KeyCorp profit off 38%, revenue misses estimate
KeyCorp's KEY +0.93% fourth-quarter profit declined 38% after suffering a deeper-than-expected slump in revenue even as credit quality once again improved in its loan portfolio.
The Ohio-based regional lender has been working to wind down commercial real-estate loans created before the financial crisis that later turned sour at rapid rates while also seeking to rebuild its loan book.
Tuesday, Chief Executive Beth Mooney said the most recent quarter's results reflected continued improvement in credit quality as well as the bank's third straight quarter of growth in its commercial, financial and agricultural loan portfolio.
"These results confirm our belief that the inflection point for loan growth was reached in the third quarter of 2011," Mooney said.
For the fourth quarter, the company recorded a loan-loss credit of $22 million compared with a credit of $97 million a year ago and a $10 million provision in the third quarter.
KeyCorp reported a profit of $200 million, down from $320 million a year earlier. Per-share earnings, reflecting the payment of preferred dividends, fell to 20 cents a share from 32 cents the year before. The latest results were hurt by a $24 million charge due to Visa Inc.'s (V) planned litigation escrow deposit.
Total revenue dropped 16% to $977 million. Analysts polled by Thomson Reuters expected a per-share profit of 20 cents on $1.01 billion in revenue.
Net charge-offs, or loans lenders don't think are collectible, fell to 0.86% of average loans on a continuing-operations basis, compared with 2% a year earlier and 0.9% in the prior quarter.
Nonperforming loans, or those near default, came in at 1.47%, down from 2.13% and 1.64%, respectively.
Shares closed Monday at $8.11 and were inactive in premarket trade. Through the close, the stock is down 5.8% over the past 12 months.