KeyCorp Reports First Quarter 2012: Net Income of $199 Million, or $.21 Per Common Share
Financial Results – Q1 2012
- Net Income: In Q1 2012, net income for continuing operations attributable to Key common shareholders totaled $199 million, or $.21 cents per common share.
- Net interest margin of 3.16% up three basis points from Q4 2011.
- Average total loans increased $766 million, or 6% annualized from the fourth quarter of 2011.
- Net loan charge-offs declined to $101 million, or .82% of average loan balances, for the first Q1 2012.
- Nonperforming loans declined to $666 million, or 1.35% of period-end loans, and nonperforming assets decreased to $767 million.
- Loan loss reserve at 1.92% of total period-end loans and 141.74% of nonperforming loans at March 31, 2012.
- Tier 1 common equity and Tier 1 risk-based capital ratios estimated at 11.50% and 13.30%, respectively, at March 31, 2012.
- Eighth Consecutive Profitable Quarter: The eighth consecutive profitable quarter was driven largely by continued improvement in credit quality and the fourth consecutive quarter of growth in our commercial, financial and agricultural loan portfolio.
CLEVELAND, April 19, 2012 – KeyCorp (NYSE: KEY) today announced first quarter net income from continuing operations attributable to Key common shareholders of $199 million, or $.21 per common share. This result compares to $184 million, or $.21 per common share for the first quarter of 2011, which included a deemed dividend of $49 million, or $.06 per diluted common share related to the accelerated amortization of the discount on the repurchased preferred shares from the U.S. Treasury. First quarter 2012 net income attributable to Key common shareholders was $194 million compared to net income attributable to Key common shareholders of $173 million for the same quarter one year ago.
During the first quarter of 2012, the Company continued to benefit from improved asset quality. Nonperforming loans decreased by $219 million and nonperforming assets declined by $322 million from the year-ago quarter to $666 million and $767 million, respectively. Net charge-offs declined to $101 million, or .82% of average loan balances for the first quarter of 2012, compared to $193 million, or 1.59% of average loan balances for the same period one year ago.
“Key’s first quarter results demonstrate continued positive momentum as we execute on our relationship strategy, strengthen our balance sheet and maintain disciplined expense control,” said Chairman and Chief Executive Officer Beth Mooney. “Asset quality improved again this quarter, and we were pleased to see growth in our commercial, financial and agricultural loan portfolio. Key remains committed to meeting the credit needs of its customers and communities.”
Key originated approximately $8.3 billion in new or renewed lending commitments to consumers and businesses during the first quarter of 2012, which is up from $6.9 billion for the same period one year ago.
Mooney added that she was particularly pleased that Key received several industry honors and recognition in the first quarter. Corporate Insight’s Bank Monitor commended Key for service excellence in categories including online bill pay, online account opening, alerts and fund transfers. Greenwich Associates’ 2011 national banking survey recognized Key as a national and regional winner of three excellence awards for its small business banking and middle market banking.
At March 31, 2012, Key’s estimated Tier 1 common equity and Tier 1 risk-based capital ratios were 11.5% and 13.3%, compared to 11.3% and 13.0%, respectively, at December 31, 2011.
Mooney continued: “As previously announced, our Board of Directors has authorized a common stock repurchase program of up to $344 million to begin in the second quarter of this year through the first quarter of 2013. Our Board will also evaluate an increase in our quarterly common stock dividend from $.03 per share up to $.05 per share next month at its regular meeting. These actions, which are a part of our 2012 capital plan submitted to the Federal Reserve and to which the Federal Reserve had no objection, represent an opportunity for Key to return capital to our shareholders while still maintaining our peer leading capital to support organic growth.”
As previously reported, on January 11, 2012, Key signed a purchase and assumption agreement to acquire 37 retail banking branches in Buffalo and Rochester, NY. The deposits associated with these branches total approximately $2.4 billion, while loans total approximately $400 million. The transaction is expected to close early third quarter of 2012, subject to customary closing conditions, including regulatory approval of the acquisition.
Key traces its history back more than 160 years and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key has assets of approximately $87 billion at March 31, 2012.
Key provides deposit, lending, cash management and investment services to individuals and small businesses through its 14-state branch network under the name KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name.
For more information, visit https://www.key.com/. KeyBank is Member FDIC.
Posted: April 21, 2012