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KEYCORP CONTINUES TO EXCEED PERFORMANCE OBJECTIVES IN THE THIRD QUARTER AND FIRST NINE MONTHS OF 1992

 KEYCORP CONTINUES TO EXCEED PERFORMANCE OBJECTIVES IN THE
 THIRD QUARTER AND FIRST NINE MONTHS OF 1992
 ALBANY, N.Y., Oct. 15 /PRNewswire/ -- KeyCorp (NYSE: KEY) reported record net income of $63.5 million for the third quarter of the year, an increase of 22.0 percent over net income of $52.1 million for the same period in 1991. Earnings per common share were $.82 for the quarter, an increase of 22.4 percent over the $.67 reported in the third quarter of 1991. Net income for the first nine months of 1992 rose 33.6 percent to $180.3 million, up from $135.0 million during the same period in 1991. This equalled $2.33 per common share, up 23.3 percent from $1.89 reported a year earlier.
 "We are pleased to be on track to exceed our financial objectives for the full year 1992," said Victor J. Riley, Jr., chairman, president and chief executive officer of KeyCorp. Key performance ratios for the third quarter and year-to-date were as follows:
 3rd Qtr. 2nd Qtr. 3rd Qtr.
 1992 1992 1991
 Return on Assets (ROA) 1.06 pct. 1.05 pct. .85 pct.
 Return on Common Equity (ROCE) 16.66 pct. 16.43 pct. 15.09 pct.
 Efficiency Ratio 61.6 pct. 61.7 pct. 64.6 pct.
 9 Mo. 9 Mo.
 1992 1991
 ROA 1.04 pct. .83 pct.
 ROCE 16.39 pct. 14.58 pct.
 Efficiency Ratio 61.8 pct. 64.3 pct.
 William H. Dougherty, group executive vice president and chief financial officer of KeyCorp, commented on important aspects of the performance ratios. "Our net yield on average earning assets continued to improve during the third quarter. The ratio equalled 5.31 percent, versus the 5.29 percent (excluding nonrecurring interest income) recorded in the second quarter. KeyCorp's net yield should continue near its current level throughout the remainder of 1992 and into 1993."
 Dougherty continued, "Total fee income expanded by $7.6 million, or 9.6 percent above the amount earned during the same quarter of 1991. Compared to this year's second quarter, fees grew by $9.0 million, or 11.7 percent. Included in fee income for the most recent quarter was a pretax gain of $2.9 million realized on the sale of a nonbank financial services subsidiary. Security and loan sale gains were limited to $1.1 million during the third quarter, down 92.7 percent from the $15.1 million reported in the same period of 1991.
 "Quarterly noninterest expense rose by $16.7 million, equal to 7.9 percent over the third quarter of last year. A substantial portion of the increase was due to other real estate (ORE) writedowns and expenses, which equalled $11.6 million versus $6.2 million for the same period last year. Excluding these ORE-related costs, core expenses grew by about 5.6 percent.
 "The efficiency ratio improved to 61.6 percent in the third quarter, compared to 64.6 percent in the third quarter of 1991 and 61.7 percent in the second quarter of the current year. Excluding ORE writedowns and expenses, the ratio equalled 58.5 percent in the most recent quarter. Our objective remains to drive this ratio below the 60 percent level in 1993, including ORE-related costs.
 "Loan demand, while still modest, exhibited some signs of recovery. Loans outstanding as of September 30 rose to $16.4 billion, an increase of $1.2 billion compared to the June 30 figure. Approximately $700 million of the increase was due to the acquisition of 48 former Security Pacific branches on September 3. Nonetheless, the internal growth rate for the first nine months of the year approximates our original estimate of 4 percent period-end to period-end loan growth for all of 1992.
 "The improvement in KeyCorp's nonperforming assets, a trend begun in the second quarter, took on greater momentum in the third period. On September 30, nonperforming assets were reduced to $358.3 million, a 5.1 percent decline compared to the $377.7 million reported as of June 30. Encouragingly, both categories of problem assets fell. Nonperforming loans stood at $161.8 million, equal to .99 percent of loans, down from $170.4 million, or 1.12 percent recorded on June 30. ORE also declined, by $10.9 million, the first improvement in this statistic since the fourth quarter of 1991. In total, nonperforming assets stood at 2.16 percent of loans plus ORE, down from 2.45 percent reported on June 30 and 2.52 percent on March 31.
 "Net charge-offs also improved in the third quarter, falling to .93 percent of average loans, down from 1.02 percent in the same period last year and the 1.00 percent experienced in the second quarter of 1992. Lower charge-off rates in both our Maine and New York banks led to the improved period-to-period comparisons. Our third quarter 1992 loan loss provision exceeded net charge-offs by $2.1 million, and the September 30 allowance of $221.0 million covered 136.6 percent of nonperforming loans, up from 124.5 percent at June 30."
 Dougherty stated that, "We fully expect the decline in nonperformers to continue during the final quarter of the year, led by a further reduction in ORE properties. A ratio of nonperforming assets to loans plus ORE approaching 2.00 percent remains our goal for the first quarter of 1993."
 Concluding the review of the quarter, Riley said, "This is KeyCorp's eighth straight quarter of record earnings performance, during which a number of acquisitions have been accomplished and/or announced. The ability to improve our performance ratios while simultaneously extending market share reflects a particularly important KeyCorp attribute.
 "The technological prowess brought to bear by Key Services is an important factor in the success of our strategy. While we have always been aware of Key Services' contribution, the September 1992 issue of Computerworld magazine ranked KeyCorp as the fifth most effective user of information systems within the financial services industry. Based on evaluations submitted by our peers, it is very gratifying to receive recognition for our technological expertise by an independent voice with the reputation of Computerworld."
 As previously announced, the merger with the $4.8 billion-asset Puget Sound Bancorp of Tacoma, Washington is expected to close in mid-January, 1993. Puget Sound's pending merger with Northwestern National Bank, a $42 million-asset institution located in Port Angeles, Wash., should be completed at the same time. The target date for the acquisition of the $650 million-asset National Savings Bank of Albany remains February, 1993.
 KeyCorp (NYSE: KEY) with assets of $25.2 billion is a multi-regional bank holding company headquartered in Albany, New York. 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
 Summary of Operations Three Months Ended Nine Months Ended
 (in thousands except September 30 September 30
 per share data) 1992 1991 1992 1991
 Interest Income
 (Taxable-Equivalent Basis)$479,933 $548,960 $1,445,862 $1,493,631
 Interest Expense 195,485 299,903 617,937 823,637
 Net Interest Income 284,448 249,057 827,925 669,994
 Less: Taxable-Equivalent
 Adjustment 8,741 8,288 26,619 25,129
 Provision for Possible
 Loan Losses 38,832 43,758 113,206 117,725
 Net Interest Income After
 Provision for Possible
 Loan Losses 236,875 197,011 688,100 527,140
 Noninterest Income:
 Service Charges on Deposit
 Accounts 27,029 23,834 77,940 67,977
 Mortgage Banking Income 16,847 19,036 49,082 33,900
 Other Service Charges
 and Fees 8,173 8,911 23,917 23,377
 Trust Service Fees 9,200 8,253 26,970 23,763
 Other 24,919 18,575 58,547 50,546
 Total Fee Income 86,168 78,609 236,456 199,563
 Gain on Sale of Loans - 13,593 2,832 21,940
 Investment Securities Gains - 1,541 2,220 8,363
 Gains on Securities
 Held for Sale 1,101 - 1,101 -
 Total Noninterest Income 87,269 93,743 242,609 229,866
 Noninterest Expense:
 Personnel Expense 106,454 95,169 306,300 255,989
 Net Occupancy Expense 21,546 21,929 64,997 61,009
 FDIC Insurance 10,743 9,870 32,276 25,391
 OREO Expense 11,550 6,230 25,200 12,066
 Other 78,135 78,560 229,356 204,404
 Total Noninterest Expense 228,428 211,758 658,129 558,859
 Income Before Taxes 95,716 78,996 272,580 198,147
 Income Taxes 32,216 26,934 92,280 63,175
 Net Income $ 63,500 $ 52,062 $ 180,300 $ 134,972
 Preferred Stock Dividends $ 4,451 $ 4,455 $ 13,352 $ 5,523
 Net Income Applicable to
 Common Shares After
 Preferred Dividends $ 59,049 $ 47,607 $ 166,948 $ 129,449
 Net Income Per Common Share $ .82 $ .67 $2.33 $1.89
 Average Common Shares
 Outstanding 72,218 70,875 71,685 68,610
 KeyCorp
 Three Months Ended Nine Months Ended
 September 30 September 30
 1992 1991 1992 1991
 Significant Ratios
 Return on Average Assets (pct.) 1.06 .85 1.04 .83
 Return on Average
 Common Equity (pct.) 16.66 15.09 16.39 14.58
 Efficiency Ratio (pct.) 61.6 64.6 61.8 64.3
 Efficiency Ratio excluding
 ORE Expenses (pct.) 58.5 62.7 59.5 62.9
 Net Yield on Average
 Earning Assets (pct.) 5.31 4.67 5.30 4.65
 Equity to Assets
 (Period-End) (pct.) 6.39 6.21 6.39 6.21
 Tangible Leverage Ratio (pct.) 5.21 4.95 5.21 4.95
 Nonperforming Loans to
 Period-End Loans (pct.) .99 1.20 .99 1.20
 Nonperforming Assets to
 Period-End Loans Plus
 OREO (pct.) 2.16 2.47 2.16 2.47
 Allowance for Possible Loan
 Losses to Period-End
 Loans (pct.) 1.35 1.42 1.35 1.42
 Allowance for Possible Loan
 Losses to Nonperforming
 Loans (pct.) 136.58 117.64 136.58 117.64
 Net Charge-Offs to
 Average Loans (pct.) .93 1.02 .95 1.09
 KeyCorp
 Credit Quality
 (dollars in thousands)
 Sept. 30 June 30 March 31 Dec. 31 Sept. 30
 1992 1992 1992 1991 1991
 Loans on
 Nonaccrual $160,548 $169,121 $183,566 $191,176 $174,758
 Renegotiated
 Loans 1,252 1,264 1,601 2,213 2,565
 Nonperforming
 Loans 161,800 170,385 185,167 193,389 177,323
 Other Real
 Estate Owned 196,464 207,316 193,560 176,309 191,590
 Nonperforming
 Assets $358,264 $377,701 $378,727 $369,698 $368,913
 Loans Past
 Due 90+ Days $ 41,184 $ 48,608 $ 53,559 $ 56,037 $ 51,427
 KeyCorp
 Three Months Ended Nine Months Ended
 Summary of Loan Loss September 30 September 30
 Experience (in thousands) 1992 1991 1992 1991
 Allowance for Possible Loan
 Losses at Beginning of
 Period $212,100 $203,281 $206,684 $162,669
 Losses Charged to the
 Allowance (42,395) (43,853) (125,345) (128,215)
 Recoveries Credited to the
 Allowance 5,669 5,416 16,692 14,414
 Net Charge-Offs (36,726) (38,437) (108,653) (113,801)
 Provision for Possible
 Loan Losses 38,832 43,758 113,206 117,725
 Allowance Acquired in Banks
 Merged 6,788 - 9,757 42,009
 Allowance for Possible Loan
 Losses at End of Period $220,994 $208,602 $220,994 $208,602
 KeyCorp
 Condensed Period-End Balance Sheet
 At September 30
 (in millions except per share data) 1992 1991
 Loans Net of Unearned Income $ 16,411 $ 14,720
 Less: Allowance for Possible
 Loan Losses (221) (209)
 Net Loans 16,190 14,511
 Investment Securities 3,841 4,607
 Short-Term Investments 228 57
 Loans Held for Sale/Putback 499 626
 Securities Held for Sale 1,568 178
 Cash and Due from Banks 1,256 1,255
 Intangible Assets 314 309
 Other Assets 1,347 1,815
 Total $ 25,243 $ 23,358
 Interest-Bearing Deposits $ 17,117 $ 15,981
 Noninterest-Bearing Deposits 3,427 3,177
 Total Deposits 20,544 19,158
 Short-Term Borrowings 2,070 1,630
 Long-Term Debt 659 518
 Other Liabilities 357 602
 Total Liabilities 23,630 21,908
 Shareholders' Equity:
 Preferred 184 184
 Common 1,429 1,266
 Total Shareholders' Equity 1,613 1,450
 $ 25,243 $ 23,358
Common Shares Outstanding (thousands) 72,270 70,952
Book Value per Common Share $ 19.78 $ 17.85
 KeyCorp
 Three Months Ended Nine Months Ended
 Condensed Average Balance Sheet September 30 September 30
 (in millions) 1992 1991 1992 1991
 Loans Net of Unearned Income $ 15,652 $ 14,946 $ 15,220 $ 13,977
 Investment Securities 3,867 3,595 4,551 3,790
 Loans Held for Sale/Putback 395 689 546 344
 Securities Held for Sale 1,377 2,026 462 980
 Short-Term Investments 101 73 73 139
 Earning Assets 21,392 21,329 20,852 19,230
 Allowance for Possible
 Loan Losses (214) (199) (213) (176)
 Cash and Due from Banks 1,033 1,233 997 1,053
 Other Assets 1,552 2,030 1,512 1,544
 Total $ 23,763 $ 24,393 $ 23,148 $ 21,651
 Interest-Bearing Deposits $ 16,613 $ 16,079 $ 16,296 $ 14,712
 Noninterest-Bearing Deposits 2,847 3,019 2,669 2,630
 Total Deposits 19,460 19,098 18,965 17,342
 Short-Term Borrowings 1,731 2,915 1,705 2,235
 Long-Term Debt 623 513 567 452
 Other Liabilities 355 432 366 355
 Total Liabilities 22,169 22,958 21,603 20,384
 Shareholders' Equity 1,594 1,435 1,545 1,267
 $ 23,763 $ 24,393 $ 23,148 $ 21,651
 KeyCorp
 Summary of Operating Results
 Summary of Operations Three Months Ended
 (in thousands except Sept. 30 June 30 March 31 Dec. 31
 per share data) 1992 1992 1992 1991
 Interest Income
 (Taxable-Equivalent Basis) $479,933 $479,922 $486,007 $507,813
 Interest Expense 195,485 203,308 219,144 253,484
 Net Interest Income 284,448 276,614 266,863 254,329
 Less: Taxable-Equivalent
 Adjustment 8,741 8,805 9,073 8,312
 Provision for Possible
 Loan Losses 38,832 39,258 35,116 34,496
 Net Interest Income After
 Provision for Possible
 Loan Losses 236,875 228,551 222,674 211,521
 Noninterest Income:
 Service Charges on Deposit
 Accounts 27,029 25,466 25,445 25,992
 Mortgage Banking Income 16,847 17,001 15,234 19,202
 Other Service Charges
 and Fees 8,173 8,047 7,697 7,832
 Trust Service Fees 9,200 9,082 8,688 8,890
 Other 24,919 17,526 16,102 17,619
 Total Fee Income 86,168 77,122 73,166 79,535
 Gain on Sale of Loans - 1,271 1,561 2,035
 Investment Securities
 Gains - 1,420 800 3,307
 Gains on Securities Held
 for Sale 1,101 - - -
 Total Noninterest Income 87,269 79,813 75,527 84,877
 Noninterest Expense:
 Personnel Expense 106,454 100,134 99,712 99,252
 Net Occupancy Expense 21,546 21,818 21,633 22,333
 FDIC Insurance 10,743 10,776 10,757 9,824
 OREO Expense 11,550 8,312 5,338 9,162
 Other 78,135 77,088 74,133 78,144
 Total Noninterest Expense 228,428 218,128 211,573 218,715
 Income Before Taxes 95,716 90,236 86,628 77,683
 Income Taxes 32,216 30,592 29,472 24,582
 Net Income $ 63,500 $ 59,644 $ 57,156 $ 53,101
 Preferred Stock Dividends $ 4,451 $ 4,450 $ 4,451 $ 4,451
 Net Income Applicable to
 Common Shares After
 Preferred Dividends $ 59,049 $ 55,194 $ 52,705 $ 48,650
 Net Income Per Common Share $ .82 $ .77 $ .74 $ .68
 Average Common Shares
 Outstanding 72,218 71,590 71,241 71,072
 KeyCorp
 Three Months Ended
 Sept 30 June 30 March 31 Dec 31
 1992 1992 1992 1991
 Significant Ratios
 Return on Average Assets (pct.) 1.06 1.05 1.01 .93
 Return on Average
 Common Equity (pct.) 16.66 16.43 16.05 15.09
 Efficiency Ratio (pct.) 61.6 61.7 62.2 65.5
 Efficiency Ratio excluding
 ORE Expenses (pct.) 58.5 59.3 60.7 62.8
 Net Yield on Average
 Earning Assets (pct.) 5.31 5.36 5.23 5.04
 Equity to Assets
 (Period-End) (pct.) 6.39 6.79 6.66 6.42
 Tangible Leverage Ratio (pct.) 5.21 5.74 5.47 5.16
 Nonperforming Loans to
 Period-End Loans (pct.) .99 1.12 1.25 1.28
 Nonperforming Assets to
 Period-End Loans
 Plus OREO (pct.) 2.16 2.45 2.52 2.42
 Allowance for Possible Loan Losses
 to Period-End Loans (pct.) 1.35 1.39 1.40 1.37
 Allowance for Possible Loan
 Losses to Nonperforming
 Loans (pct.) 136.58 124.48 111.94 106.87
 Net Charge-Offs to Average
 Loans (pct.) .93 1.00 .93 .97
 -0- 10/15/92
 /CONTACT: Lee Irving, treasurer, 518-486-8579, or 518-479-3273 after hours; or Don Kauth, investor relations, 518-487-4491, or 518-583-1608, after hours, both of KeyCorp/
 (KEY) CO: KeyCorp ST: New York IN: FIN SU: ERN


DA -- CL002 -- 0221 10/15/92 08:47 EDT
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Date:Oct 15, 1992
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