-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MWRxDqXHlTiu0UR+QSSCLOqr1AdLral+s2TD4pg95pa0gmKcG96GA/R4Ep2uoX/4 OO78dBfmj+vH5u5Mhce0Gw== 0000091576-96-000007.txt : 19961021 0000091576-96-000007.hdr.sgml : 19961021 ACCESSION NUMBER: 0000091576-96-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961017 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961018 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEYCORP /NEW/ CENTRAL INDEX KEY: 0000091576 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 346542451 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11302 FILM NUMBER: 96645010 BUSINESS ADDRESS: STREET 1: 127 PUBLIC SQ CITY: CLEVELAND STATE: OH ZIP: 44114-1306 BUSINESS PHONE: 2166893000 MAIL ADDRESS: STREET 1: 127 PUBLIC SQ CITY: CLEVELAND STATE: OH ZIP: 44114-1306 FORMER COMPANY: FORMER CONFORMED NAME: SOCIETY CORP DATE OF NAME CHANGE: 19920703 8-K 1 KEYCORP FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15d of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 17, 1996 [KEYCORP LOGO APPEARS HERE] KEYCORP ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 0-850 63-0593897 ----------------- --------------- ------------------- (State or other Commission File (I.R.S. Employer jurisdiction of Number Identification No.) incorporation or organization) 127 Public Square, Cleveland, Ohio 44114-1306 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (216) 689-6300 Item 5. OTHER EVENTS ------------ On October 17, 1996, the Registrant issued a press release announcing its earnings results for the three month period and nine month period ended September 30, 1996. This press release is attached as Exhibit 99 to this report and incorporated herein by reference. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS ----------------------------------------------------------------- (C) Exhibits -------- 99. The Registrant's October 17, 1996, press release announcing its earnings results for the three month period and nine month period ended September 30, 1996. 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 thereunto duly authorized. KEYCORP ------------- (Registrant) Date: October 17, 1996 /s/ Lee Irving ----------------- By: Lee Irving Executive Vice President and Chief Accounting Officer EX-99 2 EXHIBIT 99 KEYCORP EARNINGS RELEASE [KEY LOGO APPEARS HERE] NEWS KEYCORP 127 Public Square Cleveland, Ohio, 44114-1306 MEDIA CONTACTS: ANALYSTS CONTACTS: John Fuller (216) 689-8140 Jay S. Gould (216) 689-4721 Bill Murschel (216) 689-0457 Laurie E. Counsel (216) 689-4911 WEB SITE: http://www.keybank.com FOR IMMEDIATE RELEASE KEYCORP REPORTS THIRD QUARTER 1996 RESULTS ------------------------------------------ * EPS OF $0.95, EXCLUDING ONE-TIME SAIF ASSESSMENT, UP FROM $0.90 LAST YEAR * 5 MILLION COMMON SHARES REPURCHASED DURING THE QUARTER CLEVELAND, October 17, 1996 -- KeyCorp (NYSE: KEY) today reported earnings of $218 million, or $0.95 per common share, for the 1996 third quarter excluding a one-time charge of $17 million ($11 million after-tax, or $0.05 per common share) to provide for an assessment mandated by legislation passed by Congress on September 30, 1996 to recapitalize the Savings Association Insurance Fund (SAIF). Including the SAIF assessment, 1996 third quarter earnings were $207 million, or $0.90 per common share. Earnings in the year-ago quarter were $209 million, or $0.90 per common share, and were $217 million, or $0.92 per common share, in the 1996 second quarter. Robert W. Gillespie, KeyCorp chairman and chief executive officer, said, "Results for the third quarter were in line with our expectations and represented another quarter of improved earnings. Earnings per common share, after adjusting for the SAIF assessment, were up 6 percent from the year-ago quarter and 3 percent from the 1996 second quarter. Revenue was up 8 percent from a year ago, reflecting a 3 percent increase in net interest income resulting from the positive impact of strong growth in KeyCorp's targeted loan portfolios and a 32 basis point improvement in the net interest margin, as well as increases in fee income. Excluding the impact of the SAIF assessment in the current quarter, expenses increased 7 percent from last year's third quarter due primarily to acquisitions and increases in personnel and marketing expenses associated KEYCORP EARNINGS OCTOBER 17, 1996 PAGE 2 with significant strategic investments made in our major lines of business. We anticipate that the 1996 fourth quarter's noninterest expense will be appreciably lower than the comparable expenses for the quarter just ended." Gillespie continued, "The implementation of our strategic plan is running ahead of schedule. As a result, we have expanded our focus on significantly improving the expense efficiency ratio, with a target of achieving a 55 percent efficiency ratio by around the end of next year, and further improvement thereafter. In order to reach that target, we have initiated a comprehensive review of our branch delivery system and overall cost structure." K. Brent Somers, KeyCorp senior executive vice president and chief financial officer, said, "During the quarter, we continued our program of aggressive balance sheet and capital management. Through the first nine months of 1996, we reduced assets by $1.0 billion and repurchased 10 million shares of KeyCorp common stock, including 5 million shares during the third quarter. We expect that by year-end we will have completed the repurchase of the 12 million shares authorized for 1996. Third quarter return on average total assets was 1.28 percent, up from 1.25 percent in the year-ago quarter, although down from 1.35 percent in the 1996 second quarter. Return on average total equity for the third quarter was 16.73 percent compared with 17.79 percent in the prior-year quarter and 16.93 percent in the previous quarter." Net interest income for the 1996 third quarter totaled $683 million, up $17 million, or 3 percent, from the year-ago quarter. This increase reflected a 32 basis point improvement in the net interest margin to 4.82 percent, which was partially offset by a managed reduction of $2.9 billion, or 5 percent, in average earning assets. The net interest margin increase was attributable to wider loan spreads, in part as a result of the securitization and sale of selected assets, and the reinvestment of funds from sold and maturing securities into higher yielding loans. Compared with the 1996 second quarter, net interest income was little changed, reflecting a 2 basis point improvement in the net interest margin, which was largely offset by a managed reduction of $439 million, or one percent, in average earning assets. On September 27, 1996, student loans totaling $357 million were sold, representing a portion of a third quarter $711 million securitization. The remaining KEYCORP EARNINGS OCTOBER 17, 1996 PAGE 3 $354 million of this securitization was sold on October 15, 1996. This compares with a $724 million student loan securitization and sale during the 1995 fourth quarter. Average targeted loans, which exclude single family mortgages that are being managed down, increased $1.0 billion during the third quarter. This represented an annualized growth rate of 10 percent from the second quarter, comparable to the 9 percent and 11 percent annualized growth rates in the 1996 first and second quarters, respectively. Compared with the year-ago quarter, and excluding the impact of securitizations and sales, average total loans increased $2.8 billion, or 6 percent. Noninterest income for the 1996 third quarter totaled $289 million, up $54 million, or 23 percent, from the year-ago quarter. The primary contributors to the year-over-year increase were a $15 million increase in loan securitization income, resulting largely from the third quarter sale of student loans, and a $34 million increase in other income. This latter increase reflected a number of items, including $14 million in venture capital gains and an $11 million gain on the sale of a $101 million out-of-franchise credit card portfolio. Also contributing to the favorable comparison with the year-ago quarter were insurance and brokerage income (up 6 percent), trust and asset management income (up 5 percent), and increases in service charges on deposit accounts and credit card fees (both up 4 percent). Compared with the 1996 second quarter, noninterest income was up $25 million, reflecting the venture capital and credit card portfolio gains, as well as higher loan securitization income, service charges on deposit accounts, and insurance and brokerage income. Noninterest expense for the 1996 third quarter totaled $615 million, up $54 million, or 10 percent, from the year-ago quarter. Excluding the impact of the one-time SAIF assessment in the current quarter, noninterest expense was up $37 million, or 7 percent. This increase reflected a $22 million increase in personnel expense and an $11 million increase in marketing expense. These increases were primarily due to the impact of acquisitions and costs associated with the implementation of strategic initiatives, including developing brand recognition and other marketing activities. Marketing expenses are expected to be lower in the fourth quarter. Asset quality in the 1996 third quarter remained strong and relatively stable in comparison with second quarter levels. Nonperforming assets ended the third quarter at $396 million, or 0.82 percent of loans plus other real estate owned and other KEYCORP EARNINGS OCTOBER 17, 1996 PAGE 4 nonperforming assets, compared with $371 million, or 0.77 percent, for the previous quarter. Net loan charge-offs for the 1996 third quarter totaled $49 million, or 0.41 percent of average loans, up slightly from $46 million, or 0.38 percent, in the 1996 second quarter. The provision for loan losses for the 1996 third quarter was $49 million and matched the quarter's net loan charge-offs. The allowance for loan losses as a percent of period-end loans was 1.80 percent, with the nonperforming loan coverage ratio at 253 percent, both little changed from September 30, 1995. At September 30, 1996, KeyCorp's assets totaled $65.4 billion and shareholders' equity totaled $5.0 billion. The Tier 1 Capital ratio was estimated at 7.35 percent and the Total Capital ratio was estimated at 12.28 percent. # # # KEYCORP REPORTS THIRD QUARTER 1996 EARNINGS OCTOBER 17, 1996 PAGE 5 FINANCIAL HIGHLIGHTS (dollars in millions, except per share amounts)
Three months ended ------------------------------- 9-30-96 6-30-96 9-30-95 --------- --------- --------- Summary of operations Net interest income (TE) $696 $694 $680 Provision for loan losses 49 47 27 Noninterest income 289 264 235 Noninterest expense 615 579 561 Net income 207 217 209 Per Common Share Net income $ .90 $ .92 $ .90 Cash dividends .38 .38 .36 Book value at period-end 21.91 21.63 20.74 Market price at period-end 44.00 38.75 34.25 At period-end Full-time equivalent employees 28,337 28,319 29,560 Full-service banking offices 1,218 1,239 1,301 Performance ratios Return on average total assets 1.28% 1.35% 1.25% Return on average common equity 16.73 17.15 18.07 Return on average total equity 16.73 16.93 17.79 Efficiency (1) 60.71 60.50 61.27 Overhead (2) 44.40 45.53 47.89 Net interest margin (TE) 4.82 4.80 4.50 Capital ratios at period-end Equity to assets 7.61% 7.71% 7.48% Tangible equity to tangible assets 6.20 6.27 5.98 Tier 1 risk-adjusted capital (3) 7.35 7.60 7.55 Total risk-adjusted capital (3) 12.28 11.72 10.84 Leverage (3) 6.39 6.43 6.19 (1) Calculated as noninterest expense (excluding certain nonrecurring charges) divided by taxable - equivalent net interest income plus noninterest income (excluding net securities transactions. (2) Calculated as noninterest expense (excluding certain nonrecurring charges) less noninterest income (excluding net securities transactions) divided by taxable - equivalent net interest income. (3) 9-30-96 ratio is estimated. TE = Taxable Equivalent
KEYCORP REPORTS THIRD QUARTER 1996 EARNINGS OCTOBER 17, 1996 PAGE 6 Financial Highlights (dollars in millions, except per share amounts)
Three months ended ------------------------------- 9-30-96 6-30-96 9-30-95 --------- --------- --------- Asset quality Net loan charge-offs $49 $46 $27 Net loan charge-offs to average loans .41% .38% .23% Allowance for loan losses $870 $870 $879 Allowance for loan losses to period-end loans 1.80% 1.82% 1.82% Allowance for loan losses to nonperforming loans 252.91 266.87 280.53 Nonperforming loans at period-end $344 $326 $313 Nonperforming assets at period-end 396 371 367 Nonperforming loans to period-end loans .71% .68% .65% Nonperforming assets to period-end loans plus OREO and other nonperforming assets .82 .77 .76
Nine months ended -------------------- 9-30-96 9-30-95 --------- --------- Summary of operations Net interest income (TE) $2,072 $2,020 Provision for loan losses 140 66 Noninterest income 802 629 Noninterest expense 1,764 1,690 Income before extraordinary item 632 582 Net income 632 618 Per Common Share Income before extraordinary item $2.70 $2.44 Net income 2.70 2.59 Cash dividends 1.14 1.08 Performance ratios Return on average total assets 1.30% 1.24% Return on average common equity 16.76 17.72 Return on average total equity 16.62 17.46 Efficiency (1) 60.81 62.79 Overhead (2) 45.66 50.43 Net interest margin (TE) 4.78 4.46 Asset quality Net loan charge-offs $138 $65 Net loan charge-offs to average loans .38% .18%
KEYCORP REPORTS THIRD QUARTER 1996 EARNING OCTOBER 17, 1996 PAGE 7 Consolidated Balance Sheets (dollars in millions)
9-30-96 6-30-96 9-30-95 Assets --------- --------- --------- Loans $48,291 $47,826 $48,410 Mortgage loans held for sale 82 102 659 Investment securities 1,653 1,714 9,660 Securities available for sale 7,113 7,251 1,596 Short-term investments 501 511 522 --------- --------- --------- Total earnings assets 57,640 57,404 60,847 Allowance for loan losses (870) (870) (879) Cash and due from banks 3,110 3,061 3,344 Premises and equipment 1,052 1,032 1,023 Goodwill 838 844 907 Other intangible assets 144 154 174 Corporate owned life insurance 1,301 1,192 839 Other assets 2,141 1,947 1,712 --------- --------- --------- Total assets $65,356 $64,764 $67,967 ========= ========= ========= Liabilities Deposits in domestic offices: Noninterest-bearing $ 9,032 $ 8,877 $ 8,611 Interest-bearing 34,608 34,448 37,279 Deposits in foreign offices- interest-bearing 883 1,092 2,015 --------- --------- --------- Total deposits 44,523 44,417 47,905 Federal funds purchased and securities sold under repurchase agreements 5,592 6,171 5,908 Other short-term borrowings 3,861 3,408 3,633 Other liabilities 1,740 1,598 1,390 Long-term debt 4,664 4,174 4,048 --------- --------- --------- Total liabilities 60,380 59,768 62,884 Shareholders' equity Preferred stock -- -- 160 Common equity 4,976 4,996 4,923 --------- --------- --------- Total shareholders' equity 4,976 4,996 5,083 --------- --------- --------- Total liabilities and shareholders' equity $65,356 $64,764 $67,967 ========= ========= ========= Common Shares outstanding (000) 227,062 230,979 237,389
KEYCORP REPORTS THIRD QUARTER 1996 EARNINGS OCTOBER 17, 1996 PAGE 8 Consolidated Statements of Income (dollars in millions, except per share amounts)
Three months ended ------------------------------- 9-30-96 6-30-96 9-30-95 --------- --------- --------- Interest income $1,238 $1,234 $1,299 Interest expense 555 552 633 --------- --------- --------- Net interest income 683 682 666 Provision for loan losses 49 47 27 --------- --------- --------- 634 635 639 Noninterest income Service charges on deposit accounts 74 72 71 Trust and asset management income 61 61 58 Loan securitization income 18 14 3 Credit card fees 24 24 23 Insurance and brokerage income 18 16 17 Mortgage banking income 6 6 9 Net securities gains -- 1 -- Other income 88 70 54 --------- --------- --------- Total noninterest income 289 264 235 Noninterest expense Personnel 300 298 278 Net occupancy 55 54 54 Equipment 41 40 37 FDIC insurance assessments 20 3 1 Amortization of intangibles 21 22 19 Professional fees 18 13 19 Marketing 30 17 19 Other expense 130 132 134 --------- --------- --------- Total noninterest expense 615 579 561 --------- --------- --------- Income before income taxes 308 320 313 Income taxes 101 103 104 --------- --------- --------- Net income $ 207 $ 217 $ 209 ========= ========= ========= Net income applicable to Common Shares $207 $213 $205 Net income per Common Share .90 .92 .90 Wtd. avg. Common Shares outstanding (000) 229,668 231,341 228,187 Taxable-equivalent adjustment $13 $12 $14
KEYCORP REPORTS THIRD QUARTER 1996 EARNINGS OCTOBER 17, 1996 PAGE 9 Consolidated Statements of Income (dollars in millions, except per share amounts)
Nine months ended -------------------- 9-30-96 9-30-95 --------- --------- Interest income $3,708 $3,843 Interest expense 1,674 1,867 --------- --------- Net interest income 2,034 1,976 Provision for loan losses 140 66 --------- --------- 1,894 1,910 Noninterest income Service charges on deposit accounts 218 207 Trust and asset management income 180 170 Loan securitization income 45 9 Credit card fees 68 60 Insurance and brokerage income 52 44 Mortgage banking income 20 34 Net securities gains (losses) 1 (42) Other income 218 147 --------- --------- Total noninterest income 802 629 Noninterest expense Personnel 889 829 Net occupancy 163 160 Equipment 119 116 FDIC insurance assessments 25 52 Amortization of intangibles 65 55 Professional fees 47 49 Marketing 68 52 Other expense 388 377 --------- --------- Total noninterest expense 1,764 1,690 --------- --------- Income before income taxes and extraordinary item 932 849 Income taxes 300 267 --------- --------- Income before extraordinary item 632 582 Extraordinary net gain from the sales of subsidiaries, net of income taxes of $25 -- 36 --------- --------- Net income $ 632 $ 618 ========= ========= Net income applicable to Common Shares $624 $606 Per Common Share: Income before extraordinary item $2.70 $2.44 Net income 2.70 2.59 Wtd. avg. Common Shares outstanding (000) 231,363 234,462 Taxable-equivalent adjustment $38 $44
KEYCORP REPORTS THIRD QUARTER 1996 ARNINGS OCTOBER 17, 1996 PAGE 10 Consolidated Quarterly Average Balance Sheet (in millions)
Three months ended ------------------------------- 9-30-96 6-30-96 9-30-95 --------- --------- --------- Assets Loans $48,017 $48,192 $48,196 Mortgage loans held for sale 86 100 168 Investment securities 1,709 1,673 9,807 Securities available for sale 7,152 7,410 1,457 Short-term investments 463 491 666 --------- --------- --------- Total earning assets 57,427 57,866 60,294 Allowance for loan losses (870) (877) (870) Cash and due from banks 2,622 2,468 2,765 Other assets 5,301 5,166 4,427 --------- --------- --------- Total assets $64,480 $64,623 $66,616 ========= ========= ========= Liabilities Deposits in domestic offices: Noninterest-bearing $ 8,467 $ 8,202 $ 8,157 Interest-bearing 34,518 35,569 37,417 Deposits in foreign offices- interest-bearing 1,189 1,154 1,867 --------- --------- --------- Total deposits 44,174 44,925 47,441 Federal funds purchased and securities sold under repurchase agreements 5,694 5,899 5,672 Other short-term borrowings 3,669 2,922 3,375 Other liabilities 1,661 1,571 1,407 Long-term debt 4,359 4,152 4,046 --------- --------- --------- Total liabilities 59,557 59,469 61,941 Shareholders' equity Preferred stock -- 158 160 Common equity 4,923 4,996 4,515 --------- --------- --------- Total shareholders' equity 4,923 5,154 4,675 --------- --------- --------- Total liabilities and shareholders' equity $64,480 $64,623 $66,616 ========= ========= =========
KEYCORP REPORTS THIRD QUARTER 1996 EARNINGS OCTOBER 17, 1996 PAGE 11 Consolidated Year-to-date Average Balance Sheets (in millions)
Nine months ended -------------------- 9-30-96 9-30-95 --------- --------- Assets Loans $48,003 $47,801 Mortgage loans held for sale 179 202 Investment securities 1,689 10,057 Securities available for sale 7,474 1,501 Short-term investments 487 886 --------- -------- Total earning assets 57,832 60,447 Allowance for loan losses (874) (864) Cash and due from banks 2,584 2,728 Other assets 5,195 4,364 --------- --------- Total assets $64,737 $66,675 ========= ========= Liabilities Deposits in domestic offices: Noninterest-bearing $ 8,293 $ 8,041 Interest-bearing 35,560 37,262 Deposits in foreign offices- interest-bearing 1,064 2,564 --------- --------- Total deposits 44,917 47,867 Federal funds purchased and securities sold under repurchase agreements 5,761 5,404 Other short-term borrowings 3,182 3,454 Other liabilities 1,594 1,371 Long-term debt 4,205 3,846 --------- --------- Total liabilities 59,659 61,942 Shareholders' equity Preferred stock 106 160 Common equity 4,972 4,573 --------- --------- Total shareholders' equity 5,078 4,733 Total liabilities and --------- --------- shareholders' equity $64,737 $66,675 ========= =========
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