Results reflect provision for credit losses of $265 million, which exceeded net charge-offs by $224 million, or $.20 per share
Loan and deposit growth across commercial and consumer businesses
Solid credit quality with net charge-offs to average loans of 14 basis points
Annual positive operating leverage for the ninth time in the last ten years
CLEVELAND, Jan. 19, 2023 /PRNewswire/ -- KeyCorp (NYSE: KEY) today announced net income from continuing operations attributable to Key common shareholders of $356 million, or $.38 per diluted common share for the fourth quarter of 2022. This compared to $513 million, or $.55 per diluted common share, for the third quarter of 2022 and $601 million, or $.64 per diluted common share, for the fourth quarter of 2021.
Our fourth quarter results marked a solid finish to another successful year for Key. We continued to leverage our distinctive business model to add clients and deepen relationships in both our consumer and commercial businesses. Additionally, we are seeing substantial traction from recent investments we have made in niche businesses, digital, analytics, and importantly, our teammates.
The quality of our balance sheet continues to be a strength, as we focus on delivering sound, profitable growth. Credit quality remained strong with net charge-offs to average loans near historically low levels. Our results include a significant build in our allowance for credit losses, primarily reflecting a change in our economic outlook.
Looking forward, we will continue to unlock the value of our differentiated business model by delivering revenue growth while maintaining our expense discipline. We are focused on creating additional capacity to make investments in our targeted scale strategy and in businesses and capabilities that will propel future growth.
I am very proud of all we accomplished this year. I want to thank our teammates for their dedication and commitment to serving our clients, our communities, and our shareholders, while growing our business.
- Chris Gorman, Chairman and CEO
Selected Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions, except per share data
|
|
|
|
|
Change 4Q22 vs.
|
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$ 356
|
$ 513
|
$ 601
|
|
(30.6) %
|
(40.8) %
|
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution
|
.38
|
.55
|
.64
|
|
(30.9)
|
(40.6)
|
Return on average tangible common equity from continuing operations (a)
|
18.07 %
|
21.19 %
|
18.69 %
|
|
N/A
|
N/A
|
Return on average total assets from continuing operations
|
.83
|
1.14
|
1.34
|
|
N/A
|
N/A
|
Common Equity Tier 1 ratio (b)
|
9.1
|
9.1
|
9.5
|
|
N/A
|
N/A
|
Book value at period end
|
$ 11.79
|
$ 11.62
|
$ 16.76
|
|
1.5
|
(29.7)
|
Net interest margin (TE) from continuing operations
|
2.73 %
|
2.74 %
|
2.44 %
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
(a)
|
The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "Return on average tangible common equity from continuing operations." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
(b)
|
December 31, 2022 ratio is estimated.
|
TE = Taxable Equivalent, N/A = Not Applicable
|
INCOME STATEMENT HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Net interest income (TE)
|
$ 1,227
|
$ 1,203
|
$ 1,038
|
|
2.0 %
|
18.2 %
|
Noninterest income
|
671
|
683
|
909
|
|
(1.8)
|
(26.2)
|
Total revenue
|
$ 1,898
|
$ 1,886
|
$ 1,947
|
|
.6 %
|
(2.5) %
|
|
|
|
|
|
|
|
Taxable-equivalent net interest income was $1.2 billion for the fourth quarter of 2022 and the net interest margin was 2.73%. Compared to the fourth quarter of 2021, net interest income increased $189 million and the net interest margin increased by 29 basis points. Net interest income and net interest margin benefited from higher earning asset balances and higher interest rates. Net interest income and the net interest margin were negatively impacted by higher interest-bearing deposit costs and lower loan fees from the Paycheck Protection Program ("PPP").
Compared to the third quarter of 2022, taxable-equivalent net interest income increased by $24 million, while the net interest margin decreased by one basis point. Both net interest income and the net interest margin reflect the impact of strong loan growth and higher interest rates, offset by higher interest-bearing deposit costs, and a shift in funding mix.
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Trust and investment services income
|
$ 126
|
$ 127
|
$ 135
|
|
(.8) %
|
(6.7) %
|
Investment banking and debt placement fees
|
172
|
154
|
323
|
|
11.7
|
(46.7)
|
Service charges on deposit accounts
|
71
|
92
|
90
|
|
(22.8)
|
(21.1)
|
Operating lease income and other leasing gains
|
24
|
19
|
37
|
|
26.3
|
(35.1)
|
Corporate services income
|
89
|
96
|
76
|
|
(7.3)
|
17.1
|
Cards and payments income
|
85
|
91
|
86
|
|
(6.6)
|
(1.2)
|
Corporate-owned life insurance income
|
33
|
33
|
34
|
|
—
|
(2.9)
|
Consumer mortgage income
|
9
|
14
|
25
|
|
(35.7)
|
(64.0)
|
Commercial mortgage servicing fees
|
42
|
44
|
48
|
|
(4.5)
|
(12.5)
|
Other income
|
20
|
13
|
55
|
|
53.8
|
(63.6)
|
Total noninterest income
|
$ 671
|
$ 683
|
$ 909
|
|
(1.8) %
|
(26.2) %
|
|
|
|
|
|
|
|
Compared to the fourth quarter of 2021, noninterest income decreased by $238 million. The decrease was largely driven by investment banking and debt placement fees, down $151 million, reflecting a slowdown in capital markets activity. Other income decreased $35 million as a result of market-related gains in the year-ago period. Service charges on deposit accounts decreased $19 million, primarily reflecting a planned reduction in overdraft and non sufficient funds fees. The decline also reflected lower account analysis fees related to the interest rate environment. Additionally, consumer mortgage income decreased $16 million, reflecting lower saleable volume and gain on sale margins, while operating lease income decreased $13 million, reflecting a continued decline in operating lease balances. Trust and investment services income decreased $9 million, primarily reflecting the decline in the equity markets. Partially offsetting the decrease was an increase in corporate services income of $13 million, primarily reflecting higher derivatives income.
Compared to the third quarter of 2022, noninterest income decreased by $12 million. The decline was driven partly by service charges on deposit accounts, which decreased $21 million, primarily reflecting a planned reduction in overdraft and non sufficient funds fees. It was also driven by corporate services income, which decreased $7 million, primarily reflecting a valuation adjustment benefit in the prior quarter. Partially offsetting the decline was an increase in investment banking and debt placement fees of $18 million due to seasonality.
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Personnel expense
|
$ 674
|
$ 655
|
$ 674
|
|
2.9 %
|
- %
|
Nonpersonnel expense
|
482
|
451
|
496
|
|
6.9
|
(2.8)
|
Total noninterest expense
|
$ 1,156
|
$ 1,106
|
$ 1,170
|
|
4.5 %
|
(1.2) %
|
|
|
|
|
|
|
|
Key's noninterest expense was $1.2 billion for the fourth quarter of 2022, a decrease of $14 million from the year-ago period. The decline was driven by a decrease of $14 million in nonpersonnel expense reflecting lower professional fees and operating lease expenses, down $10 million and $9 million, respectively. Personnel expense remained flat compared to the year-ago period, reflecting higher salaries and employee benefits, offset by lower incentive and stock based compensation.
Compared to the third quarter of 2022, noninterest expense increased $50 million. The increase was primarily driven by nonpersonnel expense, which increased $31 million, reflecting a $17 million increase in other expense related primarily to a pension settlement charge and a $13 million increase in professional fees. Personnel expense was also up $19 million, reflecting lower deferred costs from slower loan originations.
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Commercial and industrial (a)
|
$ 58,212
|
$ 56,151
|
$ 49,510
|
|
3.7 %
|
17.6 %
|
Other commercial loans
|
22,720
|
22,200
|
19,743
|
|
2.3
|
15.1
|
Total consumer loans
|
36,770
|
36,067
|
30,144
|
|
1.9
|
22.0
|
Total loans
|
$ 117,702
|
$ 114,418
|
$ 99,397
|
|
2.9 %
|
18.4 %
|
|
|
|
|
|
|
|
(a)
|
Commercial and industrial average loan balances include $171 million, $162 million, and $141 million of assets from commercial credit cards at December 31, 2022, September 30, 2022, and December 31, 2021, respectively.
|
Average loans were $117.7 billion for the fourth quarter of 2022, an increase of $18.3 billion compared to the fourth quarter of 2021. Commercial loans increased by $11.7 billion, reflecting core commercial and industrial loan growth and an increase in commercial mortgage real estate loans, which mitigated the impact of a $2.2 billion decline in PPP balances. Consumer loans increased $6.6 billion, largely driven by Key's consumer mortgage business and student loan originations from Laurel Road.
Compared to the third quarter of 2022, average loans increased by $3.3 billion. Commercial loans increased $2.6 billion, reflecting growth in commercial and industrial loans and commercial mortgage real estate loans. Consumer loans increased $703 million, driven by Key's consumer mortgage business.
Average Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Non-time deposits
|
$ 139,558
|
$ 140,169
|
$ 146,979
|
|
(.4) %
|
(5.0) %
|
Certificates of deposit ($100,000 or more)
|
1,351
|
1,347
|
1,793
|
|
.3
|
(24.7)
|
Other time deposits
|
4,757
|
2,713
|
2,233
|
|
75.3
|
113.0
|
Total deposits
|
$ 145,666
|
$ 144,229
|
$ 151,005
|
|
1.0 %
|
(3.5) %
|
|
|
|
|
|
|
|
Cost of total deposits
|
.51 %
|
.16 %
|
.04 %
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
Average deposits totaled $145.7 billion for the fourth quarter of 2022, a decrease of $5.3 billion compared to the year-ago quarter. The decrease reflects declines in non-operating commercial deposit balances and retail balances.
Compared to the third quarter of 2022, average deposits increased by $1.4 billion, reflecting higher commercial balances, and a shift in mix from noninterest-bearing to interest-bearing balances, partly offset by declines in retail balances.
ASSET QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Net loan charge-offs
|
$ 41
|
$ 43
|
$ 19
|
|
(4.7) %
|
115.8 %
|
Net loan charge-offs to average total loans
|
.14 %
|
.15 %
|
.08 %
|
|
N/A
|
N/A
|
Nonperforming loans at period end
|
$ 387
|
$ 390
|
$ 454
|
|
(.8)
|
(14.8)
|
Nonperforming assets at period end
|
420
|
419
|
489
|
|
.2
|
(14.1)
|
Allowance for loan and lease losses
|
1,337
|
1,144
|
1,061
|
|
16.9
|
26.0
|
Allowance for credit losses
|
1,562
|
1,338
|
1,221
|
|
16.7
|
27.9
|
Provision for credit losses
|
265
|
109
|
4
|
|
143.1
|
N/M
|
|
|
|
|
|
|
|
Allowance for loan and lease losses to nonperforming loans
|
345 %
|
293 %
|
234 %
|
|
N/A
|
N/A
|
Allowance for credit losses to nonperforming loans
|
404
|
343
|
269
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
Key's provision for credit losses was $265 million, compared to $4 million in the fourth quarter of 2021 and provision of $109 million in the third quarter of 2022. The increase from prior periods primarily reflects the change in the economic outlook as well as growth in loans.
Net loan charge-offs for the fourth quarter of 2022 totaled $41 million, or 0.14% of average total loans. These results compare to $19 million, or 0.08%, for the fourth quarter of 2021 and $43 million, or 0.15%, for the third quarter of 2022. Key's allowance for credit losses was $1.6 billion, or 1.31% of total period-end loans at December 31, 2022, compared to 1.20% at December 31, 2021, and 1.15% at September 30, 2022.
At December 31, 2022, Key's nonperforming loans totaled $387 million, which represented 0.32% of period-end portfolio loans. These results compare to 0.45% at December 31, 2021, and 0.34% at September 30, 2022. Nonperforming assets at December 31, 2022, totaled $420 million, and represented 0.35% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.48% at December 31, 2021, and 0.36% at September 30, 2022.
CAPITAL
Key's estimated risk-based capital ratios included in the following table continued to exceed all "well-capitalized" regulatory benchmarks at December 31, 2022.
Capital Ratios
|
|
|
|
|
|
|
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
Common Equity Tier 1 (a)
|
9.1 %
|
9.1 %
|
9.5 %
|
Tier 1 risk-based capital (a)
|
10.6
|
10.7
|
10.8
|
Total risk-based capital (a)
|
12.8
|
12.7
|
12.5
|
Tangible common equity to tangible assets (b)
|
4.4
|
4.3
|
6.9
|
Leverage (a)
|
8.9
|
8.9
|
8.5
|
|
|
|
|
(a)
|
December 31, 2022 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.
|
(b)
|
The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "tangible common equity." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
Key's capital position remained strong in the fourth quarter of 2022. As shown in the preceding table, at December 31, 2022, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.1% and 10.6%, respectively. Key's tangible common equity ratio increased ten basis points to 4.4% at December 31, 2022.
Key elected the CECL phase-in option provided by regulatory guidance which delayed for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. Effective for the first quarter 2022, Key is now in the three-year transition period. On a fully phased-in basis, Key's Common Equity Tier 1 ratio would be reduced by 12 basis points.
Summary of Changes in Common Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands
|
|
|
|
|
Change 4Q22 vs.
|
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Shares outstanding at beginning of period
|
932,938
|
932,643
|
930,544
|
|
— %
|
.3 %
|
Open market repurchases, repurchases under the accelerated repurchase program, and return of shares under employee compensation plans
|
(2)
|
(3)
|
(2,482)
|
|
(33.3)
|
(99.9)
|
Shares issued under employee compensation plans (net of cancellations)
|
389
|
298
|
788
|
|
30.5
|
(50.6)
|
|
Shares outstanding at end of period
|
933,325
|
932,938
|
928,850
|
|
— %
|
.5 %
|
|
|
|
|
|
|
|
|
During the fourth quarter of 2022, Key declared a dividend of $.205 per common share, representing a 5% increase from the prior quarter. In the third quarter of 2022, the KeyCorp Board of Directors approved an extension of the remaining $790 million existing share repurchase authorization through the third quarter of 2023.
LINE OF BUSINESS RESULTS
The following table shows the contribution made by each major business segment to Key's taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.
Major Business Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Revenue from continuing operations (TE)
|
|
|
|
|
|
|
Consumer Bank
|
$ 900
|
$ 891
|
$ 839
|
|
1.0 %
|
7.3 %
|
Commercial Bank
|
928
|
889
|
1,027
|
|
4.4
|
(9.6)
|
Other (a)
|
70
|
106
|
81
|
|
(34.0)
|
(13.6)
|
|
Total
|
$ 1,898
|
$ 1,886
|
$ 1,947
|
|
.6 %
|
(2.5) %
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key
|
|
|
|
|
|
|
Consumer Bank
|
$ 73
|
$ 142
|
$ 161
|
|
(48.6) %
|
(54.7) %
|
Commercial Bank
|
250
|
295
|
448
|
|
(15.3)
|
(44.2)
|
Other (a)
|
71
|
103
|
18
|
|
(31.1)
|
294.4
|
|
Total
|
$ 394
|
$ 540
|
$ 627
|
|
(27.0) %
|
(37.2) %
|
|
|
|
|
|
|
|
|
(a)
|
Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.
|
TE = Taxable Equivalent
|
Consumer Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Summary of operations
|
|
|
|
|
|
|
Net interest income (TE)
|
$ 674
|
$ 632
|
$ 570
|
|
6.6 %
|
18.2 %
|
Noninterest income
|
226
|
259
|
269
|
|
(12.7)
|
(16.0)
|
Total revenue (TE)
|
900
|
891
|
839
|
|
1.0
|
7.3
|
Provision for credit losses
|
105
|
37
|
14
|
|
183.8
|
650.0
|
Noninterest expense
|
699
|
667
|
613
|
|
4.8
|
14.0
|
Income (loss) before income taxes (TE)
|
96
|
187
|
212
|
|
(48.7)
|
(54.7)
|
Allocated income taxes (benefit) and TE adjustments
|
23
|
45
|
51
|
|
(48.9)
|
(54.9)
|
Net income (loss) attributable to Key
|
$ 73
|
$ 142
|
$ 161
|
|
(48.6) %
|
(54.7) %
|
|
|
|
|
|
|
|
Average balances
|
|
|
|
|
|
|
Loans and leases
|
$ 43,149
|
$ 42,568
|
$ 37,841
|
|
1.4 %
|
14.0 %
|
Total assets
|
46,214
|
45,638
|
41,072
|
|
1.3
|
12.5
|
Deposits
|
87,243
|
90,044
|
90,385
|
|
(3.1)
|
(3.5)
|
|
|
|
|
|
|
|
Assets under management at period end
|
$ 51,282
|
$ 47,846
|
$ 55,806
|
|
7.2 %
|
(8.1) %
|
|
|
|
|
|
|
|
Additional Consumer Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Noninterest income
|
|
|
|
|
|
|
Trust and investment services income
|
$ 97
|
$ 99
|
$ 107
|
|
(2.0) %
|
(9.3) %
|
Service charges on deposit accounts
|
40
|
56
|
55
|
|
(28.6)
|
(27.3)
|
Cards and payments income
|
62
|
64
|
64
|
|
(3.1)
|
(3.1)
|
Consumer mortgage income
|
9
|
13
|
26
|
|
(30.8)
|
(65.4)
|
Other noninterest income
|
18
|
27
|
17
|
|
(33.3)
|
5.9
|
Total noninterest income
|
$ 226
|
$ 259
|
$ 269
|
|
(12.7) %
|
(16.0) %
|
|
|
|
|
|
|
|
Average deposit balances
|
|
|
|
|
|
|
NOW and money market deposit accounts
|
$ 54,650
|
$ 56,696
|
$ 57,242
|
|
(3.6) %
|
(4.5) %
|
Savings deposits
|
7,439
|
7,556
|
6,951
|
|
(1.5)
|
7.0
|
Certificates of deposit ($100,000 or more)
|
1,227
|
1,238
|
1,669
|
|
(.9)
|
(26.5)
|
Other time deposits
|
1,763
|
1,838
|
2,228
|
|
(4.1)
|
(20.9)
|
Noninterest-bearing deposits
|
22,164
|
22,716
|
22,295
|
|
(2.4)
|
(.6)
|
Total deposits
|
$ 87,243
|
$ 90,044
|
$ 90,385
|
|
(3.1) %
|
(3.5) %
|
|
|
|
|
|
|
|
Other data
|
|
|
|
|
|
|
Branches
|
972
|
976
|
999
|
|
|
|
Automated teller machines
|
1,265
|
1,270
|
1,317
|
|
|
|
|
|
|
|
|
|
|
Consumer Bank Summary of Operations (4Q22 vs. 4Q21)
- Key's Consumer Bank recorded net income attributable to Key of $73 million for the fourth quarter of 2022, compared to $161 million for the year-ago quarter
- Taxable-equivalent net interest income increased by $104 million, or 18.2%, compared to the fourth quarter of 2021, driven by higher earning assets and interest rates
- Average loans and leases increased $5.3 billion, or 14.0%, from the fourth quarter of 2021, driven by loan growth in consumer mortgage and Laurel Road, partly offset by a decline in home equity loans
- Average deposits decreased $3.1 billion, or 3.5%, from the fourth quarter of 2021, driven by lower retail deposits
- Provision for credit losses increased $91 million compared to the fourth quarter of 2021, due to an increase in the provision in the current quarter, reflecting the change in the economic outlook, as well as growth in the consumer loan portfolio
- Noninterest income decreased $43 million from the year-ago quarter, driven by lower consumer mortgage income, reflecting lower saleable volume and gain on sale margins, lower service charges on deposit accounts reflecting a planned reduction in overdraft and non sufficient funds fees, and a decline in trust and investment services, reflecting lower equity markets
- Noninterest expense increased $86 million, or 14.0%, from the year-ago quarter, primarily driven by continued investments in technology and cybersecurity capabilities
Commercial Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Summary of operations
|
|
|
|
|
|
|
Net interest income (TE)
|
$ 521
|
$ 495
|
$ 415
|
|
5.3 %
|
25.5 %
|
Noninterest income
|
407
|
394
|
612
|
|
3.3
|
(33.5)
|
Total revenue (TE)
|
928
|
889
|
1027
|
|
4.4
|
(9.6)
|
Provision for credit losses
|
165
|
74
|
(12)
|
|
123.0
|
N/M
|
Noninterest expense
|
460
|
450
|
501
|
|
2.2
|
(8.2)
|
Income (loss) before income taxes (TE)
|
303
|
365
|
538
|
|
(17.0)
|
(43.7)
|
Allocated income taxes and TE adjustments
|
53
|
70
|
90
|
|
(24.3)
|
(41.1)
|
Net income (loss) attributable to Key
|
$ 250
|
$ 295
|
$ 448
|
|
(15.3) %
|
(44.2) %
|
|
|
|
|
|
|
|
Average balances
|
|
|
|
|
|
|
Loans and leases
|
$ 74,100
|
$ 71,464
|
$ 61,078
|
|
3.7 %
|
21.3 %
|
Loans held for sale
|
1,377
|
1,036
|
1,962
|
|
32.9
|
(29.8)
|
Total assets
|
84,614
|
81,898
|
71,581
|
|
3.3
|
18.2
|
Deposits
|
54,385
|
52,272
|
59,423
|
|
4.0 %
|
(8.5) %
|
|
|
|
|
|
|
|
Additional Commercial Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Noninterest income
|
|
|
|
|
|
|
Trust and investment services income
|
$ 30
|
$ 29
|
$ 29
|
|
3.4 %
|
3.4 %
|
Investment banking and debt placement fees
|
172
|
153
|
322
|
|
12.4
|
(46.6)
|
Operating lease income and other leasing gains
|
23
|
19
|
36
|
|
21.1
|
(36.1)
|
|
|
|
|
|
|
|
Corporate services income
|
81
|
89
|
68
|
|
(9.0)
|
19.1
|
Service charges on deposit accounts
|
30
|
36
|
34
|
|
(16.7)
|
(11.8)
|
Cards and payments income
|
19
|
19
|
26
|
|
—
|
(26.9)
|
Payments and services income
|
130
|
144
|
128
|
|
(9.7)
|
1.6
|
|
|
|
|
|
|
|
Commercial mortgage servicing fees
|
41
|
44
|
47
|
|
(6.8)
|
(12.8)
|
Other noninterest income
|
11
|
5
|
50
|
|
120.0
|
(78.0)
|
Total noninterest income
|
$ 407
|
$ 394
|
$ 612
|
|
3.3 %
|
(33.5) %
|
|
|
|
|
|
|
|
Commercial Bank Summary of Operations (4Q22 vs. 4Q21)
- Key's Commercial Bank recorded net income attributable to Key of $250 million for the fourth quarter of 2022 compared to $448 million for the year-ago quarter
- Taxable-equivalent net interest income increased by $106 million, or 25.5%, compared to the fourth quarter of 2021, reflecting growth in commercial and industrial loans and commercial real estate loans, as well as higher interest rates
- Average loan and lease balances increased $13.0 billion, or 21.3%, compared to the fourth quarter of 2021, due to growth in commercial and industrial loans and commercial mortgage real estate loans
- Average deposit balances decreased $5.0 billion compared to the fourth quarter of 2021, driven by a decline in non-operating deposits
- Provision for credit losses increased $177 million compared to the fourth quarter of 2021, due to an increase in the provision in the current quarter, primarily reflecting the change in the economic outlook, as well as growth in the commercial loan portfolio and a reserve release in the year-ago period as uncertainty caused by the pandemic subsided
- Noninterest income decreased $205 million from the year-ago quarter, primarily driven by lower investment banking and debt placement fees and market-related gains in the year-ago period, partially offset by an increase in corporate services income primarily reflecting higher derivatives income
- Noninterest expense decreased $41 million from the fourth quarter of 2021, primarily driven by lower incentive compensation and lower operating lease expense
KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $189.8 billion at December 31, 2022.
Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,300 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as "goal," "objective," "plan," "expect," "assume," "anticipate," "intend," "project," "believe," "estimate," or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Key's actual results to differ from those described in the forward-looking statements can be found in KeyCorp's Form 10-K for the year ended December 31, 2021, as well as in KeyCorp's subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the "SEC") and are or will be available on Key's website (www.key.com/ir) and on the SEC's website (www.sec.gov). These factors may include, among others, deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a worsening of the U.S. economy due to financial, political, or other shocks, the extensive regulation of the U.S. financial services industry, and the impact of changes in the interest rate environment. Any forward-looking statements made by us or on our behalf speak only as of the date they are made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.
|
Notes to Editors:
A live Internet broadcast of KeyCorp's conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts' questions can be accessed through the Investor Relations section at https://www.key.com/irat 10:00 a.m. ET, on January 19, 2023. A replay of the call will be available through January 28, 2023.
KeyCorp
Fourth
Quarter 2022
Financial Supplement
|
|
|
Page
|
|
12
|
Financial Highlights
|
14
|
GAAP to Non-GAAP Reconciliation
|
16
|
Consolidated Balance Sheets
|
17
|
Consolidated Statements of Income
|
18
|
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
|
20
|
Noninterest Expense
|
20
|
Personnel Expense
|
21
|
Loan Composition
|
21
|
Loans Held for Sale Composition
|
21
|
Summary of Changes in Loans Held for Sale
|
21
|
Summary of Loan and Lease Loss Experience From Continuing Operations
|
23
|
Asset Quality Statistics From Continuing Operations
|
23
|
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
|
23
|
Summary of Changes in Nonperforming Loans From Continuing Operations
|
24
|
Line of Business Results
|
Financial Highlights
|
(Dollars in millions, except per share amounts)
|
|
|
|
Three months ended
|
|
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
Summary of operations
|
|
|
|
|
Net interest income (TE)
|
$ 1,227
|
$ 1,203
|
$ 1,038
|
|
Noninterest income
|
671
|
683
|
909
|
|
|
Total revenue (TE)
|
1,898
|
1,886
|
1,947
|
|
Provision for credit losses
|
265
|
109
|
4
|
|
Noninterest expense
|
1,156
|
1,106
|
1,170
|
|
Income (loss) from continuing operations attributable to Key
|
394
|
540
|
627
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
2
|
2
|
|
Net income (loss) attributable to Key
|
394
|
542
|
629
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
356
|
513
|
601
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
2
|
2
|
|
Net income (loss) attributable to Key common shareholders
|
356
|
515
|
603
|
|
|
|
|
|
|
Per common share
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$ .38
|
$ .55
|
$ .65
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
—
|
—
|
|
Net income (loss) attributable to Key common shareholders (a)
|
.38
|
.55
|
.65
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
.38
|
.55
|
.64
|
|
Income (loss) from discontinued operations, net of taxes — assuming dilution
|
—
|
—
|
—
|
|
Net income (loss) attributable to Key common shareholders — assuming dilution (a)
|
.38
|
.55
|
.64
|
|
|
|
|
|
|
|
Cash dividends declared
|
.205
|
.195
|
.195
|
|
Book value at period end
|
11.79
|
11.62
|
16.76
|
|
Tangible book value at period end
|
8.75
|
8.56
|
13.72
|
|
Market price at period end
|
17.42
|
16.02
|
23.13
|
|
|
|
|
|
|
Performance ratios
|
|
|
|
|
From continuing operations:
|
|
|
|
|
Return on average total assets
|
.83 %
|
1.14 %
|
1.34 %
|
|
Return on average common equity
|
13.24
|
16.33
|
15.31
|
|
Return on average tangible common equity (b)
|
18.07
|
21.19
|
18.69
|
|
Net interest margin (TE)
|
2.73
|
2.74
|
2.44
|
|
Cash efficiency ratio (b)
|
60.3
|
58.0
|
59.4
|
|
|
|
|
|
|
|
From consolidated operations:
|
|
|
|
|
Return on average total assets
|
.82 %
|
1.14 %
|
1.35 %
|
|
Return on average common equity
|
13.24
|
16.39
|
15.36
|
|
Return on average tangible common equity (b)
|
18.07
|
21.28
|
18.75
|
|
Net interest margin (TE)
|
2.73
|
2.73
|
2.44
|
|
Loan to deposit (c)
|
84.7
|
81.3
|
68.9
|
|
|
|
|
|
|
Capital ratios at period end
|
|
|
|
|
Key shareholders' equity to assets
|
7.1 %
|
7.0 %
|
9.4 %
|
|
Key common shareholders' equity to assets
|
5.8
|
5.7
|
8.4
|
|
Tangible common equity to tangible assets (b)
|
4.4
|
4.3
|
6.9
|
|
Common Equity Tier 1 (d)
|
9.1
|
9.1
|
9.5
|
|
Tier 1 risk-based capital (d)
|
10.6
|
10.7
|
10.8
|
|
Total risk-based capital (d)
|
12.8
|
12.7
|
12.5
|
|
Leverage (d)
|
8.9
|
8.9
|
8.5
|
|
|
|
|
|
|
Asset quality — from continuing operations
|
|
|
|
|
Net loan charge-offs
|
$ 41
|
$ 43
|
$ 19
|
|
Net loan charge-offs to average loans
|
.14 %
|
.15 %
|
.08 %
|
|
Allowance for loan and lease losses
|
$ 1,337
|
$ 1,144
|
$ 1,061
|
|
Allowance for credit losses
|
1,562
|
1,338
|
1,221
|
|
Allowance for loan and lease losses to period-end loans
|
1.12 %
|
.98 %
|
1.04 %
|
|
Allowance for credit losses to period-end loans
|
1.31
|
1.15
|
1.20
|
|
Allowance for loan and lease losses to nonperforming loans
|
345
|
293
|
234
|
|
Allowance for credit losses to nonperforming loans
|
404
|
343
|
269
|
|
Nonperforming loans at period-end
|
$ 387
|
$ 390
|
$ 454
|
|
Nonperforming assets at period-end
|
420
|
419
|
489
|
|
Nonperforming loans to period-end portfolio loans
|
.32 %
|
.34 %
|
.45 %
|
|
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
|
.35
|
.36
|
.48
|
|
|
|
|
|
|
Trust assets
|
|
|
|
|
Assets under management
|
$ 51,282
|
$ 47,846
|
$ 55,806
|
|
|
|
|
|
|
Other data
|
|
|
|
|
Average full-time equivalent employees
|
18,210
|
17,907
|
16,797
|
|
Branches
|
972
|
976
|
999
|
|
Taxable-equivalent adjustment
|
$ 7
|
$ 7
|
$ 5
|
Financial Highlights (continued)
|
(Dollars in millions, except per share amounts)
|
|
|
Twelve months ended
|
|
|
12/31/2022
|
12/31/2021
|
Summary of operations
|
|
|
|
Net interest income (TE)
|
$ 4,554
|
$ 4,098
|
|
Noninterest income
|
2,718
|
3,194
|
|
Total revenue (TE)
|
7,272
|
7,292
|
|
Provision for credit losses
|
502
|
(418)
|
|
Noninterest expense
|
4,410
|
4,429
|
|
Income (loss) from continuing operations attributable to Key
|
1,911
|
2,612
|
|
Income (loss) from discontinued operations, net of taxes
|
6
|
13
|
|
Net income (loss) attributable to Key
|
1,917
|
2,625
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
1,793
|
2,506
|
|
Income (loss) from discontinued operations, net of taxes
|
6
|
13
|
|
Net income (loss) attributable to Key common shareholders
|
1,799
|
2,519
|
|
|
|
|
Per common share
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$ 1.94
|
$ 2.64
|
|
Income (loss) from discontinued operations, net of taxes
|
.01
|
.01
|
|
Net income (loss) attributable to Key common shareholders (a)
|
1.94
|
2.65
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
1.92
|
2.62
|
|
Income (loss) from discontinued operations, net of taxes — assuming dilution
|
.01
|
.01
|
|
Net income (loss) attributable to Key common shareholders — assuming dilution (a)
|
1.93
|
2.63
|
|
|
|
|
|
Cash dividends paid
|
.79
|
.75
|
|
|
|
|
Performance ratios
|
|
|
|
From continuing operations:
|
|
|
|
Return on average total assets
|
1.03 %
|
1.46 %
|
|
Return on average common equity
|
14.21
|
15.90
|
|
Return on average tangible common equity (b)
|
18.34
|
19.37
|
|
Net interest margin (TE)
|
2.64
|
2.50
|
|
Cash efficiency ratio (b)
|
60.0
|
59.9
|
|
|
|
|
|
From consolidated operations:
|
|
|
|
Return on average total assets
|
1.03 %
|
1.46 %
|
|
Return on average common equity
|
14.26
|
15.98
|
|
Return on average tangible common equity (b)
|
18.40
|
19.47
|
|
Net interest margin (TE)
|
2.63
|
2.50
|
|
|
|
|
Asset quality — from continuing operations
|
|
|
|
Net loan charge-offs
|
$ 161
|
$ 184
|
|
Net loan charge-offs to average total loans
|
.14 %
|
.18 %
|
|
|
|
|
Other data
|
|
|
|
Average full-time equivalent employees
|
17,660
|
16,974
|
|
|
|
|
Taxable-equivalent adjustment
|
$ 27
|
$ 27
|
(a)
|
Earnings per share may not foot due to rounding.
|
(b)
|
The following table entitled "GAAP to Non-GAAP Reconciliations" presents the computations of certain financial measures related to "tangible common equity" and "cash efficiency." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
(c)
|
Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.
|
(d)
|
December 31, 2022, ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.
|
GAAP to Non-GAAP Reconciliations
(Dollars in millions)
The table below presents certain non-GAAP financial measures related to "tangible common equity," "return on average tangible common equity," "pre-provision net revenue," and "cash efficiency ratio."
The tangible common equity ratio and the return on average tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key's capital position without regard to the effects of intangible assets and preferred stock.
The table also shows the computation for pre-provision net revenue, which is not formally defined by GAAP. Management believes that eliminating the effects of the provision for credit losses makes it easier to analyze the results by presenting them on a more comparable basis.
The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash efficiency ratio performance measure removes the impact of Key's intangible asset amortization from the calculation. Management believes this ratio provides greater consistency and comparability between Key's results and those of its peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
|
Three months ended
|
|
Twelve months ended
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
12/31/2022
|
12/31/2021
|
Tangible common equity to tangible assets at period-end
|
|
|
|
|
|
|
Key shareholders' equity (GAAP)
|
$ 13,454
|
$ 13,290
|
$ 17,423
|
|
|
|
Less: Intangible assets (a)
|
2,844
|
2,856
|
2,820
|
|
|
|
Preferred Stock (b)
|
2,446
|
2,446
|
1,856
|
|
|
|
Tangible common equity (non-GAAP)
|
$ 8,164
|
$ 7,988
|
$ 12,747
|
|
|
|
Total assets (GAAP)
|
$ 189,813
|
$ 190,051
|
$ 186,346
|
|
|
|
Less: Intangible assets (a)
|
2,844
|
2,856
|
2,820
|
|
|
|
Tangible assets (non-GAAP)
|
$ 186,969
|
$ 187,195
|
$ 183,526
|
|
|
|
Tangible common equity to tangible assets ratio (non-GAAP)
|
4.37 %
|
4.27 %
|
6.95 %
|
|
|
|
Pre-provision net revenue
|
|
|
|
|
|
|
Net interest income (GAAP)
|
$ 1,220
|
$ 1,196
|
$ 1,033
|
|
$ 4,527
|
$ 4,071
|
Plus: Taxable-equivalent adjustment
|
7
|
7
|
5
|
|
27
|
27
|
Noninterest income
|
671
|
683
|
909
|
|
2,718
|
3,194
|
Less: Noninterest expense
|
1,156
|
1,106
|
1,170
|
|
4,410
|
4,429
|
Pre-provision net revenue from continuing operations (non-GAAP)
|
$ 742
|
$ 780
|
$ 777
|
|
$ 2,862
|
$ 2,863
|
Average tangible common equity
|
|
|
|
|
|
|
Average Key shareholders' equity (GAAP)
|
$ 13,168
|
$ 14,614
|
$ 17,471
|
|
$ 14,730
|
$ 17,665
|
Less: Intangible assets (average) (c)
|
2,851
|
2,863
|
2,814
|
|
2,839
|
2,829
|
Preferred stock (average)
|
2,500
|
2,148
|
1,900
|
|
2,114
|
1,900
|
Average tangible common equity (non-GAAP)
|
$ 7,817
|
$ 9,603
|
$ 12,757
|
|
$ 9,777
|
$ 12,936
|
Return on average tangible common equity from continuing operations
|
|
|
|
|
|
|
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)
|
$ 356
|
$ 513
|
$ 601
|
|
$ 1,793
|
$ 2,506
|
Average tangible common equity (non-GAAP)
|
7,817
|
9,603
|
12,757
|
|
9,777
|
12,936
|
|
|
|
|
|
|
|
Return on average tangible common equity from continuing operations (non-GAAP)
|
18.07 %
|
21.19 %
|
18.69 %
|
|
18.34 %
|
19.37 %
|
Return on average tangible common equity consolidated
|
|
|
|
|
|
|
Net income (loss) attributable to Key common shareholders (GAAP)
|
$ 356
|
$ 515
|
$ 603
|
|
$ 1,799
|
$ 2,519
|
Average tangible common equity (non-GAAP)
|
7,817
|
9,603
|
12,757
|
|
9,777
|
12,936
|
|
|
|
|
|
|
|
Return on average tangible common equity consolidated (non-GAAP)
|
18.07 %
|
21.28 %
|
18.75 %
|
|
18.40 %
|
19.47 %
|
GAAP to Non-GAAP Reconciliations (continued)
|
(Dollars in millions)
|
|
Three months ended
|
|
Twelve months ended
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
12/31/2022
|
12/31/2021
|
Cash efficiency ratio
|
|
|
|
|
|
|
Noninterest expense (GAAP)
|
$ 1,156
|
$ 1,106
|
$ 1,170
|
|
$ 4,410
|
$ 4,429
|
Less: Intangible asset amortization
|
12
|
12
|
14
|
|
47
|
58
|
Adjusted noninterest expense (non-GAAP)
|
$ 1,144
|
$ 1,094
|
$ 1,156
|
|
$ 4,363
|
$ 4,371
|
|
|
|
|
|
|
|
Net interest income (GAAP)
|
$ 1,220
|
$ 1,196
|
$ 1,033
|
|
$ 4,527
|
$ 4,071
|
Plus: Taxable-equivalent adjustment
|
7
|
7
|
5
|
|
27
|
27
|
Noninterest income
|
671
|
683
|
909
|
|
2,718
|
3,194
|
Total taxable-equivalent revenue (non-GAAP)
|
$ 1,898
|
$ 1,886
|
$ 1,947
|
|
$ 7,272
|
$ 7,292
|
|
|
|
|
|
|
|
Cash efficiency ratio (non-GAAP)
|
60.3 %
|
58.0 %
|
59.4 %
|
|
60.0 %
|
59.9 %
|
|
|
|
|
|
|
|
(a)
|
For the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, intangible assets exclude $2 million, $2 million, and $3 million, respectively, of period-end purchased credit card receivables.
|
(b)
|
Net of capital surplus.
|
(c)
|
For the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, average intangible assets exclude $2 million, $2 million, and $3 million, respectively, of average purchased credit card receivables. For the twelve months ended December 31, 2022, and December 31, 2021, average intangible assets exclude $2 million, and $4 million, respectively, of average purchased credit card receivables.
|
GAAP = U.S. generally accepted accounting principles
|
Consolidated Balance Sheets
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
Assets
|
|
|
|
|
Loans
|
$ 119,394
|
$ 116,191
|
$ 101,854
|
|
Loans held for sale
|
963
|
1,048
|
2,729
|
|
Securities available for sale
|
39,117
|
40,000
|
45,364
|
|
Held-to-maturity securities
|
8,710
|
8,163
|
7,539
|
|
Trading account assets
|
829
|
1,068
|
701
|
|
Short-term investments
|
2,432
|
4,896
|
11,010
|
|
Other investments
|
1,308
|
1,272
|
639
|
|
|
Total earning assets
|
172,753
|
172,638
|
169,836
|
|
Allowance for loan and lease losses
|
(1,337)
|
(1,144)
|
(1,061)
|
|
Cash and due from banks
|
887
|
717
|
913
|
|
Premises and equipment
|
636
|
629
|
681
|
|
Goodwill
|
2,752
|
2,752
|
2,693
|
|
Other intangible assets
|
94
|
106
|
130
|
|
Corporate-owned life insurance
|
4,369
|
4,351
|
4,327
|
|
Accrued income and other assets
|
9,223
|
9,535
|
8,265
|
|
Discontinued assets
|
436
|
467
|
562
|
|
|
Total assets
|
$ 189,813
|
$ 190,051
|
$ 186,346
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits in domestic offices:
|
|
|
|
|
|
NOW and money market deposit accounts
|
$ 86,707
|
$ 84,168
|
$ 89,207
|
|
|
Savings deposits
|
7,681
|
7,860
|
7,503
|
|
|
Certificates of deposit ($100,000 or more)
|
1,708
|
1,269
|
1,705
|
|
|
Other time deposits
|
5,665
|
4,578
|
2,153
|
|
|
Total interest-bearing deposits
|
101,761
|
97,875
|
100,568
|
|
|
Noninterest-bearing deposits
|
40,834
|
46,980
|
52,004
|
|
|
Total deposits
|
142,595
|
144,855
|
152,572
|
|
Federal funds purchased and securities sold under repurchase agreements
|
4,077
|
4,224
|
173
|
|
Bank notes and other short-term borrowings
|
5,386
|
4,576
|
588
|
|
Accrued expense and other liabilities
|
4,994
|
4,849
|
3,548
|
|
Long-term debt
|
19,307
|
18,257
|
12,042
|
|
|
Total liabilities
|
176,359
|
176,761
|
168,923
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Preferred stock
|
2,500
|
2,500
|
1,900
|
|
Common shares
|
1,257
|
1,257
|
1,257
|
|
Capital surplus
|
6,286
|
6,257
|
6,278
|
|
Retained earnings
|
15,616
|
15,450
|
14,553
|
|
Treasury stock, at cost
|
(5,910)
|
(5,917)
|
(5,979)
|
|
Accumulated other comprehensive income (loss)
|
(6,295)
|
(6,257)
|
(586)
|
|
|
Key shareholders' equity
|
13,454
|
13,290
|
17,423
|
Total liabilities and equity
|
$ 189,813
|
$ 190,051
|
$ 186,346
|
|
|
|
|
|
|
Common shares outstanding (000)
|
933,325
|
932,938
|
928,850
|
Consolidated Statements of Income
|
(Dollars in millions, except per share amounts)
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
12/31/2022
|
12/31/2021
|
Interest income
|
|
|
|
|
|
|
|
Loans
|
$ 1,347
|
$ 1,134
|
$ 873
|
|
$ 4,241
|
$ 3,532
|
|
Loans held for sale
|
20
|
14
|
15
|
|
56
|
50
|
|
Securities available for sale
|
195
|
196
|
148
|
|
752
|
546
|
|
Held-to-maturity securities
|
64
|
55
|
52
|
|
213
|
185
|
|
Trading account assets
|
10
|
8
|
5
|
|
31
|
19
|
|
Short-term investments
|
48
|
32
|
8
|
|
97
|
28
|
|
Other investments
|
11
|
5
|
2
|
|
22
|
7
|
|
|
Total interest income
|
1,695
|
1,444
|
1,103
|
|
5,412
|
4,367
|
Interest expense
|
|
|
|
|
|
|
|
Deposits
|
186
|
59
|
15
|
|
279
|
67
|
|
Federal funds purchased and securities sold under repurchase agreements
|
16
|
19
|
—
|
|
41
|
—
|
|
Bank notes and other short-term borrowings
|
54
|
24
|
2
|
|
90
|
8
|
|
Long-term debt
|
219
|
146
|
53
|
|
475
|
221
|
|
|
Total interest expense
|
475
|
248
|
70
|
|
885
|
296
|
Net interest income
|
1,220
|
1,196
|
1,033
|
|
4,527
|
4,071
|
Provision for credit losses
|
265
|
109
|
4
|
|
502
|
(418)
|
Net interest income after provision for credit losses
|
955
|
1,087
|
1,029
|
|
4,025
|
4,489
|
Noninterest income
|
|
|
|
|
|
|
|
Trust and investment services income
|
126
|
127
|
135
|
|
526
|
530
|
|
Investment banking and debt placement fees
|
172
|
154
|
323
|
|
638
|
937
|
|
Service charges on deposit accounts
|
71
|
92
|
90
|
|
350
|
337
|
|
Operating lease income and other leasing gains
|
24
|
19
|
37
|
|
103
|
148
|
|
Corporate services income
|
89
|
96
|
76
|
|
372
|
288
|
|
Cards and payments income
|
85
|
91
|
86
|
|
341
|
415
|
|
Corporate-owned life insurance income
|
33
|
33
|
34
|
|
132
|
128
|
|
Consumer mortgage income
|
9
|
14
|
25
|
|
58
|
131
|
|
Commercial mortgage servicing fees
|
42
|
44
|
48
|
|
167
|
160
|
|
Other income
|
20
|
13
|
55
|
|
31
|
120
|
|
|
Total noninterest income
|
671
|
683
|
909
|
|
2,718
|
3,194
|
Noninterest expense
|
|
|
|
|
|
|
|
Personnel
|
674
|
655
|
674
|
|
2,566
|
2,561
|
|
Net occupancy
|
72
|
72
|
75
|
|
295
|
300
|
|
Computer processing
|
82
|
77
|
73
|
|
314
|
284
|
|
Business services and professional fees
|
60
|
47
|
70
|
|
212
|
227
|
|
Equipment
|
20
|
23
|
25
|
|
92
|
100
|
|
Operating lease expense
|
22
|
24
|
31
|
|
101
|
126
|
|
Marketing
|
31
|
30
|
37
|
|
123
|
126
|
|
Other expense
|
195
|
178
|
185
|
|
707
|
705
|
|
|
Total noninterest expense
|
1,156
|
1,106
|
1,170
|
|
4,410
|
4,429
|
Income (loss) from continuing operations before income taxes
|
470
|
664
|
768
|
|
2,333
|
3,254
|
|
Income taxes
|
76
|
124
|
141
|
|
422
|
642
|
Income (loss) from continuing operations
|
394
|
540
|
627
|
|
1,911
|
2,612
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
2
|
2
|
|
6
|
13
|
Net income (loss)
|
394
|
542
|
629
|
|
1,917
|
2,625
|
Net income (loss) attributable to Key
|
$ 394
|
$ 542
|
$ 629
|
|
$ 1,917
|
2,625
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$ 356
|
$ 513
|
$ 601
|
|
$ 1,793
|
$ 2506
|
Net income (loss) attributable to Key common shareholders
|
356
|
515
|
603
|
|
1,799
|
2519
|
Per common share
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$ .38
|
$ .55
|
$ .65
|
|
$ 1.94
|
$ 2.64
|
Income (loss) from discontinued operations, net of taxes
|
—
|
—
|
—
|
|
0.01
|
.01
|
Net income (loss) attributable to Key common shareholders (a)
|
.38
|
.55
|
.65
|
|
1.94
|
2.65
|
Per common share — assuming dilution
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$ .38
|
$ .55
|
$ .64
|
|
$ 1.92
|
$ 2.62
|
Income (loss) from discontinued operations, net of taxes
|
—
|
—
|
—
|
|
0.01
|
.01
|
Net income (loss) attributable to Key common shareholders (a)
|
.38
|
.55
|
.64
|
|
1.93
|
2.63
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
$ .205
|
$ .195
|
$ .195
|
|
$ .790
|
$ .750
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding (000)
|
924,974
|
924,594
|
922,970
|
|
924,363
|
947,065
|
|
Effect of common share options and other stock awards
|
8,750
|
7,861
|
11,758
|
|
8,696
|
10,349
|
Weighted-average common shares and potential common shares outstanding (000) (b)
|
933,724
|
932,455
|
934,729
|
|
933,059
|
957,414
|
(a)
|
Earnings per share may not foot due to rounding.
|
(b)
|
Assumes conversion of common share options and other stock awards, as applicable.
|
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
|
(Dollars in millions)
|
|
|
Fourth Quarter 2022
|
|
Third Quarter 2022
|
|
Fourth Quarter 2021
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
|
Balance
|
Interest (a)
|
Rate (a)
|
|
Balance
|
Interest (a)
|
Rate (a)
|
|
Balance
|
Interest (a)
|
Rate (a)
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (b), (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial (d)
|
$ 58,212
|
$ 712
|
4.85 %
|
|
$ 56,151
|
$ 578
|
4.09 %
|
|
$ 49,510
|
$ 447
|
3.58 %
|
|
Real estate — commercial mortgage
|
16,445
|
208
|
5.01
|
|
16,002
|
168
|
4.18
|
|
13,671
|
121
|
3.51
|
|
Real estate — construction
|
2,450
|
35
|
5.70
|
|
2,306
|
27
|
4.58
|
|
2,119
|
19
|
3.50
|
|
Commercial lease financing
|
3,825
|
26
|
2.71
|
|
3,892
|
25
|
2.58
|
|
3,953
|
26
|
2.57
|
|
Total commercial loans
|
80,932
|
981
|
4.81
|
|
78,351
|
798
|
4.05
|
|
69,253
|
613
|
3.51
|
|
Real estate — residential mortgage
|
21,128
|
164
|
3.11
|
|
20,256
|
152
|
3.00
|
|
15,017
|
102
|
2.72
|
|
Home equity loans
|
7,890
|
103
|
5.18
|
|
8,024
|
91
|
4.51
|
|
8,603
|
79
|
3.64
|
|
Consumer direct loans
|
6,713
|
75
|
4.45
|
|
6,766
|
72
|
4.25
|
|
5,509
|
60
|
4.33
|
|
Credit cards
|
993
|
31
|
12.61
|
|
969
|
28
|
11.63
|
|
941
|
24
|
10.13
|
|
Consumer indirect loans
|
46
|
—
|
—
|
|
52
|
—
|
—
|
|
74
|
—
|
—
|
|
Total consumer loans
|
36,770
|
373
|
4.05
|
|
36,067
|
343
|
3.80
|
|
30,144
|
265
|
3.49
|
|
Total loans
|
117,702
|
1,354
|
4.57
|
|
114,418
|
1,141
|
3.97
|
|
99,397
|
878
|
3.50
|
|
Loans held for sale
|
1,421
|
20
|
5.63
|
|
1,102
|
14
|
5.22
|
|
2,202
|
15
|
2.83
|
|
Securities available for sale (b), (e)
|
39,149
|
195
|
1.70
|
|
42,271
|
196
|
1.69
|
|
42,329
|
148
|
1.39
|
|
Held-to-maturity securities (b)
|
8,278
|
64
|
3.07
|
|
7,933
|
55
|
2.79
|
|
7,991
|
52
|
2.61
|
|
Trading account assets
|
863
|
10
|
4.57
|
|
841
|
8
|
3.65
|
|
853
|
5
|
2.48
|
|
Short-term investments
|
3,159
|
48
|
6.02
|
|
3,043
|
32
|
4.13
|
|
15,505
|
8
|
.20
|
|
Other investments (e)
|
1,294
|
11
|
3.15
|
|
1054
|
5
|
1.78
|
|
634
|
2
|
1.15
|
|
Total earning assets
|
171,866
|
1,702
|
3.79
|
|
170,662
|
1,451
|
3.30
|
|
168,911
|
1,108
|
2.60
|
|
Allowance for loan and lease losses
|
(1,145)
|
|
|
|
(1,099)
|
|
|
|
(1,081)
|
|
|
|
Accrued income and other assets
|
18,421
|
|
|
|
18,629
|
|
|
|
17,133
|
|
|
|
Discontinued assets
|
447
|
|
|
|
478
|
|
|
|
574
|
|
|
|
Total assets
|
$ 189,589
|
|
|
|
$ 188,670
|
|
|
|
$ 185,537
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts
|
$ 85,798
|
$ 154
|
.71
|
|
$ 83,050
|
$ 50
|
.24
|
|
$ 88,110
|
$ 11
|
.05
|
|
Savings deposits
|
7,795
|
1
|
.03
|
|
7,904
|
—
|
.01
|
|
7,375
|
—
|
.01
|
|
Certificates of deposit ($100,000 or more)
|
1,351
|
3
|
.93
|
|
1,347
|
2
|
.47
|
|
1,793
|
2
|
.53
|
|
Other time deposits
|
4,757
|
28
|
2.33
|
|
2,713
|
7
|
.97
|
|
2,233
|
2
|
.21
|
|
Total interest-bearing deposits
|
99,701
|
186
|
.74
|
|
95,014
|
59
|
.25
|
|
99,511
|
15
|
.06
|
|
Federal funds purchased and securities sold under repurchase agreements
|
1,752
|
16
|
3.52
|
|
3,562
|
19
|
2.10
|
|
230
|
—
|
.02
|
|
Bank notes and other short-term borrowings
|
5,420
|
54
|
3.94
|
|
3,725
|
24
|
2.53
|
|
789
|
2
|
1.45
|
|
Long-term debt (f), (g)
|
18,351
|
219
|
4.77
|
|
17,704
|
146
|
3.32
|
|
12,159
|
53
|
1.74
|
|
Total interest-bearing liabilities
|
125,224
|
475
|
1.50
|
|
120,005
|
248
|
.82
|
|
112,689
|
70
|
.25
|
|
Noninterest-bearing deposits
|
45,965
|
|
|
|
49,215
|
|
|
|
51,494
|
|
|
|
Accrued expense and other liabilities
|
4,785
|
|
|
|
4,358
|
|
|
|
3,309
|
|
|
|
Discontinued liabilities (g)
|
447
|
|
|
|
478
|
|
|
|
574
|
|
|
|
Total liabilities
|
$ 176,421
|
|
|
|
$ 174,056
|
|
|
|
$ 168,066
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders' equity
|
$ 13,168
|
|
|
|
$ 14,614
|
|
|
|
$ 17,471
|
|
|
|
Noncontrolling interests
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Total equity
|
13,168
|
|
|
|
14,614
|
|
|
|
17,471
|
|
|
|
Total liabilities and equity
|
$ 189,589
|
|
|
|
$ 188,670
|
|
|
|
$ 185,537
|
|
|
Interest rate spread (TE)
|
|
|
2.28 %
|
|
|
|
2.48 %
|
|
|
|
2.36 %
|
Net interest income (TE) and net interest margin (TE)
|
|
$ 1,227
|
2.73 %
|
|
|
$ 1,203
|
2.74 %
|
|
|
$ 1,038
|
2.44 %
|
TE adjustment (b)
|
|
7
|
|
|
|
7
|
|
|
|
5
|
|
|
Net interest income, GAAP basis
|
|
$ 1,220
|
|
|
|
$ 1,196
|
|
|
|
$ 1,033
|
|
(a)
|
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.
|
(b)
|
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021.
|
(c)
|
For purposes of these computations, nonaccrual loans are included in average loan balances.
|
(d)
|
Commercial and industrial average balances include $171 million, $162 million, and $141 million of assets from commercial credit cards for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively.
|
(e)
|
Yield is calculated on the basis of amortized cost.
|
(f)
|
Rate calculation excludes basis adjustments related to fair value hedges.
|
(g)
|
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key's matched funds transfer pricing methodology to discontinued operations.
|
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles
|
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
|
(Dollars in millions)
|
|
|
Twelve months ended December 31, 2022
|
|
|
Twelve months ended December 31, 2021
|
|
|
Average
|
|
Yield/
|
|
|
Average
|
|
Yield/
|
|
|
Balance
|
Interest (a)
|
Rate (a)
|
|
|
Balance
|
Interest (a)
|
Rate (a)
|
Assets
|
|
|
|
|
|
|
|
|
|
Loans: (b), (c)
|
|
|
|
|
|
|
|
|
|
Commercial and industrial (d)
|
$ 54,970
|
$ 2,148
|
3.91 %
|
|
|
$ 50,931
|
$ 1,795
|
3.52 %
|
|
Real estate — commercial mortgage
|
15,572
|
633
|
4.07
|
|
|
13,118
|
472
|
3.60
|
|
Real estate — construction
|
2,229
|
99
|
4.44
|
|
|
2,113
|
77
|
3.61
|
|
Commercial lease financing
|
3,869
|
98
|
2.54
|
|
|
4,019
|
114
|
2.84
|
|
Total commercial loans
|
76,640
|
2,978
|
3.89
|
|
|
70,181
|
2,458
|
3.50
|
|
Real estate — residential mortgage
|
19,036
|
559
|
2.94
|
|
|
12,252
|
348
|
2.84
|
|
Home equity loans
|
8,115
|
347
|
4.28
|
|
|
8,967
|
336
|
3.74
|
|
Consumer direct loans
|
6,490
|
277
|
4.27
|
|
|
5,105
|
233
|
4.56
|
|
Credit cards
|
959
|
107
|
11.23
|
|
|
925
|
94
|
10.11
|
|
Consumer indirect loans
|
62
|
—
|
—
|
|
|
2,839
|
90
|
3.19
|
|
Total consumer loans
|
34,662
|
1,290
|
3.72
|
|
|
30,088
|
1,101
|
3.66
|
|
Total loans
|
111,302
|
4,268
|
3.84
|
|
|
100,269
|
3,559
|
3.55
|
|
Loans held for sale
|
1,278
|
56
|
4.41
|
|
|
1,700
|
50
|
2.96
|
|
Securities available for sale (b), (e)
|
42,325
|
752
|
1.62
|
|
|
35,765
|
546
|
1.53
|
|
Held-to-maturity securities (b)
|
7,676
|
213
|
2.77
|
|
|
7,035
|
185
|
2.63
|
|
Trading account assets
|
850
|
31
|
3.61
|
|
|
820
|
19
|
2.35
|
|
Short-term investments
|
4,264
|
97
|
2.28
|
|
|
17,529
|
28
|
.16
|
|
Other investments (e)
|
952
|
22
|
2.26
|
|
|
621
|
7
|
1.14
|
|
Total earning assets
|
168,647
|
5,439
|
3.15
|
|
|
163,739
|
4,394
|
2.69
|
|
Allowance for loan and lease losses
|
(1,101)
|
|
|
|
|
(1,340)
|
|
|
|
Accrued income and other assets
|
18,340
|
|
|
|
|
16,520
|
|
|
|
Discontinued assets
|
492
|
|
|
|
|
632
|
|
|
|
Total assets
|
$ 186,378
|
|
|
|
|
$ 179,551
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
NOW and money market deposit accounts
|
$ 85,673
|
$ 234
|
.27
|
|
|
$ 84,736
|
$ 41
|
.05
|
|
Savings deposits
|
7,798
|
1
|
.01
|
|
|
6,893
|
1
|
.02
|
|
Certificates of deposit ($100,000 or more)
|
1,455
|
8
|
.56
|
|
|
2,135
|
16
|
.72
|
|
Other time deposits
|
2,892
|
36
|
1.25
|
|
|
2,540
|
9
|
.37
|
|
Total interest-bearing deposits
|
97,818
|
279
|
.29
|
|
|
96,304
|
67
|
.07
|
|
Federal funds purchased and securities sold under repurchase agreements
|
2,107
|
41
|
1.93
|
|
|
239
|
—
|
.02
|
|
Bank notes and other short-term borrowings
|
2,963
|
90
|
3.02
|
|
|
770
|
8
|
1.08
|
|
Long-term debt (f), (g)
|
14,915
|
475
|
3.19
|
|
|
12,391
|
221
|
1.79
|
|
Total interest-bearing liabilities
|
117,803
|
885
|
.75
|
|
|
109,704
|
296
|
.27
|
|
Noninterest-bearing deposits
|
49,044
|
|
|
|
|
48,731
|
|
|
|
Accrued expense and other liabilities
|
4,309
|
|
|
|
|
2,819
|
|
|
|
Discontinued liabilities (g)
|
492
|
|
|
|
|
632
|
|
|
|
Total liabilities
|
$ 171,648
|
|
|
|
|
$ 161,886
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Key shareholders' equity
|
$ 14,730
|
|
|
|
|
$ 17,665
|
|
|
|
Noncontrolling interests
|
—
|
|
|
|
|
—
|
|
|
|
Total equity
|
14,730
|
|
|
|
|
17,665
|
|
|
|
Total liabilities and equity
|
$ 186,378
|
|
|
|
|
$ 179,551
|
|
|
Interest rate spread (TE)
|
|
|
2.40 %
|
|
|
|
|
2.42 %
|
Net interest income (TE) and net interest margin (TE)
|
|
$ 4,554
|
2.64 %
|
|
|
|
$ 4,098
|
2.50 %
|
TE adjustment (b)
|
|
27
|
|
|
|
|
27
|
|
|
Net interest income, GAAP basis
|
|
$ 4,527
|
|
|
|
|
$ 4,071
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.
|
(b)
|
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the twelve months ended December 31, 2022, and December 31, 2021.
|
(c)
|
For purposes of these computations, nonaccrual loans are included in average loan balances.
|
(d)
|
Commercial and industrial average balances include $157 million and $134 million of assets from commercial credit cards for the twelve months ended December 31, 2022, and December 31, 2021, respectively.
|
(e)
|
Yield is calculated on the basis of amortized cost.
|
(f)
|
Rate calculation excludes basis adjustments related to fair value hedges.
|
(g)
|
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key's matched funds transfer pricing methodology to discontinued operations.
|
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles
|
Noninterest Expense
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
12/31/2022
|
12/31/2021
|
Personnel (a)
|
$ 674
|
$ 655
|
$ 674
|
|
$ 2,566
|
$ 2,561
|
Net occupancy
|
72
|
72
|
75
|
|
295
|
300
|
Computer processing
|
82
|
77
|
73
|
|
314
|
284
|
Business services and professional fees
|
60
|
47
|
70
|
|
212
|
227
|
Equipment
|
20
|
23
|
25
|
|
92
|
100
|
Operating lease expense
|
22
|
24
|
31
|
|
101
|
126
|
Marketing
|
31
|
30
|
37
|
|
123
|
126
|
Other expense
|
195
|
178
|
185
|
|
707
|
705
|
Total noninterest expense
|
$ 1,156
|
$ 1,106
|
$ 1,170
|
|
$ 4,410
|
$ 4,429
|
Average full-time equivalent employees (b)
|
18,210
|
17,907
|
16,797
|
|
17,660
|
16,974
|
(a)
|
Additional detail provided in Personnel Expense table below.
|
(b)
|
The number of average full-time equivalent employees has not been adjusted for discontinued operations.
|
Personnel Expense
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
12/31/2022
|
12/31/2021
|
Salaries and contract labor
|
$ 407
|
$ 388
|
$ 342
|
|
$ 1,500
|
$ 1,311
|
Incentive and stock-based compensation
|
171
|
176
|
243
|
|
693
|
861
|
Employee benefits
|
94
|
89
|
89
|
|
363
|
388
|
Severance
|
2
|
2
|
—
|
|
10
|
1
|
Total personnel expense
|
$ 674
|
$ 655
|
$ 674
|
|
$ 2,566
|
$ 2,561
|
Loan Composition
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
Change 12/31/2022 vs.
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
9/30/2022
|
12/31/2021
|
Commercial and industrial (a)
|
$ 59,647
|
$ 56,971
|
$ 50,525
|
|
4.7 %
|
18.1 %
|
Commercial real estate:
|
|
|
|
|
|
|
Commercial mortgage
|
16,352
|
16,400
|
14,244
|
|
(.3)
|
14.8
|
Construction
|
2,530
|
2,349
|
1,996
|
|
7.7
|
26.8
|
Total commercial real estate loans
|
18,882
|
18,749
|
16,240
|
|
.7
|
16.3
|
Commercial lease financing (b)
|
3,936
|
3,877
|
4,071
|
|
1.5
|
(3.3)
|
Total commercial loans
|
82,465
|
79,597
|
70,836
|
|
3.6
|
16.4
|
Residential — prime loans:
|
|
|
|
|
|
|
Real estate — residential mortgage
|
21,401
|
20,838
|
15,756
|
|
2.7
|
35.8
|
Home equity loans
|
7,951
|
7,926
|
8,467
|
|
.3
|
(6.1)
|
Total residential — prime loans
|
29,352
|
28,764
|
24,223
|
|
2.0
|
21.2
|
Consumer direct loans
|
6,508
|
6,803
|
5,753
|
|
(4.3)
|
13.1
|
Credit cards
|
1,026
|
977
|
972
|
|
5.0
|
5.6
|
Consumer indirect loans
|
43
|
50
|
70
|
|
(14.0)
|
(38.6)
|
Total consumer loans
|
36,929
|
36,594
|
31,018
|
|
.9
|
19.1
|
Total loans (c), (d)
|
$ 119,394
|
$ 116,191
|
$ 101,854
|
|
2.8 %
|
17.2 %
|
(a)
|
Loan balances include $172 million, $166 million, and $139 million of commercial credit card balances at December 31, 2022, September 30, 2022, and December 31, 2021, respectively.
|
(b)
|
Commercial lease financing includes receivables held as collateral for a secured borrowing of $8 million, $10 million, and $16 million at December 31, 2022, September 30, 2022, and December 31, 2021, respectively. Principal reductions are based on the cash payments received from these related receivables.
|
(c)
|
Total loans exclude loans of $434 million at December 31, 2022, $467 million at September 30, 2022, and $567 million at December 31, 2021, related to the discontinued operations of the education lending business.
|
(d)
|
Accrued interest of $417 million, $274 million, and $198 million at December 31, 2022, September 30, 2022, and December 31, 2021, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
|
Loans Held for Sale Composition
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change 12/31/2022 vs.
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
9/30/2022
|
12/31/2021
|
Commercial and industrial
|
$ 477
|
$ 292
|
$ 1,438
|
|
63.4 %
|
(66.8) %
|
Real estate — commercial mortgage
|
427
|
693
|
1,010
|
|
(38.4)
|
(57.7)
|
Commercial lease financing
|
35
|
2
|
—
|
|
N/M
|
N/M
|
Real estate — residential mortgage
|
24
|
61
|
281
|
|
(60.7)
|
(91.5)
|
Total loans held for sale
|
$ 963
|
$ 1,048
|
$ 2,729
|
|
(8.1) %
|
(64.7) %
|
|
|
|
|
|
|
|
Summary of Changes in Loans Held for Sale
|
(Dollars in millions)
|
|
|
|
|
|
|
|
4Q22
|
3Q22
|
2Q22
|
1Q22
|
4Q21
|
Balance at beginning of period
|
$ 1,048
|
$ 1,306
|
$ 1,170
|
$ 2,729
|
$ 1,805
|
New originations
|
3,158
|
2,157
|
2,837
|
2,724
|
5,704
|
Transfers from (to) held to maturity, net
|
(48)
|
—
|
(57)
|
—
|
(1)
|
Loan sales
|
(3,124)
|
(2,446)
|
(2,506)
|
(4,269)
|
(4,742)
|
Loan draws (payments), net
|
(71)
|
26
|
(133)
|
(12)
|
(12)
|
Valuation and other adjustments
|
—
|
5
|
(5)
|
(2)
|
(25)
|
Balance at end of period
|
$ 963
|
$ 1,048
|
$ 1,306
|
$ 1,170
|
$ 2,729
|
Summary of Loan and Lease Loss Experience From Continuing Operations
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
12/31/2022
|
9/30/2022
|
12/31/2021
|
|
12/31/2022
|
12/31/2021
|
Average loans outstanding
|
$ 117,702
|
$ 114,418
|
$ 99,397
|
|
$ 111,302
|
$ 100,269
|
Allowance for loan and lease losses at the beginning of the period
|
1,144
|
1,099
|
1,084
|
|
1,061
|
1,626
|
Loans charged off:
|
|
|
|
|
|
|
Commercial and industrial
|
35
|
49
|
33
|
|
153
|
174
|
|
|
|
|
|
|
|
Real estate — commercial mortgage
|
13
|
3
|
1
|
|
23
|
40
|
Real estate — construction
|
—
|
—
|
—
|
|
—
|
—
|
Total commercial real estate loans
|
13
|
3
|
1
|
|
23
|
40
|
Commercial lease financing
|
—
|
—
|
1
|
|
2
|
6
|
Total commercial loans
|
48
|
52
|
35
|
|
178
|
220
|
Real estate — residential mortgage
|
—
|
1
|
(1)
|
|
(2)
|
(2)
|
Home equity loans
|
—
|
—
|
2
|
|
1
|
9
|
Consumer direct loans
|
9
|
8
|
7
|
|
34
|
29
|
Credit cards
|
8
|
7
|
6
|
|
30
|
27
|
Consumer indirect loans
|
2
|
—
|
1
|
|
4
|
39
|
Total consumer loans
|
19
|
16
|
15
|
|
67
|
102
|
Total loans charged off
|
67
|
68
|
50
|
|
245
|
322
|
Recoveries:
|
|
|
|
|
|
|
Commercial and industrial
|
18
|
13
|
23
|
|
50
|
83
|
|
|
|
|
|
|
|
Real estate — commercial mortgage
|
1
|
2
|
1
|
|
5
|
9
|
Real estate — construction
|
—
|
—
|
—
|
|
1
|
—
|
Total commercial real estate loans
|
1
|
2
|
1
|
|
6
|
9
|
Commercial lease financing
|
2
|
1
|
—
|
|
4
|
7
|
Total commercial loans
|
21
|
16
|
24
|
|
60
|
99
|
Real estate — residential mortgage
|
3
|
1
|
1
|
|
5
|
3
|
Home equity loans
|
—
|
1
|
1
|
|
3
|
5
|
Consumer direct loans
|
1
|
4
|
2
|
|
8
|
8
|
Credit cards
|
1
|
2
|
2
|
|
6
|
8
|
Consumer indirect loans
|
—
|
1
|
1
|
|
2
|
15
|
Total consumer loans
|
5
|
9
|
7
|
|
24
|
39
|
Total recoveries
|
26
|
25
|
31
|
|
84
|
138
|
Net loan charge-offs
|
(41)
|
(43)
|
(19)
|
|
(161)
|
(184)
|
Provision (credit) for loan and lease losses
|
234
|
88
|
(4)
|
|
437
|
(381)
|
Allowance for loan and lease losses at end of period
|
$ 1,337
|
$ 1,144
|
$ 1,061
|
|
$ 1,337
|
$ 1,061
|
|
|
|
|
|
|
|
Liability for credit losses on lending-related commitments at beginning of period
|
194
|
173
|
152
|
|
160
|
197
|
Provision (credit) for losses on lending-related commitments
|
31
|
21
|
8
|
|
65
|
(37)
|
Liability for credit losses on lending-related commitments at end of period (a)
|
$ 225
|
$ 194
|
$ 160
|
|
$ 225
|
$ 160
|
|
|
|
|
|
|
|
Total allowance for credit losses at end of period
|
$ 1,562
|
$ 1,338
|
$ 1,221
|
|
$ 1,562
|
$ 1,221
|
|
|
|
|
|
|
|
Net loan charge-offs to average total loans
|
.14 %
|
.15 %
|
.08 %
|
|
.14 %
|
.18 %
|
Allowance for loan and lease losses to period-end loans
|
1.12
|
.98
|
1.04
|
|
1.12
|
1.04
|
Allowance for credit losses to period-end loans
|
1.31
|
1.15
|
1.20
|
|
1.31
|
1.20
|
Allowance for loan and lease losses to nonperforming loans
|
345
|
293
|
234
|
|
345
|
234
|
Allowance for credit losses to nonperforming loans
|
404
|
343
|
269
|
|
404
|
269
|
|
|
|
|
|
|
|
Discontinued operations — education lending business:
|
|
|
|
|
|
|
Loans charged off
|
$ 2
|
$ 1
|
$ 1
|
|
$ 6
|
$ 4
|
Recoveries
|
—
|
1
|
—
|
|
2
|
2
|
Net loan charge-offs
|
$ (2)
|
$ —
|
$ (1)
|
|
$ (4)
|
$ (2)
|
(a) Included in "Accrued expense and other liabilities" on the balance sheet.
|
Asset Quality Statistics From Continuing Operations
|
(Dollars in millions)
|
|
4Q22
|
3Q22
|
2Q22
|
1Q22
|
4Q21
|
Net loan charge-offs
|
$ 41
|
$ 43
|
$ 44
|
$ 33
|
$ 19
|
Net loan charge-offs to average total loans
|
.14 %
|
.15 %
|
.16 %
|
.13 %
|
.08 %
|
Allowance for loan and lease losses
|
$ 1,337
|
$ 1,144
|
$ 1,099
|
$ 1,105
|
$ 1,061
|
Allowance for credit losses (a)
|
1,562
|
1,338
|
1,272
|
1,271
|
1,221
|
Allowance for loan and lease losses to period-end loans
|
1.12 %
|
.98 %
|
.98 %
|
1.04 %
|
1.04 %
|
Allowance for credit losses to period-end loans
|
1.31
|
1.15
|
1.13
|
1.19
|
1.20
|
Allowance for loan and lease losses to nonperforming loans
|
345
|
293
|
256
|
252
|
234
|
Allowance for credit losses to nonperforming loans
|
404
|
343
|
297
|
290
|
269
|
Nonperforming loans at period end
|
$ 387
|
$ 390
|
$ 429
|
$ 439
|
$ 454
|
Nonperforming assets at period end
|
420
|
419
|
463
|
467
|
489
|
Nonperforming loans to period-end portfolio loans
|
.32 %
|
.34 %
|
.38 %
|
.41 %
|
.45 %
|
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
|
.35
|
.36
|
.41
|
.44
|
.48
|
(a)
|
Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related commitments.
|
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
|
(Dollars in millions)
|
|
12/31/2022
|
9/30/2022
|
6/30/2022
|
3/31/2022
|
12/31/2021
|
Commercial and industrial
|
$ 174
|
$ 169
|
$ 197
|
$ 186
|
$ 191
|
|
|
|
|
|
|
Real estate — commercial mortgage
|
21
|
34
|
35
|
40
|
44
|
Real estate — construction
|
—
|
—
|
—
|
—
|
—
|
Total commercial real estate loans
|
21
|
34
|
35
|
40
|
44
|
Commercial lease financing
|
1
|
2
|
2
|
3
|
4
|
Total commercial loans
|
196
|
205
|
234
|
229
|
239
|
Real estate — residential mortgage
|
77
|
66
|
67
|
73
|
72
|
Home equity loans
|
107
|
112
|
120
|
129
|
135
|
Consumer direct loans
|
3
|
3
|
3
|
4
|
4
|
Credit cards
|
3
|
3
|
3
|
3
|
3
|
Consumer indirect loans
|
1
|
1
|
2
|
1
|
1
|
Total consumer loans
|
191
|
185
|
195
|
210
|
215
|
Total nonperforming loans
|
387
|
390
|
429
|
439
|
454
|
OREO
|
13
|
12
|
9
|
8
|
8
|
Nonperforming loans held for sale
|
20
|
17
|
25
|
20
|
24
|
Other nonperforming assets
|
—
|
—
|
—
|
—
|
3
|
Total nonperforming assets
|
$ 420
|
$ 419
|
$ 463
|
$ 467
|
$ 489
|
Accruing loans past due 90 days or more
|
60
|
47
|
41
|
55
|
68
|
Accruing loans past due 30 through 89 days
|
180
|
187
|
137
|
122
|
165
|
Restructured loans — accruing and nonaccruing (a)
|
236
|
254
|
216
|
219
|
220
|
Restructured loans included in nonperforming loans (a)
|
118
|
134
|
94
|
98
|
99
|
Nonperforming assets from discontinued operations — education lending business
|
3
|
3
|
3
|
4
|
4
|
Nonperforming loans to period-end portfolio loans
|
.32 %
|
.34 %
|
.38 %
|
.41 %
|
.45 %
|
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
|
.35
|
.36
|
.41
|
.44
|
.48
|
(a)
|
Restructured loans (i.e., troubled debt restructuring) are those for which Key, for reasons related to a borrower's financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.
|
Summary of Changes in Nonperforming Loans From Continuing Operations
|
(Dollars in millions)
|
|
4Q22
|
3Q22
|
2Q22
|
1Q22
|
4Q21
|
Balance at beginning of period
|
$ 390
|
$ 429
|
$ 439
|
$ 454
|
$ 554
|
Loans placed on nonaccrual status
|
113
|
80
|
118
|
87
|
116
|
Charge-offs
|
(67)
|
(68)
|
(59)
|
(50)
|
(51)
|
Loans sold
|
(4)
|
(3)
|
(8)
|
—
|
(38)
|
Payments
|
(22)
|
(29)
|
(35)
|
(27)
|
(68)
|
Transfers to OREO
|
(1)
|
(1)
|
(2)
|
(1)
|
(1)
|
Loans returned to accrual status
|
(22)
|
(18)
|
(24)
|
(24)
|
(58)
|
Balance at end of period
|
$ 387
|
$ 390
|
$ 429
|
$ 439
|
$ 454
|
Line of Business Results
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change 4Q22 vs.
|
|
4Q22
|
3Q22
|
2Q22
|
1Q22
|
4Q21
|
|
3Q22
|
4Q21
|
Consumer Bank
|
|
|
|
|
|
|
|
|
Summary of operations
|
|
|
|
|
|
|
|
|
Total revenue (TE)
|
$ 900
|
$ 891
|
$ 824
|
$ 799
|
$ 839
|
|
1.0 %
|
7.3 %
|
Provision for credit losses
|
105
|
37
|
8
|
43
|
14
|
|
183.8
|
650.0
|
Noninterest expense
|
699
|
667
|
676
|
663
|
613
|
|
4.8
|
14.0
|
Net income (loss) attributable to Key
|
73
|
142
|
107
|
71
|
161
|
|
(48.6)
|
(54.7)
|
Average loans and leases
|
43,149
|
42,568
|
40,827
|
38,654
|
37,841
|
|
1.4
|
14.0
|
Average deposits
|
87,243
|
90,044
|
91,273
|
91,516
|
90,385
|
|
(3.1)
|
(3.5)
|
Net loan charge-offs
|
21
|
17
|
23
|
22
|
22
|
|
23.5
|
(4.5)
|
Net loan charge-offs to average total loans
|
.19 %
|
.16 %
|
.23 %
|
.23 %
|
.23 %
|
|
18.8
|
(17.4)
|
Nonperforming assets at period end
|
$ 202
|
$ 195
|
$ 203
|
$ 217
|
$ 222
|
|
3.6
|
(9.0)
|
Return on average allocated equity
|
8.66 %
|
16.20 %
|
11.66 %
|
8.02 %
|
18.05 %
|
|
(46.5)
|
(52.0)
|
|
|
|
|
|
|
|
|
|
Commercial Bank
|
|
|
|
|
|
|
|
|
Summary of operations
|
|
|
|
|
|
|
|
|
Total revenue (TE)
|
$ 928
|
$ 889
|
$ 842
|
$ 808
|
$ 1027
|
|
4.4 %
|
(9.6) %
|
Provision for credit losses
|
165
|
74
|
37
|
41
|
(12)
|
|
123.0
|
N/M
|
Noninterest expense
|
460
|
450
|
410
|
413
|
501
|
|
2.2
|
(8.2)
|
Net income (loss) attributable to Key
|
250
|
295
|
317
|
284
|
448
|
|
(15.3)
|
(44.2)
|
Average loans and leases
|
74,100
|
71,464
|
67,825
|
64,684
|
61,078
|
|
3.7
|
21.3
|
Average loans held for sale
|
1,377
|
1,036
|
1,016
|
1,323
|
1,962
|
|
32.9
|
(29.8)
|
Average deposits
|
54,385
|
52,272
|
54,846
|
57,241
|
59,423
|
|
4.0
|
(8.5)
|
Net loan charge-offs
|
25
|
27
|
21
|
11
|
—
|
|
(7.4)
|
N/M
|
|