
|
|
6.97
|
|
|
Credit
cards
|
1,080
|
|
30
|
|
11.32
|
|
|
1,061
|
|
30
|
|
11.14
|
|
|
1,067
|
|
29
|
|
11.06
|
|
|
Consumer indirect
loans
|
3,287
|
|
35
|
|
4.29
|
|
|
3,232
|
|
36
|
|
4.42
|
|
|
2,996
|
|
37
|
|
4.91
|
|
|
Total consumer
loans
|
23,489
|
|
286
|
|
4.91
|
|
|
23,677
|
|
286
|
|
4.80
|
|
|
23,956
|
|
281
|
|
4.75
|
|
|
Total
loans
|
86,927
|
|
948
|
|
4.41
|
|
|
86,006
|
|
938
|
|
4.33
|
|
|
86,133
|
|
888
|
|
4.17
|
|
|
Loans held for
sale
|
1,187
|
|
12
|
|
4.10
|
|
|
1,420
|
|
13
|
|
3.81
|
|
|
1,188
|
|
13
|
|
4.28
|
|
|
Securities available
for sale (b), (e)
|
17,889
|
|
95
|
|
2.06
|
|
|
18,447
|
|
93
|
|
1.97
|
|
|
19,181
|
|
95
|
|
1.95
|
|
|
Held-to-maturity
securities (b)
|
12,041
|
|
69
|
|
2.30
|
|
|
11,121
|
|
61
|
|
2.20
|
|
|
9,988
|
|
51
|
|
2.04
|
|
|
Trading account
assets
|
907
|
|
7
|
|
2.99
|
|
|
898
|
|
6
|
|
2.72
|
|
|
968
|
|
7
|
|
2.75
|
|
|
Short-term
investments
|
2,048
|
|
8
|
|
1.51
|
|
|
3,684
|
|
12
|
|
1.29
|
|
|
1,610
|
|
3
|
|
.79
|
|
|
Other investments
(e)
|
723
|
|
6
|
|
2.96
|
|
|
725
|
|
5
|
|
2.80
|
|
|
709
|
|
4
|
|
2.26
|
|
|
Total earning
assets
|
121,722
|
|
1,145
|
|
3.78
|
|
|
122,301
|
|
1,128
|
|
3.66
|
|
|
119,777
|
|
1,061
|
|
3.57
|
|
|
Allowance for loan
and lease losses
|
(875)
|
|
|
|
|
(871)
|
|
|
|
|
(855)
|
|
|
|
|
Accrued income and
other assets
|
14,068
|
|
|
|
|
13,825
|
|
|
|
|
13,819
|
|
|
|
|
Discontinued
assets
|
1,304
|
|
|
|
|
1,358
|
|
|
|
|
1,540
|
|
|
|
|
Total
assets
|
$
|
136,219
|
|
|
|
|
$
|
136,613
|
|
|
|
|
$
|
134,281
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market
deposit accounts
|
$
|
53,503
|
|
46
|
|
.34
|
|
|
$
|
53,601
|
|
40
|
|
.29
|
|
|
$
|
54,295
|
|
32
|
|
.24
|
|
|
Savings
deposits
|
6,232
|
|
5
|
|
.29
|
|
|
6,372
|
|
3
|
|
.24
|
|
|
6,351
|
|
1
|
|
.10
|
|
|
Certificates of
deposit ($100,000 or more)
|
6,972
|
|
27
|
|
1.58
|
|
|
6,776
|
|
26
|
|
1.50
|
|
|
5,627
|
|
16
|
|
1.16
|
|
|
Other time
deposits
|
4,865
|
|
13
|
|
1.12
|
|
|
4,771
|
|
13
|
|
1.05
|
|
|
4,706
|
|
9
|
|
.76
|
|
|
Total
interest-bearing deposits
|
71,572
|
|
91
|
|
.51
|
|
|
71,520
|
|
82
|
|
.45
|
|
|
70,979
|
|
58
|
|
.33
|
|
|
Federal funds
purchased and securities
sold under repurchase
agreements
|
1,421
|
|
4
|
|
1.11
|
|
|
360
|
|
—
|
|
.08
|
|
|
795
|
|
1
|
|
.32
|
|
|
Bank notes and other
short-term borrowings
|
1,342
|
|
6
|
|
1.87
|
|
|
693
|
|
3
|
|
1.72
|
|
|
1,802
|
|
5
|
|
1.06
|
|
|
Long-term debt
(f), (g)
|
12,465
|
|
92
|
|
2.95
|
|
|
13,140
|
|
91
|
|
2.76
|
|
|
10,833
|
|
68
|
|
2.54
|
|
|
Total
interest-bearing liabilities
|
86,800
|
|
193
|
|
.90
|
|
|
85,713
|
|
176
|
|
.81
|
|
|
84,409
|
|
132
|
|
.63
|
|
|
Noninterest-bearing
deposits
|
30,984
|
|
|
|
|
32,278
|
|
|
|
|
31,099
|
|
|
|
|
Accrued expense and
other liabilities
|
2,241
|
|
|
|
|
1,994
|
|
|
|
|
2,048
|
|
|
|
|
Discontinued
liabilities (g)
|
1,304
|
|
|
|
|
1,359
|
|
|
|
|
1,540
|
|
|
|
|
Total
liabilities
|
121,329
|
|
|
|
|
121,344
|
|
|
|
|
119,096
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
14,889
|
|
|
|
|
15,268
|
|
|
|
|
15,184
|
|
|
|
|
Noncontrolling
interests
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
Total
equity
|
14,890
|
|
|
|
|
15,269
|
|
|
|
|
15,185
|
|
|
|
|
Total liabilities
and equity
|
$
|
136,219
|
|
|
|
|
$
|
136,613
|
|
|
|
|
$
|
134,281
|
|
|
|
Interest rate spread
(TE)
|
|
|
2.88
|
%
|
|
|
|
2.85
|
%
|
|
|
|
2.94
|
%
|
Net interest income
(TE) and net interest margin (TE)
|
|
952
|
|
3.15
|
%
|
|
|
952
|
|
3.09
|
%
|
|
|
929
|
|
3.13
|
%
|
TE adjustment
(b)
|
|
8
|
|
|
|
|
14
|
|
|
|
|
11
|
|
|
|
Net interest income,
GAAP basis
|
|
$
|
944
|
|
|
|
|
$
|
938
|
|
|
|
|
$
|
918
|
|
|
|
|
(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 in effect for that period.
|
(c)
|
For purposes of these
computations, nonaccrual loans are included in average loan
balances.
|
(d)
|
Commercial and
industrial average balances include $120 million, $119 million, and
$114 million of assets from commercial credit cards for the three
months ended March 31, 2018, December 31, 2017, and
March 31, 2017, 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
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Personnel
(a)
|
$
|
594
|
|
$
|
608
|
|
$
|
556
|
|
Net
occupancy
|
78
|
|
92
|
|
87
|
|
Computer
processing
|
52
|
|
54
|
|
60
|
|
Business services and
professional fees
|
41
|
|
52
|
|
46
|
|
Equipment
|
26
|
|
31
|
|
27
|
|
Operating lease
expense
|
27
|
|
28
|
|
19
|
|
Marketing
|
25
|
|
35
|
|
21
|
|
FDIC
assessment
|
21
|
|
20
|
|
20
|
|
Intangible asset
amortization
|
29
|
|
26
|
|
22
|
|
OREO expense,
net
|
2
|
|
3
|
|
2
|
|
Other
expense
|
111
|
|
149
|
|
153
|
|
Total
noninterest expense
|
$
|
1,006
|
|
$
|
1,098
|
|
$
|
1,013
|
|
Notable items
(b)
|
—
|
|
85
|
|
81
|
|
Total
noninterest expense excluding notable items
|
$
|
1,006
|
|
$
|
1,013
|
|
$
|
932
|
|
Average full-time
equivalent employees (c)
|
18,540
|
|
18,379
|
|
18,386
|
|
|
|
(a)
|
Additional detail
provided in Personnel Expense table below.
|
(b)
|
Notable items for the
fourth quarter of 2017 includes $56 million of merger-related
charges and $29 million of estimated impacts of tax reform and
related actions. Notable items for the first quarter of 2017
includes $81 million of merger-related charges. See the table
entitled "GAAP to Non-GAAP Reconciliations" in the attached
financial supplement which presents the computations of certain
financial measures related to "notable items."
|
(c)
|
The number of average
full-time equivalent employees has not been adjusted for
discontinued operations.
|
Personnel
Expense
|
(in
millions)
|
|
|
|
|
|
Three months
ended
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Salaries and contract
labor
|
$
|
339
|
|
$
|
346
|
|
$
|
324
|
|
Incentive and
stock-based compensation
|
145
|
|
168
|
|
127
|
|
Employee
benefits
|
105
|
|
90
|
|
96
|
|
Severance
|
5
|
|
4
|
|
9
|
|
Total personnel
expense
|
$
|
594
|
|
$
|
608
|
|
$
|
556
|
|
Notable items
(a)
|
—
|
|
42
|
|
30
|
|
Total personnel
expense excluding notable items
|
$
|
594
|
|
$
|
566
|
|
$
|
526
|
|
|
|
(a)
|
Notable items for the
fourth quarter of 2017 includes $26 million of merger-related
charges and $16 million of estimated impacts of tax reform related
actions. Notable items for the first quarter of 2017 includes $30
million of merger-related charges.
|
Merger-Related
Charges
|
(in
millions)
|
|
|
|
|
|
Three months
ended
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
Personnel
|
—
|
|
$
|
26
|
|
$
|
30
|
|
Net
occupancy
|
—
|
|
12
|
|
5
|
|
Business services and
professional fees
|
—
|
|
3
|
|
5
|
|
Computer
processing
|
—
|
|
1
|
|
5
|
|
Marketing
|
—
|
|
5
|
|
6
|
|
Other nonpersonnel
expense
|
—
|
|
9
|
|
30
|
|
Total
merger-related charges
|
—
|
|
$
|
56
|
|
$
|
81
|
|
|
|
|
|
|
|
|
|
|
Loan
Composition
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Percent change
3/31/2018 vs.
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
|
12/31/2017
|
3/31/2017
|
Commercial and
industrial (a)
|
$
|
44,313
|
|
$
|
41,859
|
|
$
|
40,112
|
|
|
5.9
|
%
|
10.5
|
%
|
Commercial real
estate:
|
|
|
|
|
|
|
Commercial
mortgage
|
13,997
|
|
14,088
|
|
15,260
|
|
|
(.6)
|
|
(8.3)
|
|
Construction
|
1,871
|
|
1,960
|
|
2,270
|
|
|
(4.5)
|
|
(17.6)
|
|
Total
commercial real estate loans
|
15,868
|
|
16,048
|
|
17,530
|
|
|
(1.1)
|
|
(9.5)
|
|
Commercial lease
financing (b)
|
4,598
|
|
4,826
|
|
4,665
|
|
|
(4.7)
|
|
(1.4)
|
|
Total
commercial loans
|
64,779
|
|
62,733
|
|
62,307
|
|
|
3.3
|
|
4.0
|
|
Residential — prime
loans:
|
|
|
|
|
|
|
Real estate —
residential mortgage
|
5,473
|
|
5,483
|
|
5,507
|
|
|
(.2)
|
|
(.6)
|
|
Home equity
loans
|
11,720
|
|
12,028
|
|
12,541
|
|
|
(2.6)
|
|
(6.5)
|
|
Total
residential — prime loans
|
17,193
|
|
17,511
|
|
18,048
|
|
|
(1.8)
|
|
(4.7)
|
|
Consumer direct
loans
|
1,758
|
|
1,794
|
|
1,735
|
|
|
(2.0)
|
|
1.3
|
|
Credit
cards
|
1,068
|
|
1,106
|
|
1,037
|
|
|
(3.4)
|
|
3.0
|
|
Consumer indirect
loans
|
3,291
|
|
3,261
|
|
2,998
|
|
|
.9
|
|
9.8
|
|
Total consumer
loans
|
23,310
|
|
23,672
|
|
23,818
|
|
|
(1.5)
|
|
(2.1)
|
|
Total loans
(c)
|
$
|
88,089
|
|
$
|
86,405
|
|
$
|
86,125
|
|
|
1.9
|
%
|
2.3
|
%
|
|
|
(a)
|
Loan balances include
$121 million, $119 million, and $114 million of commercial credit
card balances at March 31, 2018, December 31, 2017, and
March 31, 2017, respectively.
|
(b)
|
Commercial lease
financing includes receivables held as collateral for a secured
borrowing of $16 million, $24 million, and $55 million at
March 31, 2018, December 31, 2017, and March 31,
2017, respectively. Principal reductions are based on the cash
payments received from these related receivables.
|
(c)
|
Total loans exclude
loans of $1.3 billion at March 31, 2018, $1.3 billion at
December 31, 2017, and $1.5 billion at March 31, 2017,
related to the discontinued operations of the education lending
business.
|
Loans Held for
Sale Composition
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
3/31/2018 vs.
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
|
12/31/2017
|
3/31/2017
|
Commercial and
industrial
|
$
|
194
|
|
$
|
139
|
|
$
|
171
|
|
|
39.6
|
%
|
13.5
|
%
|
Real estate —
commercial mortgage
|
1,426
|
|
897
|
|
1,150
|
|
|
59.0
|
|
24.0
|
|
Commercial lease
financing
|
—
|
|
—
|
|
1
|
|
|
N/M
|
N/M
|
Real estate —
residential mortgage
|
47
|
|
71
|
|
62
|
|
|
(33.8)
|
|
(24.2)
|
|
Total loans
held for sale (a)
|
$
|
1,667
|
|
$
|
1,107
|
|
$
|
1,384
|
|
|
50.6
|
%
|
20.4
|
%
|
|
|
(a)
|
Total loans held for
sale include Real estate — residential mortgage loans held for sale
at fair value of $47 million at March 31, 2018, $71 million at
December 31, 2017, and $62 million at March 31,
2017.
|
N/M = Not
Meaningful
|
Summary of Changes
in Loans Held for Sale
|
(in
millions)
|
|
|
|
|
|
|
|
1Q18
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
Balance at beginning
of period
|
$
|
1,107
|
|
$
|
1,341
|
|
$
|
1,743
|
|
$
|
1,384
|
|
$
|
1,104
|
|
New
originations
|
3,280
|
|
3,566
|
|
2,855
|
|
2,876
|
|
2,563
|
|
Transfers from
(to) held to maturity, net
|
(14)
|
|
(10)
|
|
(63)
|
|
(7)
|
|
17
|
|
Loan
sales
|
(2,705)
|
|
(3,783)
|
|
(3,191)
|
|
(2,507)
|
|
(2,299)
|
|
Loan draws
(payments), net
|
(1)
|
|
(7)
|
|
(3)
|
|
(3)
|
|
(1)
|
|
Balance at end of
period (a)
|
$
|
1,667
|
|
$
|
1,107
|
|
$
|
1,341
|
|
$
|
1,743
|
|
$
|
1,384
|
|
|
|
(a)
|
Total loans held for
sale include Real estate — residential mortgage loans held for sale
at fair value of $47 million at March 31, 2018, $71 million at
December 31, 2017, $60 million at September 30, 2017, $63
million at June 30, 2017, and $62 million at March 31,
2017.
|
Summary of Loan
and Lease Loss Experience From Continuing Operations
|
(dollars in
millions)
|
|
|
|
|
|
Three months
ended
|
|
3/31/2018
|
12/31/2017
|
3/31/2017
|
Average loans
outstanding
|
$
|
86,927
|
|
$
|
86,006
|
|
$
|
86,133
|
|
Allowance for loan
and lease losses at beginning of period
|
$
|
877
|
|
$
|
880
|
|
$
|
858
|
|
Loans charged
off:
|
|
|
|
Commercial and
industrial
|
37
|
|
32
|
|
32
|
|
|
|
|
|
Real estate —
commercial mortgage
|
1
|
|
2
|
|
—
|
|
Real estate —
construction
|
—
|
|
—
|
|
—
|
|
Total
commercial real estate loans
|
1
|
|
2
|
|
—
|
|
Commercial lease
financing
|
1
|
|
5
|
|
7
|
|
Total
commercial loans
|
39
|
|
39
|
|
39
|
|
Real estate —
residential mortgage
|
1
|
|
1
|
|
(2)
|
|
Home equity
loans
|
4
|
|
7
|
|
8
|
|
Consumer direct
loans
|
8
|
|
8
|
|
10
|
|
Credit
cards
|
12
|
|
10
|
|
11
|
|
Consumer indirect
loans
|
8
|
|
7
|
|
11
|
|
Total consumer
loans
|
33
|
|
33
|
|
38
|
|
Total loans
charged off
|
72
|
|
72
|
|
77
|
|
Recoveries:
|
|
|
|
Commercial and
industrial
|
6
|
|
8
|
|
5
|
|
|
|
|
|
Real estate —
commercial mortgage
|
—
|
|
1
|
|
—
|
|
Real estate —
construction
|
1
|
|
—
|
|
1
|
|
Total
commercial real estate loans
|
1
|
|
1
|
|
1
|
|
Commercial lease
financing
|
1
|
|
1
|
|
2
|
|
Total
commercial loans
|
8
|
|
10
|
|
8
|
|
Real estate —
residential mortgage
|
—
|
|
—
|
|
2
|
|
Home equity
loans
|
3
|
|
3
|
|
3
|
|
Consumer direct
loans
|
2
|
|
2
|
|
1
|
|
Credit
cards
|
1
|
|
1
|
|
1
|
|
Consumer indirect
loans
|
4
|
|
4
|
|
4
|
|
Total consumer
loans
|
10
|
|
10
|
|
11
|
|
Total
recoveries
|
18
|
|
20
|
|
19
|
|
Net loan
charge-offs
|
(54)
|
|
(52)
|
|
(58)
|
|
Provision (credit)
for loan and lease losses
|
58
|
|
49
|
|
70
|
|
Foreign currency
translation adjustment
|
—
|
|
—
|
|
—
|
|
Allowance for loan
and lease losses at end of period
|
$
|
881
|
|
$
|
877
|
|
$
|
870
|
|
|
|
|
|
Liability for credit
losses on lending-related commitments at beginning of
period
|
$
|
57
|
|
$
|
57
|
|
$
|
55
|
|
Provision (credit)
for losses on lending-related commitments
|
3
|
|
—
|
|
(7)
|
|
Liability for credit
losses on lending-related commitments at end of period
(a)
|
$
|
60
|
|
$
|
57
|
|
$
|
48
|
|
|
|
|
|
Total allowance for
credit losses at end of period
|
$
|
941
|
|
$
|
934
|
|
$
|
918
|
|
|
|
|
|
Net loan charge-offs
to average total loans
|
.25
|
%
|
.24
|
%
|
.27
|
%
|
Allowance for loan
and lease losses to period-end loans
|
1.00
|
|
1.01
|
|
1.01
|
|
Allowance for credit
losses to period-end loans
|
1.07
|
|
1.08
|
|
1.07
|
|
Allowance for loan
and lease losses to nonperforming loans
|
162.8
|
|
174.4
|
|
151.8
|
|
Allowance for credit
losses to nonperforming loans
|
173.9
|
|
185.7
|
|
160.2
|
|
|
|
|
|
Discontinued
operations — education lending business:
|
|
|
|
Loans charged
off
|
$
|
4
|
|
$
|
6
|
|
$
|
6
|
|
Recoveries
|
2
|
|
2
|
|
2
|
|
Net loan
charge-offs
|
$
|
(2)
|
|
$
|
(4)
|
|
$
|
(4)
|
|
|
(a) Included in "Accrued
expense and other liabilities" on the balance sheet.
|
Asset Quality
Statistics From Continuing Operations
|
(dollars in
millions)
|
|
1Q18
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
Net loan
charge-offs
|
$
|
54
|
|
$
|
52
|
|
$
|
32
|
|
$
|
66
|
|
$
|
58
|
|
Net loan charge-offs
to average total loans
|
.25
|
%
|
.24
|
%
|
.15
|
%
|
.31
|
%
|
.27
|
%
|
Allowance for loan
and lease losses
|
$
|
881
|
|
$
|
877
|
|
$
|
880
|
|
$
|
870
|
|
$
|
870
|
|
Allowance for credit
losses (a)
|
941
|
|
934
|
|
937
|
|
918
|
|
918
|
|
Allowance for loan
and lease losses to period-end loans
|
1.00
|
%
|
1.01
|
%
|
1.02
|
%
|
1.01
|
%
|
1.01
|
%
|
Allowance for credit
losses to period-end loans
|
1.07
|
|
1.08
|
|
1.08
|
|
1.06
|
|
1.07
|
|
Allowance for loan
and lease losses to nonperforming loans (b)
|
162.8
|
|
174.4
|
|
170.2
|
|
171.6
|
|
151.8
|
|
Allowance for credit
losses to nonperforming loans (b)
|
173.9
|
|
185.7
|
|
181.2
|
|
181.1
|
|
160.2
|
|
Nonperforming loans
at period end (b)
|
$
|
541
|
|
$
|
503
|
|
$
|
517
|
|
$
|
507
|
|
$
|
573
|
|
Nonperforming assets
at period end (b)
|
569
|
|
534
|
|
556
|
|
556
|
|
623
|
|
Nonperforming loans
to period-end portfolio loans (b)
|
.61
|
%
|
.58
|
%
|
.60
|
%
|
.59
|
%
|
.67
|
%
|
Nonperforming assets
to period-end portfolio loans plus OREO and other
nonperforming
assets (b)
|
.65
|
|
.62
|
|
.64
|
|
.64
|
|
.72
|
|
|
|
(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 $690 million, $738 million, $783 million, $835
million, and $812 million of purchased credit impaired loans at
March 31, 2018, December 31, 2017, September 30,
2017, June 30, 2017, and March 31, 2017,
respectively.
|
Summary of
Nonperforming Assets and Past Due Loans From Continuing
Operations
|
(dollars in
millions)
|
|
3/31/2018
|
12/31/2017
|
9/30/2017
|
6/30/2017
|
3/31/2017
|
Commercial and
industrial
|
$
|
189
|
|
$
|
153
|
|
$
|
169
|
|
$
|
178
|
|
$
|
258
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
33
|
|
30
|
|
30
|
|
34
|
|
32
|
|
Real estate —
construction
|
2
|
|
2
|
|
2
|
|
4
|
|
2
|
|
Total commercial real
estate loans
|
35
|
|
32
|
|
32
|
|
38
|
|
34
|
|
Commercial lease
financing
|
5
|
|
6
|
|
11
|
|
11
|
|
5
|
|
Total commercial
loans
|
229
|
|
191
|
|
212
|
|
227
|
|
297
|
|
Real estate —
residential mortgage
|
59
|
|
58
|
|
57
|
|
58
|
|
54
|
|
Home equity
loans
|
229
|
|
229
|
|
227
|
|
208
|
|
207
|
|
Consumer direct
loans
|
4
|
|
4
|
|
3
|
|
2
|
|
3
|
|
Credit
cards
|
2
|
|
2
|
|
2
|
|
2
|
|
3
|
|
Consumer indirect
loans
|
18
|
|
19
|
|
16
|
|
10
|
|
9
|
|
Total consumer
loans
|
312
|
|
312
|
|
305
|
|
280
|
|
276
|
|
Total nonperforming
loans (a)
|
541
|
|
503
|
|
517
|
|
507
|
|
573
|
|
OREO
|
28
|
|
31
|
|
39
|
|
48
|
|
49
|
|
Other nonperforming
assets
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
Total nonperforming
assets (a)
|
$
|
569
|
|
$
|
534
|
|
$
|
556
|
|
$
|
556
|
|
$
|
623
|
|
Accruing loans past
due 90 days or more
|
$
|
82
|
|
$
|
89
|
|
$
|
86
|
|
$
|
85
|
|
$
|
79
|
|
Accruing loans past
due 30 through 89 days
|
305
|
|
359
|
|
329
|
|
340
|
|
312
|
|
Restructured loans —
accruing and nonaccruing (b)
|
317
|
|
317
|
|
315
|
|
333
|
|
302
|
|
Restructured loans
included in nonperforming loans (b)
|
179
|
|
189
|
|
187
|
|
193
|
|
161
|
|
Nonperforming assets
from discontinued operations — education lending
business
|
6
|
|
7
|
|
8
|
|
5
|
|
4
|
|
Nonperforming loans
to period-end portfolio loans (a)
|
.61
|
%
|
.58
|
%
|
.60
|
%
|
.59
|
%
|
.67
|
%
|
Nonperforming assets
to period-end portfolio loans plus OREO and other
nonperforming assets
(a)
|
.65
|
|
.62
|
|
.64
|
|
.64
|
|
.72
|
|
|
|
(a)
|
Nonperforming loan
balances exclude $690 million, $738 million, $783 million, $835
million, and $812 million of purchased credit impaired loans at
March 31, 2018, December 31, 2017, September 30,
2017, June 30, 2017, and March 31, 2017,
respectively.
|
(b)
|
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)
|
|
1Q18
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
Balance at beginning
of period
|
$
|
503
|
|
$
|
517
|
|
$
|
507
|
|
$
|
573
|
|
$
|
625
|
|
Loans placed on
nonaccrual status
|
182
|
|
137
|
|
181
|
|
143
|
|
218
|
|
Charge-offs
|
(70)
|
|
(67)
|
|
(71)
|
|
(82)
|
|
(77)
|
|
Loans sold
|
—
|
|
—
|
|
(1)
|
|
—
|
|
(8)
|
|
Payments
|
(29)
|
|
(52)
|
|
(32)
|
|
(84)
|
|
(59)
|
|
Transfers to
OREO
|
(4)
|
|
(8)
|
|
(10)
|
|
(8)
|
|
(11)
|
|
Loans returned to
accrual status
|
(41)
|
|
(24)
|
|
(57)
|
|
(35)
|
|
(115)
|
|
Balance at end of
period (a)
|
$
|
541
|
|
$
|
503
|
|
$
|
517
|
|
$
|
507
|
|
$
|
573
|
|
|
|
(a)
|
Nonperforming loan
balances exclude $690 million, $738 million, $783 million,
$835 million, and $812 million of purchased credit impaired loans
at March 31, 2018, December 31, 2017, September 30,
2017, June 30, 2017, and March 31, 2017,
respectively.
|
Line of Business
Results
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
1Q18 vs.
|
|
1Q18
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
|
4Q17
|
1Q17
|
Key Community
Bank
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
|
973
|
|
$
|
972
|
|
$
|
961
|
|
$
|
1,012
|
|
$
|
905
|
|
|
.1
|
%
|
7.5
|
%
|
Provision for credit
losses
|
48
|
|
57
|
|
59
|
|
47
|
|
46
|
|
|
(15.8)
|
|
4.3
|
|
Noninterest
expense
|
668
|
|
677
|
|
641
|
|
654
|
|
625
|
|
|
(1.3)
|
|
6.9
|
|
Net income (loss)
attributable to Key
|
196
|
|
151
|
|
164
|
|
195
|
|
147
|
|
|
29.8
|
|
33.3
|
|
Average loans and
leases
|
47,680
|
|
47,405
|
|
47,611
|
|
47,477
|
|
47,085
|
|
|
.6
|
|
1.3
|
|
Average
deposits
|
79,945
|
|
80,352
|
|
79,563
|
|
79,601
|
|
79,148
|
|
|
(.5)
|
|
1.0
|
|
Net loan
charge-offs
|
42
|
|
35
|
|
41
|
|
47
|
|
43
|
|
|
20.0
|
|
(2.3)
|
|
Net loan charge-offs
to average total loans
|
.36
|
%
|
.29
|
%
|
.34
|
%
|
.40
|
%
|
.37
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming assets
at period end
|
$
|
425
|
|
$
|
405
|
|
$
|
427
|
|
$
|
406
|
|
$
|
395
|
|
|
4.9
|
|
7.6
|
|
Return on average
allocated equity
|
16.48
|
%
|
12.35
|
%
|
13.44
|
%
|
16.30
|
%
|
12.56
|
%
|
|
N/A
|
|
N/A
|
|
Average full-time
equivalent employees
|
10,988
|
|
10,957
|
|
11,032
|
|
10,899
|
|
10,804
|
|
|
.3
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
Key Corporate
Bank
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
|
559
|
|
$
|
605
|
|
$
|
561
|
|
$
|
597
|
|
$
|
578
|
|
|
(7.6)
|
%
|
(3.3)
|
%
|
Provision for credit
losses
|
14
|
|
(6)
|
|
(11)
|
|
19
|
|
18
|
|
|
N/M
|
|
(22.2)
|
|
Noninterest
expense
|
314
|
|
354
|
|
304
|
|
297
|
|
304
|
|
|
(11.3)
|
|
3.3
|
|
Net income (loss)
attributable to Key
|
207
|
|
222
|
|
189
|
|
224
|
|
180
|
|
|
(6.8)
|
|
15.0
|
|
Average loans and
leases
|
38,260
|
|
37,460
|
|
38,024
|
|
37,704
|
|
37,688
|
|
|
2.1
|
|
1.5
|
|
Average loans held
for sale
|
1,118
|
|
1,345
|
|
1,521
|
|
1,000
|
|
1,097
|
|
|
(16.9)
|
|
1.9
|
|
Average
deposits
|
20,815
|
|
21,558
|
|
21,559
|
|
21,145
|
|
21,002
|
|
|
(3.4)
|
|
(.9)
|
|
Net loan
charge-offs
|
11
|
|
16
|
|
(9)
|
|
19
|
|
14
|
|
|
(31.3)
|
|
(21.4)
|
|
Net loan charge-offs
to average total loans
|
.12
|
%
|
.17
|
%
|
(.09)
|
%
|
.20
|
%
|
.15
|
%
|
|
N/A
|
|
N/A
|
|
Nonperforming assets
at period end
|
$
|
127
|
|
$
|
109
|
|
$
|
106
|
|
$
|
119
|
|
$
|
197
|
|
|
16.5
|
|
(35.5)
|
|
Return on average
allocated equity
|
29.46
|
%
|
31.33
|
%
|
26.90
|
%
|
31.66
|
%
|
24.94
|
%
|
|
N/A
|
|
N/A
|
|
Average full-time
equivalent employees
|
2,543
|
|
2,418
|
|
2,460
|
|
2,364
|
|
2,384
|
|
|
5.2
|
|
6.7
|
|
TE = Taxable
Equivalent, N/A = Not Applicable, N/M = Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/keycorp-reports-first-quarter-2018-net-income-of-402-million-or-38-per-common-share-300632883.html
SOURCE KeyCorp