KeyCorp (NYSE: KEY) today announced fourth quarter net income from continuing operations attributable to Key common shareholders of $229 million, or $.26 per common share, compared to $229 million, or $.25 per common share for the third quarter of 2013, and $190 million, or $.20 per common share for the fourth quarter of 2012.’‘ During the fourth quarter of 2013, Key incurred $24 million, or $.02 per common share of costs related to both its previously announced efficiency initiative and a pension settlement charge.
For the twelve months ended December 31, 2013, net income from continuing operations attributable to Key common shareholders was $847 million, or $.93 per common share, compared to $813 million, or $.86 per common share for the same period one year ago.’ During 2013, Key incurred $117 million, or $.08 per common share of costs related to both its efficiency initiative and pension settlement charge.
‘2013 was a significant year for Key,’ said Chairman and Chief Executive Officer Beth Mooney.’ ‘We executed our strategy, acquired relationships, successfully invested in our businesses and returned peer-leading capital to shareholders.’’
‘Reflecting the success of our distinctive business model, average loans were up 5% in 2013 compared to the prior year, driven by a 12% increase in commercial, financial and agricultural loans, and our credit quality improved to levels not seen since 2007,’ Mooney added.’ ‘Both commercial and consumer loans grew relative to the full year and fourth quarter of 2012.’ Fee income benefitted from the investments we have made in several of our businesses.’ Cards and payments income was up 20% from 2012, and mortgage servicing fees more than doubled.’ We also had a record year for investment banking and debt placement fees, with five consecutive years of growth.’ We achieved the goal we set in June 2012, by implementing annualized cost savings of $241 million.’ With increased cost discipline embedded in our culture, we are poised to drive further improvements in efficiency and productivity.’
‘We have also maintained our disciplined approach to capital management by investing in our businesses and returning 76% of our net income to our shareholders through dividends and common share repurchases in 2013.’ At year end our capital remained in the top tier of our peer group, positioning us well for the future,’ continued Mooney.
Selected Financial Highlights
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dollars in millions, except per share data
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Change 4Q13 vs.
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4Q13
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3Q13
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4Q12
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3Q13
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4Q12
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Income (loss) from continuing operations attributable to Key common shareholders
$
229
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$
229
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$
190
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20.5
%
Income (loss) from continuing operations attributable to Key common shareholders per
‘‘‘‘ common share ‘ assuming dilution
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.26
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.25
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.20
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4.0
%
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30.0
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Return on average total assets from continuing operations
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1.08
%
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1.12
%
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.96
%
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N/A
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N/A
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Tier 1 common equity (a)
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11.23
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11.17
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11.36
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N/A
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N/A
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Book value at period end
$
11.25
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$
11.05
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$
10.78
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1.8
%
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4.4
%
Net interest margin (TE) from continuing operations
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3.01
%
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3.11
%
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3.37
%
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N/A
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N/A
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‘(a)’‘ The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "Tier 1 common equity."’ The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
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TE = Taxable Equivalent, N/A = Not Applicable
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INCOME STATEMENT HIGHLIGHTS
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Revenue
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dollars in millions
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Change 4Q13 vs.
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4Q13
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3Q13
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4Q12
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3Q13
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4Q12
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Net interest income (TE)
$
589
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$
584
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$
607
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.9
%
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(3.0)
%
Noninterest income
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453
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459
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439
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(1.3)
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3.2
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Total revenue
$
1,042
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$
1,043
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$
1,046
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(.1)
%
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(.4)
%
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TE = Taxable Equivalent
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‘Taxable-equivalent net interest income was $589 million for the fourth quarter of 2013, and the net interest margin was 3.01%.’ These results compare to taxable-equivalent net interest income of $607 million and a net interest margin of 3.37% for the fourth quarter of 2012.’ The decrease in net interest income and net interest margin is attributable to the impact of lower interest rates on asset yields combined with a significant increase in liquidity levels resulting from strong deposit inflows.’ The decreases were partially offset by the maturity of higher-rate certificates of deposit and a more favorable mix of lower-cost deposits.’
Compared to the third quarter of 2013, taxable-equivalent net interest income increased by $5 million, and the net interest margin declined by 10 basis points.’ The increase in net interest income was primarily due to $5 million less of amortized lease origination costs recognized in the fourth quarter of 2013 compared to the third quarter of 2013 in connection with the early termination of leveraged leases.’ The decrease in the net interest margin was largely attributable to higher levels of liquidity, which were deployed in lower-yielding short-term investments.
CLEVELAND, January 23, 2014 ‘ KeyCorp. For additional information on 2013 results, see http://investor.key.com/file.aspx?IID=100334&FID=21742734