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KEYCORP ACHIEVES PERFORMANCE OBJECTIVES IN THE FIRST QUARTER OF 1992: THREE-FOR-TWO STOCK SPLIT EFFECTIVE

 KEYCORP ACHIEVES PERFORMANCE OBJECTIVES IN THE FIRST
 QUARTER OF 1992: THREE-FOR-TWO STOCK SPLIT EFFECTIVE
 ALBANY, N.Y., April 15 /PRNewswire/ -- KeyCorp (NYSE: KEY) reported record net income of $57.2 million for the first quarter of the year, an increase of 46.8percent over net income of $38.9 million for the same period in 1991.
 Earnings per common share were $.74 for the quarter, an increase of 23.3percent over the $.60 reported in the first quarter of 1991. There was an average of 71.2 million shares outstanding for the first quarter of 1992 compared to 64.2 million shares for the same period in 1991. All amounts have been restated to give effect to KeyCorp's three-for-two stock split payable today to shareholders of record on March 31, 1992.
 Key performance ratios for the quarter were as follows:
 1st Qtr. 4th Qtr. 1st Qtr.
 1992 1991 1991
 Return on Assets (ROA) 1.01 pct. .93 pct. .83 pct.
 Return on Common Equity (ROCE) 16.05 pct. 15.09 pct. 14.34 pct.
 Efficiency Ratio 62.2 pct. 65.5 pct. 65.8 pct.


"Earlier this year, KeyCorp indicated its expectations with regard to these performance statistics for all of 1992 included a 1 percent ROA, 16 percent ROCE, and 62 percent efficiency ratio," said Victor J. Riley, Jr., chairman, president and chief executive officer of KeyCorp. "To achieve these percentages so early in the year is gratifying, especiallysince they were accomplished with the lowest level of nonrecurring gains since the third quarter of 1990.
 "This exceptionally improved earnings performance comes on top of substantial events which positively impacted KeyCorp and its shareholders during the first quarter," continued Riley. "In February, the KeyCorp Board approved a three-for-two stock split in addition to an 8.3 percent increase in the quarterly common stock cash dividend. Later in the period, a two-step strategy to substantially enhance market share in the State of Washington was enacted. The acquisition of Puget Sound Bancorp, with 112 offices and $4.9 billion in assets, will be accounted for as a pooling-of-interests. Next, the acquisition from BankAmerica of 48 Security Pacific branches with $1.5 billion in deposits will take the form of a purchase transaction, further leveraging the capital to be available with Puget Sound Bancorp.
 "These announcements, placed within the context of an accelerated pace of core earnings growth, should give our shareholders ongoing confidence in the management of the KeyCorp enterprise."
 William H. Dougherty, group executive vice president and chief financial officer of KeyCorp, commented on important aspects of first quarter performance. "Most notable was the continued improvement of our net yield on average earning assets. This ratio stood at 5.23 percent for the period, a 19 basis-point improvement over the 5.04 percent recorded in the fourth quarter of 1991, and far above the 4.65 percent earned in the first quarter of last year. The net yield has now improved in three consecutive quarters by a total of 59 basis points. While we do not anticipate further improvement during succeeding quarters of the year, neither do we expect significant contraction in the near term.
 "We continue to emphasize the importance of driving down our efficiency ratio. The 62.2 percent generated in the first quarter represents a decided improvement versus the 65.8 percent reported in the first period a year ago as well as the 65.5 percent compiled during the fourth quarter of 1991. Reducing this ratio to the 60 percent range in 1993 continues to be an objective for KeyCorp, and most of the Key Banks are already at or below that level."
 Dougherty continued, "Total fee income fell from that of the fourth quarter of 1991 by $6.4 million. Mortgage banking accounts for $4.0 million of this decline, attributable to accelerated amortization of mortgage servicing rights. Extraordinary refinancing activity occurred late last year and early this year as customers took advantage of low interest rates. In general, the early payouts were replaced with new mortgages which kept our total servicing portfolio stable.
 "As anticipated, loan demand remained sluggish, but slightly in excess of our first quarter plan. Average outstandings for the period rose to $15.0 billion, or .5 percent above the $14.9 billion reported during the final quarter of 1991. Despite the slowed pace of economic activity, asset quality trends showed continued stabilization. Nonperforming loans fell to $185.2 million, equal to 1.25 percent of loans as of March 31, down from $193.4 million, or 1.28 percent recorded three months earlier. However, due to a $17.3 million rise in ORE, total nonperforming assets increased by $9.0 million, 2.4 percent above the year-end level. At March 31, total nonperformers stood at 2.52 percent of loans plus ORE, up slightly from the 2.42 percent reported at Dec. 31. On the positive side, net charge-offs in the first quarter fell to .93 percent of average loans, down from 1.01 percent in the same period last year and .97 percent in the fourth quarter of 1991. Our first quarter 1992 loan loss provision exceeded net charge-offs, and the March 31 allowance of $207.3 million covered 111.9 percent of nonperforming loans, up from 106.9 percent at year- end."
 Dougherty concluded, "We were encouraged by the underlying trend in asset quality during the first quarter. Moreover, based on the diminished level of 90-day delinquent accounts, it is anticipated that the second quarter should see little or no growth in problem credits. This forecast is further supported by a decrease in the level of nonaccrual loans in our New York State bank. Previously, this bank contributed significantly to the quarterly increases in nonperforming assets."
 Concluding the review of the first quarter, Riley said, "We begin 1992 with expanded income growth initiated during the second half of 1991. We believe the addition of Puget Sound Bancorp and the former Security Pacific branches will enhance future earnings growth, thus helping to sustain performance for KeyCorp shareholders."
 KeyCorp with assets of $22.9 billion is a multi-regional bank holding company headquartered in Albany, N.Y. It has focused its banking expansion activities in the Northeast and Northwest. As "America's neighborhood bank", KeyCorp has pursued a middle-market target, concentrating its resources in cities and smaller communities of the northern tier of states, thus avoiding overcrowded marketplaces and single industry loan exposure.
 KeyCorp
 Summary of Operating Results
 Three Months Ended
 Summary of Operations March 31
 (in thousands except
 per share data) 1992 1991
 Interest Income
 (Taxable-Equivalent Basis) $486,007 $450,950
 Interest Expense 219,144 252,595
 Net Interest Income 266,863 198,355
 Less: Taxable-Equivalent
 Adjustment 9,073 8,170
 Provision for Possible
 Loan Losses 35,116 30,516
 Net Interest Income After
 Provision for Possible
 Loan Losses 222,674 159,669
 Noninterest Income:
 Service Charges on Deposit
 Accounts 25,445 21,546
 Mortgage Banking Income 15,234 5,291
 Other Service Charges
 and Fees 7,697 6,508
 Trust Service Fees 8,688 7,369
 Other 16,102 16,188
 Total Fee Income 73,166 56,902
 Gain on Sale of Loans 1,561 2,474
 Investment Securities
 Gains 800 4,580
 Total Noninterest Income 75,527 63,956
 Noninterest Expense:
 Personnel Expense 99,712 78,407
 Net Occupancy Expense 21,633 19,105
 FDIC Insurance 10,757 7,580
 OREO Expense 5,338 2,009
 Other 74,133 60,816
 Total Noninterest Expense 211,573 167,917
 Income Before Taxes 86,628 55,708
 Income Taxes 29,472 16,781
 Net Income $ 57,156 $ 38,927
 Preferred Stock Dividends $ 4,451 $ 451
 Net Income Applicable to
 Common Shares After
 Preferred Dividends $ 52,705 $ 38,476
 Net Income Per Common Share $ .74 $ .60
 Average Common Shares
 Outstanding 71,241 64,159
 KeyCorp
 Three Months Ended
 March 31
 1992 1991
 Significant Ratios (pct.)
 Return on Average Assets 1.01 .83
 Return on Average
 Common Equity 16.05 14.34
 Net Yield on Average
 Earning Assets 5.23 4.65
 Equity to Assets (Period-End) 6.66 6.39
 Nonperforming Loans to
 Period-End Loans 1.25 1.15
 Nonperforming Loans to
 Period-End Loans Plus OREO 2.52 2.43
 Allowance for Possible Loan
 Losses to Period-End Loans 1.40 1.23
 Allowance for Possible Loan
 Losses to Nonperforming
 Loans 111.94 106.94
 Net Charge-Offs to Average
 Loans .93 1.01
 Efficiency Ratio 62.2 65.8
 Credit Quality
 (dollars in thousands)
 March 30 December 31 September 30
 1992 1991 1991
 Loans on
 Nonaccrual $183,566 $191,176 $174,758
 Renegotiated
 Loans 1,601 2,213 2,565
 Nonperforming
 Loans 185,167 193,389 177,323
 Other Real
 Estate Owned 193,560 176,309 191,590
 Nonperforming
 Assets $378,727 $369,698 $368,913
 Loans Past
 Due 90+ Days $ 53,559 $ 56,037 $ 51,427
 June 30 March 31
 1991 1991
 Loans on
 Nonaccrual 160,949 $147,148
 Renegotiated
 Loans 2,485 2,949
 Nonperforming
 Loans 163,434 150,097
 Other Real
 Estate Owned 196,182 170,190
 Nonperforming
 Assets $359,616 $320,287
 Loans Past
 Due 90+ Days $ 47,172 $ 49,554
 Three Months Ended
 Summary of Loan Loss Experience March 31
 (in millions) 1992 1991
 Allowance for Possible Loan
 Losses at Beginning of
 Period $206,684 $162,669
 Losses Charged to the
 Allowance (39,897) (36,951)
 Recoveries Credited to the
 Allowance 5,373 4,285
 Net Charge-Offs (34,524) (32,666)
 Provision for Possible
 Loan Losses 35,116 30,516
 Allowance for Possible Loan
 Losses at End of Period $207,276 $160,519
 Condensed Period-End Balance Sheet
 At March 31
 (in millions except per share data) 1992 1991
 Loans Net of Unearned Income $ 14,837 $ 13,002
 Less: Allowance for Possible
 Loan Losses (207) (160)
 Net Loans 14,630 12,842
 Investment Securities 4,859 4,033
 Short-Term Investments 36 36
 Loans Held for Sale/Putback 679 66
 Cash and Due from Banks 1,128 988
 Intangible Assets 288 308
 Other Assets 1,248 1,011
 Total $ 22,868 $ 19,284
 Interest Bearing Deposits $ 16,022 $ 13,523
 Noninterest Bearing Deposits 2,612 2,406
 Total Deposits 18,634 15,929
 Short-Term Borrowings 1,795 1,411
 Long-Term Debt 546 388
 Other Liabilities 370 323
 Total Liabilities 21,345 18,051
 Shareholders' Equity:
 Preferred 184 24
 Common 1,339 1,209
 Total Shareholders' Equity 1,523 1,233
 Total $ 22,868 $ 19,284
 Common Shares Outstanding (thousands) 71,332 70,605
 Book Value per Common Share $ 18.77 $ 17.13
 Three Months Ended
Condensed Average Balance Sheet March 31
(in millions) 1992 1991
Loans Net of Unearned Income $ 14,975 $ 13,004
Investment Securities 4,775 3,905
Loans Held for Sale/Putback 627 62
Securities Held for Sale - 90
Short-Term Investments 77 37
Earning Assets 20,454 17,098
Allowance for Possible Loan Losses (211) (160)
Cash and Due from Banks 1,021 920
Other Assets 1,470 1,203
 $ 22,734 $ 19,061
Interest Bearing Deposits $ 16,160 $ 13,500
Noninterest Bearing Deposits 2,567 2,321
 Total Deposits 18,727 15,821
Short-Term Borrowings 1,602 1,462
Long-Term Debt 529 413
Other Liabilities 371 253
 Total Liabilities 21,229 17,949
Shareholders' Equity 1,505 1,112
 Total $ 22,734 $ 19,061
 -0- 4/15/92
 /CONTACT: Lee Irving, treasurer, 518-486-8579, or 518-479-3273, after hours; Don Kauth, investor relations, 518-487-4491, or 518-583-1608, after hours; or Donna R. O'Neill, investor relations, 518-486-8901, or 518-373-9621, after hours, all of Keycorp/
 (KEY) CO: KeyCorp ST: New York IN: FIN SU: ERN


KK -- CL017 -- 8867 04/15/92 15:56 EDT
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