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Section 1: 8-K (8-K)

Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549



FORM 8-K

CURRENT REPORT


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): October 25, 2016
36376143_keylogoa01.jpg
 
(Exact name of registrant as specified in charter)
 
 
 
 
 
 
Ohio
 
001-11302
 
34-6542451
(State or other jurisdiction of incorporation)
 
Commission File Number
 
(I.R.S. Employer Identification No.)
 
 
 
127 Public Square, Cleveland, Ohio
 
44114-1306
(Address of principal executive offices)
 
(Zip Code)
 
(216) 689-3000
Registrant’s telephone number, including area code
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02
Results of Operations and Financial Condition.

On October 25, 2016, KeyCorp issued a press release announcing its financial results for the three and nine-month periods ended September 30, 2016 (the “Press Release”), and posted on its website its third quarter 2016 Supplemental Information Package (the “Supplemental Information Package”). The Press Release and Supplemental Information Package are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively.

The information in the preceding paragraph, as well as Exhibit 99.1 and Exhibit 99.2 referenced therein, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”).

KeyCorp’s Consolidated Balance Sheets and Consolidated Statements of Income (collectively, the “Financial Statements”), included as part of the Press Release, are filed as Exhibit 99.3 to this report. Exhibit 99.3 is deemed “filed” for purposes of Section 18 of the Exchange Act and, therefore, may be incorporated by reference in filings under the Securities Act.

Item 9.01
Financial Statements and Exhibits.

(d)
Exhibits

The following exhibits are furnished, or filed in the case of Exhibit 99.3, herewith:

99.1
Press Release, dated October 25, 2016, announcing financial results for the three and nine-month periods ended September 30, 2016.

99.2
Supplemental Information Package reviewed during the conference call and webcast.

99.3
Financial Statements.






SIGNATURE
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
KEYCORP
 
 
(Registrant)
 
 
 
 
 
 
Date: October 25, 2016
 
/s/ Douglas M. Schosser
 
 
By: Douglas M. Schosser
 
 
Chief Accounting Officer
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

36376143_a2q16keycorper1a01.jpgNEWS
FOR IMMEDIATE RELEASE


KEYCORP REPORTS THIRD QUARTER 2016
NET INCOME OF $165 MILLION, OR $.16 PER COMMON SHARE; EARNINGS PER COMMON SHARE OF $.30, EXCLUDING $.14 OF MERGER-RELATED CHARGES

Key completes acquisition of First Niagara Financial Group; reflected in 3Q16 results

Positive operating leverage compared to the prior year, driven by 6% increase in revenue,
excluding the impact of First Niagara and merger-related charges

Average loans up 5% from prior year, driven by an 11% increase in commercial,
financial and agricultural loans, excluding the impact of First Niagara

Strong fee income, excluding the impact of First Niagara: record quarter for
investment banking and debt placement fees

Resumed common share repurchases, with $65 million of repurchases during 3Q16

CLEVELAND, October 25, 2016 – KeyCorp (NYSE: KEY) today announced third quarter net income from continuing operations attributable to Key common shareholders of $165 million, or $.16 per common share, compared to $193 million, or $.23 per common share, for the second quarter of 2016, and $216 million, or $.26 per common share, for the third quarter of 2015. During the third quarter of 2016, Key incurred merger-related charges totaling $207 million, or $.14 per common share, compared to $45 million, or $.04 per common share, in the second quarter of 2016. Excluding merger-related charges, earnings per common share were $.30 for the third quarter of 2016 and $.27 for the second quarter of 2016. No merger-related charges were incurred in the third quarter of 2015.

"Third quarter results reflect strong momentum and performance in Key's core businesses, and we achieved a significant milestone with the completion of our First Niagara acquisition,” said Chairman and Chief Executive Officer Beth Mooney. “Excluding the impact from the acquisition and merger-related charges, Key’s revenue was up 6%, benefiting from solid loan growth and strong fee income, including a record quarter for investment banking and debt placement fees. Credit quality remained solid with net charge-offs as a percent of average loans remaining below our targeted range. Also, during the quarter, we leveraged Key’s strong capital position by reinitiating our share repurchase program.”

“With the completion of our acquisition, we were pleased to welcome our new colleagues and one million new clients from First Niagara,” Mooney continued. “We successfully converted branches, ATMs, systems and client accounts to Key earlier this month, and I continue to be encouraged and energized by the opportunity we have ahead. Our focus remains on achieving our financial targets and delivering on the commitments we have made to our shareholders.”




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 2


First Niagara Financial Group Acquisition

KeyCorp's third quarter results reflect its acquisition of First Niagara Financial Group ("First Niagara"), effective August 1, 2016, in exchange for total consideration paid of $4 billion, including the cash consideration of $811 million, the issuance of 240 million common shares valued at $2.8 billion, and the issuance of a new series of KeyCorp preferred stock to replace the First Niagara preferred stock valued at $350 million. Results of the operations acquired from First Niagara have been reflected in Key's results since the acquisition date. Assets acquired in the transaction totaled approximately $35.6 billion, while liabilities assumed were $33 billion, not reflecting the impact of branch divestitures.

In connection with Key's acquisition of First Niagara, third quarter 2016 results also include the divestiture of 18 branches on September 9, 2016. The impact of divested branches on Key’s third quarter 2016 results included $439 million of loans and $1.6 billion of deposits.

Selected Financial Highlights
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions, except per share data
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Income (loss) from continuing operations attributable to Key common shareholders
$
165

 
$
193

 
$
216

 
(14.5
)
%
(23.6
)
%
 Income (loss) from continuing operations attributable to Key common shareholders per
common share — assuming dilution
.16

 
.23

 
.26

 
(30.4
)
 
(38.5
)
 
Return on average total assets from continuing operations
.55

%
.82

%
.95

%
N/A

 
N/A

 
 Common Equity Tier 1 ratio (non-GAAP) (a), (b)
9.55

 
11.10

 
10.47

 
N/A

 
N/A

 
Book value at period end
$
12.78

 
$
13.08

 
$
12.47

 
(2.3
)
%
2.5

%
Net interest margin (TE) from continuing operations
2.85

%
2.76

%
2.87

%
N/A

 
N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “Common Equity Tier 1.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. For further information on the Regulatory Capital Rules, see the “Capital” section of this release.
 
(b)
9-30-16 ratio is estimated.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TE = Taxable Equivalent, N/A = Not Applicable
 
 
 
 
 
 
 
 
 
 

INCOME STATEMENT HIGHLIGHTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Net interest income (TE)
$
788

 
$
605

 
$
598

 
30.2
%
31.8
%
Merger-related charges
(6
)
 

 

 
N/M
 
N/M
 
First Niagara impact (a)
175

 

 

 
N/M
 
N/M
 
Total net interest income excluding merger-related charges and First Niagara impact
$
619

 
$
605

 
$
598

 
2.3
%
3.5
%
 
 
 
 
 
 
 
 
 
 
 
(a)
Reflects two months of First Niagara activity during the third quarter of 2016.

TE = Taxable Equivalent

The acquisition of First Niagara contributed approximately $175 million of net interest income in the third quarter of 2016, which included $19 million of related purchase accounting accretion. Third quarter 2016 net interest income included an additional $6 million of one-time merger-related charges.

Taxable-equivalent net interest income was $788 million for the third quarter of 2016, and the net interest margin was 2.85%, compared to taxable-equivalent net interest income of $598 million and a net interest margin of 2.87% for the third quarter of 2015. The net interest margin declined two basis points, reflecting higher levels of liquidity, partially offset by the benefit from the First Niagara acquisition.



KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 3


Excluding the impact of First Niagara and merger-related charges, net interest income increased 4% compared to the year-ago quarter, driven by higher earning asset balances.

Compared to the second quarter of 2016, taxable-equivalent net interest income increased by $183 million, and the net interest margin increased by nine basis points. The net interest margin increased primarily due to the acquisition of First Niagara, partially offset by lower reinvestment yields in Key’s securities portfolio. Excluding the impact of First Niagara and merger-related charges, net interest income increased by $14 million, driven by higher earning asset balances.

Noninterest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Trust and investment services income
$
122

 
$
110

 
$
108

 
10.9

%
13.0

%
Investment banking and debt placement fees
156

 
98

 
109

 
59.2

 
43.1

 
Service charges on deposit accounts
85

 
68

 
68

 
25.0

 
25.0

 
Operating lease income and other leasing gains
6

 
18

 
15

 
(66.7
)
 
(60.0
)
 
Corporate services income
51

 
53

 
57

 
(3.8
)
 
(10.5
)
 
Cards and payments income
66

 
52

 
47

 
26.9

 
40.4

 
Corporate-owned life insurance income
29

 
28

 
30

 
3.6

 
(3.3
)
 
Consumer mortgage income
6

 
3

 
3

 
100.0

 
100.0

 
Mortgage servicing fees
15

 
10

 
11

 
50.0

 
36.4

 
Net gains (losses) from principal investing
5

 
11

 
11

 
(54.5
)
 
(54.5
)
 
Other income
8

 
22

 
11

 
(63.6
)
 
(27.3
)
 
Total noninterest income
$
549

 
$
473

 
$
470

 
16.1

%
16.8

%
 
 
 
 
 
 
 
 
 
 
 
Merger-related charges
(12
)
 

 

 
N/M

 
N/M

 
First Niagara impact (a)
53

 

 

 
N/M

 
N/M

 
Total noninterest income excluding merger-related charges and First Niagara impact
$
508

 
$
473

 
$
470

 
7.4

%
8.1

%
 
 
 
 
 
 
 
 
 
 
 
(a)
Reflects two months of First Niagara activity during the third quarter of 2016.

The acquisition of First Niagara contributed approximately $53 million of noninterest income in the third quarter of 2016, which primarily impacted service charges on deposit accounts, trust and investment services income, and cards and payments income. Additionally, third quarter 2016 reported noninterest income includes $12 million of merger-related charges, including losses from investment portfolio repositioning.

Key’s noninterest income was $549 million for the third quarter of 2016, compared to $470 million for the year-ago quarter. Excluding the impact of First Niagara and merger-related charges discussed above, noninterest income increased $38 million, or 8%, primarily driven by a record quarter in investment banking and debt placement fees. Also benefiting the quarter was continued growth in cards and payments income, as well as service charges on deposit accounts. These increases were partially offset by lower corporate services income, net gains on principal investing and operating lease income and other leasing gains.

Compared to the second quarter of 2016, noninterest income increased by $76 million. Excluding the impact of First Niagara and merger-related charges, noninterest income increased $35 million, or 7%, primarily related to the record quarter in investment banking and debt placement fees. Cards and payments income also increased. Partially offsetting the increases were lower operating lease income and other leasing gains, net gains on principal investing and corporate services income.




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 4


Noninterest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Personnel expense
$
594

 
$
427

 
$
426

 
39.1
%
39.4
%
Nonpersonnel expense
488

 
324

 
298

 
50.6
 
63.8
 
     Total noninterest expense
$
1,082

 
$
751

 
$
724

 
44.1
 
49.4
 
 
 
 
 
 
 
 

 
 
 
Merger-related charges
189

 
45

 

 
320.0
 
N/M
 
First Niagara impact (a)
140

 

 

 
N/M
 
N/M
 
     Total noninterest expense excluding merger-related charges and First Niagara impact
$
753

 
$
706

 
$
724

 
6.7
%
4.0
%
 
 
 
 
 
 
 
 
 
 
 
(a)
Reflects two months of First Niagara activity during the third quarter of 2016.

N/M = Not Meaningful


Key’s noninterest expense was $1.1 billion for the third quarter of 2016, including $140 million related to the operations of First Niagara, which primarily impacted personnel expense, net occupancy, business services and professional fees and other expense.

Additionally, noninterest expense included $189 million of merger-related charges, primarily made up of $97 million in personnel expense related to severance and technology development for systems conversions, as well as fully-dedicated personnel for merger and integration efforts. The remaining $92 million of merger-related charges were nonpersonnel expense, largely recognized in business services and professional fees, computer processing and other expense. In the second quarter of 2016, Key incurred $45 million of merger-related charges, while no merger-related charges were incurred in the third quarter of 2015.

Excluding the $140 million impact of First Niagara and $189 million of merger-related charges, noninterest expense was $29 million higher than the third quarter of last year. The increase was primarily driven by higher performance-based compensation, along with slight increases across various nonpersonnel line items, including FDIC assessment expense. These increases were partially offset by lower employee benefits expense.

Compared to the second quarter of 2016, excluding the impact of First Niagara and merger-related charges, noninterest expense increased by $47 million. The increase was primarily related to higher personnel expense reflecting higher performance-based compensation, as well as an increased FDIC assessment expense.

BALANCE SHEET HIGHLIGHTS

In the third quarter of 2016, Key had average assets of $125.1 billion compared to $94.8 billion in the third quarter of 2015 and $99.2 billion in the second quarter of 2016, primarily reflecting the acquisition of First Niagara.

Key’s securities available-for-sale ($18 billion) and held-to-maturity securities ($6.2 billion) averaged $24.2 billion in the third quarter of 2016, compared to $19.2 billion in both the third quarter of 2015 and the second quarter of 2016. The increase compared to both the year-ago quarter and prior quarter primarily reflects the impact of the First Niagara acquisition, which added $4.7 billion of average investment securities, or $9 billion of securities at period-end. During the quarter, Key completed the planned sales and repositioning of First Niagara's portfolio to more closely align with Key's portfolio and investment philosophy.




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 5


Average Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Commercial, financial and agricultural (a)
$
37,318

 
$
32,630

 
$
30,374

 
14.4
%
22.9
%
Other commercial loans
19,110

 
13,222

 
13,098

 
44.5
 
45.9
 
Home equity loans
11,968

 
10,098

 
10,510

 
18.5
 
13.9
 
Other consumer loans
9,301

 
5,198

 
5,299

 
78.9
 
75.5
 
Total loans
$
77,697

 
$
61,148

 
$
59,281

 
27.1
%
31.1
%
 
 
 
 
 
 
 
 
 
 
 
First Niagara impact (b)
15,420

 

 

 
N/M
 
N/M
 
Total loans excluding First Niagara impact
$
62,277

 
$
61,148

 
$
59,281

 
1.8
%
5.1
%
 
 
 
 
 
 
 
 
 
 
 

(a)
Commercial, financial and agricultural average loan balances include $107 million, $87 million, and $88 million of assets from commercial credit cards at September 30, 2016, June 30, 2016, and September 30, 2015, respectively.

(b)
Balance includes two months of average First Niagara activity during the third quarter of 2016.

N/M = Not Meaningful


In the third quarter of 2016, the acquisition of First Niagara contributed approximately $15.4 billion of average loans, or $23 billion at period-end, impacting both the commercial and consumer loan portfolios. These results include the estimated fair value adjustment on the acquired portfolio of $686 million and the divestiture of $439 million of loans.

Average loans were $77.7 billion for the third quarter of 2016, an increase of $18.4 billion compared to the third quarter of 2015. Excluding the impact of the First Niagara acquisition, average loans were $62.3 billion for the third quarter of 2016, an increase of $3 billion compared to the third quarter of 2015. The loan growth occurred primarily in the commercial, financial and agricultural portfolio, which increased $3.3 billion. Consumer loans declined $537 million, largely due to paydowns in Key’s home equity loan portfolio.

Compared to the second quarter of 2016, average loans increased by $16.5 billion, or $1.1 billion excluding the impact of First Niagara. This increase was driven by growth in commercial, financial and agricultural loans, which increased $1 billion, and reflects broad based growth across Key's commercial lines of business.

Average Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Non-time deposits (a)
$
85,683

 
$
67,419

 
$
64,928

 
27.1
%
32.0
%
Certificates of deposit ($100,000 or more)
4,204

 
3,233

 
1,985

 
30.0
 
111.8
 
Other time deposits
5,031

 
3,252

 
3,064

 
54.7
 
64.2
 
 
Total deposits
$
94,918

 
$
73,904

 
$
69,977

 
28.4
%
35.6
%
 
 
 
 
 
 
 
 
 
 
 
 
First Niagara impact (b)
18,851

 

 

 
N/M
 
N/M
 
 
Total deposits excluding First Niagara impact
$
76,067

 
$
73,904

 
$
69,977

 
2.9
%
8.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of total deposits (a)
.21

%
.19

%
.15

%
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Excludes deposits in foreign office.

(b)
Balance includes two months of average First Niagara activity during the third quarter of 2016.

N/M = Not Meaningful

N/A = Not Applicable

In the third quarter of 2016, the acquisition of First Niagara contributed approximately $18.9 billion of average deposits, or $27.3 billion at period-end, which are spread across deposit products and consist primarily of consumer deposits. During the quarter, $1.6 billion of deposits were divested.




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 6


Average deposits, excluding deposits in foreign office, totaled $94.9 billion for the third quarter of 2016, an increase of $24.9 billion compared to the year-ago quarter. Excluding the impact of First Niagara, average deposits increased $5.7 billion over the year-ago quarter. Interest-bearing deposits increased $5.9 billion driven by a $4.7 billion increase in NOW and money market deposit accounts and a $1.2 billion increase in certificates of deposits and other time deposits. The increase from the year-ago quarter reflects core deposit growth in Key’s retail banking franchise and growth in escrow deposits from our commercial mortgage servicing business.

Compared to the second quarter of 2016, average deposits increased by $21 billion. Excluding the impact of First Niagara, average deposits increased $2.2 billion driven by an increase in escrow deposits from Key’s commercial mortgage servicing business, core deposit growth in Key’s retail banking franchise, and deposit inflows from Key’s commercial clients.

ASSET QUALITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Net loan charge-offs
$
44

 
$
43

 
$
41

 
2.3
%
7.3
%
Net loan charge-offs to average total loans
.23

%
.28

%
.27

%
N/A
 
N/A
 
Nonperforming loans at period end (a)
$
723

 
$
619

 
$
400

 
16.8
%
80.8
%
Nonperforming assets at period end (a)
760

 
637

 
417

 
19.3
 
82.3
 
Allowance for loan and lease losses
865

 
854

 
790

 
1.3
 
9.5
 
Allowance for loan and lease losses to nonperforming loans (a)
119.6

%
138.0

%
197.5

%
N/A
 
N/A
 
Provision for credit losses
$
59

 
$
52

 
$
45

 
13.5
%
31.1
%
 
 
 
 
 
 
 
 
 
 
 

(a)
Nonperforming loan balances exclude $959 million, $11 million, and $12 million of purchased credit impaired loans at September 30, 2016, June 30, 2016, and September 30, 2015, respectively.

N/A = Not Applicable

Key’s provision for credit losses was $59 million for the third quarter of 2016, compared to $45 million for the third quarter of 2015 and $52 million for the second quarter of 2016. Key's provision for credit losses in the third quarter of 2016 included $12 million related to the acquired credit card portfolio from First Niagara. Key’s allowance for loan and lease losses was $865 million, or 1.01% of total period-end loans, at September 30, 2016, compared to 1.31% at September 30, 2015, and 1.38% at June 30, 2016.

Net loan charge-offs for the third quarter of 2016 totaled $44 million, or .23% of average total loans, including $2 million of net charge-offs related to First Niagara. These results compare to $41 million, or .27%, for the third quarter of 2015, and $43 million, or .28%, for the second quarter of 2016.

At September 30, 2016, Key’s nonperforming loans totaled $723 million, which represented .85% of period-end portfolio loans, and include $150 million of nonperforming loans related to First Niagara. These results compare to .67% at September 30, 2015, and 1.00% at June 30, 2016. Nonperforming assets at September 30, 2016, totaled $760 million, and represented .89% of period-end portfolio loans and OREO and other nonperforming assets, and include $167 million of nonperforming assets related to First Niagara. These results compare to .69% at September 30, 2015, and 1.03% at June 30, 2016.
 
CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at September 30, 2016.




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 7


Capital Ratios
 
 
 
 
 
 
 
 
9/30/2016
6/30/2016
9/30/2015
Common Equity Tier 1 (a), (b)
9.55
%
11.10
%
10.47
%
Tier 1 risk-based capital (a)
10.52

11.41

10.87

Total risk based capital (a)
12.54

13.63

12.47

Tangible common equity to tangible assets (b)
8.26

9.95

9.90

Leverage (a)
10.17

10.59

10.68

 
 
 
 
(a)
9-30-16 ratio is estimated.

(b)
The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “tangible common equity” and “Common Equity Tier 1.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. See below for further information on the Regulatory Capital Rules.


As shown in the preceding table, at September 30, 2016, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.55% and 10.52%, respectively. In addition, the tangible common equity ratio was 8.26% at September 30, 2016. The declines from the prior quarter are primarily related to the acquisition of First Niagara.

As a “standardized approach” banking organization, Key’s mandatory compliance with the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”) began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Key’s estimated Common Equity Tier 1 ratio as calculated under the fully phased-in Regulatory Capital Rules was 9.39% at September 30, 2016. This estimate exceeds the fully phased-in required minimum Common Equity Tier 1 and Capital Conservation Buffer of 7.00%.

Summary of Changes in Common Shares Outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in thousands
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Shares outstanding at beginning of period
842,703

 
842,290

 
843,608

 
 
(.1
)
%
Common shares repurchased
(5,240
)
 

 
(8,386
)
 
N/M
 
(37.5
)
 
Shares reissued (returned) under employee benefit plans
4,857

 
413

 
63

 
N/M
 
N/M

 
Common shares issued to acquire First Niagara
239,735

 

 

 
N/M
 
N/M

 
 
Shares outstanding at end of period
1,082,055

 
842,703

 
835,285

 
28.4
%
29.5

%
 
 
 
 
 
 
 
 
 
 
 
 
N/M = Not Meaningful

During the third quarter of 2016, Key issued 240 million common shares related to the acquisition of First Niagara. Key also resumed its share repurchase program under the 2016 Capital Plan following the close of the First Niagara acquisition. Accordingly, Key completed $65 million of common share repurchases in the third quarter of 2016, including repurchases to offset issuances of common shares under our employee compensation plans.


LINE OF BUSINESS RESULTS

The following table shows the contribution made by each major business segment to Key’s taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 8


Major Business Segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Revenue from continuing operations (TE)
 
 
 
 
 
 
 
 
 
 
Key Community Bank
$
779

 
$
598

 
$
579

 
30.3

%
34.5

%
Key Corporate Bank
553

 
452

 
454

 
22.3

 
21.8

 
Other Segments
17

 
31

 
35

 
(45.2
)
 
(51.4
)
 
 
Total segments
1,349


1,081


1,068


24.8


26.3

 
Reconciling Items
(12
)
 
(3
)
 

 
N/M

 
N/M

 
 
Total
$
1,337

 
$
1,078

 
$
1,068

 
24.0

%
25.2

%
 
 
 
 
 
 
 
 
 
 


 
Income (loss) from continuing operations attributable to Key
 
 
 
 
 
 
 
 


 
Key Community Bank
$
103

 
$
81

 
$
74

 
27.2

%
39.2

%
Key Corporate Bank
159

 
135

 
136

 
17.8

 
16.9

 
Other Segments
16

 
24

 
26

 
(33.3
)
 
(38.5
)
 
 
Total segments
278

 
240

 
236

 
15.8

 
17.8

 
Reconciling Items (a)
(107
)
 
(41
)
 
(14
)
 
N/M

 
N/M

 
 
Total
$
171

 
$
199

 
$
222

 
(14.1
)
%
(23.0
)
%
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Reconciling items consists primarily of the unallocated portion of merger-related charges and items not allocated to the business segments because they do not reflect their normal operations.

TE = Taxable Equivalent, N/M = Not Meaningful


Key Community Bank
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Summary of operations
 
 
 
 
 
 
 
 
 
 
Net interest income (TE)
$
530

 
$
391

 
$
379

 
35.5
%
39.8
%
Noninterest income
249

 
207

 
200

 
20.3
 
24.5
 
 
Total revenue (TE)
779

 
598

 
579

 
30.3
 
34.5
 
Provision for credit losses
37

 
25

 
18

 
48.0
 
105.6
 
Noninterest expense
578

 
444

 
444

 
30.2
 
30.2
 
 
Income (loss) before income taxes (TE)
164

 
129

 
117

 
27.1
 
40.2
 
Allocated income taxes (benefit) and TE adjustments
61

 
48

 
43

 
27.1
 
41.9
 
 
Net income (loss) attributable to Key
$
103

 
$
81

 
$
74

 
27.2
%
39.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Average balances
 
 
 
 
 
 
 
 
 
 
Loans and leases
$
41,548

 
$
30,936

 
$
31,039

 
34.3
%
33.9
%
Total assets
44,219

 
32,963

 
33,155

 
34.1
 
33.4
 
Deposits
69,397

 
53,794

 
51,234

 
29.0
 
35.5
 
 
 
 
 
 
 
 
 

 

 
Assets under management at period end
$
36,752

 
$
34,535

 
$
35,158

 
6.4
%
4.5
%
 
 
 
 
 
 
 
 
 
 
 
 
TE = Taxable Equivalent





KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 9


Additional Key Community Bank Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
3Q15
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Noninterest income
 
 
 
 
 
 
 
 
 
 
Trust and investment services income
$
86

 
$
73

 
$
73

 
17.8
%
17.8
%
Service charges on deposit accounts
70

 
56

 
56

 
25.0
 
25.0
 
Cards and payments income
54

 
46

 
43

 
17.4
 
25.6
 
Other noninterest income
39

 
32

 
28

 
21.9
 
39.3
 
 
Total noninterest income
$
249

 
$
207

 
$
200

 
20.3
%
24.5
%
 
 
 
 
 
 
 
 

 

 
Average deposit balances
 
 
 
 
 
 

 

 
NOW and money market deposit accounts
$
38,417

 
$
30,144

 
$
28,568

 
27.4
%
34.5
%
Savings deposits
4,369

 
2,365

 
2,362

 
84.7
 
85.0
 
Certificates of deposit ($100,000 or more)
2,607

 
2,383

 
1,560

 
9.4
 
67.1
 
Other time deposits
4,943

 
3,245

 
3,061

 
52.3
 
61.5
 
Deposits in foreign office

 

 
271

 
N/M
 
N/M
 
Noninterest-bearing deposits
19,061

 
15,657

 
15,412

 
21.7
 
23.7
 
 
Total deposits
$
69,397

 
$
53,794

 
$
51,234

 
29.0
%
35.5
%
 
 
 
 
 
 
 
 
 
 
 
 
Home equity loans
 
 
 
 
 
 
 
 
 
 
Average balance
$
11,703

 
$
9,908

 
$
10,281

 
 
 
 
 
Combined weighted-average loan-to-value ratio (at date of origination)
70
%
 
71
%
 
71
%
 
 
 
 
 
Percent first lien positions
55

 
61

 
60

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other data
 
 
 
 
 
 
 
 
 
 
Branches
1,322

 
949

 
972

 
 
 
 
 
Automated teller machines
1,701

 
1,236

 
1,259

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N/M = Not Meaningful

Key Community Bank Summary of Operations

Net income increased $29 million, or 39.2% from prior year (up $11 million, or 14.9% excluding the impact of First Niagara)
Average deposits increased $18.2 billion, or 35.5% from the prior year (up $3.8 billion, or 7.4% excluding the impact of First Niagara)
Average loans increased $10.5 billion, or 33.9% from the prior year (up $206 million, or .7% excluding the impact of First Niagara)

Key Community Bank recorded net income attributable to Key of $103 million for the third quarter of 2016, compared to $74 million for the year-ago quarter. First Niagara contributed $18 million of the growth year-over-year.
Taxable-equivalent net interest income increased by $151 million, or 39.8%, from the third quarter of 2015. Excluding the impact of First Niagara, taxable-equivalent net interest income increased $27 million, primarily driven by deposit growth and higher interest rates.
Noninterest income increased $49 million, or 24.5%, from the year-ago quarter. Excluding the impact of First Niagara, noninterest income increased $8 million, or 4%, related to positive trends in cards and payments income and service charges on deposit accounts. Investment banking and debt placement fees also increased from the year-ago period. These increases were partially offset by declines in trust and investment services and consumer mortgage income.
The provision for credit losses increased by $19 million, or 105.6%, from the third quarter of 2015, primarily related to the acquired credit card portfolio from First Niagara. Excluding the impact of First Niagara, the provision for credit losses increased $3 million, or 16.6%, related to an increase in net loan charge-offs of $9 million from the same period one year ago.



KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 10


Noninterest expense increased by $134 million, or 30.2%, from the year-ago quarter. Excluding the impact of First Niagara, noninterest expense increased $14 million, or 3.1%, mostly driven by the implementation of an FDIC surcharge and increased marketing expense.
Key Corporate Bank
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Summary of operations
 
 
 
 
 
 
 
 
 
 
Net interest income (TE)
$
276

 
$
222

 
$
221

 
24.3

%
24.9

%
Noninterest income
277

 
230

 
233

 
20.4

 
18.9

 
 
Total revenue (TE)
553

 
452

 
454

 
22.3

 
21.8

 
Provision for credit losses
25

 
30

 
30

 
(16.7
)
 
(16.7
)
 
Noninterest expense
307

 
259

 
250

 
18.5

 
22.8

 
 
Income (loss) before income taxes (TE)
221

 
163

 
174

 
35.6

 
27.0

 
Allocated income taxes and TE adjustments
62

 
29

 
41

 
113.8

 
51.2

 
 
Net income (loss)
159

 
134

 
133

 
18.7

 
19.5

 
Less: Net income (loss) attributable to noncontrolling interests

 
(1
)
 
(3
)
 
N/M

 
N/M

 
 
Net income (loss) attributable to Key
$
159

 
$
135

 
$
136

 
17.8

%
16.9

%
 
 
 
 
 
 
 
 


 


 
Average balances
 
 
 
 
 
 


 


 
Loans and leases
$
34,561

 
$
28,607

 
$
26,425

 
20.8

%
30.8

%
Loans held for sale
1,103

 
591

 
918

 
86.6

 
20.2

 
Total assets
40,581

 
33,909

 
32,099

 
19.7

 
26.4

 
Deposits
22,708

 
19,129

 
18,809

 
18.7

 
20.7

 
 
 
 
 
 
 
 
 
 
 
 
 
TE = Taxable Equivalent, N/M = Not Meaningful

Additional Key Corporate Bank Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
dollars in millions
 
 
 
 
 
 
Change 3Q16 vs.
 
 
 
3Q16
 
2Q16
 
3Q15
 
2Q16
 
3Q15
 
Noninterest income
 
 
 
 
 
 
 
 
 
 
Trust and investment services income
$
36

 
$
37

 
$
35

 
(2.7
)
%
2.9

%
Investment banking and debt placement fees
153

 
94

 
107

 
62.8

 
43.0

 
Operating lease income and other leasing gains
9

 
15

 
16

 
(40.0
)
 
(43.8
)
 
 
 
 
 
 
 
 
 


 


 
Corporate services income
36

 
40

 
46

 
(10.0
)
 
(21.7
)
 
Service charges on deposit accounts
15

 
12

 
11

 
25.0

 
36.4

 
Cards and payments income
10

 
6

 
4

 
66.7

 
150.0

 
 
Payments and services income
61

 
58

 
61

 
5.2

 

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage servicing fees
13

 
10

 
11

 
30.0

 
18.2

 
Other noninterest income
5

 
16

 
3

 
(68.8
)
 
66.7

 
 
Total noninterest income
$
277

 
$
230

 
$
233

 
20.4

%
18.9

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Key Corporate Bank Summary of Operations

Record quarter for investment banking and debt placement fees, up $46 million, or 43% from prior year (no impact from First Niagara)
Net income increased $23 million, or 16.9% from the prior year (up $9 million, or 6.6% excluding the impact of First Niagara)
Average loans and leases increased $8.1 billion, or 30.8% from the prior year (up $3.1 billion, or 11.7% excluding the impact of First Niagara)
Average deposits increased $3.9 billion, or 20.7% from the prior year (up $1.5 billion, or 7.9% excluding the impact of First Niagara)




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 11


Key Corporate Bank recorded net income attributable to Key of $159 million for the third quarter of 2016, compared to $136 million for the same period one year ago. First Niagara contributed $14 million of the growth year-over year.

Taxable-equivalent net interest income increased by $55 million, or 24.9%, compared to the third quarter of 2015. Excluding the impact of First Niagara, taxable-equivalent net interest income increased by $18 million, or 8%, compared to the third quarter of 2015. Average loan and lease balances increased $8.1 billion, or 30.8%, from the year-ago quarter, primarily driven by the First Niagara acquisition as well as growth in commercial, financial and agricultural loans. This loan growth was offset by spread compression due to higher funding costs. Average deposit balances increased $3.9 billion, or 20.7%, from the year-ago quarter, mostly driven by the First Niagara acquisition as well as growth in commercial escrow deposits.

Noninterest income increased $44 million, or 18.9%, from the prior year. Excluding the impact of First Niagara, noninterest income increased $40 million, or 17%. This growth was mostly due to a record quarter for investment banking and debt placement fees, which were up $46 million, or 43%, related to strength in commercial mortgage banking, equity capital markets and merger and acquisition advisory fees.

The provision for credit losses decreased $5 million, or 16.7%, compared to the third quarter of 2015. Excluding the impact of First Niagara, the provision for credit losses decreased $7 million, or 22.2%. The decrease was mostly due to lower net loan charge-offs.

Noninterest expense increased by $57 million, or 22.8%, from the third quarter of 2015. Excluding the impact of First Niagara, noninterest expense increased $39 million, or 15.4%. Personnel expense increased $32 million, or 26%, mostly due to increases in incentive compensation and salaries. Several other line items increased over the prior year, including operating lease, cards and payments, FDIC, and overhead expenses.

Other Segments

Other Segments consist of Corporate Treasury, Key’s Principal Investing unit, and various exit portfolios. Other Segments generated net income attributable to Key of $16 million for the third quarter of 2016, compared to $26 million for the same period last year. This decline was largely attributable to spread compression.

*****

KeyCorp's roots trace back 190 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation’s largest bank-based financial services companies, with assets of approximately $135.8 billion at September 30, 2016.

Key provides deposit, lending, cash management, insurance, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of more than 1,200 branches and more than 1,500 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 12


CONTACTS:
 
 
 
ANALYSTS
MEDIA
Vernon L. Patterson
Jack Sparks
216.689.0520
720.904.4554
Vernon_Patterson@KeyBank.com
Jack_Sparks@KeyBank.com
 
 Twitter: @keybank_news
Kelly L. Dillon
 
216.689.3133
 
Kelly_L_Dillon@KeyBank.com
 
 
 
Melanie S. Misconish
 
216.689.4545
 
Melanie_S_Misconish@KeyBank.com
 
 
 
INVESTOR
KEY MEDIA
RELATIONS: www.key.com/ir
NEWSROOM: www.key.com/newsroom
  
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as “goal,” “objective,” “plan,” “expect,” “assume,” “anticipate,” “intend,” “project,” “believe,” “estimate,” or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Key’s actual results to differ from those described in the forward-looking statements can be found in KeyCorp’s Form 10-K for the year ended December 31, 2015, as well as in KeyCorp’s subsequent SEC filings, all of which have been filed with the Securities and Exchange Commission (the “SEC”) and are available on Key’s website (www.key.com/ir) and on the SEC’s website (www.sec.gov). These factors may include, among others: deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a reversal of the U.S. economic recovery due to financial, political, or other shocks, and the extensive and increasing regulation of the U.S. financial services industry. Any forward-looking statements made by us or on our behalf speak only as of the date they are made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.

Notes to Editors:
A live Internet broadcast of KeyCorp’s conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section at https://www.key.com/ir at 9:00 a.m. ET, on Tuesday, October 25, 2016. An audio replay of the call will be available through November 8, 2016.
 
For up-to-date company information, media contacts, and facts and figures about Key’s lines of business, visit our Media Newsroom at https://www.key.com/newsroom.

*****




KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 13





KeyCorp
Third Quarter 2016
Financial Supplement


    
Page
 
Financial Highlights
GAAP to Non-GAAP Reconciliation
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
Noninterest Expense
Personnel Expense
Loan Composition
Loans Held for Sale Composition
Summary of Changes in Loans Held for Sale
Asset Quality Statistics From Continuing Operations
Summary of Loan and Lease Loss Experience From Continuing Operations
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
Summary of Changes in Nonperforming Loans From Continuing Operations
Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations
Line of Business Results



KeyCorp Reports Third Quarter 2016 Profit     
October 25, 2016
Page 14


Financial Highlights
(dollars in millions, except per share amounts)
 
 
 
Three months ended
 
 
 
 
9/30/2016
 
6/30/2016
 
9/30/2015
 
Summary of operations
 
 
 
 
 
 
 
Net interest income (TE)
$
788

 
$
605

 
$
598

 
 
Noninterest income
549

 
473

 
470

 
 
 
Total revenue (TE)
1,337

 
1,078

 
1,068

 
 
Provision for credit losses
59

 
52

 
45

 
 
Noninterest expense
1,082

 
751

 
724

 
 
Income (loss) from continuing operations attributable to Key
171

 
199

 
222

 
 
Income (loss) from discontinued operations, net of taxes (a)
1

 
3

 
(3
)
 
 
Net income (loss) attributable to Key
172

 
202

 
219

 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations attributable to Key common shareholders
165

 
193

 
216

 
 
Income (loss) from discontinued operations, net of taxes (a)
1

 
3

 
(3
)
 
 
Net income (loss) attributable to Key common shareholders
166

 
196

 
213

 
 
 
 
 
 
 
 
 
 
Per common share
 
 
 
 
 
 
 
Income (loss) from continuing operations attributable to Key common shareholders
$
.17

 
.23

 
.26

 
 
Income (loss) from discontinued operations, net of taxes  (a)

 

 

 
 
Net income (loss) attributable to Key common shareholders  (b)
.17

 
.23

 
.26

 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
.16

 
.23

 
.26

 
 
Income (loss) from discontinued operations, net of taxes — assuming dilution  (a)

 

 

 
 
Net income (loss) attributable to Key common shareholders — assuming dilution   (b)
.17

 
.23

 
.25

 
 
 
 
 
 
 
 
 
 
 
Cash dividends paid
.085

 
.085

 
.075

 
 
Book value at period end
12.78

 
13.08

 
12.47

 
 
Tangible book value at period end
10.14

 
11.81

 
11.17

 
 
Market price at period end
12.17

 
11.05

 
13.01

 
 
 
 
 
 
 
 
 
 
Performance ratios
 
 
 
 
 
 
 
From continuing operations:
 
 
 
 
 
 
 
Return on average total assets
.55

%
.82

%
.95

%
 
Return on average common equity
5.09

 
7.15

 
8.30

 
 
Return on average tangible common equity  (c)
6.16

 
7.94

 
9.27

 
 
Net interest margin (TE)
2.85

 
2.76

 
2.87

 
 
Cash efficiency ratio  (c)
80.0

 
69.0

 
66.9

 
 
 
 
 
 
 
 
 
 
 
From consolidated operations:
 
 
 
 
 
 
 
Return on average total assets
.55

%
.82

%
.92

%
 
Return on average common equity
5.12

 
7.26

 
8.19

 
 
Return on average tangible common equity  (c)
6.20

 
8.06

 
9.14

 
 
Net interest margin (TE)
2.83

 
2.74

 
2.84

 
 
Loan to deposit  (d)
84.7

 
85.3

 
89.3

 
 
 
 
 
 
 
 
 
 
Capital ratios at period end
 
 
 
 
 
 
 
Key shareholders’ equity to assets
11.04

%
11.18

%
11.22

%
 
Key common shareholders’ equity to assets
10.18

 
10.90

 
10.91

 
 
Tangible common equity to tangible assets  (c)
8.26

 
9.95

 
9.90

 
 
Common Equity Tier 1  (c), (e)
9.55

 
11.10

 
10.47

 
 
Tier 1 risk-based capital  (e)
10.52

 
11.41

 
10.87

 
 
Total risk-based capital  (e)
12.54

 
13.63

 
12.47

 
 
Leverage  (e)
10.17

 
10.59

 
10.68

 
 
 
 
 
 
 
 
 
 
Asset quality — from continuing operations
 
 
 
 
 
 
 
Net loan charge-offs
$
44

 
$
43

 
$
41

 
 
Net loan charge-offs to average loans
.23

%
.28

%
.27

%
 
Allowance for loan and lease losses
$
865

 
$
854

 
$
790

 
 
Allowance for credit losses
918

 
904

 
844

 
 
Allowance for loan and lease losses to period-end loans
1.01

%
1.38

%
1.31

%
 
Allowance for credit losses to period-end loans
1.07

 
1.46

 
1.40

 
 
Allowance for loan and lease losses to nonperforming loans  (f)
119.6

 
138.0

 
197.5

 
 
Allowance for credit losses to nonperforming loans   (f)
127.0

 
146.0

 
211.0

 
 
Nonperforming loans at period end  (f)
$
723

 
$
619

 
$
400

 
 
Nonperforming assets at period end  (f)
760

 
637

 
417

 
 
Nonperforming loans to period-end portfolio loans  (f)
.85

%
1.00

%
.67

%
 
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets  (f)
.89

 
1.03

 
.69