Things Are Getting Better At KeyCorp
Why KeyCorp May Be One Of The Bank Sector's Safest Bets
Tue, Jul. 26, 7:53 AM
- Q2 EPS, excluding merger-related expenses, of $0.27 vs. $0.24 in Q1 and $0.27 one year ago. Book value of $13.08 vs. $12.79 three months ago, and $12.21 a year ago.
- First Niagara acquisition still expects to close on or about August 1.
- Net interest income of $605M down 1.1% Q/Q, up 2.4% Y/Y. NIM of 2.76% down 13 bps on the quarter, down 12 bps for the year.
- Noninterest income of $473M up 9.7% Q/Q, down 3.1% Y/Y. Investment banking and debt placement fees of $98M down 30.5% Y/Y. Service charges on deposits of $68M up 7.9%.
- Noninterest expense (excl. merger-related) of $706M up 4% Q/Q, down 0.7% Y/Y. Personnel expense of $427M up 5.7% Q/Q, up 4.7% Y/Y.
- Previously: KeyCorp EPS and revenue in-line (July 26)
- KEY flat premarket
Tue, Jul. 26, 6:32 AM
Mon, Jul. 25, 5:30 PM
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Wed, Jul. 13, 5:43 PM
Tue, Jul. 12, 7:37 PM
- After nine months, the Fed has given approval to KeyCorp's (KEY +2.2%) purchase of First Niagara Financial Group (FNFG +1.9%).
- KeyCorp now expects to close the deal Aug. 1 following a formal OK from the U.S. Comptroller of the Currency.
- The move will transform Western New York banking, making KeyCorp that region's No. 2 retail bank, behind only M&T Bank.
- KeyCorp has confirmed it plans to lay off no more than 250 people, and to retain all branch employees. It will close 106 retail branches, including 23 in Western New York.
- The deal had to clear a regulatory hurdle as the Justice Dept. looked into minority lending practices at First Niagara.
Mon, Jul. 11, 3:40 PM
- While nearly all major U.S. banks cruised through the stress tests last month, writes David Schawel, those exams are about determining if lenders have enough capital to get through a crisis, not whether they can earn the sort of risk-adjusted returns of the past.
- On this front (for insurers as well as banks), there's plenty more for investors to worry about, he says, thanks to the vanishing spread between short rates (what the companies pay on their liabilities), and long rates (what they earn on their assets).
- A new Fed study finds the adverse effect of weaker net interest margins is materially larger when rates are low. The reason: The lower bound of funding costs is zero as institutions are reticent to charge negative rates.
- Investors interested in buying banks or insurers because of seemingly cheap valuations might want to look again. Bank multiples, says Schawel, typically move alongside ROE, and serious improvement in ROE is unlikely with rates remaining low.
- Interested parties include: BAC, C, JPM, WFC, MET, PRU, LNC, PNC, USB, RF, KEY, KRE, KBE
Mon, Jul. 11, 8:10 AM
Thu, Jun. 30, 8:19 AM
Mon, Jun. 27, 10:16 AM
- No financial name will be immune to the downside from rates lower for longer post-Brexit, says Ken Usdin, but KeyCorp (KEY -3.8%) could fare better than peers. The lender, he says, is less needful of higher rates, less sensitive to the energy sector, and has the positive catalyst of the First Niagara purchase (expected to close in Q3). He reiterates a Buy rating and $14.50 price target (vs. current $10.58).
- Ken Usdin ranks #922 out of #3,980 analysts on TipRanks.
- The price action in Signature Bank (SBNY -3.1%) looks overdone, says Casey Haire, thanks to bank's attractive relative valuation, weak asset sensitivity profile and strong organic loan prospects. He maintains a Buy rating and $162 price target (vs. current $118).
- Also overdone is the action is Western Alliance Bancorp (WAL -3.4%), he says, noting the bank has been planning for a lower for longer rate policy. He maintains a Buy and $42 PT (vs. current $30.41).
- Casey Haire ranks #133 on TipRanks.
Fri, Jun. 24, 11:58 AM
- The Too Big To Fail lenders are naturally among the day's big losers following the U.K. vote to leave the EU, but losses in the financial sector are wide and deep as - among other things - interest rates look to be a lot lower for a lot longer.
- Among asset managers, Invesco (IVZ -10.8%) - with a sizable U.K. exposure - is faring about the worst. WisdomTree (WETF -7.8%) takes a hit as the yen is the solo currency surging against the dollar, reducing demand for its popular hedged Japan ETF.
- It's wait till next year (or even 2018 if you believe short-term rate futures markets) for rate hikes, meaning regional lenders can't celebrate their passing of the Fed stress tests last night. Regions (RF -7.8%), KeyCorp (KEY -6.4%), PNC Financial (PNC -5.5%), U.S. Bancorp (USB -4.2%), BB&T (BBT -5.1%).
- Even lower rates put even more pressure on the business models of the life insurers: MetLife (MET -8.8%), Prudential (PRU -7.7%), Lincoln National (LNC -9.9%), Voya (VOYA -7%). Online brokers too: E*Trade (ETFC -9.4%), Schwab (SCHW -9.5%).
- ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, KRS, WDRW, DPST
Thu, Jun. 23, 4:51 PM
- Ally Financial (NYSE:ALLY): Actual end of 2015 CET1 ratio of 9.2%, Q1 2018 CET1 ratio under severely adverse scenario of 6.1%, minimum 6.1%.
- American Express (NYSE:AXP): Actual 12.4%, Q1 2018 12.3%, minimum 11.4%.
- Bank of America (NYSE:BAC): Actual 11.6%, Q1 2018 8.1%, minimum 8.1%.
- BNY Mellon (NYSE:BK): Actual 11.5%, Q1 2018 11.2%; minimum 10.5%.
- BB&T (NYSE:BBT): 10.3%, 6.9%, 6.9%
- BBVA Compass (NYSE:BBVA): 10.7%, 6.5%, 6.5%.
- BMO Financial (NYSE:BMO): 11.9%, 5.9%, 5.9%.
- Capital One (NYSE:COF): 11.1%, 8.2%, 8.2%.
- Citigroup (NYSE:C): 15.3%, 9.2%, 9.2%.
- Citizens Financial (NYSE:CFG): 11.7%, 8.8%, 8.8%.
- Comerica (NYSE:CMA): 10.5%, 8.3%, 8.3%.
- Discover (NYSE:DFS): 13.9%, 12.4%, 11.9%.
- Fifth Third (NASDAQ:FITB): 9.8%, 6.8%, 6.8%.
- Goldman Sachs (NYSE:GS): 13.6%, 10.2%, 8.4%.
- HSBC N.A. (NYSE:HSBC): 15.7%, 9.1%, 9.1%.
- Huntington Bancshares (NASDAQ:HBAN): 9.8%, 5%, 5%.
- JPMorgan (NYSE:JPM): 12%, 8.3%, 8.3%.
- KeyCorp (NYSE:KEY): 10.9%, 6.4%, 6.4%.
- M&T (NYSE:MTB): 11.1%, 6.9%, 6.9%.
- Morgan Stanley (NYSE:MS): 16.4%, 10%, 9.1%.
- Northern Trust (NASDAQ:NTRS): 10.8%, 9.6%, 9.6%.
- PNC Financial (NYSE:PNC): 10.6%, 7.6%, 7.6%.
- Regions (NYSE:RF): 10.9%, 7.3%, 7.3%.
- Santander Holdings (NYSE:SAN): 12%, 11.8%, 11.8%
- State Street (NYSE:STT): 13%, 9.6%, 9.6%
- SunTrust (NYSE:STI): 10%, 7.5%, 7.5%.
- TD Group (NYSE:TD): 13.1%, 8.4%, 8.4%.
- U.S. Bancorp (NYSE:USB): 9.6%, 7.5%, 7.5%.
- Wells Fargo (NYSE:WFC): 11.1%, 7.2%, 7.2%.
- Zions (NASDAQ:ZION): 12.2%, 6.6%, 6.6%.
- Previously: All 33 banks pass this year's stress tests (June 23)
Tue, Jun. 14, 3:48 PM
- The S&P 500 is down just 0.25%, but the financial sector (XLF -1.5%) is taking a far larger beating as the idea of higher interest rates fades, with German 10-year yields falling below zero, and the U.S. 10-year Treasury yield within sight of its all-time low. KBE -2.3%, KRE -2.3%
- The FOMC concludes its two-day policy meeting tomorrow, at which updated economic projections and dots will be unveiled, along with a Janet Yellen press conference.
- How much of the panic into fixed-income is due to concern about the U.K. exiting the EU will become evident next Thursday night as that country's Brexit votes are tallied.
- Bank of America (BAC -2.5%), Citigroup (C -3.1%), Wells Fargo (WFC -2.5%), Regions Financial (RF -2.9%), KeyCorp (KEY -3.7%), PNC Financial (PNC -2.4%), Fifth Third (FITB -2.6%), SunTrust (STI -2.8%), E*Trade (ETFC -2.6%), MetLife (MET -1.6%), Prudential (PRU -1.8%), BNY Mellon (BK -2%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF
Fri, Jun. 3, 9:47 AM
- At the moment, it's looking like "wait till next year," for the higher interest rates much of the yield-starved financial sector has been waiting for. This morning's disappointing jobs numbers has traders quickly reversing bets on a rate hike this summer.
- Meanwhile, the 10-year Treasury yield has crumbled to a two-month low of 1.70%.
- The XLF is down 1.9%, leading the S&P 500's 0.5% decline. The SPDR KBW Bank ETF (KBE -3.5%), the SPDR Regional Banking ETF (KRE -3.4%).
- Among the Too Big To Fail names, Bank of America (BAC -4.7%) and Citigroup (C -4.8%) are hardest hit. In regionals, Regions Financial (RF -4.4%), KeyCorp (KEY -4%), BB&T (BBT -3.3%), Fifth Third (FITB -4.4%).
- State Street (STT -3.5%), Northern Trust (NTRS -3.8%), Schwab (SCHW -5.4%), E*Trade (ETFC -5.8%), Ameritrade (AMTD -5.5%), MetLife (MET -3.6%), Prudential (PRU -3.2%), Lincoln Financial (LNC -4.1%)
- ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, FNCL, SEF, FXO, KBWB, QABA, KBWR, RYF, FINU, KRU, RWW, XLFS, FINZ, KRS, JHMF, WDRW, FAZZ, DPST, FNCF
Wed, Jun. 1, 7:13 AM
- At issue, according to the report, is a more than two-year old Justice Department probe into First Niagara's (NASDAQ:FNFG) minority lending practices.
- Those regulators who must sign off on KeyCorp's (NYSE:KEY) purchase have questions, but it's not yet known if the scrutiny is holding up the deal which was announced in October, but still a long way from the expected closing date.
- It's been nearly a decade since D.C. released a public report on First Niagara's community lending practices, but a 2007 study showed the bank's share of loans in poorer areas was slightly below the industry norm, though it was deemed "adequate."
Thu, May 19, 7:08 AM
Wed, May 18, 1:08 PM
- The meme of rates lower for longer has been stood on its head in the last 24 hours thanks to some decent economic data, but also surprisingly hawkish Fedspeak yesterday.
- The fixed-income world now believes remarks from the Fed's Williams and Lockhart yesterday may have been a preview of what we'll get when the real power speaks tomorrow - Fischer and Dudley - and then on May 27, when Janet Yellen gives a speech.
- Up at 2 ET are the minutes from the FOMC's April meeting.
- The 10-year yield is higher by five basis points to 1.82% and short-term rate markets have upped expectations for a Fed move this year.
- XLF +1.85%, KBE +3.15%, KRE +3.3%
- Bank of America (BAC +3.7%), Citigroup (C +4.2%), JPMorgan (JPM +3.2%), Wells Fargo (WFC +2.1%), U.S. Bancorp (USB +2.1%), Regions (RF +3.3%), KeyCorp (KEY +3.7%), PNC Financial (PNC +2.7%), Fifth Third (FITB +3.7%), Capital One (COF +1.9%), E*Trade (ETFC +4.4%), Schwab (SCHW +4.8%), MetLife (MET +2.9%), Prudential (PRU +3.4%), Lincoln National (LNC +4.2%), BNY Mellon (BK +2.3%), Northern Trust (NTRS +2.9%)
KeyCorp is a bank holding company. The company through its subsidiary, KeyBank National Association provides a wide range of retail and commercial banking, commercial leasing, investment management, consumer finance and investment banking products and services to individual, corporate and... More
Industry: Money Center Banks
Country: United States
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