Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
State or other jurisdiction of incorporation or organization: | Commission File Number | I.R.S. Employer Identification Number: |
Address of principal executive offices: | Zip 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)) | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 |
99.2 |
99.3 |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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: January 23, 2020 | /s/ Douglas M. Schosser | |
By: Douglas M. Schosser | ||
Chief Accounting Officer | ||
Selected Financial Highlights | |||||||||||||||
dollars in millions, except per share data | Change 4Q19 vs. | ||||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | |||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | 439 | $ | 383 | $ | 459 | 14.6 | % | (4.4 | )% | |||||
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution | .45 | .38 | .45 | 18.4 | — | ||||||||||
Return on average tangible common equity from continuing operations (a) | 14.09 | % | 12.38 | % | 16.40 | % | N/A | N/A | |||||||
Return on average total assets from continuing operations | 1.27 | 1.14 | 1.37 | N/A | N/A | ||||||||||
Common Equity Tier 1 ratio (b) | 9.43 | 9.48 | 9.93 | N/A | N/A | ||||||||||
Book value at period end | $ | 15.54 | $ | 15.44 | $ | 13.90 | .6 | % | 11.8 | % | |||||
Net interest margin (TE) from continuing operations | 2.98 | % | 3.00 | % | 3.16 | % | 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 “Return on average tangible common equity from continuing operations.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. |
(b) | 12/31/19 ratio is estimated. |
INCOME STATEMENT HIGHLIGHTS | ||||||||||||||
Revenue | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Net interest income (TE) | $ | 987 | $ | 980 | $ | 1,008 | .7 | % | (2.1 | )% | ||||
Noninterest income | 651 | 650 | 645 | .2 | .9 | |||||||||
Total revenue | $ | 1,638 | $ | 1,630 | $ | 1,653 | .5 | % | (.9 | )% | ||||
Noninterest Income | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Trust and investment services income | $ | 120 | $ | 118 | $ | 121 | 1.7 | % | (.8 | )% | ||||
Investment banking and debt placement fees | 181 | 176 | 186 | 2.8 | (2.7 | ) | ||||||||
Service charges on deposit accounts | 86 | 86 | 84 | — | 2.4 | |||||||||
Operating lease income and other leasing gains | 39 | 42 | 28 | (7.1 | ) | 39.3 | ||||||||
Corporate services income | 65 | 63 | 58 | 3.2 | 12.1 | |||||||||
Cards and payments income | 67 | 69 | 68 | (2.9 | ) | (1.5 | ) | |||||||
Corporate-owned life insurance income | 39 | 32 | 39 | 21.9 | — | |||||||||
Consumer mortgage income | 14 | 14 | 7 | — | 100.0 | |||||||||
Mortgage servicing fees | 26 | 23 | 21 | 13.0 | 23.8 | |||||||||
Other income | 14 | 27 | 33 | (48.1 | ) | (57.6 | ) | |||||||
Total noninterest income | $ | 651 | $ | 650 | $ | 645 | .2 | % | .9 | % | ||||
Noninterest Expense | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Personnel expense | $ | 551 | $ | 547 | $ | 576 | .7 | % | (4.3 | )% | ||||
Nonpersonnel expense | 429 | 392 | 436 | 9.4 | (1.6 | ) | ||||||||
Total noninterest expense | $ | 980 | $ | 939 | $ | 1,012 | 4.4 | % | (3.2 | )% | ||||
BALANCE SHEET HIGHLIGHTS | ||||||||||||||
Average Loans | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Commercial and industrial (a) | $ | 48,345 | $ | 48,322 | $ | 45,129 | — | 7.1 | % | |||||
Other commercial loans | 19,312 | 19,016 | 20,899 | 1.6 | % | (7.6 | ) | |||||||
Total consumer loans | 25,950 | 24,618 | 23,260 | 5.4 | 11.6 | |||||||||
Total loans | $ | 93,607 | $ | 91,956 | $ | 89,288 | 1.8 | % | 4.8 | % | ||||
(a) | Commercial and industrial average loan balances include $146 million, $144 million, and $132 million of assets from commercial credit cards at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
Average Deposits | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Non-time deposits | $ | 100,518 | $ | 97,205 | $ | 94,480 | 3.4 | % | 6.4 | % | ||||
Certificates of deposit ($100,000 or more) | 6,899 | 7,625 | 8,217 | (9.5 | ) | (16.0 | ) | |||||||
Other time deposits | 5,187 | 5,449 | 5,255 | (4.8 | ) | (1.3 | ) | |||||||
Total deposits | $ | 112,604 | $ | 110,279 | $ | 107,952 | 2.1 | % | 4.3 | % | ||||
Cost of total deposits | .71 | % | .82 | % | .64 | % | N/A | N/A | ||||||
ASSET QUALITY | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Net loan charge-offs | $ | 99 | $ | 196 | $ | 60 | (49.5 | )% | 65.0 | % | ||||
Net loan charge-offs to average total loans | .42 | % | .85 | % | .27 | % | N/A | N/A | ||||||
Nonperforming loans at period end (a) | $ | 577 | $ | 585 | $ | 542 | (1.4 | ) | 6.5 | |||||
Nonperforming assets at period end (a) | 715 | 711 | 577 | .6 | 23.9 | |||||||||
Allowance for loan and lease losses | 900 | 893 | 883 | .8 | 1.9 | |||||||||
Allowance for loan and lease losses to nonperforming loans (a) | 156.0 | % | 152.6 | % | 162.9 | % | N/A | N/A | ||||||
Provision for credit losses | $ | 109 | $ | 200 | $ | 59 | (45.5 | )% | 84.7 | % | ||||
(a) | Nonperforming loan balances exclude $446 million, $497 million, and $575 million of purchased credit impaired loans at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
Capital Ratios | ||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | ||||
Common Equity Tier 1 (a) | 9.43 | % | 9.48 | % | 9.93 | % |
Tier 1 risk-based capital (a) | 10.85 | 10.91 | 11.08 | |||
Total risk based capital (a) | 12.77 | 12.90 | 12.89 | |||
Tangible common equity to tangible assets (b) | 8.64 | 8.58 | 8.30 | |||
Leverage (a) | 9.86 | 9.93 | 9.89 | |||
(a) | 12/31/2019 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.” 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. |
Summary of Changes in Common Shares Outstanding | ||||||||||||
in thousands | Change 4Q19 vs. | |||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||
Shares outstanding at beginning of period | 988,538 | 1,003,114 | 1,034,287 | (1.5 | )% | (4.4 | )% | |||||
Open market repurchases and return of shares under employee compensation plans | (12,968 | ) | (15,076 | ) | (15,216 | ) | (14.0 | ) | (14.8 | ) | ||
Shares issued under employee compensation plans (net of cancellations) | 1,619 | 500 | 432 | 223.8 | 274.8 | |||||||
Shares outstanding at end of period | 977,189 | 988,538 | 1,019,503 | (1.1 | )% | (4.2 | )% | |||||
Major Business Segments | |||||||||||||||
dollars in millions | Change 4Q19 vs. | ||||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | |||||||||||
Revenue from continuing operations (TE) | |||||||||||||||
Consumer Bank | $ | 825 | $ | 833 | $ | 829 | (1.0 | )% | (.5 | )% | |||||
Commercial Bank | 771 | 779 | 771 | (1.0 | ) | — | |||||||||
Other (a) | 42 | 18 | 53 | 133.3 | (20.8 | )% | |||||||||
Total | $ | 1,638 | $ | 1,630 | $ | 1,653 | .5 | % | (.9 | )% | |||||
Income (loss) from continuing operations attributable to Key | |||||||||||||||
Consumer Bank | $ | 166 | $ | 194 | $ | 177 | (14.4 | )% | (6.2 | )% | |||||
Commercial Bank | 315 | 304 | 302 | 3.6 | 4.3 | ||||||||||
Other (a), (b) | (12 | ) | (82 | ) | 5 | N/M | N/M | ||||||||
Total | $ | 469 | $ | 416 | $ | 484 | 12.7 | % | (3.1 | )% | |||||
(a) | Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. |
(b) | Other segments included $12 million and $94 million, after tax, of notable items related to a previously disclosed fraud loss for the third quarter and fourth quarters of 2019, respectively; additional detail can be found on page 24 of this release. |
Consumer Bank | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Summary of operations | ||||||||||||||
Net interest income (TE) | $ | 586 | $ | 595 | $ | 598 | (1.5 | )% | (2.0 | )% | ||||
Noninterest income | 239 | 238 | 231 | .4 | 3.5 | |||||||||
Total revenue (TE) | 825 | 833 | 829 | (1.0 | ) | (.5 | ) | |||||||
Provision for credit losses | 55 | 48 | 43 | 14.6 | 27.9 | |||||||||
Noninterest expense | 552 | 531 | 554 | 4.0 | (.4 | ) | ||||||||
Income (loss) before income taxes (TE) | 218 | 254 | 232 | (14.2 | ) | (6.0 | ) | |||||||
Allocated income taxes (benefit) and TE adjustments | 52 | 60 | 55 | (13.3 | ) | (5.5 | ) | |||||||
Net income (loss) attributable to Key | $ | 166 | $ | 194 | $ | 177 | (14.4 | )% | (6.2 | )% | ||||
Average balances | ||||||||||||||
Loans and leases | $ | 34,148 | $ | 32,760 | $ | 31,241 | 4.2 | % | 9.3 | % | ||||
Total assets | 37,729 | 36,417 | 34,450 | 3.6 | 9.5 | |||||||||
Deposits | 73,561 | 72,995 | 70,426 | .8 | 4.5 | |||||||||
Assets under management at period end | $ | 40,833 | $ | 39,416 | $ | 36,775 | 3.6 | % | 11.0 | % | ||||
Additional Consumer Bank Data | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Noninterest income | ||||||||||||||
Trust and investment services income | $ | 91 | $ | 90 | $ | 89 | 1.1 | % | 2.2 | |||||
Service charges on deposit accounts | 58 | 58 | 57 | — | 1.8 | % | ||||||||
Cards and payments income | 52 | 52 | 51 | — | 2.0 | |||||||||
Other noninterest income | 38 | 38 | 34 | — | 11.8 | |||||||||
Total noninterest income | $ | 239 | $ | 238 | $ | 231 | .4 | % | 3.5 | % | ||||
Average deposit balances | ||||||||||||||
NOW and money market deposit accounts | $ | 44,765 | $ | 43,638 | $ | 41,189 | 2.6 | % | 8.7 | % | ||||
Savings deposits | 4,332 | 4,406 | 4,579 | (1.7 | ) | (5.4 | ) | |||||||
Certificates of deposit ($100,000 or more) | 6,065 | 6,488 | 5,863 | (6.5 | ) | 3.4 | ||||||||
Other time deposits | 5,164 | 5,430 | 5,239 | (4.9 | ) | (1.4 | ) | |||||||
Noninterest-bearing deposits | 13,235 | 13,033 | 13,556 | 1.5 | (2.4 | ) | ||||||||
Total deposits | $ | 73,561 | $ | 72,995 | $ | 70,426 | .8 | % | 4.5 | % | ||||
Home equity loans | ||||||||||||||
Average balance | $ | 10,295 | $ | 10,413 | $ | 11,144 | ||||||||
Combined weighted-average loan-to-value ratio (at date of origination) | 70 | % | 70 | % | 70 | % | ||||||||
Percent first lien positions | 61 | 60 | 60 | |||||||||||
Other data | ||||||||||||||
Branches | 1,098 | 1,101 | 1,159 | |||||||||||
Automated teller machines | 1,420 | 1,422 | 1,505 | |||||||||||
• | Net income attributable to Key of $166 million for the fourth quarter of 2019, compared to $177 million for the year-ago quarter |
• | Taxable equivalent net interest income decreased by $12 million, or 2.0%, from the fourth quarter of 2018, with balance sheet growth offset by lower purchase accounting accretion and change in deposit mix |
• | Average loans and leases increased $2.9 billion, or 9.3%. This was driven by Laurel Road along with strength in residential mortgage and indirect auto lending |
• | Average deposits increased $3.1 billion, or 4.5%, from the fourth quarter of 2018. This was driven by growth in money market deposits, reflecting Key’s relationship strategy |
• | Provision for credit losses increased $12 million compared to the fourth quarter of 2018, driven by balance sheet growth. Credit quality remained stable to the year-ago quarter |
• | Noninterest income increased $8 million, or 3.5%, from the year ago quarter, driven by growth in consumer mortgage income |
• | Noninterest expense decreased $2 million, or 0.4%, from the year ago quarter. The decline reflects the benefit of efficiency initiatives and strong expense discipline. The decline in expense was partially offset by expenses related to the acquisition of Laurel Road |
Commercial Bank | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Summary of operations | ||||||||||||||
Net interest income (TE) | $ | 416 | $ | 399 | $ | 417 | 4.3 | % | (.2 | )% | ||||
Noninterest income | 355 | 380 | 354 | (6.6 | ) | .3 | ||||||||
Total revenue (TE) | 771 | 779 | 771 | (1.0 | ) | — | ||||||||
Provision for credit losses | 38 | 32 | 17 | 18.8 | 123.5 | |||||||||
Noninterest expense | 388 | 372 | 401 | 4.3 | (3.2 | ) | ||||||||
Income (loss) before income taxes (TE) | 345 | 375 | 353 | (8.0 | ) | (2.3 | ) | |||||||
Allocated income taxes and TE adjustments | 30 | 71 | 51 | (57.7 | ) | (41.2 | ) | |||||||
Net income (loss) attributable to Key | $ | 315 | $ | 304 | $ | 302 | 3.6 | % | 4.3 | % | ||||
Average balances | ||||||||||||||
Loans and leases | $ | 58,535 | $ | 58,215 | $ | 56,884 | .5 | % | 2.9 | % | ||||
Loans held for sale | 1,465 | 1,325 | 2,250 | 10.6 | (34.9 | ) | ||||||||
Total assets | 67,135 | 66,549 | 65,603 | 0.9 | 2.3 | |||||||||
Deposits | 38,224 | 36,204 | 35,113 | 5.6 | % | 8.9 | % | |||||||
Additional Commercial Bank Data | ||||||||||||||
dollars in millions | Change 4Q19 vs. | |||||||||||||
4Q19 | 3Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||
Noninterest income | ||||||||||||||
Trust and investment services income | $ | 29 | $ | 28 | $ | 32 | 3.6 | % | (9.4 | )% | ||||
Investment banking and debt placement fees | 179 | 176 | 186 | 1.7 | (3.8 | ) | ||||||||
Operating lease income and other leasing gains | 39 | 40 | 27 | (2.5 | ) | 44.4 | ||||||||
Corporate services income | 58 | 56 | 51 | 3.6 | 13.7 | |||||||||
Service charges on deposit accounts | 27 | 27 | 26 | — | 3.8 | |||||||||
Cards and payments income | 15 | 16 | 17 | (6.3 | ) | (11.8 | ) | |||||||
Payments and services income | 100 | 99 | 94 | 1.0 | 6.4 | |||||||||
Mortgage servicing fees | 19 | 20 | 18 | (5.0 | ) | 5.6 | ||||||||
Other noninterest income | (11 | ) | 17 | (3 | ) | (164.7 | ) | 266.7 | ||||||
Total noninterest income | $ | 355 | $ | 380 | $ | 354 | (6.6 | )% | 0.3 | % | ||||
• | Net income attributable to Key of $315 million for the fourth quarter of 2019, compared to $302 million for the year-ago quarter |
• | Taxable-equivalent net interest income decreased by $1 million, compared to the fourth quarter of 2018, with balance sheet growth offset by lower loan fees and loan spread compression |
• | Average loan and lease balances increased $1.7 billion, or 2.9%, compared to the fourth quarter of 2018, driven by broad-based growth in commercial and industrial loans |
• | Average deposit balances increased $3.1 billion, or 8.9%, compared to the fourth quarter of 2018, driven by growth in core deposits |
• | Provision for credit losses increased $21 million compared to the fourth quarter of 2018, driven by higher recoveries in the fourth quarter of 2018 |
• | Noninterest income increased $1 million from the prior year, reflecting stable customer activity |
• | Noninterest expense decreased by $13 million, or 3.2%, from the fourth quarter of 2018. The decline reflects the benefit of efficiency initiatives and strong expense discipline |
CONTACTS: | |
ANALYSTS | MEDIA |
Vernon L. Patterson | Susan Donlan |
216.689.0520 | 216.471.3133 |
Vernon_Patterson@KeyBank.com | Susan_E_Donlan@KeyBank.com |
Emily J. Mills | Tracy Pesho |
216.689.7781 | 216.471.2825 |
emills@key.com | Tracy_Pesho@KeyBank.com |
Melanie S. Kaiser | Twitter: @keybank |
216.689.4545 | |
Melanie_S_Kaiser@KeyBank.com | |
INVESTOR RELATIONS: | KEY MEDIA NEWSROOM: |
www.key.com/ir | 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, 2018, as well as in KeyCorp’s subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the “SEC”) and are or will be 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 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. |
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 | |
Summary of Loan and Lease Loss Experience From Continuing Operations | |
Asset Quality Statistics From Continuing Operations | |
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations | |
Summary of Changes in Nonperforming Loans From Continuing Operations | |
Line of Business Results |
Financial Highlights | |||||||||||
(dollars in millions, except per share amounts) | |||||||||||
Three months ended | |||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | |||||||||
Summary of operations | |||||||||||
Net interest income (TE) | $ | 987 | $ | 980 | $ | 1,008 | |||||
Noninterest income | 651 | 650 | 645 | ||||||||
Total revenue (TE) | 1,638 | 1,630 | 1,653 | ||||||||
Provision for credit losses | 109 | 200 | 59 | ||||||||
Noninterest expense | 980 | 939 | 1,012 | ||||||||
Income (loss) from continuing operations attributable to Key | 466 | 413 | 482 | ||||||||
Income (loss) from discontinued operations, net of taxes | 3 | 3 | 2 | ||||||||
Net income (loss) attributable to Key | 469 | 416 | 484 | ||||||||
Income (loss) from continuing operations attributable to Key common shareholders | 439 | 383 | 459 | ||||||||
Income (loss) from discontinued operations, net of taxes | 3 | 3 | 2 | ||||||||
Net income (loss) attributable to Key common shareholders | 442 | 386 | 461 | ||||||||
Per common share | |||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .45 | $ | .39 | $ | .45 | |||||
Income (loss) from discontinued operations, net of taxes | — | — | — | ||||||||
Net income (loss) attributable to Key common shareholders (a) | .45 | .39 | .45 | ||||||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution | .45 | .38 | .45 | ||||||||
Income (loss) from discontinued operations, net of taxes — assuming dilution | — | — | — | ||||||||
Net income (loss) attributable to Key common shareholders — assuming dilution (a) | .45 | .39 | .45 | ||||||||
Cash dividends declared | .185 | .185 | .17 | ||||||||
Book value at period end | 15.54 | 15.44 | 13.90 | ||||||||
Tangible book value at period end | 12.56 | 12.48 | 11.14 | ||||||||
Market price at period end | 20.24 | 17.84 | 14.78 | ||||||||
Performance ratios | |||||||||||
From continuing operations: | |||||||||||
Return on average total assets | 1.27 | % | 1.14 | % | 1.37 | % | |||||
Return on average common equity | 11.40 | 9.99 | 13.07 | ||||||||
Return on average tangible common equity (b) | 14.09 | 12.38 | 16.40 | ||||||||
Net interest margin (TE) | 2.98 | 3.00 | 3.16 | ||||||||
Cash efficiency ratio (b) | 58.7 | 56.0 | 59.9 | ||||||||
From consolidated operations: | |||||||||||
Return on average total assets | 1.27 | % | 1.14 | % | 1.37 | % | |||||
Return on average common equity | 11.48 | 10.07 | 13.13 | ||||||||
Return on average tangible common equity (b) | 14.19 | 12.48 | 16.47 | ||||||||
Net interest margin (TE) | 2.97 | 2.98 | 3.14 | ||||||||
Loan to deposit (c) | 86.6 | 85.3 | 85.6 | ||||||||
Capital ratios at period end | |||||||||||
Key shareholders’ equity to assets | 11.75 | % | 11.67 | % | 11.17 | % | |||||
Key common shareholders’ equity to assets | 10.47 | 10.40 | 10.15 | ||||||||
Tangible common equity to tangible assets (b) | 8.64 | 8.58 | 8.30 | ||||||||
Common Equity Tier 1 (d) | 9.43 | 9.48 | 9.93 | ||||||||
Tier 1 risk-based capital (d) | 10.85 | 10.91 | 11.08 | ||||||||
Total risk-based capital (d) | 12.77 | 12.90 | 12.89 | ||||||||
Leverage (d) | 9.86 | 9.93 | 9.89 | ||||||||
Asset quality — from continuing operations | |||||||||||
Net loan charge-offs | $ | 99 | $ | 196 | $ | 60 | |||||
Net loan charge-offs to average loans | .42 | % | .85 | % | .27 | % | |||||
Allowance for loan and lease losses | $ | 900 | $ | 893 | $ | 883 | |||||
Allowance for credit losses | 968 | 958 | 946 | ||||||||
Allowance for loan and lease losses to period-end loans | .95 | % | .96 | % | .99 | % | |||||
Allowance for credit losses to period-end loans | 1.02 | 1.03 | 1.06 | ||||||||
Allowance for loan and lease losses to nonperforming loans (e) | 156.0 | 152.6 | 162.9 | ||||||||
Allowance for credit losses to nonperforming loans (e) | 167.8 | 163.8 | 174.5 | ||||||||
Nonperforming loans at period-end (e) | $ | 577 | $ | 585 | $ | 542 | |||||
Nonperforming assets at period-end (e) | 715 | 711 | 577 | ||||||||
Nonperforming loans to period-end portfolio loans (e) | .61 | % | .63 | % | .61 | % | |||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (e) | .75 | .77 | .64 | ||||||||
Trust assets | |||||||||||
Assets under management | $ | 40,833 | $ | 39,416 | $ | 36,775 | |||||
Other data | |||||||||||
Average full-time equivalent employees | 16,537 | 16,898 | 17,664 | ||||||||
Branches | 1,098 | 1,101 | 1,159 | ||||||||
Taxable-equivalent adjustment | $ | 8 | $ | 8 | $ | 8 |
Financial Highlights (continued) | |||||||
(dollars in millions, except per share amounts) | |||||||
Twelve months ended | |||||||
12/31/2019 | 12/31/2018 | ||||||
Summary of operations | |||||||
Net interest income (TE) | $ | 3,941 | $ | 3,940 | |||
Noninterest income | 2,459 | 2,515 | |||||
Total revenue (TE) | 6,400 | 6,455 | |||||
Provision for credit losses | 445 | 246 | |||||
Noninterest expense | 3,901 | 3,975 | |||||
Income (loss) from continuing operations attributable to Key | 1,708 | 1,859 | |||||
Income (loss) from discontinued operations, net of taxes | 9 | 7 | |||||
Net income (loss) attributable to Key | 1,717 | 1,866 | |||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | 1,611 | $ | 1,793 | |||
Income (loss) from discontinued operations, net of taxes | 9 | 7 | |||||
Net income (loss) attributable to Key common shareholders | 1,620 | 1,800 | |||||
Per common share | |||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | 1.62 | $ | 1.72 | |||
Income (loss) from discontinued operations, net of taxes | .01 | .01 | |||||
Net income (loss) attributable to Key common shareholders (a) | 1.63 | 1.73 | |||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution | 1.61 | 1.70 | |||||
Income (loss) from discontinued operations, net of taxes — assuming dilution | .01 | .01 | |||||
Net income (loss) attributable to Key common shareholders — assuming dilution (a) | 1.62 | 1.71 | |||||
Cash dividends paid | .71 | .565 | |||||
Performance ratios | |||||||
From continuing operations: | |||||||
Return on average total assets | 1.19 | % | 1.36 | % | |||
Return on average common equity | 10.83 | 12.88 | |||||
Return on average tangible common equity (b) | 13.46 | 16.22 | |||||
Net interest margin (TE) | 3.04 | 3.17 | |||||
Cash efficiency ratio (b) | 59.6 | 60.0 | |||||
From consolidated operations: | |||||||
Return on average total assets | 1.19 | % | 1.35 | % | |||
Return on average common equity | 10.89 | 12.93 | |||||
Return on average tangible common equity (b) | 13.53 | 16.28 | |||||
Net interest margin (TE) | 3.03 | 3.15 | |||||
Asset quality — from continuing operations | |||||||
Net loan charge-offs | $ | 424 | $ | 234 | |||
Net loan charge-offs to average total loans | .46 | % | .26 | % | |||
Other data | |||||||
Average full-time equivalent employees | 17,045 | 18,180 | |||||
Taxable-equivalent adjustment | 32 | 31 |
(a) | Earnings per share may not foot due to rounding. |
(b) | The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” 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. |
(c) | Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits. |
(d) | December 31, 2019, ratio is estimated. |
(e) | Nonperforming loan balances exclude $446 million, $497 million, and $575 million of purchased credit impaired loans at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
Three months ended | Twelve months ended | |||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||
Tangible common equity to tangible assets at period-end | ||||||||||||||||
Key shareholders’ equity (GAAP) | $ | 17,038 | $ | 17,116 | $ | 15,595 | ||||||||||
Less: Intangible assets (a) | 2,910 | 2,928 | 2,818 | |||||||||||||
Preferred Stock (b) | 1,856 | 1,856 | 1,421 | |||||||||||||
Tangible common equity (non-GAAP) | $ | 12,272 | $ | 12,332 | $ | 11,356 | ||||||||||
Total assets (GAAP) | $ | 144,988 | $ | 146,691 | $ | 139,613 | ||||||||||
Less: Intangible assets (a) | 2,910 | 2,928 | 2,818 | |||||||||||||
Tangible assets (non-GAAP) | $ | 142,078 | $ | 143,763 | $ | 136,795 | ||||||||||
Tangible common equity to tangible assets ratio (non-GAAP) | 8.64 | % | 8.58 | % | 8.30 | % | ||||||||||
Earnings per common share (EPS) excluding notable items | ||||||||||||||||
EPS from continuing operations attributable to Key common shareholders — assuming dilution (GAAP) | $ | .45 | $ | .38 | $ | .45 | ||||||||||
Plus: EPS impact of notable items | .03 | .10 | .03 | |||||||||||||
EPS from continuing operations attributable to Key common shareholders — assuming dilution excluding notable items (non-GAAP) | $ | .48 | $ | .48 | $ | .48 | ||||||||||
Pre-provision net revenue | ||||||||||||||||
Net interest income (GAAP) | $ | 979 | $ | 972 | $ | 1,000 | $ | 3,909 | $ | 3,909 | ||||||
Plus: Taxable-equivalent adjustment | 8 | 8 | 8 | 32 | 31 | |||||||||||
Noninterest income | 651 | 650 | 645 | 2,459 | 2,515 | |||||||||||
Less: Noninterest expense | 980 | 939 | 1,012 | 3,901 | 3,975 | |||||||||||
Pre-provision net revenue from continuing operations (non-GAAP) | $ | 658 | $ | 691 | $ | 641 | $ | 2,499 | $ | 2,480 | ||||||
Average tangible common equity | ||||||||||||||||
Average Key shareholders' equity (GAAP) | $ | 17,178 | $ | 17,113 | $ | 15,384 | $ | 16,636 | $ | 15,131 | ||||||
Less: Intangible assets (average) (c) | 2,919 | 2,942 | 2,828 | 2,909 | 2,869 | |||||||||||
Preferred stock (average) | 1,900 | 1,900 | 1,450 | 1,755 | 1,205 | |||||||||||
Average tangible common equity (non-GAAP) | $ | 12,359 | $ | 12,271 | $ | 11,106 | $ | 11,972 | $ | 11,057 | ||||||
Return on average tangible common equity from continuing operations | ||||||||||||||||
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) | $ | 439 | $ | 383 | $ | 459 | $ | 1,611 | $ | 1,793 | ||||||
Plus: Notable items, after tax (d) | 29 | 94 | 31 | 183 | 31 | |||||||||||
Net income (loss) from continuing operations attributable to Key common shareholders excluding notable items (non-GAAP) | $ | 468 | $ | 477 | $ | 490 | $ | 1,794 | $ | 1,824 | ||||||
Average tangible common equity (non-GAAP) | 12,359 | 12,271 | 11,106 | 11,972 | 11,057 | |||||||||||
Return on average tangible common equity from continuing operations (non-GAAP) | 14.09 | % | 12.38 | % | 16.40 | % | 13.46 | % | 16.22 | % | ||||||
Return on average tangible common equity from continuing operations excluding notable items (non-GAAP) | 15.02 | % | 15.42 | % | 17.50 | % | 14.98 | % | 16.50 | % | ||||||
Return on average tangible common equity consolidated | ||||||||||||||||
Net income (loss) attributable to Key common shareholders (GAAP) | $ | 442 | $ | 386 | $ | 461 | $ | 1,620 | $ | 1,800 | ||||||
Average tangible common equity (non-GAAP) | 12,359 | 12,271 | 11,106 | 11,972 | 11,057 | |||||||||||
Return on average tangible common equity consolidated (non-GAAP) | 14.19 | % | 14.19 | % | 16.47 | % | 13.53 | % | 16.28 | % |
GAAP to Non-GAAP Reconciliations (continued) | ||||||||||||||||
(dollars in millions) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||
Cash efficiency ratio | ||||||||||||||||
Noninterest expense (GAAP) | $ | 980 | $ | 939 | $ | 1,012 | $ | 3,901 | $ | 3,975 | ||||||
Less: Intangible asset amortization | 19 | 26 | 22 | 89 | 99 | |||||||||||
Adjusted noninterest expense (non-GAAP) | $ | 961 | $ | 913 | $ | 990 | $ | 3,812 | $ | 3,876 | ||||||
Less: Notable items (d) | 22 | — | 41 | 100 | 41 | |||||||||||
Adjusted noninterest expense excluding notable items (non-GAAP) | $ | 939 | $ | 913 | $ | 949 | $ | 3,712 | $ | 3,835 | ||||||
Net interest income (GAAP) | $ | 979 | $ | 972 | $ | 1,000 | $ | 3,909 | $ | 3,909 | ||||||
Plus: Taxable-equivalent adjustment | 8 | 8 | 8 | 32 | 31 | |||||||||||
Noninterest income | 651 | 650 | 645 | 2,459 | 2,515 | |||||||||||
Total taxable-equivalent revenue (non-GAAP) | $ | 1,638 | $ | 1,630 | $ | 1,653 | $ | 6,400 | $ | 6,455 | ||||||
Cash efficiency ratio (non-GAAP) | 58.7 | % | 56.0 | % | 59.9 | % | 59.6 | % | 60.0 | % | ||||||
Cash efficiency ratio excluding notable items (non-GAAP) | 57.3 | % | 56.0 | % | 57.4 | % | 58.0 | % | 59.4 | % | ||||||
Net loan charge-offs to average total loans excluding notable items | ||||||||||||||||
Net loan charge-offs (GAAP) | $ | 99 | $ | 196 | $ | 60 | $ | 424 | $ | 234 | ||||||
Less: Notable items | 16 | 123 | — | 139 | — | |||||||||||
Net loan charge-offs excluding notable items (non-GAAP) | $ | 83 | $ | 73 | $ | 60 | $ | 285 | $ | 234 | ||||||
Average loans outstanding | $ | 93,607 | $ | 91,956 | $ | 89,288 | $ | 91,511 | $ | 88,338 | ||||||
Net loan charge-offs to average total loans excluding notable items (non-GAAP) | .35 | % | .31 | % | .27 | % | .31 | % | .26 | % | ||||||
Provision for credit losses excluding notable items | ||||||||||||||||
Provision for credit losses (GAAP) | $ | 109 | $ | 200 | $ | 59 | $ | 445 | $ | 246 | ||||||
Less: Notable Items | 16 | 123 | — | 139 | — | |||||||||||
Provision for credit loses excluding notable items (non-GAAP) | $ | 93 | $ | 77 | $ | 59 | $ | 306 | $ | 246 |
Three months ended | |||||
12/31/2019 | |||||
Common Equity Tier 1 under the Regulatory Capital Rules (“RCR”) (estimates) | |||||
Common Equity Tier 1 under current RCR | $ | 12,353 | |||
Adjustments from current RCR to the fully phased-in RCR: | |||||
Deferred tax assets and other intangible assets (e) | — | ||||
Common Equity Tier 1 anticipated under the fully phased-in RCR (f) | $ | 12,353 | |||
Net risk-weighted assets under current RCR | $ | 131,009 | |||
Adjustments from current RCR to the fully phased-in RCR: | |||||
Mortgage servicing assets (g) | 878 | ||||
Deferred tax assets | 201 | ||||
All other assets | — | ||||
Total risk-weighted assets anticipated under the fully phased-in RCR (f) | $ | 132,088 | |||
Common Equity Tier 1 ratio under the fully phased-in RCR (f) | 9.35 | % |
(a) | For the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, intangible assets exclude $7 million, $9 million, and $14 million, respectively, of period-end purchased credit card receivables. |
(b) | Net of capital surplus. |
(c) | For the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, average intangible assets exclude $8 million, $9 million, and $15 million, respectively, of average purchased credit card receivables. For the twelve months ended December 31, 2019, and December 31, 2018, average intangible assets exclude $10 million and $20 million, respectively, of average purchase credit card receivables. |
(d) | Additional detail provided in Notable Items table on page 24 of this release. |
(e) | Includes the deferred tax assets subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule. |
(f) | The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (fully phased-in); Key is subject to the Regulatory Capital Rules under the “standardized approach.” |
(g) | Item is included in the 25% exceptions bucket calculation and is risk-weighted at 250%. |
Consolidated Balance Sheets | |||||||||||
(dollars in millions) | |||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | |||||||||
Assets | |||||||||||
Loans | $ | 94,646 | $ | 92,760 | $ | 89,552 | |||||
Loans held for sale | 1,334 | 1,598 | 1,227 | ||||||||
Securities available for sale | 21,843 | 22,378 | 19,428 | ||||||||
Held-to-maturity securities | 10,067 | 10,490 | 11,519 | ||||||||
Trading account assets | 1,040 | 963 | 849 | ||||||||
Short-term investments | 1,272 | 3,351 | 2,562 | ||||||||
Other investments | 605 | 620 | 666 | ||||||||
Total earning assets | 130,807 | 132,160 | 125,803 | ||||||||
Allowance for loan and lease losses | (900 | ) | (893 | ) | (883 | ) | |||||
Cash and due from banks | 732 | 636 | 678 | ||||||||
Premises and equipment | 814 | 815 | 882 | ||||||||
Goodwill | 2,664 | 2,664 | 2,516 | ||||||||
Other intangible assets | 253 | 272 | 316 | ||||||||
Corporate-owned life insurance | 4,233 | 4,216 | 4,171 | ||||||||
Accrued income and other assets | 5,494 | 5,881 | 5,030 | ||||||||
Discontinued assets | 891 | 940 | 1,100 | ||||||||
Total assets | $ | 144,988 | 146,691 | 139,613 | |||||||
Liabilities | |||||||||||
Deposits in domestic offices: | |||||||||||
NOW and money market deposit accounts | $ | 66,714 | $ | 65,604 | $ | 59,918 | |||||
Savings deposits | 4,651 | 4,668 | 4,854 | ||||||||
Certificates of deposit ($100,000 or more) | 6,598 | 7,194 | 7,913 | ||||||||
Other time deposits | 5,054 | 5,300 | 5,332 | ||||||||
Total interest-bearing deposits | 83,017 | 82,766 | 78,017 | ||||||||
Noninterest-bearing deposits | 28,853 | 28,883 | 29,292 | ||||||||
Total deposits | 111,870 | 111,649 | 107,309 | ||||||||
Federal funds purchased and securities sold under repurchase agreements | 387 | 182 | 319 | ||||||||
Bank notes and other short-term borrowings | 705 | 700 | 544 | ||||||||
Accrued expense and other liabilities | 2,540 | 2,574 | 2,113 | ||||||||
Long-term debt | 12,448 | 14,470 | 13,732 | ||||||||
Total liabilities | 127,950 | 129,575 | 124,017 | ||||||||
Equity | |||||||||||
Preferred stock | 1,900 | 1,900 | 1,450 | ||||||||
Common shares | 1,257 | 1,257 | 1,257 | ||||||||
Capital surplus | 6,295 | 6,287 | 6,331 | ||||||||
Retained earnings | 12,469 | 12,209 | 11,556 | ||||||||
Treasury stock, at cost | (4,909 | ) | (4,696 | ) | (4,181 | ) | |||||
Accumulated other comprehensive income (loss) | 26 | 159 | (818 | ) | |||||||
Key shareholders’ equity | 17,038 | 17,116 | 15,595 | ||||||||
Noncontrolling interests | — | — | 1 | ||||||||
Total equity | 17,038 | 17,116 | 15,596 | ||||||||
Total liabilities and equity | $ | 144,988 | $ | 146,691 | $ | 139,613 | |||||
Common shares outstanding (000) | 977,189 | 988,538 | 1,019,503 |
Consolidated Statements of Income | ||||||||||||||||||
(dollars in millions, except per share amounts) | ||||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||||
Interest income | ||||||||||||||||||
Loans | $ | 1,046 | $ | 1,073 | $ | 1,058 | $ | 4,267 | $ | 4,023 | ||||||||
Loans held for sale | 17 | 18 | 26 | 63 | 66 | |||||||||||||
Securities available for sale | 137 | 136 | 115 | 537 | 409 | |||||||||||||
Held-to-maturity securities | 63 | 64 | 71 | 262 | 284 | |||||||||||||
Trading account assets | 8 | 7 | 8 | 32 | 29 | |||||||||||||
Short-term investments | 12 | 16 | 15 | 61 | 46 | |||||||||||||
Other investments | 2 | 3 | 4 | 13 | 21 | |||||||||||||
Total interest income | 1,285 | 1,317 | 1,297 | 5,235 | 4,878 | |||||||||||||
Interest expense | ||||||||||||||||||
Deposits | 201 | 227 | 174 | 853 | 517 | |||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 1 | — | 1 | 2 | 11 | |||||||||||||
Bank notes and other short-term borrowings | 4 | 4 | 4 | 17 | 21 | |||||||||||||
Long-term debt | 100 | 114 | 118 | 454 | 420 | |||||||||||||
Total interest expense | 306 | 345 | 297 | 1,326 | 969 | |||||||||||||
Net interest income | 979 | 972 | 1,000 | 3,909 | 3,909 | |||||||||||||
Provision for credit losses | 109 | 200 | 59 | 445 | 246 | |||||||||||||
Net interest income after provision for credit losses | 870 | 772 | 941 | 3,464 | 3,663 | |||||||||||||
Noninterest income | ||||||||||||||||||
Trust and investment services income | 120 | 118 | 121 | 475 | 499 | |||||||||||||
Investment banking and debt placement fees | 181 | 176 | 186 | 630 | 650 | |||||||||||||
Service charges on deposit accounts | 86 | 86 | 84 | 337 | 349 | |||||||||||||
Operating lease income and other leasing gains | 39 | 42 | 28 | 162 | 89 | |||||||||||||
Corporate services income | 65 | 63 | 58 | 236 | 233 | |||||||||||||
Cards and payments income | 67 | 69 | 68 | 275 | 270 | |||||||||||||
Corporate-owned life insurance income | 39 | 32 | 39 | 136 | 137 | |||||||||||||
Consumer mortgage income | 14 | 14 | 7 | 46 | 30 | |||||||||||||
Mortgage servicing fees | 26 | 23 | 21 | 94 | 82 | |||||||||||||
Other income (a) | 14 | 27 | 33 | 68 | 176 | |||||||||||||
Total noninterest income | 651 | 650 | 645 | 2,459 | 2,515 | |||||||||||||
Noninterest expense | ||||||||||||||||||
Personnel | 551 | 547 | 576 | 2,250 | 2,309 | |||||||||||||
Net occupancy | 76 | 72 | 75 | 293 | 308 | |||||||||||||
Computer processing | 51 | 53 | 55 | 214 | 210 | |||||||||||||
Business services and professional fees | 54 | 43 | 49 | 186 | 184 | |||||||||||||
Equipment | 25 | 27 | 26 | 100 | 105 | |||||||||||||
Operating lease expense | 32 | 33 | 32 | 123 | 120 | |||||||||||||
Marketing | 27 | 26 | 25 | 96 | 102 | |||||||||||||
FDIC assessment | 8 | 7 | 9 | 31 | 72 | |||||||||||||
Intangible asset amortization | 19 | 26 | 22 | 89 | 99 | |||||||||||||
OREO expense, net | 3 | 3 | 1 | 13 | 6 | |||||||||||||
Other expense | 134 | 102 | 142 | 506 | 460 | |||||||||||||
Total noninterest expense | 980 | 939 | 1,012 | 3,901 | 3,975 | |||||||||||||
Income (loss) from continuing operations before income taxes | 541 | 483 | 574 | 2,022 | 2,203 | |||||||||||||
Income taxes | 75 | 70 | 92 | 314 | 344 | |||||||||||||
Income (loss) from continuing operations | 466 | 413 | 482 | 1,708 | 1,859 | |||||||||||||
Income (loss) from discontinued operations, net of taxes | 3 | 3 | 2 | 9 | 7 | |||||||||||||
Net income (loss) | 469 | 416 | 484 | 1,717 | 1,866 | |||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | — | — | — | — | — | |||||||||||||
Net income (loss) attributable to Key | $ | 469 | $ | 416 | $ | 484 | $ | 1,717 | $ | 1,866 | ||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | 439 | $ | 383 | $ | 459 | $ | 1,611 | $ | 1,793 | ||||||||
Net income (loss) attributable to Key common shareholders | 442 | 386 | 461 | 1,620 | 1,800 | |||||||||||||
Per common share | ||||||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .45 | $ | .39 | $ | .45 | $ | 1.62 | $ | 1.72 | ||||||||
Income (loss) from discontinued operations, net of taxes | — | — | — | .01 | .01 | |||||||||||||
Net income (loss) attributable to Key common shareholders (b) | .45 | .39 | .45 | 1.63 | 1.73 | |||||||||||||
Per common share — assuming dilution | ||||||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .45 | $ | .38 | $ | .45 | $ | 1.61 | $ | 1.70 | ||||||||
Income (loss) from discontinued operations, net of taxes | — | — | — | .01 | .01 | |||||||||||||
Net income (loss) attributable to Key common shareholders (b) | .45 | .39 | .45 | 1.62 | 1.71 | |||||||||||||
Cash dividends declared per common share | $ | .185 | $ | .185 | $ | .17 | $ | .710 | $ | .565 | ||||||||
Weighted-average common shares outstanding (000) | 973,450 | 988,319 | 1,018,614 | 992,091 | 1,040,890 | |||||||||||||
Effect of common share options and other stock awards | 10,911 | 10,009 | 11,803 | 10,163 | 13,792 | |||||||||||||
Weighted-average common shares and potential common shares outstanding (000) (c) | 984,361 | 998,328 | 1,030,417 | 1,002,254 | 1,054,682 |
(a) | For the three and twelve months ended December 31, 2019, net securities gains (losses) totaled $5 million and $20 million, respectively. For the three months ended September 30, 2019, net securities gains (losses) totaled $15 million. For the three and twelve months ended December 31, 2018, net securities gains (losses) totaled less than $1 million. For the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, and the twelve months ended December 31, 2019 and December 31, 2018, Key did not have any impairment losses related to securities. |
(b) | Earnings per share may not foot due to rounding. |
(c) | Assumes conversion of common share options and other stock awards, as applicable. |
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations | |||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||
Fourth Quarter 2019 | Third Quarter 2019 | Fourth Quarter 2018 | |||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||
Balance | Interest (a) | Rate (a) | Balance | Interest (a) | Rate (a) | Balance | Interest (a) | Rate (a) | |||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Loans: (b), (c) | |||||||||||||||||||||||||||
Commercial and industrial (d) | $ | 48,345 | $ | 522 | 4.28 | % | $ | 48,322 | $ | 543 | 4.46 | % | $ | 45,129 | $ | 512 | 4.51 | % | |||||||||
Real estate — commercial mortgage | 13,335 | 159 | 4.71 | 13,056 | 163 | 4.95 | 14,656 | 185 | 5.03 | ||||||||||||||||||
Real estate — construction | 1,495 | 18 | 4.87 | 1,463 | 19 | 5.22 | 1,761 | 23 | 5.26 | ||||||||||||||||||
Commercial lease financing | 4,482 | 39 | 3.52 | 4,497 | 42 | 3.68 | 4,482 | 43 | 3.79 | ||||||||||||||||||
Total commercial loans | 67,657 | 738 | 4.33 | 67,338 | 767 | 4.52 | 66,028 | 763 | 4.59 | ||||||||||||||||||
Real estate — residential mortgage | 6,777 | 65 | 3.83 | 6,256 | 62 | 3.97 | 5,496 | 54 | 3.97 | ||||||||||||||||||
Home equity loans | 10,362 | 122 | 4.69 | 10,488 | 132 | 4.97 | 11,234 | 141 | 4.96 | ||||||||||||||||||
Consumer direct loans | 3,125 | 51 | 6.45 | 2,548 | 45 | 6.99 | 1,806 | 36 | 7.87 | ||||||||||||||||||
Credit cards | 1,103 | 32 | 11.38 | 1,100 | 32 | 11.59 | 1,112 | 33 | 11.61 | ||||||||||||||||||
Consumer indirect loans | 4,583 | 46 | 3.99 | 4,226 | 43 | 4.10 | 3,612 | 39 | 4.28 | ||||||||||||||||||
Total consumer loans | 25,950 | 316 | 4.84 | 24,618 | 314 | 5.07 | 23,260 | 303 | 5.16 | ||||||||||||||||||
Total loans | 93,607 | 1,054 | 4.47 | 91,956 | 1,081 | 4.67 | 89,288 | 1,066 | 4.74 | ||||||||||||||||||
Loans held for sale | 1,653 | 17 | 4.11 | 1,558 | 18 | 4.65 | 2,319 | 26 | 4.50 | ||||||||||||||||||
Securities available for sale (b), (e) | 22,262 | 137 | 2.49 | 21,867 | 136 | 2.52 | 18,626 | 115 | 2.38 | ||||||||||||||||||
Held-to-maturity securities (b) | 10,264 | 63 | 2.43 | 10,684 | 64 | 2.41 | 11,683 | 71 | 2.42 | ||||||||||||||||||
Trading account assets | 1,103 | 8 | 3.08 | 884 | 7 | 3.00 | 934 | 8 | 3.42 | ||||||||||||||||||
Short-term investments | 2,716 | 12 | 1.73 | 2,861 | 16 | 2.19 | 2,795 | 15 | 2.12 | ||||||||||||||||||
Other investments (e) | 603 | 2 | 1.82 | 624 | 3 | 1.82 | 671 | 4 | 2.86 | ||||||||||||||||||
Total earning assets | 132,208 | 1,293 | 3.90 | 130,434 | 1,325 | 4.05 | 126,316 | 1,305 | 4.09 | ||||||||||||||||||
Allowance for loan and lease losses | (882 | ) | (881 | ) | (878 | ) | |||||||||||||||||||||
Accrued income and other assets | 14,402 | 14,605 | 13,743 | ||||||||||||||||||||||||
Discontinued assets | 908 | 957 | 1,120 | ||||||||||||||||||||||||
Total assets | $ | 146,636 | $ | 145,115 | $ | 140,301 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||
NOW and money market deposit accounts | $ | 66,412 | 135 | .81 | $ | 64,595 | 154 | .94 | $ | 59,292 | 110 | .74 | |||||||||||||||
Savings deposits | 4,660 | 1 | .07 | 4,709 | 1 | .10 | 4,915 | 1 | .08 | ||||||||||||||||||
Certificates of deposit ($100,000 or more) | 6,899 | 40 | 2.31 | 7,625 | 45 | 2.37 | 8,217 | 42 | 2.02 | ||||||||||||||||||
Other time deposits | 5,187 | 25 | 1.92 | 5,449 | 27 | 1.96 | 5,255 | 21 | 1.59 | ||||||||||||||||||
Total interest-bearing deposits | 83,158 | 201 | .96 | 82,378 | 227 | 1.09 | 77,679 | 174 | .89 | ||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 267 | 1 | .75 | 187 | — | .50 | 281 | 1 | .12 | ||||||||||||||||||
Bank notes and other short-term borrowings | 801 | 4 | 2.02 | 626 | 4 | 2.04 | 618 | 4 | 3.05 | ||||||||||||||||||
Long-term debt (f), (g) | 12,531 | 100 | 3.22 | 13,347 | 114 | 3.51 | 12,963 | 118 | 3.58 | ||||||||||||||||||
Total interest-bearing liabilities | 96,757 | 306 | 1.25 | 96,538 | 345 | 1.42 | 91,541 | 297 | 1.28 | ||||||||||||||||||
Noninterest-bearing deposits | 29,446 | 27,901 | 30,273 | ||||||||||||||||||||||||
Accrued expense and other liabilities | 2,347 | 2,605 | 1,981 | ||||||||||||||||||||||||
Discontinued liabilities (g) | 908 | 957 | 1,120 | ||||||||||||||||||||||||
Total liabilities | 129,458 | 128,001 | 124,915 | ||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||
Key shareholders’ equity | 17,178 | 17,113 | 15,384 | ||||||||||||||||||||||||
Noncontrolling interests | — | 1 | 2 | ||||||||||||||||||||||||
Total equity | 17,178 | 17,114 | 15,386 | ||||||||||||||||||||||||
Total liabilities and equity | $ | 146,636 | $ | 145,115 | $ | 140,301 | |||||||||||||||||||||
Interest rate spread (TE) | 2.65 | % | 2.63 | % | 2.81 | % | |||||||||||||||||||||
Net interest income (TE) and net interest margin (TE) | 987 | 2.98 | % | 980 | 3.00 | % | 1,008 | 3.16 | % | ||||||||||||||||||
TE adjustment (b) | 8 | 8 | 8 | ||||||||||||||||||||||||
Net interest income, GAAP basis | $ | 979 | $ | 972 | $ | 1,000 |
(a) | Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology. |
(b) | Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018. |
(c) | For purposes of these computations, nonaccrual loans are included in average loan balances. |
(d) | Commercial and industrial average balances include $146 million, $144 million, and $132 million of assets from commercial credit cards for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
(e) | Yield is calculated on the basis of amortized cost. |
(f) | Rate calculation excludes basis adjustments related to fair value hedges. |
(g) | A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key’s matched funds transfer pricing methodology to discontinued operations. |
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations | ||||||||||||||||||
(dollars in millions) | ||||||||||||||||||
Twelve months ended December 31, 2019 | Twelve months ended December 31, 2018 | |||||||||||||||||
Average | Yield/ | Average | Yield/ | |||||||||||||||
Balance | Interest (a) | Rate (a) | Balance | Interest (a) | Rate (a) | |||||||||||||
Assets | ||||||||||||||||||
Loans: (b), (c) | ||||||||||||||||||
Commercial and industrial (d) | $ | 47,482 | $ | 2,144 | 4.51 | % | $ | 44,418 | $ | 1,926 | 4.34 | % | ||||||
Real estate — commercial mortgage | 13,641 | 676 | 4.95 | 14,267 | 698 | 4.90 | ||||||||||||
Real estate — construction | 1,485 | 78 | 5.24 | 1,816 | 90 | 4.97 | ||||||||||||
Commercial lease financing | 4,488 | 163 | 3.63 | 4,534 | 168 | 3.70 | ||||||||||||
Total commercial loans | 67,096 | 3,061 | 4.56 | 65,035 | 2,882 | 4.43 | ||||||||||||
Real estate — residential mortgage | 6,095 | 241 | 3.95 | 5,473 | 217 | 3.97 | ||||||||||||
Home equity loans | 10,634 | 526 | 4.95 | 11,530 | 547 | 4.74 | ||||||||||||
Consumer direct loans | 2,475 | 176 | 7.11 | 1,782 | 137 | 7.66 | ||||||||||||
Credit cards | 1,100 | 127 | 11.51 | 1,092 | 125 | 11.40 | ||||||||||||
Consumer indirect loans | 4,111 | 168 | 4.09 | 3,426 | 146 | 4.27 | ||||||||||||
Total consumer loans | 24,415 | 1,238 | 5.07 | 23,303 | 1,172 | 5.03 | ||||||||||||
Total loans | 91,511 | 4,299 | 4.70 | 88,338 | 4,054 | 4.59 | ||||||||||||
Loans held for sale | 1,411 | 63 | 4.48 | 1,501 | 66 | 4.43 | ||||||||||||
Securities available for sale (b), (e) | 21,362 | 537 | 2.51 | 17,898 | 409 | 2.20 | ||||||||||||
Held-to-maturity securities (b) | 10,841 | 262 | 2.41 | 12,003 | 284 | 2.37 | ||||||||||||
Trading account assets | 1017 | 32 | 3.18 | 893 | 29 | 3.25 | ||||||||||||
Short-term investments | 2,876 | 61 | 2.11 | 2,450 | 46 | 1.86 | ||||||||||||
Other investments (e) | 630 | 13 | 2.09 | 697 | 21 | 3.04 | ||||||||||||
Total earning assets | 129,648 | 5,267 | 4.06 | 123,780 | 4,909 | 3.94 | ||||||||||||
Allowance for loan and lease losses | (880 | ) | (878 | ) | ||||||||||||||
Accrued income and other assets | 14,411 | 13,910 | ||||||||||||||||
Discontinued assets | 984 | 1,212 | ||||||||||||||||
Total assets | $ | 144,163 | $ | 138,024 | ||||||||||||||
Liabilities | ||||||||||||||||||
NOW and money market deposit accounts | $ | 63,731 | 566 | .89 | $ | 56,001 | 297 | .53 | ||||||||||
Savings deposits | 4,740 | 4 | .09 | 5,704 | 14 | .24 | ||||||||||||
Certificates of deposit ($100,000 or more) | 7,757 | 180 | 2.32 | 7,728 | 139 | 1.80 | ||||||||||||
Other time deposits | 5,426 | 103 | 1.90 | 5,025 | 67 | 1.34 | ||||||||||||
Total interest-bearing deposits | 81,654 | 853 | 1.04 | 74,458 | 517 | .69 | ||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 264 | 2 | .66 | 928 | 11 | 1.14 | ||||||||||||
Bank notes and other short-term borrowings | 730 | 17 | 2.31 | 915 | 21 | 2.34 | ||||||||||||
Long-term debt (f), (g) | 13,062 | 454 | 3.52 | 12,715 | 420 | 3.27 | ||||||||||||
Total interest-bearing liabilities | 95,710 | 1,326 | 1.39 | 89,016 | 969 | 1.09 | ||||||||||||
Noninterest-bearing deposits | 28,376 | 30,593 | ||||||||||||||||
Accrued expense and other liabilities | 2,456 | 2,071 | ||||||||||||||||
Discontinued liabilities (g) | 984 | 1,212 | ||||||||||||||||
Total liabilities | 127,526 | 122,892 | ||||||||||||||||
Equity | ||||||||||||||||||
Key shareholders’ equity | 16,636 | 15,131 | ||||||||||||||||
Noncontrolling interests | 1 | 1 | ||||||||||||||||
Total equity | 16,637 | 15,132 | ||||||||||||||||
Total liabilities and equity | $ | 144,163 | $ | 138,024 | ||||||||||||||
Interest rate spread (TE) | 2.67 | % | 2.85 | % | ||||||||||||||
Net interest income (TE) and net interest margin (TE) | 3,941 | 3.04 | % | 3,940 | 3.17 | % | ||||||||||||
TE adjustment (b) | 32 | 31 | ||||||||||||||||
Net interest income, GAAP basis | $ | 3,909 | $ | 3,909 |
(a) | Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology. |
(b) | Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% and 35% for the twelve months ended December 31, 2019, and December 31, 2018, respectively. |
(c) | For purposes of these computations, nonaccrual loans are included in average loan balances. |
(d) | Commercial and industrial average balances include $141 million and $126 million of assets from commercial credit cards for the twelve months ended December 31, 2019, and December 31, 2018, respectively. |
(e) | Yield is calculated on the basis of amortized cost. |
(f) | Rate calculation excludes basis adjustments related to fair value hedges. |
(g) | A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key’s matched funds transfer pricing methodology to discontinued operations. |
Noninterest Expense | ||||||||||||||||
(dollars in millions) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||
Personnel (a) | $ | 551 | $ | 547 | $ | 576 | $ | 2,250 | $ | 2,309 | ||||||
Net occupancy | 76 | 72 | 75 | 293 | 308 | |||||||||||
Computer processing | 51 | 53 | 55 | 214 | 210 | |||||||||||
Business services and professional fees | 54 | 43 | 49 | 186 | 184 | |||||||||||
Equipment | 25 | 27 | 26 | 100 | 105 | |||||||||||
Operating lease expense | 32 | 33 | 32 | 123 | 120 | |||||||||||
Marketing | 27 | 26 | 25 | 96 | 102 | |||||||||||
FDIC assessment | 8 | 7 | 9 | 31 | 72 | |||||||||||
Intangible asset amortization | 19 | 26 | 22 | 89 | 99 | |||||||||||
OREO expense, net | 3 | 3 | 1 | 13 | 6 | |||||||||||
Other expense | 134 | 102 | 142 | 506 | 460 | |||||||||||
Total noninterest expense | $ | 980 | $ | 939 | $ | 1,012 | $ | 3,901 | $ | 3,975 | ||||||
Average full-time equivalent employees (b) | 16,537 | 16,898 | 17,664 | 17,045 | 18,180 |
(a) | Additional detail provided in Personnel Expense table below. |
(b) | The number of average full-time equivalent employees has not been adjusted for discontinued operations. |
Personnel Expense | ||||||||||||||||
(in millions) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||
Salaries and contract labor | $ | 312 | $ | 314 | $ | 336 | $ | 1,268 | $ | 1,351 | ||||||
Incentive and stock-based compensation | 154 | 143 | 139 | 584 | 569 | |||||||||||
Employee benefits | 85 | 87 | 77 | 348 | 343 | |||||||||||
Severance | — | 3 | 24 | 50 | 46 | |||||||||||
Total personnel expense | $ | 551 | $ | 547 | $ | 576 | $ | 2,250 | $ | 2,309 |
Loan Composition | ||||||||||||||
(dollars in millions) | ||||||||||||||
Percent change 12/31/2019 vs | ||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 9/30/2019 | 12/31/2018 | ||||||||||
Commercial and industrial (a) | $ | 48,295 | $ | 48,362 | $ | 45,753 | (.1 | )% | 5.6 | % | ||||
Commercial real estate: | ||||||||||||||
Commercial mortgage | 13,491 | 13,167 | 14,285 | 2.5 | (5.6 | ) | ||||||||
Construction | 1,558 | 1,480 | 1,666 | 5.3 | (6.5 | ) | ||||||||
Total commercial real estate loans | 15,049 | 14,647 | 15,951 | 2.7 | (5.7 | ) | ||||||||
Commercial lease financing (b) | 4,688 | 4,470 | 4,606 | 4.9 | 1.8 | |||||||||
Total commercial loans | 68,032 | 67,479 | 66,310 | .8 | 2.6 | |||||||||
Residential — prime loans: | ||||||||||||||
Real estate — residential mortgage | 7,023 | 6,527 | 5,513 | 7.6 | 27.4 | |||||||||
Home equity loans | 10,274 | 10,456 | 11,142 | (1.7 | ) | (7.8 | ) | |||||||
Total residential — prime loans | 17,297 | 16,983 | 16,655 | 1.8 | 3.9 | |||||||||
Consumer direct loans | 3,513 | 2,789 | 1,809 | 26.0 | 94.2 | |||||||||
Credit cards | 1,130 | 1,105 | 1,144 | 2.3 | (1.2 | ) | ||||||||
Consumer indirect loans | 4,674 | 4,404 | 3,634 | 6.1 | 28.6 | |||||||||
Total consumer loans | 26,614 | 25,281 | 23,242 | 5.3 | 14.5 | |||||||||
Total loans (c) | $ | 94,646 | $ | 92,760 | $ | 89,552 | 2.0 | % | 5.7 | % |
(a) | Loan balances include $144 million, $147 million, and $132 million of commercial credit card balances at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
(b) | Commercial lease financing includes receivables held as collateral for a secured borrowing of $15 million, $10 million, and $10 million at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. Principal reductions are based on the cash payments received from these related receivables. |
(c) | Total loans exclude loans of $865 million at December 31, 2019, $915 million at September 30, 2019, and $1.1 billion at December 31, 2018, related to the discontinued operations of the education lending business. |
Loans Held for Sale Composition | ||||||||||||||
(dollars in millions) | ||||||||||||||
Percent change 12/31/2019 vs | ||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 9/30/2019 | 12/31/2018 | ||||||||||
Commercial and industrial | $ | 367 | $ | 195 | $ | 279 | 88.2 | % | 31.5 | % | ||||
Real estate — commercial mortgage | 772 | 1,123 | 894 | (31.3 | ) | (13.6 | ) | |||||||
Commercial lease financing | 2 | 100 | — | (98.0 | ) | N/M | ||||||||
Real estate — residential mortgage | 140 | 120 | 54 | 16.7 | 159.3 | |||||||||
Consumer direct loans | 53 | 60 | — | (11.7 | ) | N/M | ||||||||
Total loans held for sale (a) | $ | 1,334 | $ | 1,598 | $ | 1,227 | (16.5 | )% | 8.7 | % |
(a) | Total loans held for sale include Real estate — residential mortgage loans held for sale at fair value of $140 million at December 31, 2019, $120 million at September 30, 2019, and $54 million at December 31, 2018. |
Summary of Changes in Loans Held for Sale | |||||||||||||||
(in millions) | |||||||||||||||
4Q19 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | |||||||||||
Balance at beginning of period | $ | 1,598 | $ | 1,790 | $ | 894 | $ | 1,227 | $ | 1,618 | |||||
New originations | 3,659 | 3,222 | 3,218 | 1,676 | 5,057 | ||||||||||
Transfers from (to) held to maturity, net | 26 | 237 | 42 | 6 | 24 | ||||||||||
Loan sales | (3,933 | ) | (3,602 | ) | (2,358 | ) | (2,017 | ) | (5,448 | ) | |||||
Loan draws (payments), net | (18 | ) | (49 | ) | (6 | ) | 2 | (24 | ) | ||||||
Valuation adjustments | 2 | — | — | — | — | ||||||||||
Balance at end of period (a) | $ | 1,334 | $ | 1,598 | $ | 1,790 | $ | 894 | $ | 1,227 |
(a) | Total loans held for sale include Real estate — residential mortgage loans held for sale at fair value of $140 million at December 31, 2019, $120 million at September 30, 2019, $164 million at June 30, 2019, $71 million at March 31, 2019, and $54 million at December 31, 2018. |
Summary of Loan and Lease Loss Experience From Continuing Operations | ||||||||||||||||
(dollars in millions) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||
Average loans outstanding | $ | 93,607 | $ | 91,956 | $ | 89,288 | $ | 91,511 | $ | 88,338 | ||||||
Allowance for loan and lease losses at beginning of period | $ | 893 | $ | 890 | $ | 887 | $ | 883 | $ | 877 | ||||||
Loans charged off: | ||||||||||||||||
Commercial and industrial | 77 | 176 | 45 | 319 | 159 | |||||||||||
Real estate — commercial mortgage | 2 | — | 12 | 8 | 21 | |||||||||||
Real estate — construction | 1 | — | — | 5 | — | |||||||||||
Total commercial real estate loans | 3 | — | 12 | 13 | 21 | |||||||||||
Commercial lease financing | 1 | 1 | 1 | 26 | 10 | |||||||||||
Total commercial loans | 81 | 177 | 58 | 358 | 190 | |||||||||||
Real estate — residential mortgage | — | 1 | — | 3 | 3 | |||||||||||
Home equity loans | 3 | 6 | 7 | 19 | 21 | |||||||||||
Consumer direct loans | 11 | 10 | 9 | 41 | 36 | |||||||||||
Credit cards | 10 | 11 | 10 | 44 | 44 | |||||||||||
Consumer indirect loans | 10 | 8 | 8 | 34 | 30 | |||||||||||
Total consumer loans | 34 | 36 | 34 | 141 | 134 | |||||||||||
Total loans charged off | 115 | 213 | 92 | 499 | 324 | |||||||||||
Recoveries: | ||||||||||||||||
Commercial and industrial | 5 | 6 | 19 | 27 | 37 | |||||||||||
Real estate — commercial mortgage | — | — | 1 | 2 | 3 | |||||||||||
Real estate — construction | — | — | 1 | — | 2 | |||||||||||
Total commercial real estate loans | — | — | 2 | 2 | 5 | |||||||||||
Commercial lease financing | 1 | 1 | 1 | 5 | 5 | |||||||||||
Total commercial loans | 6 | 7 | 22 | 34 | 47 | |||||||||||
Real estate — residential mortgage | 1 | — | — | 2 | 2 | |||||||||||
Home equity loans | 2 | 2 | 2 | 8 | 11 | |||||||||||
Consumer direct loans | 2 | 2 | 2 | 7 | 7 | |||||||||||
Credit cards | 1 | 2 | 2 | 7 | 7 | |||||||||||
Consumer indirect loans | 4 | 4 | 4 | 17 | 16 | |||||||||||
Total consumer loans | 10 | 10 | 10 | 41 | 43 | |||||||||||
Total recoveries | 16 | 17 | 32 | 75 | 90 | |||||||||||
Net loan charge-offs | (99 | ) | (196 | ) | (60 | ) | (424 | ) | (234 | ) | ||||||
Provision (credit) for loan and lease losses | 106 | 199 | 56 | 441 | 240 | |||||||||||
Allowance for loan and lease losses at end of period | $ | 900 | $ | 893 | $ | 883 | $ | 900 | $ | 883 | ||||||
Liability for credit losses on lending-related commitments at beginning of period | $ | 65 | $ | 64 | $ | 60 | $ | 64 | $ | 57 | ||||||
Provision (credit) for losses on lending-related commitments | 3 | 1 | 3 | 4 | 6 | |||||||||||
Liability for credit losses on lending-related commitments at end of period (a) | $ | 68 | $ | 65 | $ | 63 | $ | 68 | $ | 63 | ||||||
Total allowance for credit losses at end of period | $ | 968 | $ | 958 | $ | 946 | $ | 968 | $ | 946 | ||||||
Net loan charge-offs to average total loans | .42 | % | .85 | % | .27 | % | .46 | % | .26 | % | ||||||
Allowance for loan and lease losses to period-end loans | .95 | .96 | .99 | .95 | .99 | |||||||||||
Allowance for credit losses to period-end loans | 1.02 | 1.03 | 1.06 | 1.02 | 1.06 | |||||||||||
Allowance for loan and lease losses to nonperforming loans | 156.0 | 152.6 | 162.9 | 156.0 | 162.9 | |||||||||||
Allowance for credit losses to nonperforming loans | 167.8 | 163.8 | 174.5 | 167.8 | 174.5 | |||||||||||
Discontinued operations — education lending business: | ||||||||||||||||
Loans charged off | $ | 3 | $ | 1 | $ | 4 | $ | 12 | $ | 15 | ||||||
Recoveries | 2 | 1 | 1 | 5 | 5 | |||||||||||
Net loan charge-offs | $ | (1 | ) | — | $ | (3 | ) | $ | (7 | ) | $ | (10 | ) |
(a) | Included in "Accrued expense and other liabilities" on the balance sheet. |
Asset Quality Statistics From Continuing Operations | |||||||||||||||
(dollars in millions) | |||||||||||||||
4Q19 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | |||||||||||
Net loan charge-offs | $ | 99 | $ | 196 | $ | 65 | $ | 64 | $ | 60 | |||||
Net loan charge-offs to average total loans | .42 | % | .85 | % | .29 | % | .29 | % | .27 | % | |||||
Allowance for loan and lease losses | $ | 900 | $ | 893 | $ | 890 | $ | 883 | $ | 883 | |||||
Allowance for credit losses (a) | 968 | 958 | 954 | 945 | 946 | ||||||||||
Allowance for loan and lease losses to period-end loans | .95 | % | .96 | % | .97 | % | .98 | % | .99 | % | |||||
Allowance for credit losses to period-end loans | 1.02 | 1.03 | 1.04 | 1.05 | 1.06 | ||||||||||
Allowance for loan and lease losses to nonperforming loans (b) | 156.0 | 152.6 | 158.6 | 161.1 | 162.9 | ||||||||||
Allowance for credit losses to nonperforming loans (b) | 167.8 | 163.8 | 170.1 | 172.4 | 174.5 | ||||||||||
Nonperforming loans at period end (b) | $ | 577 | $ | 585 | $ | 561 | $ | 548 | $ | 542 | |||||
Nonperforming assets at period end (b) | 715 | 711 | 608 | 597 | 577 | ||||||||||
Nonperforming loans to period-end portfolio loans (b) | .61 | % | .63 | % | .61 | % | .61 | % | .61 | % | |||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (b) | .75 | .77 | .66 | .66 | .64 |
(a) | Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related unfunded commitments. |
(b) | Nonperforming loan balances exclude $446 million, $497 million, $518 million, $551 million, and $575 million of purchased credit impaired loans at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. |
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations | |||||||||||||||
(dollars in millions) | |||||||||||||||
12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | |||||||||||
Commercial and industrial | $ | 264 | $ | 238 | $ | 189 | $ | 170 | $ | 152 | |||||
Real estate — commercial mortgage | 83 | 92 | 85 | 82 | 81 | ||||||||||
Real estate — construction | 2 | 2 | 2 | 2 | 2 | ||||||||||
Total commercial real estate loans | 85 | 94 | 87 | 84 | 83 | ||||||||||
Commercial lease financing | 6 | 7 | 7 | 9 | 9 | ||||||||||
Total commercial loans | 355 | 339 | 283 | 263 | 244 | ||||||||||
Real estate — residential mortgage | 48 | 42 | 62 | 64 | 62 | ||||||||||
Home equity loans | 145 | 179 | 191 | 195 | 210 | ||||||||||
Consumer direct loans | 4 | 3 | 3 | 3 | 4 | ||||||||||
Credit cards | 3 | 2 | 2 | 3 | 2 | ||||||||||
Consumer indirect loans | 22 | 20 | 20 | 20 | 20 | ||||||||||
Total consumer loans | 222 | 246 | 278 | 285 | 298 | ||||||||||
Total nonperforming loans (a) | 577 | 585 | 561 | 548 | 542 | ||||||||||
OREO | 35 | 39 | 38 | 40 | 35 | ||||||||||
Nonperforming loans held for sale | 94 | 78 | — | — | — | ||||||||||
Other nonperforming assets | 9 | 9 | 9 | 9 | — | ||||||||||
Total nonperforming assets (a) | $ | 715 | $ | 711 | $ | 608 | $ | 597 | $ | 577 | |||||
Accruing loans past due 90 days or more | 101 | 54 | 74 | 118 | 112 | ||||||||||
Accruing loans past due 30 through 89 days | 389 | 366 | 299 | 290 | 312 | ||||||||||
Restructured loans — accruing and nonaccruing (b) | 347 | 347 | 395 | 365 | 399 | ||||||||||
Restructured loans included in nonperforming loans (b) | 183 | 176 | 228 | 198 | 247 | ||||||||||
Nonperforming assets from discontinued operations — education lending business | 7 | 7 | 7 | 7 | 8 | ||||||||||
Nonperforming loans to period-end portfolio loans (a) | .61 | % | .63 | % | .61 | % | .61 | % | .61 | % | |||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (a) | .75 | .77 | .66 | .66 | .64 |
(a) | Nonperforming loan balances exclude $446 million, $497 million, $518 million, $551 million, and $575 million of purchased credit impaired loans at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. |
(b) | Restructured loans (i.e., troubled debt restructuring) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance. |
Summary of Changes in Nonperforming Loans From Continuing Operations | |||||||||||||||
(in millions) | |||||||||||||||
4Q19 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | |||||||||||
Balance at beginning of period | $ | 585 | $ | 561 | $ | 548 | $ | 542 | $ | 645 | |||||
Loans placed on nonaccrual status | 268 | 271 | 189 | 196 | 103 | ||||||||||
Charge-offs | (114 | ) | (91 | ) | (84 | ) | (91 | ) | (92 | ) | |||||
Loans sold | (1 | ) | — | (38 | ) | (18 | ) | (16 | ) | ||||||
Payments | (59 | ) | (37 | ) | (23 | ) | (22 | ) | (53 | ) | |||||
Transfers to OREO | (3 | ) | (4 | ) | (4 | ) | (8 | ) | (10 | ) | |||||
Transfers to nonperforming loans held for sale | (47 | ) | (78 | ) | — | — | — | ||||||||
Transfers to other nonperforming assets | — | — | — | (13 | ) | — | |||||||||
Loans returned to accrual status | (52 | ) | (37 | ) | (27 | ) | (38 | ) | (35 | ) | |||||
Balance at end of period (a) | $ | 577 | $ | 585 | $ | 561 | $ | 548 | $ | 542 |
(a) | Nonperforming loan balances exclude $446 million, $497 million, $518 million, $551 million, and $575 million of purchased credit impaired loans at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. |
Line of Business Results | ||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Percentage change 4Q19 vs. | ||||||||||||||||||||
4Q19 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q19 | 4Q18 | ||||||||||||||
Consumer Bank | ||||||||||||||||||||
Summary of operations | ||||||||||||||||||||
Total revenue (TE) | $ | 825 | $ | 833 | $ | 825 | $ | 805 | $ | 829 | (1.0 | )% | (.5 | )% | ||||||
Provision for credit losses | 55 | 48 | 40 | 45 | 43 | 14.6 | 27.9 | |||||||||||||
Noninterest expense | 552 | 531 | 552 | 540 | 554 | 4.0 | (.4 | ) | ||||||||||||
Net income (loss) attributable to Key | 166 | 194 | 177 | 168 | 177 | (14.4 | ) | (6.2 | ) | |||||||||||
Average loans and leases | 34,148 | 32,760 | 31,881 | 31,321 | 31,241 | 4.2 | 9.3 | |||||||||||||
Average deposits | 73,561 | 72,995 | 72,303 | 71,288 | 70,426 | .8 | 4.5 | |||||||||||||
Net loan charge-offs | 43 | 40 | 40 | 34 | 40 | 7.5 | 7.5 | |||||||||||||
Net loan charge-offs to average total loans | .50 | % | .48 | % | .50 | % | .44 | % | .51 | % | N/A | N/A | ||||||||
Nonperforming assets at period end | $ | 306 | $ | 354 | $ | 366 | $ | 365 | $ | 364 | (13.6 | ) | (15.9 | ) | ||||||
Return on average allocated equity | 19.27 | % | 22.82 | % | 21.75 | % | 21.27 | % | 21.51 | % | N/A | N/A | ||||||||
Commercial Bank | ||||||||||||||||||||
Summary of operations | ||||||||||||||||||||
Total revenue (TE) | $ | 771 | $ | 779 | $ | 760 | $ | 702 | $ | 771 | (1.0 | )% | — | % | ||||||
Provision for credit losses | 38 | 32 | 33 | 16 | 17 | 18.8 | 123.5 | |||||||||||||
Noninterest expense | 388 | 372 | 389 | 373 | 401 | 4.3 | (3.2 | ) | ||||||||||||
Net income (loss) attributable to Key | 315 | 304 | 277 | 250 | 302 | 3.6 | 4.3 | |||||||||||||
Average loans and leases | 58,535 | 58,215 | 57,918 | 57,267 | 56,884 | .5 | 2.9 | |||||||||||||
Average loans held for sale | 1,465 | 1,325 | 1,168 | 1,066 | 2,250 | 10.6 | (34.9 | ) | ||||||||||||
Average deposits | 38,224 | 36,204 | 35,960 | 34,417 | 35,113 | 5.6 | 8.9 | |||||||||||||
Net loan charge-offs | 39 | 35 | 23 | 30 | 19 | 11.4 | 105.3 | |||||||||||||
Net loan charge-offs to average total loans | .26 | % | .24 | % | .16 | % | .21 | % | .13 | % | N/A | N/A | ||||||||
Nonperforming assets at period end | $ | 402 | $ | 351 | $ | 235 | $ | 225 | $ | 205 | 14.5 | 96.1 | ||||||||
Return on average allocated equity | 26.69 | % | 26.37 | % | 24.09 | % | 22.60 | % | 26.64 | % | N/A | N/A |
Notable Items | ||||||||||||||||
(in millions) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||
Provision for credit losses | $ | (16 | ) | $ | (123 | ) | — | $ | (139 | ) | — | |||||
Professional fees related to fraud loss | (4 | ) | — | — | (4 | ) | — | |||||||||
Efficiency initiative expenses | — | — | $ | (24 | ) | (76 | ) | $ | (24 | ) | ||||||
Laurel Road acquisition expenses | — | — | — | (2 | ) | — | ||||||||||
Pension settlement charge | (18 | ) | — | (17 | ) | (18 | ) | (17 | ) | |||||||
Total notable items | $ | (38 | ) | $ | (123 | ) | $ | (41 | ) | $ | (239 | ) | $ | (41 | ) | |
Income taxes | (9 | ) | (29 | ) | (10 | ) | (56 | ) | (10 | ) | ||||||
Total notable items, after tax | $ | (29 | ) | $ | (94 | ) | $ | (31 | ) | $ | (183 | ) | $ | (31 | ) |
Consolidated Balance Sheets | |||||||||||
(dollars in millions) | |||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | |||||||||
Assets | |||||||||||
Loans | $ | 94,646 | $ | 92,760 | $ | 89,552 | |||||
Loans held for sale | 1,334 | 1,598 | 1,227 | ||||||||
Securities available for sale | 21,843 | 22,378 | 19,428 | ||||||||
Held-to-maturity securities | 10,067 | 10,490 | 11,519 | ||||||||
Trading account assets | 1,040 | 963 | 849 | ||||||||
Short-term investments | 1,272 | 3,351 | 2,562 | ||||||||
Other investments | 605 | 620 | 666 | ||||||||
Total earning assets | 130,807 | 132,160 | 125,803 | ||||||||
Allowance for loan and lease losses | (900 | ) | (893 | ) | (883 | ) | |||||
Cash and due from banks | 732 | 636 | 678 | ||||||||
Premises and equipment | 814 | 815 | 882 | ||||||||
Goodwill | 2,664 | 2,664 | 2,516 | ||||||||
Other intangible assets | 253 | 272 | 316 | ||||||||
Corporate-owned life insurance | 4,233 | 4,216 | 4,171 | ||||||||
Accrued income and other assets | 5,494 | 5,881 | 5,030 | ||||||||
Discontinued assets | 891 | 940 | 1,100 | ||||||||
Total assets | $ | 144,988 | $ | 146,691 | $ | 139,613 | |||||
Liabilities | |||||||||||
Deposits in domestic offices: | |||||||||||
NOW and money market deposit accounts | $ | 66,714 | $ | 65,604 | $ | 59,918 | |||||
Savings deposits | 4,651 | 4,668 | 4,854 | ||||||||
Certificates of deposit ($100,000 or more) | 6,598 | 7,194 | 7,913 | ||||||||
Other time deposits | 5,054 | 5,300 | 5,332 | ||||||||
Total interest-bearing deposits | 83,017 | 82,766 | 78,017 | ||||||||
Noninterest-bearing deposits | 28,853 | 28,883 | 29,292 | ||||||||
Total deposits | 111,870 | 111,649 | 107,309 | ||||||||
Federal funds purchased and securities sold under repurchase agreements | 387 | 182 | 319 | ||||||||
Bank notes and other short-term borrowings | 705 | 700 | 544 | ||||||||
Accrued expense and other liabilities | 2,540 | 2,574 | 2,113 | ||||||||
Long-term debt | 12,448 | 14,470 | 13,732 | ||||||||
Total liabilities | 127,950 | 129,575 | 124,017 | ||||||||
Equity | |||||||||||
Preferred stock | 1,900 | 1,900 | 1,450 | ||||||||
Common shares | 1,257 | 1,257 | 1,257 | ||||||||
Capital surplus | 6,295 | 6,287 | 6,331 | ||||||||
Retained earnings | 12,469 | 12,209 | 11,556 | ||||||||
Treasury stock, at cost | (4,909 | ) | (4,696 | ) | (4,181 | ) | |||||
Accumulated other comprehensive income (loss) | 26 | 159 | (818 | ) | |||||||
Key shareholders’ equity | 17,038 | 17,116 | 15,595 | ||||||||
Noncontrolling interests | — | — | 1 | ||||||||
Total equity | 17,038 | 17,116 | 15,596 | ||||||||
Total liabilities and equity | $ | 144,988 | $ | 146,691 | $ | 139,613 | |||||
Common shares outstanding (000) | 977,189 | 988,538 | 1,019,503 |
Consolidated Statements of Income | ||||||||||||||||||
(dollars in millions, except per share amounts) | ||||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||
12/31/2019 | 9/30/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 | ||||||||||||||
Interest income | ||||||||||||||||||
Loans | $ | 1,046 | $ | 1,073 | $ | 1,058 | $ | 4,267 | $ | 4,023 | ||||||||
Loans held for sale | 17 | 18 | 26 | 63 | 66 | |||||||||||||
Securities available for sale | 137 | 136 | 115 | 537 | 409 | |||||||||||||
Held-to-maturity securities | 63 | 64 | 71 | 262 | 284 | |||||||||||||
Trading account assets | 8 | 7 | 8 | 32 | 29 | |||||||||||||
Short-term investments | 12 | 16 | 15 | 61 | 46 | |||||||||||||
Other investments | 2 | 3 | 4 | 13 | 21 | |||||||||||||
Total interest income | 1,285 | 1,317 | 1,297 | 5,235 | 4,878 | |||||||||||||
Interest expense | ||||||||||||||||||
Deposits | 201 | 227 | 174 | 853 | 517 | |||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 1 | — | 1 | 2 | 11 | |||||||||||||
Bank notes and other short-term borrowings | 4 | 4 | 4 | 17 | 21 | |||||||||||||
Long-term debt | 100 | 114 | 118 | 454 | 420 | |||||||||||||
Total interest expense | 306 | 345 | 297 | 1,326 | 969 | |||||||||||||
Net interest income | 979 | 972 | 1,000 | 3,909 | 3,909 | |||||||||||||
Provision for credit losses | 109 | 200 | 59 | 445 | 246 | |||||||||||||
Net interest income after provision for credit losses | 870 | 772 | 941 | 3,464 | 3,663 | |||||||||||||
Noninterest income | ||||||||||||||||||
Trust and investment services income | 120 | 118 | 121 | 475 | 499 | |||||||||||||
Investment banking and debt placement fees | 181 | 176 | 186 | 630 | 650 | |||||||||||||
Service charges on deposit accounts | 86 | 86 | 84 | 337 | 349 | |||||||||||||
Operating lease income and other leasing gains | 39 | 42 | 28 | 162 | 89 | |||||||||||||
Corporate services income | 65 | 63 | 58 | 236 | 233 | |||||||||||||
Cards and payments income | 67 | 69 | 68 | 275 | 270 | |||||||||||||
Corporate-owned life insurance income | 39 | 32 | 39 | 136 | 137 | |||||||||||||
Consumer mortgage income | 14 | 14 | 7 | 46 | 30 | |||||||||||||
Mortgage servicing fees | 26 | 23 | 21 | 94 | 82 | |||||||||||||
Other income (a) | 14 | 27 | 33 | 68 | 176 | |||||||||||||
Total noninterest income | 651 | 650 | 645 | 2,459 | 2,515 | |||||||||||||
Noninterest expense | ||||||||||||||||||
Personnel | 551 | 547 | 576 | 2,250 | 2,309 | |||||||||||||
Net occupancy | 76 | 72 | 75 | 293 | 308 | |||||||||||||
Computer processing | 51 | 53 | 55 | 214 | 210 | |||||||||||||
Business services and professional fees | 54 | 43 | 49 | 186 | 184 | |||||||||||||
Equipment | 25 | 27 | 26 | 100 | 105 | |||||||||||||
Operating lease expense | 32 | 33 | 32 | 123 | 120 | |||||||||||||
Marketing | 27 | 26 | 25 | 96 | 102 | |||||||||||||
FDIC assessment | 8 | 7 | 9 | 31 | 72 | |||||||||||||
Intangible asset amortization | 19 | 26 | 22 | 89 | 99 | |||||||||||||
OREO expense, net | 3 | 3 | 1 | 13 | 6 | |||||||||||||
Other expense | 134 | 102 | 142 | 506 | 460 | |||||||||||||
Total noninterest expense | 980 | 939 | 1,012 | 3,901 | 3,975 | |||||||||||||
Income (loss) from continuing operations before income taxes | 541 | 483 | 574 | 2,022 | 2,203 | |||||||||||||
Income taxes | 75 | 70 | 92 | 314 | 344 | |||||||||||||
Income (loss) from continuing operations | 466 | 413 | 482 | 1,708 | 1,859 | |||||||||||||
Income (loss) from discontinued operations, net of taxes | 3 | 3 | 2 | 9 | 7 | |||||||||||||
Net income (loss) | 469 | 416 | 484 | 1,717 | 1,866 | |||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | — | — | — | — | — | |||||||||||||
Net income (loss) attributable to Key | $ | 469 | $ | 416 | $ | 484 | $ | 1,717 | $ | 1,866 | ||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | 439 | $ | 383 | $ | 459 | $ | 1,611 | $ | 1,793 | ||||||||
Net income (loss) attributable to Key common shareholders | 442 | 386 | 461 | 1,620 | 1,800 | |||||||||||||
Per common share | ||||||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .45 | $ | .39 | $ | .45 | $ | 1.62 | $ | 1.72 | ||||||||
Income (loss) from discontinued operations, net of taxes | — | — | — | .01 | .01 | |||||||||||||
Net income (loss) attributable to Key common shareholders (b) | .45 | .39 | .45 | 1.63 | 1.73 | |||||||||||||
Per common share — assuming dilution | ||||||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .45 | $ | .38 | $ | .45 | $ | 1.61 | $ | 1.70 | ||||||||
Income (loss) from discontinued operations, net of taxes | — | — | — | .01 | .01 | |||||||||||||
Net income (loss) attributable to Key common shareholders (b) | .45 | .39 | .45 | 1.62 | 1.71 | |||||||||||||
Cash dividends declared per common share | $ | .185 | $ | .185 | $ | .17 | $ | .71 | $ | .565 | ||||||||
Weighted-average common shares outstanding (000) | 973,450 | 988,319 | 1,018,614 | 992,091 | 1,040,890 | |||||||||||||
Effect of common share options and other stock awards | 10,911 | 10,009 | 11,803 | 10,163 | 13,792 | |||||||||||||
Weighted-average common shares and potential common shares outstanding (000) (c) | 984,361 | 998,328 | 1,030,417 | 1,002,254 | 1,054,682 | |||||||||||||
(a) | For the three and twelve months ended December 31, 2019, net securities gains (losses) totaled $5 million and $20 million, respectively. For the three months ended September 30, 2019, net securities gains (losses) totaled $15 million. For the three and twelve months ended December 31, 2018, net securities gains (losses) totaled less than $1 million. For the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, and the twelve months ended December 31, 2019 and December 31, 2018, Key did not have any impairment losses related to securities. |
(b) | Earnings per share may not foot due to rounding. |
(c) | Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable. |
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