CLEVELAND, July 22 /PRNewswire-FirstCall/ --
- Net income from continuing operations of $56 million, or $.06 per common share
- Net interest margin of 3.17%
- Nonperforming loans decrease by $362 million from first quarter of 2010 to 3.19% of period-end loans
- Loan loss reserve at 4.16% of total period-end loans
- Tier 1 common equity and Tier 1 risk-based capital ratios of 8.01% and 13.55%, respectively
- $7.6 billion in new or renewed lending commitments originated
KeyCorp (NYSE: KEY) today announced second quarter net income from continuing operations attributable to Key common shareholders of $56 million, or $.06 per common share. These results compare to a net loss from continuing operations attributable to Key common shareholders of $394 million, or $.68 per common share, for the second quarter of 2009, which was negatively impacted by an $823 million loan loss provision. Second quarter net income attributable to Key common shareholders was $29 million compared to a net loss attributable to Key common shareholders of $390 million for the second quarter of 2009. Net loss attributable to Key common shareholders for the six-month period ended June 30, 2010 was $67 million compared to a net loss attributable to Key common shareholders of $926 million for the same period one year ago.
Key's second quarter earnings improvement results from a lower provision for loan losses, higher fee income, and well-controlled expenses when compared to the first quarter of 2010. Credit quality continued to improve across the majority of the loan portfolios in both Community Banking and National Banking. Net charge-offs declined by $87 million, and nonperforming loans decreased by $362 million from March 31, 2010.
"These results are encouraging and the return to profitability represents an important step forward for our company," said Chief Executive Officer Henry L. Meyer III. "Continued improvement in credit quality across most of our businesses was the principal contributor to the quarterly performance."
Meyer continued: "Key is now focusing on opportunities in a gradually improving economy. That said, some uncertainty remains in the markets, and consumer and business loan demand is soft. Recognizing current economic conditions, we remain focused on investing in our relationship businesses, maintaining our strong capital and liquidity positions, reducing risk, and careful expense control as we navigate through the economic cycle."
At June 30, 2010, Key's estimated Tier 1 common equity ratio was 8.01% compared to 7.51% at March 31, 2010, and estimated Tier 1 risk-based capital ratio was 13.55% up from 12.92% one quarter ago.
Key's strong capital and liquidity positions enable the Company to support the borrowing needs of clients. The Company originated approximately $7.6 billion in new or renewed lending commitments to consumers and businesses during the quarter.
Meyer also noted that Key opened 18 new branches during the first six months and expects to open an additional 22 new branches during the remainder of 2010, increasing its market presence in selected markets of its 14-state branch network. In addition, Key continues with its plans to modernize its existing branches.
The following table shows Key's continuing and discontinued operating results for the comparative quarters and for the six-month periods ended June 30, 2010 and 2009.
Results of Operations |
|||||||||||
Three months ended |
Six months ended |
||||||||||
in millions, except per share amounts |
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||
Summary of operations |
|||||||||||
Income (loss) from continuing operations attributable to Key |
$ 97 |
$ (57) |
$ (230) |
$ 40 |
$ (689) |
||||||
Income (loss) from discontinued operations, net of taxes (a) |
(27) |
2 |
4 |
(25) |
(25) |
||||||
Net income (loss) attributable to Key |
$ 70 |
$ (55) |
$ (226) |
$ 15 |
$ (714) |
||||||
Income (loss) from continuing operations attributable to Key |
$ 97 |
$ (57) |
$ (230) |
$ 40 |
$ (689) |
||||||
Less: |
Dividends on Series A Preferred Stock |
6 |
6 |
15 |
12 |
27 |
|||||
Noncash deemed dividend — common shares exchanged for Series A Preferred Stock |
-- |
-- |
114 |
-- |
114 |
||||||
Cash dividends on Series B Preferred Stock |
31 |
31 |
31 |
62 |
63 |
||||||
Amortization of discount on Series B Preferred Stock |
4 |
4 |
4 |
8 |
8 |
||||||
Income (loss) from continuing operations attributable to Key common shareholders |
56 |
(98) |
(394) |
(42) |
(901) |
||||||
Income (loss) from discontinued operations, net of taxes (a) |
(27) |
2 |
4 |
(25) |
(25) |
||||||
Net income (loss) attributable to Key common shareholders |
$ 29 |
$ (96) |
$ (390) |
$ (67) |
$ (926) |
||||||
Per common share — assuming dilution |
|||||||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ .06 |
$ (.11) |
$ (.68) |
$ (.05) |
$ (1.68) |
||||||
Income (loss) from discontinued operations, net of taxes (a) |
(.03) |
-- |
.01 |
(.03) |
(.05) |
||||||
Net income (loss) attributable to Key common shareholders (b) |
$ .03 |
$ (.11) |
$ (.68) |
$ (.08) |
$ (1.73) |
||||||
(a) In September 2009, management made the decision to discontinue the education lending business conducted through Key Education Resources, (b) Earnings per share may not foot due to rounding. |
|||||||||||
SUMMARY OF CONTINUING OPERATIONS
Taxable-equivalent net interest income was $623 million for the second quarter of 2010, and the net interest margin was 3.17%. These results compare to taxable-equivalent net interest income of $575 million and a net interest margin of 2.70% for the second quarter of 2009. The increase in the net interest margin is primarily attributable to lower funding costs. The Company continues to experience an improvement in the mix of deposits by reducing the level of higher costing certificates of deposit and increasing lower costing transaction accounts. The Company expects this change in funding mix to continue through the second half of 2010 as certificates of deposit mature and re-price to lower current market rates. Over the past year, funding costs were also reduced by maturities of long-term debt and the 2009 exchanges of capital securities for Key common shares. Key also experienced improved spreads on loan renewals.
Compared to the first quarter of 2010, taxable-equivalent net interest income decreased by $9 million, and the net interest margin fell by two basis points. Although there was a benefit from the improvement in the mix of deposits, the decline in the net interest margin was largely the result of funds from loan pay downs being reinvested in lower yielding investment securities.
Key's noninterest income was $492 million for the second quarter of 2010, compared to $706 million for the year-ago quarter. The second quarter of 2009 included a $125 million net gain from the sale of collateralized mortgage obligations, a $95 million gain related to the exchange of common shares for capital securities, and a $32 million gain from the sale of Key's claim associated with the Lehman Brothers' bankruptcy. Additionally, net gains on leased equipment during the second quarter of 2010 declined by $34 million from the year-ago quarter. Partially offsetting this decline in noninterest income were net gains of $25 million from loan sales, and net gains of $17 million from principal investing (including results attributable to noncontrolling interests) in the second quarter of 2010, compared to net losses of $3 million and $6 million for the same period last year, as well as an increase in investment banking and capital markets income of $17 million during the second quarter of 2010.
The major components of Key's fee-based income for the past five quarters are shown in the following table.
Fee-based Income – Major Components |
||||||||||
in millions |
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
|||||
Trust and investment services income |
$112 |
$114 |
$117 |
$113 |
$119 |
|||||
Service charges on deposit accounts |
80 |
76 |
82 |
83 |
83 |
|||||
Operating lease income |
43 |
47 |
52 |
55 |
59 |
|||||
Letter of credit and loan fees |
42 |
40 |
52 |
46 |
44 |
|||||
Corporate-owned life insurance income |
28 |
28 |
36 |
26 |
25 |
|||||
Electronic banking fees |
29 |
27 |
27 |
27 |
27 |
|||||
Insurance income |
19 |
18 |
16 |
18 |
16 |
|||||
Net gains (losses) from principal investing |
17 |
37 |
80 |
(6) |
(6) |
|||||
Investment banking and capital markets income (loss) |
31 |
9 |
(47) |
(26) |
14 |
|||||
Compared to the first quarter of 2010, noninterest income increased by $42 million. This increase in noninterest income resulted from an increase of $22 million in investment banking and capital markets income, a $21 million increase in net gains from loan sales, and increases in various other miscellaneous income components. These gains were partially offset by a $20 million decline in net gains from principal investing (including results attributable to noncontrolling interests).
Key's noninterest expense was $769 million for the second quarter of 2010, compared to $855 million for the same period last year. FDIC deposit insurance premiums decreased by $37 million from the second quarter of 2009 as a result of a special assessment imposed during that time period. Key also recorded a credit of $10 million to the provision for losses on lending-related commitments during the second quarter of 2010, compared to a charge to the provision of $11 million in the year-ago quarter. Additionally, in the second quarter of 2009, Key recognized a $16 million charge to the provision for losses on low-income housing tax credit ("LIHTC") guaranteed funds and incurred $14 million more in operating lease expense than in the current quarter.
Compared to the first quarter of 2010, noninterest expense decreased by $16 million. Nonpersonnel expense decreased by $39 million, reflecting a decrease in other real estate owned ("OREO") expense of $10 million, an increase in the credit to the provision for losses on lending-related commitments of $8 million, and reductions in various other miscellaneous expense items. These items were partially offset by a $23 million increase in personnel expense due primarily to compensation accruals on increases in fee-related revenues and improved profitability.
ASSET QUALITY
Key's provision for loan losses was $228 million for the second quarter of 2010, compared to $823 million for the year-ago quarter and $413 million for the first quarter of 2010. Key's allowance for loan losses was $2.2 billion, or 4.16% of total loans, at June 30, 2010, compared to 4.34% at March 31, 2010, and 3.48% at June 30, 2009.
Selected asset quality statistics for Key for each of the past five quarters are presented in the following table.
Selected Asset Quality Statistics from Continuing Operations |
|||||||||||
dollars in millions |
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
||||||
Net loan charge-offs |
$ 435 |
$ 522 |
$ 708 |
$ 587 |
$ 502 |
||||||
Net loan charge-offs to average loans |
3.18 |
% |
3.67 |
% |
4.64 |
% |
3.59 |
% |
2.93 |
% |
|
Allowance for loan losses |
$ 2,219 |
$ 2,425 |
$2,534 |
$ 2,485 |
$ 2,339 |
||||||
Allowance for credit losses (a) |
2,328 |
2,544 |
2,655 |
2,579 |
2,404 |
||||||
Allowance for loan losses to period-end loans |
4.16 |
% |
4.34 |
% |
4.31 |
% |
4.00 |
% |
3.48 |
% |
|
Allowance for credit losses to period-end loans |
4.36 |
4.55 |
4.52 |
4.15 |
3.58 |
||||||
Allowance for loan losses to nonperforming loans |
130.30 |
117.43 |
115.87 |
108.52 |
107.05 |
||||||
Allowance for credit losses to nonperforming loans |
136.70 |
123.20 |
121.40 |
112.62 |
110.02 |
||||||
Nonperforming loans at period end |
$ 1,703 |
$ 2,065 |
$ 2,187 |
$ 2,290 |
$ 2,185 |
||||||
Nonperforming assets at period end |
2,086 |
2,428 |
2,510 |
2,799 |
2,548 |
||||||
Nonperforming loans to period-end portfolio loans |
3.19 |
% |
3.69 |
% |
3.72 |
% |
3.68 |
% |
3.25 |
% |
|
Nonperforming assets to period-end portfolio loans plus |
|||||||||||
OREO and other nonperforming assets |
3.88 |
4.31 |
4.25 |
4.46 |
3.77 |
||||||
(a) Includes the allowance for loan losses plus the liability for credit losses on lending-related commitments. |
|||||||||||
Net loan charge-offs for the quarter totaled $435 million, or 3.18% of average loans. These results compare to $502 million, or 2.93%, for the same period last year and $522 million, or 3.67%, for the previous quarter. Management expects net charge-offs to remain elevated in 2010 but continue to show improvement in future quarters.
Key's net loan charge-offs by loan type for each of the past five quarters are shown in the following table.
Net Loan Charge-offs from Continuing Operations |
|||||||||||
dollars in millions |
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
||||||
Commercial, financial and agricultural |
$ 136 |
$ 126 |
$ 218 |
$ 168 |
$ 168 |
||||||
Real estate --- commercial mortgage |
126 |
106 |
165 |
81 |
87 |
||||||
Real estate --- construction |
75 |
157 |
181 |
216 |
133 |
||||||
Commercial lease financing |
14 |
21 |
39 |
27 |
22 |
||||||
Total commercial loans |
351 |
410 |
603 |
492 |
410 |
||||||
Home equity --- Community Banking |
25 |
30 |
27 |
25 |
24 |
||||||
Home equity --- Other |
16 |
17 |
19 |
20 |
18 |
||||||
Marine |
19 |
38 |
33 |
25 |
29 |
||||||
Other |
24 |
27 |
26 |
25 |
21 |
||||||
Total consumer loans |
84 |
112 |
105 |
95 |
92 |
||||||
Total net loan charge-offs |
$ 435 |
$ 522 |
$ 708 |
$ 587 |
$ 502 |
||||||
Net loan charge-offs to average loans from continuing operations |
3.18 |
% |
3.67 |
% |
4.64 |
% |
3.59 |
% |
2.93 |
% |
|
Net loan charge-offs from discontinued operations --- education lending business |
$ 31 |
$ 36 |
$ 36 |
$ 38 |
$ 37 |
||||||
Compared to the first quarter of 2010, net loan charge-offs in the commercial loan portfolio decreased by $59 million. The decrease was primarily attributable to a decline in the real estate construction loan portfolio. The level of net charge-offs in the consumer portfolio also declined by $28 million. As shown in the table on page 6, Key's exit loan portfolio accounted for $114 million, or 26.21%, of Key's total net loan charge-offs for the second quarter of 2010. Net charge-offs in the exit loan portfolio decreased by $39 million from the first quarter of 2010, primarily driven by improvements in the residential properties – homebuilder and marine portfolios.
At June 30, 2010, Key's nonperforming loans totaled $1.7 billion and represented 3.19% of period-end portfolio loans, compared to 3.69% at March 31, 2010, and 3.25% at June 30, 2009. Nonperforming assets at June 30, 2010 totaled $2.1 billion and represented 3.88% of portfolio loans, OREO and other nonperforming assets, compared to 4.31% at March 31, 2010, and 3.77% at June 30, 2009. The following table illustrates the trend in Key's nonperforming assets by loan type over the past five quarters.
Nonperforming Assets from Continuing Operations |
|||||||||||
dollars in millions |
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
||||||
Commercial, financial and agricultural |
$ 489 |
$ 558 |
$ 586 |
$ 679 |
$ 700 |
||||||
Real estate — commercial mortgage |
404 |
579 |
614 |
566 |
454 |
||||||
Real estate — construction |
473 |
607 |
641 |
702 |
716 |
||||||
Commercial lease financing |
83 |
99 |
113 |
131 |
122 |
||||||
Total consumer loans |
254 |
222 |
233 |
212 |
193 |
||||||
Total nonperforming loans |
1,703 |
2,065 |
2,187 |
2,290 |
2,185 |
||||||
Nonperforming loans held for sale |
221 |
195 |
116 |
304 |
145 |
||||||
OREO and other nonperforming assets |
162 |
168 |
207 |
205 |
218 |
||||||
Total nonperforming assets |
$ 2,086 |
$ 2,428 |
$ 2,510 |
$ 2,799 |
$ 2,548 |
||||||
Restructured loans included in nonperforming loans (a) |
$ 213 |
$ 226 |
$ 364 |
$ 65 |
$ 7 |
||||||
Nonperforming assets from discontinued operations — education lending business |
40 |
43 |
14 |
12 |
3 |
||||||
Nonperforming loans to period-end portfolio loans |
3.19 |
% |
3.69 |
% |
3.72 |
% |
3.68 |
% |
3.25 |
% |
|
Nonperforming assets to period-end portfolio loans, plus OREO and other nonperforming assets |
3.88 |
4.31 |
4.25 |
4.46 |
3.77 |
||||||
(a) Restructured loans (i.e. troubled debt restructurings) are those for which Key, for reasons related to a borrower's financial difficulties, |
|||||||||||
Nonperforming assets continued to decrease during the second quarter of 2010, representing the third consecutive quarterly decline. Most of the reduction came from nonperforming loans in the commercial real estate and commercial, financial and agricultural portfolios. These reductions were offset in part by an increase in nonperforming loans held for sale and consumer loans. As shown in the following table, Key's exit loan portfolio accounted for $385 million, or 18.46%, of Key's total nonperforming assets at June 30, 2010, compared to $499 million, or 20.55%, at March 31, 2010.
Shown in the following table are the composition of Key's exit loan portfolio at June 30, 2010, and March 31, 2010, the net charge-offs recorded on this portfolio for the first and second quarters of 2010, and the nonperforming status of these loans at June 30, 2010, and March 31, 2010.
Exit Loan Portfolio from Continuing Operations |
||||||||||||||
Balance |
Change |
Net Loan |
Balance on |
|||||||||||
in millions |
6-30-10 |
3-31-10 |
3-31-10 |
2Q10 |
1Q10 |
6-30-10 |
3-31-10 |
|||||||
Residential properties --- homebuilder |
$ 195 |
$ 269 |
$ (74) |
$ 20 |
$ 44 |
$ 109 |
$ 167 |
|||||||
Residential properties --- held for sale |
25 |
40 |
(15) |
- |
- |
25 |
40 |
|||||||
Total residential properties |
220 |
309 |
(89) |
20 |
44 |
134 |
207 |
|||||||
Marine and RV floor plan |
268 |
339 |
(71) |
14 |
28 |
59 |
66 |
|||||||
Commercial lease financing (a) |
2,437 |
2,685 |
(248) |
44 |
22 |
133 |
191 |
|||||||
Total commercial loans |
2,925 |
3,333 |
(408) |
78 |
94 |
326 |
464 |
|||||||
Home equity --- Other |
753 |
795 |
(42) |
16 |
17 |
17 |
18 |
|||||||
Marine |
2,491 |
2,636 |
(145) |
19 |
38 |
41 |
16 |
|||||||
RV and other consumer |
188 |
201 |
(13) |
1 |
4 |
1 |
1 |
|||||||
Total consumer loans |
3,432 |
3,632 |
(200) |
36 |
59 |
59 |
35 |
|||||||
Total exit loans in loan portfolio |
$ 6,357 |
$ 6,965 |
$ (608) |
$ 114 |
$ 153 |
$ 385 |
$ 499 |
|||||||
Discontinued operations --- education lending business (not included in exit loans above) (b) |
$ 6,686 |
$ 6,268 |
$ 418 |
$ 31 |
$ 36 |
$ 40 |
$ 42 |
|||||||
(a) Includes the business aviation, commercial vehicle, office products, construction and industrial leases, and Canadian lease (b) Includes loans in Key's education loan securitization trusts consolidated upon the adoption of new consolidation accounting |
||||||||||||||
CAPITAL
Key's risk-based capital ratios included in the following table continued to exceed all "well-capitalized" regulatory benchmarks at June 30, 2010.
Capital Ratios |
||||||||||||
6-30-10 |
3-31-10 |
12-31-09 |
9-30-09 |
6-30-09 |
||||||||
Tier 1 common equity (a) (b) |
8.01 |
% |
7.51 |
% |
7.50 |
% |
7.64 |
% |
7.36 |
% |
||
Tier 1 risk-based capital (a) |
13.55 |
12.92 |
12.75 |
12.61 |
12.57 |
|||||||
Total risk-based capital (a) |
17.58 |
17.07 |
16.95 |
16.65 |
16.67 |
|||||||
Tangible common equity to tangible assets (b) |
7.65 |
7.37 |
7.56 |
7.58 |
7.35 |
|||||||
(a) June 30, 2010 ratio is estimated. (b) The table entitled "GAAP to Non-GAAP Reconciliations" presents the computations of certain financial measures related to "tangible common |
||||||||||||
As shown in the preceding table, at June 30, 2010, Key had an estimated Tier 1 common equity ratio of 8.01%, an estimated Tier 1 risk-based capital ratio of 13.55%, and a tangible common equity ratio of 7.65%.
Transactions that caused the change in Key's outstanding common shares over the past five quarters are summarized in the following table.
Summary of Changes in Common Shares Outstanding |
||||||||||
in thousands |
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
|||||
Shares outstanding at beginning of period |
879,052 |
878,535 |
878,559 |
797,246 |
498,573 |
|||||
Common shares exchanged for capital securities |
- |
- |
- |
81,278 |
46,338 |
|||||
Common shares exchanged for Series A Preferred Stock |
- |
- |
- |
- |
46,602 |
|||||
Common shares issued |
- |
- |
- |
- |
205,439 |
|||||
Shares reissued (returned) under employee benefit plans |
1,463 |
517 |
(24) |
35 |
294 |
|||||
Shares outstanding at end of period |
880,515 |
879,052 |
878,535 |
878,559 |
797,246 |
|||||
During each of the first and second quarters of 2010, Key made a $31 million cash dividend payment to the U.S. Treasury Department as a participant in the U.S. Treasury's Capital Purchase Program. During 2009, Key made four quarterly dividend payments aggregating $125 million to the U.S. Treasury Department.
LINE OF BUSINESS RESULTS
The following table shows the contribution made by each major business group to Key's taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. The specific lines of business that comprise each of the major business groups are described under the heading "Line of Business Descriptions." During the first quarter of 2010, Key re-aligned its reporting structure for its business groups. Prior to 2010, Consumer Finance consisted mainly of portfolios which were identified as exit or run-off portfolios and were included in Key's National Banking segment. Effective for all periods presented, Key is reflecting the results of these exit portfolios in Other Segments. The automobile dealer floor plan business, previously included in Consumer Finance, has been re-aligned with the Commercial Banking line of business within the Community Banking segment. In addition, other previously identified exit portfolios included in the National Banking segment have been moved to Other Segments. For more detailed financial information pertaining to each business group and its respective lines of business, see the tables at the end of this release.
Major Business Groups |
||||||||||||
Percent change 2Q10 vs. |
||||||||||||
dollars in millions |
2Q10 |
1Q10 |
2Q09 |
1Q10 |
2Q09 |
|||||||
Revenue from continuing operations (TE) |
||||||||||||
Community Banking |
$ 607 |
$ 599 |
$ 630 |
1.3 |
% |
(3.7) |
% |
|||||
National Banking |
409 |
376 |
445 |
8.8 |
(8.1) |
|||||||
Other Segments (a) |
86 |
96 |
187 |
(10.4) |
(54.0) |
|||||||
Total Segments |
1,102 |
1,071 |
1,262 |
2.9 |
(12.7) |
|||||||
Reconciling Items (b) |
13 |
11 |
19 |
18.2 |
(31.6) |
|||||||
Total |
$ 1,115 |
$ 1,082 |
$ 1,281 |
3.0 |
% |
(13.0) |
% |
|||||
Income (loss) from continuing operations |
||||||||||||
attributable to Key |
||||||||||||
Community Banking |
$ 32 |
$ 6 |
$ (30) |
433.3 |
% |
N/M |
||||||
National Banking |
33 |
(33) |
(211) |
N/M |
N/M |
|||||||
Other Segments (a) |
29 |
(47) |
8 |
N/M |
262.5 |
% |
||||||
Total Segments |
94 |
(74) |
(233) |
N/M |
N/M |
|||||||
Reconciling Items (b) |
3 |
17 |
3 |
(82.4) |
___ |
|||||||
Total |
$ 97 |
$ (57) |
$ (230) |
N/M |
N/M |
|||||||
(a) Other Segments' results for the second quarter of 2009 include net gains of $125 million ($78 million after tax) in connection with the repositioning of the (b) Reconciling Items for the second quarter of 2009 include a $32 million ($20 million after tax) gain from the sale of Key's claim associated with the TE = Taxable Equivalent, N/M = Not Meaningful |
||||||||||||
Community Banking |
||||||||||||
Percent change 2Q10 vs. |
||||||||||||
dollars in millions |
2Q10 |
1Q10 |
2Q09 |
1Q10 |
2Q09 |
|||||||
Summary of operations |
||||||||||||
Net interest income (TE) |
$ 408 |
$ 412 |
$ 437 |
(1.0) |
% |
(6.6) |
% |
|||||
Noninterest income |
199 |
187 |
193 |
6.4 |
3.1 |
|||||||
Total revenue (TE) |
607 |
599 |
630 |
1.3 |
(3.7) |
|||||||
Provision for loan losses |
121 |
142 |
199 |
(14.8) |
(39.2) |
|||||||
Noninterest expense |
455 |
467 |
496 |
(2.6) |
(8.3) |
|||||||
Income (loss) before income taxes (TE) |
31 |
(10) |
(65) |
N/M |
N/M |
|||||||
Allocated income taxes and TE adjustments |
(1) |
(16) |
(35) |
93.8 |
97.1 |
% |
||||||
Net income (loss) attributable to Key |
$ 32 |
$ 6 |
$ (30) |
433.3 |
% |
N/M |
||||||
Average balances |
||||||||||||
Loans and leases |
$ 27,218 |
$ 27,769 |
$ 30,305 |
(2.0) |
% |
(10.2) |
% |
|||||
Total assets |
30,292 |
30,873 |
33,162 |
(1.9) |
(8.7) |
|||||||
Deposits |
50,421 |
51,459 |
52,786 |
(2.0) |
(4.5) |
|||||||
Assets under management at period end |
$ 16,980 |
$ 18,248 |
$ 15,815 |
(6.9) |
% |
7.4 |
% |
|||||
TE = Taxable Equivalent, N/M = Not Meaningful |
||||||||||||
Additional Community Banking Data |
|||||||||||||||
Percent change 2Q10 vs. |
|||||||||||||||
dollars in millions |
2Q10 |
1Q10 |
2Q09 |
1Q10 |
2Q09 |
||||||||||
Average deposits outstanding |
|||||||||||||||
NOW and money market deposit accounts |
$ 19,418 |
$ 18,650 |
$ 17,367 |
4.1 |
% |
11.8 |
% |
||||||||
Savings deposits |
1,870 |
1,814 |
1,785 |
3.1 |
4.8 |
||||||||||
Certificates of deposit ($100,000 or more) |
6,597 |
7,363 |
8,975 |
(10.4) |
(26.5) |
||||||||||
Other time deposits |
11,248 |
12,559 |
14,898 |
(10.4) |
(24.5) |
||||||||||
Deposits in foreign office |
421 |
502 |
549 |
(16.1) |
(23.3) |
||||||||||
Noninterest-bearing deposits |
10,867 |
10,571 |
9,212 |
2.8 |
18.0 |
||||||||||
Total deposits |
$ 50,421 |
$ 51,459 |
$ 52,786 |
(2.0) |
% |
(4.5) |
% |
||||||||
Home equity loans |
|||||||||||||||
Average balance |
$ 9,837 |
$ 9,967 |
$ 10,291 |
||||||||||||
Weighted-average loan-to-value ratio |
70 |
% |
70 |
% |
70 |
% |
|||||||||
Percent first lien positions |
52 |
53 |
53 |
||||||||||||
Other data |
|||||||||||||||
Branches |
1,019 |
1,014 |
993 |
||||||||||||
Automated teller machines |
1,511 |
1,501 |
1,485 |
||||||||||||
Community Banking Summary of Operations
Community Banking recorded net income attributable to Key of $32 million for the second quarter of 2010, compared to a net loss attributable to Key of $30 million for the year-ago quarter. Decreases in the provision for loan losses and noninterest expense and an increase in noninterest income contributed to the improvement in the second quarter of 2010.
Taxable-equivalent net interest income declined by $29 million, or 7%, from the second quarter of 2009, due to declines in average earning assets and average deposits. Average earning assets decreased $3 billion, or 10%, from the year-ago quarter, reflecting reductions in the commercial loan and home equity loan portfolios. Average deposits declined by $2 billion, or 5%. The mix of deposits continues to change from the prior period as higher-costing certificates of deposit originated in prior years mature, partially offset by growth in noninterest-bearing deposits and NOW and money market deposit accounts.
Noninterest income increased by $6 million, or 3%, from the year-ago quarter, due to higher income from trust and investment services, electronic banking fees, and a reduction in the provision for credit losses from client derivatives. The increase in trust and investment services income reflects increased performance in our Key Private Bank, as well as growth in our branch based investment services. These factors were partially offset by lower service charges on deposits, increased net losses on securities from a Community Development lending investment, and decreases in various other components of noninterest income.
The provision for loan losses declined by $78 million, or 39%, compared to the second quarter of 2009 due to the improved economic conditions from one year ago and lower loan balances.
Noninterest expense declined by $41 million, or 8%, from the year-ago quarter. FDIC deposit insurance premiums decreased $29 million from the second quarter of 2009 as a result of a special assessment imposed during that time period, and a credit of $4 million was recorded to the provision for losses on lending-related commitments compared to a charge of $4 million recorded in the second quarter of 2009. These decreases were partially offset by increases in personnel expense and professional fees.
National Banking |
|||||||||||
Percent change 2Q10 vs. |
|||||||||||
dollars in millions |
2Q10 |
1Q10 |
2Q09 |
1Q10 |
2Q09 |
||||||
Summary of operations |
|||||||||||
Net interest income (TE) |
$ 199 |
$ 197 |
$ 234 |
1.0 |
% |
(15.0) |
% |
||||
Noninterest income |
210 |
179 |
211 |
17.3 |
(.5) |
||||||
Total revenue (TE) |
409 |
376 |
445 |
8.8 |
(8.1) |
||||||
Provision for loan losses |
99 |
161 |
494 |
(38.5) |
(80.0) |
||||||
Noninterest expense |
259 |
271 |
292 |
(4.4) |
(11.3) |
||||||
Income (loss) before income taxes (TE) |
51 |
(56) |
(341) |
N/M |
N/M |
||||||
Allocated income taxes and TE adjustments |
18 |
(23) |
(129) |
N/M |
N/M |
||||||
Net income (loss) |
33 |
(33) |
(212) |
N/M |
N/M |
||||||
Less: Net income (loss) attributable to noncontrolling interests |
-- |
-- |
(1) |
N/M |
(100.0) |
||||||
Net income (loss) attributable to Key |
$ 33 |
$ (33) |
$ (211) |
N/M |
N/M |
||||||
Average balances |
|||||||||||
Loans and leases |
$ 20,948 |
$ 22,440 |
$ 28,586 |
(6.6) |
% |
(26.7) |
% |
||||
Loans held for sale |
381 |
240 |
393 |
58.8 |
(3.1) |
||||||
Total assets |
24,781 |
26,269 |
34,798 |
(5.7) |
(28.8) |
||||||
Deposits |
12,474 |
12,416 |
13,019 |
.5 |
(4.2) |
||||||
Assets under management at period end |
$ 41,882 |
$ 47,938 |
$ 47,567 |
(12.6) |
% |
(12.0) |
% |
||||
TE = Taxable Equivalent, N/M = Not Meaningful |
|||||||||||
National Banking Summary of Operations
National Banking recorded net income attributable to Key of $33 million for the second quarter of 2010, compared to a $211 million net loss attributable to Key for the same period one year ago. This improvement in the second quarter of 2010 was a result of a substantial decrease in the provision for loan losses.
Taxable-equivalent net interest income decreased by $35 million, or 15%, from the second quarter of 2009, primarily due to lower earning assets, partially offset by improved earning asset yields. Average earning assets decreased by $8 billion, or 26%, from the year-ago quarter.
Noninterest income declined $1 million from the second quarter of 2009. Investment banking and capital markets income increased $18 million, and net gains from loan sales were $9 million, compared to net losses from loan sales of $7 million for the same period one year ago. These gains were offset by decreases in brokerage commissions and fee income of $13 million, operating lease revenue of $8 million, and various other miscellaneous income items from the second quarter of 2009.
The provision for loan losses in the second quarter of 2010 was $99 million compared to $494 million for the same period one year ago. National Banking continued to experience improved asset quality for the third quarter in a row.
Noninterest expense decreased by $33 million, or 11%, from the second quarter of 2009 as a result of a credit of $6 million to the provision for losses on lending-related commitments compared to a charge of $13 million in the year-ago quarter. Operating lease expense, the provision for losses on LIHTC guaranteed funds, and FDIC deposit insurance premiums also declined from the second quarter of 2009. These improvements were partially offset by an increase in personnel costs and higher costs associated with OREO.
Other Segments
Other Segments consist of Corporate Treasury, Key's Principal Investing unit and various exit portfolios which were previously included within the National Banking segment. These exit portfolios were moved to Other Segments during the first quarter of 2010. Prior periods have been adjusted to conform with the current reporting of the financial information for each segment. Other Segments generated net income attributable to Key of $29 million for the second quarter of 2010, compared to net income attributable to Key of $8 million for the same period last year. These results reflect an increase in net interest income from the second quarter of 2009 as well as a decrease in the provision for loan losses. In addition, net gains from principal investing attributable to Key were $12 million during the current quarter, compared to net losses of $10 million in the year-ago quarter. Compared to the same period in the prior year, the impact of the above items was partially offset by net gains of $125 million recorded in connection with the repositioning of the securities portfolio as well as a $95 million gain related to the exchange of Key common shares for capital securities during the second quarter of 2009.
Line of Business Descriptions
Community Banking
Regional Banking provides individuals with branch-based deposit and investment products, personal finance services and loans, including residential mortgages, home equity and various types of installment loans. This line of business also provides small businesses with deposit, investment and credit products, and business advisory services.
Regional Banking also offers financial, estate and retirement planning, and asset management services to assist high-net-worth clients with their banking, trust, portfolio management, insurance, charitable giving and related needs.
Commercial Banking provides midsize businesses with products and services that include commercial lending, cash management, equipment leasing, investment and employee benefit programs, succession planning, access to capital markets, derivatives and foreign exchange.
National Banking
Real Estate Capital and Corporate Banking Services consists of two business units, Real Estate Capital and Corporate Banking Services.
Real Estate Capital is a national business that provides construction and interim lending, permanent debt placements and servicing, equity and investment banking, and other commercial banking products and services to developers, brokers and owner-investors. This unit deals primarily with nonowner-occupied properties (i.e., generally properties in which at least 50% of the debt service is provided by rental income from nonaffiliated third parties). Real Estate Capital emphasizes providing clients with finance solutions through access to the capital markets.
Corporate Banking Services provides cash management, interest rate derivatives, and foreign exchange products and services to clients served by both the Community Banking and National Banking groups. Through its Public Sector and Financial Institutions businesses, Corporate Banking Services also provides a full array of commercial banking products and services to government and not-for-profit entities, and to community banks. A variety of cash management services, including the processing of tuition payments for private schools, are provided through the Global Treasury Management unit.
Equipment Finance meets the equipment leasing needs of companies worldwide and provides equipment manufacturers, distributors and resellers with financing options for their clients. Lease financing receivables and related revenues are assigned to other lines of business (primarily Institutional and Capital Markets, and Commercial Banking) if those businesses are principally responsible for maintaining the relationship with the client.
Institutional and Capital Markets, through its KeyBanc Capital Markets unit, provides commercial lending, treasury management, investment banking, derivatives, foreign exchange, equity and debt underwriting and trading, and syndicated finance products and services to large corporations and middle-market companies.
Through its Victory Capital Management unit, Institutional and Capital Markets also manages or offers advice regarding investment portfolios for a national client base, including corporations, labor unions, not-for-profit organizations, governments and individuals. These portfolios may be managed in separate accounts, common funds or the Victory family of mutual funds.
Cleveland-based KeyCorp (NYSE: KEY) is one of the nation's largest bank-based financial services companies, with assets of approximately $94 billion at June 30, 2010. Key companies provide investment management, retail and commercial banking, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. In 2009, KeyBank was awarded its seventh consecutive "Outstanding" rating for economic development achievements under the Community Reinvestment Act, the only national bank among the 50 largest in the United States to achieve this distinction from the Office of the Comptroller of the Currency. Key has also been recognized for excellence in numerous areas of the multi-channel customer banking experience, including Corporate Insight's 2009 Bank Monitor for online service. For more information about Key, visit https://www.key.com/.
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, July 22, 2010. An audio replay of the call will be available through July 29, 2010.
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.
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Key's financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management's current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key's control. Key's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Key's actual results to differ materially from those described in the forward-looking statements can be found in Key's Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the period ended March 31, 2010, which have been filed with the Securities and Exchange Commission and are available on Key's website (www.key.com) and on the Securities and Exchange Commission's website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management's views as of any subsequent date. Key does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Financial Highlights |
|||||||||
(dollars in millions, except per share amounts) |
|||||||||
Three months ended |
|||||||||
6-30-10 |
3-31-10 |
6-30-09 |
|||||||
Summary of operations |
|||||||||
Net interest income (TE) |
$ 623 |
$ 632 |
$ 575 |
||||||
Noninterest income |
492 |
450 |
706 |
||||||
Total revenue (TE) |
1,115 |
1,082 |
1,281 |
||||||
Provision for loan losses |
228 |
413 |
823 |
||||||
Noninterest expense |
769 |
785 |
855 |
||||||
Income (loss) from continuing operations attributable to Key |
97 |
(57) |
(230) |
||||||
Income (loss) from discontinued operations, net of taxes (b) |
(27) |
2 |
4 |
||||||
Net income (loss) attributable to Key |
70 |
(55) |
(226) |
||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ 56 |
$ (98) |
$ (394) |
||||||
Income (loss) from discontinued operations, net of taxes (b) |
(27) |
2 |
4 |
||||||
Net income (loss) attributable to Key common shareholders |
29 |
(96) |
(390) |
||||||
Per common share |
|||||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ .06 |
$ (.11) |
$ (.68) |
||||||
Income (loss) from discontinued operations, net of taxes (b) |
(.03) |
-- |
.01 |
||||||
Net income (loss) attributable to Key common shareholders |
.03 |
(.11) |
(.68) |
||||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution |
.06 |
(.11) |
(.68) |
||||||
Income (loss) from discontinued operations, net of taxes — assuming dilution (b) |
(.03) |
-- |
.01 |
||||||
Net income (loss) attributable to Key common shareholders — assuming dilution |
.03 |
(.11) |
(.68) |
||||||
Cash dividends paid |
.01 |
.01 |
.01 |
||||||
Book value at period end |
9.19 |
9.01 |
10.21 |
||||||
Tangible book value at period end |
8.10 |
7.91 |
8.93 |
||||||
Market price at period end |
7.69 |
7.75 |
5.24 |
||||||
Performance ratios |
|||||||||
From continuing operations: |
|||||||||
Return on average total assets |
.44 |
% |
(.26) |
% |
(.96) |
% |
|||
Return on average common equity |
2.84 |
(4.95) |
(15.54) |
||||||
Net interest margin (TE) |
3.17 |
3.19 |
2.70 |
||||||
From consolidated operations: |
|||||||||
Return on average total assets |
.30 |
% |
(.23) |
% |
(.90) |
% |
|||
Return on average common equity |
1.47 |
(4.85) |
(15.32) |
||||||
Net interest margin (TE) |
3.12 |
3.13 |
2.67 |
||||||
Loan to deposit |
93.43 |
93.44 |
107.24 |
||||||
Capital ratios at period end |
|||||||||
Key shareholders' equity to assets |
11.49 |
% |
11.17 |
% |
11.10 |
% |
|||
Tangible Key shareholders' equity to tangible assets |
10.58 |
10.26 |
10.16 |
||||||
Tangible common equity to tangible assets (a) |
7.65 |
7.37 |
7.35 |
||||||
Tier 1 common equity (a) (c) |
8.01 |
7.51 |
7.36 |
||||||
Tier 1 risk-based capital (c) |
13.55 |
12.92 |
12.57 |
||||||
Total risk-based capital (c) |
17.58 |
17.07 |
16.67 |
||||||
Leverage (c) |
11.99 |
11.60 |
12.26 |
||||||
Asset quality — from continuing operations |
|||||||||
Net loan charge-offs |
$ 435 |
$ 522 |
$ 502 |
||||||
Net loan charge-offs to average loans |
3.18 |
% |
3.67 |
% |
2.93 |
% |
|||
Allowance for loan losses |
$ 2,219 |
$ 2,425 |
$ 2,339 |
||||||
Allowance for credit losses |
2,328 |
2,544 |
2,404 |
||||||
Allowance for loan losses to period-end loans |
4.16 |
% |
4.34 |
% |
3.48 |
% |
|||
Allowance for credit losses to period-end loans |
4.36 |
4.55 |
3.58 |
||||||
Allowance for loan losses to nonperforming loans |
130.30 |
117.43 |
107.05 |
||||||
Allowance for credit losses to nonperforming loans |
136.70 |
123.20 |
110.02 |
||||||
Nonperforming loans at period end |
$ 1,703 |
$ 2,065 |
$ 2,185 |
||||||
Nonperforming assets at period end |
2,086 |
2,428 |
2,548 |
||||||
Nonperforming loans to period-end portfolio loans |
3.19 |
% |
3.69 |
% |
3.25 |
% |
|||
Nonperforming assets to period-end portfolio loans plus |
|||||||||
OREO and other nonperforming assets |
3.88 |
4.31 |
3.77 |
||||||
Trust and brokerage assets |
|||||||||
Assets under management |
$ 58,862 |
$ 66,186 |
$ 63,382 |
||||||
Nonmanaged and brokerage assets |
27,189 |
27,809 |
23,261 |
||||||
Other data |
|||||||||
Average full-time equivalent employees |
15,665 |
15,772 |
16,937 |
||||||
Branches |
1,019 |
1,014 |
993 |
||||||
Taxable-equivalent adjustment |
$ 6 |
$ 7 |
$ 6 |
||||||
Six months ended |
|||||||
6-30-10 |
6-30-09 |
||||||
Summary of operations |
|||||||
Net interest income (TE) |
$ 1,255 |
$ 1,170 |
|||||
Noninterest income |
942 |
1,184 |
|||||
Total revenue (TE) |
2,197 |
2,354 |
|||||
Provision for loan losses |
641 |
1,670 |
|||||
Noninterest expense |
1,554 |
1,782 |
|||||
Income (loss) from continuing operations attributable to Key |
40 |
(689) |
|||||
Income (loss) from discontinued operations, net of taxes (b) |
(25) |
(25) |
|||||
Net income (loss) attributable to Key |
15 |
(714) |
|||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ (42) |
$ (901) |
|||||
Income (loss) from discontinued operations, net of taxes (b) |
(25) |
(25) |
|||||
Net income (loss) attributable to Key common shareholders |
(67) |
(926) |
|||||
Per common share |
|||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ (.05) |
$ (1.68) |
|||||
Income (loss) from discontinued operations, net of taxes (b) |
(.03) |
(.05) |
|||||
Net income (loss) attributable to Key common shareholders |
(.08) |
(1.73) |
|||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution |
(.05) |
(1.68) |
|||||
Income (loss) from discontinued operations, net of taxes — assuming dilution (b) |
(.03) |
(.05) |
|||||
Net income (loss) attributable to Key common shareholders — assuming dilution |
(.08) |
(1.73) |
|||||
Cash dividends paid |
.02 |
.0725 |
|||||
Performance ratios |
|||||||
From continuing operations: |
|||||||
Return on average total assets |
.09 |
% |
(1.42) |
% |
|||
Return on average common equity |
(1.06) |
(21.88) |
|||||
Net interest margin (TE) |
3.18 |
2.75 |
|||||
From consolidated operations: |
|||||||
Return on average total assets |
.03 |
% |
(1.41) |
% |
|||
Return on average common equity |
(1.70) |
(22.58) |
|||||
Net interest margin (TE) |
3.13 |
2.72 |
|||||
Asset quality — from continuing operations |
|||||||
Net loan charge-offs |
$ 957 |
$ 962 |
|||||
Net loan charge-offs to average loans |
3.43 |
% |
2.77 |
% |
|||
Other data |
|||||||
Average full-time equivalent employees |
15,718 |
17,201 |
|||||
Taxable-equivalent adjustment |
$ 13 |
$ 12 |
|||||
(a) The following table entitled "GAAP to Non-GAAP Reconciliations" presents the computations of certain financial measures related to "tangible common equity" |
|||||||
(b) In September 2009, management made the decision to discontinue the education lending business conducted through Key Education Resources, the |
|||||||
(c) 6-30-10 ratio is estimated. |
|||||||
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles |
|||||||
GAAP to Non-GAAP Reconciliations |
|||||||||
(dollars in millions, except per share amounts) |
|||||||||
The table below presents the computations of certain financial measures related to "tangible common equity" and "Tier 1 |
|||||||||
Because the Tier 1 common equity is neither formally defined by GAAP nor prescribed in amount by federal banking |
|||||||||
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To |
|||||||||
Three months ended |
|||||||||
6-30-10 |
3-31-10 |
6-30-09 |
|||||||
Tangible common equity to tangible assets at period end |
|||||||||
Key shareholders' equity (GAAP) |
$ 10,820 |
$ 10,641 |
$ 10,851 |
||||||
Less: |
Intangible assets |
959 |
963 |
1,021 |
|||||
Preferred Stock, Series B |
2,438 |
2,434 |
2,422 |
||||||
Preferred Stock, Series A |
291 |
291 |
291 |
||||||
Tangible common equity (non-GAAP) |
$ 7,132 |
$ 6,953 |
$ 7,117 |
||||||
Total assets (GAAP) |
$ 94,167 |
$ 95,303 |
$ 97,792 |
||||||
Less: |
Intangible assets |
959 |
963 |
1,021 |
|||||
Tangible assets (non-GAAP) |
$ 93,208 |
$ 94,340 |
$ 96,771 |
||||||
Tangible common equity to tangible assets ratio (non-GAAP) |
7.65 |
% |
7.37 |
% |
7.35 |
% |
|||
Tier 1 common equity at period end |
|||||||||
Key shareholders' equity (GAAP) |
$ 10,820 |
$ 10,641 |
$ 10,851 |
||||||
Qualifying capital securities |
1,791 |
1,791 |
2,290 |
||||||
Less: |
Goodwill |
917 |
917 |
917 |
|||||
Accumulated other comprehensive income (loss) (a) |
127 |
(25) |
(20) |
||||||
Other assets (b) |
517 |
765 |
172 |
||||||
Total Tier 1 capital (regulatory) |
11,050 |
10,775 |
12,072 |
||||||
Less: |
Qualifying capital securities |
1,791 |
1,791 |
2,290 |
|||||
Preferred Stock, Series B |
2,438 |
2,434 |
2,422 |
||||||
Preferred Stock, Series A |
291 |
291 |
291 |
||||||
Total Tier 1 common equity (non-GAAP) |
$ 6,530 |
$ 6,259 |
$ 7,069 |
||||||
Net risk-weighted assets (regulatory) (b), (c) |
$ 81,572 |
$ 83,362 |
$ 96,006 |
||||||
Tier 1 common equity ratio (non-GAAP) (c) |
8.01 |
% |
7.51 |
% |
7.36 |
% |
|||
(a) Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on |
|||||||||
(b) Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed deferred tax |
|||||||||
(c) 6-30-10 amount or ratio is estimated. |
|||||||||
GAAP = U.S. generally accepted accounting principles |
|||||||||
Consolidated Balance Sheets |
||||||||
(dollars in millions) |
||||||||
6-30-10 |
3-31-10 |
6-30-09 |
||||||
Assets |
||||||||
Loans |
$ 53,334 |
$ 55,913 |
$ 67,167 |
|||||
Loans held for sale |
699 |
556 |
761 |
|||||
Securities available for sale |
19,773 |
16,553 |
11,988 |
|||||
Held-to-maturity securities |
19 |
22 |
25 |
|||||
Trading account assets |
1,014 |
1,034 |
771 |
|||||
Short-term investments |
1,984 |
4,345 |
3,487 |
|||||
Other investments |
1,415 |
1,525 |
1,450 |
|||||
Total earning assets |
78,238 |
79,948 |
85,649 |
|||||
Allowance for loan losses |
(2,219) |
(2,425) |
(2,339) |
|||||
Cash and due from banks |
591 |
619 |
706 |
|||||
Premises and equipment |
872 |
872 |
858 |
|||||
Operating lease assets |
589 |
652 |
842 |
|||||
Goodwill |
917 |
917 |
917 |
|||||
Other intangible assets |
42 |
46 |
104 |
|||||
Corporate-owned life insurance |
3,109 |
3,087 |
3,016 |
|||||
Derivative assets |
1,153 |
1,063 |
1,182 |
|||||
Accrued income and other assets |
4,061 |
4,150 |
2,775 |
|||||
Discontinued assets |
6,814 |
6,374 |
4,082 |
|||||
Total assets |
$ 94,167 |
$ 95,303 |
$ 97,792 |
|||||
Liabilities |
||||||||
Deposits in domestic offices: |
||||||||
NOW and money market deposit accounts |
$ 25,526 |
$ 25,068 |
$ 23,939 |
|||||
Savings deposits |
1,883 |
1,873 |
1,795 |
|||||
Certificates of deposit ($100,000 or more) |
8,476 |
10,188 |
13,486 |
|||||
Other time deposits |
10,430 |
12,010 |
15,055 |
|||||
Total interest-bearing deposits |
46,315 |
49,139 |
54,275 |
|||||
Noninterest-bearing deposits |
15,226 |
15,364 |
12,873 |
|||||
Deposits in foreign office — interest-bearing |
834 |
646 |
632 |
|||||
Total deposits |
62,375 |
65,149 |
67,780 |
|||||
Federal funds purchased and securities sold under repurchase agreements |
2,836 |
1,927 |
1,530 |
|||||
Bank notes and other short-term borrowings |
819 |
446 |
1,710 |
|||||
Derivative liabilities |
1,321 |
1,103 |
528 |
|||||
Accrued expense and other liabilities |
2,154 |
2,089 |
1,600 |
|||||
Long-term debt |
10,451 |
11,177 |
13,462 |
|||||
Discontinued liabilities |
3,139 |
2,490 |
122 |
|||||
Total liabilities |
83,095 |
84,381 |
86,732 |
|||||
Equity |
||||||||
Preferred stock, Series A |
291 |
291 |
291 |
|||||
Preferred stock, Series B |
2,438 |
2,434 |
2,422 |
|||||
Common shares |
946 |
946 |
865 |
|||||
Common stock warrant |
87 |
87 |
87 |
|||||
Capital surplus |
3,701 |
3,724 |
3,292 |
|||||
Retained earnings |
5,118 |
5,098 |
5,878 |
|||||
Treasury stock, at cost |
(1,914) |
(1,958) |
(1,984) |
|||||
Accumulated other comprehensive income (loss) |
153 |
19 |
-- |
|||||
Key shareholders' equity |
10,820 |
10,641 |
10,851 |
|||||
Noncontrolling interests |
252 |
281 |
209 |
|||||
Total equity |
11,072 |
10,922 |
11,060 |
|||||
Total liabilities and equity |
$ 94,167 |
$ 95,303 |
$ 97,792 |
|||||
Common shares outstanding (000) |
880,515 |
879,052 |
797,246 |
|||||
Consolidated Statements of Income |
||||||||||||
(dollars in millions, except per share amounts) |
||||||||||||
Three months ended |
Six months ended |
|||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||||
Interest income |
||||||||||||
Loans |
$ 677 |
$ 710 |
$ 819 |
$ 1,387 |
$ 1,659 |
|||||||
Loans held for sale |
5 |
4 |
8 |
9 |
16 |
|||||||
Securities available for sale |
154 |
150 |
89 |
304 |
189 |
|||||||
Held-to-maturity securities |
-- |
1 |
-- |
1 |
1 |
|||||||
Trading account assets |
10 |
11 |
13 |
21 |
26 |
|||||||
Short-term investments |
2 |
2 |
3 |
4 |
6 |
|||||||
Other investments |
13 |
14 |
13 |
27 |
25 |
|||||||
Total interest income |
861 |
892 |
945 |
1,753 |
1,922 |
|||||||
Interest expense |
||||||||||||
Deposits |
188 |
212 |
296 |
400 |
596 |
|||||||
Federal funds purchased and securities sold under repurchase agreements |
2 |
1 |
1 |
3 |
2 |
|||||||
Bank notes and other short-term borrowings |
4 |
3 |
4 |
7 |
10 |
|||||||
Long-term debt |
50 |
51 |
75 |
101 |
156 |
|||||||
Total interest expense |
244 |
267 |
376 |
511 |
764 |
|||||||
Net interest income |
617 |
625 |
569 |
1,242 |
1,158 |
|||||||
Provision for loan losses |
228 |
413 |
823 |
641 |
1,670 |
|||||||
Net interest income (expense) after provision for loan losses |
389 |
212 |
(254) |
601 |
(512) |
|||||||
Noninterest income |
||||||||||||
Trust and investment services income |
112 |
114 |
119 |
226 |
229 |
|||||||
Service charges on deposit accounts |
80 |
76 |
83 |
156 |
165 |
|||||||
Operating lease income |
43 |
47 |
59 |
90 |
120 |
|||||||
Letter of credit and loan fees |
42 |
40 |
44 |
82 |
82 |
|||||||
Corporate-owned life insurance income |
28 |
28 |
25 |
56 |
52 |
|||||||
Net securities gains (losses) |
(2) |
(a) |
3 |
(a) |
125 |
1 |
111 |
|||||
Electronic banking fees |
29 |
27 |
27 |
56 |
51 |
|||||||
Gains on leased equipment |
2 |
8 |
36 |
10 |
62 |
|||||||
Insurance income |
19 |
18 |
16 |
37 |
34 |
|||||||
Net gains (losses) from loan sales |
25 |
4 |
(3) |
29 |
4 |
|||||||
Net gains (losses) from principal investing |
17 |
37 |
(6) |
54 |
(78) |
|||||||
Investment banking and capital markets income (loss) |
31 |
9 |
14 |
40 |
31 |
|||||||
Gain from sale/redemption of Visa Inc. shares |
-- |
-- |
-- |
-- |
105 |
|||||||
Gain (loss) related to exchange of common shares for capital securities |
-- |
-- |
95 |
-- |
95 |
|||||||
Other income |
66 |
39 |
72 |
105 |
121 |
|||||||
Total noninterest income |
492 |
450 |
706 |
942 |
1,184 |
|||||||
Noninterest expense |
||||||||||||
Personnel |
385 |
362 |
375 |
747 |
734 |
|||||||
Net occupancy |
64 |
66 |
63 |
130 |
129 |
|||||||
Operating lease expense |
35 |
39 |
49 |
74 |
99 |
|||||||
Computer processing |
47 |
47 |
48 |
94 |
95 |
|||||||
Professional fees |
41 |
38 |
46 |
79 |
80 |
|||||||
FDIC assessment |
33 |
37 |
70 |
70 |
100 |
|||||||
OREO expense, net |
22 |
32 |
15 |
54 |
21 |
|||||||
Equipment |
26 |
24 |
25 |
50 |
47 |
|||||||
Marketing |
16 |
13 |
17 |
29 |
31 |
|||||||
Provision (credit) for losses on lending-related commitments |
(10) |
(2) |
11 |
(12) |
11 |
|||||||
Intangible assets impairment |
-- |
-- |
-- |
-- |
196 |
|||||||
Other expense |
110 |
129 |
136 |
239 |
239 |
|||||||
Total noninterest expense |
769 |
785 |
855 |
1,554 |
1,782 |
|||||||
Income (loss) from continuing operations before income taxes |
112 |
(123) |
(403) |
(11) |
(1,110) |
|||||||
Income taxes |
11 |
(82) |
(176) |
(71) |
(414) |
|||||||
Income (loss) from continuing operations |
101 |
(41) |
(227) |
60 |
(696) |
|||||||
Income (loss) from discontinued operations, net of taxes |
(27) |
2 |
4 |
(25) |
(25) |
|||||||
Net income (loss) |
74 |
(39) |
(223) |
35 |
(721) |
|||||||
Less: Net income (loss) attributable to noncontrolling interests |
4 |
16 |
3 |
20 |
(7) |
|||||||
Net income (loss) attributable to Key |
$ 70 |
$ (55) |
$ (226) |
$ 15 |
$ (714) |
|||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ 56 |
$ (98) |
$ (394) |
$ (42) |
$ (901) |
|||||||
Net income (loss) attributable to Key common shareholders |
29 |
(96) |
(390) |
(67) |
(926) |
|||||||
Per common share |
||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ .06 |
$ (.11) |
$ (.68) |
$ (.05) |
$ (1.68) |
|||||||
Income (loss) from discontinued operations, net of taxes |
(.03) |
-- |
.01 |
(.03) |
(.05) |
|||||||
Net income (loss) attributable to Key common shareholders |
.03 |
(.11) |
(.68) |
(.08) |
(1.73) |
|||||||
Per common share — assuming dilution |
||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders |
$ .06 |
$ (.11) |
$ (.68) |
$ (.05) |
$ (1.68) |
|||||||
Income (loss) from discontinued operations, net of taxes |
(.03) |
-- |
.01 |
(.03) |
(.05) |
|||||||
Net income (loss) attributable to Key common shareholders |
.03 |
(.11) |
(.68) |
(.08) |
(1.73) |
|||||||
Cash dividends declared per common share |
$ .01 |
$ .01 |
$ .01 |
$ .02 |
$ .0725 |
|||||||
Weighted-average common shares outstanding (000) |
874,664 |
874,386 |
576,883 |
874,526 |
535,080 |
|||||||
Weighted-average common shares and potential common shares outstanding (000) |
874,664 |
874,386 |
576,883 |
874,526 |
535,080 |
|||||||
(a) For the three months ended June 30, 2010, Key had $4 million in impairment losses related to securities |
||||||||||||
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations |
||||||||||||||||||||||||
(dollars in millions) |
||||||||||||||||||||||||
Second Quarter 2010 |
First Quarter 2010 |
Second Quarter 2009 |
||||||||||||||||||||||
Average |
Average |
Average |
||||||||||||||||||||||
Balance |
Interest |
(a) |
Yield/Rate |
(a) |
Balance |
Interest |
(a) |
Yield/Rate |
(a) |
Balance |
Interest |
(a) |
Yield/Rate |
(a) |
||||||||||
Assets |
||||||||||||||||||||||||
Loans: (b), (c) |
||||||||||||||||||||||||
Commercial, financial and agricultural |
$ 17,725 |
$ 209 |
4.74 |
% |
$ 18,796 |
$ 222 |
4.78 |
% |
$ 24,468 |
$ 273 |
4.48 |
% |
||||||||||||
Real estate — commercial mortgage |
10,354 |
124 |
4.78 |
10,430 |
128 |
4.98 |
11,892 |
144 |
4.83 |
|||||||||||||||
Real estate — construction |
3,773 |
41 |
4.31 |
4,537 |
45 |
4.07 |
6,264 |
76 |
4.89 |
|||||||||||||||
Commercial lease financing |
6,759 |
90 |
5.33 |
7,195 |
93 |
5.19 |
8,432 |
90 |
4.26 |
|||||||||||||||
Total commercial loans |
38,611 |
464 |
4.81 |
40,958 |
488 |
4.82 |
51,056 |
583 |
4.58 |
|||||||||||||||
Real estate — residential mortgage |
1,829 |
25 |
5.60 |
1,803 |
26 |
5.65 |
1,750 |
26 |
5.96 |
|||||||||||||||
Home equity: |
||||||||||||||||||||||||
Community Banking |
9,837 |
103 |
4.21 |
9,967 |
105 |
4.26 |
10,291 |
112 |
4.36 |
|||||||||||||||
Other |
773 |
15 |
7.62 |
816 |
15 |
7.57 |
972 |
18 |
7.49 |
|||||||||||||||
Total home equity loans |
10,610 |
118 |
4.45 |
10,783 |
120 |
4.51 |
11,263 |
130 |
4.63 |
|||||||||||||||
Consumer other — Community Banking |
1,145 |
33 |
11.57 |
1,162 |
36 |
12.63 |
1,207 |
31 |
10.41 |
|||||||||||||||
Consumer other: |
||||||||||||||||||||||||
Marine |
2,563 |
39 |
6.21 |
2,713 |
42 |
6.15 |
3,178 |
49 |
6.23 |
|||||||||||||||
Other |
195 |
4 |
7.80 |
209 |
4 |
7.76 |
256 |
6 |
7.96 |
|||||||||||||||
Total consumer other |
2,758 |
43 |
6.32 |
2,922 |
46 |
6.27 |
3,434 |
55 |
6.36 |
|||||||||||||||
Total consumer loans |
16,342 |
219 |
5.40 |
16,670 |
228 |
5.51 |
17,654 |
242 |
5.49 |
|||||||||||||||
Total loans |
54,953 |
683 |
4.99 |
57,628 |
716 |
5.02 |
68,710 |
825 |
4.81 |
|||||||||||||||
Loans held for sale |
516 |
5 |
3.50 |
390 |
4 |
4.43 |
635 |
8 |
4.92 |
|||||||||||||||
Securities available for sale (b), (e) |
17,285 |
154 |
3.63 |
16,312 |
151 |
3.73 |
8,360 |
89 |
4.37 |
|||||||||||||||
Held-to-maturity securities (b) |
22 |
-- |
11.46 |
23 |
1 |
8.20 |
25 |
-- |
9.75 |
|||||||||||||||
Trading account assets |
1,048 |
10 |
3.71 |
1,186 |
11 |
3.86 |
1,217 |
13 |
4.09 |
|||||||||||||||
Short-term investments |
3,830 |
2 |
.23 |
2,806 |
2 |
.28 |
5,195 |
3 |
.26 |
|||||||||||||||
Other investments (e) |
1,445 |
13 |
3.11 |
1,498 |
14 |
3.32 |
1,463 |
13 |
3.19 |
|||||||||||||||
Total earning assets |
79,099 |
867 |
4.40 |
79,843 |
899 |
4.54 |
85,605 |
951 |
4.45 |
|||||||||||||||
Allowance for loan losses |
(2,356) |
(2,603) |
(2,211) |
|||||||||||||||||||||
Accrued income and other assets |
11,133 |
11,454 |
13,094 |
|||||||||||||||||||||
Discontinued assets — education lending business |
6,389 |
6,884 |
4,370 |
|||||||||||||||||||||
Total assets |
$ 94,265 |
$ 95,578 |
$ 100,858 |
|||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
NOW and money market deposit accounts |
$ 25,270 |
24 |
.39 |
$ 24,722 |
23 |
.37 |
$ 24,058 |
32 |
.52 |
|||||||||||||||
Savings deposits |
1,883 |
1 |
.06 |
1,828 |
-- |
.06 |
1,806 |
1 |
.07 |
|||||||||||||||
Certificates of deposit ($100,000 or more) (f) |
9,485 |
77 |
3.28 |
10,538 |
88 |
3.39 |
13,555 |
124 |
3.69 |
|||||||||||||||
Other time deposits |
11,309 |
85 |
3.01 |
12,611 |
100 |
3.23 |
14,908 |
139 |
3.74 |
|||||||||||||||
Deposits in foreign office |
818 |
1 |
.36 |
693 |
1 |
.30 |
579 |
-- |
.26 |
|||||||||||||||
Total interest-bearing deposits |
48,765 |
188 |
1.55 |
50,392 |
212 |
1.71 |
54,906 |
296 |
2.15 |
|||||||||||||||
Federal funds purchased and securities sold under repurchase agreements |
1,841 |
2 |
.33 |
1,790 |
1 |
.32 |
1,627 |
1 |
.31 |
|||||||||||||||
Bank notes and other short-term borrowings |
539 |
4 |
3.06 |
490 |
3 |
2.41 |
1,821 |
4 |
.79 |
|||||||||||||||
Long-term debt (f) |
7,031 |
50 |
3.09 |
7,001 |
51 |
3.16 |
10,132 |
75 |
3.23 |
|||||||||||||||
Total interest-bearing liabilities |
58,176 |
244 |
1.70 |
59,673 |
267 |
1.83 |
68,486 |
376 |
2.22 |
|||||||||||||||
Noninterest-bearing deposits |
15,644 |
14,941 |
12,457 |
|||||||||||||||||||||
Accrued expense and other liabilities |
3,151 |
3,064 |
5,140 |
|||||||||||||||||||||
Discontinued liabilities — education lending business (d) |
6,389 |
6,884 |
4,370 |
|||||||||||||||||||||
Total liabilities |
83,360 |
84,562 |
90,453 |
|||||||||||||||||||||
Equity |
||||||||||||||||||||||||
Key shareholders' equity |
10,646 |
10,747 |
10,201 |
|||||||||||||||||||||
Noncontrolling interests |
259 |
269 |
204 |
|||||||||||||||||||||
Total equity |
10,905 |
11,016 |
10,405 |
|||||||||||||||||||||
Total liabilities and equity |
$ 94,265 |
$ 95,578 |
$ 100,858 |
|||||||||||||||||||||
Interest rate spread (TE) |
2.70 |
% |
2.71 |
% |
2.23 |
% |
||||||||||||||||||
Net interest income (TE) and net interest margin (TE) |
623 |
3.17 |
% |
632 |
3.19 |
% |
575 |
2.70 |
% |
|||||||||||||||
TE adjustment (b) |
6 |
7 |
6 |
|||||||||||||||||||||
Net interest income, GAAP basis |
$ 617 |
$ 625 |
$ 569 |
|||||||||||||||||||||
Average balances have not been adjusted prior to the third quarter of 2009 to reflect Key's January 1, 2008, adoption of the applicable accounting guidance related to the offsetting of certain derivative contracts on the consolidated balance sheet. (a) Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (d) below, calculated using a matched funds transfer pricing methodology. (b) Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 35%. (c) For purposes of these computations, nonaccrual loans are included in average loan balances. (d) Discontinued liabilities include the liabilities of the education lending business and the dollar amount of any additional liabilities assumed necessary to support the assets associated with this business. (e) Yield is calculated on the basis of amortized cost. (f) Rate calculation excludes basis adjustments related to fair value hedges. TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles |
||||||||||||||||||||||||
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations |
|||||||||||||||
(dollars in millions) |
|||||||||||||||
Six months ended June 30, 2010 |
Six months ended June 30, 2009 |
||||||||||||||
Average |
Average |
||||||||||||||
Balance |
Interest |
(a) |
Yield/Rate |
(a) |
Balance |
Interest |
(a) |
Yield/Rate |
(a) |
||||||
Assets |
|||||||||||||||
Loans: (b),(c) |
|||||||||||||||
Commercial, financial and agricultural |
$ 18,257 |
$ 431 |
4.76 |
% |
$ 25,442 |
$ 551 |
4.37 |
% |
|||||||
Real estate — commercial mortgage |
10,392 |
252 |
4.88 |
11,431 |
(d) |
284 |
5.01 |
||||||||
Real estate — construction |
4,153 |
86 |
4.18 |
6,884 |
(d) |
160 |
4.70 |
||||||||
Commercial lease financing |
6,976 |
183 |
5.25 |
8,610 |
184 |
4.27 |
|||||||||
Total commercial loans |
39,778 |
952 |
4.82 |
52,367 |
1,179 |
4.54 |
|||||||||
Real estate — residential mortgage |
1,816 |
51 |
5.62 |
1,763 |
53 |
5.98 |
|||||||||
Home equity: |
|||||||||||||||
Community Banking |
9,902 |
208 |
4.23 |
10,284 |
226 |
4.42 |
|||||||||
Other |
794 |
30 |
7.58 |
1,004 |
37 |
7.50 |
|||||||||
Total home equity loans |
10,696 |
238 |
4.48 |
11,288 |
263 |
4.70 |
|||||||||
Consumer other — Community Banking |
1,153 |
69 |
12.10 |
1,216 |
63 |
10.48 |
|||||||||
Consumer other: |
|||||||||||||||
Marine |
2,637 |
81 |
6.18 |
3,254 |
101 |
6.23 |
|||||||||
Other |
202 |
8 |
7.78 |
265 |
11 |
7.97 |
|||||||||
Total consumer other |
2,839 |
89 |
6.29 |
3,519 |
112 |
6.36 |
|||||||||
Total consumer loans |
16,504 |
447 |
5.45 |
17,786 |
491 |
5.55 |
|||||||||
Total loans |
56,282 |
1,399 |
5.00 |
70,153 |
1,670 |
4.79 |
|||||||||
Loans held for sale |
454 |
9 |
3.90 |
660 |
16 |
4.91 |
|||||||||
Securities available for sale (b), (g) |
16,801 |
305 |
3.68 |
8,244 |
190 |
4.70 |
|||||||||
Held-to-maturity securities (b) |
22 |
1 |
9.79 |
25 |
1 |
9.79 |
|||||||||
Trading account assets |
1,117 |
21 |
3.79 |
1,282 |
26 |
4.03 |
|||||||||
Short-term investments |
3,321 |
4 |
.25 |
3,830 |
6 |
.33 |
|||||||||
Other investments (g) |
1,471 |
27 |
3.22 |
1,493 |
25 |
3.00 |
|||||||||
Total earning assets |
79,468 |
1,766 |
4.47 |
85,687 |
1,934 |
4.54 |
|||||||||
Allowance for loan losses |
(2,478) |
(2,054) |
|||||||||||||
Accrued income and other assets |
11,293 |
14,265 |
|||||||||||||
Discontinued assets — education lending business |
6,635 |
4,430 |
|||||||||||||
Total assets |
$ 94,918 |
$ 102,328 |
|||||||||||||
Liabilities |
|||||||||||||||
NOW and money market deposit accounts |
$ 24,997 |
47 |
.38 |
$ 24,008 |
70 |
.58 |
|||||||||
Savings deposits |
1,855 |
1 |
.06 |
1,775 |
1 |
.08 |
|||||||||
Certificates of deposit ($100,000 or more) (g) |
10,009 |
165 |
3.34 |
13,008 |
245 |
3.80 |
|||||||||
Other time deposits |
11,957 |
185 |
3.12 |
14,823 |
279 |
3.79 |
|||||||||
Deposits in foreign office |
756 |
2 |
.33 |
917 |
1 |
.25 |
|||||||||
Total interest-bearing deposits |
49,574 |
400 |
1.63 |
54,531 |
596 |
2.20 |
|||||||||
Federal funds purchased and securities |
|||||||||||||||
sold under repurchase agreements |
1,816 |
3 |
.32 |
1,586 |
2 |
.31 |
|||||||||
Bank notes and other short-term borrowings |
515 |
7 |
2.75 |
3,106 |
10 |
.64 |
|||||||||
Long-term debt (g) |
7,002 |
101 |
3.13 |
10,281 |
156 |
3.31 |
|||||||||
Total interest-bearing liabilities |
58,907 |
511 |
1.76 |
69,504 |
764 |
2.24 |
|||||||||
Noninterest-bearing deposits |
15,308 |
11,779 |
|||||||||||||
Accrued expense and other liabilities |
3,108 |
6,134 |
|||||||||||||
Discontinued liabilities — education lending business (e) |
6,635 |
4,430 |
|||||||||||||
Total liabilities |
83,958 |
91,847 |
|||||||||||||
Equity |
|||||||||||||||
Key shareholders' equity |
10,696 |
10,276 |
|||||||||||||
Noncontrolling interests |
264 |
205 |
|||||||||||||
Total equity |
10,960 |
10,481 |
|||||||||||||
Total liabilities and equity |
$ 94,918 |
$ 102,328 |
|||||||||||||
Interest rate spread (TE) |
2.71 |
% |
2.30 |
% |
|||||||||||
Net interest income (TE) and net interest margin (TE) |
1,255 |
3.18 |
% |
1,170 |
2.75 |
% |
|||||||||
TE adjustment (b) |
13 |
. |
12 |
||||||||||||
Net interest income, GAAP basis |
$ 1,242 |
$ 1,158 |
|||||||||||||
Average balances have not been adjusted prior to the third quarter of 2009 to reflect Key's January 1, 2008, adoption of the applicable accounting (a) Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (e) below, calculated using a (b) Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate (c) For purposes of these computations, nonaccrual loans are included in average loan balances. (d) In late March 2009, Key transferred $1.5 billion of loans from the construction portfolio to the commercial mortgage portfolio in accordance with (e) Discontinued liabilities include the liabilities of the education lending business and the dollar amount of any additional liabilities assumed (f) Yield is calculated on the basis of amortized cost. (g) Rate calculation excludes basis adjustments related to fair value hedges. TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles |
|||||||||||||||
Noninterest Income |
||||||||||||
(in millions) |
||||||||||||
Three months ended |
Six months ended |
|||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||||
Trust and investment services income (a) |
$ 112 |
$ 114 |
$ 119 |
$ 226 |
$ 229 |
|||||||
Service charges on deposit accounts |
80 |
76 |
83 |
156 |
165 |
|||||||
Operating lease income |
43 |
47 |
59 |
90 |
120 |
|||||||
Letter of credit and loan fees |
42 |
40 |
44 |
82 |
82 |
|||||||
Corporate-owned life insurance income |
28 |
28 |
25 |
56 |
52 |
|||||||
Net securities gains (losses) |
(2) |
3 |
125 |
1 |
111 |
|||||||
Electronic banking fees |
29 |
27 |
27 |
56 |
51 |
|||||||
Gains on leased equipment |
2 |
8 |
36 |
10 |
62 |
|||||||
Insurance income |
19 |
18 |
16 |
37 |
34 |
|||||||
Net gains (losses) from loan sales |
25 |
4 |
(3) |
29 |
4 |
|||||||
Net gains (losses) from principal investing |
17 |
37 |
(6) |
54 |
(78) |
|||||||
Investment banking and capital markets income (loss) (a) |
31 |
9 |
14 |
40 |
31 |
|||||||
Gain from sale/redemption of Visa Inc. shares |
-- |
-- |
-- |
-- |
105 |
|||||||
Gain (loss) related to exchange of common shares for capital securities |
-- |
-- |
95 |
-- |
95 |
|||||||
Other income: |
||||||||||||
Gain from sale of Key's claim associated with the Lehman Brothers' Bankruptcy |
-- |
-- |
32 |
-- |
32 |
|||||||
Credit card fees |
3 |
3 |
3 |
6 |
6 |
|||||||
Miscellaneous income |
63 |
36 |
37 |
99 |
83 |
|||||||
Total other income |
66 |
39 |
72 |
105 |
121 |
|||||||
Total noninterest income |
$ 492 |
$ 450 |
$ 706 |
$ 942 |
$ 1,184 |
|||||||
(a) Additional detail provided in tables below. |
||||||||||||
Trust and Investment Services Income |
||||||||||||
(in millions) |
||||||||||||
Three months ended |
Six months ended |
|||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||||
Brokerage commissions and fee income |
$ 35 |
$ 33 |
$ 45 |
$ 68 |
$ 83 |
|||||||
Personal asset management and custody fees |
37 |
37 |
36 |
74 |
69 |
|||||||
Institutional asset management and custody fees |
40 |
44 |
38 |
84 |
77 |
|||||||
Total trust and investment services income |
$ 112 |
$ 114 |
$ 119 |
$ 226 |
$ 229 |
|||||||
Investment Banking and Capital Markets Income (Loss) |
||||||||||||
(in millions) |
||||||||||||
Three months ended |
Six months ended |
|||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||||
Investment banking income |
$ 25 |
$ 16 |
$ 21 |
$ 41 |
$ 32 |
|||||||
Income (loss) from other investments |
3 |
1 |
(6) |
4 |
(14) |
|||||||
Dealer trading and derivatives income (loss) |
(8) |
(16) |
(14) |
(24) |
(13) |
|||||||
Foreign exchange income |
11 |
8 |
13 |
19 |
26 |
|||||||
Total investment banking and capital markets income (loss) |
$ 31 |
$ 9 |
$ 14 |
$ 40 |
$ 31 |
|||||||
Noninterest Expense |
||||||||||
(dollars in millions) |
||||||||||
Three months ended |
Six months ended |
|||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||
Personnel (a) |
$ 385 |
$ 362 |
$ 375 |
$ 747 |
$ 734 |
|||||
Net occupancy |
64 |
66 |
63 |
130 |
129 |
|||||
Operating lease expense |
35 |
39 |
49 |
74 |
99 |
|||||
Computer processing |
47 |
47 |
48 |
94 |
95 |
|||||
Professional fees |
41 |
38 |
46 |
79 |
80 |
|||||
FDIC assessment |
33 |
37 |
70 |
70 |
100 |
|||||
OREO expense, net |
22 |
32 |
15 |
54 |
21 |
|||||
Equipment |
26 |
24 |
25 |
50 |
47 |
|||||
Marketing |
16 |
13 |
17 |
29 |
31 |
|||||
Provision (credit) for losses on lending-related commitments |
(10) |
(2) |
11 |
(12) |
11 |
|||||
Intangible assets impairment |
-- |
-- |
-- |
-- |
196 |
|||||
Other expense: |
||||||||||
Postage and delivery |
8 |
7 |
8 |
15 |
16 |
|||||
Franchise and business taxes |
6 |
7 |
9 |
13 |
18 |
|||||
Telecommunications |
5 |
6 |
6 |
11 |
13 |
|||||
Provision for losses on LIHTC guaranteed funds |
-- |
-- |
16 |
-- |
16 |
|||||
Miscellaneous expense |
91 |
109 |
97 |
200 |
176 |
|||||
Total other expense |
110 |
129 |
136 |
239 |
239 |
|||||
Total noninterest expense |
$ 769 |
$ 785 |
$ 855 |
$ 1,554 |
$ 1,782 |
|||||
Average full-time equivalent employees (b) |
15,665 |
15,772 |
16,937 |
15,718 |
17,201 |
|||||
(a) Additional detail provided in table below. |
||||||||||
(b) The number of average full-time equivalent employees has not been adjusted for discontinued operations. |
||||||||||
Personnel Expense |
||||||||||
(in millions) |
||||||||||
Three months ended |
Six months ended |
|||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||
Salaries |
$ 229 |
$ 222 |
$ 225 |
$ 451 |
$ 448 |
|||||
Incentive compensation |
65 |
47 |
52 |
112 |
88 |
|||||
Employee benefits |
71 |
74 |
69 |
145 |
152 |
|||||
Stock-based compensation |
15 |
14 |
15 |
29 |
24 |
|||||
Severance |
5 |
5 |
14 |
10 |
22 |
|||||
Total personnel expense |
$ 385 |
$ 362 |
$ 375 |
$ 747 |
$ 734 |
|||||
Loan Composition |
|||||||||||||
(dollars in millions) |
|||||||||||||
Percent change 6-30-10 vs. |
|||||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
3-31-10 |
6-30-09 |
|||||||||
Commercial, financial and agricultural |
$ 17,113 |
$ 18,015 |
$ 23,542 |
(5.0) |
% |
(27.3) |
% |
||||||
Commercial real estate: |
|||||||||||||
Commercial mortgage |
9,971 |
10,467 |
11,761 |
(4.7) |
(15.2) |
||||||||
Construction |
3,430 |
3,990 |
6,119 |
(14.0) |
(43.9) |
||||||||
Total commercial real estate loans |
13,401 |
14,457 |
17,880 |
(7.3) |
(25.1) |
||||||||
Commercial lease financing |
6,620 |
6,964 |
8,263 |
(4.9) |
(19.9) |
||||||||
Total commercial loans |
37,134 |
39,436 |
49,685 |
(5.8) |
(25.3) |
||||||||
Real estate — residential mortgage |
1,846 |
1,812 |
1,753 |
1.9 |
5.3 |
||||||||
Home equity: |
|||||||||||||
Community Banking |
9,775 |
9,892 |
10,250 |
(1.2) |
(4.6) |
||||||||
Other |
753 |
795 |
940 |
(5.3) |
(19.9) |
||||||||
Total home equity loans |
10,528 |
10,687 |
11,190 |
(1.5) |
(5.9) |
||||||||
Consumer other — Community Banking |
1,147 |
1,141 |
1,199 |
.5 |
(4.3) |
||||||||
Consumer other: |
|||||||||||||
Marine |
2,491 |
2,636 |
3,095 |
(5.5) |
(19.5) |
||||||||
Other |
188 |
201 |
245 |
(6.5) |
(23.3) |
||||||||
Total consumer other |
2,679 |
2,837 |
3,340 |
(5.6) |
(19.8) |
||||||||
Total consumer loans |
16,200 |
16,477 |
17,482 |
(1.7) |
(7.3) |
||||||||
Total loans (a) |
$ 53,334 |
$ 55,913 |
$ 67,167 |
(4.6) |
% |
(20.6) |
% |
||||||
Loans Held for Sale Composition |
|||||||||||||
(dollars in millions) |
|||||||||||||
Percent change 6-30-10 vs. |
|||||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
3-31-10 |
6-30-09 |
|||||||||
Commercial, financial and agricultural |
$ 255 |
$ 25 |
$ 51 |
920.0 |
% |
400.0 |
% |
||||||
Real estate — commercial mortgage |
235 |
265 |
288 |
(11.3) |
(18.4) |
||||||||
Real estate — construction |
112 |
147 |
146 |
(23.8) |
(23.3) |
||||||||
Commercial lease financing |
16 |
27 |
30 |
(40.7) |
(46.7) |
||||||||
Real estate — residential mortgage |
81 |
92 |
245 |
(12.0) |
(66.9) |
||||||||
Automobile |
-- |
-- |
1 |
N/M |
(100.0) |
||||||||
Total loans held for sale (b) |
$ 699 |
(c) |
$ 556 |
(c) |
$ 761 |
25.7 |
% |
(8.1) |
% |
||||
(a) Excluded at June 30, 2010, March 31, 2010, and June 30, 2009, are loans in the amount of $6.6 billion, $6.0 billion and $3.6 |
|||||||||||||
(b) Excluded at June 30, 2010, March 31, 2010, and June 30, 2009, are loans held for sale in the amount of $92 million, $246 |
|||||||||||||
(c) The beginning balance at March 31, 2010 of $556 million increased by new originations in the amount of $812 million and net transfers from held to maturity in the amount of $65 million, and decreased by loan sales of $712 million, transfers to OREO/valuation adjustments of $6 million and loan payments of $16 million, for an ending balance of $699 million at June 30, 2010. |
|||||||||||||
N/M = Not Meaningful |
|||||||||||||
Summary of Loan Loss Experience from Continuing Operations |
||||||||||||
(dollars in millions) |
||||||||||||
Three months ended |
Six months ended |
|||||||||||
6-30-10 |
3-31-10 |
6-30-09 |
6-30-10 |
6-30-09 |
||||||||
Average loans outstanding |
$ 54,953 |
$ 57,628 |
$ 68,710 |
$ 56,282 |
$ 70,153 |
|||||||
Allowance for loan losses at beginning of period |
$ 2,425 |
$ 2,534 |
$ 2,016 |
$ 2,534 |
$ 1,629 |
|||||||
Loans charged off: |
||||||||||||
Commercial, financial and agricultural |
152 |
139 |
182 |
291 |
426 |
|||||||
Real estate -- commercial mortgage |
128 |
109 |
87 |
237 |
109 |
|||||||
Real estate -- construction |
86 |
157 |
135 |
243 |
239 |
|||||||
Total commercial real estate loans |
214 |
266 |
222 |
480 |
348 |
|||||||
Commercial lease financing |
21 |
25 |
29 |
46 |
51 |
|||||||
Total commercial loans |
387 |
430 |
433 |
817 |
825 |
|||||||
Real estate -- residential mortgage |
11 |
7 |
4 |
18 |
7 |
|||||||
Home equity: |
||||||||||||
Community Banking |
28 |
31 |
25 |
59 |
43 |
|||||||
Other |
17 |
18 |
19 |
35 |
34 |
|||||||
Total home equity loans |
45 |
49 |
44 |
94 |
77 |
|||||||
Consumer other -- Community Banking |
15 |
18 |
17 |
33 |
31 |
|||||||
Consumer other: |
||||||||||||
Marine |
31 |
48 |
39 |
79 |
78 |
|||||||
Other |
3 |
5 |
3 |
8 |
9 |
|||||||
Total consumer other |
34 |
53 |
42 |
87 |
87 |
|||||||
Total consumer loans |
105 |
127 |
107 |
232 |
202 |
|||||||
Total loans charged off |
492 |
557 |
540 |
1,049 |
1,027 |
|||||||
Recoveries: |
||||||||||||
Commercial, financial and agricultural |
16 |
13 |
14 |
29 |
26 |
|||||||
Real estate -- commercial mortgage |
2 |
3 |
-- |
5 |
1 |
|||||||
Real estate -- construction |
11 |
-- |
2 |
11 |
2 |
|||||||
Total commercial real estate loans |
13 |
3 |
2 |
16 |
3 |
|||||||
Commercial lease financing |
7 |
4 |
7 |
11 |
11 |
|||||||
Total commercial loans |
36 |
20 |
23 |
56 |
40 |
|||||||
Real estate -- residential mortgage |
1 |
-- |
-- |
1 |
-- |
|||||||
Home equity: |
||||||||||||
Community Banking |
3 |
1 |
1 |
4 |
2 |
|||||||
Other |
1 |
1 |
1 |
2 |
1 |
|||||||
Total home equity loans |
4 |
2 |
2 |
6 |
3 |
|||||||
Consumer other -- Community Banking |
2 |
2 |
2 |
4 |
3 |
|||||||
Consumer other: |
||||||||||||
Marine |
12 |
10 |
10 |
22 |
17 |
|||||||
Other |
2 |
1 |
1 |
3 |
2 |
|||||||
Total consumer other |
14 |
11 |
11 |
25 |
19 |
|||||||
Total consumer loans |
21 |
15 |
15 |
36 |
25 |
|||||||
Total recoveries |
57 |
35 |
38 |
92 |
65 |
|||||||
Net loan charge-offs |
(435) |
(522) |
(502) |
(957) |
(962) |
|||||||
Provision for loan losses |
228 |
413 |
823 |
641 |
1,670 |
|||||||
Foreign currency translation adjustment |
1 |
-- |
2 |
1 |
2 |
|||||||
Allowance for loan losses at end of period |
$ 2,219 |
$ 2,425 |
$ 2,339 |
$ 2,219 |
$ 2,339 |
|||||||
Liability for credit losses on lending-related commitments at beginning of period |
$ 119 |
$ 121 |
$ 54 |
$ 121 |
$ 54 |
|||||||
Provision (credit) for losses on lending-related commitments |
(10) |
(2) |
11 |
(12) |
11 |
|||||||
Liability for credit losses on lending-related commitments at end of period (a) |
$ 109 |
$ 119 |
$ 65 |
$ 109 |
$ 65 |
|||||||
Total allowance for credit losses at end of period |
$ 2,328 |
$ 2,544 |
$ 2,404 |
$ 2,328 |
$ 2,404 |
|||||||
Net loan charge-offs to average loans |
3.18 |
% |
3.67 |
% |
2.93 |
% |
3.43 |
% |
2.77 |
% |
||
Allowance for loan losses to period-end loans |
4.16 |
4.34 |
3.48 |
4.16 |
3.48 |
|||||||
Allowance for credit losses to period-end loans |
4.36 |
4.55 |
3.58 |
4.36 |
3.58 |
|||||||
Allowance for loan losses to nonperforming loans |
130.30 |
117.43 |
107.05 |
130.30 |
107.05 |
|||||||
Allowance for credit losses to nonperforming loans |
136.70 |
123.20 |
110.02 |
136.70 |
110.02 |
|||||||
Discontinued operations --- education lending business: |
||||||||||||
Loans charged off |
$ 32 |
$ 37 |
$ 38 |
$ 69 |
$ 71 |
|||||||
Recoveries |
1 |
1 |
1 |
2 |
2 |
|||||||
Net loan charge-offs |
$ (31) |
$ (36) |
$ (37) |
$ (67) |
$ (69) |
|||||||
(a) Included in "accrued expense and other liabilities" on the balance sheet. |
||||||||||||
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations |
|||||||||||||
(dollars in millions) |
|||||||||||||
6-30-10 |
3-31-10 |
12-31-09 |
9-30-09 |
6-30-09 |
|||||||||
Commercial, financial and agricultural |
$ 489 |
$ 558 |
$ 586 |
$ 679 |
$ 700 |
||||||||
Real estate — commercial mortgage |
404 |
579 |
614 |
566 |
454 |
||||||||
Real estate — construction |
473 |
607 |
641 |
702 |
716 |
||||||||
Total commercial real estate loans |
877 |
1,186 |
1,255 |
1,268 |
1,170 |
||||||||
Commercial lease financing |
83 |
99 |
113 |
131 |
122 |
||||||||
Total commercial loans |
1,449 |
1,843 |
1,954 |
2,078 |
1,992 |
||||||||
Real estate — residential mortgage |
77 |
72 |
73 |
68 |
46 |
||||||||
Home equity: |
|||||||||||||
Community Banking |
112 |
111 |
107 |
103 |
101 |
||||||||
Other |
17 |
18 |
21 |
21 |
20 |
||||||||
Total home equity loans |
129 |
129 |
128 |
124 |
121 |
||||||||
Consumer other — Community Banking |
5 |
4 |
4 |
4 |
5 |
||||||||
Consumer other: |
|||||||||||||
Marine |
41 |
16 |
26 |
15 |
19 |
||||||||
Other |
2 |
1 |
2 |
1 |
2 |
||||||||
Total consumer other |
43 |
17 |
28 |
16 |
21 |
||||||||
Total consumer loans |
254 |
222 |
233 |
212 |
193 |
||||||||
Total nonperforming loans |
1,703 |
2,065 |
2,187 |
2,290 |
2,185 |
||||||||
Nonperforming loans held for sale |
221 |
195 |
116 |
304 |
145 |
||||||||
OREO |
200 |
175 |
191 |
187 |
182 |
||||||||
Allowance for OREO losses |
(64) |
(45) |
(23) |
(40) |
(11) |
||||||||
OREO, net of allowance |
136 |
130 |
168 |
147 |
171 |
||||||||
Other nonperforming assets |
26 |
38 |
39 |
58 |
47 |
||||||||
Total nonperforming assets |
$ 2,086 |
$ 2,428 |
$ 2,510 |
$ 2,799 |
$ 2,548 |
||||||||
Accruing loans past due 90 days or more |
$ 240 |
$ 434 |
$ 331 |
$ 375 |
$ 552 |
||||||||
Accruing loans past due 30 through 89 days |
610 |
639 |
933 |
1,071 |
1,081 |
||||||||
Restructured loans included in nonperforming loans (a) |
213 |
226 |
364 |
65 |
7 |
||||||||
Nonperforming assets from discontinued operations -- education lending business |
40 |
43 |
14 |
12 |
3 |
||||||||
Nonperforming loans to period-end portfolio loans |
3.19 |
% |
3.69 |
% |
3.72 |
% |
3.68 |
% |
3.25 |
% |
|||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets |
3.88 |
4.31 |
4.25 |
4.46 |
3.77 |
||||||||
(a) Restructured loans (i.e. troubled debt restructurings) are those for which Key, for reasons related to a borrower's financial difficulties, grants a concession to the borrower that it would not |
|||||||||||||
Summary of Changes in Nonperforming Loans From Continuing Operations |
|||||||||||
(in millions) |
|||||||||||
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
|||||||
Balance at beginning of period |
$ 2,065 |
$ 2,187 |
$ 2,290 |
$ 2,185 |
$ 1,735 |
||||||
Loans placed on nonaccrual status |
682 |
746 |
1,141 |
1,160 |
1,227 |
||||||
Charge-offs |
(492) |
(557) |
(750) |
(619) |
(540) |
||||||
Loans sold |
(136) |
(15) |
(70) |
(4) |
(12) |
||||||
Payments |
(185) |
(102) |
(237) |
(294) |
(142) |
||||||
Transfers to OREO |
(66) |
(20) |
(98) |
(91) |
(45) |
||||||
Transfers to nonperforming loans held for sale |
(82) |
(59) |
(23) |
(5) |
(30) |
||||||
Transfers to other nonperforming assets |
(36) |
(3) |
(4) |
(29) |
-- |
||||||
Loans returned to accrual status |
(47) |
(112) |
(62) |
(13) |
(8) |
||||||
Balance at end of period |
$ 1,703 |
$ 2,065 |
$ 2,187 |
$ 2,290 |
$ 2,185 |
||||||
Summary of Changes in Nonperforming Loans Held For Sale From Continuing Operations |
|||||||||||
(in millions) |
|||||||||||
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
|||||||
Balance at beginning of period |
$ 195 |
$ 116 |
$ 304 |
$ 145 |
$ 72 |
||||||
Transfers in |
86 |
129 |
71 |
216 |
79 |
||||||
Loans sold |
(53) |
(38) |
(228) |
(45) |
(1) |
||||||
Transfers to OREO |
(6) |
(6) |
-- |
-- |
(1) |
||||||
Valuation adjustments |
(1) |
(6) |
(15) |
(10) |
(4) |
||||||
Loans returned to accrual status / other |
-- |
-- |
(16) |
(2) |
-- |
||||||
Balance at end of period |
$ 221 |
$ 195 |
$ 116 |
$ 304 |
$ 145 |
||||||
Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations |
|||||||||||
(in millions) |
|||||||||||
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
|||||||
Balance at beginning of period |
$ 130 |
$ 168 |
$ 147 |
$ 171 |
$ 143 |
||||||
Properties acquired — nonperforming loans |
72 |
26 |
98 |
91 |
46 |
||||||
Valuation adjustments |
(24) |
(28) |
(12) |
(36) |
(9) |
||||||
Properties sold |
(42) |
(36) |
(65) |
(79) |
(9) |
||||||
Balance at end of period |
$ 136 |
$ 130 |
$ 168 |
$ 147 |
$ 171 |
||||||
Line of Business Results |
|||||||||||||||
(dollars in millions) |
|||||||||||||||
Community Banking |
|||||||||||||||
Percent change 2Q10 vs. |
|||||||||||||||
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
1Q10 |
2Q09 |
|||||||||
Summary of operations |
|||||||||||||||
Total revenue (TE) |
$ 607 |
$ 599 |
$ 628 |
$ 630 |
$ 630 |
1.3 |
% |
(3.7) |
% |
||||||
Provision for loan losses |
121 |
142 |
230 |
160 |
199 |
(14.8) |
(39.2) |
||||||||
Noninterest expense |
455 |
467 |
492 |
490 |
496 |
(2.6) |
(8.3) |
||||||||
Net income (loss) attributable to Key |
32 |
6 |
(41) |
(1) |
(30) |
433.3 |
N/M |
||||||||
Average loans and leases |
27,218 |
27,769 |
28,321 |
29,126 |
30,305 |
(2.0) |
(10.2) |
||||||||
Average deposits |
50,421 |
51,459 |
52,640 |
53,068 |
52,786 |
(2.0) |
(4.5) |
||||||||
Net loan charge-offs |
148 |
116 |
148 |
103 |
114 |
27.6 |
29.8 |
||||||||
Net loan charge-offs to average loans |
2.18 |
% |
1.69 |
% |
2.07 |
% |
1.40 |
% |
1.51 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 561 |
$ 597 |
$ 544 |
$ 559 |
$ 512 |
(6.0) |
9.6 |
||||||||
Return on average allocated equity |
3.46 |
% |
.65 |
% |
(4.52) |
% |
(.11) |
% |
(3.30) |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
8,246 |
8,187 |
8,227 |
8,472 |
8,709 |
.7 |
(5.3) |
||||||||
Supplementary information (lines of business) |
|||||||||||||||
Regional Banking |
|||||||||||||||
Total revenue (TE) |
$ 494 |
$ 490 |
$ 511 |
$ 526 |
$ 527 |
.8 |
% |
(6.3) |
% |
||||||
Provision for loan losses |
57 |
115 |
139 |
93 |
166 |
(50.4) |
(65.7) |
||||||||
Noninterest expense |
409 |
420 |
429 |
429 |
439 |
(2.6) |
(6.8) |
||||||||
Net income (loss) attributable to Key |
30 |
(16) |
(18) |
14 |
(38) |
N/M |
N/M |
||||||||
Average loans and leases |
18,405 |
18,753 |
19,076 |
19,347 |
19,745 |
(1.9) |
(6.8) |
||||||||
Average deposits |
45,234 |
46,197 |
47,569 |
48,551 |
48,717 |
(2.1) |
(7.1) |
||||||||
Net loan charge-offs |
82 |
96 |
82 |
78 |
72 |
(14.6) |
13.9 |
||||||||
Net loan charge-offs to average loans |
1.79 |
% |
2.08 |
% |
1.71 |
% |
1.60 |
% |
1.46 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 339 |
$ 327 |
$ 319 |
$ 289 |
$ 245 |
3.7 |
38.4 |
||||||||
Return on average allocated equity |
4.90 |
% |
(2.66) |
% |
(3.07) |
% |
2.40 |
% |
(6.60) |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
7,891 |
7,836 |
7,877 |
8,120 |
8,339 |
.7 |
(5.4) |
||||||||
Commercial Banking |
|||||||||||||||
Total revenue (TE) |
$ 113 |
$ 109 |
$ 117 |
$ 104 |
$ 103 |
3.7 |
% |
9.7 |
% |
||||||
Provision for loan losses |
64 |
27 |
91 |
67 |
33 |
137.0 |
93.9 |
||||||||
Noninterest expense |
46 |
47 |
63 |
61 |
57 |
(2.1) |
(19.3) |
||||||||
Net income (loss) attributable to Key |
2 |
22 |
(23) |
(15) |
8 |
(90.9) |
(75.0) |
||||||||
Average loans and leases |
8,813 |
9,016 |
9,245 |
9,779 |
10,560 |
(2.3) |
(16.5) |
||||||||
Average deposits |
5,187 |
5,262 |
5,071 |
4,517 |
4,069 |
(1.4) |
27.5 |
||||||||
Net loan charge-offs |
66 |
20 |
66 |
25 |
42 |
230.0 |
57.1 |
||||||||
Net loan charge-offs to average loans |
3.00 |
% |
.90 |
% |
2.83 |
% |
1.01 |
% |
1.60 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 222 |
$ 270 |
$ 225 |
$ 270 |
$ 267 |
(17.8) |
(16.9) |
||||||||
Return on average allocated equity |
.64 |
% |
6.98 |
% |
(7.19) |
% |
(4.54) |
% |
2.39 |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
355 |
351 |
350 |
352 |
370 |
1.1 |
(4.1) |
||||||||
National Banking |
|||||||||||||||
Percent change 2Q10 vs. |
|||||||||||||||
2Q10 |
1Q10 |
4Q09 |
3Q09 |
2Q09 |
1Q10 |
2Q09 |
|||||||||
Summary of operations |
|||||||||||||||
Total revenue (TE) |
$ 409 |
$ 376 |
$ 340 |
$ 381 |
$ 445 |
8.8 |
% |
(8.1) |
% |
||||||
Provision for loan losses |
99 |
161 |
382 |
439 |
494 |
(38.5) |
(80.0) |
||||||||
Noninterest expense |
259 |
271 |
297 |
323 |
292 |
(4.4) |
(11.3) |
||||||||
Net income (loss) attributable to Key |
33 |
(33) |
(212) |
(235) |
(211) |
N/M |
N/M |
||||||||
Average loans and leases |
20,948 |
22,440 |
24,011 |
26,716 |
28,586 |
(6.6) |
(26.7) |
||||||||
Average loans held for sale |
381 |
240 |
431 |
368 |
393 |
58.8 |
(3.1) |
||||||||
Average deposits |
12,474 |
12,416 |
13,257 |
13,305 |
13,019 |
.5 |
(4.2) |
||||||||
Net loan charge-offs |
173 |
251 |
411 |
357 |
252 |
(31.1) |
(31.3) |
||||||||
Net loan charge-offs to average loans |
3.31 |
% |
4.54 |
% |
6.79 |
% |
5.30 |
% |
3.54 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 1,089 |
$ 1,285 |
$ 1,326 |
$ 1,510 |
$ 1,217 |
(15.3) |
(10.5) |
||||||||
Return on average allocated equity |
3.92 |
% |
(3.89) |
% |
(22.76) |
% |
(24.00) |
% |
(21.47) |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
2,327 |
2,370 |
2,400 |
2,473 |
2,545 |
(1.8) |
(8.6) |
||||||||
Supplementary information (lines of business) |
|||||||||||||||
Real Estate Capital and Corporate Banking Services |
|||||||||||||||
Total revenue (TE) |
$ 176 |
$ 145 |
$ 92 |
$ 135 |
$ 191 |
21.4 |
% |
(7.9) |
% |
||||||
Provision for loan losses |
77 |
145 |
304 |
336 |
414 |
(46.9) |
(81.4) |
||||||||
Noninterest expense |
106 |
115 |
113 |
97 |
113 |
(7.8) |
(6.2) |
||||||||
Net income (loss) attributable to Key |
(4) |
(72) |
(203) |
(184) |
(209) |
94.4 |
98.1 |
||||||||
Average loans and leases |
11,465 |
12,340 |
13,256 |
14,322 |
15,145 |
(7.1) |
(24.3) |
||||||||
Average loans held for sale |
194 |
115 |
228 |
201 |
182 |
68.7 |
6.6 |
||||||||
Average deposits |
9,811 |
9,835 |
10,602 |
10,848 |
10,678 |
(.2) |
(8.1) |
||||||||
Net loan charge-offs |
142 |
207 |
381 |
276 |
212 |
(31.4) |
(33.0) |
||||||||
Net loan charge-offs to average loans |
4.97 |
% |
6.80 |
% |
11.40 |
% |
7.65 |
% |
5.61 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 867 |
$ 1,067 |
$ 1,094 |
$ 1,184 |
$ 1,023 |
(18.7) |
(15.2) |
||||||||
Return on average allocated equity |
(.78) |
% |
(14.08) |
% |
(35.62) |
% |
(30.66) |
% |
(34.43) |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
1,052 |
1,078 |
1,093 |
1,110 |
1,125 |
(2.4) |
(6.5) |
||||||||
Equipment Finance |
|||||||||||||||
Total revenue (TE) |
$ 61 |
$ 61 |
$ 66 |
$ 59 |
$ 65 |
-- |
(6.2) |
% |
|||||||
Provision for loan losses |
10 |
4 |
65 |
75 |
42 |
150.0 |
% |
(76.2) |
|||||||
Noninterest expense |
49 |
46 |
57 |
86 |
60 |
6.5 |
(18.3) |
||||||||
Net income (loss) attributable to Key |
1 |
7 |
(35) |
(64) |
(23) |
(85.7) |
N/M |
||||||||
Average loans and leases |
4,478 |
4,574 |
4,610 |
5,010 |
5,051 |
(2.1) |
(11.3) |
||||||||
Average loans held for sale |
16 |
1 |
-- |
20 |
18 |
N/M |
(11.1) |
||||||||
Average deposits |
5 |
6 |
7 |
6 |
9 |
(16.7) |
(44.4) |
||||||||
Net loan charge-offs |
18 |
18 |
21 |
30 |
29 |
-- |
(37.9) |
||||||||
Net loan charge-offs to average loans |
1.61 |
% |
1.60 |
% |
1.81 |
% |
2.38 |
% |
2.30 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 106 |
$ 111 |
$ 122 |
$ 118 |
$ 105 |
(4.5) |
1.0 |
||||||||
Return on average allocated equity |
1.14 |
% |
7.71 |
% |
(37.94) |
% |
(65.95) |
% |
(25.07) |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
549 |
563 |
586 |
619 |
637 |
(2.5) |
(13.8) |
||||||||
Institutional and Capital Markets |
|||||||||||||||
Total revenue (TE) |
$ 172 |
$ 170 |
$ 182 |
$ 187 |
$ 189 |
1.2 |
% |
(9.0) |
% |
||||||
Provision for loan losses |
12 |
12 |
13 |
28 |
38 |
-- |
(68.4) |
||||||||
Noninterest expense |
104 |
110 |
127 |
140 |
119 |
(5.5) |
(12.6) |
||||||||
Net income (loss) attributable to Key |
36 |
32 |
26 |
13 |
21 |
12.5 |
71.4 |
||||||||
Average loans and leases |
5,005 |
5,526 |
6,145 |
7,384 |
8,390 |
(9.4) |
(40.3) |
||||||||
Average loans held for sale |
171 |
124 |
203 |
147 |
193 |
37.9 |
(11.4) |
||||||||
Average deposits |
2,658 |
2,575 |
2,648 |
2,451 |
2,332 |
3.2 |
14.0 |
||||||||
Net loan charge-offs |
13 |
26 |
9 |
51 |
11 |
(50.0) |
18.2 |
||||||||
Net loan charge-offs to average loans |
1.04 |
% |
1.91 |
% |
.58 |
% |
2.74 |
% |
.53 |
% |
N/A |
N/A |
|||
Nonperforming assets at period end |
$ 116 |
$ 107 |
$ 110 |
$ 208 |
$ 89 |
8.4 |
30.3 |
||||||||
Return on average allocated equity |
14.92 |
% |
12.96 |
% |
9.66 |
% |
4.61 |
% |
7.40 |
% |
N/A |
N/A |
|||
Average full-time equivalent employees |
726 |
729 |
721 |
744 |
783 |
(.4) |
(7.3) |
||||||||
TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful |
|||||||||||||||
SOURCE KeyCorp
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