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8-K Filing
KeyCorp (KEY) 8-KKeycorp Reports Second Quarter 2014
Filed: 17 Jul 14, 12:00am
Exhibit 99.3
Consolidated Balance Sheets
(dollars in millions)
6-30-14 | 3-31-14 | 6-30-13 | ||||||||||
Assets | ||||||||||||
Loans | $ | 55,600 | $ | 55,445 | $ | 53,101 | ||||||
Loans held for sale | 435 | 401 | 402 | |||||||||
Securities available for sale | 12,224 | 12,359 | 13,253 | |||||||||
Held-to-maturity securities | 5,233 | 4,826 | 4,750 | |||||||||
Trading account assets | 890 | 840 | 592 | |||||||||
Short-term investments | 3,176 | 2,922 | 3,582 | |||||||||
Other investments | 899 | 899 | 1,037 | |||||||||
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Total earning assets | 78,457 | 77,692 | 76,717 | |||||||||
Allowance for loan and lease losses | (814 | ) | (834 | ) | (876 | ) | ||||||
Cash and due from banks | 604 | 409 | 696 | |||||||||
Premises and equipment | 844 | 862 | 900 | |||||||||
Operating lease assets | 306 | 294 | 303 | |||||||||
Goodwill | 979 | 979 | 979 | |||||||||
Other intangible assets | 108 | 117 | 149 | |||||||||
Corporate-owned life insurance | 3,438 | 3,425 | 3,362 | |||||||||
Derivative assets | 549 | 427 | 461 | |||||||||
Accrued income and other assets | 3,090 | 3,004 | 2,864 | |||||||||
Discontinued assets | 4,237 | 4,427 | 5,084 | |||||||||
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Total assets | $ | 91,798 | $ | 90,802 | $ | 90,639 | ||||||
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Liabilities | ||||||||||||
Deposits in domestic offices: | ||||||||||||
NOW and money market deposit accounts | $ | 33,637 | $ | 34,373 | $ | 32,689 | ||||||
Savings deposits | 2,450 | 2,513 | 2,542 | |||||||||
Certificates of deposit ($100,000 or more) | 2,743 | 2,849 | 2,918 | |||||||||
Other time deposits | 3,505 | 3,682 | 4,089 | |||||||||
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Total interest-bearing deposits | 42,335 | 43,417 | 42,238 | |||||||||
Noninterest-bearing deposits | 24,781 | 23,244 | 24,939 | |||||||||
Deposits in foreign office — interest-bearing | 683 | 605 | 544 | |||||||||
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Total deposits | 67,799 | 67,266 | 67,721 | |||||||||
Federal funds purchased and securities sold under repurchase agreements | 1,213 | 1,417 | 1,647 | |||||||||
Bank notes and other short-term borrowings | 521 | 464 | 298 | |||||||||
Derivative liabilities | 451 | 408 | 456 | |||||||||
Accrued expense and other liabilities | 1,400 | 1,297 | 1,421 | |||||||||
Long-term debt | 8,213 | 7,712 | 6,666 | |||||||||
Discontinued liabilities | 1,680 | 1,819 | 2,169 | |||||||||
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Total liabilities | 81,277 | 80,383 | 80,378 | |||||||||
Equity | ||||||||||||
Preferred stock, Series A | 291 | 291 | 291 | |||||||||
Common shares | 1,017 | 1,017 | 1,017 | |||||||||
Capital surplus | 3,987 | 3,961 | 4,045 | |||||||||
Retained earnings | 7,950 | 7,793 | 7,214 | |||||||||
Treasury stock, at cost | (2,452 | ) | (2,335 | ) | (2,020 | ) | ||||||
Accumulated other comprehensive income (loss) | (289 | ) | (324 | ) | (318 | ) | ||||||
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Key shareholders’ equity | 10,504 | 10,403 | 10,229 | |||||||||
Noncontrolling interests | 17 | 16 | 32 | |||||||||
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Total equity | 10,521 | 10,419 | 10,261 | |||||||||
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Total liabilities and equity | $ | 91,798 | $ | 90,802 | $ | 90,639 | ||||||
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Common shares outstanding (000) | 876,823 | 884,869 | 912,883 |
Consolidated Statements of Income
(dollars in millions, except per share amounts)
Three months ended | Six months ended | |||||||||||||||||||
6-30-14 | 3-31-14 | 6-30-13 | 6-30-14 | 6-30-13 | ||||||||||||||||
Interest income | ||||||||||||||||||||
Loans | $ | 526 | $ | 519 | $ | 539 | $ | 1,045 | $ | 1,087 | ||||||||||
Loans held for sale | 5 | 4 | 5 | 9 | 9 | |||||||||||||||
Securities available for sale | 71 | 72 | 80 | 143 | 160 | |||||||||||||||
Held-to-maturity securities | 23 | 22 | 20 | 45 | 38 | |||||||||||||||
Trading account assets | 7 | 6 | 4 | 13 | 10 | |||||||||||||||
Short-term investments | 1 | 1 | 1 | 2 | 3 | |||||||||||||||
Other investments | 6 | 6 | 8 | 12 | 17 | |||||||||||||||
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Total interest income | 639 | 630 | 657 | 1,269 | 1,324 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 31 | 32 | 42 | 63 | 87 | |||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 1 | — | 1 | 1 | |||||||||||||||
Bank notes and other short-term borrowings | 2 | 2 | 2 | 4 | 3 | |||||||||||||||
Long-term debt | 33 | 32 | 32 | 65 | 69 | |||||||||||||||
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Total interest expense | 66 | 67 | 76 | 133 | 160 | |||||||||||||||
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Net interest income | 573 | 563 | 581 | 1,136 | 1,164 | |||||||||||||||
Provision (credit) for loan and lease losses | 10 | 6 | 28 | 16 | 83 | |||||||||||||||
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Net interest income (expense) after provision for loan and lease losses | 563 | 557 | 553 | 1,120 | 1,081 | |||||||||||||||
Noninterest income | ||||||||||||||||||||
Trust and investment services income | 94 | 98 | 100 | 192 | 195 | |||||||||||||||
Investment banking and debt placement fees | 99 | 84 | 84 | 183 | 163 | |||||||||||||||
Service charges on deposit accounts | 66 | 63 | 71 | 129 | 140 | |||||||||||||||
Operating lease income and other leasing gains | 35 | 29 | 22 | 64 | 47 | |||||||||||||||
Corporate services income | 41 | 42 | 43 | 83 | 88 | |||||||||||||||
Cards and payments income | 43 | 38 | 42 | 81 | 79 | |||||||||||||||
Corporate-owned life insurance income | 28 | 26 | 31 | 54 | 61 | |||||||||||||||
Consumer mortgage income | 2 | 2 | 6 | 4 | 13 | |||||||||||||||
Mortgage servicing fees | 11 | 15 | 13 | 26 | 21 | |||||||||||||||
Net gains (losses) from principal investing | 27 | 24 | 7 | 51 | 15 | |||||||||||||||
Other income (a) | 9 | 14 | 10 | 23 | 32 | |||||||||||||||
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Total noninterest income | 455 | 435 | 429 | 890 | 854 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Personnel | 389 | 388 | 406 | 777 | 797 | |||||||||||||||
Net occupancy | 68 | 64 | 72 | 132 | 136 | |||||||||||||||
Computer processing | 41 | 38 | 39 | 79 | 78 | |||||||||||||||
Business services and professional fees | 41 | 41 | 37 | 82 | 72 | |||||||||||||||
Equipment | 24 | 24 | 27 | 48 | 53 | |||||||||||||||
Operating lease expense | 10 | 10 | 11 | 20 | 23 | |||||||||||||||
Marketing | 13 | 5 | 11 | 18 | 17 | |||||||||||||||
FDIC assessment | 6 | 6 | 8 | 12 | 16 | |||||||||||||||
Intangible asset amortization | 9 | 10 | 10 | 19 | 22 | |||||||||||||||
Provision (credit) for losses on lending-related commitments | 2 | (2 | ) | 5 | — | 8 | ||||||||||||||
OREO expense, net | 1 | 1 | 1 | 2 | 4 | |||||||||||||||
Other expense | 85 | 77 | 84 | 162 | 166 | |||||||||||||||
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Total noninterest expense | 689 | 662 | 711 | 1,351 | 1,392 | |||||||||||||||
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Income (loss) from continuing operations before income taxes | 329 | 330 | 271 | 659 | 543 | |||||||||||||||
Income taxes | 76 | 92 | 72 | 168 | 142 | |||||||||||||||
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Income (loss) from continuing operations | 253 | 238 | 199 | 491 | 401 | |||||||||||||||
Income (loss) from discontinued operations, net of taxes | (28 | ) | 4 | 5 | (24 | ) | 8 | |||||||||||||
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Net income (loss) | 225 | 242 | 204 | 467 | 409 | |||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 6 | — | — | 6 | 1 | |||||||||||||||
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Net income (loss) attributable to Key | $ | 219 | $ | 242 | $ | 204 | $ | 461 | $ | 408 | ||||||||||
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Income (loss) from continuing operations attributable to Key common shareholders | $ | 242 | $ | 232 | $ | 193 | $ | 474 | $ | 389 | ||||||||||
Net income (loss) attributable to Key common shareholders | 214 | 236 | 198 | 450 | 397 | |||||||||||||||
Per common share | ||||||||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .28 | $ | .26 | $ | .21 | $ | .54 | $ | .42 | ||||||||||
Income (loss) from discontinued operations, net of taxes | (.03 | ) | — | .01 | (.03 | ) | .01 | |||||||||||||
Net income (loss) attributable to Key common shareholders (b) | .24 | .27 | .22 | .51 | .43 | |||||||||||||||
Per common share — assuming dilution | ||||||||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders | $ | .27 | $ | .26 | $ | .21 | $ | .53 | $ | .42 | ||||||||||
Income (loss) from discontinued operations, net of taxes | (.03 | ) | — | .01 | (.03 | ) | .01 | |||||||||||||
Net income (loss) attributable to Key common shareholders (b) | .24 | .26 | .22 | .51 | .43 | |||||||||||||||
Cash dividends declared per common share | $ | .065 | $ | .055 | $ | .055 | $ | .12 | $ | .105 | ||||||||||
Weighted-average common shares outstanding (000) | 875,298 | 884,727 | 913,736 | 879,986 | 917,008 | |||||||||||||||
Weighted-average common shares and potential common shares outstanding (000) (c) | 902,137 | 891,890 | 918,628 | 886,684 | 922,319 |
(a) | For each of the three months ended June 30, 2014, March 31, 2014, and June 30, 2013, net securities gains (losses) totaled less than $1 million. For the three months ended June 30, 2014, March 31, 2014, and June 30, 2013, Key did not have any impairment losses related to securities. |
(b) | Earnings per share may not foot due to rounding. |
(c) | Assumes conversion of stock options and/or Preferred Series A shares, as applicable. |