Tags: KeyCorp | regional | bank | KEY

KeyCorp: Regional Bank, Diverse Businesses

By    |   Thursday, 08 Dec 2011 10:42 AM

KeyCorp (KEY) is a regional bank company which differentiates itself from rivals with a composition of diverse financial businesses. Investors considering KeyCorp should be looking for a record of sustained earnings growth, although such growth is not currently apparent when the numbers are broken down.

The current basis of KeyCorp was formed with the 1994 merger of New York based KeyCorp and Ohio based Society Corporation, with the merged company headquartered in Cleveland, Ohio. After a series of acquisitions, the company now provides banking services in the Northeast, the Great Lakes states and the Rocky Mountains and Northwest.

The company refers to retail banking as Key Community Bank, which has more than 1,000 branches evenly divided between the three covered regions. Key Corporate Bank includes the business functions of real estate capital, corporate banking services, equipment finance services, investment banking and money management through Victory Capital Management.

For the first nine months of 2011, KeyCorp reported total revenues of $3.12 billion, down from $3.33 billion for the first three quarters of 2011. Revenue was split into $1.73 billion from net income and $1.39 billion of non-interest revenue.

Net income from continuing operations for the period was 71 cents per share, up from 14 cents in 2010. For the full year, the KeyCorp earnings estimate is 87 cents per share, compared to 44 cents earned in 2010.

Tight margins

For the 2011 third quarter KeyCorp reported net income of 24 cents per share, down from 26 cents a year earlier. Net interest income dropped as the amount of assets earning interest declined and the net interest margin dropped to 3.09 percent from 3.35 percent. Non-interest income also declined by $3 million to $483 million.

For the 2011 fourth quarter, the consensus earnings estimate is 20 cents per share, compared to 32 cents earned in 2010. The third quarter earnings report discussed positive momentum, but the third and fourth quarter results are indicating a reversal of momentum.

In recent analyst reports on KeyCorp, the analysts at UBS initiated coverage on the stock with a buy rating. Also, Raymond James analysts have upgraded KEY to outperform from market perform.

The company next reports on Jan. 24.

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KeyCorp (KEY) is a regional bank company which differentiates itself from rivals with a composition of diverse financial businesses. Investors considering KeyCorp should be looking for a record of sustained earnings growth, although such growth is not currently apparent...
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2011-42-08
Thursday, 08 Dec 2011 10:42 AM
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