Note: to view the full release, visit http://investor.key.com/file.aspx?IID=100334&FID=18287057
CONTACT:
Therese Myers
518-257-8637
therese_myers@keybank.com
Gillian Britt
gBritt PR
207-775-2126
gillian@gbritt.com
KEY MEDIA NEWSROOM: www.Key.com/newsroom
KEYCORP REPORTS SECOND QUARTER 2013
NET INCOME OF $193 MILLION, OR $.21 PER COMMON SHARE
Efficiency initiative results in achieved annualized run rate savings of approximately
$171 million through the second quarter of 2013
CLEVELAND, July 18, 2013 – KeyCorp (NYSE: KEY) today announced second quarter net income from continuing operations attributable to Key common shareholders of $193 million, or $.21 per common share, compared to $196 million, or $.21 per common share for the first quarter of 2013, and $217 million, or $.23 per common share for the second quarter of 2012. During the second quarter, Key incurred $37 million, or $.03 per common share of costs associated with its previously announced efficiency initiative.
For the six months ended June 30, 2013, net income from continuing operations attributable to Key common shareholders was $389 million, or $.42 per common share, compared to $412 million, or $.43 per common share for the same period one year ago. During the first half of 2013, Key incurred $52 million, or $.04 per common share of costs related to its efficiency initiative.
CURRENT QUARTER DEVELOPMENTS
Executing on growth initiatives
- Acquiring a commercial mortgage servicing portfolio and special servicing business, building scale and becoming one of the top three largest named servicers of commercial/multifamily loans in the U.S. and the fifth largest special servicer of CMBS (Initial closing completed in June; final closing expected in July)
- Expanded mobile offering with the launch of new remote deposit capabilities for both consumer and commercial clients
Continued progress on efficiency initiative
- Achieved annualized run rate savings of approximately $171 million through the second quarter of 2013
- Recognized expenses of $37 million, or $.03 per common share associated with efficiency initiative during the second quarter of 2013
- Cash efficiency ratio of 69.06%, and adjusted cash efficiency ratio net of efficiency initiative charges of 65.42% for the second quarter of 2013
- Consolidated 33 branches during the second quarter of 2013
- Realigned Community Bank organization around core relationship strategy to drive profitability
Focused on capital management priorities
- Repurchased $112 million of common shares during the second quarter of 2013
- Increased common share dividend by 10% to $.055 per common share
“During the second quarter, the strength of our business model continued to drive results. Key made clear progress implementing growth initiatives, improving its cost structure and executing capital priorities,” said Chairman and Chief Executive Officer Beth Mooney.
“Compared to the first quarter, cautious client behavior led to slower loan growth, higher levels of liquidity for Key and greater than anticipated pressure on our net interest margin. Despite the challenging economic backdrop, Key was able to produce slight increases in both loans and revenue and control expenses. Further, we stayed true to our commitment of disciplined capital management by repurchasing $112 million in common shares and increasing our dividend by 10%,” continued Mooney.
Mooney added: “To maintain and enhance our growth, we also continued to invest in our businesses. We are in the process of acquiring a commercial mortgage servicing portfolio and special servicing business that will significantly enhance our scale and presence in the market. We also launched new mobile capabilities that add accessibility and functionality for both our consumer and commercial clients. Our efficiency initiative, which began in June 2012, remains on target to reach our goal of $200 million in annualized savings by the end of the year. Through the second quarter of 2013, we have achieved approximately $171 million of the targeted savings.”
SECOND QUARTER 2013 FINANCIAL RESULTS
Compared with Second Quarter of 2012
- Total revenue increased $14 millionNet interest margin of 3.13%, up 7 basis points
- Taxable-equivalent net interest income of $586 million, up $42 million, or 7.7%, which included $30 million associated with Key’s third quarter 2012 branch and credit card portfolio acquisitions
- Noninterest income declined $28 million, or 6.1% primarily due to a gain on the early terminations of leveraged leases one year ago and a reduction in net gains (losses) from principal investing; noninterest income included $14 million associated with Key’s acquisitions noted above
- Net interest margin of 3.13%, up 7 basis points
- Continued average loan growth driven by 13.9% increase in commercial, financial and agricultural loans
- Average deposits increased $4.6 billion, or 7.6%, which included $2 billion of deposits from Key’s third quarter 2012 Western New York branch acquisition
- Noninterest expense up $18 million, which included $37 million associated with the efficiency initiative and $26 million associated with Key’s acquisitions noted above
- Net loan charge-offs decreased 41.6% to .34% of average total loans
- Maintained solid capital position with Tier 1 common equity of 11.25%
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The release is continued at http://investor.key.com/file.aspx?IID=100334&FID=18287057