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KeyCorp (NYSE: KEY), Cleveland, Ohio reported a fourth quarter net loss of $258 million, compared with a prior-year loss of $524 million. For the full year, Key had a net loss from continuing operations attributable to Key common shareholders of $1.581 billion.

As of Dec. 31, 2009, nonperforming loans at KeyCorp totaled $2.2 billion, or 3.72 percent of all loans. That’s up from a year ago when nonperforming loans accounted for 1.68 percent of all loans.

Key’s loan and leasing division are not doing well with more write-offs and less business. Note revenue down, charge offs up, balance sheet down, as well as going from 858 employees in the fourth quarter to 672 (had to influence performance): These numbers come from Key’s SEC filings:

Line of Business Results
(dollars in millions)
Equipment Finance

4Q 09 3Q 09 2Q 09 1Q 09 4Q 08
Total Revenue 85 87 102 101 86
Prov.Loss Loss 112 99 72 77 33
Net Loss to Key (65) (86) (36) (40) (278)
Avg. f-t empl. 672 731 766 781 858

Net Loan Charge-offs from Continuing Operations
Commercial lease financing
(dollar in millions)

4Q 09 39
3Q 09 27
2Q 09 22
1Q 09 18
4Q 08 21

Non-Performing Loans
Commercial lease financing
(dollar in millions)

4Q 09 113
3Q 09 131
2Q 09 122
1Q 09 109
4Q 08 81

Consolidated Average Balance Sheets, and Net Interest Income
and Yields/Rates From Continuing Operations
(dollars in millions)

Commercial lease financing

AV Balance Interest Yield
4Q 09 7,598 97 5.1
3Q 09 8,073 88 4.35
4Q 09 9,186 78 3.38

Consolidated Average Balance Sheets, and Net Interest Income
and Yields/Rates From Continuing Operations
(dollars in millions)

Commercial lease financing

AV Balance Interest Yield
YE 09 8,220 369 4.48
YE 08 9,642 425 4.41

Key has been cutting back. CEO Henry Meyer III originally said the bank was not subject to Eastern bank problems of subprime mortgages and was more into community banking. Recently the bank moved a telephone call division out of Cleveland to New Jersey, obviously not support the Cleveland community where the bank is headquartered. Cleveland has high unemployment and many real estate vacancies. The direction of the bank straddles its image between consumer, community, national, and commercial bank and appears trying to out wait the down economy.

Meyer III said in a company press release:

“We clearly have work remaining, but as we turn our sights to 2010, we believe our aggressive actions over the past two years to address asset quality, to strengthen capital, reserves and liquidity, and to invest in and reshape our businesses have Key on the right track, and will set the stage for us to emerge from this extraordinary period as a strong, competitive company.”

“Full-year results for both 2009 and 2008 were adversely affected by elevated provisions for loan losses and write-offs of certain intangible assets. In addition, 2008 results include a $1.011 billion after-tax charge recorded in the second quarter as a result of an adverse federal tax court ruling that impacted Key’s accounting for certain lease financing transactions.”

Press Release:

“Key opened 38 new branches in 8 markets in 2009 and the company expects to open 40 additional new branches in 2010. The company has completed renovations on approximately 160 branches over the past two years and expects to renovate another 100 branches in 2010.”

Note: Key has yet to repay $2.5 billion in U.S. bailout funds. Meyer was one of the first most vocal against TARP, by the way.

Key SEC Filing:
http://www.leasingnews.org/PDF/keycorp.pdf

Author's Disclosure: No positions on stock

Source: Key Equipment Finance Follows KeyCorp Losses

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