KeyCorp (NYSE: KEY) today announced a fourthquarter net loss from continuing operations attributable to Key common shareholders of $258million, or $.30 per common share. These results compare to a net loss from continuingoperations attributable to Key common shareholders of $524 million, or $1.07 per commonshare, for the fourth quarter of 2008.During the fourth quarter, Key continued to increase its loan loss reserves by recording a$756 million provision for loan losses, which exceeded net charge-offs by $48 million. At theend of the quarter, Key’s allowance for loan losses was $2.5 billion, or 4.31% of total loans, upfrom $1.6 billion, or 2.24%, one year ago. The loss for the current quarter is largely the result ofan increase in the provision for loan losses, write-downs of certain commercial real estate relatedinvestments, the provision for losses on lending-related commitments and costs associated withother real estate owned (“OREO”). These charges were offset in part by a $106 million credit toincome taxes, due primarily to the settlement of IRS audits for the tax years 1997-2006.Included in the credit is a final adjustment of $80 million related to the resolution of certain leasefinancing tax issues.For the full year, Key had a net loss from continuing operations attributable to Keycommon shareholders of $1.581 billion, or $2.27 per common share. Per share results for thecurrent year are after preferred stock dividends of $294 million, or $.42 per common share.These dividends include a noncash deemed dividend of $114 million related to the exchange ofKey common shares for Key’s Series A Preferred Stock as part of the company’s efforts to raiseadditional Tier 1 common equity, and cash dividend payments of $125 million made to the U.S.
Treasury Department under the Capital Purchase Program. Results for the current year compareto a net loss from continuing operations attributable to Key common shareholders of $1.337billion, or $2.97 per common share, for 2008.Full-year results for both 2009 and 2008 were adversely affected by elevated provisionsfor loan losses and write-offs of certain intangible assets. In addition, 2008 results include a$1.011 billion after-tax charge recorded in the second quarter as a result of an adverse federal taxcourt ruling that impacted Key’s accounting for certain lease financing transactions.“Although this remains a challenging environment, we are encouraged by the continuedstabilization of the economy and some positive trends in our fourth quarter results,” said ChiefExecutive Officer Henry L. Meyer III. “Our net interest margin benefited from improvedfunding costs and better earning asset yields.”Meyer continued: “Asset quality remains an area of focus for the company, however,during the fourth quarter we saw meaningful improvement in most of our credit metrics,including decreases in delinquencies, criticized and classified assets, nonperforming loans andnonperforming assets. In addition, our allowance for loan losses stood at 4.31% of total loansand 116% of nonperforming loans at December 31.”Key’s estimated Tier 1 risk-based capital and Tier 1 common equity ratios were 12.68%and 7.46%, respectively, at December 31, 2009. These strong capital ratios reflect the successfulcapital raises and exchanges completed over the course of the year, whereby Key raisedapproximately $2.4 billion of new Tier 1 common equity.The company originated approximately $7.5 billion in new or renewed lendingcommitments to consumers and businesses during the quarter, and $32 billion during the year.Key’s average deposits grew by $3 billion, or 5%, from the year-ago quarter.Key has continued to invest in its relationship businesses, including its 14-state branchnetwork. Key opened 38 new branches in 8 markets in 2009 and the company expects to open40 additional new branches in 2010. The company has completed renovations on approximately160 branches over the past two years and expects to renovate another 100 branches in 2010.“We clearly have work remaining, but as we turn our sights to 2010, we believe ouraggressive actions over the past two years to address asset quality, to strengthen capital, reservesand liquidity; and to invest in and reshape our businesses have Key on the right track, and willset the stage for us to emerge from this extraordinary period as a strong, competitive company,”concluded Meyer.
Source: KeyCorp. CLEVELAND, January 21, 2010 –