8-K 1 l92029ae8-k.txt 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): December 20, 2001 [KEYCORP LOGO] -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 0-850 34-6542451 ------------------------------- ------------------------------------ ------------------------------------- (State or other jurisdiction Commission File Number (I.R.S. Employer Identification No.) of incorporation or organization) 127 Public Square, Cleveland, Ohio 44114-1306 ---------------------------------------- ------------------------------------- (Address of principal executive (Zip Code) offices)
Registrant's telephone number, including area code: (216) 689-6300 ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE ----------------------------------------- On December 20, 2001, the Registrant issued a press release announcing actions taken to build the loan loss reserve and strengthen the balance sheet. The Registrant also announced that its Board of Directors increased the cash dividend on its common stock. This press release, dated December 20, 2001, is attached as Exhibit 99.1 to this report. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS --------------------------------- (c) Exhibits -------- 99.1 The Registrant's December 20, 2001, press release announcing: (a) actions taken to build the loan loss reserve and strengthen the balance sheet and (b) that its Board of Directors increased the cash dividend on its common stock. ITEM 9. REGULATION FD DISCLOSURE ------------------------ On December 20, 2001, the Registrant conducted a conference call/webcast to discuss the press release. The slide presentation reviewed by the Registrant in the conference call/webcast follows as Annex A to this Item 9. 1 Annex A [KEYCORP LOGO] DECEMBER 20, 2001 [KEYCORP LOGO] 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 levels of net loan charge-offs and nonperforming assets and anticipated improvements 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. [KEYCORP LOGO] 3 TODAY'S ANNOUNCEMENT - Builds loan loss reserve - Decisive response to economic environment - Improves Key's position relative to its peers - Strengthens balance sheet - Addresses impact of September 11 events on principal investing portfolio - Creates reserve for customer derivative losses - Increases dividend 1.7% - 37th consecutive year [KEYCORP LOGO] 4 ANTICIPATED EARNINGS CHARGES IN MILLIONS, EXCEPT PER SHARE DATA
PRE-TAX AFTER-TAX EPS ------- --------- --- Loan Loss Provision (Continuing) $425 $268 $0.63 Loan Loss Provision (Run-off/ 165 104 0.24 loan sales/non-replenishing reserve) Principal Investing Write-downs 45 28 0.07 Customer Derivatives 15 10 0.02 ---- ---- ----- Total Charges $650 $410 $0.96
[KEYCORP LOGO] 5 STRENGTHENING THE LOAN LOSS RESERVE
CONTINUING PORTFOLIO RUNOFF PORTFOLIO TOTAL PORTFOLIO DOLLARS IN MILLIONS 3Q01 4Q01 EST. 3Q01 4Q01 EST. 3Q01 4Q01 EST. ---- --------- ---- --------- ---- --------- EST. Allowance $1,002 $1,428 $172 $242 $1,174 $1,670 to Total Loans 1.58% 2.29% 14.63% 22.88% 1.82% 2.64% to Nonperforming Loans 154% 217% 74% 96% 133% 183%
[KEYCORP LOGO] 6 STRENGTHENING THE LOAN LOSS RESERVE
Pro Forma 3Q01 * 3Q01 * Peer Rank Peer Rank --------- --------- Reserve/Total Loans #5 #2 Reserve/NPLs #11 #6 Reserve/NCOs #11 #7
* Rankings are based on 12 bank peer group as of 9/30/01 [KEYCORP LOGO] 7 STRONG CAPITAL POSITION Tangible Common Equity Ratio [CHART]
4Q00 1Q01 2Q01 3Q01 4Q01 ---- ---- ---- ---- ---- Tangible Common Equity Ratio 6.12% 6.29% 6.25% 6.51% 6.89% Tangible Common Equity Ratio With Special Charges 6.43%
[KEYCORP LOGO] 8 SUMMARY OF SIGNIFICANT STRATEGIC ACTIONS - 2001 - Accelerated downsizing of auto business - Reduced auto leases and indirect loans by $1.2 billion - Exit non-relationship corporate lending - Runoff portfolio reduced by $490 million - Sold $3.6 billion of loans - Reduced dependence on wholesale funding by $2.1 billion - Added $669 million to loan loss reserve [KEYCORP 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: December 20, 2001 /s/ Lee Irving ------------------------------------- By: Lee Irving Executive Vice President and Chief Accounting Officer