0000950152-01-505070.txt : 20011019
0000950152-01-505070.hdr.sgml : 20011019
ACCESSION NUMBER: 0000950152-01-505070
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20011017
ITEM INFORMATION: Other events
ITEM INFORMATION: Financial statements and exhibits
ITEM INFORMATION:
FILED AS OF DATE: 20011017
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: 1760914
BUSINESS ADDRESS:
STREET 1: 127 PUBLIC SQ
CITY: CLEVELAND
STATE: OH
ZIP: 44114-1306
BUSINESS PHONE: 2166896300
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
l90749ae8-k.txt
KEYCORP 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, 2001
[KEYCORP LOGO]
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 0-850 34-6542451
------------------------------- ---------------------- -------------------------------------
(State or other jurisdiction of Commission File Number (I.R.S. Employer 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 AND REGULATION FD DISCLOSURE
On October 17, 2001, the Registrant issued a press release announcing its
earnings results for the three- and nine-month period ended September 30, 2001.
This press release, dated October 17, 2001, is attached as Exhibit 99.1 to this
report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
--------
99.1 The Registrant's October 17, 2001, press release
announcing its earnings results for the three- and
nine-month period ended September 30, 2001.
ITEM 9. REGULATION FD DISCLOSURE
On October 17, 2001, the Registrant conducted a conference call/webcast to
discuss its quarterly earnings and currently anticipated earnings trends. The
slide presentation reviewed by the Registrant in the conference call/webcast
follows as Annex A to this Item 9.
Annex A
THIRD QUARTER 2001 REVIEW
[LOGO]
OCTOBER 17, 2001
2
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
FORWARD-LOOKING STATEMENT DISCLOSURE
The conference call and discussion, including related questions and answers, and
presentation materials, contain forward-looking statements about issues like
anticipated fourth quarter and full-year 2001 earnings, anticipated level of net
loan charge-offs and nonperforming assets and anticipated improvement in
profitability and competitiveness. Forward-looking statements by their nature
are subject to assumptions, risks and uncertainties. Actual results could differ
materially from those contained in or implied by such forward-looking statements
for a variety of factors including: changes in interest rates; continued
weakness in the economy which could materially impact credit quality trends and
the ability to generate loans; failure of the capital markets to function
consistent with customary levels; delay in or inability to execute strategic
initiatives designed to grow revenues and/or manage expenses; consummation of
significant business combinations or divestitures; changes in law imposing new
legal obligations or restrictions or unfavorable resolution of litigation;
disruption in the economy or business operations or activities as a result of
terrorist activities or military actions; and changes in accounting, tax or
regulatory practices or requirements.
[LOGO]
3
THIRD QUARTER REVIEW
- INTRODUCTION B. SOMERS
- OVERVIEW H. MEYER
- FINANCIAL REVIEW L. IRVING
- ASSET QUALITY K. BLAKELY
- WRAP UP / Q&A B. SOMERS
[LOGO]
4
UPDATE ON STRATEGIC INITIATIVES
- ACCELERATED DOWNSIZING OF AUTO BUSINESS
- EXIT NON-RELATIONSHIP CORPORATE LENDING
- DELIVER ON PEG COMMITMENTS
[LOGO]
5
DOWNSIZING AUTO BUSINESS
- DISCONTINUED NEW LEASE ORIGINATIONS
- PORTFOLIO REDUCED FROM $2.8 TO $2.4 BILL.
- INDIRECT PRIME LENDING FOCUSED ON FOOTPRINT
- PORTFOLIO REDUCED FROM $2.6 TO $2.3 BILL.
- MAINTAINED NONPRIME AUTO PORTFOLIO AT LESS THAN $500 MILLION (LESS THAN
1% OF TOTAL LOAN PORTFOLIO)
[LOGO]
6
DELIVERING ON PEG COMMITMENTS
FTE REDUCTIONS
---------------------------
FTE NET REDUCTION: 18%
IN THOUSANDS ---------------------------
[GRAPH]
1998 1999 2000 MAR-01 JUN-01 SEP-01
---- ---- ---- ------ ------ ------
25.9 24.6 22.1 21.9 21.7 21.3
[LOGO]
7
DELIVERING ON PEG COMMITMENTS
PEG Savings- Annual Run Rate
IN MILLIONS
[GRAPH]
1Q01 2Q01 3Q01
---- ---- ----
$40 - $50 $70 - $80 $100 - $110
[LOGO]
8
FINANCIAL HIGHLIGHTS - 3Q01
- $0.58 EPS MEETS CONSENSUS
- NET INTEREST MARGIN INCREASES 8BP
- RECORD NET INTEREST INCOME-UP $11 MM
- CONTINUED WEAKNESS IN MARKET SENSITIVE REVENUE
- STRONG GROWTH IN DEPOSIT SERVICE CHARGES
- CONTINUED EXPENSE REDUCTION
[LOGO]
9
NET INTEREST INCOME & MARGIN (TE)
IN MILLIONS
[GRAPH]
3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
NET INTEREST $691 $709 $695 $719 $730
INCOME
NET INTEREST 3.68% 3.71% 3.63% 3.77% 3.85%
MARGIN
AVG. EARNING $74,709 $76,036 $76,872 $76,546 $75,687
ASSETS
[LOGO]
10
CORE NONINTEREST INCOME
2Q01 VS. 3Q01
IN MILLIONS
Noninterest Income 2Q01 $398
2Q auto lease residual charge not repeated 40
Increase in deposit service charges 17
Increase in net loan sale gains 10
Lower trading/derivative income (11)
Lower investment banking fees ( 7)
All other-net 7
-------
Noninterest Income 3Q01 $454
[LOGO]
11
CORE NONINTEREST EXPENSE
2Q01 VS. 3Q01
IN MILLIONS
Noninterest Expense 2Q01 $686
Lower Personnel Expense (11)
All other-net 8
Noninterest Expense 3Q01 $683
[LOGO]
12
NET CHARGE-OFFS BY LOAN TYPE
-----------
IN MILLIONS
3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
CONTINUING PORTFOLIO
Commercial $60.6 $43.0 $51.0 $39.9 $47.8
Consumer 43.8 64.8 58.2 59.6 68.1
---- ---- ---- ---- ----
104.4 107.8 109.2 99.5 115.9
RUN-OFF PORTFOLIO 71.3 57.0
---- ----
TOTAL NET C/O $104.4 $107.8 $109.2 $170.8 $172.9
-----------
[LOGO]
13
ASSET QUALITY INDICATORS
TOTAL TOTAL CONTINUING CONTINUING
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
2Q01 3Q01 2Q01 3Q01
---- ---- ---- ----
IN MILLIONS
Nonperforming Loans $797 $885 $555 $652
to EOP Loans 1.20% 1.37% 0.85% 1.03%
Nonperforming Assets $823 $913 $581 $680
to EOP Loans + OREO 1.23% 1.41% 0.89% 1.07%
Net C/O $171 $173 $100 $116
to Average Loans 1.02% 1.04% 0.61% 0.71%
Allowance $1,231 $1,174 $1,002 $1,002
to Total Loans 1.85% 1.82% 1.54% 1.58%
to Nonperforming Loans 154% 133% 181% 154%
[LOGO]
14
RUN-OFF PORTFOLIO
IN MILLIONS
5/17/01 6/30/01 9/30/01
------- ------- -------
LOANS OUTSTANDING $1,611 $1,423 $1,176
LOAN COMMITMENTS 2,648 2,393 2,019
ALLOWANCE FOR LOAN LOSSES 300 229 172
NONPERFORMING LOANS 257 242 233
[LOGO]
15
NONPERFORMING LOANS: 3Q01
3Q01 INCREASE IN NPL: $88MM OR 11%
LARGEST NPL: $32MM (HEALTHCARE-CP) NEW
10TH LARGEST: $13MM (KEY CAPITAL PARTNERS- CP)
20TH LARGEST: $ 9MM (STRUCTURED FINANCE-ROP)
CP: CONTINUING PORTFOLIO
ROP: RUN-OFF PORTFOLIO
[LOGO]
16
NONPERFORMING LOANS: 3Q01
Composition of Top 20 NPLs:
in millions
CP ROP TP
-- --- --
Healthcare $100 - $100
Structured Finance 14 $67 81
Middle Market 10 40 50
Commercial Real Estate 19 - 19
Leasing - 15 15
Key Capital Partners 13 - 13
Large Corporate - 10 10
CP: Continuing Portfolio $156M
ROP: Run-off Portfolio 132M
------
TP: Total Portfolio $288M
Top 20 Average Size $14.4M
[LOGO]
17
FOURTH QUARTER 2001 OUTLOOK
(COMPARED WITH 3Q01)
ASSUMPTIONS GDP: DECLINE OF 1-2%
SHORT-TERM INTEREST RATES: DECLINE OF 25- 50 BP
REVENUE FLAT - DEPENDENT UPON GROWTH IN FEE INCOME
- LOAN GROWTH: FLAT TO SLIGHTLY DOWN
- NIM (PLUS OR MINUS) 3.85%
- MODEST FEE GROWTH- DEPENDENT ON MARKET
SENSITIVE REVENUES
EXPENSE FLAT - DEPENDENT UPON GROWTH IN FEE INCOME
CREDIT QUALITY NONPERFORMING ASSETS ARE EXPECTED TO
INCREASE AS ECONOMY WEAKENS. MODEST INCREASE
IN NET CHARGE-OFFS AND LOAN LOSS PROVISION.
EARNINGS EPS RANGE: $0.54 TO $0.60
[LOGO]
18
APPENDIX
[LOGO]
19
LINE OF BUSINESS PERFORMANCE
[GRAPH]
RETAIL BANKING
(A DIVISION OF KEY CONSUMER BANKING)
in millions
3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
REVENUE $356 $341 $339 $341 $361
NET INCOME $79 $72 $74 $73 $88
NONINTEREST INCOME AND EXPENSE ATTRIBUTABLE TO KEY CAPITAL PARTNERS IS ASSIGNED
TO RETAIL BANKING, HOME EQUITY AND CONSUMER FINANCE OR KEY CORPORATE FINANCE IF
ONE OF THOSE BUSINESSES IS PRINCIPALLY RESPONSIBLE FOR MAINTAINING THE
RELATIONSHIP WITH THE CLIENT THAT USED KEY CAPITAL PARTNERS' PRODUCTS AND
SERVICES.
[LOGO]
20
LINE OF BUSINESS PERFORMANCE
HOME EQUITY & CONSUMER FINANCE
(A DIVISION OF KEY CONSUMER BANKING)
[GRAPH]
in millions
3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
REVENUE $136 $146 $147 $146 $154
NET INCOME $16 $17 $19 $17* $19
*EXCLUDES ONE-TIME CHARGE FOR RETAINED INTERESTS IN SECURITIZED ASSETS
NONINTEREST INCOME AND EXPENSE ATTRIBUTABLE TO KEY CAPITAL PARTNERS IS ASSIGNED
TO RETAIL BANKING, HOME EQUITY AND CONSUMER FINANCE OR KEY CORPORATE FINANCE IF
ONE OF THOSE BUSINESSES IS PRINCIPALLY RESPONSIBLE FOR MAINTAINING THE
RELATIONSHIP WITH THE CLIENT THAT USED KEY CAPITAL PARTNERS' PRODUCTS AND
SERVICES.
[LOGO]
21
LINE OF BUSINESS PERFORMANCE
[GRAPH]
KEY CORPORATE FINANCE
in millions
3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
REVENUE $435 $480 $442 $474 $459
NET INCOME $114 $141 $109 $130 $127
NONINTEREST INCOME AND EXPENSE ATTRIBUTABLE TO KEY CAPITAL PARTNERS IS ASSIGNED
TO RETAIL BANKING, HOME EQUITY AND CONSUMER FINANCE OR KEY CORPORATE FINANCE IF
ONE OF THOSE BUSINESSES IS PRINCIPALLY RESPONSIBLE FOR MAINTAINING THE
RELATIONSHIP WITH THE CLIENT THAT USED KEY CAPITAL PARTNERS' PRODUCTS AND
SERVICES.
[LOGO]
22
LINE OF BUSINESS PERFORMANCE
[GRAPH]
KEY CAPITAL PARTNERS
in millions
3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
REVENUE $238 $252 $244 $240 $242
NET INCOME $26 $25 $13 $12 $18
NONINTEREST INCOME AND EXPENSE ATTRIBUTABLE TO KEY CAPITAL PARTNERS IS ASSIGNED
TO RETAIL BANKING, HOME EQUITY AND CONSUMER FINANCE OR KEY CORPORATE FINANCE IF
ONE OF THOSE BUSINESSES IS PRINCIPALLY RESPONSIBLE FOR MAINTAINING THE
RELATIONSHIP WITH THE CLIENT THAT USED KEY CAPITAL PARTNERS' PRODUCTS AND
SERVICES.
[LOGO]
23
NONINTEREST INCOME
---------
IN MILLIONS 3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
RECURRING ITEMS
1. Trust & Invest Services Inc. $148 $150 $141 $132 $140
2. Inv. Banking & Cap. Mkts. Inc. 91 94 65 72 46
3. Service Charges on Deposits 85 85 84 90 107
4. COLI Income 28 31 27 27 28
5. L/C & Loan Fees 26 34 29 30 27
6. Electronic Banking Fees 18 18 17 18 20
7. Other Income 64 96 92 29 86
-- -- -- -- --
CORE NONINTEREST INCOME 460 508 455 398 454
NON-CORE ITEMS (55) - - - -
------ ---- ---- ---- ----
TOTAL NONINTEREST INCOME $405 $508 $455 $398 $454
---------
[LOGO]
24
NONINTEREST EXPENSE
---------
IN MILLIONS 3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
RECURRING ITEMS
1. Personnel $342 $360 $364 $345 $334
2. Net Occupancy & Equipment 96 97 95 96 97
3. Computer Processing 59 62 62 63 62
4. Marketing 29 28 27 29 31
5. Amortization of Intangibles 26 25 26 24 22
6. Professional Fees 18 19 18 19 26
7. Postage & Delivery 15 16 17 16 16
8. Telecommunications 12 12 11 12 10
9. Other Expense 75 89 78 82 85
-- -- -- -- -- --
CORE NONINTEREST EXPENSE 672 708 698 686 683
NON-CORE ITEMS 115 (3) - 172 -
--- -- --- --- ---
TOTAL NONINTEREST EXPENSE $787 $705 $698 $858 $683
---------
[LOGO]
25
STATEMENT OF INCOME-REPORTED
--------
----------
IN MILLIONS, EXCEPT PER SHARE DATA 3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
Net Interest Income (TE) $691 $709 $695 $719 $730
Loan Loss Provision 131 108 110 401 116
Noninterest Income 405 508 455 398 454
Noninterest Expense 787 705 698 858 683
---- ---- ---- ----- ----
178 404 342 (142) 385
Income Taxes & TE adj. 57 138 124 (6) 136
Accounting Change, Net of Tax - - (1) (24) -
---- ---- ---- ----- ----
Net Income $121 $266 $217 $(160) $249
EPS - Assuming Dilution $0.28 $0.62 $0.51 $(0.38) $0.58
Avg. Common Shares O/S
Assuming Dilution 432.0 430.6 429.9 424.7 430.3
----------
[LOGO]
26
SIGNIFICANT NON-CORE ITEMS
----------
IN MILLIONS, EXCEPT PER SHARE DATA 3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
Net Interest Income (TE) - - - - -
Loan Loss Provision $27 $13 - - -
Noninterest Income (55) - - - -
Noninterest Expense 115 (3) - $172 -
--- --- ----
(197) (10) - (172) -
Income Taxes and TE adj. (73) (4) - (8) -
Acct. Change, Net of Tax - - - (24) -
---- ---- ----- ------ -----
Net Loss $(124) $(6) - $(188) -
----------
3Q00 Investment portfolio reconfiguration, additional loan loss provision,
restructuring and other one-time charges
4Q00 Adjustment to loan loss provision (FFIEC), restructuring credit and other
one-time charges
2Q01 Goodwill write-down, additional litigation reserves, restructuring and
other one-time net charges, accounting change for retained interests
[LOGO]
27
STATEMENT OF INCOME-CORE
----
---------
IN MILLIONS, EXCEPT PER SHARE DATA 3Q00 4Q00 1Q01 2Q01 3Q01
---- ---- ---- ---- ----
Net Interest Income (TE) $691 $709 $695 $719 $730
Loan Loss Provision 104 95 110 401 116
Noninterest Income 460 508 455 398 454
Noninterest Expense 672 708 698 686 683
--- --- --- --- ---
375 414 342 30 385
Income Taxes & TE adj. 130 142 124 2 136
Accounting Change, Net of Tax - - (1) - -
--- --- --- --- ---
Net Income $245 $272 $217 $ 28 $249
Avg. Common Shares O/S
Assuming Dilution 432.0 430.6 429.9 424.7 430.3
EPS - Core $0.57 $0.63 $0.51 $0.07 $0.58
---------
[LOGO]
28
ASSET QUALITY INDICATORS
CP: CONTINUING PORTFOLIO
TP: TOTAL PORTFOLIO
CP TP
IN MILLIONS 3Q00 4Q00 1Q01 2Q01 3Q01 3Q01
---- ---- ---- ---- ---- ----
Nonperforming Loans $592 $650 $713 $797 $652 $885
to EOP Loans 0.89% 0.97% 1.06% 1.20% 1.03% 1.37%
Nonperforming Assets $617 $672 $740 $823 $680 $913
to EOP Loans + OREO 0.93% 1.00% 1.10% 1.23% 1.07% 1.41%
Net C/O $104 $95* $109 $171 $116 $173
to Average Loans 0.63% 0.57%* 0.66% 1.02% 0.71% 1.04%
Allowance $1,001 $1,001 $1,001 $1,231 $1,002 $1,174
to Total Loans 1.51% 1.50% 1.49% 1.85% 1.58% 1.82%
to Nonperforming Loans 169% 154% 140% 154% 154% 133%
* EXCLUDES FFIEC AND ONE-TIME ITEMS
[LOGO]
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, 2001 /s/ Lee Irving
-------------------------------------------
By: Lee Irving
Executive Vice President
and Chief Accounting Officer
EX-99.1
3
l90749aex99-1.txt
EXHIBIT 99.1
Exhibit 99.1
MEDIA CONTACT: WILLIAM FULLER ANALYST CONTACT: VERNON L. PATTERSON
216.689.8140 216.689.0520
KEY MEDIA INVESTOR RELATIONS
NEWSROOM: www.Key.com/newsroom INFORMATION: www.Key.com/ir
FOR IMMEDIATE RELEASE
KEYCORP REPORTS THIRD QUARTER 2001 EARNINGS
- CORE EPS OF $0.58
- NET INTEREST MARGIN STRONG
- EXPENSE DISCIPLINE IN PLACE
CLEVELAND, October 17, 2001 - KeyCorp (NYSE: KEY) today announced third quarter
net income of $249 million, or $0.58 per diluted common share on both a core and
reported basis. These results compare with core net income of $245 million, or
$0.57 per share, for the third quarter of 2000.
Third quarter 2001 results are not directly comparable to those
reported for the previous quarter. Last quarter's reported results amounted to a
net loss of $160 million, or $0.38 per share, due to significant charges
recorded in connection with the implementation of strategic actions announced in
May.
"I am encouraged by Key's third quarter performance," said Chairman and
Chief Executive Officer Henry L. Meyer III. "We improved our results despite a
sluggish economy, which weakened further after the events of September 11.
Relative to last quarter, core revenue increased by 5 percent, even though loan
demand fell and softness continued in our market-sensitive businesses. This
growth was driven by an improved net interest margin, which produced record net
interest income. We also began to see an increase in core noninterest income
from the implementation of various revenue-generating ideas associated with PEG,
the corporate-wide competitiveness initiative we announced last fall.
"Moreover, core noninterest expense decreased for the third consecutive
quarter. This disciplined expense management is a direct result of our
competitiveness initiative. The lasting benefits derived from PEG will provide
Key with a competitive advantage in the event of a prolonged economic downturn."
KEYCORP REPORTS THIRD QUARTER 2001 EARNINGS
OCTOBER 17, 2001
PAGE 2
SUMMARY OF CONSOLIDATED RESULTS
Net interest income for the third quarter of 2001 was a record $724
million and represented an $11 million increase from the previous quarter. This
growth resulted from a higher net interest margin, which was largely
attributable to continued improvement in loan spreads and declining short-term
interest rates.
Noninterest income of $454 million for the third quarter of 2001 was
significantly higher than the $398 million earned in the prior quarter.
Excluding the $40 million charge recorded in the second quarter for losses
incurred on the residual values of leased vehicles, noninterest income grew by
$16 million. This improvement was achieved despite the effects of continued
economic weakness on Key's market-sensitive revenues and was largely
attributable to increases in service charges on deposit accounts and net gains
from loan sales and securitizations. Net securitization gains were driven by
Key's annual education loan securitization. The increase in deposit service
charges reflects the implementation of pricing changes made in connection with
Key's competitiveness initiative.
Key's noninterest expense totaled $683 million for the third quarter of
2001, compared with core noninterest expense of $686 million for the prior
quarter. The improvement from the second quarter was driven by reduced personnel
expense, offset in part by higher costs for professional services.
ASSET QUALITY
Key's provision for loan losses was $116 million for the third quarter
of 2001, compared with $401 million for the second quarter. Included in the
second quarter amount is an additional provision recorded in connection with
Key's decision to eliminate nonrelationship lending in the leveraged financing
and nationally syndicated lending businesses. The added provision is being used
to exit and resolve approximately $2.7 billion in related commitments that were
moved to a separate loan run-off portfolio. Approximately $2.0 billion of these
commitments were remaining as of September 30, of which $1.176 billion were
funded. As write-downs on the run-off portfolio occur over time, the related
allowance will not be replenished.
The following table summarizes certain asset quality indicators,
segregated between Key's continuing and run-off loan portfolios.
ASSET QUALITY INDICATORS
Asset Quality Indicators
Continuing Loan Portfolio Run-off Loan Portfolio Total Loan Portfolio
-------------------------- ----------------------------------------------------
dollars in millions 3Q01 2Q01 3Q01 2Q01 3Q01 2Q01
----------------------------------------------------------------------------------------------------------------------------------
Loans outstanding $63,330 $65,270 $1,176 $1,423 $64,506 $66,693
Nonperforming loans at period end 652 555 233 242 885 797
Net loan charge-offs 116 100 57 71 173 171
Net loan charge-offs to average loans .71 % .61 % N/M N/M 1.04 % 1.02 %
Allowance for loan losses $1,002 $1,002 $172 $229 $1,174 $1,231
Allowance for loan losses to period-end loans 1.58 % 1.54 % 14.63 % 16.09 % 1.82 % 1.85 %
----------------------------------------------------------------------------------------------------------------------------------
N/M= Not Meaningful
KEYCORP REPORTS THIRD QUARTER 2001 EARNINGS
OCTOBER 17, 2001
PAGE 3
The level of net loan charge-offs was essentially unchanged from the
prior quarter and included $38 million of charge-offs on shared national
credits. However, nonperforming loans increased by $88 million, reflecting the
impact of continued economic weakness, particularly in the healthcare,
structured finance and consumer portfolios.
CAPITAL
Key's capital ratios continued to exceed all "well-capitalized"
benchmarks at September 30, 2001. During the third quarter, Key repurchased 2.0
million of its common shares under an authorization that allows for the
repurchase of up to 25 million shares. There were 16.8 million shares remaining
for repurchase under this authorization as of September 30, 2001.
LINE OF BUSINESS RESULTS
The following table summarizes the contribution made by each major line
of business to Key's net income (loss) for the periods presented.
NET INCOME (LOSS) BY LINE OF BUSINESS
Percent Change 3Q01 vs.
-----------------------------
dollars in millions 3Q01 2Q01 3Q00 2Q01 3Q00
------------------------------------------------------------------------------------------------------------------------
Key Consumer Banking:
Retail Banking $ 88 $ 73 $ 79 20.5 % 11.4 %
Home Equity and Consumer Finance(a) 19 17 16 11.8 18.8
Key Corporate Finance 127 130 114 (2.3) 11.4
Key Capital Partners(b) 18 12 26 50.0 (30.8)
Treasury and Other 3 (4) (13) N/M N/M
----- ----- ----- ----- -----
Total segments 255 228 222 11.8 14.9
Reconciling items(c) (6) (388) (101)
----- ----- -----
Total net income (loss)(d) $ 249 $(160) $ 121
===== ===== =====
-------------------------------------------------------------------------------------------------------------------------
(a) Second quarter 2001 results exclude a one-time cumulative charge of $39
million ($24 million after tax) resulting from a prescribed change,
applicable to all companies, in the accounting for retained interests in
securitized assets (See note (c) below).
(b) Noninterest income and expense attributable to Key Capital Partners is
assigned to Retail Banking, Home Equity and Consumer Finance or Key
Corporate Finance if one of those businesses is principally responsible for
maintaining the relationship with the client that used Key Capital
Partners' products and services. Key Capital Partners had net income of $27
million in the third quarter of 2001, $22 million in the second quarter of
2001 and $39 million in the third quarter of 2000 before its income and
expense were reassigned.
(c) Reconciling items include certain strategic and nonrecurring items. In the
second quarter of 2001 these items include an additional provision for loan
losses recorded in connection with Key's decision to eliminate
nonrelationship credit-only transactions and the write-down of goodwill
associated with Key's decision to downsize its automobile finance business.
For the third quarter of 2000, reconciling items include an additional
provision for loan losses and nonrecurring charges recorded in connection
with strategic actions being taken to improve Key's operating efficiency
and profitability. Reconciling items also include charges related to
unallocated nonearning assets of corporate support functions and the effect
of the accounting change described in note (a) above.
(d) Key's management accounting system utilizes a methodology for loan loss
provisioning by line of business that reflects credit quality expectations
within each line of business over a normal business cycle. The "normalized
provision for loan losses" assigned to each line as a result of this
methodology does not necessarily coincide with net loan charge-offs at any
given point in the cycle.
N/M = Not Meaningful
KEYCORP REPORTS THIRD QUARTER 2001 EARNINGS
OCTOBER 17, 2001
PAGE 4
KEY CONSUMER BANKING
Retail Banking (a division of Key Consumer Banking)
Net income for Retail Banking was $88 million for the third quarter of
2001, up from $73 million in the previous quarter. The quarter-to-quarter
improvement was attributable to an increase in total revenue, but also
reflected a decrease in noninterest expense.
Noninterest income rose by $22 million from the second quarter of 2001.
This was largely the result of higher income from service charges on deposit
accounts, which resulted from the implementation of new pricing under Key's
competitiveness initiative. Net interest income decreased by $2 million due
primarily to a less favorable interest rate spread on deposits. At the same
time, noninterest expense was down $4 million, reflecting lower costs for
personnel and computer processing.
Home Equity and Consumer Finance (a division of Key Consumer Banking)
Net income for Home Equity and Consumer Finance was $19 million for the
third quarter of 2001. This represents a $2 million increase from the prior
quarter, after excluding a $24 million, one-time, second quarter charge
pertaining to a prescribed change in the accounting for retained interests in
securitized assets. Total revenue rose significantly from the prior quarter,
reflecting increases in both net interest income and noninterest income. These
improvements were substantially offset, however, by a rise in noninterest
expense.
The $5 million improvement in noninterest income was driven by net
gains associated with loan sales and securitizations. Net interest income grew
by $3 million, as a result of improved interest rate spreads. At the same time,
noninterest expense rose by $6 million, reflecting higher costs for marketing
and collections.
KEY CORPORATE FINANCE
Net income for Key Corporate Finance was $127 million for the third
quarter of 2001, down from $130 million in the previous quarter. The decline was
due to lower revenue, partially offset by a reduction in noninterest expense.
Net interest income declined by $2 million from the prior quarter due
to a lower level of average loans. At the same time, noninterest income declined
by $13 million as a significant increase in service charges on deposit accounts
was more than offset by lower income from capital markets activities and a
decrease in net gains from loan sales. The $10 million decline in noninterest
expense reflects lower costs associated with capital markets activities and
collections.
KEY CAPITAL PARTNERS
Net income for Key Capital Partners was $18 million in the third
quarter of 2001, up from $12 million in the second quarter. Prior to assigning
revenue and expense to other business lines whose clients use products and
services offered by Key Capital Partners, net income was $27 million in the
third quarter of 2001, compared with $22 million last quarter.
KEYCORP REPORTS THIRD QUARTER 2001 EARNINGS
OCTOBER 17, 2001
PAGE 5
Total revenue for Key Capital Partners increased by $2 million from the
prior quarter. The improvement was driven by increases in revenue derived from
brokerage and asset management services, and higher net gains from loan sales.
Lower trading volume and losses, as well as decreases in revenue generated by
investment banking services, foreign exchange and derivatives substantially
offset these positive factors. These reductions were due primarily to the
effects of more challenging securities markets and continued weakness in the
overall economy. In addition, management estimates that third quarter revenue
was reduced by approximately $5 million as a result of the temporary closing of
the securities markets in the aftermath of the September 11 events. Noninterest
expense decreased by $8 million from the second quarter, primarily due to lower
personnel costs.
Cleveland-based KeyCorp is one of the nation's largest bank-based
financial services companies, with assets of approximately $84 billion. Key
companies provide investment management, retail and commercial banking,
retirement, consumer finance, and investment banking products and services to
individuals and companies throughout the United States and, for certain
businesses, internationally. The company's businesses deliver their products and
services through KeyCenters and offices; a network of approximately 2,400 ATMs;
telephone banking centers (1.800.KEY2YOU); and a Web site, Key.com(R) that
provides account access and financial products 24 hours a day.
NOTES TO EDITORS:
A live Internet broadcast of KeyCorp's conference call to discuss quarterly
earnings and currently anticipated earnings trends and to answer analysts'
questions can be accessed through the Investor Relations section at
www.Key.com/ir at 10:00 a.m. ET, on Wednesday, October 17, 2001. A tape of the
call will be available until Wednesday, October 24.
For up-to-date company information, media contacts and facts and figures about
Key's lines of business visit our Media Newsroom at www.Key.com/newsroom.
--------------------------------------------------------------------------------
This news release contains forward-looking statements that are subject to
assumptions, risks and uncertainties. Actual results could differ materially
from those contained in or implied by such forward-looking statements for a
variety of factors including: changes in interest rates; continued weakness in
the economy which could materially impact credit quality trends and the ability
to generate loans; failure of the capital markets to function consistent with
customary levels; delay in or inability to execute strategic initiatives
designed to grow revenues and/or manage expenses; consummation of significant
business combinations or divestitures; changes in law imposing new legal
obligations or restrictions or unfavorable resolution of litigation; disruption
in the economy or business operations or activities as a result of terrorist
activities or military actions; and changes in accounting, tax or regulatory
practices or requirements.
--------------------------------------------------------------------------------
###
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 6
FINANCIAL HIGHLIGHTS
(dollars in millions, except per share amounts)
THREE MONTHS ENDED
-----------------------------------------------
9-30-01 6-30-01 9-30-00
----------- ----------- -----------
SUMMARY OF OPERATIONS
Net interest income (taxable equivalent) $ 730 $ 719 $ 691
Noninterest income 454 398 405
----------- ----------- -----------
Total revenue (taxable equivalent) 1,184 1,117 1,096
Provision for loan losses 116 401 131
Noninterest expense 683 858 787
Net income (loss) 249 (160) 121
Net income - core 249 28 245
PER COMMON SHARE
Net income (loss) $ .59 $ (.38) $ .28
Net income - core .59 .07 .57
Net income (loss) - assuming dilution .58 (.38) .28
Net income - assuming dilution - core .58 .07 .57
Cash dividends .295 .295 .28
Book value at period end 15.53 15.02 15.26
Market price at period end 24.14 26.05 25.31
AT PERIOD END
Full-time equivalent employees 21,297 21,742 22,457
Branches 911 926 932
PERFORMANCE RATIOS
Return on average total assets 1.16 % (.75)% .57 %
Return on average total assets - core 1.16 .13 1.16
Return on average equity 15.20 (9.67) 7.39
Return on average equity - core 15.20 1.69 14.97
Net interest margin (taxable equivalent) 3.85 3.77 3.68
CAPITAL RATIOS AT PERIOD END
Equity to assets 7.79 % 7.53 % 7.63 %
Tangible equity to tangible assets 6.51 6.25 6.10
Tier 1 risk-adjusted capital(a) 7.81 7.71 7.59
Total risk-adjusted capital(a) 11.78 11.81 11.34
Leverage(a) 7.92 7.68 7.73
ASSET QUALITY
Net loan charge-offs $ 173 $ 171 $ 104
Net loan charge-offs to average loans 1.04 % 1.02 % .63 %
Allowance for loan losses $ 1,174 $ 1,231 $ 1,001
Allowance for loan losses to period-end loans 1.82 % 1.85 % 1.51 %
Allowance for loan losses to nonperforming loans 132.66 154.45 169.09
Nonperforming loans at period end $ 885 $ 797 $ 592
Nonperforming assets at period end 913 823 617
Nonperforming loans to period-end loans 1.37 % 1.20 % .89 %
Nonperforming assets to period-end loans plus
OREO and other nonperforming assets 1.41 1.23 .93
(a) 9-30-01 ratio is estimated.
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 7
FINANCIAL HIGHLIGHTS
(dollars in millions, except per share amounts)
NINE MONTHS ENDED
---------------------------------
9-30-01 9-30-00
------------- -------------
SUMMARY OF OPERATIONS
Net interest income (taxable equivalent) $ 2,144 $ 2,049
Noninterest income 1,307 1,686
---------- ----------
Total revenue (taxable equivalent) 3,451 3,735
Provision for loan losses 627 382
Noninterest expense 2,239 2,212
Net income 306 736
Net income - core 494 737
PER COMMON SHARE
Net income $ .72 $ 1.69
Net income - core 1.16 1.69
Net income - assuming dilution .71 1.68
Net income - assuming dilution - core 1.15 1.69
Cash dividends .885 .84
PERFORMANCE RATIOS
Return on average total assets .48 % 1.18 %
Return on average total assets - core .77 1.18
Return on average equity 6.21 15.12
Return on average equity - core 10.03 15.15
Net interest margin (taxable equivalent) 3.75 3.68
ASSET QUALITY
Net loan charge-offs $ 453 $ 306
Net loan charge-offs to average loans .91 % .63 %
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 8
LINE OF BUSINESS RESULTS
(dollars in millions)
KEY CONSUMER BANKING
Retail Banking (a division of Key Consumer Banking)
PERCENT CHANGE 3Q01 VS.
-----------------------
3Q01 2Q01 3Q00 2Q01 3Q00
------- ------- ------- ------- -------
SUMMARY OF OPERATIONS
Net interest income (taxable equivalent) $ 233 $ 235 $ 240 (.9)% (2.9)%
Noninterest income 116 93 97 24.7 19.6
Revenue sharing 12 13 19 (7.7) (36.8)
------- ------- ------- ------- -------
Total revenue 361 341 356 5.9 1.4
Provision for loan losses(a) 12 12 12 -- --
Noninterest expense 196 200 202 (2.0) (3.0)
Expense sharing 9 9 13 -- (30.8)
------- ------- ------- ------- -------
Income (loss) before income taxes (taxable equivalent) 144 120 129 20.0 11.6
Allocated income taxes and taxable equivalent adjustments 56 47 50 19.1 12.0
------- ------- ------- ------- -------
Net income (loss) $ 88 $ 73 $ 79 20.5 11.4
======= ======= =======
Percent of consolidated net income 35 % N/M 65 %
Net loan charge-offs(a) $ 15 $ 16 $ 17 (6.3)% (11.8)%
AVERAGE BALANCES
Loans $ 7,735 $ 7,766 $ 7,840 (.4)% (1.3)%
Total assets 9,058 9,153 9,304 (1.0) (2.6)
Deposits 30,892 32,000 32,188 (3.5) (4.0)
OTHER FINANCIAL DATA
Efficiency ratio 46.11 % 49.86 % 49.24 %
Home Equity and Consumer Finance (a division of Key Consumer Banking)
PERCENT CHANGE 3Q01 VS.
-----------------------
3Q01 2Q01 3Q00 2Q01 3Q00
------- ------- ------- ------- -------
SUMMARY OF OPERATIONS
Net interest income (taxable equivalent) $ 150 $ 147 $ 131 2.0 % 14.5 %
Noninterest income 4 (2) 5 N/M (20.0)
Revenue sharing -- 1 -- (100.0) --
------- ------- ------- ------- -------
Total revenue 154 146 136 5.5 13.2
Provision for loan losses(a) 33 33 33 -- --
Noninterest expense 89 83 75 7.2 18.7
Expense sharing -- -- -- -- --
------- ------- ------- ------- -------
Income (loss) before income taxes (taxable equivalent)
and accounting change 32 30 28 6.7 14.3
Allocated income taxes and taxable equivalent adjustments 13 13 12 -- 8.3
------- ------- ------- ------- -------
Income (loss) before accounting change 19 17 16 -- 18.8
Cumulative effect of accounting change -- (24) -- (100.0) --
------- ------- ------- ------- -------
Net income (loss) $ 19 $ (7) $ 16 N/M 18.8
======= ======= =======
Percent of consolidated net income 8 % N/M 12 %
Net loan charge-offs(a) $ 50 $ 57 $ 30 (12.3)% 66.7 %
AVERAGE BALANCES
Loans $15,586 $15,775 $15,084 (1.2)% 3.3 %
Total assets 16,558 16,815 16,206 (1.5) 2.2
Deposits 213 135 164 57.8 29.9
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 9
LINE OF BUSINESS RESULTS (CONTINUED)
(dollars in millions)
KEY CORPORATE FINANCE
PERCENT CHANGE 3Q01 VS.
-----------------------
3Q01 2Q01 3Q00 2Q01 3Q00
------- ------- ------- ------- -------
SUMMARY OF OPERATIONS
Net interest income (taxable equivalent) $ 351 $ 353 $ 334 (.6)% 5.1 %
Noninterest income 76 86 67 (11.6) 13.4
Revenue sharing 32 35 34 (8.6) (5.9)
------- ------- ------- ------- -------
Total revenue 459 474 435 (3.2) 5.5
Provision for loan losses(a) 52 52 50 -- 4.0
Noninterest expense 184 191 180 (3.7) 2.2
Expense sharing 18 21 21 (14.3) (14.3)
------- ------- ------- ------- -------
Income (loss) before income taxes (taxable equivalent) 205 210 184 (2.4) 11.4
Allocated income taxes and taxable equivalent adjustments 78 80 70 (2.5) 11.4
------- ------- ------- ------- -------
Net income (loss) $ 127 $ 130 $ 114 (2.3) 11.4
======= ======= =======
Percent of consolidated net income 51 % N/M 94 %
Net loan charge-offs(a) $ 99 $ 87 $ 56 13.8 % 76.8 %
AVERAGE BALANCES
Loans $35,545 $35,888 $34,826 (1.0)% 2.1 %
Total assets 37,377 37,653 36,618 (.7) 2.1
Deposits 6,637 6,508 6,482 2.0 2.4
KEY CAPITAL PARTNERS
PERCENT CHANGE 3Q01 VS.
-----------------------
3Q01 2Q01 3Q00 2Q01 3Q00
------- ------- ------- ------- -------
SUMMARY OF OPERATIONS
Net interest income (taxable equivalent) $ 53 $ 52 $ 54 1.9 % (1.9)%
Noninterest income 233 237 237 (1.7) (1.7)
Revenue sharing (44) (49) (53) (10.2) (17.0)
------- ------- ------- ------- -------
Total revenue 242 240 238 .8 1.7
Provision for loan losses(a) 3 3 2 -- 50.0
Noninterest expense 233 244 225 (4.5) 3.6
Expense sharing (27) (30) (34) (10.0) (20.6)
------- ------- ------- ------- -------
Income (loss) before income taxes (taxable equivalent) 33 23 45 43.5 (26.7)
Allocated income taxes and taxable equivalent adjustments 15 11 19 36.4 (21.1)
------- ------- ------- ------- -------
Net income (loss) $ 18 $ 12 $ 26 50.0 (30.8)
======= ======= =======
Percent of consolidated net income 7 % N/M 22 %
Net loan charge-offs(a) $ 4 $ 7 $ 2 (42.9)% 100.0 %
AVERAGE BALANCES
Loans $ 5,456 $ 5,487 $ 5,424 (.6)% .6 %
Total assets 9,195 9,266 8,945 (.8) 2.8
Deposits 3,466 3,805 3,378 (8.9) 2.6
(a) Key's management accounting system utilizes a methodology for loan loss
provisioning by line of business that reflects credit quality expectations
within each line of business over a normal business cycle. The "normalized
provision for loan losses" assigned to each line as a result of this
methodology does not necessarily coincide with net loan charge-offs at any
given point in the cycle.
N/M = Not Meaningful
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 10
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
9-30-01 6-30-01 9-30-00
--------- --------- ---------
ASSETS
Loans $ 64,506 $ 66,693 $ 66,299
Investment securities 1,174 1,171 1,253
Securities available for sale 6,471 6,706 6,664
Short-term investments 1,792 1,961 1,570
--------- --------- ---------
Total earning assets 73,943 76,531 75,786
Allowance for loan losses (1,174) (1,231) (1,001)
Cash and due from banks 2,803 2,781 2,691
Premises and equipment 682 694 711
Goodwill 1,121 1,141 1,339
Other intangible assets 34 36 48
Corporate-owned life insurance 2,289 2,265 2,185
Accrued income and other assets 4,721 3,621 3,741
--------- --------- ---------
TOTAL ASSETS $ 84,419 $ 85,838 $ 85,500
========= ========= =========
LIABILITIES
Deposits in domestic offices:
Noninterest-bearing $ 8,643 $ 8,376 $ 8,386
Interest-bearing 33,526 33,986 35,016
Deposits in foreign office-interest-bearing 3,203 3,381 4,407
--------- --------- ---------
Total deposits 45,372 45,743 47,809
Federal funds purchased and securities
sold under repurchase agreements 4,367 5,919 5,324
Bank notes and other short-term borrowings 6,040 7,128 6,407
Accrued expense and other liabilities 5,622 4,627 4,397
Long-term debt 15,114 14,675 13,800
Capital securities of subsidiary trusts 1,329 1,279 1,243
--------- --------- ---------
TOTAL LIABILITIES 77,844 79,371 78,980
SHAREHOLDERS' EQUITY 6,575 6,467 6,520
--------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 84,419 $ 85,838 $ 85,500
========= ========= =========
Common shares outstanding (000) 423,427 424,958 427,260
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 11
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------------- -----------------------
9-30-01 6-30-01 9-30-00 9-30-01 9-30-00
--------- --------- --------- --------- ---------
INTEREST INCOME $ 1,380 $ 1,467 $ 1,596 $ 4,417 $ 4,625
INTEREST EXPENSE 656 754 912 2,292 2,597
--------- --------- --------- --------- ---------
NET INTEREST INCOME 724 713 684 2,125 2,028
Provision for loan losses 116 401 131 627 382
--------- --------- --------- --------- ---------
608 312 553 1,498 1,646
NONINTEREST INCOME
Trust and investment services income 140 132 148 413 458
Investment banking and capital markets income 46 72 91 183 278
Service charges on deposit accounts 107 90 85 281 256
Corporate-owned life insurance income 28 27 28 82 78
Letter of credit and loan fees 27 30 26 86 73
Net securities gains (losses) 2 8 (50) 36 (47)
Gains from divestitures -- -- -- -- 332
Other income 104 39 77 226 258
--------- --------- --------- --------- ---------
Total noninterest income 454 398 405 1,307 1,686
NONINTEREST EXPENSE
Personnel 334 345 342 1,043 1,085
Net occupancy 60 56 55 173 168
Computer processing 62 63 59 187 178
Equipment 37 40 41 115 131
Marketing 31 29 29 87 82
Amortization of intangibles 22 174 26 222 76
Professional fees 26 19 30 63 70
Restructuring charges -- -- 102 (4) 109
Other expense 111 132 103 353 313
--------- --------- --------- --------- ---------
Total noninterest expense 683 858 787 2,239 2,212
--------- --------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGES 379 (148) 171 566 1,120
Income taxes 130 (12) 50 235 384
--------- --------- --------- --------- ---------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 249 (136) 121 331 736
Cumulative effect of accounting changes, net of tax -- (24) -- (25) --
--------- --------- --------- --------- ---------
NET INCOME (LOSS) $ 249 $ (160) $ 121 $ 306 $ 736
========= ========= ========= ========= =========
Per common share
Income (loss) before cumulative effect of accounting changes $ .59 $ (.32) $ .28 $ .78 $ 1.69
Net income (loss) .59 (.38) .28 .72 1.69
Per common share-assuming dilution
Income (loss) before cumulative effect of accounting changes $ .58 $ (.32) $ .28 $ .77 $ 1.69
Net income (loss) .58 (.38) .28 .71 1.68
Weighted average common shares outstanding (000) 424,802 424,675 429,584 424,503 435,156
Weighted average common shares and potential
common shares outstanding (000) 430,346 424,675 431,972 430,009 437,231
Taxable-equivalent adjustment $ 6 $ 6 $ 7 $ 19 $ 21
KEYCORP REPORTS THIRD QUARTER 2001 RESULTS
OCTOBER 17, 2001
PAGE 12
CONSOLIDATED AVERAGE BALANCE SHEETS, NET INTEREST INCOME AND YIELDS/RATES
(dollars in millions)
THIRD QUARTER 2001
---------------------------------------
AVERAGE
BALANCE INTEREST YIELD/RATE
---------------------------------------
ASSETS
Loans:(a,b)
Commercial, financial and agricultural $19,338 $324 6.63 %
Real estate -- commercial mortgage 6,813 123 7.20
Real estate -- construction 5,859 101 6.87
Commercial lease financing 6,995 117 6.68
----------- -------- ----------
Total commercial loans 39,005 665 6.77
Real estate -- residential 3,826 71 7.42
Home equity 10,777 228 8.38
Consumer - direct 2,409 56 9.34
Consumer - indirect lease financing 2,557 54 8.30
Consumer - indirect other 5,494 132 9.60
----------- -------- ----------
Total consumer loans 25,063 541 8.58
Loans held for sale 2,130 38 7.17
----------- -------- ----------
Total loans 66,198 1,244 7.47
Taxable investment securities 925 8 3.44
Tax-exempt investment securities(a) 258 5 8.65
----------- -------- ----------
Total investment securities 1,183 13 4.57
Securities available for sale(a,c) 6,565 114 6.99
Short-term investments 1,741 15 3.57
----------- -------- ----------
Total earning assets 75,687 1,386 7.29
Allowance for loan losses (1,204)
Accrued income and other assets 10,396
-----------
TOTAL ASSETS $84,879
===========
LIABILITIES
Money market deposit accounts $12,522 55 1.72
Savings deposits 1,936 5 1.01
NOW accounts 611 2 1.41
Certificates of deposit ($100,000 or more)(d) 4,800 67 5.53
Other time deposits 13,703 184 5.33
Deposits in foreign office 3,399 30 3.57
----------- -------- ----------
Total interest-bearing deposits 36,971 343 3.68
Federal funds purchased and securities
sold under repurchase agreements 6,078 52 3.37
Bank notes and other short-term borrowings(d) 6,230 61 3.95
Long-term debt, including capital securities(d,e) 15,991 200 4.97
----------- -------- ----------
Total interest-bearing liabilities 65,270 656 3.99
----------- -------- ----------
Noninterest-bearing deposits 8,262
Accrued expense and other liabilities 4,848
-----------
Total liabilities 78,380
SHAREHOLDERS' EQUITY 6,499
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $84,879
===========
Interest rate spread (TE) 3.30 %
==========
Net interest income (TE) and net
interest margin (TE) $730 3.85 %
======== ==========
Capital securities $1,305 $21
Taxable-equivalent adjustment(a) 6
SECOND QUARTER 2001
----------------------------------------
AVERAGE
BALANCE INTEREST YIELD/RATE
----------------------------------------
ASSETS
Loans:(a,b)
Commercial, financial and agricultural $20,030 $361 7.24 %
Real estate -- commercial mortgage 6,837 135 7.91
Real estate -- construction 5,504 108 7.81
Commercial lease financing 6,990 120 6.86
------------- --------- ---------
Total commercial loans 39,361 724 7.37
Real estate -- residential 4,065 79 7.81
Home equity 10,459 228 8.74
Consumer - direct 2,458 60 9.74
Consumer - indirect lease financing 2,778 57 8.27
Consumer - indirect other 5,593 134 9.61
------------- --------- ---------
Total consumer loans 25,353 558 8.83
Loans held for sale 2,240 43 7.69
------------- --------- ---------
Total loans 66,954 1,325 7.93
Taxable investment securities 911 8 3.41
Tax-exempt investment securities(a) 297 6 8.79
------------- --------- ---------
Total investment securities 1,208 14 4.74
Securities available for sale(a,c) 6,572 115 6.99
Short-term investments 1,812 19 4.19
------------- --------- ---------
Total earning assets 76,546 1,473 7.71
Allowance for loan losses (988)
Accrued income and other assets 10,429
-------------
TOTAL ASSETS $85,987
=============
LIABILITIES
Money market deposit accounts $12,296 67 2.22
Savings deposits 1,969 5 1.06
NOW accounts 610 3 1.50
Certificates of deposit ($100,000 or more)(d) 5,571 81 5.85
Other time deposits 14,479 209 5.77
Deposits in foreign office 2,173 23 4.27
------------- --------- ---------
Total interest-bearing deposits 37,098 388 4.20
Federal funds purchased and securities
sold under repurchase agreements 5,177 52 4.06
Bank notes and other short-term borrowings(d) 8,016 94 4.67
Long-term debt, including capital securities(d,e) 16,068 220 5.49
------------- --------- ---------
Total interest-bearing liabilities 66,359 754 4.56
------------- --------- ---------
Noninterest-bearing deposits 8,213
Accrued expense and other liabilities 4,779
-------------
Total liabilities 79,351
SHAREHOLDERS' EQUITY 6,636
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $85,987
=============
Interest rate spread (TE) 3.15 %
=========
Net interest income (TE) and net
interest margin (TE) $719 3.77 %
========= =========
Capital securities $1,292 $23
Taxable-equivalent adjustment(a) 6
THIRD QUARTER 2000
---------------------------------------
AVERAGE
BALANCE INTEREST YIELD/RATE
---------------------------------------
ASSETS
Loans:(a,b)
Commercial, financial and agricultural $19,647 $434 8.87 %
Real estate -- commercial mortgage 6,932 160 9.29
Real estate -- construction 4,866 121 9.98
Commercial lease financing 6,861 122 7.14
------------- ------- ----------
Total commercial loans 38,306 837 8.78
Real estate -- residential 4,273 80 7.51
Home equity 9,095 219 9.68
Consumer - direct 2,595 68 10.50
Consumer - indirect lease financing 3,052 62 8.08
Consumer - indirect other 5,952 142 9.55
------------- ------- ----------
Total consumer loans 24,967 571 9.17
Loans held for sale 2,504 56 8.96
------------- ------- ----------
Total loans 65,777 1,464 8.93
Taxable investment securities 787 8 3.63
Tax-exempt investment securities(a) 369 7 8.12
------------- ------- ----------
Total investment securities 1,156 15 5.06
Securities available for sale(a,c) 6,275 107 6.67
Short-term investments 1,501 17 4.76
------------- ------- ----------
Total earning assets 74,709 1,603 8.61
Allowance for loan losses (969)
Accrued income and other assets 10,365
-------------
TOTAL ASSETS $84,105
=============
LIABILITIES
Money market deposit accounts $11,956 102 3.43
Savings deposits 2,151 8 1.49
NOW accounts 592 2 1.59
Certificates of deposit ($100,000 or more)(d) 5,269 84 6.40
Other time deposits 14,634 218 6.01
Deposits in foreign office 2,860 48 6.70
------------- ------- ----------
Total interest-bearing deposits 37,462 462 4.96
Federal funds purchased and securities
sold under repurchase agreements 5,746 88 6.17
Bank notes and other short-term borrowings(d) 6,403 99 6.19
Long-term debt, including capital securities(d,e) 15,356 263 6.91
------------- ------- ----------
Total interest-bearing liabilities 64,967 912 5.65
------------- ------- ----------
Noninterest-bearing deposits 8,377
Accrued expense and other liabilities 4,248
-------------
Total liabilities 77,592
SHAREHOLDERS' EQUITY 6,513
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $84,105
=============
Interest rate spread (TE) 2.96 %
==========
Net interest income (TE) and net
interest margin (TE) $691 3.68 %
======= ==========
Capital securities $1,243 $24
Taxable-equivalent adjustment(a) 7
(a) Interest income on tax-exempt securities and loans has been adjusted to a
taxable-equivalent basis using the statutory Federal income tax rate of
35%.
(b) For purposes of these computations, nonaccrual loans are included in
average loan balances.
(c) Yield is calculated on the basis of amortized cost.
(d) Rate calculation excludes basis adjustments related to fair value hedges.
(e) Rate calculation excludes ESOP debt.
TE = Taxable Equivalent