8-K 1 l98260ae8vk.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): January 15, 2003 [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 January 15, 2003, the Registrant issued a press release announcing its earnings results for the three- and twelve-month period ended December 31, 2002. This press release, dated January 15, 2003, is attached as Exhibit 99.1 to this report. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (C) Exhibits 99.1 The Registrant's January 15, 2003, press release announcing its earnings results for the three- and twelve-month period ended December 31, 2002. ITEM 9. REGULATION FD DISCLOSURE On January 15, 2003, 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 1 FOURTH QUARTER 2002 REVIEW JANUARY 15, 2003 SPEAKERS: HENRY MEYER JEFF WEEDEN [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 first quarter and full-year 2003 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; new legal obligations or restrictions or unfavorable resolution of litigation; further disruption in the economy or the general business climate as a result of terrorist activities or military actions; and changes in accounting, tax or regulatory practices or requirements. [KEYCORP LOGO] 3 STRATEGIC OVERVIEW - DEPOSIT GROWTH - EXPENSE MANAGEMENT - CREDIT QUALITY - UNION BANKSHARES ACQUISITION [KEYCORP LOGO] 4 FINANCIAL SUMMARY - 4Q02 - EPS OF $0.57 - TOTAL REVENUE UP $26 MILLION - NONPERFORMING LOANS DECLINED - REPURCHASED 1.2 MILLION SHARES [KEYCORP LOGO] 5 NET INTEREST INCOME & MARGIN (TE) $ IN MILLIONS [BAR GRAPH]
4Q01 1Q02 2Q02 3Q02 4Q02 ---- ---- ---- ---- ---- NET INTEREST INCOME $726 $702 $721 $722 $724 NET INTEREST MARGIN 3.98% 3.93% 3.98% 3.99% 3.98% AVG. EARNING ASSETS $ 72,706 $ 71,981 $ 72,579 $ 72,083 $ 72,554
[KEYCORP LOGO] 6 NONINTEREST INCOME 4Q02 VS. 3Q02 IN MILLIONS NONINTEREST INCOME 3Q02 $ 432 Investment Banking & Capital Markets 8 Net Securities Gains 5 Trust & Investment Services (9) All other-net 10 ------ Total 14 NONINTEREST INCOME 4Q02 $ 446
[KEYCORP LOGO] 7 NONINTEREST EXPENSE 4Q02 VS. 3Q02 IN MILLIONS NONINTEREST EXPENSE 3Q02 $ 659 Personnel (4) Professional Fees 8 All other 5 ------ Total 9 NONINTEREST EXPENSE 4Q02 $ 668
[KEYCORP LOGO] 8 NET CHARGE-OFFS BY LOAN TYPE
IN MILLIONS 4Q01 1Q02 2Q02 3Q02 4Q02 ----------- ---- ---- ---- ---- ---- CONTINUING PORTFOLIO Commercial $ 62 $ 69 $ 76 $ 84 $ 84 Consumer 71 67 59 51 63 ---- ---- ---- ---- ---- 133 136 135 135 147 RUN-OFF PORTFOLIO & LOAN SALES 87 70 68 50 39 ---- ---- ---- ---- ---- TOTAL NET C/O $220 $206 $203 $185 $186
[KEYCORP LOGO] 9 ASSET QUALITY INDICATORS
$ IN MILLIONS 4Q01 1Q02 2Q02 3Q02 4Q02 ------------- ---- ---- ---- ---- ---- Nonperforming Loans $ 910 $ 973 $ 957 $ 987 $ 943 to EOP Loans 1.44% 1.52% 1.50% 1.57% 1.51% Nonperforming Assets $ 947 $1,012 $ 995 $1,017 $ 993 to EOP Loans + OREO 1.49% 1.58% 1.56% 1.61% 1.59% Net C/O $ 220 $ 206 $ 203 $ 185 $ 186 to Average Loans 1.37% 1.32% 1.27% 1.16% 1.18% Allowance $1,677 $1,607 $1,539 $1,489 $1,452 to Total Loans 2.65% 2.51% 2.41% 2.37% 2.32% to Nonperforming Loans 184% 165% 161% 151% 154%
[KEYCORP LOGO] 10 RUN-OFF PORTFOLIO & NONREPLENISHING RESERVES IN MILLIONS
12/31/01 3/31/02 6/30/02 9/30/02 12/31/02 -------- ------- ------- ------- -------- COMMITMENTS $ 1,694 $ 1,532 $ 1,143 $ 1,005 $ 940 OUTSTANDINGS 1,023 941 724 662 599 ALLOWANCE FOR LOAN LOSSES 275 205 137 87 48 NPLs 231 208 132 91 85
[KEYCORP LOGO] 11 FIRST QUARTER 2003 OUTLOOK (COMPARED WITH 4Q02)
COMMENTS -------- REVENUE NIM pressure due to rate environment Seasonal decline in noninterest income EXPENSES Higher employee benefits cost Continued focus on expense control CREDIT QUALITY NPLs Stable to down Net Charge-offs Stable to down Watch List Stable to down EPS Down from 4Q02
[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: January 15, 2003 /s/ Lee Irving -------------------------------- By: Lee Irving Executive Vice President and Chief Accounting Officer