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Ohio
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34-6542451
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State or other jurisdiction of incorporation or organization
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I.R.S. Employer Identification Number:
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127 Public Square, Cleveland, Ohio
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44114-1306
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Address of principal executive offices:
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Zip Code:
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Common Shares with a par value of $1 each
|
1,096,107,344 shares
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Title of class
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Outstanding at May 3, 2017
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Page Number
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Item 1.
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Item 2.
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Forward-looking statements
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Long-term financial
targets
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
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in millions, except per share data
|
March 31,
2017 |
|
December 31,
2016 |
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||
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(Unaudited)
|
|
|
|||
ASSETS
|
|
|
||||
Cash and due from banks
|
$
|
549
|
|
$
|
677
|
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Short-term investments
|
2,525
|
|
2,775
|
|
||
Trading account assets
|
921
|
|
867
|
|
||
Securities available for sale
|
18,431
|
|
20,212
|
|
||
Held-to-maturity securities (fair value: $9,954 and $10,007)
|
10,186
|
|
10,232
|
|
||
Other investments
|
689
|
|
738
|
|
||
Loans, net of unearned income of $783 and $826
|
86,125
|
|
86,038
|
|
||
Less: Allowance for loan and lease losses
|
(870
|
)
|
(858
|
)
|
||
Net loans
|
85,255
|
|
85,180
|
|
||
Loans held for sale
(a)
|
1,384
|
|
1,104
|
|
||
Premises and equipment
|
935
|
|
978
|
|
||
Operating lease assets
|
563
|
|
540
|
|
||
Goodwill
|
2,427
|
|
2,446
|
|
||
Other intangible assets
|
362
|
|
384
|
|
||
Corporate-owned life insurance
|
4,087
|
|
4,068
|
|
||
Derivative assets
|
578
|
|
803
|
|
||
Accrued income and other assets
|
4,064
|
|
3,864
|
|
||
Discontinued assets (including $3 and $3 of portfolio loans at fair value, see Note 12)
|
1,520
|
|
1,585
|
|
||
Total assets
|
$
|
134,476
|
|
$
|
136,453
|
|
LIABILITIES
|
|
|
||||
Deposits in domestic offices:
|
|
|
||||
NOW and money market deposit accounts
|
$
|
55,095
|
|
$
|
54,590
|
|
Savings deposits
|
6,306
|
|
6,491
|
|
||
Certificates of deposit ($100,000 or more)
|
5,859
|
|
5,483
|
|
||
Other time deposits
|
4,694
|
|
4,698
|
|
||
Total interest-bearing deposits
|
71,954
|
|
71,262
|
|
||
Noninterest-bearing deposits
|
32,028
|
|
32,825
|
|
||
Total deposits
|
103,982
|
|
104,087
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
442
|
|
1,502
|
|
||
Bank notes and other short-term borrowings
|
943
|
|
808
|
|
||
Derivative liabilities
|
255
|
|
636
|
|
||
Accrued expense and other liabilities
|
1,552
|
|
1,796
|
|
||
Long-term debt
|
12,324
|
|
12,384
|
|
||
Total liabilities
|
119,498
|
|
121,213
|
|
||
EQUITY
|
|
|
||||
Preferred stock
|
1,025
|
|
1,665
|
|
||
Common shares, $1 par value; authorized 1,400,000,000 shares; issued
1,256,702,081, and
1,256,702,081
shares
|
1,257
|
|
1,257
|
|
||
Capital surplus
|
6,287
|
|
6,385
|
|
||
Retained earnings
|
9,584
|
|
9,378
|
|
||
Treasury stock, at cost (159,223,419 and 177,388,429 shares)
|
(2,623
|
)
|
(2,904
|
)
|
||
Accumulated other comprehensive income (loss)
|
(554
|
)
|
(541
|
)
|
||
Key shareholders’ equity
|
14,976
|
|
15,240
|
|
||
Noncontrolling interests
|
2
|
|
—
|
|
||
Total equity
|
14,978
|
|
15,240
|
|
||
Total liabilities and equity
|
$
|
134,476
|
|
$
|
136,453
|
|
|
|
|
(a)
|
Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of
$62 million
at
March 31, 2017
, and December 31, 2016.
|
dollars in millions, except per share amounts
|
Three months ended March 31,
|
|||||
(Unaudited)
|
2017
|
|
2016
|
|
||
INTEREST INCOME
|
|
|
||||
Loans
|
$
|
877
|
|
$
|
562
|
|
Loans held for sale
|
13
|
|
8
|
|
||
Securities available for sale
|
95
|
|
75
|
|
||
Held-to-maturity securities
|
51
|
|
24
|
|
||
Trading account assets
|
7
|
|
7
|
|
||
Short-term investments
|
3
|
|
4
|
|
||
Other investments
|
4
|
|
3
|
|
||
Total interest income
|
1,050
|
|
683
|
|
||
INTEREST EXPENSE
|
|
|
||||
Deposits
|
58
|
|
31
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
1
|
|
—
|
|
||
Bank notes and other short-term borrowings
|
5
|
|
2
|
|
||
Long-term debt
|
68
|
|
46
|
|
||
Total interest expense
|
132
|
|
79
|
|
||
NET INTEREST INCOME
|
918
|
|
604
|
|
||
Provision for credit losses
|
63
|
|
89
|
|
||
Net interest income after provision for credit losses
|
855
|
|
515
|
|
||
NONINTEREST INCOME
|
|
|
||||
Trust and investment services income
|
135
|
|
109
|
|
||
Investment banking and debt placement fees
|
127
|
|
71
|
|
||
Service charges on deposit accounts
|
87
|
|
65
|
|
||
Operating lease income and other leasing gains
|
23
|
|
17
|
|
||
Corporate services income
|
54
|
|
50
|
|
||
Cards and payments income
|
65
|
|
46
|
|
||
Corporate-owned life insurance income
|
30
|
|
28
|
|
||
Consumer mortgage income
|
6
|
|
2
|
|
||
Mortgage servicing fees
|
18
|
|
12
|
|
||
Net gains (losses) from principal investing
|
1
|
|
—
|
|
||
Other income
(a)
|
31
|
|
31
|
|
||
Total noninterest income
|
577
|
|
431
|
|
||
NONINTEREST EXPENSE
|
|
|
||||
Personnel
|
556
|
|
404
|
|
||
Net occupancy
|
87
|
|
61
|
|
||
Computer processing
|
60
|
|
43
|
|
||
Business services and professional fees
|
46
|
|
41
|
|
||
Equipment
|
27
|
|
21
|
|
||
Operating lease expense
|
19
|
|
13
|
|
||
Marketing
|
21
|
|
12
|
|
||
FDIC assessment
|
20
|
|
9
|
|
||
Intangible asset amortization
|
22
|
|
8
|
|
||
OREO expense, net
|
2
|
|
1
|
|
||
Other expense
|
153
|
|
90
|
|
||
Total noninterest expense
|
1,013
|
|
703
|
|
||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
419
|
|
243
|
|
||
Income taxes
|
94
|
|
56
|
|
||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
325
|
|
187
|
|
||
Income (loss) from discontinued operations, net of taxes $0 and $0 (see Note 12)
|
—
|
|
1
|
|
||
NET INCOME (LOSS)
|
325
|
|
188
|
|
||
Less: Net income (loss) attributable to noncontrolling interests
|
1
|
|
—
|
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO KEY
|
$
|
324
|
|
$
|
188
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
296
|
|
$
|
182
|
|
Net income (loss) attributable to Key common shareholders
|
296
|
|
183
|
|
||
Per common share:
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.28
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders
(b)
|
.28
|
|
.22
|
|
||
Per common share — assuming dilution:
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.27
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders
(b)
|
.27
|
|
.22
|
|
||
Cash dividends declared per common share
|
$
|
.085
|
|
$
|
.075
|
|
Weighted-average common shares outstanding (000)
|
1,068,609
|
|
827,381
|
|
||
Effect of convertible preferred stock
|
—
|
|
—
|
|
||
Effect of common share options and other stock awards
|
17,931
|
|
7,679
|
|
||
Weighted-average common shares and potential common shares outstanding (000)
(c)
|
1,086,540
|
|
835,060
|
|
||
|
|
|
(a)
|
For the
three months ended March 31, 2017
, net securities gains totaled $1 million. For the
three months ended March 31, 2016
, net securities gains (losses) totaled less than
$1 million
. For the three months ended
March 31, 2017
, and
March 31, 2016
, we did not have any impairment losses related to securities.
|
(b)
|
EPS may not foot due to rounding.
|
(c)
|
Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.
|
in millions
|
Three months ended March 31,
|
|||||
(Unaudited)
|
2017
|
|
2016
|
|
||
Net income (loss)
|
$
|
325
|
|
$
|
188
|
|
Other comprehensive income (loss), net of tax:
|
|
|
||||
Net unrealized gains (losses) on securities available for sale, net of income taxes of $4 and $76
|
6
|
|
128
|
|
||
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($15) and $34
|
(24
|
)
|
58
|
|
||
Foreign currency translation adjustments, net of income taxes of $1 and $3
|
1
|
|
5
|
|
||
Net pension and postretirement benefit costs, net of income taxes of $2 and $4
|
4
|
|
1
|
|
||
Total other comprehensive income (loss), net of tax
|
(13
|
)
|
192
|
|
||
Comprehensive income (loss)
|
312
|
|
380
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
1
|
|
—
|
|
||
Comprehensive income (loss) attributable to Key
|
$
|
311
|
|
$
|
380
|
|
|
|
|
|
Key Shareholders’ Equity
|
|
|||||||||||||||||||||||
dollars in millions, except per share amounts
(Unaudited)
|
Preferred
Shares
Outstanding
(000)
|
Common
Shares
Outstanding
(000)
|
Preferred
Stock
|
Common
Shares
|
Capital
Surplus
|
Retained
Earnings
|
Treasury
Stock,
at Cost
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Noncontrolling
Interests
|
||||||||||||||||
BALANCE AT DECEMBER 31, 2015
|
2,900
|
|
835,751
|
|
$
|
290
|
|
$
|
1,017
|
|
$
|
3,922
|
|
$
|
8,922
|
|
$
|
(3,000
|
)
|
$
|
(405
|
)
|
$
|
13
|
|
Net income (loss)
|
|
|
|
|
|
188
|
|
|
|
—
|
|
||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net unrealized gains (losses) on securities available for sale, net of income taxes of $76
|
|
|
|
|
|
|
|
128
|
|
|
|||||||||||||||
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of $34
|
|
|
|
|
|
|
|
58
|
|
|
|||||||||||||||
Foreign currency translation adjustments, net of income taxes of $3
|
|
|
|
|
|
|
|
5
|
|
|
|||||||||||||||
Net pension and postretirement benefit costs, net of income taxes of $4
|
|
|
|
|
|
|
|
1
|
|
|
|||||||||||||||
Deferred compensation
|
|
|
|
|
(6
|
)
|
|
|
|
|
|||||||||||||||
Cash dividends declared on common shares ($.075 per share)
|
|
|
|
|
|
(63
|
)
|
|
|
|
|||||||||||||||
Cash dividends declared on Noncumulative Series A Preferred Stock ($1.9375 per share)
|
|
|
|
|
|
(5
|
)
|
|
|
|
|||||||||||||||
Common shares reissued (returned) for stock options and other employee benefit plans
|
|
6,539
|
|
|
|
(98
|
)
|
|
112
|
|
|
|
|||||||||||||
Net contribution from (distribution to) noncontrolling interests
|
|
|
|
|
|
|
|
|
(8
|
)
|
|||||||||||||||
BALANCE AT MARCH 31, 2016
|
2,900
|
|
842,290
|
|
$
|
290
|
|
$
|
1,017
|
|
$
|
3,818
|
|
$
|
9,042
|
|
$
|
(2,888
|
)
|
$
|
(213
|
)
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE AT DECEMBER 31, 2016
|
17,421
|
|
1,079,314
|
|
$
|
1,665
|
|
$
|
1,257
|
|
$
|
6,385
|
|
$
|
9,378
|
|
$
|
(2,904
|
)
|
$
|
(541
|
)
|
$
|
—
|
|
Net income (loss)
|
|
|
|
|
|
324
|
|
|
|
1
|
|
||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net unrealized gains (losses) on securities available for sale, net of income taxes of $4
|
|
|
|
|
|
|
|
6
|
|
|
|||||||||||||||
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($15)
|
|
|
|
|
|
|
|
(24
|
)
|
|
|||||||||||||||
Foreign currency translation adjustments, net of income taxes of $1
|
|
|
|
|
|
|
|
1
|
|
|
|||||||||||||||
Net pension and postretirement benefit costs, net of income taxes of $2
|
|
|
|
|
|
|
|
4
|
|
|
|||||||||||||||
Deferred compensation
|
|
|
|
|
3
|
|
|
|
|
|
|||||||||||||||
Cash dividends declared on common shares ($.085 per share)
|
|
|
|
|
|
(90
|
)
|
|
|
|
|||||||||||||||
Cash dividends declared on Noncumulative Series A Preferred Stock ($1.9375 per share)
|
|
|
|
|
|
(6
|
)
|
|
|
|
|||||||||||||||
Cash dividends declared on Noncumulative Series C Preferred Stock ($.539063 per share)
|
|
|
|
|
|
(7
|
)
|
|
|
|
|||||||||||||||
Cash dividends declared on Noncumulative Series D Preferred Stock ($12.50 per depository share)
|
|
|
|
|
|
(7
|
)
|
|
|
|
|||||||||||||||
Cash dividends declared on Noncumulative Series E Preferred Stock ($.395573 per depositary share)
|
|
|
|
|
|
(8
|
)
|
|
|
|
|||||||||||||||
Open market common share repurchases
|
|
(5,844
|
)
|
|
|
|
|
(107
|
)
|
|
|
||||||||||||||
Employee equity compensation program common share repurchases
|
|
(2,829
|
)
|
|
|
|
|
(53
|
)
|
|
|
||||||||||||||
Series A Preferred Stock exchanged for common shares
|
(2,900
|
)
|
20,568
|
|
(290
|
)
|
|
(49
|
)
|
|
338
|
|
|
|
|||||||||||
Redemption of Series C Preferred Stock
|
(14,000
|
)
|
|
(350
|
)
|
|
|
|
|
|
|
||||||||||||||
Common shares reissued (returned) for stock options and other employee benefit plans
|
|
6,270
|
|
|
|
(52
|
)
|
|
103
|
|
|
|
|||||||||||||
Net contribution from (distribution to) noncontrolling interests
|
|
|
|
|
|
|
|
|
1
|
|
|||||||||||||||
BALANCE AT MARCH 31, 2017
|
521
|
|
1,097,479
|
|
$
|
1,025
|
|
$
|
1,257
|
|
$
|
6,287
|
|
$
|
9,584
|
|
$
|
(2,623
|
)
|
$
|
(554
|
)
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
Three months ended March 31,
|
||||||
(Unaudited)
|
2017
|
|
2016
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (loss)
|
$
|
325
|
|
|
$
|
188
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Provision for credit losses
|
63
|
|
|
89
|
|
||
Depreciation and amortization expense, net
|
100
|
|
|
62
|
|
||
Accretion of acquired loans
|
43
|
|
|
—
|
|
||
Increase in cash surrender value of corporate-owned life insurance
|
(28
|
)
|
|
(25
|
)
|
||
Stock-based compensation expense
|
27
|
|
|
19
|
|
||
FDIC reimbursement (payments), net of FDIC expense
|
(2
|
)
|
|
1
|
|
||
Deferred income taxes (benefit)
|
137
|
|
|
50
|
|
||
Proceeds from sales of loans held for sale
|
2,334
|
|
|
1,110
|
|
||
Originations of loans held for sale, net of repayments
|
(2,562
|
)
|
|
(1,153
|
)
|
||
Net losses (gains) on sales of loans held for sale
|
(35
|
)
|
|
(2
|
)
|
||
Net losses (gains) from principal investing
|
(1
|
)
|
|
—
|
|
||
Net losses (gains) and writedown on OREO
|
1
|
|
|
1
|
|
||
Net losses (gains) on leased equipment
|
(2
|
)
|
|
—
|
|
||
Net securities losses (gains)
|
(1
|
)
|
|
—
|
|
||
Net losses (gains) on sales of fixed assets
|
12
|
|
|
1
|
|
||
Net decrease (increase) in trading account assets
|
(54
|
)
|
|
23
|
|
||
Other operating activities, net
|
(762
|
)
|
|
9
|
|
||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
(405
|
)
|
|
373
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Net decrease (increase) in short-term investments, excluding acquisitions
|
250
|
|
|
(2,729
|
)
|
||
Purchases of securities available for sale
|
(195
|
)
|
|
(610
|
)
|
||
Proceeds from sales of securities available for sale
|
912
|
|
|
—
|
|
||
Proceeds from prepayments and maturities of securities available for sale
|
1,061
|
|
|
722
|
|
||
Proceeds from prepayments and maturities of held-to-maturity securities
|
456
|
|
|
251
|
|
||
Purchases of held-to-maturity securities
|
(411
|
)
|
|
(358
|
)
|
||
Purchases of other investments
|
(2
|
)
|
|
(18
|
)
|
||
Proceeds from sales of other investments
|
51
|
|
|
24
|
|
||
Proceeds from prepayments and maturities of other investments
|
1
|
|
|
—
|
|
||
Net decrease (increase) in loans, excluding acquisitions, sales and transfers
|
(255
|
)
|
|
(663
|
)
|
||
Proceeds from sales of portfolio loans
|
37
|
|
|
40
|
|
||
Proceeds from corporate-owned life insurance
|
9
|
|
|
9
|
|
||
Purchases of premises, equipment, and software
|
(2
|
)
|
|
(8
|
)
|
||
Proceeds from sales of premises and equipment
|
—
|
|
|
—
|
|
||
Proceeds from sales of OREO
|
11
|
|
|
3
|
|
||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
1,923
|
|
|
(3,337
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Net increase (decrease) in deposits, excluding acquisitions
|
(105
|
)
|
|
2,336
|
|
||
Net increase (decrease) in short-term borrowings
|
(925
|
)
|
|
84
|
|
||
Net proceeds from issuance of long-term debt
|
—
|
|
|
976
|
|
||
Payments on long-term debt
|
(10
|
)
|
|
(498
|
)
|
||
Open market common share repurchases
|
(107
|
)
|
|
—
|
|
||
Employee equity compensation program common share repurchases
|
(53
|
)
|
|
—
|
|
||
Redemption of Preferred Stock Series C
|
(350
|
)
|
|
—
|
|
||
Net proceeds from reissuance of common shares
|
22
|
|
|
1
|
|
||
Cash dividends paid
|
(118
|
)
|
|
(68
|
)
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
(1,646
|
)
|
|
2,831
|
|
||
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
|
(128
|
)
|
|
(133
|
)
|
||
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD
|
677
|
|
|
607
|
|
||
CASH AND DUE FROM BANKS AT END OF PERIOD
|
$
|
549
|
|
|
$
|
474
|
|
Additional disclosures relative to cash flows:
|
|
|
|
||||
Interest paid
|
$
|
151
|
|
|
$
|
108
|
|
Income taxes paid (refunded)
|
(11
|
)
|
|
13
|
|
||
Noncash items:
|
|
|
|
||||
Reduction of secured borrowing and related collateral
|
$
|
13
|
|
|
$
|
21
|
|
Loans transferred to portfolio from held for sale
|
8
|
|
|
—
|
|
||
Loans transferred to held for sale from portfolio
|
25
|
|
|
—
|
|
||
Loans transferred to OREO
|
11
|
|
|
4
|
|
||
|
|
|
|
AICPA: American Institute of Certified Public Accountants.
|
KCDC: Key Community Development Corporation.
|
ALCO: Asset/Liability Management Committee.
|
KEF: Key Equipment Finance.
|
ALLL: Allowance for loan and lease losses.
|
KPP: Key Principal Partners.
|
A/LM: Asset/liability management.
|
KREEC: Key Real Estate Equity Capital, Inc.
|
AOCI: Accumulated other comprehensive income (loss).
|
LCR: Liquidity coverage ratio.
|
APBO: Accumulated postretirement benefit obligation.
|
LIBOR: London Interbank Offered Rate.
|
Austin: Austin Capital Management, Ltd.
|
LIHTC: Low-income housing tax credit.
|
BHCs: Bank holding companies.
|
LTV: Loan-to-value.
|
Board: KeyCorp Board of Directors.
|
Moody’s: Moody’s Investor Services, Inc.
|
CCAR: Comprehensive Capital Analysis and Review.
|
MRM: Market Risk Management group.
|
CMBS: Commercial mortgage-backed securities.
|
N/A: Not applicable.
|
CME: Chicago Mercantile Exchange.
|
NASDAQ: The NASDAQ Stock Market LLC.
|
CMO: Collateralized mortgage obligation.
|
NAV: Net asset value.
|
Common Shares: KeyCorp common shares, $1 par value.
|
N/M: Not meaningful.
|
DIF: Deposit Insurance Fund of the FDIC.
|
NOW: Negotiable Order of Withdrawal.
|
Dodd-Frank Act: Dodd-Frank Wall Street Reform and
|
NPR: Notice of proposed rulemaking.
|
Consumer Protection Act of 2010.
|
NYSE: New York Stock Exchange.
|
EBITDA: Earnings before interest, taxes, depreciation, and
|
OCC: Office of the Comptroller of the Currency.
|
amortization.
|
OCI: Other comprehensive income (loss).
|
EPS: Earnings per share.
|
OREO: Other real estate owned.
|
ERISA: Employee Retirement Income Security Act of 1974.
|
OTTI: Other-than-temporary impairment.
|
ERM: Enterprise risk management.
|
PBO: Projected benefit obligation.
|
EVE: Economic value of equity.
|
PCI: Purchased credit impaired.
|
FASB: Financial Accounting Standards Board.
|
S&P: Standard and Poor’s Ratings Services, a Division
|
FDIC: Federal Deposit Insurance Corporation.
|
of The McGraw-Hill Companies, Inc.
|
Federal Reserve: Board of Governors of the Federal Reserve
|
SEC: U.S. Securities and Exchange Commission.
|
System.
|
Series A Preferred Stock: KeyCorp’s 7.750%
|
FHLB: Federal Home Loan Bank of Cincinnati.
|
Noncumulative Perpetual Convertible Preferred Stock,
|
FHLMC: Federal Home Loan Mortgage Corporation.
|
Series A.
|
FICO: Fair Isaac Corporation
|
SIFIs: Systemically important financial institutions
|
First Niagara: First Niagara Financial Group, Inc.
|
including BHCs with total consolidated assets of at least
|
(NASDAQ: FNFG).
|
$50 billion and nonbank financial companies designated
|
FNMA: Federal National Mortgage Association, or Fannie Mae.
|
by FSOC for supervision by the Federal Reserve.
|
FSOC: Financial Stability Oversight Council.
|
TDR: Troubled debt restructuring.
|
GAAP: U.S. generally accepted accounting principles.
|
TE: Taxable-equivalent.
|
GNMA: Government National Mortgage Association, or Ginnie
|
U.S. Treasury: United States Department of the Treasury.
|
Mae.
|
VaR: Value at risk.
|
ISDA: International Swaps and Derivatives Association.
|
VEBA: Voluntary Employee Beneficiary Association.
|
KAHC: Key Affordable Housing Corporation.
|
VIE: Variable interest entity.
|
KCC: Key Capital Corporation.
|
|
in millions
|
|
|
||||
Consideration paid:
|
|
|
||||
KeyCorp common stock issued
|
|
$
|
2,831
|
|
||
Cash payments to First Niagara stockholders
|
|
811
|
|
|||
Exchange of First Niagara preferred stock for KeyCorp preferred stock
|
|
350
|
|
|||
Total consideration paid
|
|
$
|
3,992
|
|
||
|
|
|
||||
Statement of Net Assets Acquired at Fair Value:
|
|
|
||||
ASSETS
|
|
|
||||
Cash and due from banks and short-term investments
|
$
|
620
|
|
|
||
Investment securities
|
9,012
|
|
|
|||
Other investments
|
297
|
|
|
|||
Loans
|
23,645
|
|
|
|||
Premises and equipment
|
245
|
|
|
|||
Other intangible assets
|
385
|
|
|
|||
Accrued income and other assets
|
1,449
|
|
|
|||
Total assets
|
$
|
35,653
|
|
|
||
|
|
|
||||
LIABILITIES
|
|
|
||||
Deposits
|
$
|
28,994
|
|
|
||
Bank notes and other short-term borrowings
|
2,698
|
|
|
|||
Accrued expense and other liabilities
|
490
|
|
|
|||
Long-term debt
|
846
|
|
|
|||
Total liabilities
|
$
|
33,028
|
|
|
||
|
|
|
||||
Net identifiable assets acquired
|
|
2,625
|
|
|||
Goodwill
|
|
$
|
1,367
|
|
||
|
|
|
in millions
|
|
|
|
|
||||||
Acquired Asset or Liability
|
Balance Sheet Line Item
|
Provisional Estimate
|
Revised Estimate
|
Increase (Decrease)
|
||||||
Tax adjustment on previous fair value measurements
(a)
|
Accrued income and other assets
|
$
|
175
|
|
$
|
194
|
|
$
|
19
|
|
|
|
|
|
|
(a)
|
The tax adjustment on previous fair value measurements did not have any impact on the income statement for the three months ended March 31, 2017.
|
in millions
|
PCI
|
||
Contractual required payments receivable
|
$
|
1,378
|
|
Nonaccretable difference
|
189
|
|
|
Expected cash flows
|
1,189
|
|
|
Accretable yield
|
205
|
|
|
Fair value
|
$
|
984
|
|
|
|
|
Key
|
|
Key
|
|
|
||||
|
Community
|
|
Corporate
|
|
|
||||
in millions
|
Bank
|
|
Bank
|
|
Total
|
|
|||
BALANCE AT DECEMBER 31, 2015
|
$
|
979
|
|
$
|
81
|
|
$
|
1,060
|
|
Acquisition of First Niagara
|
1,109
|
|
277
|
|
1,386
|
|
|||
BALANCE AT DECEMBER 31, 2016
|
2,088
|
|
358
|
|
2,446
|
|
|||
Tax adjustment on previous fair value measurements
|
(15
|
)
|
(4
|
)
|
(19
|
)
|
|||
BALANCE AT MARCH 31, 2017
|
$
|
2,073
|
|
$
|
354
|
|
$
|
2,427
|
|
|
|
|
|
|
Pro forma
|
||
in millions
|
Three months ended March 31, 2016
|
||
Net interest income (TE)
|
$
|
886
|
|
Noninterest income
|
506
|
|
|
Net income (loss) attributable to common shareholders
|
245
|
|
|
|
|
|
Three months ended March 31,
|
|||||
dollars in millions, except per share amounts
|
2017
|
|
2016
|
|
||
EARNINGS
|
|
|
||||
Income (loss) from continuing operations
|
$
|
325
|
|
$
|
187
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
1
|
|
—
|
|
||
Income (loss) from continuing operations attributable to Key
|
324
|
|
187
|
|
||
Less: Dividends on Preferred Stock
|
28
|
|
5
|
|
||
Income (loss) from continuing operations attributable to Key common shareholders
|
296
|
|
182
|
|
||
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
1
|
|
||
Net income (loss) attributable to Key common shareholders
|
$
|
296
|
|
$
|
183
|
|
WEIGHTED-AVERAGE COMMON SHARES
|
|
|
||||
Weighted-average common shares outstanding (000)
|
1,068,609
|
|
827,381
|
|
||
Effect of convertible preferred stock
|
—
|
|
—
|
|
||
Effect of common share options and other stock awards
|
17,931
|
|
7,679
|
|
||
Weighted-average common shares and potential common shares outstanding (000)
(b)
|
1,086,540
|
|
835,060
|
|
||
EARNINGS PER COMMON SHARE
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.28
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders
(c)
|
.28
|
|
.22
|
|
||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
$
|
.27
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders — assuming dilution
(c)
|
.27
|
|
.22
|
|
||
|
|
|
(a)
|
In September 2009, we decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank. As a result of this decision, we have accounted for this business as a discontinued operation. For further discussion regarding the income (loss) from discontinued operations, see Note
12
(“
Acquisition, Divestiture, and Discontinued Operations
”).
|
(b)
|
Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.
|
(c)
|
EPS may not foot due to rounding.
|
in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Commercial and industrial
(a)
|
$
|
40,112
|
|
$
|
39,768
|
|
Commercial real estate:
|
|
|
||||
Commercial mortgage
|
15,260
|
|
15,111
|
|
||
Construction
|
2,270
|
|
2,345
|
|
||
Total commercial real estate loans
|
17,530
|
|
17,456
|
|
||
Commercial lease financing
(b)
|
4,665
|
|
4,685
|
|
||
Total commercial loans
|
62,307
|
|
61,909
|
|
||
Residential — prime loans:
|
|
|
||||
Real estate — residential mortgage
|
5,507
|
|
5,547
|
|
||
Home equity loans
|
12,541
|
|
12,674
|
|
||
Total residential — prime loans
|
18,048
|
|
18,221
|
|
||
Consumer direct loans
|
1,735
|
|
1,788
|
|
||
Credit cards
|
1,037
|
|
1,111
|
|
||
Consumer indirect loans
|
2,998
|
|
3,009
|
|
||
Total consumer loans
|
23,818
|
|
24,129
|
|
||
Total loans
(c), (d)
|
$
|
86,125
|
|
$
|
86,038
|
|
|
|
|
(a)
|
Loan balances include
$114 million
and
$116 million
of commercial credit card balances at
March 31, 2017
, and
December 31, 2016
, respectively.
|
(b)
|
Commercial lease financing includes receivables held as collateral for a secured borrowing of
$55 million
and
$68 million
at
March 31, 2017
, and
December 31, 2016
, respectively. Principal reductions are based on the cash payments received from these related receivables. Additional information pertaining to this secured borrowing is included in Note
19
(“
Long-Term Debt
”) beginning on page 191 of our
2016
Form 10-K.
|
(c)
|
At
March 31, 2017
, total loans include purchased loans of
$19 billion
of which
$812 million
were PCI loans. At
December 31, 2016
, total loans include purchased loans of
$21 billion
, of which
$865 million
were PCI loans.
|
(d)
|
Total loans exclude loans of
$1.5 billion
at
March 31, 2017
, and
$1.6 billion
at
December 31, 2016
, related to the discontinued operations of the education lending business. Additional information pertaining to these loans is provided in Note
12
(“
Acquisition, Divestiture, and Discontinued Operations
”).
|
in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Commercial and industrial
|
$
|
171
|
|
$
|
19
|
|
Real estate — commercial mortgage
|
1,150
|
|
1,022
|
|
||
Real estate — construction
|
—
|
|
1
|
|
||
Commercial lease financing
|
1
|
|
—
|
|
||
Real estate — residential mortgage
(a)
|
62
|
|
62
|
|
||
Total loans held for sale
|
$
|
1,384
|
|
$
|
1,104
|
|
|
|
|
(a)
|
Real estate — residential mortgage loans held for sale are held at fair value at
March 31, 2017
, and
December 31, 2016
. The fair value option was elected for real estate — residential mortgage loans held for sale during the third quarter of 2016 with the First Niagara acquisition. The contractual amount due on these loans totaled
$62 million
at
March 31, 2017
, and
December 31, 2016
. Changes in fair value are recorded in “Consumer mortgage income” on the income statement. Additional information regarding residential mortgage loans held for sale fair value methodology is provided in Note
6
(“
Fair Value Measurements
”).
|
in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Balance at beginning of the period
|
$
|
1,104
|
|
$
|
1,137
|
|
New originations
|
2,563
|
|
2,846
|
|
||
Transfers from (to) held to maturity, net
|
17
|
|
11
|
|
||
Loan sales
|
(2,299
|
)
|
(2,889
|
)
|
||
Loan draws (payments), net
|
(1
|
)
|
(1
|
)
|
||
Balance at end of period
(a)
|
$
|
1,384
|
|
$
|
1,104
|
|
|
|
|
(a)
|
Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of
$62 million
at
March 31, 2017
, and
December 31, 2016
.
|
in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
||
Total nonperforming loans
(a)
|
$
|
573
|
|
$
|
625
|
|
OREO
(b)
|
49
|
|
51
|
|
||
Other nonperforming assets
|
1
|
|
—
|
|
||
Total nonperforming assets
|
$
|
623
|
|
$
|
676
|
|
Nonperforming assets from discontinued operations—education lending
(c)
|
$
|
4
|
|
$
|
5
|
|
TDRs included in nonperforming loans
|
161
|
|
141
|
|
||
TDRs with an allocated specific allowance
(d)
|
84
|
|
59
|
|
||
Specifically allocated allowance for restructured loans
(e)
|
30
|
|
27
|
|
||
Accruing loans past due 90 days or more
|
$
|
79
|
|
$
|
87
|
|
Accruing loans past due 30 through 89 days
|
312
|
|
404
|
|
||
|
|
|
(a)
|
Nonperforming loan balances exclude
$812 million
and
$865 million
of PCI loans at
March 31, 2017
, and
December 31, 2016
, respectively.
|
(b)
|
Includes carrying value of foreclosed residential real estate of approximately
$31 million
and
$29 million
at
March 31, 2017
and
December 31, 2016
, respectively.
|
(c)
|
Restructured loans of approximately
$23 million
and
$22 million
are included in discontinued operations at
March 31, 2017
, and
December 31, 2016
, respectively. See Note
12
(“
Acquisition, Divestiture, and Discontinued Operations
”) for further discussion.
|
(d)
|
Included in individually impaired loans allocated a specific allowance.
|
(e)
|
Included in allowance for individually evaluated impaired loans.
|
August 1, 2016
|
PCI
|
||
in millions
|
|||
Contractual required payments receivable
|
$
|
1,378
|
|
Nonaccretable difference
|
189
|
|
|
Expected cash flows
|
1,189
|
|
|
Accretable yield
|
205
|
|
|
Fair value
|
$
|
984
|
|
|
|
|
Three months ended March 31,
|
|
Twelve months ended December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||
in millions
|
Accretable Yield
|
Carrying Amount
|
Outstanding Unpaid Principal Balance
|
|
Accretable Yield
|
Carrying Amount
|
Outstanding Unpaid Principal Balance
|
||||||||||||
Balance at beginning of period
|
$
|
197
|
|
$
|
865
|
|
$
|
1,002
|
|
|
$
|
5
|
|
$
|
11
|
|
$
|
17
|
|
Additions
|
—
|
|
|
|
|
205
|
|
|
|
||||||||||
Accretion
|
(19
|
)
|
|
|
|
(29
|
)
|
|
|
||||||||||
Net reclassifications from nonaccretable to accretable
|
25
|
|
|
|
|
35
|
|
|
|
||||||||||
Payments received, net
|
(11
|
)
|
|
|
|
(19
|
)
|
|
|
||||||||||
Disposals
|
—
|
|
|
|
|
—
|
|
|
|
||||||||||
Balance at end of period
|
$
|
192
|
|
$
|
812
|
|
$
|
930
|
|
|
$
|
197
|
|
$
|
865
|
|
$
|
1,002
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
Recorded
Investment
(a)
|
Unpaid Principal Balance
(b)
|
Specific
Allowance
|
||||||
in millions
|
|||||||||
With no related allowance recorded:
|
|
|
|
||||||
Commercial and industrial
|
$
|
152
|
|
$
|
217
|
|
—
|
|
|
Commercial real estate:
|
|
|
|
||||||
Commercial mortgage
|
1
|
|
3
|
|
—
|
|
|||
Total commercial real estate loans
|
1
|
|
3
|
|
—
|
|
|||
Total commercial loans
|
153
|
|
220
|
|
—
|
|
|||
Real estate — residential mortgage
|
20
|
|
20
|
|
—
|
|
|||
Home equity loans
|
60
|
|
60
|
|
—
|
|
|||
Consumer indirect loans
|
2
|
|
2
|
|
—
|
|
|||
Total consumer loans
|
82
|
|
82
|
|
—
|
|
|||
Total loans with no related allowance recorded
|
235
|
|
302
|
|
—
|
|
|||
With an allowance recorded:
|
|
|
|
||||||
Commercial and industrial
|
85
|
|
90
|
|
$
|
16
|
|
||
Commercial real estate:
|
|
|
|
||||||
Commercial mortgage
|
15
|
|
15
|
|
3
|
|
|||
Total commercial real estate loans
|
15
|
|
15
|
|
3
|
|
|||
Total commercial loans
|
100
|
|
105
|
|
19
|
|
|||
Real estate — residential mortgage
|
30
|
|
30
|
|
2
|
|
|||
Home equity loans
|
64
|
|
64
|
|
17
|
|
|||
Consumer direct loans
|
3
|
|
3
|
|
—
|
|
|||
Credit cards
|
3
|
|
3
|
|
—
|
|
|||
Consumer indirect loans
|
33
|
|
33
|
|
1
|
|
|||
Total consumer loans
|
133
|
|
133
|
|
20
|
|
|||
Total loans with an allowance recorded
|
233
|
|
238
|
|
39
|
|
|||
Total
|
$
|
468
|
|
$
|
540
|
|
$
|
39
|
|
|
|
|
|
(a)
|
The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.
|
(b)
|
The Unpaid Principal Balance represents the customer’s legal obligation to us.
|
December 31, 2016
|
Recorded
Investment
(a)
|
Unpaid Principal Balance
(b)
|
Specific
Allowance
|
||||||
in millions
|
|||||||||
With no related allowance recorded:
|
|
|
|
||||||
Commercial and industrial
|
$
|
222
|
|
$
|
301
|
|
—
|
|
|
Commercial real estate:
|
|
|
|
||||||
Commercial mortgage
|
2
|
|
3
|
|
—
|
|
|||
Total commercial real estate loans
|
2
|
|
3
|
|
—
|
|
|||
Total commercial loans
|
224
|
|
304
|
|
—
|
|
|||
Real estate — residential mortgage
|
20
|
|
20
|
|
—
|
|
|||
Home equity loans
|
61
|
|
61
|
|
—
|
|
|||
Consumer indirect loans
|
1
|
|
1
|
|
—
|
|
|||
Total consumer loans
|
82
|
|
82
|
|
—
|
|
|||
Total loans with no related allowance recorded
|
306
|
|
386
|
|
—
|
|
|||
With an allowance recorded:
|
|
|
|
||||||
Commercial and industrial
|
62
|
|
73
|
|
$
|
17
|
|
||
Commercial real estate:
|
|
|
|
||||||
Commercial mortgage
|
4
|
|
4
|
|
—
|
|
|||
Total commercial real estate loans
|
4
|
|
4
|
|
—
|
|
|||
Total commercial loans
|
66
|
|
77
|
|
17
|
|
|||
Real estate — residential mortgage
|
31
|
|
31
|
|
2
|
|
|||
Home equity loans
|
64
|
|
64
|
|
18
|
|
|||
Consumer direct loans
|
2
|
|
3
|
|
—
|
|
|||
Credit cards
|
3
|
|
3
|
|
—
|
|
|||
Consumer indirect loans
|
29
|
|
29
|
|
1
|
|
|||
Total consumer loans
|
129
|
|
130
|
|
21
|
|
|||
Total loans with an allowance recorded
|
195
|
|
207
|
|
38
|
|
|||
Total
|
$
|
501
|
|
$
|
593
|
|
$
|
38
|
|
|
|
|
|
(a)
|
The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.
|
(b)
|
The Unpaid Principal Balance represents the customer’s legal obligation to us.
|
Average Recorded Investment
(a)
|
Three Months Ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Commercial and industrial
|
$
|
260
|
|
$
|
215
|
|
Commercial real estate:
|
|
|
||||
Commercial mortgage
|
10
|
|
9
|
|
||
Construction
|
—
|
|
6
|
|
||
Total commercial real estate loans
|
10
|
|
15
|
|
||
Total commercial loans
|
270
|
|
230
|
|
||
Real estate — residential mortgage
|
51
|
|
55
|
|
||
Home equity loans
|
125
|
|
129
|
|
||
Consumer direct loans
|
3
|
|
1
|
|
||
Credit cards
|
2
|
|
3
|
|
||
Consumer indirect loans
|
33
|
|
39
|
|
||
Total consumer loans
|
214
|
|
227
|
|
||
Total
|
$
|
484
|
|
$
|
457
|
|
|
|
|
(a)
|
The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.
|
March 31, 2017
|
Number of
Loans
|
Pre-modification
Outstanding
Recorded
Investment
|
Post-modification
Outstanding
Recorded
Investment
|
|||||
dollars in millions
|
||||||||
LOAN TYPE
|
|
|
|
|||||
Nonperforming:
|
|
|
|
|||||
Commercial and industrial
|
20
|
|
$
|
100
|
|
$
|
66
|
|
Commercial real estate:
|
|
|
|
|||||
Commercial mortgage
|
7
|
|
5
|
|
4
|
|
||
Total commercial real estate loans
|
7
|
|
5
|
|
4
|
|
||
Total commercial loans
|
27
|
|
105
|
|
70
|
|
||
Real estate — residential mortgage
|
267
|
|
16
|
|
16
|
|
||
Home equity loans
|
1,186
|
|
72
|
|
64
|
|
||
Consumer direct loans
|
40
|
|
1
|
|
1
|
|
||
Credit cards
|
288
|
|
2
|
|
1
|
|
||
Consumer indirect loans
|
522
|
|
10
|
|
9
|
|
||
Total consumer loans
|
2,303
|
|
101
|
|
91
|
|
||
Total nonperforming TDRs
|
2,330
|
|
206
|
|
161
|
|
||
Prior-year accruing:
(a)
|
|
|
|
|||||
Commercial and industrial
|
4
|
|
29
|
|
16
|
|
||
Total commercial loans
|
4
|
|
29
|
|
16
|
|
||
Real estate — residential mortgage
|
526
|
|
35
|
|
35
|
|
||
Home equity loans
|
1,240
|
|
75
|
|
61
|
|
||
Consumer direct loans
|
32
|
|
2
|
|
1
|
|
||
Credit cards
|
440
|
|
3
|
|
1
|
|
||
Consumer indirect loans
|
365
|
|
55
|
|
27
|
|
||
Total consumer loans
|
2,603
|
|
170
|
|
125
|
|
||
Total prior-year accruing TDRs
|
2,607
|
|
199
|
|
141
|
|
||
Total TDRs
|
4,937
|
|
$
|
405
|
|
$
|
302
|
|
|
|
|
|
(a)
|
All TDRs that were restructured prior to January 1,
2017
, and are fully accruing.
|
December 31, 2016
|
Number
of Loans
|
Pre-modification
Outstanding
Recorded
Investment
|
Post-modification
Outstanding
Recorded
Investment
|
|||||
dollars in millions
|
||||||||
LOAN TYPE
|
|
|
|
|||||
Nonperforming:
|
|
|
|
|||||
Commercial and industrial
|
18
|
|
$
|
91
|
|
$
|
50
|
|
Commercial real estate:
|
|
|
|
|||||
Commercial mortgage
|
7
|
|
2
|
|
1
|
|
||
Total commercial real estate loans
|
7
|
|
2
|
|
1
|
|
||
Total commercial loans
|
25
|
|
93
|
|
51
|
|
||
Real estate — residential mortgage
|
264
|
|
16
|
|
16
|
|
||
Home equity loans
|
1,199
|
|
77
|
|
69
|
|
||
Consumer direct loans
|
32
|
|
1
|
|
—
|
|
||
Credit cards
|
336
|
|
2
|
|
2
|
|
||
Consumer indirect loans
|
124
|
|
4
|
|
3
|
|
||
Total consumer loans
|
1,955
|
|
100
|
|
90
|
|
||
Total nonperforming TDRs
|
1,980
|
|
193
|
|
141
|
|
||
Prior-year accruing:
(a)
|
|
|
||||||
Commercial and Industrial
|
5
|
|
30
|
|
16
|
|
||
Total commercial loans
|
5
|
|
30
|
|
16
|
|
||
Real estate — residential mortgage
|
477
|
|
35
|
|
35
|
|
||
Home equity loans
|
1,231
|
|
70
|
|
57
|
|
||
Consumer direct loans
|
35
|
|
2
|
|
2
|
|
||
Credit cards
|
410
|
|
3
|
|
1
|
|
||
Consumer indirect loans
|
377
|
|
56
|
|
28
|
|
||
Total consumer loans
|
2,530
|
|
166
|
|
123
|
|
||
Total prior-year accruing TDRs
|
2,535
|
|
196
|
|
139
|
|
||
Total TDRs
|
4,515
|
|
$
|
389
|
|
$
|
280
|
|
|
|
|
|
(a)
|
All TDRs that were restructured prior to January 1,
2016
, and are fully accruing.
|
|
Three Months Ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Commercial loans:
|
|
|
||||
Interest rate reduction
|
$
|
7
|
|
—
|
|
|
Other
|
21
|
|
$
|
3
|
|
|
Total
|
$
|
28
|
|
$
|
3
|
|
Consumer loans:
|
|
|
||||
Interest rate reduction
|
$
|
3
|
|
$
|
2
|
|
Forgiveness of principal
|
—
|
|
12
|
|
||
Other
|
12
|
|
2
|
|
||
Total
|
$
|
15
|
|
$
|
16
|
|
Total commercial and consumer TDRs
|
$
|
43
|
|
$
|
19
|
|
Total loans
|
86,125
|
|
60,438
|
|
||
|
|
|
March 31, 2017
|
Current
|
30-59
Days Past
Due
(b)
|
60-89
Days Past
Due
(b)
|
90 and
Greater
Days Past
Due
(b)
|
Non-performing
Loans
|
Total Past
Due and
Non-performing
Loans
|
Purchased
Credit
Impaired
|
Total
Loans
(c), (d)
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
39,621
|
|
$
|
60
|
|
$
|
47
|
|
$
|
24
|
|
$
|
258
|
|
$
|
389
|
|
$
|
102
|
|
$
|
40,112
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage
|
14,891
|
|
25
|
|
10
|
|
11
|
|
32
|
|
78
|
|
291
|
|
15,260
|
|
||||||||
Construction
|
2,242
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
26
|
|
2,270
|
|
||||||||
Total commercial real estate loans
|
17,133
|
|
25
|
|
10
|
|
11
|
|
34
|
|
80
|
|
317
|
|
17,530
|
|
||||||||
Commercial lease financing
|
4,634
|
|
12
|
|
8
|
|
6
|
|
5
|
|
31
|
|
—
|
|
4,665
|
|
||||||||
Total commercial loans
|
$
|
61,388
|
|
$
|
97
|
|
$
|
65
|
|
$
|
41
|
|
$
|
297
|
|
$
|
500
|
|
$
|
419
|
|
$
|
62,307
|
|
Real estate — residential mortgage
|
$
|
5,065
|
|
$
|
16
|
|
$
|
7
|
|
$
|
4
|
|
$
|
54
|
|
$
|
81
|
|
$
|
361
|
|
$
|
5,507
|
|
Home equity loans
|
12,225
|
|
42
|
|
27
|
|
14
|
|
207
|
|
290
|
|
26
|
|
12,541
|
|
||||||||
Consumer direct loans
|
1,709
|
|
8
|
|
4
|
|
5
|
|
3
|
|
20
|
|
6
|
|
1,735
|
|
||||||||
Credit cards
|
1,011
|
|
7
|
|
5
|
|
11
|
|
3
|
|
26
|
|
—
|
|
1,037
|
|
||||||||
Consumer indirect loans
|
2,951
|
|
27
|
|
7
|
|
4
|
|
9
|
|
47
|
|
—
|
|
2,998
|
|
||||||||
Total consumer loans
|
$
|
22,961
|
|
$
|
100
|
|
$
|
50
|
|
$
|
38
|
|
$
|
276
|
|
$
|
464
|
|
$
|
393
|
|
$
|
23,818
|
|
Total loans
|
$
|
84,349
|
|
$
|
197
|
|
$
|
115
|
|
$
|
79
|
|
$
|
573
|
|
$
|
964
|
|
$
|
812
|
|
$
|
86,125
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.
|
(b)
|
Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.
|
(c)
|
Net of unearned income, net deferred loan fees and costs, and unamortized discounts and premiums.
|
(d)
|
Future accretable yield related to PCI loans is not included in the analysis of the loan portfolio.
|
December 31, 2016
|
Current
|
30-59
Days Past
Due
(b)
|
60-89
Days Past
Due
(b)
|
90 and
Greater
Days Past
Due
(b)
|
Non-performing
Loans
|
Total Past
Due and
Non-performing
Loans
|
Purchased
Credit
Impaired
|
Total
Loans
(c), (d)
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
39,242
|
|
$
|
58
|
|
$
|
28
|
|
$
|
31
|
|
$
|
297
|
|
$
|
414
|
|
112
|
|
$
|
39,768
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage
|
14,655
|
|
93
|
|
9
|
|
6
|
|
26
|
|
134
|
|
322
|
|
15,111
|
|
||||||||
Construction
|
2,314
|
|
—
|
|
—
|
|
2
|
|
3
|
|
5
|
|
26
|
|
2,345
|
|
||||||||
Total commercial real estate loans
|
16,969
|
|
93
|
|
9
|
|
8
|
|
29
|
|
139
|
|
348
|
|
17,456
|
|
||||||||
Commercial lease financing
|
4,641
|
|
28
|
|
3
|
|
5
|
|
8
|
|
44
|
|
—
|
|
4,685
|
|
||||||||
Total commercial loans
|
$
|
60,852
|
|
$
|
179
|
|
$
|
40
|
|
$
|
44
|
|
$
|
334
|
|
$
|
597
|
|
460
|
|
$
|
61,909
|
|
|
Real estate — residential mortgage
|
$
|
5,098
|
|
$
|
17
|
|
$
|
5
|
|
$
|
3
|
|
$
|
56
|
|
$
|
81
|
|
$
|
368
|
|
$
|
5,547
|
|
Home equity loans
|
12,327
|
|
49
|
|
29
|
|
16
|
|
223
|
|
317
|
|
30
|
|
12,674
|
|
||||||||
Consumer direct loans
|
1,705
|
|
44
|
|
15
|
|
11
|
|
6
|
|
76
|
|
7
|
|
1,788
|
|
||||||||
Credit cards
|
1,082
|
|
9
|
|
6
|
|
12
|
|
2
|
|
29
|
|
—
|
|
1,111
|
|
||||||||
Consumer indirect loans
|
2,993
|
|
7
|
|
4
|
|
1
|
|
4
|
|
16
|
|
—
|
|
3,009
|
|
||||||||
Total consumer loans
|
$
|
23,205
|
|
$
|
126
|
|
$
|
59
|
|
$
|
43
|
|
$
|
291
|
|
$
|
519
|
|
$
|
405
|
|
$
|
24,129
|
|
Total loans
|
$
|
84,057
|
|
$
|
305
|
|
$
|
99
|
|
$
|
87
|
|
$
|
625
|
|
$
|
1,116
|
|
$
|
865
|
|
$
|
86,038
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.
|
(b)
|
Past due loan amounts exclude purchased impaired loans, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.
|
(c)
|
Net of unearned income, net deferred loan fees and costs, and unamortized discounts and premiums.
|
(d)
|
Future accretable yield related to purchased credit impaired loans is not included in the analysis of the loan portfolio.
|
in millions
|
Commercial and industrial
|
RE — Commercial
|
RE — Construction
|
Commercial lease
|
Total
|
|||||||||||||||||||||||||
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
||||||||||||||||||||
RATING
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||||||
Pass
|
$
|
38,268
|
|
$
|
37,845
|
|
$
|
14,536
|
|
$
|
14,308
|
|
$
|
2,199
|
|
$
|
2,287
|
|
$
|
4,602
|
|
$
|
4,632
|
|
$
|
59,605
|
|
$
|
59,072
|
|
Criticized (Accruing)
|
1,484
|
|
1,514
|
|
401
|
|
455
|
|
43
|
|
30
|
|
58
|
|
45
|
|
1,986
|
|
2,044
|
|
||||||||||
Criticized (Nonaccruing)
|
258
|
|
297
|
|
32
|
|
26
|
|
2
|
|
2
|
|
5
|
|
8
|
|
297
|
|
333
|
|
||||||||||
Total
|
$
|
40,010
|
|
$
|
39,656
|
|
$
|
14,969
|
|
$
|
14,789
|
|
$
|
2,244
|
|
$
|
2,319
|
|
$
|
4,665
|
|
$
|
4,685
|
|
$
|
61,888
|
|
$
|
61,449
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.
|
(b)
|
The term criticized refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.
|
in millions
|
Residential — Prime
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
|||||||||||||||||||||||||
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
||||||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||||||
750 and above
|
$
|
9,935
|
|
$
|
9,818
|
|
$
|
472
|
|
$
|
498
|
|
$
|
408
|
|
$
|
453
|
|
$
|
1,263
|
|
$
|
1,266
|
|
$
|
12,078
|
|
$
|
12,035
|
|
660 to 749
|
5,821
|
|
5,266
|
|
644
|
|
661
|
|
498
|
|
525
|
|
1,190
|
|
1,195
|
|
8,153
|
|
7,647
|
|
||||||||||
Less than 660
|
1,665
|
|
1,617
|
|
199
|
|
194
|
|
131
|
|
132
|
|
545
|
|
543
|
|
2,540
|
|
2,486
|
|
||||||||||
No Score
|
240
|
|
1,122
|
|
414
|
|
428
|
|
—
|
|
1
|
|
—
|
|
5
|
|
654
|
|
1,556
|
|
||||||||||
Total
|
$
|
17,661
|
|
$
|
17,823
|
|
$
|
1,729
|
|
$
|
1,781
|
|
$
|
1,037
|
|
$
|
1,111
|
|
$
|
2,998
|
|
$
|
3,009
|
|
$
|
23,425
|
|
$
|
23,724
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.
|
in millions
|
Commercial and Industrial
|
RE — Commercial
|
RE — Construction
|
Commercial Lease
|
Total
|
|||||||||||||||||||||||
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
||||||||||||||||||
RATING
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||||
Pass
|
$
|
26
|
|
$
|
12
|
|
$
|
118
|
|
$
|
139
|
|
$
|
20
|
|
$
|
21
|
|
—
|
|
—
|
|
$
|
164
|
|
$
|
172
|
|
Criticized
|
76
|
|
100
|
|
173
|
|
183
|
|
6
|
|
5
|
|
—
|
|
—
|
|
255
|
|
288
|
|
||||||||
Total
|
$
|
102
|
|
$
|
112
|
|
$
|
291
|
|
$
|
322
|
|
$
|
26
|
|
$
|
26
|
|
—
|
|
—
|
|
$
|
419
|
|
$
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.
|
(b)
|
The term “criticized” refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.
|
in millions
|
Residential — Prime
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
|||||||||||||||||||||
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
750 and above
|
$
|
136
|
|
$
|
133
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
136
|
|
$
|
133
|
|
||
660 to 749
|
143
|
|
127
|
|
$
|
2
|
|
$
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
145
|
|
129
|
|
||||
Less than 660
|
103
|
|
133
|
|
3
|
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
106
|
|
137
|
|
||||||
No Score
|
5
|
|
5
|
|
1
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
|
6
|
|
||||||
Total
|
$
|
387
|
|
$
|
398
|
|
$
|
6
|
|
$
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
393
|
|
$
|
405
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.
|
|
Three months ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Balance at beginning of period — continuing operations
|
$
|
858
|
|
$
|
796
|
|
|
|
|
||||
Charge-offs
|
(77
|
)
|
(60
|
)
|
||
Recoveries
|
19
|
|
14
|
|
||
Net loans and leases charged off
|
(58
|
)
|
(46
|
)
|
||
|
|
|
||||
Provision for loan and lease losses from continuing operations
|
70
|
|
76
|
|
||
Balance at end of period — continuing operations
|
$
|
870
|
|
$
|
826
|
|
|
|
|
in millions
|
December 31, 2016
|
Provision
|
|
Charge-offs
|
Recoveries
|
March 31, 2017
|
||||||||||
Commercial and Industrial
|
$
|
508
|
|
$
|
31
|
|
|
$
|
(32
|
)
|
$
|
5
|
|
$
|
512
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
144
|
|
2
|
|
|
—
|
|
—
|
|
146
|
|
|||||
Real estate — construction
|
22
|
|
6
|
|
|
—
|
|
1
|
|
29
|
|
|||||
Total commercial real estate loans
|
166
|
|
8
|
|
|
—
|
|
1
|
|
175
|
|
|||||
Commercial lease financing
|
42
|
|
3
|
|
|
(7
|
)
|
2
|
|
40
|
|
|||||
Total commercial loans
|
716
|
|
42
|
|
|
(39
|
)
|
8
|
|
727
|
|
|||||
Real estate — residential mortgage
|
17
|
|
(3
|
)
|
|
2
|
|
2
|
|
18
|
|
|||||
Home equity loans
|
54
|
|
4
|
|
|
(8
|
)
|
3
|
|
53
|
|
|||||
Consumer direct loans
|
24
|
|
9
|
|
|
(10
|
)
|
1
|
|
24
|
|
|||||
Credit cards
|
38
|
|
10
|
|
|
(11
|
)
|
1
|
|
38
|
|
|||||
Consumer indirect loans
|
9
|
|
8
|
|
|
(11
|
)
|
4
|
|
10
|
|
|||||
Total consumer loans
|
142
|
|
28
|
|
|
(38
|
)
|
11
|
|
143
|
|
|||||
Total ALLL — continuing operations
|
858
|
|
70
|
|
(a)
|
(77
|
)
|
19
|
|
870
|
|
|||||
Discontinued operations
|
24
|
|
3
|
|
|
(6
|
)
|
2
|
|
23
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
882
|
|
$
|
73
|
|
|
$
|
(83
|
)
|
$
|
21
|
|
$
|
893
|
|
|
|
|
|
|
|
|
in millions
|
December 31, 2015
|
Provision
|
|
Charge-offs
|
Recoveries
|
March 31, 2016
|
||||||||||
Commercial and Industrial
|
$
|
450
|
|
$
|
50
|
|
|
$
|
(26
|
)
|
$
|
3
|
|
$
|
477
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
134
|
|
—
|
|
|
(1
|
)
|
2
|
|
135
|
|
|||||
Real estate — construction
|
25
|
|
(3
|
)
|
|
—
|
|
1
|
|
$
|
23
|
|
||||
Total commercial real estate loans
|
159
|
|
(3
|
)
|
|
(1
|
)
|
3
|
|
158
|
|
|||||
Commercial lease financing
|
47
|
|
(1
|
)
|
|
(3
|
)
|
—
|
|
43
|
|
|||||
Total commercial loans
|
656
|
|
46
|
|
|
(30
|
)
|
6
|
|
678
|
|
|||||
Real estate — residential mortgage
|
18
|
|
2
|
|
|
(2
|
)
|
2
|
|
20
|
|
|||||
Home equity loans
|
57
|
|
14
|
|
|
(10
|
)
|
3
|
|
64
|
|
|||||
Consumer direct loans
|
20
|
|
5
|
|
|
(6
|
)
|
1
|
|
20
|
|
|||||
Credit cards
|
32
|
|
6
|
|
|
(8
|
)
|
1
|
|
31
|
|
|||||
Consumer indirect loans
|
13
|
|
3
|
|
|
(4
|
)
|
1
|
|
13
|
|
|||||
Total consumer loans
|
140
|
|
30
|
|
|
(30
|
)
|
8
|
|
148
|
|
|||||
Total ALLL — continuing operations
|
796
|
|
76
|
|
(a)
|
(60
|
)
|
14
|
|
826
|
|
|||||
Discontinued operations
|
28
|
|
2
|
|
|
(9
|
)
|
3
|
|
24
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
824
|
|
$
|
78
|
|
|
$
|
(69
|
)
|
$
|
17
|
|
$
|
850
|
|
|
|
|
|
|
|
|
|
Allowance
|
|
Outstanding
|
||||||||||||||||||||
March 31, 2017
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
Purchased
Credit
Impaired
|
|
Loans
|
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
|
Purchased
Credit
Impaired
|
|||||||||||||
in millions
|
|
|
|||||||||||||||||||||
Commercial and industrial
|
$
|
16
|
|
$
|
495
|
|
1
|
|
|
$
|
40,112
|
|
|
$
|
237
|
|
$
|
39,773
|
|
|
$
|
102
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial mortgage
|
3
|
|
140
|
|
3
|
|
|
15,260
|
|
|
16
|
|
14,953
|
|
|
291
|
|
||||||
Construction
|
—
|
|
29
|
|
—
|
|
|
2,270
|
|
|
—
|
|
2,244
|
|
|
26
|
|
||||||
Total commercial real estate loans
|
3
|
|
169
|
|
3
|
|
|
17,530
|
|
|
16
|
|
17,197
|
|
|
317
|
|
||||||
Commercial lease financing
|
—
|
|
40
|
|
—
|
|
|
4,665
|
|
|
—
|
|
4,665
|
|
|
—
|
|
||||||
Total commercial loans
|
19
|
|
704
|
|
4
|
|
|
62,307
|
|
|
253
|
|
61,635
|
|
|
419
|
|
||||||
Real estate — residential mortgage
|
2
|
|
15
|
|
1
|
|
|
5,507
|
|
|
51
|
|
5,095
|
|
|
361
|
|
||||||
Home equity loans
|
17
|
|
35
|
|
1
|
|
|
12,541
|
|
|
124
|
|
12,391
|
|
|
26
|
|
||||||
Consumer direct loans
|
—
|
|
24
|
|
—
|
|
|
1,735
|
|
|
3
|
|
1,726
|
|
|
6
|
|
||||||
Credit cards
|
—
|
|
38
|
|
—
|
|
|
1,037
|
|
|
3
|
|
1,034
|
|
|
—
|
|
||||||
Consumer indirect loans
|
1
|
|
9
|
|
—
|
|
|
2,998
|
|
|
35
|
|
2,963
|
|
|
—
|
|
||||||
Total consumer loans
|
20
|
|
121
|
|
2
|
|
|
23,818
|
|
|
216
|
|
23,209
|
|
|
393
|
|
||||||
Total ALLL — continuing operations
|
39
|
|
825
|
|
6
|
|
|
86,125
|
|
|
469
|
|
84,844
|
|
|
812
|
|
||||||
Discontinued operations
|
2
|
|
21
|
|
—
|
|
|
1,500
|
|
(a)
|
23
|
|
1,477
|
|
(a)
|
—
|
|
||||||
Total ALLL — including discontinued operations
|
$
|
41
|
|
$
|
846
|
|
6
|
|
|
$
|
87,625
|
|
|
$
|
492
|
|
$
|
86,321
|
|
|
$
|
812
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amount includes
$3 million
of loans carried at fair value that are excluded from ALLL consideration.
|
|
Allowance
|
Outstanding
|
|||||||||||||||||||||
December 31, 2016
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
Purchased
Credit
Impaired
|
Loans
|
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
|
Purchased
Credit
Impaired
|
||||||||||||||
in millions
|
|
|
|||||||||||||||||||||
Commercial and Industrial
|
$
|
17
|
|
$
|
486
|
|
5
|
|
$
|
39,768
|
|
|
$
|
284
|
|
$
|
39,372
|
|
|
$
|
112
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial mortgage
|
—
|
|
144
|
|
—
|
|
15,111
|
|
|
5
|
|
14,784
|
|
|
322
|
|
|||||||
Construction
|
—
|
|
22
|
|
—
|
|
2,345
|
|
|
—
|
|
2,319
|
|
|
26
|
|
|||||||
Total commercial real estate loans
|
—
|
|
166
|
|
—
|
|
17,456
|
|
|
5
|
|
17,103
|
|
|
348
|
|
|||||||
Commercial lease financing
|
—
|
|
42
|
|
—
|
|
4,685
|
|
|
—
|
|
4,685
|
|
|
—
|
|
|||||||
Total commercial loans
|
17
|
|
694
|
|
5
|
|
61,909
|
|
|
289
|
|
61,160
|
|
|
460
|
|
|||||||
Real estate — residential mortgage
|
2
|
|
15
|
|
—
|
|
5,547
|
|
|
51
|
|
5,128
|
|
|
368
|
|
|||||||
Home equity loans
|
17
|
|
37
|
|
—
|
|
12,674
|
|
|
125
|
|
12,519
|
|
|
30
|
|
|||||||
Consumer direct loans
|
—
|
|
24
|
|
—
|
|
1,788
|
|
|
3
|
|
1,778
|
|
|
7
|
|
|||||||
Credit cards
|
—
|
|
38
|
|
—
|
|
1,111
|
|
|
3
|
|
1,108
|
|
|
—
|
|
|||||||
Consumer indirect loans
|
1
|
|
8
|
|
—
|
|
3,009
|
|
|
30
|
|
2,979
|
|
|
—
|
|
|||||||
Total consumer loans
|
20
|
|
122
|
|
—
|
|
24,129
|
|
|
212
|
|
23,512
|
|
|
405
|
|
|||||||
Total ALLL — continuing operations
|
37
|
|
816
|
|
5
|
|
86,038
|
|
|
501
|
|
84,672
|
|
|
865
|
|
|||||||
Discontinued operations
|
2
|
|
22
|
|
—
|
|
1,565
|
|
(a)
|
22
|
|
1,543
|
|
(a)
|
—
|
|
|||||||
Total ALLL — including discontinued operations
|
$
|
39
|
|
$
|
838
|
|
$
|
5
|
|
$
|
87,603
|
|
|
$
|
523
|
|
$
|
86,215
|
|
|
$
|
865
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amount includes
$3 million
of loans carried at fair value that are excluded from ALLL consideration.
|
|
Three months ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Balance at beginning of period
|
$
|
55
|
|
$
|
56
|
|
Provision (credit) for losses on lending-related commitments
|
(7
|
)
|
13
|
|
||
Balance at end of period
|
$
|
48
|
|
$
|
69
|
|
|
|
|
•
|
the amount of time since the last relevant valuation;
|
•
|
whether there is an actual trade or relevant external quote available at the measurement date; and
|
•
|
volatility associated with the primary pricing components.
|
•
|
an independent review and approval of valuation models and assumptions;
|
•
|
recurring detailed reviews of profit and loss; and
|
•
|
a validation of valuation model components against benchmark data and similar products, where possible.
|
•
|
Securities are classified as Level 1 when quoted market prices are available in an active market for the identical securities. Level 1 instruments include exchange-traded equity securities.
|
•
|
Securities are classified as Level 2 if quoted prices for identical securities are not available, and fair value is determined using pricing models (either by a third-party pricing service or internally) or quoted prices of similar securities. These instruments include municipal bonds, bonds backed by the U.S. government, corporate bonds, agency residential and CMBS, securities issued by the U.S. Treasury, money markets, and certain agency and corporate CMOs. Inputs to the pricing models include standard inputs (i.e. yields, benchmark securities, bids, and offers), actual trade data (i.e., spreads, credit ratings, and interest rates) for comparable assets, spread tables, matrices, high-grade scales, and option-adjusted spreads.
|
•
|
Securities are classified as Level 3 when there is limited activity in the market for a particular instrument. To determine fair value in such cases, depending on the complexity of the valuations required, we use internal models based on certain assumptions or a third-party valuation service. At
March 31, 2017
, our Level 3 instruments consist of
two
convertible preferred securities. Our Corporate Strategy group is responsible for reviewing the valuation model and determining the fair value of these investments on a quarterly basis. The securities are valued using a cash flow analysis of the associated private company issuers. The valuations of the securities are negatively affected by projected net losses of the associated private companies and positively affected by projected net gains.
|
•
|
review documentation received from our third-party pricing service regarding the inputs used in their valuations and determine a level assessment for each category of securities;
|
•
|
substantiate actual inputs used for a sample of securities by comparing the actual inputs used by our third-party pricing service to comparable inputs for similar securities; and
|
•
|
substantiate the fair values determined for a sample of securities by comparing the fair values provided by our third-party pricing service to prices from other independent sources for the same and similar securities. We analyze variances and conduct additional research with our third-party pricing service and take appropriate steps based on our findings.
|
March 31, 2017
|
Fair Value
|
Unfunded
Commitments
|
||||
in millions
|
||||||
INVESTMENT TYPE
|
|
|
||||
Indirect investments
|
|
|
||||
Passive funds
(a)
(measured at NAV)
|
$
|
2
|
|
$
|
1
|
|
Total
|
$
|
2
|
|
$
|
1
|
|
|
|
|
(a)
|
We invest in passive funds, which are multi-investor private equity funds. These investments can never be redeemed. Instead, distributions are received through the liquidation of the underlying investments in the funds. Some funds have no restrictions on sale, while others require investors to remain in the fund until maturity. The funds will be liquidated over a period of
one
to
three
years. The purpose of KREEC’s funding is to allow funds to make additional investments and keep a certain market value threshold in the funds. KREEC is obligated to provide financial support, as all investors are required, to the funds based on its ownership percentage, as noted in the Limited Partnership Agreements.
|
|
|
|
|
Financial support provided
|
|||||||||||||||
|
|
|
|
Three months ended March 31,
|
|||||||||||||||
|
March 31, 2017
|
|
2017
|
|
2016
|
||||||||||||||
in millions
|
Fair
Value
|
Unfunded
Commitments
|
|
Funded
Commitments
|
Funded
Other
|
|
Funded
Commitments
|
Funded
Other
|
|||||||||||
INVESTMENT TYPE
|
|
|
|
|
|
|
|
|
|||||||||||
Direct investments
(a)
|
$
|
21
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
$
|
13
|
|
|||
Indirect investments
(b)
(measured at NAV)
|
155
|
|
$
|
37
|
|
|
$
|
1
|
|
—
|
|
|
$
|
1
|
|
—
|
|
||
Total
|
$
|
176
|
|
$
|
37
|
|
|
$
|
1
|
|
—
|
|
|
$
|
1
|
|
$
|
13
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Our direct investments consist of equity and debt investments directly in independent business enterprises. Operations of the business enterprises are handled by management of the portfolio company. The purpose of funding these enterprises is to provide financial support for business development and acquisition strategies. We infuse equity capital based on an initial contractual cash contribution and later from additional requests on behalf of the companies’ management.
|
(b)
|
Our indirect investments consist of buyout funds, venture capital funds, and fund of funds. These investments are generally not redeemable. Instead, distributions are received through the liquidation of the underlying investments of the fund. An investment in any one of these funds typically can be sold only with the approval of the fund’s general partners. We estimate that the underlying investments of the funds will be liquidated over a period of
one
to
eight
years. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.
|
March 31, 2017
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
in millions
|
||||||||||||
ASSETS MEASURED ON A RECURRING BASIS
|
|
|
|
|
||||||||
Trading account assets:
|
|
|
|
|
||||||||
U.S. Treasury, agencies and corporations
|
—
|
|
$
|
586
|
|
—
|
|
$
|
586
|
|
||
States and political subdivisions
|
—
|
|
47
|
|
—
|
|
47
|
|
||||
Collateralized mortgage obligations
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Other mortgage-backed securities
|
—
|
|
248
|
|
—
|
|
248
|
|
||||
Other securities
|
$
|
1
|
|
35
|
|
—
|
|
36
|
|
|||
Total trading account securities
|
1
|
|
916
|
|
—
|
|
917
|
|
||||
Commercial loans
|
—
|
|
4
|
|
—
|
|
4
|
|
||||
Total trading account assets
|
1
|
|
920
|
|
—
|
|
921
|
|
||||
Securities available for sale:
|
|
|
|
|
||||||||
U.S. Treasury, agencies and corporations
|
—
|
|
185
|
|
—
|
|
185
|
|
||||
States and political subdivisions
|
—
|
|
11
|
|
—
|
|
11
|
|
||||
Agency residential collateralized mortgage obligations
(a)
|
—
|
|
14,563
|
|
—
|
|
14,563
|
|
||||
Agency residential mortgage-backed securities
(a)
|
—
|
|
1,742
|
|
—
|
|
1,742
|
|
||||
Agency commercial mortgage-backed securities
|
—
|
|
1,910
|
|
—
|
|
1,910
|
|
||||
Other securities
|
3
|
|
—
|
|
$
|
17
|
|
20
|
|
|||
Total securities available for sale
|
3
|
|
18,411
|
|
17
|
|
18,431
|
|
||||
Other investments:
|
|
|
|
|
||||||||
Principal investments:
|
|
|
|
|
||||||||
Direct
|
—
|
|
—
|
|
21
|
|
21
|
|
||||
Indirect (measured at NAV)
(b)
|
—
|
|
—
|
|
—
|
|
155
|
|
||||
Total principal investments
|
—
|
|
—
|
|
21
|
|
176
|
|
||||
Equity and mezzanine investments:
|
|
|
|
|
||||||||
Indirect (measured at NAV)
(b)
|
—
|
|
—
|
|
—
|
|
2
|
|
||||
Total equity and mezzanine investments
|
—
|
|
—
|
|
—
|
|
2
|
|
||||
Total other investments
|
—
|
|
—
|
|
21
|
|
178
|
|
||||
Loans, net of unearned income
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Loans held for sale
|
—
|
|
62
|
|
—
|
|
62
|
|
||||
Derivative assets:
|
|
|
|
|
||||||||
Interest rate
|
—
|
|
777
|
|
5
|
|
782
|
|
||||
Foreign exchange
|
91
|
|
7
|
|
—
|
|
98
|
|
||||
Commodity
|
—
|
|
150
|
|
—
|
|
150
|
|
||||
Credit
|
—
|
|
2
|
|
1
|
|
3
|
|
||||
Other
|
—
|
|
5
|
|
4
|
|
9
|
|
||||
Derivative assets
|
91
|
|
941
|
|
10
|
|
1,042
|
|
||||
Netting adjustments
(c)
|
—
|
|
—
|
|
—
|
|
(464
|
)
|
||||
Total derivative assets
|
91
|
|
941
|
|
10
|
|
578
|
|
||||
Accrued income and other assets
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Total assets on a recurring basis at fair value
|
$
|
95
|
|
$
|
20,334
|
|
$
|
48
|
|
$
|
20,170
|
|
LIABILITIES MEASURED ON A RECURRING BASIS
|
|
|
|
|
||||||||
Bank notes and other short-term borrowings:
|
|
|
|
|
||||||||
Short positions
|
$
|
214
|
|
$
|
729
|
|
—
|
|
$
|
943
|
|
|
Derivative liabilities:
|
|
|
|
|
||||||||
Interest rate
|
—
|
|
531
|
|
—
|
|
531
|
|
||||
Foreign exchange
|
78
|
|
8
|
|
—
|
|
86
|
|
||||
Commodity
|
—
|
|
140
|
|
—
|
|
140
|
|
||||
Credit
|
—
|
|
6
|
|
—
|
|
6
|
|
||||
Other
|
—
|
|
16
|
|
—
|
|
16
|
|
||||
Derivative liabilities
|
78
|
|
701
|
|
—
|
|
779
|
|
||||
Netting adjustments
(c)
|
—
|
|
—
|
|
—
|
|
(524
|
)
|
||||
Total derivative liabilities
|
78
|
|
701
|
|
—
|
|
255
|
|
||||
Accrued expense and other liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Total liabilities on a recurring basis at fair value
|
$
|
292
|
|
$
|
1,430
|
|
—
|
|
$
|
1,198
|
|
|
|
|
|
|
|
(a)
|
“Collateralized mortgage obligations” and “Other mortgage-back securities” were renamed to “Agency residential collateralized mortgage obligations” and “Agency residential mortgage-backed securities”, respectively, in September 2016. There was no reclassification of previously reported balances.
|
(b)
|
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
|
(c)
|
Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Total derivative assets and liabilities include these netting adjustments.
|
December 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
in millions
|
||||||||||||
ASSETS MEASURED ON A RECURRING BASIS
|
|
|
|
|
||||||||
Trading account assets:
|
|
|
|
|
||||||||
U.S. Treasury, agencies and corporations
|
—
|
|
$
|
655
|
|
—
|
|
$
|
655
|
|
||
States and political subdivisions
|
—
|
|
8
|
|
—
|
|
8
|
|
||||
Collateralized mortgage obligations
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Other mortgage-backed securities
|
—
|
|
113
|
|
—
|
|
113
|
|
||||
Other securities
|
—
|
|
73
|
|
—
|
|
73
|
|
||||
Total trading account securities
|
—
|
|
849
|
|
—
|
|
849
|
|
||||
Commercial loans
|
—
|
|
18
|
|
—
|
|
18
|
|
||||
Total trading account assets
|
—
|
|
867
|
|
—
|
|
867
|
|
||||
Securities available for sale:
|
|
|
|
|
||||||||
U.S. Treasury, agencies and corporations
|
—
|
|
184
|
|
—
|
|
184
|
|
||||
States and political subdivisions
|
—
|
|
11
|
|
—
|
|
11
|
|
||||
Agency residential collateralized mortgage obligations
(a)
|
—
|
|
16,408
|
|
—
|
|
16,408
|
|
||||
Agency residential mortgage-backed securities
(a)
|
—
|
|
1,846
|
|
—
|
|
1,846
|
|
||||
Agency commercial mortgage-backed securities
|
—
|
|
1,743
|
|
—
|
|
1,743
|
|
||||
Other securities
|
$
|
3
|
|
—
|
|
$
|
17
|
|
20
|
|
||
Total securities available for sale
|
3
|
|
20,192
|
|
17
|
|
20,212
|
|
||||
Other investments:
|
|
|
|
|
||||||||
Principal investments:
|
|
|
|
|
||||||||
Direct
|
—
|
|
—
|
|
27
|
|
27
|
|
||||
Indirect (measured at NAV)
(b)
|
—
|
|
—
|
|
—
|
|
158
|
|
||||
Total principal investments
|
—
|
|
—
|
|
27
|
|
185
|
|
||||
Equity and mezzanine investments:
|
|
|
|
|
||||||||
Indirect (measured at NAV)
(b)
|
—
|
|
—
|
|
—
|
|
6
|
|
||||
Total equity and mezzanine investments
|
—
|
|
—
|
|
—
|
|
6
|
|
||||
Total other investments
|
—
|
|
—
|
|
27
|
|
191
|
|
||||
Loans, net of unearned income
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Loans held for sale
|
—
|
|
62
|
|
—
|
|
62
|
|
||||
Derivative assets:
|
|
|
|
|
||||||||
Interest rate
|
—
|
|
923
|
|
7
|
|
930
|
|
||||
Foreign exchange
|
114
|
|
9
|
|
—
|
|
123
|
|
||||
Commodity
|
—
|
|
176
|
|
—
|
|
176
|
|
||||
Credit
|
—
|
|
—
|
|
1
|
|
1
|
|
||||
Other
|
—
|
|
2
|
|
2
|
|
4
|
|
||||
Derivative assets
|
114
|
|
1,110
|
|
10
|
|
1,234
|
|
||||
Netting adjustments
(c)
|
—
|
|
—
|
|
—
|
|
(431
|
)
|
||||
Total derivative assets
|
114
|
|
1,110
|
|
10
|
|
803
|
|
||||
Accrued income and other assets
|
—
|
|
8
|
|
—
|
|
8
|
|
||||
Total assets on a recurring basis at fair value
|
$
|
117
|
|
$
|
22,239
|
|
$
|
54
|
|
$
|
22,143
|
|
LIABILITIES MEASURED ON A RECURRING BASIS
|
|
|
|
|
||||||||
Bank notes and other short-term borrowings:
|
|
|
|
|
||||||||
Short positions
|
$
|
192
|
|
$
|
616
|
|
—
|
|
$
|
808
|
|
|
Derivative liabilities:
|
|
|
|
|
||||||||
Interest rate
|
—
|
|
737
|
|
—
|
|
737
|
|
||||
Foreign exchange
|
102
|
|
11
|
|
—
|
|
113
|
|
||||
Commodity
|
—
|
|
165
|
|
—
|
|
165
|
|
||||
Credit
|
—
|
|
4
|
|
—
|
|
4
|
|
||||
Other
|
—
|
|
1
|
|
—
|
|
1
|
|
||||
Derivative liabilities
|
102
|
|
918
|
|
—
|
|
1,020
|
|
||||
Netting adjustments
(c)
|
—
|
|
—
|
|
—
|
|
(384
|
)
|
||||
Total derivative liabilities
|
102
|
|
918
|
|
—
|
|
636
|
|
||||
Accrued expense and other liabilities
|
—
|
|
14
|
|
—
|
|
14
|
|
||||
Total liabilities on a recurring basis at fair value
|
$
|
294
|
|
$
|
1,548
|
|
—
|
|
$
|
1,458
|
|
|
|
|
|
|
|
(a)
|
“Collateralized mortgage obligations” and “Other mortgage-back securities” were renamed to “Agency residential collateralized mortgage obligations” and “Agency residential mortgage-backed securities”, respectively, in September 2016. There was no reclassification of previously reported balances.
|
(b)
|
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
|
(c)
|
Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Total derivative assets and liabilities include these netting adjustments.
|
in millions
|
Beginning of Period Balance
|
Gains (Losses) Included in Earnings
|
Purchases
|
Sales
|
Settlements
|
Transfers Other
|
Transfers into Level 3
(a)
|
Transfers out of Level 3
(a)
|
End of Period Balance
(f)
|
Unrealized Gains (Losses) Included in Earnings
|
|||||||||||||||||||||||
Three months ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Other securities
|
$
|
17
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
17
|
|
—
|
|
|
|||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Direct
|
27
|
|
$
|
(2
|
)
|
(b)
|
—
|
|
$
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
21
|
|
$
|
(6
|
)
|
(b)
|
||||||
Other indirect
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|||||||||
Derivative instruments
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Interest rate
|
7
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1
|
|
(e)
|
$
|
(3
|
)
|
(e)
|
5
|
|
—
|
|
|
|||||||
Credit
|
1
|
|
(3
|
)
|
(d)
|
—
|
|
—
|
|
$
|
3
|
|
—
|
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
|
||||||||
Other
(g)
|
2
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
$
|
2
|
|
—
|
|
|
—
|
|
|
4
|
|
—
|
|
|
in millions
|
Beginning of Period Balance
|
Gains (Losses) Included in Earnings
|
Purchases
|
Sales
|
Settlements
|
Transfers into Level 3
(a)
|
Transfers out of Level 3
(a)
|
End of Period Balance
(f)
|
Unrealized Gains (Losses) Included in Earnings
|
|||||||||||||||||||||
Three months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other securities
|
$
|
17
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
17
|
|
—
|
|
|
||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Direct
|
50
|
|
$
|
(3
|
)
|
(b)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
47
|
|
$
|
(3
|
)
|
(b)
|
||||||
Other indirect
|
20
|
|
(1
|
)
|
(b)
|
—
|
|
$
|
(1
|
)
|
—
|
|
—
|
|
|
—
|
|
|
18
|
|
(1
|
)
|
(b)
|
|||||||
Derivative instruments
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest rate
|
16
|
|
4
|
|
(d)
|
—
|
|
—
|
|
—
|
|
$
|
3
|
|
(e)
|
$
|
(7
|
)
|
(e)
|
16
|
|
—
|
|
|
||||||
Credit
|
1
|
|
(2
|
)
|
(d)
|
—
|
|
—
|
|
$
|
3
|
|
—
|
|
|
—
|
|
|
2
|
|
—
|
|
|
(a)
|
Our policy is to recognize transfers into and transfers out of Level 3 as of the end of the reporting period.
|
(b)
|
Realized and unrealized gains and losses on principal investments are reported in “net gains (losses) from principal investing” on the income statement. Realized and unrealized losses on other and private equity and mezzanine investments are reported in “other income” on the income statement.
|
(c)
|
Amounts represent Level 3 derivative assets less Level 3 derivative liabilities.
|
(d)
|
Realized and unrealized gains and losses on derivative instruments are reported in “corporate services income” and “other income” on the income statement.
|
(e)
|
Certain derivatives previously classified as Level 2 were transferred to Level 3 because Level 3 unobservable inputs became significant. Certain derivatives previously classified as Level 3 were transferred to Level 2 because Level 3 unobservable inputs became less significant.
|
(f)
|
There were
no
issuances for the
three-month
periods ended
March 31, 2017
, and
March 31, 2016
.
|
(g)
|
Amounts represent Level 3 interest rate lock commitments.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||
in millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
ASSETS MEASURED ON A NONRECURRING BASIS
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impaired loans
|
—
|
|
—
|
|
$
|
11
|
|
$
|
11
|
|
|
—
|
|
—
|
|
$
|
11
|
|
$
|
11
|
|
Loans held for sale
(a)
|
—
|
|
—
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Accrued income and other assets
|
—
|
|
—
|
|
6
|
|
6
|
|
|
—
|
|
—
|
|
11
|
|
11
|
|
||||
Total assets on a nonrecurring basis at fair value
|
—
|
|
—
|
|
$
|
18
|
|
$
|
18
|
|
|
—
|
|
—
|
|
$
|
22
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
During the first
three
months of
2017
, we transferred
$17 million
of commercial loans and leases at their current fair value from held-to-maturity portfolio to held-for-sale status, compared to
$35 million
during
2016
.
|
•
|
Cash flow analysis considers internally developed inputs, such as discount rates, default rates, costs of foreclosure, and changes in collateral values.
|
•
|
The fair value of the collateral, which may take the form of real estate or personal property, is based on internal estimates, field observations, and assessments provided by third-party appraisers. We perform or reaffirm appraisals of collateral-dependent impaired loans at least annually. Appraisals may occur more frequently if the most recent appraisal does not accurately reflect the current market, if the debtor is seriously delinquent or chronically past due, or there has been a material deterioration in the performance of the project or condition of the property. Adjustments to outdated appraisals that result in an appraisal value less than the carrying amount of a collateral-dependent impaired loan are reflected in the ALLL.
|
•
|
Commercial Real Estate Valuation Process: When a loan is reclassified from loan status to OREO because we took possession of the collateral, the Asset Recovery Group Loan Officer, in consultation with our OREO group, obtains a broker price opinion or a third-party appraisal, which is used to establish the fair value of the underlying collateral. The determined fair value of the underlying collateral less estimated selling costs becomes the carrying value of the OREO asset. In addition to valuations from independent third-party sources, our OREO group also writes down the carrying balance of OREO assets once a
bona fide
offer is contractually accepted, where the accepted price is lower than the current balance of the particular OREO asset. The fair value of OREO property is re-evaluated every
90 days
, and the OREO asset is adjusted as necessary.
|
•
|
Residential Real Estate Valuation Process: The Asset Management team within our Risk Operations group is responsible for valuation policies and procedures of these loans. The current vendor partner provides monthly reporting of all broker price opinion evaluations, appraisals, and the monthly market plans. Market plans are reviewed monthly, and valuations are reviewed and tested monthly to ensure proper pricing has been established and guidelines are being met. Risk Operations Compliance validates and provides periodic testing of the valuation process. The Asset Management team reviews changes in fair value measurements. Third-party broker price opinions are reviewed every
180 days
, and the fair value is written down based on changes to the valuation. External factors are documented and monitored as appropriate.
|
•
|
|
March 31, 2017
|
Fair Value of
Level 3 Assets
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
||
dollars in millions
|
||||||
Recurring
|
|
|
|
|
||
Other investments — principal investments — direct:
|
$
|
21
|
|
Individual analysis of the condition of each investment
|
|
|
Debt instruments
|
|
|
EBITDA multiple
|
6.00 - 6.30 (6.20)
|
||
Equity instruments of private companies
|
|
|
EBITDA multiple (where applicable)
|
N/A (6.3)
|
||
Nonrecurring
|
|
|
|
|
||
Impaired loans
|
11
|
|
Fair value of underlying collateral
|
Discount
|
00.00 - 70.00% (16.00%)
|
December 31, 2016
|
Fair Value of
Level 3 Assets
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted-Average)
|
||
dollars in millions
|
||||||
Recurring
|
|
|
|
|
||
Other investments — principal investments — direct:
|
$
|
27
|
|
Individual analysis of the condition of each investment
|
|
|
Debt instruments
|
|
|
EBITDA multiple
|
6.30 - 7.00 (6.50)
|
||
Equity instruments of private companies
|
|
|
EBITDA multiple (where applicable)
|
N/A (6.3)
|
||
Nonrecurring
|
|
|
|
|
||
Impaired loans
|
11
|
|
Fair value of underlying collateral
|
Discount
|
00.00 - 70.00% (46.00%)
|
|
March 31, 2017
|
|||||||||||||||||||||
|
|
Fair Value
|
||||||||||||||||||||
in millions
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Measured
at NAV
|
Netting
Adjustment
|
|
Total
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and short-term investments
(a)
|
$
|
3,074
|
|
$
|
3,074
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
$
|
3,074
|
|
||||
Trading account assets
(b)
|
921
|
|
1
|
|
$
|
920
|
|
—
|
|
—
|
|
—
|
|
|
921
|
|
||||||
Securities available for sale
(b)
|
18,431
|
|
3
|
|
18,411
|
|
$
|
17
|
|
—
|
|
—
|
|
|
18,431
|
|
||||||
Held-to-maturity securities
(c)
|
10,186
|
|
—
|
|
9,954
|
|
—
|
|
—
|
|
—
|
|
|
9,954
|
|
|||||||
Other investments
(b)
|
689
|
|
—
|
|
—
|
|
527
|
|
$
|
157
|
|
—
|
|
|
684
|
|
||||||
Loans, net of allowance
(d)
|
85,255
|
|
—
|
|
83,520
|
|
—
|
|
—
|
|
—
|
|
|
83,520
|
|
|||||||
Loans held for sale
(b)
|
1,384
|
|
—
|
|
62
|
|
1,322
|
|
—
|
|
—
|
|
|
1,384
|
|
|||||||
Derivative assets
(b)
|
578
|
|
91
|
|
941
|
|
10
|
|
—
|
|
$
|
(464
|
)
|
(f)
|
578
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits with no stated maturity
(a)
|
$
|
93,429
|
|
—
|
|
$
|
93,429
|
|
—
|
|
—
|
|
—
|
|
|
$
|
93,429
|
|
||||
Time deposits
(e)
|
10,553
|
|
—
|
|
10,649
|
|
—
|
|
—
|
|
—
|
|
|
10,649
|
|
|||||||
Short-term borrowings
(a)
|
1,385
|
|
$
|
214
|
|
1,171
|
|
—
|
|
—
|
|
—
|
|
|
1,385
|
|
||||||
Long-term debt
(e)
|
12,324
|
|
12,372
|
|
289
|
|
—
|
|
—
|
|
—
|
|
|
12,661
|
|
|||||||
Derivative liabilities
(b)
|
255
|
|
78
|
|
701
|
|
—
|
|
—
|
|
$
|
(524
|
)
|
(f)
|
255
|
|
|
December 31, 2016
|
|||||||||||||||||||||
|
|
Fair Value
|
||||||||||||||||||||
in millions
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Measured
at NAV
|
Netting
Adjustment
|
|
Total
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and short-term investments
(a)
|
$
|
3,452
|
|
$
|
3,452
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
$
|
3,452
|
|
||||
Trading account assets
(b)
|
867
|
|
—
|
|
$
|
867
|
|
—
|
|
—
|
|
—
|
|
|
867
|
|
||||||
Securities available for sale
(b)
|
20,212
|
|
3
|
|
20,192
|
|
$
|
17
|
|
—
|
|
—
|
|
|
20,212
|
|
||||||
Held-to-maturity securities
(c)
|
10,232
|
|
—
|
|
10,007
|
|
—
|
|
—
|
|
—
|
|
|
10,007
|
|
|||||||
Other investments
(b)
|
738
|
|
—
|
|
—
|
|
569
|
|
$
|
164
|
|
—
|
|
|
733
|
|
||||||
Loans, net of allowance
(d)
|
85,180
|
|
—
|
|
—
|
|
83,285
|
|
—
|
|
—
|
|
|
83,285
|
|
|||||||
Loans held for sale
(b)
|
1,104
|
|
—
|
|
62
|
|
1,042
|
|
—
|
|
—
|
|
|
1,104
|
|
|||||||
Derivative assets
(b)
|
803
|
|
114
|
|
1,110
|
|
10
|
|
—
|
|
$
|
(431
|
)
|
(f)
|
803
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits with no stated maturity
(a)
|
$
|
93,906
|
|
—
|
|
$
|
93,906
|
|
—
|
|
—
|
|
—
|
|
|
$
|
93,906
|
|
||||
Time deposits
(e)
|
10,181
|
|
—
|
|
10,267
|
|
—
|
|
—
|
|
—
|
|
|
10,267
|
|
|||||||
Short-term borrowings
(a)
|
2,310
|
|
$
|
192
|
|
2,118
|
|
—
|
|
—
|
|
—
|
|
|
2,310
|
|
||||||
Long-term debt
(e)
|
12,384
|
|
12,386
|
|
304
|
|
—
|
|
—
|
|
—
|
|
|
12,690
|
|
|||||||
Derivative liabilities
(b)
|
636
|
|
102
|
|
918
|
|
—
|
|
—
|
|
$
|
(384
|
)
|
(f)
|
636
|
|
(a)
|
Fair value equals or approximates carrying amount. The fair value of deposits with no stated maturity does not take into consideration the value ascribed to core deposit intangibles.
|
(b)
|
Information pertaining to our methodology for measuring the fair values of these assets and liabilities is included in the sections entitled “Qualitative Disclosures of Valuation Techniques” and “Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis” in this Note. Investments accounted for under the equity method are not included in this table.
|
(c)
|
Fair values of held-to-maturity securities are determined by using models that are based on security-specific details, as well as relevant industry and economic factors. The most significant of these inputs are quoted market prices, interest rate spreads on relevant benchmark securities, and certain prepayment assumptions. We review the valuations derived from the models to ensure that they are reasonable and consistent with the values placed on similar securities traded in the secondary markets.
|
(d)
|
The fair value of loans is based on the present value of the expected cash flows. The projected cash flows are based on the contractual terms of the loans, adjusted for prepayments and use of a discount rate based on the relative risk of the cash flows, taking into account the loan type, maturity of the loan, liquidity risk, servicing costs, and a required return on debt and capital. In addition, an incremental liquidity discount is applied to certain loans, using historical sales of loans during periods of similar economic conditions as a benchmark. The fair value of loans includes lease financing receivables at their aggregate carrying amount, which is equivalent to their fair value.
|
(e)
|
Fair values of time deposits and long-term debt are based on discounted cash flows utilizing relevant market inputs.
|
(f)
|
Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Total derivative assets and liabilities include these netting adjustments.
|
•
|
Loans at carrying value, net of allowance, of
$1.5 billion
(
$1.3 billion
at fair value) at
March 31, 2017
, and
December 31, 2016
;
|
•
|
Portfolio loans at fair value of
$3 million
at
March 31, 2017
, and
December 31, 2016
.
|
|
March 31, 2017
|
|||||||||||
in millions
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||
SECURITIES AVAILABLE FOR SALE
|
|
|
|
|
||||||||
U.S. Treasury, agencies, and corporations
|
$
|
188
|
|
—
|
|
$
|
3
|
|
$
|
185
|
|
|
States and political subdivisions
|
11
|
|
—
|
|
—
|
|
11
|
|
||||
Agency residential collateralized mortgage obligations
|
14,790
|
|
$
|
29
|
|
256
|
|
14,563
|
|
|||
Agency residential mortgage-backed securities
|
1,751
|
|
5
|
|
14
|
|
1,742
|
|
||||
Agency commercial mortgage-backed securities
|
1,956
|
|
—
|
|
46
|
|
1,910
|
|
||||
Other securities
|
21
|
|
—
|
|
1
|
|
20
|
|
||||
Total securities available for sale
|
$
|
18,717
|
|
$
|
34
|
|
$
|
320
|
|
$
|
18,431
|
|
|
|
|
|
|
||||||||
HELD TO MATURITY SECURITIES
|
|
|
|
|
||||||||
Agency residential collateralized mortgage obligations
|
$
|
7,973
|
|
$
|
2
|
|
$
|
188
|
|
$
|
7,787
|
|
Agency residential mortgage-backed securities
|
605
|
|
—
|
|
5
|
|
600
|
|
||||
Agency commercial mortgage-backed securities
|
1,593
|
|
3
|
|
44
|
|
1,552
|
|
||||
Other securities
|
15
|
|
—
|
|
—
|
|
15
|
|
||||
Total held-to-maturity securities
|
$
|
10,186
|
|
$
|
5
|
|
$
|
237
|
|
$
|
9,954
|
|
|
|
|
|
|
|
December 31, 2016
|
|||||||||||
in millions
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||
SECURITIES AVAILABLE FOR SALE
|
|
|
|
|
||||||||
U.S. Treasury, agencies, and corporations
|
$
|
188
|
|
—
|
|
$
|
4
|
|
$
|
184
|
|
|
States and political subdivisions
|
11
|
|
—
|
|
—
|
|
11
|
|
||||
Agency residential collateralized mortgage obligations
|
16,652
|
|
$
|
31
|
|
275
|
|
16,408
|
|
|||
Agency residential mortgage-backed securities
|
1,857
|
|
6
|
|
17
|
|
1,846
|
|
||||
Agency commercial mortgage-backed securities
|
1,778
|
|
—
|
|
35
|
|
1,743
|
|
||||
Other securities
|
21
|
|
—
|
|
1
|
|
20
|
|
||||
Total securities available for sale
|
$
|
20,507
|
|
$
|
37
|
|
$
|
332
|
|
$
|
20,212
|
|
|
|
|
|
|
||||||||
HELD TO MATURITY SECURITIES
|
|
|
|
|
||||||||
Agency residential collateralized mortgage obligations
|
$
|
8,404
|
|
$
|
1
|
|
$
|
173
|
|
$
|
8,232
|
|
Agency residential mortgage-backed securities
|
629
|
|
—
|
|
5
|
|
624
|
|
||||
Agency commercial mortgage-backed securities
|
1,184
|
|
1
|
|
49
|
|
1,136
|
|
||||
Other securities
|
15
|
|
—
|
|
—
|
|
15
|
|
||||
Total held-to-maturity securities
|
$
|
10,232
|
|
$
|
2
|
|
$
|
227
|
|
$
|
10,007
|
|
|
|
|
|
|
|
Duration of Unrealized Loss Position
|
|
|
|||||||||||||||
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
|||||||||||||||
in millions
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
March 31, 2017
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
||||||||||||
U.S Treasury, agencies, and corporations
|
$
|
185
|
|
$
|
3
|
|
—
|
|
—
|
|
$
|
185
|
|
$
|
3
|
|
||
Agency residential collateralized mortgage obligations
|
10,573
|
|
205
|
|
$
|
1,507
|
|
$
|
51
|
|
12,080
|
|
256
|
|
||||
Agency residential mortgage-backed securities
|
1,527
|
|
14
|
|
—
|
|
—
|
|
1,527
|
|
14
|
|
||||||
Agency commercial mortgage-backed securities
|
1,910
|
|
46
|
|
—
|
|
—
|
|
1,910
|
|
46
|
|
||||||
Other securities
(a)
|
—
|
|
—
|
|
3
|
|
1
|
|
3
|
|
1
|
|
||||||
Held-to-maturity:
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
$
|
6,634
|
|
$
|
169
|
|
$
|
521
|
|
$
|
19
|
|
$
|
7,155
|
|
$
|
188
|
|
Agency residential mortgage-backed securities
(a)
|
525
|
|
5
|
|
—
|
|
—
|
|
525
|
|
5
|
|
||||||
Agency commercial mortgage-backed securities
|
1,001
|
|
44
|
|
—
|
|
—
|
|
1,001
|
|
44
|
|
||||||
Other securities
(b)
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
|
||||||
Total temporarily impaired securities
|
$
|
22,359
|
|
$
|
486
|
|
$
|
2,031
|
|
$
|
71
|
|
$
|
24,390
|
|
$
|
557
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury, agencies, and corporations
|
$
|
182
|
|
$
|
4
|
|
—
|
|
—
|
|
$
|
182
|
|
$
|
4
|
|
||
Agency residential collateralized mortgage obligations
|
12,345
|
|
231
|
|
$
|
1,410
|
|
$
|
44
|
|
13,755
|
|
275
|
|
||||
Agency residential mortgage-backed securities
|
1,452
|
|
17
|
|
—
|
|
—
|
|
1,452
|
|
17
|
|
||||||
Agency commercial mortgage-backed securities
|
1,482
|
|
35
|
|
—
|
|
—
|
|
1,482
|
|
35
|
|
||||||
Other securities
(a)
|
2
|
|
—
|
|
3
|
|
1
|
|
5
|
|
1
|
|
||||||
Held-to-maturity:
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
7,028
|
|
156
|
|
518
|
|
17
|
|
7,546
|
|
173
|
|
||||||
Agency residential mortgage-backed securities
|
547
|
|
5
|
|
—
|
|
—
|
|
547
|
|
5
|
|
||||||
Agency commercial mortgage-backed securities
|
996
|
|
49
|
|
—
|
|
—
|
|
996
|
|
49
|
|
||||||
Other securities
(b)
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
|
||||||
Total temporarily impaired securities
|
$
|
24,038
|
|
$
|
497
|
|
$
|
1,931
|
|
$
|
62
|
|
$
|
25,969
|
|
$
|
559
|
|
|
|
|
|
|
|
|
(a)
|
Gross unrealized losses totaled less than
$1 million
for other securities available for sale at
March 31, 2017
, and
December 31, 2016
.
|
(b)
|
Gross unrealized losses totaled less than
$1 million
for other securities held to maturity at
March 31, 2017
, and
December 31, 2016
.
|
Three months ended March 31, 2017
|
|
||
in millions
|
|
||
Balance at December 31, 2016
|
$
|
4
|
|
Impairment recognized in earnings
|
—
|
|
|
Balance at March 31, 2017
|
$
|
4
|
|
|
|
|
Securities
Available for Sale
|
Held to Maturity
Securities
|
||||||||||
March 31, 2017
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
||||||||
in millions
|
||||||||||||
Due in one year or less
|
$
|
177
|
|
$
|
179
|
|
$
|
55
|
|
$
|
56
|
|
Due after one through five years
|
16,595
|
|
16,354
|
|
6,935
|
|
6,798
|
|
||||
Due after five through ten years
|
1,737
|
|
1,693
|
|
2,936
|
|
2,862
|
|
||||
Due after ten years
|
208
|
|
205
|
|
260
|
|
238
|
|
||||
Total
|
$
|
18,717
|
|
$
|
18,431
|
|
$
|
10,186
|
|
$
|
9,954
|
|
|
|
|
|
|
•
|
interest rate risk is the risk that the EVE or net interest income will be adversely affected by fluctuations in interest rates;
|
•
|
credit risk is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms; and
|
•
|
foreign exchange risk is the risk that an exchange rate will adversely affect the fair value of a financial instrument.
|
•
|
interest rate swap, cap, and floor contracts generally entered into to accommodate the needs of commercial loan clients;
|
•
|
energy and base metal swap and option contracts entered into to accommodate the needs of clients;
|
•
|
foreign exchange forward and option contracts entered into primarily to accommodate the needs of clients; and
|
•
|
futures contracts and positions with third parties that are intended to offset or mitigate the interest rate or market risk related to client positions discussed above.
|
|
March 31, 2017
|
December 31, 2016
|
||||||||||||||||
|
|
Fair Value
|
|
Fair Value
|
||||||||||||||
in millions
|
Notional
Amount
|
Derivative
Assets
|
Derivative
Liabilities
|
Notional
Amount
|
Derivative
Assets
|
Derivative
Liabilities
|
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
$
|
24,917
|
|
$
|
98
|
|
$
|
20
|
|
$
|
24,237
|
|
$
|
189
|
|
$
|
94
|
|
Foreign exchange
|
284
|
|
3
|
|
2
|
|
282
|
|
6
|
|
4
|
|
||||||
Total
|
25,201
|
|
101
|
|
22
|
|
24,519
|
|
195
|
|
98
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
58,963
|
|
684
|
|
511
|
|
55,315
|
|
741
|
|
643
|
|
||||||
Foreign exchange
|
6,897
|
|
95
|
|
84
|
|
6,230
|
|
117
|
|
109
|
|
||||||
Commodity
|
1,569
|
|
150
|
|
140
|
|
1,474
|
|
176
|
|
165
|
|
||||||
Credit
|
418
|
|
3
|
|
6
|
|
360
|
|
1
|
|
4
|
|
||||||
Other
(a)
|
2,625
|
|
9
|
|
16
|
|
390
|
|
4
|
|
1
|
|
||||||
Total
|
70,472
|
|
941
|
|
757
|
|
63,769
|
|
1,039
|
|
922
|
|
||||||
Netting adjustments
(b)
|
—
|
|
(464
|
)
|
(524
|
)
|
—
|
|
(431
|
)
|
(384
|
)
|
||||||
Net derivatives in the balance sheet
|
95,673
|
|
578
|
|
255
|
|
88,288
|
|
803
|
|
636
|
|
||||||
Other collateral
(c)
|
—
|
|
(11
|
)
|
(71
|
)
|
—
|
|
(21
|
)
|
(97
|
)
|
||||||
Net derivative amounts
|
$
|
95,673
|
|
$
|
567
|
|
$
|
184
|
|
$
|
88,288
|
|
$
|
782
|
|
$
|
539
|
|
|
|
|
|
|
|
|
(a)
|
Other derivatives include interest rate lock commitments and forward sale commitments related to our residential mortgage banking activities, forward purchase and sales contracts consisting of contractual commitments associated with “to be announced” securities and when issued securities, and when-issued security transactions in connection with an “at-the-market” equity offering program.
|
(b)
|
Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.
|
(c)
|
Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.
|
|
Three months ended March 31, 2017
|
|
||||||||
in millions
|
Income Statement Location of
Net Gains (Losses) on Derivative
|
Net Gains
(Losses) on
Derivative
|
Hedged Item
|
Income Statement Location of
Net Gains (Losses) on Hedged Item
|
Net Gains
(Losses) on
Hedged Item
|
|
||||
Interest rate
|
Other income
|
$
|
(35
|
)
|
Long-term debt
|
Other income
|
$
|
35
|
|
(a)
|
Interest rate
|
Interest expense — Long-term debt
|
18
|
|
|
|
|
|
|||
Total
|
|
$
|
(17
|
)
|
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|
||||||||
in millions
|
Income Statement Location of
Net Gains (Losses) on Derivative
|
Net Gains
(Losses) on
Derivative
|
Hedged Item
|
Income Statement Location of
Net Gains (Losses) on Hedged Item
|
Net Gains
(Losses) on
Hedged Item
|
|
||||
Interest rate
|
Other income
|
$
|
115
|
|
Long-term debt
|
Other income
|
$
|
(115
|
)
|
(a)
|
Interest rate
|
Interest expense — Long-term debt
|
27
|
|
|
|
|
|
|||
Total
|
|
$
|
142
|
|
|
|
$
|
(115
|
)
|
|
|
|
|
|
|
|
|
(a)
|
Net gains (losses) on hedged items represent the change in fair value caused by fluctuations in interest rates.
|
|
Three months ended March 31, 2017
|
|||||||||
in millions
|
Net Gains (Losses)
Recognized in OCI
(Effective Portion)
|
Income Statement Location of Net Gains (Losses)
Reclassified From OCI Into Income (Effective Portion)
|
Net Gains
(Losses) Reclassified
From OCI Into Income
(Effective Portion)
|
Income Statement Location
of Net Gains (Losses)
Recognized in Income
(Ineffective Portion)
|
Net Gains (Losses)
Recognized in
Income
(Ineffective Portion)
|
|||||
Cash Flow Hedges
|
|
|
|
|
|
|||||
Interest rate
|
$
|
(22
|
)
|
Interest income — Loans
|
$
|
15
|
|
Other income
|
—
|
|
Interest rate
|
—
|
|
Interest expense — Long-term debt
|
(1
|
)
|
Other income
|
—
|
|
||
Interest rate
|
—
|
|
Investment banking and debt placement fees
|
—
|
|
Other income
|
—
|
|
||
Net Investment Hedges
|
|
|
|
|
|
|||||
Foreign exchange contracts
|
(3
|
)
|
Other Income
|
—
|
|
Other income
|
—
|
|
||
Total
|
$
|
(25
|
)
|
|
$
|
14
|
|
|
—
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|||||||||
in millions
|
Net Gains (Losses)
Recognized in OCI
(Effective Portion)
|
Income Statement Location of Net Gains (Losses)
Reclassified From OCI Into Income (Effective Portion)
|
Net Gains
(Losses) Reclassified
From OCI Into Income
(Effective Portion)
|
Income Statement Location
of Net Gains (Losses)
Recognized in Income
(Ineffective Portion)
|
Net Gains (Losses)
Recognized in
Income
(Ineffective Portion)
|
|||||
Cash Flow Hedges
|
|
|
|
|
|
|||||
Interest rate
|
$
|
133
|
|
Interest income — Loans
|
$
|
23
|
|
Other income
|
—
|
|
Interest rate
|
(4
|
)
|
Interest expense — Long-term debt
|
(1
|
)
|
Other income
|
—
|
|
||
Interest rate
|
(1
|
)
|
Investment banking and debt placement fees
|
—
|
|
Other income
|
—
|
|
||
Net Investment Hedges
|
|
|
|
|
|
|||||
Foreign exchange contracts
|
(14
|
)
|
Other Income
|
—
|
|
Other income
|
—
|
|
||
Total
|
$
|
114
|
|
|
$
|
22
|
|
|
—
|
|
|
|
|
|
|
|
in millions
|
December 31, 2016
|
2017 Hedging Activity
|
Reclassification of Gains to Net Income
|
March 31, 2017
|
||||||||
AOCI resulting from cash flow and net investment hedges
|
$
|
(14
|
)
|
$
|
(15
|
)
|
$
|
(9
|
)
|
$
|
(38
|
)
|
|
Three months ended March 31, 2017
|
|
Three months ended March 31, 2016
|
|||||||||||||||||||
in millions
|
Corporate
Services
Income
|
Consumer Mortgage Income
(a)
|
Other
Income
|
Total
|
|
Corporate
Services
Income
|
Other
Income
|
Total
|
||||||||||||||
NET GAINS (LOSSES)
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate
|
$
|
6
|
|
—
|
|
$
|
(1
|
)
|
$
|
5
|
|
|
$
|
6
|
|
$
|
(1
|
)
|
$
|
5
|
|
|
Foreign exchange
|
11
|
|
—
|
|
—
|
|
11
|
|
|
10
|
|
—
|
|
10
|
|
|||||||
Commodity
|
2
|
|
—
|
|
—
|
|
2
|
|
|
1
|
|
—
|
|
1
|
|
|||||||
Credit
|
1
|
|
—
|
|
(5
|
)
|
(4
|
)
|
|
1
|
|
(2
|
)
|
(1
|
)
|
|||||||
Other
|
—
|
|
$
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Total net gains (losses)
|
$
|
20
|
|
$
|
(1
|
)
|
$
|
(7
|
)
|
$
|
12
|
|
|
$
|
18
|
|
$
|
(3
|
)
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
(a)
|
As a result of the First Niagara acquisition, we began recognizing net gains (losses) on other derivatives related to our residential mortgage banking activities in “consumer mortgage income” in December 2016.
|
in millions
|
March 31, 2017
|
December 31, 2016
|
||||
Interest rate
|
$
|
452
|
|
$
|
782
|
|
Foreign exchange
|
41
|
|
62
|
|
||
Commodity
|
50
|
|
110
|
|
||
Credit
|
1
|
|
—
|
|
||
Other
|
9
|
|
4
|
|
||
Derivative assets before collateral
|
553
|
|
958
|
|
||
Less: Related collateral
|
(25
|
)
|
155
|
|
||
Total derivative assets
|
$
|
578
|
|
$
|
803
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
in millions
|
Purchased
|
Sold
|
Net
|
|
Purchased
|
Sold
|
Net
|
|||||||||||
Single-name credit default swaps
|
$
|
(2
|
)
|
—
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
—
|
|
$
|
(2
|
)
|
|
Traded credit default swap indices
|
(1
|
)
|
—
|
|
(1
|
)
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|||||
Other
(a)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
$
|
—
|
|
—
|
|
||||
Total credit derivatives
|
$
|
(3
|
)
|
—
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
$
|
—
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
(a)
|
As of both
March 31, 2017
, and
December 31, 2016
, the fair value of other credit derivatives sold totaled less than
$1 million
.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
dollars in millions
|
Notional
Amount
|
Average
Term
(Years)
|
Payment /
Performance
Risk
|
|
Notional
Amount
|
Average
Term
(Years)
|
Payment /
Performance
Risk
|
||||||||
Other
|
$
|
8
|
|
11.40
|
|
12.85
|
%
|
|
$
|
4
|
|
6.49
|
|
17.93
|
%
|
Total credit derivatives sold
|
$
|
8
|
|
—
|
|
—
|
|
|
$
|
4
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||
in millions
|
Moody’s
|
S&P
|
|
Moody’s
|
S&P
|
||||||||
KeyBank’s long-term senior unsecured credit ratings
|
A3
|
|
A-
|
|
|
A3
|
|
A-
|
|
||||
One rating downgrade
|
$
|
2
|
|
$
|
2
|
|
|
$
|
2
|
|
$
|
2
|
|
Two rating downgrades
|
2
|
|
2
|
|
|
2
|
|
2
|
|
||||
Three rating downgrades
|
2
|
|
2
|
|
|
4
|
|
4
|
|
|
Three months ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Balance at beginning of period
|
$
|
356
|
|
$
|
321
|
|
Servicing retained from loan sales
|
28
|
|
7
|
|
||
Purchases
|
7
|
|
12
|
|
||
Amortization
|
(22
|
)
|
(22
|
)
|
||
Balance at end of period
|
$
|
369
|
|
$
|
318
|
|
Fair value at end of period
|
$
|
480
|
|
$
|
408
|
|
|
|
|
March 31, 2017
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
dollars in millions
|
|||
Commercial mortgage servicing assets
|
Discounted cash flow
|
Expected defaults
|
1.00 - 3.00% (1.30%)
|
|
|
Residual cash flows discount rate
|
7.00 - 15.00% (8.60%)
|
|
|
Escrow earn rate
|
1.20 - 3.20% (2.60%)
|
|
|
Servicing cost
|
$150 - $38,500 ($1,342)
|
|
|
Loan assumption rate
|
0.00 - 3.00% (1.25%)
|
|
|
Percentage late
|
0.00 - 2.00% (.31%)
|
|
|
|
|
December 31, 2016
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
dollars in millions
|
|||
Commercial mortgage servicing assets
|
Discounted cash flow
|
Expected defaults
|
1.00 - 3.00% (1.40%)
|
|
|
Residual cash flows discount rate
|
7.00 - 12.00% (8.00%)
|
|
|
Escrow earn rate
|
1.10 - 3.00% (2.40%)
|
|
|
Servicing cost
|
$150 - $2,700 ($1,124)
|
|
|
Loan assumption rate
|
0.00 - 3.00% (1.13%)
|
|
|
Percentage late
|
0.00 - 2.00% (.34%)
|
|
|
|
|
|
Three months ended March 31, 2017
|
||
in millions
|
|||
Balance at beginning of period
|
$
|
28
|
|
Servicing retained from loan sales
|
2
|
|
|
Amortization
|
(1
|
)
|
|
Balance at end of period
|
$
|
29
|
|
Fair value at end of period
|
$
|
35
|
|
|
|
March 31, 2017
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
dollars in millions
|
|||
Residential mortgage servicing assets
|
Discounted cash flow
|
Prepayment speed
|
7.68 - 19.68% (9.24%)
|
|
|
Discount rate
|
8.50 - 11.00% (8.55%)
|
|
|
Servicing cost
|
$76 - $3,335 ($83.03)
|
|
|
|
|
•
|
The entity does not have sufficient equity to conduct its activities without additional subordinated financial support from another party.
|
•
|
The entity’s investors lack the power to direct the activities that most significantly affect the entity’s economic performance.
|
•
|
The entity’s equity at risk holders do not have the obligation to absorb losses or the right to receive residual returns.
|
•
|
The voting rights of some investors are not proportional to their economic interests in the entity, and substantially all of the entity’s activities involve, or are conducted on behalf of, investors with disproportionately few voting rights.
|
|
Unconsolidated VIEs
|
||||||||
in millions
|
Total
Assets
|
Total
Liabilities
|
Maximum
Exposure to Loss
|
||||||
March 31, 2017
|
|
|
|
||||||
LIHTC investments
|
$
|
4,785
|
|
$
|
1,972
|
|
$
|
1,451
|
|
December 31, 2016
|
|
|
|
||||||
LIHTC investments
|
$
|
4,814
|
|
$
|
2,003
|
|
$
|
1,465
|
|
|
|
|
|
|
Unconsolidated VIEs
|
||||||||
in millions
|
Total
Assets
|
Total
Liabilities
|
Maximum
Exposure to Loss
|
||||||
March 31, 2017
|
|
|
|
||||||
KCC indirect investments
|
$
|
19,029
|
|
$
|
135
|
|
$
|
192
|
|
December 31, 2016
|
|
|
|
||||||
KCC indirect investments
|
$
|
32,755
|
|
$
|
201
|
|
$
|
195
|
|
|
|
|
|
|
Three months ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Net interest income
|
$
|
5
|
|
$
|
7
|
|
Provision for credit losses
|
3
|
|
2
|
|
||
Net interest income after provision for credit losses
|
2
|
|
5
|
|
||
Noninterest income
|
2
|
|
1
|
|
||
Noninterest expense
|
4
|
|
5
|
|
||
Income (loss) before income taxes
|
—
|
|
1
|
|
||
Income taxes
|
—
|
|
—
|
|
||
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
$
|
1
|
|
|
|
|
|
(a)
|
Includes after-tax charges of
$6 million
for each of the three-month periods ended
March 31, 2017
, and
March 31, 2016
, determined by applying a matched funds transfer pricing methodology to the liabilities assumed necessary to support the discontinued operations.
|
in millions
|
March 31, 2017
|
December 31, 2016
|
||||
Held-to-maturity securities
|
$
|
1
|
|
$
|
1
|
|
Portfolio loans at fair value
|
3
|
|
3
|
|
||
Loans, net of unearned income
(a)
|
1,497
|
|
1,562
|
|
||
Less: Allowance for loan and lease losses
|
23
|
|
24
|
|
||
Net loans
|
1,477
|
|
1,541
|
|
||
Accrued income and other assets
|
27
|
|
28
|
|
||
Total assets
|
$
|
1,505
|
|
$
|
1,570
|
|
|
|
|
(a)
|
At
March 31, 2017
, and
December 31, 2016
, unearned income was less than
$1 million
.
|
March 31, 2017
|
Fair Value of Level 3
Assets and Liabilities
|
Valuation
Technique
|
Significant
Unobservable Input
|
Range
(Weighted-Average)
|
||
dollars in millions
|
||||||
Portfolio loans accounted for at fair value
|
$
|
3
|
|
Market approach
|
Indicative bids
|
84.50-104.00%
|
December 31, 2016
|
Fair Value of Level 3
Assets and Liabilities
|
Valuation
Technique
|
Significant
Unobservable Input
|
Range
(Weighted-Average)
|
||
dollars in millions
|
||||||
Portfolio loans accounted for at fair value
|
$
|
3
|
|
Market approach
|
Indicative bids
|
84.50-104.00%
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||
in millions
|
Principal
|
Fair Value
|
|
Principal
|
Fair Value
|
||||
Portfolio loans at carrying value
|
|
|
|
|
|
||||
Accruing loans past due 90 days or more
|
$
|
20
|
|
N/A
|
|
$
|
22
|
|
N/A
|
Loans placed on nonaccrual status
|
4
|
|
N/A
|
|
5
|
|
N/A
|
||
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||
in millions
|
Contractual
Amount
|
Fair
Value
|
|
Contractual
Amount
|
Fair
Value
|
||||||||
ASSETS
|
|
|
|
|
|
||||||||
Portfolio loans
|
$
|
3
|
|
$
|
3
|
|
|
$
|
3
|
|
$
|
3
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
|
|
||||||
in millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||
ASSETS MEASURED ON A RECURRING BASIS
|
|
|
|
|
||||||
Portfolio loans
|
—
|
|
—
|
|
$
|
3
|
|
$
|
3
|
|
Total assets on a recurring basis at fair value
|
—
|
|
—
|
|
$
|
3
|
|
$
|
3
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
|
||||||
in millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||
ASSETS MEASURED ON A RECURRING BASIS
|
|
|
|
|
||||||
Portfolio loans
|
—
|
|
—
|
|
$
|
3
|
|
$
|
3
|
|
Total assets on a recurring basis at fair value
|
—
|
|
—
|
|
$
|
3
|
|
$
|
3
|
|
|
|
|
|
|
in millions
|
|
Portfolio Student
Loans
|
||
Balance at December 31, 2016
|
$
|
3
|
|
|
Settlements
|
—
|
|
||
Balance at March 31, 2017
|
(a)
|
$
|
3
|
|
|
|
|||
Balance at December 31, 2015
|
$
|
4
|
|
|
Settlements
|
(1
|
)
|
||
Balance at March 31, 2016
|
(a)
|
$
|
3
|
|
|
|
(a)
|
There were
no
purchases, sales, issuances, gains (losses) recognized in earnings, transfers into Level 3, or transfers out of Level 3 for the
three
-month period ended
March 31, 2017
. There were
no
purchases, sales, issuances, gains (losses) recognized in earnings, transfers into Level 3, or transfers out of Level 3 for the
three
-month period ended
March 31, 2016
.
|
in millions
|
March 31, 2017
|
December 31, 2016
|
||||
Cash and due from banks
|
$
|
15
|
|
$
|
15
|
|
Total assets
|
$
|
15
|
|
$
|
15
|
|
|
|
|
|
Three months ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Net interest income
|
$
|
5
|
|
$
|
7
|
|
Provision for credit losses
|
3
|
|
2
|
|
||
Net interest income after provision for credit losses
|
2
|
|
5
|
|
||
Noninterest income
|
2
|
|
1
|
|
||
Noninterest expense
|
4
|
|
5
|
|
||
Income (loss) before income taxes
|
—
|
|
1
|
|
||
Income taxes
|
—
|
|
—
|
|
||
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
$
|
1
|
|
|
|
|
|
(a)
|
Includes after-tax charges of
$6 million
and for each of the three-month periods ended
March 31, 2017
, and
March 31, 2016
, determined by applying a matched funds transfer pricing methodology to the liabilities assumed necessary to support the discontinued operations.
|
in millions
|
March 31, 2017
|
December 31, 2016
|
||||
Cash and due from banks
|
$
|
15
|
|
$
|
15
|
|
Held-to-maturity securities
|
1
|
|
1
|
|
||
Portfolio loans at fair value
|
3
|
|
3
|
|
||
Loans, net of unearned income
(a)
|
1,497
|
|
1,562
|
|
||
Less: Allowance for loan and lease losses
|
23
|
|
24
|
|
||
Net loans
|
1,477
|
|
1,541
|
|
||
Accrued income and other assets
|
27
|
|
28
|
|
||
Total assets
|
$
|
1,520
|
|
$
|
1,585
|
|
|
|
|
(a)
|
At
March 31, 2017
, and
December 31, 2016
, unearned income was less than
$1 million
.
|
|
March 31, 2017
|
||||||||||
in millions
|
Gross Amount
Presented in
Balance Sheet
|
Netting
Adjustments
(a)
|
Collateral
(b)
|
Net
Amounts
|
|||||||
Offsetting of financial assets:
|
|
|
|
|
|||||||
Reverse repurchase agreements
|
$
|
4
|
|
$
|
(3
|
)
|
$
|
(1
|
)
|
—
|
|
Total
|
$
|
4
|
|
$
|
(3
|
)
|
$
|
(1
|
)
|
—
|
|
|
|
|
|
|
|||||||
Offsetting of financial liabilities:
|
|
|
|
|
|||||||
Repurchase agreements
(c)
|
$
|
437
|
|
$
|
(3
|
)
|
$
|
(434
|
)
|
—
|
|
Total
|
$
|
437
|
|
$
|
(3
|
)
|
$
|
(434
|
)
|
—
|
|
|
|
|
|
|
|
December 31, 2016
|
||||||||||
in millions
|
Gross Amount
Presented in
Balance Sheet
|
Netting Adjustments
(a)
|
Collateral
(b)
|
Net
Amounts
|
|||||||
Offsetting of financial assets:
|
|
|
|
|
|||||||
Reverse repurchase agreements
|
$
|
3
|
|
$
|
(3
|
)
|
—
|
|
—
|
|
|
Total
|
$
|
3
|
|
$
|
(3
|
)
|
—
|
|
—
|
|
|
|
|
|
|
|
|||||||
Offsetting of financial liabilities:
|
|
|
|
|
|||||||
Repurchase agreements
(c)
|
$
|
497
|
|
$
|
(3
|
)
|
$
|
(494
|
)
|
—
|
|
Total
|
$
|
497
|
|
$
|
(3
|
)
|
$
|
(494
|
)
|
—
|
|
|
|
|
|
|
(a)
|
Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net basis.
|
(b)
|
These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related collateral. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected above.
|
(c)
|
Repurchase agreements are collateralized by federal agency CMOs and U.S. Treasury securities and contracted on an overnight basis. These securities are reported in “securities available for sale” on our balance sheet.
|
|
Three months ended March 31,
|
|||||
in millions
|
2017
|
2016
|
||||
Interest cost on PBO
|
$
|
12
|
|
$
|
10
|
|
Expected return on plan assets
|
(17
|
)
|
(13
|
)
|
||
Amortization of losses
|
4
|
|
4
|
|
||
Net pension cost
|
$
|
(1
|
)
|
$
|
1
|
|
|
|
|
|
Three months ended March 31,
|
||||
in millions
|
2017
|
2016
|
|||
Interest cost on APBO
|
—
|
|
$
|
1
|
|
Expected return on plan assets
|
—
|
|
(1
|
)
|
|
Net postretirement benefit cost
|
—
|
|
—
|
|
|
|
|
|
•
|
required distributions on the trust preferred securities;
|
•
|
the redemption price when a capital security is redeemed; and
|
•
|
the amounts due if a trust is liquidated or terminated.
|
dollars in millions
|
Trust Preferred Securities, Net of Discount
(a)
|
Common Stock
|
Principal Amount of Debentures, Net of Discount
(b)
|
Interest Rate of Trust Preferred Securities and Debentures
(c)
|
Maturity of Trust Preferred Securities and Debentures
|
||||||||
March 31, 2017
|
|
|
|
|
|
||||||||
KeyCorp Capital I
|
$
|
155
|
|
$
|
6
|
|
$
|
161
|
|
1.738
|
%
|
2028
|
|
KeyCorp Capital II
|
105
|
|
4
|
|
109
|
|
6.875
|
|
2029
|
|
|||
KeyCorp Capital III
|
138
|
|
4
|
|
142
|
|
7.750
|
|
2029
|
|
|||
HNC Statutory Trust III
|
18
|
|
1
|
|
19
|
|
2.453
|
|
2035
|
|
|||
Willow Grove Statutory Trust I
|
18
|
|
1
|
|
19
|
|
2.441
|
|
2036
|
|
|||
HNC Statutory Trust IV
|
16
|
|
1
|
|
17
|
|
2.319
|
|
2037
|
|
|||
Westbank Capital Trust II
|
7
|
|
—
|
|
7
|
|
3.342
|
|
2034
|
|
|||
Westbank Capital Trust III
|
7
|
|
—
|
|
7
|
|
3.342
|
|
2034
|
|
|||
Total
|
$
|
464
|
|
$
|
17
|
|
$
|
481
|
|
4.811
|
%
|
—
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
$
|
475
|
|
$
|
17
|
|
$
|
492
|
|
4.845
|
%
|
—
|
|
|
|
|
|
|
|
(a)
|
The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture. Each issue of trust preferred securities carries an interest rate identical to that of the related debenture. Certain trust preferred securities include basis adjustments related to fair value hedges totaling
$58 million
at
March 31, 2017
, and
$59 million
at
December 31, 2016
. See Note
8
(“
Derivatives and Hedging Activities
”) for an explanation of fair value hedges.
|
(b)
|
We have the right to redeem these debentures. If the debentures purchased by KeyCorp Capital I, HNC Statutory Trust III, Willow Grove Statutory Trust I, HNC Statutory Trust IV, Westbank Capital Trust II, or Westbank Capital Trust III are redeemed before they mature, the redemption price will be the principal amount, plus any accrued but unpaid interest. If the debentures purchased by KeyCorp Capital II or KeyCorp Capital III are redeemed before they mature, the redemption price will be the greater of: (i) the principal amount, plus any accrued but unpaid interest, or (ii) the sum of the present values of principal and interest payments discounted at the Treasury Rate (as defined in the applicable indenture), plus 20 basis points for KeyCorp Capital II or 25 basis points for KeyCorp Capital III, or 50 basis points in the case of redemption upon either a tax or a capital treatment event for either KeyCorp Capital II or KeyCorp Capital III, plus any accrued but unpaid interest. The principal amount of certain debentures includes basis adjustments related to fair value hedges totaling
$58 million
at
March 31, 2017
, and
$59 million
at
December 31, 2016
. See Note
8
for an explanation of fair value hedges. The principal amount of debentures, net of discounts, is included in “long-term debt” on the balance sheet.
|
(c)
|
The interest rates for the trust preferred securities issued by KeyCorp Capital II and KeyCorp Capital III are fixed. The trust preferred securities issued by KeyCorp Capital I have a floating interest rate, equal to three-month LIBOR plus 74 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust III have a floating interest rate, equal to three-month LIBOR plus 140 basis points, that reprices quarterly. The trust preferred securities issued by Willow Grove Statutory Trust I have a floating interest rate, equal to three-month LIBOR plus 131 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust IV have a floating interest rate, equal to three-month LIBOR plus 128 basis points, that reprices quarterly. The trust preferred securities issued by Westbank Capital Trust II and Westbank Capital Trust III each have a floating interest rate, equal to three-month LIBOR plus 219 basis points, that reprices quarterly. The total interest rates are weighted-average rates.
|
March 31, 2017
|
Maximum Potential Undiscounted Future Payments
|
Liability Recorded
|
||||
in millions
|
||||||
Financial guarantees:
|
|
|
||||
Standby letters of credit
|
$
|
11,779
|
|
$
|
70
|
|
Recourse agreement with FNMA
|
2,664
|
|
5
|
|
||
Residential mortgage reserve
|
1,270
|
|
5
|
|
||
Return guarantee agreement with LIHTC investors
|
3
|
|
3
|
|
||
Written put options
(a)
|
2,052
|
|
43
|
|
||
Total
|
$
|
17,768
|
|
$
|
126
|
|
|
|
|
(a)
|
The maximum potential undiscounted future payments represent notional amounts of derivatives qualifying as guarantees.
|
in millions
|
Unrealized gains (losses) on securities available for sale
|
Unrealized gains (losses) on derivative financial instruments
|
Foreign currency translation adjustment
|
Net pension and postretirement benefit costs
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
(185
|
)
|
$
|
(14
|
)
|
$
|
(3
|
)
|
$
|
(339
|
)
|
$
|
(541
|
)
|
Other comprehensive income before reclassification, net of income taxes
|
6
|
|
(15
|
)
|
1
|
|
1
|
|
(7
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income, net of income taxes
(a)
|
—
|
|
(9
|
)
|
—
|
|
3
|
|
(6
|
)
|
|||||
Net current-period other comprehensive income, net of income taxes
|
6
|
|
(24
|
)
|
1
|
|
4
|
|
(13
|
)
|
|||||
Balance at March 31, 2017
|
$
|
(179
|
)
|
$
|
(38
|
)
|
$
|
(2
|
)
|
$
|
(335
|
)
|
$
|
(554
|
)
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2015
|
$
|
(58
|
)
|
$
|
20
|
|
$
|
(2
|
)
|
$
|
(365
|
)
|
$
|
(405
|
)
|
Other comprehensive income before reclassification, net of income taxes
|
128
|
|
72
|
|
5
|
|
(2
|
)
|
203
|
|
|||||
Amounts reclassified from accumulated other comprehensive income, net of income taxes
(a)
|
—
|
|
(14
|
)
|
—
|
|
3
|
|
(11
|
)
|
|||||
Net current-period other comprehensive income, net of income taxes
|
128
|
|
58
|
|
5
|
|
1
|
|
192
|
|
|||||
Balance at March 31, 2016
|
$
|
70
|
|
$
|
78
|
|
$
|
3
|
|
$
|
(364
|
)
|
$
|
(213
|
)
|
|
|
|
|
|
|
(a)
|
See table below for details about these reclassifications
.
|
Three months ended March 31, 2017
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the Statement Where Net Income is Presented
|
||
in millions
|
||||
Unrealized gains (losses) on derivative financial instruments
|
|
|
||
Interest rate
|
$
|
15
|
|
Interest income — Loans
|
Interest rate
|
(1
|
)
|
Interest expense — Long-term debt
|
|
|
14
|
|
Income (loss) from continuing operations before income taxes
|
|
|
5
|
|
Income taxes
|
|
|
$
|
9
|
|
Income (loss) from continuing operations
|
Net pension and postretirement benefit costs
|
|
|
||
Amortization of losses
|
$
|
(4
|
)
|
Personnel expense
|
Amortization of unrecognized prior service credit
|
—
|
|
Personnel expense
|
|
|
(4
|
)
|
Income (loss) from continuing operations before income taxes
|
|
|
(1
|
)
|
Income taxes
|
|
|
$
|
(3
|
)
|
Income (loss) from continuing operations
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the Statement Where Net Income is Presented
|
||
in millions
|
||||
Unrealized gains (losses) on derivative financial instruments
|
|
|
||
Interest rate
|
$
|
23
|
|
Interest income — Loans
|
Interest rate
|
(1
|
)
|
Interest expense — Long-term debt
|
|
|
22
|
|
Income (loss) from continuing operations before income taxes
|
|
|
8
|
|
Income taxes
|
|
|
$
|
14
|
|
Income (loss) from continuing operations
|
Net pension and postretirement benefit costs
|
|
|
||
Amortization of losses
|
$
|
(4
|
)
|
Personnel expense
|
|
(4
|
)
|
Income (loss) from continuing operations before income taxes
|
|
|
(1
|
)
|
Income taxes
|
|
|
$
|
(3
|
)
|
Income (loss) from continuing operations
|
|
|
|
|
|
|
•
|
Net interest income is determined by assigning a standard cost for funds used or a standard credit for funds provided based on their assumed maturity, prepayment, and/or repricing characteristics;
|
•
|
Indirect expenses, such as computer servicing costs and corporate overhead, are allocated based on assumptions regarding the extent that each line of business actually uses the services;
|
•
|
The consolidated provision for credit losses is allocated among the lines of business primarily based on their actual net loan charge-offs, adjusted periodically for loan growth and changes in risk profile. The amount of the consolidated
|
•
|
Income taxes are allocated based on the statutory federal income tax rate of
35%
and a blended state income tax rate (net of the federal income tax benefit) of
2.2%
; and
|
•
|
Capital is assigned to each line of business based on economic equity.
|
Three months ended March 31,
|
Key Community Bank
|
|
Key Corporate Bank
|
||||||||||
dollars in millions
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
||||||||
Net interest income (TE)
|
$
|
631
|
|
$
|
399
|
|
|
$
|
304
|
|
$
|
218
|
|
Noninterest income
|
277
|
|
196
|
|
|
275
|
|
207
|
|
||||
Total revenue (TE)
(a)
|
908
|
|
595
|
|
|
579
|
|
425
|
|
||||
Provision for credit losses
|
47
|
|
42
|
|
|
17
|
|
43
|
|
||||
Depreciation and amortization expense
|
28
|
|
13
|
|
|
20
|
|
13
|
|
||||
Other noninterest expense
|
599
|
|
423
|
|
|
283
|
|
224
|
|
||||
Income (loss) from continuing operations before income taxes (TE)
|
234
|
|
117
|
|
|
259
|
|
145
|
|
||||
Allocated income taxes and TE adjustments
|
87
|
|
43
|
|
|
78
|
|
27
|
|
||||
Income (loss) from continuing operations
|
147
|
|
74
|
|
|
181
|
|
118
|
|
||||
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Net income (loss)
|
147
|
|
74
|
|
|
181
|
|
118
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Net income (loss) attributable to Key
|
$
|
147
|
|
$
|
74
|
|
|
$
|
181
|
|
$
|
118
|
|
|
|
|
|
|
|
||||||||
AVERAGE BALANCES
(b)
|
|
|
|
|
|
||||||||
Loans and leases
|
$
|
47,036
|
|
$
|
30,789
|
|
|
$
|
37,737
|
|
$
|
27,722
|
|
Total assets
(a)
|
50,962
|
|
32,856
|
|
|
44,167
|
|
33,413
|
|
||||
Deposits
|
79,393
|
|
52,803
|
|
|
21,003
|
|
18,074
|
|
||||
OTHER FINANCIAL DATA
|
|
|
|
|
|
||||||||
Net loan charge-offs
(b)
|
$
|
43
|
|
$
|
23
|
|
|
$
|
14
|
|
$
|
18
|
|
Return on average allocated equity
(b)
|
12.60
|
%
|
11.10
|
%
|
|
24.86
|
%
|
22.92
|
%
|
||||
Return on average allocated equity
|
12.60
|
|
11.10
|
|
|
24.86
|
|
22.92
|
|
||||
Average full-time equivalent employees
(c)
|
10,804
|
|
7,376
|
|
|
2,384
|
|
2,126
|
|
(a)
|
Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.
|
(b)
|
From continuing operations.
|
(c)
|
The number of average full-time equivalent employees was not adjusted for discontinued operations.
|
|
|
|
|
|
|
Other Segments
|
|
Total Segments
|
|
Reconciling Items
|
|
Key
|
||||||||||||||||||||
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
(5
|
)
|
$
|
(9
|
)
|
|
$
|
930
|
|
$
|
608
|
|
|
$
|
(1
|
)
|
$
|
4
|
|
|
$
|
929
|
|
$
|
612
|
|
33
|
|
30
|
|
|
585
|
|
433
|
|
|
(8
|
)
|
(2
|
)
|
|
577
|
|
431
|
|
||||||||
28
|
|
21
|
|
|
1,515
|
|
1,041
|
|
|
(9
|
)
|
2
|
|
|
1,506
|
|
1,043
|
|
||||||||
(1
|
)
|
5
|
|
|
63
|
|
90
|
|
|
—
|
|
(1
|
)
|
|
63
|
|
89
|
|
||||||||
1
|
|
1
|
|
|
49
|
|
27
|
|
|
44
|
|
37
|
|
|
93
|
|
64
|
|
||||||||
10
|
|
9
|
|
|
892
|
|
656
|
|
|
28
|
|
(17
|
)
|
|
920
|
|
639
|
|
||||||||
18
|
|
6
|
|
|
511
|
|
268
|
|
|
(81
|
)
|
(17
|
)
|
|
430
|
|
251
|
|
||||||||
(5
|
)
|
(8
|
)
|
|
160
|
|
62
|
|
|
(55
|
)
|
2
|
|
|
105
|
|
64
|
|
||||||||
23
|
|
14
|
|
|
351
|
|
206
|
|
|
(26
|
)
|
(19
|
)
|
|
325
|
|
187
|
|
||||||||
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|
—
|
|
1
|
|
||||||||
23
|
|
14
|
|
|
351
|
|
206
|
|
|
(26
|
)
|
(18
|
)
|
|
325
|
|
188
|
|
||||||||
2
|
|
(1
|
)
|
|
2
|
|
(1
|
)
|
|
(1
|
)
|
1
|
|
|
1
|
|
—
|
|
||||||||
$
|
21
|
|
$
|
15
|
|
|
$
|
349
|
|
$
|
207
|
|
|
$
|
(25
|
)
|
$
|
(19
|
)
|
|
$
|
324
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
1,328
|
|
$
|
1,603
|
|
|
$
|
86,101
|
|
$
|
60,114
|
|
|
$
|
32
|
|
$
|
42
|
|
|
$
|
86,133
|
|
$
|
60,156
|
|
36,549
|
|
27,729
|
|
|
131,678
|
|
93,998
|
|
|
1,063
|
|
479
|
|
|
132,741
|
|
94,477
|
|
||||||||
2,030
|
|
756
|
|
|
102,426
|
|
71,633
|
|
|
(348
|
)
|
(35
|
)
|
|
102,078
|
|
71,598
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
1
|
|
$
|
5
|
|
|
$
|
58
|
|
$
|
46
|
|
|
—
|
|
—
|
|
|
$
|
58
|
|
$
|
46
|
|
||
53.56
|
%
|
33.33
|
%
|
|
18.04
|
%
|
16.88
|
%
|
|
(1.38
|
)%
|
(1.34
|
)%
|
|
8.65
|
%
|
6.87
|
%
|
||||||||
53.56
|
|
33.33
|
|
|
18.04
|
|
16.88
|
|
|
(1.38
|
)
|
(1.27
|
)
|
|
8.65
|
|
6.90
|
|
||||||||
3
|
|
8
|
|
|
13,191
|
|
9,510
|
|
|
5,195
|
|
3,893
|
|
|
18,386
|
|
13,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
![]() |
Cleveland, Ohio
|
Ernst & Young LLP
|
May 5, 2017
|
|
•
|
We use the phrase
continuing operations
in this document to mean all of our businesses other than the education lending business and Austin. The education lending business and Austin have been accounted for as
discontinued operations
since 2009.
|
•
|
Our
exit loan portfolios
are separate from our
discontinued operations
. These portfolios, which are in a run-off mode, stem from product lines we decided to cease because they no longer fit with our corporate strategy. These exit loan portfolios are included in
Other Segments.
|
•
|
We engage in
capital markets activities
primarily through business conducted by our Key Corporate Bank segment
.
These activities encompass a variety of products and services. Among other things, we trade securities as a dealer, enter into derivative contracts (both to accommodate clients’ financing needs and to mitigate certain risks), and conduct transactions in foreign currencies (both to accommodate clients’ needs and to benefit from fluctuations in exchange rates).
|
•
|
For regulatory purposes, capital is divided into two classes. Federal regulations currently prescribe that at least one-half of a bank or BHC’s
total risk-based capital
must qualify as
Tier 1 capital
. Both total and Tier 1 capital serve as bases for several measures of capital adequacy, which is an important indicator of financial stability and condition. As described under the heading “Regulatory capital requirements – Capital planning and stress testing” in the section entitled “Supervision and Regulation” that begins on page 8 of our
2016
Form 10-K, the regulators are required to conduct a supervisory capital assessment of all BHCs with assets of at least $50 billion, including KeyCorp. As part of this capital adequacy review, banking regulators evaluate a component of Tier 1 capital, known as
Common Equity Tier 1
, under the
Regulatory Capital Rules
. The “Capital” section of this report under the heading “Capital adequacy” provides more information on total capital, Tier 1 capital, and the Regulatory Capital Rules, including Common Equity Tier 1, and describes how these measures are calculated.
|
•
|
deterioration of commercial real estate market fundamentals;
|
•
|
defaults by our loan counterparties or clients;
|
•
|
adverse changes in credit quality trends;
|
•
|
declining asset prices;
|
•
|
our concentrated credit exposure in commercial and industrial loans;
|
•
|
the extensive and increasing regulation of the U.S. financial services industry;
|
•
|
operational or risk management failures by us or critical third parties;
|
•
|
changes in accounting policies, standards, and interpretations;
|
•
|
breaches of security or failures of our technology systems due to technological or other factors and cybersecurity threats;
|
•
|
negative outcomes from claims or litigation;
|
•
|
the occurrence of natural or man-made disasters, conflicts, or terrorist attacks, or other adverse external events;
|
•
|
evolving capital and liquidity standards under applicable regulatory rules;
|
•
|
unanticipated changes in our liquidity position, including but not limited to, changes in our access to or the cost of funding, and our ability to secure alternative funding sources;
|
•
|
downgrades in our credit ratings or those of KeyBank;
|
•
|
a reversal of the U.S. economic recovery due to financial, political, or other shocks;
|
•
|
our ability to anticipate interest rate changes and manage interest rate risk;
|
•
|
deterioration of economic conditions in the geographic regions where we operate;
|
•
|
the soundness of other financial institutions;
|
•
|
tax reform and other changes in tax laws;
|
•
|
our ability to attract and retain talented executives and employees and to manage our reputational risks;
|
•
|
our ability to timely and effectively implement our strategic initiatives;
|
•
|
increased competitive pressure due to industry consolidation;
|
•
|
our ability to adapt our products and services to industry standards and consumer preferences;
|
•
|
unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses;
|
•
|
our ability to realize the anticipated benefits of the First Niagara merger; and
|
•
|
our ability to develop and effectively use the quantitative models we rely upon in our business planning.
|
|
2017
|
|
2016
|
|||||||||||||
dollars in millions, except per share amounts
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
|||||
FOR THE PERIOD
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
1,050
|
|
|
$
|
1,062
|
|
$
|
890
|
|
$
|
684
|
|
$
|
683
|
|
Interest expense
|
132
|
|
|
124
|
|
110
|
|
87
|
|
79
|
|
|||||
Net interest income
|
918
|
|
|
938
|
|
780
|
|
597
|
|
604
|
|
|||||
Provision for credit losses
|
63
|
|
|
66
|
|
59
|
|
52
|
|
89
|
|
|||||
Noninterest income
|
577
|
|
|
618
|
|
549
|
|
473
|
|
431
|
|
|||||
Noninterest expense
|
1,013
|
|
|
1,220
|
|
1,082
|
|
751
|
|
703
|
|
|||||
Income (loss) from continuing operations before income taxes
|
419
|
|
|
270
|
|
188
|
|
267
|
|
243
|
|
|||||
Income (loss) from continuing operations attributable to Key
|
324
|
|
|
233
|
|
171
|
|
199
|
|
187
|
|
|||||
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
|
(4
|
)
|
1
|
|
3
|
|
1
|
|
|||||
Net income (loss) attributable to Key
|
324
|
|
|
229
|
|
172
|
|
202
|
|
188
|
|
|||||
Income (loss) from continuing operations attributable to Key common shareholders
|
296
|
|
|
213
|
|
165
|
|
193
|
|
182
|
|
|||||
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
|
(4
|
)
|
1
|
|
3
|
|
1
|
|
|||||
Net income (loss) attributable to Key common shareholders
|
296
|
|
|
209
|
|
166
|
|
196
|
|
183
|
|
|||||
PER COMMON SHARE
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.28
|
|
|
$
|
.20
|
|
$
|
.17
|
|
$
|
.23
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Net income (loss) attributable to Key common shareholders
(b)
|
.28
|
|
|
.20
|
|
.17
|
|
.23
|
|
.22
|
|
|||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
$
|
.27
|
|
|
$
|
.20
|
|
$
|
.16
|
|
$
|
.23
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes — assuming dilution
(a)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Net income (loss) attributable to Key common shareholders — assuming dilution
(b)
|
.27
|
|
|
.19
|
|
.17
|
|
.23
|
|
.22
|
|
|||||
Cash dividends paid
|
.085
|
|
|
.085
|
|
.085
|
|
.085
|
|
.075
|
|
|||||
Book value at period end
|
12.71
|
|
|
12.58
|
|
12.78
|
|
13.08
|
|
12.79
|
|
|||||
Tangible book value at period end
|
10.21
|
|
|
9.99
|
|
10.14
|
|
11.81
|
|
11.52
|
|
|||||
Market price:
|
|
|
|
|
|
|
||||||||||
High
|
19.36
|
|
|
18.62
|
|
12.64
|
|
13.08
|
|
13.37
|
|
|||||
Low
|
16.90
|
|
|
12.00
|
|
10.38
|
|
10.21
|
|
9.88
|
|
|||||
Close
|
17.78
|
|
|
18.27
|
|
12.17
|
|
11.05
|
|
11.04
|
|
|||||
Weighted-average common shares outstanding (000)
|
1,068,609
|
|
|
1,067,771
|
|
982,080
|
|
831,899
|
|
827,381
|
|
|||||
Weighted-average common shares and potential common shares outstanding (000)
(c)
|
1,086,540
|
|
|
1,083,717
|
|
994,660
|
|
838,496
|
|
835,060
|
|
|||||
AT PERIOD END
|
|
|
|
|
|
|
||||||||||
Loans
|
$
|
86,125
|
|
|
$
|
86,038
|
|
$
|
85,528
|
|
$
|
62,098
|
|
$
|
60,438
|
|
Earning assets
|
120,261
|
|
|
121,966
|
|
121,089
|
|
90,065
|
|
87,273
|
|
|||||
Total assets
|
134,476
|
|
|
136,453
|
|
135,805
|
|
101,150
|
|
98,402
|
|
|||||
Deposits
|
103,982
|
|
|
104,087
|
|
104,185
|
|
75,325
|
|
73,382
|
|
|||||
Long-term debt
|
12,324
|
|
|
12,384
|
|
12,622
|
|
11,388
|
|
10,760
|
|
|||||
Key common shareholders’ equity
|
13,951
|
|
|
13,575
|
|
13,831
|
|
11,023
|
|
10,776
|
|
|||||
Key shareholders’ equity
|
14,976
|
|
|
15,240
|
|
14,996
|
|
11,313
|
|
11,066
|
|
|||||
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
||||||||||
Return on average total assets
|
.99
|
%
|
|
.69
|
%
|
.55
|
%
|
.82
|
%
|
.80
|
%
|
|||||
Return on average common equity
|
8.76
|
|
|
6.22
|
|
5.09
|
|
7.15
|
|
6.86
|
|
|||||
Return on average tangible common equity
(d)
|
10.98
|
|
|
7.88
|
|
6.16
|
|
7.94
|
|
7.64
|
|
|||||
Net interest margin (TE)
|
3.13
|
|
|
3.12
|
|
2.85
|
|
2.76
|
|
2.89
|
|
|||||
Cash efficiency ratio
(d)
|
65.8
|
|
|
76.2
|
|
80.0
|
|
69.0
|
|
66.6
|
|
|||||
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
|
|
|
|
|
|
|
||||||||||
Return on average total assets
|
.98
|
%
|
|
.67
|
%
|
.55
|
%
|
.82
|
%
|
.79
|
%
|
|||||
Return on average common equity
|
8.76
|
|
|
6.10
|
|
5.12
|
|
7.26
|
|
6.90
|
|
|||||
Return on average tangible common equity
(d)
|
10.98
|
|
|
7.73
|
|
6.20
|
|
8.06
|
|
7.68
|
|
|||||
Net interest margin (TE)
|
3.11
|
|
|
3.09
|
|
2.83
|
|
2.74
|
|
2.83
|
|
|||||
Loan-to-deposit
(e)
|
85.6
|
|
|
85.2
|
|
84.7
|
|
85.3
|
|
85.7
|
|
|||||
CAPITAL RATIOS AT PERIOD END
|
|
|
|
|
|
|
||||||||||
Key shareholders’ equity to assets
|
11.14
|
%
|
|
11.17
|
%
|
11.04
|
%
|
11.18
|
%
|
11.25
|
%
|
|||||
Key common shareholders’ equity to assets
|
10.37
|
|
|
9.95
|
|
10.18
|
|
10.90
|
|
10.95
|
|
|||||
Tangible common equity to tangible assets
(d)
|
8.51
|
|
|
8.09
|
|
8.27
|
|
9.95
|
|
9.97
|
|
|||||
Common Equity Tier 1
(d)
|
9.91
|
|
|
9.54
|
|
9.56
|
|
11.10
|
|
11.07
|
|
|||||
Tier 1 risk-based capital
|
10.74
|
|
|
10.89
|
|
10.53
|
|
11.41
|
|
11.38
|
|
|||||
Total risk-based capital
|
12.69
|
|
|
12.85
|
|
12.63
|
|
13.63
|
|
13.12
|
|
|||||
Leverage
|
9.81
|
|
|
9.90
|
|
10.22
|
|
10.59
|
|
10.73
|
|
|||||
TRUST ASSETS
|
|
|
|
|
|
|
||||||||||
Assets under management
|
$
|
37,417
|
|
|
$
|
36,592
|
|
$
|
36,752
|
|
$
|
34,535
|
|
$
|
34,107
|
|
OTHER DATA
|
|
|
|
|
|
|
||||||||||
Average full-time-equivalent employees
|
18,386
|
|
|
18,849
|
|
17,079
|
|
13,419
|
|
13,403
|
|
|||||
Branches
|
1,216
|
|
|
1,217
|
|
1,322
|
|
949
|
|
961
|
|
|||||
|
|
|
|
|
|
|
(a)
|
In September 2009, we decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank. As a result of this decision, we have accounted for this business as a discontinued operation. For further discussion regarding the income (loss) from discontinued operations, see Note
12
(“
Acquisition, Divestiture, and Discontinued Operations
”).
|
(b)
|
EPS may not foot due to rounding.
|
(c)
|
Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.
|
(d)
|
See Figure
6
entitled “
GAAP to Non-GAAP Reconciliations
,” which presents the computations of certain financial measures related to “tangible common equity,” “Common Equity Tier 1,” 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.
|
(e)
|
Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits (excluding deposits in foreign office).
|
•
|
Generate positive operating leverage and a cash efficiency ratio of less than 60%;
|
•
|
Maintain a moderate risk profile by targeting a net loan charge-offs to average loans ratio in the range of .40% to .60%; and
|
•
|
Achieve a return on tangible common equity ratio in the range of 13% to 15%.
|
|
Key Metrics
(a)
|
1Q17
|
Targets
|
|
Positive operating leverage
|
Cash efficiency ratio
(b)
|
65.8
|
%
|
< 60 %
|
Cash efficiency ratio excluding merger-related charges
(b)
|
60.4
|
%
|
||
Moderate Risk Profile
|
Net loan charge-offs to average loans
|
.27
|
%
|
.40 - .60 %
|
Financial Returns
|
Return on average tangible common equity
(c)
|
10.98
|
%
|
13.00-15.00 %
|
Return on average tangible common equity excluding merger related charges
(c)
|
12.87
|
%
|
(a)
|
Calculated from continuing operations, unless otherwise noted.
|
(b)
|
Excludes intangible asset amortization; non-GAAP measure; see Figure
6
entitled “
GAAP to Non-GAAP Reconciliations
” for reconciliation.
|
(c)
|
Non-GAAP measure: see Figure
6
entitled “
GAAP to Non-GAAP Reconciliations
”
for reconciliation.
|
•
|
We continue to focus on growing our businesses and remain committed to improving productivity and efficiency. During the first
three
months of
2017
, we generated positive operating leverage compared to the prior year, as revenue relative to the year-ago period benefited from higher net interest income, positive momentum in our fee-based businesses, and the addition of over one million newly acquired consumer and business clients. Investment banking and debt placement fees increased by $56 million, related to improved capital markets conditions and activity from the year-ago period. Trust and investment services income, cards and payments income, and service charges on deposits accounts also contributed to the growth, largely resulting from the First Niagara acquisition.
|
•
|
Net loan charge-offs increased during the first
three
months of
2017
compared to the year-ago quarter due to loan growth and credit quality migration in our commercial loan portfolio. Our net loan charge-offs were
.27%
of average loans for the first
three
months of
2017
, below our targeted range.
|
•
|
Capital management remains a priority for
2017
. As previously reported, share repurchases of up to $350 million were included in the 2016 capital plan, which is effective through the second quarter of 2017. We completed
$160 million
of Common Share repurchases, including
$107 million
of Common Share repurchases in the open market and
$53 million
of Common Share repurchases related to employee equity compensation programs in the
first
quarter of
2017
under this authorization.
|
•
|
Consistent with our 2016 capital plan, we made a dividend payment of $.085 per share, for the first quarter of 2017. An additional potential increase in our quarterly Common Share dividend, up to $.095 per share, will be considered by the Board for the second quarter of 2017, consistent with the 2016 capital plan.
|
Ratios (including Capital conservation buffer)
|
Key
March 31, 2017 Pro forma |
Minimum
January 1, 2017 |
Phase-in
Period
|
Minimum
January 1, 2019
|
|||
Common Equity Tier 1
(a)
|
9.83
|
%
|
4.5
|
%
|
None
|
4.5
|
%
|
Capital conservation buffer
(b)
|
|
—
|
|
1/1/16-1/1/19
|
2.5
|
|
|
Common Equity Tier 1 + Capital conservation buffer
|
|
4.5
|
|
1/1/16-1/1/19
|
7.0
|
|
|
Tier 1 Capital
|
10.51
|
%
|
6.0
|
|
None
|
6.0
|
|
Tier 1 Capital + Capital conservation buffer
|
|
6.0
|
|
1/1/16-1/1/19
|
8.5
|
|
|
Total Capital
|
12.49
|
%
|
8.0
|
|
None
|
8.0
|
|
Total Capital + Capital conservation buffer
|
|
8.0
|
|
1/1/16-1/1/19
|
10.5
|
|
|
Leverage
(c)
|
9.66
|
%
|
4.0
|
|
None
|
4.0
|
|
(a)
|
See Figure
6
entitled “
GAAP to Non-GAAP Reconciliations
,
” which presents the computation for estimated Common Equity Tier 1. The table reconciles the GAAP performance measure to the corresponding non-GAAP measure, which provides a basis for period-to-period comparisons.
|
(b)
|
Capital conservation buffer must consist of Common Equity Tier 1 capital. As a standardized approach banking organization, KeyCorp is not subject to the countercyclical capital buffer of up to 2.5% imposed upon an advanced approaches banking organization under the Regulatory Capital Rules.
|
(c)
|
As a standardized approach banking organization, KeyCorp is not subject to the 3% supplemental leverage ratio requirement, which becomes effective January 1, 2018.
|
Prompt Corrective Action
|
|
Capital Category
|
|
||
Ratio
|
|
Well Capitalized
(a)
|
|
Adequately Capitalized
|
|
Common Equity Tier 1 Risk-Based
|
|
6.5
|
%
|
4.5
|
%
|
Tier 1 Risk-Based
|
|
8.0
|
|
6.0
|
|
Total Risk-Based
|
|
10.0
|
|
8.0
|
|
Tier 1 Leverage
(b)
|
|
5.0
|
|
4.0
|
|
|
|
|
|
|
|
(a)
|
A “well capitalized” institution also must not be subject to any written agreement, order, or directive to meet and maintain a specific capital level for any capital measure.
|
(b)
|
As a “standardized approach” banking organization, KeyBank is not subject to the 3% supplemental leverage ratio requirement, which becomes effective January 1, 2018.
|
|
Three months ended
|
||||||||
in millions, except per share amounts
|
3/31/2017
|
12/31/2016
|
3/31/2016
|
||||||
Summary of operations
|
|
|
|
||||||
Income (loss) from continuing operations attributable to Key
|
$
|
324
|
|
$
|
233
|
|
$
|
187
|
|
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
(4
|
)
|
1
|
|
|||
Net income (loss) attributable to Key
|
$
|
324
|
|
$
|
229
|
|
$
|
188
|
|
Income (loss) from continuing operations attributable to Key
|
$
|
324
|
|
$
|
233
|
|
$
|
187
|
|
Less: Dividends on Preferred Stock
|
28
|
|
20
|
|
5
|
|
|||
Income (loss) from continuing operations attributable to Key common shareholders
|
296
|
|
213
|
|
182
|
|
|||
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
(4
|
)
|
1
|
|
|||
Net income (loss) attributable to Key common shareholders
|
$
|
296
|
|
$
|
209
|
|
$
|
183
|
|
Per common share — assuming dilution
|
|
|
|
||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.27
|
|
$
|
.20
|
|
$
|
.22
|
|
Income (loss) from discontinued operations, net of taxes
(a)
|
—
|
|
—
|
|
—
|
|
|||
Net income (loss) attributable to Key common shareholders
(b)
|
$
|
.27
|
|
$
|
.19
|
|
$
|
.22
|
|
|
|
|
|
(a)
|
In September 2009, we decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank. As a result of this decision, we have accounted for these businesses as discontinued operations. For further discussion regarding the income (loss) from discontinued operations, see Note
12
(“
Acquisition, Divestiture, and Discontinued Operations
”).
|
(b)
|
EPS may not foot due to rounding.
|
|
|
Three months ended
|
||||||||||||||
dollars in millions
|
3/31/2017
|
12/31/2016
|
9/30/2016
|
6/30/2016
|
3/31/2016
|
|||||||||||
Tangible common equity to tangible assets at period end
|
|
|
|
|
|
|||||||||||
Key shareholders’ equity (GAAP)
|
$
|
14,976
|
|
$
|
15,240
|
|
$
|
14,996
|
|
$
|
11,313
|
|
$
|
11,066
|
|
|
Less:
|
Intangible assets
(a)
|
2,751
|
|
2,788
|
|
2,855
|
|
1,074
|
|
1,077
|
|
|||||
|
Preferred Stock
(b)
|
1,009
|
|
1,640
|
|
1,150
|
|
281
|
|
281
|
|
|||||
|
Tangible common equity (non-GAAP)
|
$
|
11,216
|
|
$
|
10,812
|
|
$
|
10,991
|
|
$
|
9,958
|
|
$
|
9,708
|
|
|
Total assets (GAAP)
|
$
|
134,476
|
|
$
|
136,453
|
|
$
|
135,805
|
|
$
|
101,150
|
|
$
|
98,402
|
|
Less:
|
Intangible assets
(a)
|
2,751
|
|
2,788
|
|
2,855
|
|
1,074
|
|
1,077
|
|
|||||
|
Tangible assets (non-GAAP)
|
$
|
131,725
|
|
$
|
133,665
|
|
$
|
132,950
|
|
$
|
100,076
|
|
$
|
97,325
|
|
|
Tangible common equity to tangible assets ratio (non-GAAP)
|
8.51
|
%
|
8.09
|
%
|
8.27
|
%
|
9.95
|
%
|
9.97
|
%
|
|||||
Common Equity Tier 1 at period end
|
|
|
|
|
|
|||||||||||
Key shareholders’ equity (GAAP)
|
$
|
14,976
|
|
$
|
15,240
|
|
$
|
14,996
|
|
$
|
11,313
|
|
$
|
11,066
|
|
|
Less:
|
Preferred Stock
(b)
|
1,009
|
|
1,640
|
|
1,150
|
|
281
|
|
281
|
|
|||||
|
Common Equity Tier 1 capital before adjustments and deductions
|
13,967
|
|
13,600
|
|
13,846
|
|
11,032
|
|
10,785
|
|
|||||
Less:
|
Goodwill, net of deferred taxes
|
2,379
|
|
2,405
|
|
2,450
|
|
1,031
|
|
1,033
|
|
|||||
|
Intangible assets, net of deferred taxes
|
194
|
|
155
|
|
216
|
|
30
|
|
35
|
|
|||||
|
Deferred tax assets
|
11
|
|
4
|
|
6
|
|
1
|
|
1
|
|
|||||
|
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes
|
(179
|
)
|
(185
|
)
|
101
|
|
129
|
|
70
|
|
|||||
|
Accumulated gains (losses) on cash flow hedges, net of deferred taxes
|
(76
|
)
|
(52
|
)
|
39
|
|
77
|
|
46
|
|
|||||
|
Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes
|
(335
|
)
|
(339
|
)
|
(359
|
)
|
(362
|
)
|
(365
|
)
|
|||||
|
Total Common Equity Tier 1 capital
|
$
|
11,973
|
|
$
|
11,612
|
|
$
|
11,393
|
|
$
|
10,126
|
|
$
|
9,965
|
|
|
Net risk-weighted assets (regulatory)
|
$
|
120,852
|
|
$
|
121,671
|
|
$
|
119,120
|
|
$
|
91,195
|
|
$
|
90,014
|
|
|
Common Equity Tier 1 ratio (non-GAAP)
|
9.91
|
%
|
9.54
|
%
|
9.56
|
%
|
11.10
|
%
|
11.07
|
%
|
|||||
Average tangible common equity
|
|
|
|
|
|
|||||||||||
Average Key shareholders’ equity (GAAP)
|
$
|
15,184
|
|
$
|
14,901
|
|
$
|
13,552
|
|
$
|
11,147
|
|
$
|
10,953
|
|
|
Less:
|
Intangible assets (average)
(c)
|
2,772
|
|
2,874
|
|
2,255
|
|
1,076
|
|
1,079
|
|
|||||
|
Preferred Stock (average)
|
1,480
|
|
1,274
|
|
648
|
|
290
|
|
290
|
|
|||||
|
Average tangible common equity (non-GAAP)
|
$
|
10,932
|
|
$
|
10,753
|
|
$
|
10,649
|
|
$
|
9,781
|
|
$
|
9,584
|
|
Return on average tangible common equity from continuing operations
|
|
|
|
|
|
|||||||||||
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)
|
$
|
296
|
|
$
|
213
|
|
$
|
165
|
|
$
|
193
|
|
$
|
182
|
|
|
Plus:
|
Merger-related charges, after tax
|
51
|
|
124
|
|
132
|
|
28
|
|
15
|
|
|||||
|
Net income (loss) from continuing operations attributable to Key common shareholders after merger-related charges (non-GAAP)
|
$
|
347
|
|
$
|
337
|
|
$
|
297
|
|
$
|
221
|
|
$
|
197
|
|
Average tangible common equity (non-GAAP)
|
10,932
|
|
10,753
|
|
10,649
|
|
9,781
|
|
9,584
|
|
||||||
Return on average tangible common equity from continuing operations (non-GAAP)
|
10.98
|
%
|
7.88
|
%
|
6.16
|
%
|
7.94
|
%
|
7.64
|
%
|
||||||
Return on average tangible common equity from continuing operations excluding merger-related charges (non-GAAP)
|
12.87
|
|
12.47
|
%
|
11.22
|
%
|
9.09
|
%
|
8.27
|
%
|
||||||
Return on average tangible common equity consolidated
|
|
|
|
|
|
|||||||||||
Net income (loss) attributable to Key common shareholders (GAAP)
|
$
|
296
|
|
$
|
209
|
|
$
|
166
|
|
$
|
196
|
|
$
|
183
|
|
|
Average tangible common equity (non-GAAP)
|
10,932
|
|
10,753
|
|
10,649
|
|
9,781
|
|
9,584
|
|
||||||
Return on average tangible common equity consolidated (non-GAAP)
|
10.98
|
%
|
7.73
|
%
|
6.20
|
%
|
8.06
|
%
|
7.68
|
%
|
||||||
Pre provision net revenue
|
|
|
|
|
|
|||||||||||
Net interest income (GAAP)
|
$
|
918
|
|
$
|
938
|
|
$
|
780
|
|
$
|
597
|
|
$
|
604
|
|
|
Plus:
|
Taxable-equivalent adjustment
|
11
|
|
10
|
|
8
|
|
8
|
|
8
|
|
|||||
|
Noninterest income (GAAP)
|
577
|
|
618
|
|
549
|
|
473
|
|
431
|
|
|||||
Less:
|
Noninterest expense (GAAP)
|
1,013
|
|
1,220
|
|
1,082
|
|
751
|
|
703
|
|
|||||
|
Pre provision net revenue from continuing operations (non-GAAP)
|
$
|
493
|
|
$
|
346
|
|
$
|
255
|
|
$
|
327
|
|
$
|
340
|
|
Plus:
|
Merger-related charges
|
81
|
|
198
|
|
207
|
|
45
|
|
24
|
|
|||||
|
Pre provision net revenue from continuing operations excluding merger-related charges (non-GAAP)
|
574
|
|
544
|
|
462
|
|
372
|
|
364
|
|
|||||
Noninterest expense excluding merger-related charges
|
|
|
|
|
|
|||||||||||
Noninterest expense (GAAP)
|
$
|
1,013
|
|
$
|
1,220
|
|
$
|
1,082
|
|
$
|
751
|
|
$
|
703
|
|
|
Less:
|
Merger-related charges
|
81
|
|
207
|
|
189
|
|
45
|
|
24
|
|
|||||
|
Noninterest expense excluding merger-related charges (non-GAAP)
|
$
|
932
|
|
$
|
1,013
|
|
$
|
893
|
|
$
|
706
|
|
$
|
679
|
|
Cash efficiency ratio
|
|
|
|
|
|
|||||||||||
Noninterest expense (GAAP)
|
$
|
1,013
|
|
$
|
1,220
|
|
$
|
1,082
|
|
$
|
751
|
|
$
|
703
|
|
|
Less:
|
Intangible asset amortization
|
22
|
|
27
|
|
13
|
|
7
|
|
8
|
|
|||||
Adjusted noninterest expense (non-GAAP)
|
$
|
991
|
|
$
|
1,193
|
|
$
|
1,069
|
|
$
|
744
|
|
$
|
695
|
|
|
Less:
|
Merger-related charges
|
81
|
|
207
|
|
189
|
|
45
|
|
24
|
|
|||||
Adjusted noninterest expense excluding merger-related charges (non-GAAP)
|
$
|
910
|
|
$
|
986
|
|
$
|
880
|
|
$
|
699
|
|
$
|
671
|
|
|
Net interest income (GAAP)
|
$
|
918
|
|
$
|
938
|
|
$
|
780
|
|
$
|
597
|
|
$
|
604
|
|
|
Plus:
|
Taxable-equivalent adjustment
|
11
|
|
10
|
|
8
|
|
8
|
|
8
|
|
|||||
|
Noninterest income (GAAP)
|
577
|
|
618
|
|
549
|
|
473
|
|
431
|
|
|||||
Total taxable-equivalent revenue (non-GAAP)
|
$
|
1,506
|
|
$
|
1,566
|
|
$
|
1,337
|
|
$
|
1,078
|
|
$
|
1,043
|
|
|
Plus:
|
Merger-related charges
|
—
|
|
(9
|
)
|
18
|
|
—
|
|
—
|
|
|||||
|
Adjusted noninterest income excluding merger-related charges (non-GAAP)
|
$
|
1,506
|
|
$
|
1,557
|
|
$
|
1,355
|
|
$
|
1,078
|
|
$
|
1,043
|
|
Cash efficiency ratio (non-GAAP)
|
65.8
|
%
|
76.2
|
%
|
80.0
|
%
|
69.0
|
%
|
66.6
|
%
|
||||||
Cash efficiency ratio excluding merger-related charges (non-GAAP)
|
60.4
|
%
|
63.3
|
%
|
64.9
|
%
|
64.8
|
%
|
64.3
|
%
|
||||||
Return on average total assets from continuing operations excluding merger-related charges
|
|
|
|
|
|
|||||||||||
Income from continuing operations attributable to Key (GAAP)
|
$
|
324
|
|
$
|
233
|
|
$
|
171
|
|
$
|
199
|
|
$
|
187
|
|
|
Plus:
|
Merger-related charges, after tax
|
51
|
|
124
|
|
132
|
|
28
|
|
15
|
|
|||||
|
Income from continuing operations attributable to Key excluding merger-related charges, after tax (non-GAAP)
|
$
|
375
|
|
$
|
357
|
|
$
|
303
|
|
$
|
227
|
|
$
|
202
|
|
Average total assets from continuing operations (GAAP)
|
$
|
132,741
|
|
$
|
134,428
|
|
$
|
123,469
|
|
$
|
97,413
|
|
$
|
94,477
|
|
|
Return on average total assets from continuing operations excluding merger-related charges (non-GAAP)
|
1.15
|
%
|
1.06
|
%
|
.98
|
%
|
.94
|
%
|
.86
|
%
|
||||||
|
|
|
|
|
|
|
dollars in millions
|
Three months ended
3/31/2017 |
||
Common Equity Tier 1 under the Regulatory Capital Rules (estimates)
|
|
||
Common Equity Tier 1 under current Regulatory Capital Rules
|
$
|
11,973
|
|
Adjustments from current Regulatory Capital Rules to the fully phased-in Regulatory Capital Rules:
|
|
||
Deferred tax assets and other intangible assets
(d)
|
(51
|
)
|
|
Common Equity Tier 1 anticipated under the fully phased-in Regulatory Capital Rules
(e)
|
$
|
11,922
|
|
|
|
||
Net risk-weighted assets under current Regulatory Capital Rules
|
$
|
120,852
|
|
Adjustments from current Regulatory Capital Rules to the fully phased-in Regulatory Capital Rules:
|
|
||
Mortgage servicing assets
(f)
|
597
|
|
|
Volcker Funds
|
(172
|
)
|
|
All other assets
|
61
|
|
|
Total risk-weighted assets anticipated under the fully phased-in Regulatory Capital Rules
(e)
|
$
|
121,338
|
|
|
|
||
Common Equity Tier 1 ratio under the fully phased-in Regulatory Capital Rules
(e)
|
9.83
|
%
|
|
|
|
(a)
|
For the three months ended
March 31, 2017
,
December 31, 2016
,
September 30, 2016
,
June 30, 2016
, and
March 31, 2016
, intangible assets exclude
$38 million
, $42 million, $51 million, $36 million, and $40 million, respectively, of period-end purchased credit card relationships.
|
(b)
|
Net of capital surplus.
|
(c)
|
For the three months ended
March 31, 2017
,
December 31, 2016
,
September 30, 2016
,
June 30, 2016
, and
March 31, 2016
, average intangible assets exclude
$40 million
, $46 million, $47 million, $38 million, and $42 million, respectively, of average purchased credit card relationships.
|
(d)
|
Includes the deferred tax assets subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule.
|
(e)
|
The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on January 1, 2019); we are subject to the Regulatory Capital Rules under the “standardized approach.”
|
|
|
|
•
|
the volume, pricing, mix, and maturity of earning assets and interest-bearing liabilities;
|
•
|
the volume and value of net free funds, such as noninterest-bearing deposits and equity capital;
|
•
|
the use of derivative instruments to manage interest rate risk;
|
•
|
interest rate fluctuations and competitive conditions within the marketplace; and
|
•
|
asset quality.
|
|
First Quarter 2017
|
|
Fourth Quarter 2016
|
||||||||||||||
dollars in millions
|
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
|
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||||
Loans
(b), (c)
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
(d)
|
$
|
40,002
|
|
$
|
373
|
|
3.77
|
%
|
|
$
|
39,495
|
|
$
|
365
|
|
3.68
|
%
|
Real estate — commercial mortgage
|
15,187
|
|
164
|
|
4.39
|
|
|
14,771
|
|
168
|
|
4.50
|
|
||||
Real estate — construction
|
2,353
|
|
26
|
|
4.54
|
|
|
2,222
|
|
37
|
|
6.72
|
|
||||
Commercial lease financing
|
4,635
|
|
44
|
|
3.76
|
|
|
4,624
|
|
50
|
|
4.34
|
|
||||
Total commercial loans
|
62,177
|
|
607
|
|
3.95
|
|
|
61,112
|
|
620
|
|
4.04
|
|
||||
Real estate — residential mortgage
|
5,520
|
|
54
|
|
3.94
|
|
|
5,554
|
|
57
|
|
4.17
|
|
||||
Home equity loans
|
12,611
|
|
131
|
|
4.22
|
|
|
12,812
|
|
129
|
|
3.99
|
|
||||
Consumer direct loans
|
1,762
|
|
30
|
|
6.97
|
|
|
1,785
|
|
31
|
|
6.84
|
|
||||
Credit cards
|
1,067
|
|
29
|
|
11.06
|
|
|
1,088
|
|
29
|
|
10.78
|
|
||||
Consumer indirect loans
|
2,996
|
|
37
|
|
4.91
|
|
|
3,009
|
|
42
|
|
5.50
|
|
||||
Total consumer loans
|
23,956
|
|
281
|
|
4.75
|
|
|
24,248
|
|
288
|
|
4.73
|
|
||||
Total loans
|
86,133
|
|
888
|
|
4.17
|
|
|
85,360
|
|
908
|
|
4.24
|
|
||||
Loans held for sale
|
1,188
|
|
13
|
|
4.28
|
|
|
1,323
|
|
11
|
|
3.39
|
|
||||
Securities available for sale
(b), (e)
|
19,181
|
|
95
|
|
1.95
|
|
|
20,145
|
|
92
|
|
1.82
|
|
||||
Held-to-maturity securities
(b)
|
9,988
|
|
51
|
|
2.04
|
|
|
9,121
|
|
44
|
|
1.95
|
|
||||
Trading account assets
|
968
|
|
7
|
|
2.75
|
|
|
892
|
|
6
|
|
2.54
|
|
||||
Short-term investments
|
1,610
|
|
3
|
|
.79
|
|
|
3,717
|
|
5
|
|
.49
|
|
||||
Other investments
(e)
|
709
|
|
4
|
|
2.26
|
|
|
741
|
|
6
|
|
3.23
|
|
||||
Total earning assets
|
119,777
|
|
1,061
|
|
3.57
|
|
|
121,299
|
|
1,072
|
|
3.52
|
|
||||
Allowance for loan and lease losses
|
(855
|
)
|
|
|
|
(855
|
)
|
|
|
||||||||
Accrued income and other assets
|
13,819
|
|
|
|
|
13,984
|
|
|
|
||||||||
Discontinued assets
|
1,540
|
|
|
|
|
1,610
|
|
|
|
||||||||
Total assets
|
$
|
134,281
|
|
|
|
|
$
|
136,038
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES
|
|
|
|
|
|
|
|
||||||||||
NOW and money market deposit accounts
|
$
|
54,295
|
|
32
|
|
.24
|
|
|
$
|
55,444
|
|
31
|
|
.22
|
|
||
Savings deposits
|
6,351
|
|
1
|
|
.10
|
|
|
6,546
|
|
2
|
|
.10
|
|
||||
Certificates of deposit ($100,000 or more)
(f)
|
5,627
|
|
16
|
|
1.16
|
|
|
5,428
|
|
15
|
|
1.11
|
|
||||
Other time deposits
|
4,706
|
|
9
|
|
.76
|
|
|
4,849
|
|
9
|
|
.77
|
|
||||
Total interest-bearing deposits
|
70,979
|
|
58
|
|
.33
|
|
|
72,267
|
|
57
|
|
.32
|
|
||||
Federal funds purchased and securities sold under repurchase agreements
|
795
|
|
1
|
|
.32
|
|
|
592
|
|
1
|
|
.11
|
|
||||
Bank notes and other short-term borrowings
|
1,802
|
|
5
|
|
1.06
|
|
|
934
|
|
3
|
|
1.11
|
|
||||
Long-term debt
(f), (g)
|
10,833
|
|
68
|
|
2.54
|
|
|
10,914
|
|
63
|
|
2.38
|
|
||||
Total interest-bearing liabilities
|
84,409
|
|
132
|
|
.63
|
|
|
84,707
|
|
124
|
|
.58
|
|
||||
Noninterest-bearing deposits
|
31,099
|
|
|
|
|
32,424
|
|
|
|
||||||||
Accrued expense and other liabilities
|
2,048
|
|
|
|
|
2,394
|
|
|
|
||||||||
Discontinued liabilities
(g)
|
1,540
|
|
|
|
|
1,610
|
|
|
|
||||||||
Total liabilities
|
119,096
|
|
|
|
|
121,135
|
|
|
|
||||||||
EQUITY
|
|
|
|
|
|
|
|
||||||||||
Key shareholders’ equity
|
15,184
|
|
|
|
|
14,901
|
|
|
|
||||||||
Noncontrolling interests
|
1
|
|
|
|
|
2
|
|
|
|
||||||||
Total equity
|
15,185
|
|
|
|
|
14,903
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
134,281
|
|
|
|
|
$
|
136,038
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
Interest rate spread (TE)
|
|
|
2.94
|
%
|
|
|
|
2.94
|
%
|
||||||||
Net interest income (TE) and net interest margin (TE)
|
|
929
|
|
3.13
|
%
|
|
|
948
|
|
3.12
|
%
|
||||||
TE adjustment
(b)
|
|
11
|
|
|
|
|
10
|
|
|
||||||||
Net interest income, GAAP basis
|
|
$
|
918
|
|
|
|
|
$
|
938
|
|
|
||||||
|
|
|
|
|
|
|
|
(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 TE basis using the statutory federal income tax rate of 35%.
|
(c)
|
For purposes of these computations, nonaccrual loans are included in average loan balances.
|
(d)
|
Commercial and industrial average balances include
$114 million
,
$119 million
, $107 million, $87 million, and $85 million of assets from commercial credit cards for the
three months ended March 31, 2017
,
December 31, 2016
, September 30, 2016, June 30, 2016, and March 31, 2016, respectively.
|
Third Quarter 2016
|
|
Second Quarter 2016
|
|
First Quarter 2016
|
|||||||||||||||||||||
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
|
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
|
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$
|
37,318
|
|
$
|
317
|
|
3.38
|
%
|
|
$
|
32,630
|
|
$
|
270
|
|
3.32
|
%
|
|
$
|
31,590
|
|
$
|
263
|
|
3.35
|
%
|
12,879
|
|
126
|
|
3.91
|
|
|
8,404
|
|
80
|
|
3.85
|
|
|
8,138
|
|
77
|
|
3.78
|
|
||||||
1,723
|
|
21
|
|
4.67
|
|
|
869
|
|
8
|
|
3.78
|
|
|
1,016
|
|
10
|
|
4.11
|
|
||||||
4,508
|
|
38
|
|
3.33
|
|
|
3,949
|
|
37
|
|
3.77
|
|
|
3,957
|
|
36
|
|
3.65
|
|
||||||
56,428
|
|
502
|
|
3.54
|
|
|
45,852
|
|
395
|
|
3.47
|
|
|
44,701
|
|
386
|
|
3.47
|
|
||||||
4,453
|
|
45
|
|
3.96
|
|
|
2,253
|
|
22
|
|
4.11
|
|
|
2,236
|
|
24
|
|
4.18
|
|
||||||
11,968
|
|
122
|
|
4.07
|
|
|
10,098
|
|
102
|
|
4.04
|
|
|
10,240
|
|
103
|
|
4.06
|
|
||||||
1,666
|
|
30
|
|
7.20
|
|
|
1,599
|
|
26
|
|
6.53
|
|
|
1,593
|
|
26
|
|
6.53
|
|
||||||
996
|
|
27
|
|
10.80
|
|
|
792
|
|
21
|
|
10.58
|
|
|
784
|
|
21
|
|
10.72
|
|
||||||
2,186
|
|
28
|
|
5.23
|
|
|
554
|
|
9
|
|
6.56
|
|
|
602
|
|
10
|
|
6.44
|
|
||||||
21,269
|
|
252
|
|
4.73
|
|
|
15,296
|
|
180
|
|
4.74
|
|
|
15,455
|
|
184
|
|
4.76
|
|
||||||
77,697
|
|
754
|
|
3.86
|
|
|
61,148
|
|
575
|
|
3.78
|
|
|
60,156
|
|
570
|
|
3.80
|
|
||||||
1,152
|
|
10
|
|
3.48
|
|
|
611
|
|
5
|
|
3.18
|
|
|
826
|
|
8
|
|
4.02
|
|
||||||
17,972
|
|
88
|
|
1.99
|
|
|
14,268
|
|
74
|
|
2.08
|
|
|
14,207
|
|
75
|
|
2.12
|
|
||||||
6,250
|
|
30
|
|
1.86
|
|
|
4,883
|
|
24
|
|
1.98
|
|
|
4,817
|
|
24
|
|
2.01
|
|
||||||
860
|
|
4
|
|
2.12
|
|
|
967
|
|
6
|
|
2.28
|
|
|
817
|
|
7
|
|
3.50
|
|
||||||
5,911
|
|
7
|
|
.48
|
|
|
5,559
|
|
6
|
|
.45
|
|
|
3,432
|
|
4
|
|
.46
|
|
||||||
717
|
|
5
|
|
2.74
|
|
|
610
|
|
2
|
|
1.54
|
|
|
647
|
|
3
|
|
1.73
|
|
||||||
110,559
|
|
898
|
|
3.24
|
|
|
88,046
|
|
692
|
|
3.16
|
|
|
84,902
|
|
691
|
|
3.27
|
|
||||||
(847
|
)
|
|
|
|
(833
|
)
|
|
|
|
(803
|
)
|
|
|
||||||||||||
13,757
|
|
|
|
|
10,200
|
|
|
|
|
10,378
|
|
|
|
||||||||||||
1,676
|
|
|
|
|
1,738
|
|
|
|
|
1,804
|
|
|
|
||||||||||||
$
|
125,145
|
|
|
|
|
$
|
99,151
|
|
|
|
|
$
|
96,281
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$
|
51,318
|
|
25
|
|
.20
|
|
|
$
|
39,687
|
|
16
|
|
.17
|
|
|
$
|
37,708
|
|
15
|
|
.16
|
|
|||
4,521
|
|
1
|
|
.07
|
|
|
2,375
|
|
—
|
|
.02
|
|
|
2,349
|
|
—
|
|
.02
|
|
||||||
4,204
|
|
12
|
|
1.15
|
|
|
3,233
|
|
11
|
|
1.39
|
|
|
2,761
|
|
10
|
|
1.37
|
|
||||||
5,031
|
|
11
|
|
.85
|
|
|
3,252
|
|
7
|
|
.85
|
|
|
3,200
|
|
6
|
|
.79
|
|
||||||
65,074
|
|
49
|
|
.30
|
|
|
48,547
|
|
34
|
|
.29
|
|
|
46,018
|
|
31
|
|
.27
|
|
||||||
578
|
|
—
|
|
.16
|
|
|
337
|
|
—
|
|
.01
|
|
|
437
|
|
—
|
|
.07
|
|
||||||
1,186
|
|
2
|
|
.91
|
|
|
694
|
|
3
|
|
1.39
|
|
|
591
|
|
2
|
|
1.63
|
|
||||||
10,415
|
|
59
|
|
2.31
|
|
|
9,294
|
|
50
|
|
2.25
|
|
|
8,566
|
|
46
|
|
2.19
|
|
||||||
77,253
|
|
110
|
|
.57
|
|
|
58,872
|
|
87
|
|
.60
|
|
|
55,612
|
|
79
|
|
.57
|
|
||||||
29,844
|
|
|
|
|
25,357
|
|
|
|
|
25,580
|
|
|
|
||||||||||||
2,818
|
|
|
|
|
2,032
|
|
|
|
|
2,322
|
|
|
|
||||||||||||
1,676
|
|
|
|
|
1,738
|
|
|
|
|
1,804
|
|
|
|
||||||||||||
111,591
|
|
|
|
|
87,999
|
|
|
|
|
85,318
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
13,552
|
|
|
|
|
11,147
|
|
|
|
|
10,953
|
|
|
|
||||||||||||
2
|
|
|
|
|
5
|
|
|
|
|
10
|
|
|
|
||||||||||||
13,554
|
|
|
|
|
11,152
|
|
|
|
|
10,963
|
|
|
|
||||||||||||
$
|
125,145
|
|
|
|
|
$
|
99,151
|
|
|
|
|
$
|
96,281
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
2.67
|
%
|
|
|
|
2.56
|
%
|
|
|
|
2.70
|
%
|
||||||||||||
|
788
|
|
2.85
|
%
|
|
|
605
|
|
2.76
|
%
|
|
|
612
|
|
2.89
|
%
|
|||||||||
|
8
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
||||||||||||
|
$
|
780
|
|
|
|
|
$
|
597
|
|
|
|
|
$
|
604
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
(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 our matched funds transfer pricing methodology to discontinued operations.
|
|
From three months ended March 31, 2016
|
||||||||
|
to three months ended March 31, 2017
|
||||||||
in millions
|
Average
Volume
|
Yield/
Rate
|
Net
Change
(a)
|
||||||
INTEREST INCOME
|
|
|
|
||||||
Loans
|
$
|
264
|
|
$
|
54
|
|
$
|
318
|
|
Loans held for sale
|
4
|
|
1
|
|
5
|
|
|||
Securities available for sale
|
25
|
|
(5
|
)
|
20
|
|
|||
Held-to-maturity securities
|
26
|
|
1
|
|
27
|
|
|||
Trading account assets
|
1
|
|
(1
|
)
|
—
|
|
|||
Short-term investments
|
(3
|
)
|
2
|
|
(1
|
)
|
|||
Other investments
|
—
|
|
1
|
|
1
|
|
|||
Total interest income (TE)
|
317
|
|
53
|
|
370
|
|
|||
INTEREST EXPENSE
|
|
|
|
||||||
NOW and money market deposit accounts
|
8
|
|
9
|
|
17
|
|
|||
Savings deposits
|
—
|
|
1
|
|
1
|
|
|||
Certificates of deposit ($100,000 or more)
|
9
|
|
(3
|
)
|
6
|
|
|||
Other time deposits
|
3
|
|
—
|
|
3
|
|
|||
Total interest-bearing deposits
|
20
|
|
7
|
|
27
|
|
|||
Federal funds purchased and securities sold under repurchase agreements
|
—
|
|
1
|
|
1
|
|
|||
Bank notes and other short-term borrowings
|
3
|
|
—
|
|
3
|
|
|||
Long-term debt
|
13
|
|
9
|
|
22
|
|
|||
Total interest expense
|
36
|
|
17
|
|
53
|
|
|||
Net interest income (TE)
|
$
|
281
|
|
$
|
36
|
|
$
|
317
|
|
|
|
|
|
(a)
|
The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amounts of the change in each
.
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
Trust and investment services income
|
$
|
135
|
|
$
|
109
|
|
$
|
26
|
|
23.9
|
%
|
Investment banking and debt placement fees
|
127
|
|
71
|
|
56
|
|
78.9
|
|
|||
Service charges on deposit accounts
|
87
|
|
65
|
|
22
|
|
33.8
|
|
|||
Operating lease income and other leasing gains
|
23
|
|
17
|
|
6
|
|
35.3
|
|
|||
Corporate services income
|
54
|
|
50
|
|
4
|
|
8.0
|
|
|||
Cards and payments income
|
65
|
|
46
|
|
19
|
|
41.3
|
|
|||
Corporate-owned life insurance income
|
30
|
|
28
|
|
2
|
|
7.1
|
|
|||
Consumer mortgage income
|
6
|
|
2
|
|
4
|
|
200.0
|
|
|||
Mortgage servicing fees
|
18
|
|
12
|
|
6
|
|
50.0
|
|
|||
Net gains (losses) from principal investing
|
1
|
|
—
|
|
1
|
|
N/M
|
|
|||
Other income
|
31
|
|
31
|
|
—
|
|
—
|
|
|||
Total noninterest income
|
$
|
577
|
|
$
|
431
|
|
$
|
146
|
|
33.9
|
%
|
|
|
|
|
|
|
2017
|
|
2016
|
|||||||||||||
in millions
|
First
|
|
Fourth
|
Third
|
Second
|
First
|
||||||||||
Assets under management by investment type:
|
|
|
|
|
|
|
||||||||||
Equity
|
$
|
22,522
|
|
|
$
|
21,722
|
|
$
|
21,568
|
|
$
|
20,458
|
|
$
|
20,210
|
|
Securities lending
|
1,095
|
|
|
1,148
|
|
991
|
|
968
|
|
1,147
|
|
|||||
Fixed income
|
10,497
|
|
|
10,386
|
|
11,016
|
|
10,053
|
|
9,789
|
|
|||||
Money market
|
3,303
|
|
|
3,336
|
|
3,177
|
|
3,056
|
|
2,961
|
|
|||||
Total assets under management
|
$
|
37,417
|
|
|
$
|
36,592
|
|
$
|
36,752
|
|
$
|
34,535
|
|
$
|
34,107
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
Personnel
(a)
|
$
|
556
|
|
$
|
404
|
|
$
|
152
|
|
37.6
|
%
|
Net occupancy
|
87
|
|
61
|
|
26
|
|
42.6
|
|
|||
Computer processing
|
60
|
|
43
|
|
17
|
|
39.5
|
|
|||
Business services and professional fees
|
46
|
|
41
|
|
5
|
|
12.2
|
|
|||
Equipment
|
27
|
|
21
|
|
6
|
|
28.6
|
|
|||
Operating lease expense
|
19
|
|
13
|
|
6
|
|
46.2
|
|
|||
Marketing
|
21
|
|
12
|
|
9
|
|
75.0
|
|
|||
FDIC assessment
|
20
|
|
9
|
|
11
|
|
122.2
|
|
|||
Intangible asset amortization
|
22
|
|
8
|
|
14
|
|
175.0
|
|
|||
OREO expense, net
|
2
|
|
1
|
|
1
|
|
100.0
|
|
|||
Other expense
|
153
|
|
90
|
|
63
|
|
70.0
|
|
|||
Total noninterest expense
|
$
|
1,013
|
|
$
|
703
|
|
$
|
310
|
|
44.1
|
%
|
Merger-related charges
(b)
|
81
|
|
24
|
|
57
|
|
237.5
|
|
|||
Total noninterest expense excluding merger-related charges
(c)
|
$
|
932
|
|
$
|
679
|
|
$
|
253
|
|
37.3
|
%
|
|
|
|
|
|
|||||||
Average full-time equivalent employees
(d)
|
18,386
|
|
13,403
|
|
4,983
|
|
37.2
|
%
|
|||
|
|
|
|
|
(a)
|
Additional detail provided in Figure
13
entitled “
Personnel Expense
.”
|
(b)
|
Additional detail provided in Figure
12
entitled “
Merger-Related Charges
.”
|
(c)
|
Non-GAAP measure.
|
(d)
|
The number of average full-time equivalent employees has not been adjusted for discontinued operations.
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
Personnel
|
$
|
30
|
|
$
|
16
|
|
$
|
14
|
|
87.5
|
%
|
Net occupancy
|
5
|
|
—
|
|
5
|
|
N/M
|
|
|||
Business services and professional fees
|
5
|
|
7
|
|
(2
|
)
|
(28.6
|
)
|
|||
Computer processing
|
5
|
|
—
|
|
5
|
|
N/M
|
|
|||
Marketing
|
6
|
|
1
|
|
5
|
|
500.0
|
|
|||
Other nonpersonnel expense
|
30
|
|
—
|
|
30
|
|
N/M
|
|
|||
Noninterest expense
|
81
|
|
24
|
|
57
|
|
237.5
|
|
|||
Total merger-related charges
|
$
|
81
|
|
$
|
24
|
|
$
|
57
|
|
237.5
|
%
|
|
|
|
|
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
Salaries and contract labor
|
$
|
324
|
|
$
|
244
|
|
$
|
80
|
|
32.8
|
%
|
Incentive and stock-based compensation
|
127
|
|
89
|
|
38
|
|
42.7
|
|
|||
Employee benefits
|
96
|
|
68
|
|
28
|
|
41.2
|
|
|||
Severance
|
9
|
|
3
|
|
6
|
|
200.0
|
|
|||
Total personnel expense
|
$
|
556
|
|
$
|
404
|
|
$
|
152
|
|
37.6
|
%
|
Merger-related charges
|
30
|
|
16
|
|
14
|
|
87.5
|
|
|||
Total personnel expense excluding merger-related charges
|
$
|
526
|
|
$
|
388
|
|
$
|
138
|
|
35.6
|
%
|
|
|
|
|
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
REVENUE FROM CONTINUING OPERATIONS (TE)
|
|
|
|
|
|||||||
Key Community Bank
|
$
|
908
|
|
$
|
595
|
|
$
|
313
|
|
52.6
|
%
|
Key Corporate Bank
|
579
|
|
425
|
|
154
|
|
36.2
|
|
|||
Other Segments
|
28
|
|
21
|
|
7
|
|
33.3
|
|
|||
Total Segments
|
1,515
|
|
1,041
|
|
474
|
|
45.5
|
|
|||
Reconciling Items
(a)
|
(9
|
)
|
2
|
|
(11
|
)
|
N/M
|
|
|||
Total
|
$
|
1,506
|
|
$
|
1,043
|
|
$
|
463
|
|
44.4
|
%
|
INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO KEY
|
|
|
|
|
|||||||
Key Community Bank
|
$
|
147
|
|
$
|
74
|
|
$
|
73
|
|
98.6
|
%
|
Key Corporate Bank
|
181
|
|
118
|
|
63
|
|
53.4
|
|
|||
Other Segments
|
21
|
|
15
|
|
6
|
|
40.0
|
|
|||
Total Segments
|
349
|
|
207
|
|
142
|
|
68.6
|
|
|||
Reconciling Items
(a)
|
(25
|
)
|
(20
|
)
|
(5
|
)
|
N/M
|
|
|||
Total
|
$
|
324
|
|
$
|
187
|
|
$
|
137
|
|
73.3
|
%
|
|
|
|
|
|
|
•
|
Positive operating leverage from prior year
|
•
|
Net income increased $73 million, or 98.6%, from prior year
|
•
|
Average commercial and industrial loans increased $5.1 billion, or 39.3%, from the prior year
|
•
|
Average deposits increased $26.6 billion, or 50.4%, from the prior year
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|||||||
Net interest income (TE)
|
$
|
631
|
|
$
|
399
|
|
$
|
232
|
|
58.1
|
%
|
Noninterest income
|
277
|
|
196
|
|
81
|
|
41.3
|
|
|||
Total revenue (TE)
|
908
|
|
595
|
|
313
|
|
52.6
|
|
|||
Provision for credit losses
|
47
|
|
42
|
|
5
|
|
11.9
|
|
|||
Noninterest expense
|
627
|
|
436
|
|
191
|
|
43.8
|
|
|||
Income (loss) before income taxes (TE)
|
234
|
|
117
|
|
117
|
|
100.0
|
|
|||
Allocated income taxes (benefit) and TE adjustments
|
87
|
|
43
|
|
44
|
|
102.3
|
|
|||
Net income (loss) attributable to Key
|
$
|
147
|
|
$
|
74
|
|
$
|
73
|
|
98.6
|
%
|
AVERAGE BALANCES
|
|
|
|
|
|||||||
Loans and leases
|
$
|
47,036
|
|
$
|
30,789
|
|
$
|
16,247
|
|
52.8
|
%
|
Total assets
|
50,962
|
|
32,856
|
|
18,106
|
|
55.1
|
|
|||
Deposits
|
79,393
|
|
52,803
|
|
26,590
|
|
50.4
|
|
|||
Assets under management at period end
|
$
|
37,417
|
|
$
|
34,107
|
|
$
|
3,310
|
|
9.7
|
%
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
NONINTEREST INCOME
|
|
|
|
|
|||||||
Trust and investment services income
|
$
|
98
|
|
$
|
73
|
|
$
|
25
|
|
34.2
|
%
|
Services charges on deposit accounts
|
75
|
|
54
|
|
21
|
|
38.9
|
|
|||
Cards and payments income
|
55
|
|
43
|
|
12
|
|
27.9
|
|
|||
Other noninterest income
|
49
|
|
26
|
|
23
|
|
88.5
|
|
|||
Total noninterest income
|
$
|
277
|
|
$
|
196
|
|
$
|
81
|
|
41.3
|
%
|
AVERAGE DEPOSITS OUTSTANDING
|
|
|
|
|
|||||||
NOW and money market deposit accounts
|
$
|
45,027
|
|
$
|
29,432
|
|
$
|
15,595
|
|
53.0
|
%
|
Savings deposits
|
5,268
|
|
2,340
|
|
2,928
|
|
125.1
|
|
|||
Certificates of deposits ($100,000 or more)
|
3,878
|
|
2,120
|
|
1,758
|
|
82.9
|
|
|||
Other time deposits
|
4,692
|
|
3,197
|
|
1,495
|
|
46.8
|
|
|||
Noninterest-bearing deposits
|
20,528
|
|
15,714
|
|
4,814
|
|
30.6
|
|
|||
Total deposits
|
$
|
79,393
|
|
$
|
52,803
|
|
$
|
26,590
|
|
50.4
|
%
|
HOME EQUITY LOANS
|
|
|
|
|
|||||||
Average balance
|
$
|
12,456
|
|
$
|
10,037
|
|
|
|
|
||
Combined weighted-average loan-to-value ratio (at date of origination)
|
70
|
%
|
71
|
%
|
|
|
|||||
Percent first lien positions
|
60
|
|
61
|
|
|
|
|||||
OTHER DATA
|
|
|
|
|
|||||||
Branches
|
1,216
|
|
961
|
|
|
|
|
||||
Automated teller machines
|
1,594
|
|
1,249
|
|
|
|
•
|
Average loan and lease balances up $10 billion, or 36.1%, from the prior year
|
•
|
Revenue up $154 million, or 36.2%, from the prior year
|
•
|
Noninterest income up $68 million, or 32.9%, from the prior year
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|||||||
Net interest income (TE)
|
$
|
304
|
|
$
|
218
|
|
$
|
86
|
|
39.4
|
%
|
Noninterest income
|
275
|
|
207
|
|
68
|
|
32.9
|
|
|||
Total revenue (TE)
|
579
|
|
425
|
|
154
|
|
36.2
|
|
|||
Provision for credit losses
|
17
|
|
43
|
|
(26
|
)
|
(60.5
|
)
|
|||
Noninterest expense
|
303
|
|
237
|
|
66
|
|
27.8
|
|
|||
Income (loss) before income taxes (TE)
|
259
|
|
145
|
|
114
|
|
78.6
|
|
|||
Allocated income taxes and TE adjustments
|
78
|
|
27
|
|
51
|
|
188.9
|
|
|||
Net income (loss) attributable to Key
|
$
|
181
|
|
$
|
118
|
|
$
|
63
|
|
53.4
|
%
|
AVERAGE BALANCES
|
|
|
|
|
|||||||
Loans and leases
|
$
|
37,737
|
|
$
|
27,722
|
|
$
|
10,015
|
|
36.1
|
%
|
Loans held for sale
|
1,097
|
|
811
|
|
286
|
|
35.3
|
|
|||
Total assets
|
44,167
|
|
33,413
|
|
10,754
|
|
32.2
|
|
|||
Deposits
|
21,003
|
|
18,074
|
|
2,929
|
|
16.2
|
|
|
Three months ended
March 31, |
Change
|
|||||||||
dollars in millions
|
2017
|
2016
|
Amount
|
Percent
|
|||||||
NONINTEREST INCOME
|
|
|
|
|
|||||||
Trust and investment services income
|
$
|
37
|
|
$
|
36
|
|
$
|
1
|
|
2.8
|
%
|
Investment banking and debt placement fees
|
124
|
|
70
|
|
54
|
|
77.1
|
|
|||
Operating lease income and other leasing gains
|
21
|
|
13
|
|
8
|
|
61.5
|
|
|||
|
|
|
|
|
|||||||
Corporate services income
|
38
|
|
38
|
|
—
|
|
—
|
|
|||
Service charges on deposit accounts
|
12
|
|
11
|
|
1
|
|
9.1
|
|
|||
Cards and payments income
|
10
|
|
3
|
|
7
|
|
233.3
|
|
|||
Payments and services income
|
60
|
|
52
|
|
8
|
|
15.4
|
|
|||
|
|
|
|
|
|||||||
Mortgage servicing fees
|
16
|
|
12
|
|
4
|
|
33.3
|
|
|||
Other noninterest income
|
17
|
|
24
|
|
(7
|
)
|
(29.2
|
)
|
|||
Total noninterest income
|
$
|
275
|
|
$
|
207
|
|
$
|
68
|
|
32.9
|
%
|
|
|
|
|
|
March 31, 2017
|
Commercial and industrial
|
|
Commercial
real estate
|
|
Commercial
lease financing
|
|
Total commercial
loans
|
|
Percent of
total
|
|||||||||
dollars in millions
|
|
|
|
|
||||||||||||||
Industry classification:
|
|
|
|
|
|
|
|
|
|
|||||||||
Agricultural
|
$
|
620
|
|
|
$
|
185
|
|
|
$
|
55
|
|
|
$
|
860
|
|
|
1.4
|
%
|
Automotive
|
2,275
|
|
|
477
|
|
|
93
|
|
|
2,845
|
|
|
4.6
|
|
||||
Business products
|
1,590
|
|
|
159
|
|
|
51
|
|
|
1,800
|
|
|
2.9
|
|
||||
Business services
|
2,681
|
|
|
162
|
|
|
306
|
|
|
3,149
|
|
|
5.1
|
|
||||
Commercial real estate
|
5,117
|
|
|
11,266
|
|
|
11
|
|
|
16,394
|
|
|
26.3
|
|
||||
Construction materials and contractors
|
1,664
|
|
|
357
|
|
|
106
|
|
|
2,127
|
|
|
3.4
|
|
||||
Consumer discretionary
|
3,759
|
|
|
552
|
|
|
351
|
|
|
4,662
|
|
|
7.5
|
|
||||
Consumer services
|
2,866
|
|
|
1,001
|
|
|
220
|
|
|
4,087
|
|
|
6.5
|
|
||||
Equipment
|
1,624
|
|
|
153
|
|
|
115
|
|
|
1,892
|
|
|
3.0
|
|
||||
Financial
|
3,700
|
|
|
99
|
|
|
259
|
|
|
4,058
|
|
|
6.6
|
|
||||
Healthcare
|
3,096
|
|
|
2,530
|
|
|
457
|
|
|
6,083
|
|
|
9.8
|
|
||||
Materials manufacturing and mining
|
1,965
|
|
|
139
|
|
|
142
|
|
|
2,246
|
|
|
3.6
|
|
||||
Media
|
489
|
|
|
23
|
|
|
54
|
|
|
566
|
|
|
.9
|
|
||||
Oil and gas
|
817
|
|
|
21
|
|
|
50
|
|
|
888
|
|
|
1.4
|
|
||||
Public exposure
|
2,241
|
|
|
72
|
|
|
1,067
|
|
|
3,380
|
|
|
5.4
|
|
||||
Technology
|
439
|
|
|
6
|
|
|
17
|
|
|
462
|
|
|
.7
|
|
||||
Transportation
|
1,410
|
|
|
310
|
|
|
936
|
|
|
2,656
|
|
|
4.3
|
|
||||
Utilities
|
3,312
|
|
|
7
|
|
|
375
|
|
|
3,694
|
|
|
5.9
|
|
||||
Other
|
447
|
|
|
11
|
|
|
—
|
|
|
458
|
|
|
.7
|
|
||||
Total
|
$
|
40,112
|
|
|
$
|
17,530
|
|
|
$
|
4,665
|
|
|
$
|
62,307
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2016
|
Commercial and industrial
|
|
Commercial
real estate
|
|
Commercial
lease financing
|
|
Total commercial
loans
|
|
Percent of
total
|
|||||||||
dollars in millions
|
|
|
|
|
||||||||||||||
Industry classification:
|
|
|
|
|
|
|
|
|
|
|||||||||
Agricultural
|
$
|
844
|
|
|
$
|
194
|
|
|
$
|
151
|
|
|
$
|
1,189
|
|
|
1.9
|
%
|
Automotive
|
2,139
|
|
|
491
|
|
|
74
|
|
|
2,704
|
|
|
4.4
|
|
||||
Business products
|
1,243
|
|
|
152
|
|
|
31
|
|
|
1,426
|
|
|
2.3
|
|
||||
Business services
|
2,648
|
|
|
179
|
|
|
303
|
|
|
3,130
|
|
|
5.1
|
|
||||
Commercial real estate
|
4,759
|
|
|
11,235
|
|
|
2
|
|
|
15,996
|
|
|
25.8
|
|
||||
Construction materials and contractors
|
1,282
|
|
|
307
|
|
|
79
|
|
|
1,668
|
|
|
2.7
|
|
||||
Consumer discretionary
|
3,367
|
|
|
539
|
|
|
314
|
|
|
4,220
|
|
|
6.8
|
|
||||
Consumer services
|
2,281
|
|
|
749
|
|
|
66
|
|
|
3,096
|
|
|
5.0
|
|
||||
Equipment
|
1,582
|
|
|
107
|
|
|
87
|
|
|
1,776
|
|
|
2.9
|
|
||||
Financial
|
3,864
|
|
|
95
|
|
|
296
|
|
|
4,255
|
|
|
6.9
|
|
||||
Healthcare
|
3,487
|
|
|
2,577
|
|
|
526
|
|
|
6,590
|
|
|
10.6
|
|
||||
Materials manufacturing and mining
|
2,743
|
|
|
276
|
|
|
212
|
|
|
3,231
|
|
|
5.2
|
|
||||
Media
|
478
|
|
|
18
|
|
|
70
|
|
|
566
|
|
|
.9
|
|
||||
Oil and gas
|
1,094
|
|
|
27
|
|
|
62
|
|
|
1,183
|
|
|
1.9
|
|
||||
Public exposure
|
2,621
|
|
|
311
|
|
|
1,204
|
|
|
4,136
|
|
|
6.7
|
|
||||
Technology
|
485
|
|
|
6
|
|
|
34
|
|
|
525
|
|
|
.8
|
|
||||
Transportation
|
940
|
|
|
148
|
|
|
923
|
|
|
2,011
|
|
|
3.3
|
|
||||
Utilities
|
3,441
|
|
|
26
|
|
|
251
|
|
|
3,718
|
|
|
6.0
|
|
||||
Other
|
470
|
|
|
19
|
|
|
—
|
|
|
489
|
|
|
.8
|
|
||||
Total
|
$
|
39,768
|
|
|
$
|
17,456
|
|
|
$
|
4,685
|
|
|
$
|
61,909
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Region
(a)
|
|
|
|
Total
|
|
Percent of
Total
|
|
Construction
|
|
Commercial
Mortgage
|
|||||||||||||||||||||||||||||||
dollars in millions
|
West
|
|
Southwest
|
|
Central
|
|
Midwest
|
|
Southeast
|
|
Northeast
|
|
National
|
|
||||||||||||||||||||||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonowner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Retail properties
|
$
|
203
|
|
|
$
|
122
|
|
|
$
|
73
|
|
|
$
|
377
|
|
|
$
|
258
|
|
|
$
|
778
|
|
|
$
|
247
|
|
|
$
|
2,058
|
|
|
11.7
|
%
|
|
$
|
202
|
|
|
$
|
1,856
|
|
Multifamily properties
|
338
|
|
|
179
|
|
|
791
|
|
|
576
|
|
|
996
|
|
|
2,339
|
|
|
137
|
|
|
5,356
|
|
|
30.6
|
|
|
1,280
|
|
|
4,076
|
|
||||||||||
Health facilities
|
258
|
|
|
—
|
|
|
173
|
|
|
165
|
|
|
351
|
|
|
1,148
|
|
|
189
|
|
|
2,284
|
|
|
13.0
|
|
|
164
|
|
|
2,120
|
|
||||||||||
Office buildings
|
168
|
|
|
7
|
|
|
188
|
|
|
158
|
|
|
259
|
|
|
1,108
|
|
|
35
|
|
|
1,923
|
|
|
11.0
|
|
|
184
|
|
|
1,739
|
|
||||||||||
Warehouses
|
71
|
|
|
29
|
|
|
83
|
|
|
95
|
|
|
104
|
|
|
394
|
|
|
40
|
|
|
816
|
|
|
4.7
|
|
|
89
|
|
|
727
|
|
||||||||||
Manufacturing facilities
|
5
|
|
|
2
|
|
|
—
|
|
|
27
|
|
|
12
|
|
|
68
|
|
|
37
|
|
|
151
|
|
|
.9
|
|
|
16
|
|
|
135
|
|
||||||||||
Hotels/Motels
|
14
|
|
|
—
|
|
|
16
|
|
|
5
|
|
|
24
|
|
|
172
|
|
|
23
|
|
|
254
|
|
|
1.4
|
|
|
31
|
|
|
223
|
|
||||||||||
Residential properties
|
1
|
|
|
—
|
|
|
20
|
|
|
2
|
|
|
2
|
|
|
201
|
|
|
—
|
|
|
226
|
|
|
1.3
|
|
|
84
|
|
|
142
|
|
||||||||||
Land and development
|
9
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|
7
|
|
|
128
|
|
|
—
|
|
|
149
|
|
|
.8
|
|
|
75
|
|
|
74
|
|
||||||||||
Other
|
43
|
|
|
12
|
|
|
2
|
|
|
53
|
|
|
51
|
|
|
359
|
|
|
85
|
|
|
605
|
|
|
3.4
|
|
|
68
|
|
|
537
|
|
||||||||||
Total nonowner-occupied
|
1,110
|
|
|
351
|
|
|
1,347
|
|
|
1,462
|
|
|
2,064
|
|
|
6,695
|
|
|
793
|
|
|
13,822
|
|
|
78.8
|
|
|
2,193
|
|
|
11,629
|
|
||||||||||
Owner-occupied
|
991
|
|
|
7
|
|
|
266
|
|
|
618
|
|
|
207
|
|
|
1,619
|
|
|
—
|
|
|
3,708
|
|
|
21.2
|
|
|
77
|
|
|
3,631
|
|
||||||||||
Total
|
$
|
2,101
|
|
|
$
|
358
|
|
|
$
|
1,613
|
|
|
$
|
2,080
|
|
|
$
|
2,271
|
|
|
$
|
8,314
|
|
|
$
|
793
|
|
|
17,530
|
|
|
100.0
|
%
|
|
$
|
2,270
|
|
|
$
|
15,260
|
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
2,032
|
|
|
$
|
291
|
|
|
$
|
1,508
|
|
|
$
|
2,281
|
|
|
$
|
2,304
|
|
|
$
|
8,340
|
|
|
$
|
700
|
|
|
$
|
17,456
|
|
|
|
|
$
|
2,345
|
|
|
$
|
15,111
|
|
|
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonowner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonperforming loans
|
1
|
|
|
—
|
|
|
2
|
|
|
5
|
|
|
12
|
|
|
9
|
|
|
—
|
|
|
29
|
|
|
N/M
|
|
|
2
|
|
|
27
|
|
||||||||||
Accruing loans past due 90 days or more
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
5
|
|
|
N/M
|
|
|
—
|
|
|
5
|
|
||||||||||
Accruing loans past due 30 through 89 days
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
10
|
|
|
21
|
|
|
—
|
|
|
34
|
|
|
N/M
|
|
|
5
|
|
|
29
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West –
|
Alaska, California, Hawaii, Idaho, Montana, Oregon, Washington, and Wyoming
|
Southwest –
|
Arizona, Nevada, and New Mexico
|
Central –
|
Arkansas, Colorado, Oklahoma, Texas, and Utah
|
Midwest –
|
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin
|
Southeast –
|
Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Washington D.C., and West Virginia
|
Northeast –
|
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont
|
National –
|
Accounts in three or more regions
|
in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
|
|||||
Commercial TDRs by Accrual Status
|
|
|
|
|
|
||||||||||
Nonaccruing
|
$
|
70
|
|
$
|
51
|
|
$
|
67
|
|
$
|
33
|
|
$
|
50
|
|
Accruing
|
16
|
|
16
|
|
18
|
|
20
|
|
2
|
|
|||||
Total Commercial TDRs
|
$
|
86
|
|
$
|
67
|
|
$
|
85
|
|
$
|
53
|
|
$
|
52
|
|
|
|
|
|
|
|
•
|
our business strategy for particular lending areas;
|
•
|
whether particular lending businesses meet established performance standards or fit with our relationship banking strategy;
|
•
|
our A/LM needs;
|
•
|
the cost of alternative funding sources;
|
•
|
the level of credit risk;
|
•
|
capital requirements; and
|
•
|
market conditions and pricing.
|
in millions
|
Commercial
|
Commercial
Real Estate
|
Commercial
Lease
Financing
|
Residential
Real Estate
|
Total
|
||||||||||
2017
|
|
|
|
|
|
||||||||||
First quarter
|
$
|
49
|
|
$
|
2,011
|
|
$
|
83
|
|
$
|
194
|
|
$
|
2,337
|
|
Total
|
$
|
49
|
|
$
|
2,011
|
|
$
|
83
|
|
$
|
194
|
|
$
|
2,337
|
|
2016
|
|
|
|
|
|
||||||||||
Fourth quarter
|
$
|
83
|
|
$
|
2,521
|
|
$
|
93
|
|
$
|
232
|
|
$
|
2,929
|
|
Third quarter
|
105
|
|
1,791
|
|
52
|
|
260
|
|
$
|
2,208
|
|
||||
Second quarter
|
83
|
|
1,518
|
|
121
|
|
111
|
|
$
|
1,833
|
|
||||
First quarter
|
46
|
|
925
|
|
88
|
|
89
|
|
$
|
1,148
|
|
||||
Total
|
$
|
317
|
|
$
|
6,755
|
|
$
|
354
|
|
$
|
692
|
|
$
|
8,118
|
|
|
|
|
|
|
|
in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
|
|||||
Commercial real estate loans
|
$
|
218,387
|
|
$
|
218,135
|
|
$
|
213,998
|
|
$
|
213,879
|
|
$
|
214,756
|
|
Residential mortgage
|
4,272
|
|
4,198
|
|
—
|
|
—
|
|
—
|
|
|||||
Education loans
|
1,067
|
|
1,122
|
|
1,172
|
|
1,226
|
|
1,280
|
|
|||||
Commercial lease financing
|
916
|
|
899
|
|
930
|
|
930
|
|
891
|
|
|||||
Commercial loans
|
427
|
|
418
|
|
1,461
|
|
355
|
|
347
|
|
|||||
Total
|
$
|
225,069
|
|
$
|
224,772
|
|
$
|
217,561
|
|
$
|
216,390
|
|
$
|
217,274
|
|
|
|
|
|
|
|
in millions
|
March 31, 2017
|
December 31, 2016
|
||||
FHLMC
|
$
|
5,575
|
|
$
|
6,415
|
|
FNMA
|
8,966
|
|
9,879
|
|
||
GNMA
|
13,845
|
|
13,920
|
|
||
Total
(a)
|
$
|
28,386
|
|
$
|
30,214
|
|
|
|
|
dollars in millions
|
U.S. Treasury, Agencies, and Corporations
|
States and
Political
Subdivisions
|
Agency Residential Collateralized Mortgage Obligations
(a)
|
Agency Residential Mortgage-backed Securities
(a)
|
Agency Commercial Mortgage-backed Securities
|
Other Securities
(b)
|
|
Total
|
|
Weighted-Average Yield
(c)
|
|||||||||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Remaining maturity:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
One year or less
|
$
|
27
|
|
$
|
1
|
|
$
|
130
|
|
$
|
18
|
|
$
|
—
|
|
$
|
3
|
|
|
$
|
179
|
|
|
2.72
|
%
|
After one through five years
|
45
|
|
10
|
|
13,063
|
|
1,598
|
|
1,628
|
|
10
|
|
|
16,354
|
|
|
2.04
|
|
|||||||
After five through ten years
|
112
|
|
—
|
|
1,370
|
|
114
|
|
90
|
|
7
|
|
|
1,693
|
|
|
2.04
|
|
|||||||
After ten years
|
1
|
|
—
|
|
—
|
|
12
|
|
192
|
|
—
|
|
|
205
|
|
|
2.66
|
|
|||||||
Fair value
|
$
|
185
|
|
$
|
11
|
|
$
|
14,563
|
|
$
|
1,742
|
|
$
|
1,910
|
|
$
|
20
|
|
|
$
|
18,431
|
|
|
—
|
|
Amortized cost
|
188
|
|
11
|
|
14,790
|
|
1,751
|
|
1,956
|
|
21
|
|
|
18,717
|
|
|
2.05
|
%
|
|||||||
Weighted-average yield
(c)
|
1.65
|
%
|
6.23
|
%
|
2.03
|
%
|
2.07
|
%
|
2.24
|
%
|
—
|
|
(d)
|
2.05
|
%
|
(d)
|
—
|
|
|||||||
Weighted-average maturity
|
4.5 years
|
|
2.3 years
|
|
4.0 years
|
|
3.7 years
|
|
4.7 years
|
|
3.2 years
|
|
|
4.0 years
|
|
|
—
|
|
|||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fair value
|
$
|
184
|
|
$
|
11
|
|
$
|
16,408
|
|
$
|
1,846
|
|
$
|
1,743
|
|
$
|
20
|
|
|
$
|
20,212
|
|
|
—
|
|
Amortized cost
|
188
|
|
11
|
|
16,652
|
|
1,857
|
|
1,778
|
|
21
|
|
|
20,507
|
|
|
2.00
|
%
|
(a)
|
Maturity is based upon expected average lives rather than contractual terms.
|
(b)
|
Includes primarily marketable equity securities.
|
(c)
|
Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate of
35%
.
|
(d)
|
Excludes
$20 million
of securities at
March 31, 2017
, that have no stated yield.
|
dollars in millions
|
Agency Residential Collateralized Mortgage Obligations
|
Agency Residential Mortgage-backed Securities
|
Agency Commercial Mortgage-backed Securities
|
Other
Securities
|
Total
|
Weighted-Average Yield
(a)
|
|||||||||||
March 31, 2017
|
|
|
|
|
|
|
|||||||||||
Remaining maturity:
|
|
|
|
|
|
|
|||||||||||
One year or less
|
$
|
55
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
55
|
|
2.37
|
%
|
After one through five years
|
6,035
|
|
128
|
|
757
|
|
15
|
|
6,935
|
|
2.00
|
|
|||||
After five through ten years
|
1,883
|
|
477
|
|
576
|
|
—
|
|
2,936
|
|
2.27
|
|
|||||
After ten years
|
—
|
|
—
|
|
260
|
|
—
|
|
260
|
|
2.22
|
|
|||||
Amortized cost
|
$
|
7,973
|
|
$
|
605
|
|
$
|
1,593
|
|
$
|
15
|
|
$
|
10,186
|
|
2.08
|
%
|
Fair value
|
7,787
|
|
600
|
|
1,552
|
|
15
|
|
9,954
|
|
—
|
|
|||||
Weighted-average yield
|
1.92
|
%
|
2.65
|
%
|
2.68
|
%
|
2.85
|
%
|
2.08
|
%
|
—
|
|
|||||
Weighted-average maturity
|
4.1 years
|
|
6.1 years
|
|
7.1 years
|
|
2.3 years
|
|
4.7 years
|
|
—
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|||||||||||
Amortized cost
|
$
|
8,404
|
|
$
|
629
|
|
$
|
1,184
|
|
$
|
15
|
|
$
|
10,232
|
|
2.05
|
%
|
Fair value
|
8,232
|
|
624
|
|
1,136
|
|
15
|
|
10,007
|
|
—
|
|
(a)
|
Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate of
35%
.
|
•
|
$1.9375 per share, or $6 million, on our Series A Preferred Stock;
|
•
|
$.539063 per share, or $7 million, on our Series C Preferred Stock;
|
•
|
$12.50 per depositary share, or $7 million, on the depositary shares related to our Series D Preferred Stock; and
|
•
|
$.395573 per depositary share, or $8 million, on the depositary shares related to our Series E Preferred Stock.
|
|
2017
|
|
2016
|
||||||||
in thousands
|
First
|
|
Fourth
|
Third
|
Second
|
First
|
|||||
Shares outstanding at beginning of period
|
1,079,314
|
|
|
1,082,055
|
|
842,703
|
|
842,290
|
|
835,751
|
|
Open market repurchases and return of shares under employee compensation plans
|
(8,673
|
)
|
|
(4,380
|
)
|
(5,240
|
)
|
—
|
|
—
|
|
Shares issued under employee compensation plans (net of cancellations)
|
6,270
|
|
|
1,642
|
|
4,857
|
|
413
|
|
6,539
|
|
Series A Preferred Stock exchanged for common shares
|
20,568
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Common shares issued to acquire First Niagara
|
—
|
|
|
(3
|
)
|
239,735
|
|
—
|
|
—
|
|
Shares outstanding at end of period
|
1,097,479
|
|
|
1,079,314
|
|
1,082,055
|
|
842,703
|
|
842,290
|
|
|
|
|
|
|
|
|
|
dollars in millions
|
March 31, 2017
|
December 31, 2016
|
||||
COMMON EQUITY TIER 1
|
|
|
|||||
Key shareholders’ equity (GAAP)
|
$
|
14,976
|
|
$
|
15,240
|
|
|
Less:
|
Preferred Stock
(a)
|
1,009
|
|
1,640
|
|
||
|
Common Equity Tier 1 capital before adjustments and deductions
|
13,967
|
|
13,600
|
|
||
Less:
|
Goodwill, net of deferred taxes
|
2,379
|
|
2,405
|
|
||
|
Intangible assets, net of deferred taxes
|
194
|
|
155
|
|
||
|
Deferred tax assets
|
11
|
|
4
|
|
||
|
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes
|
(179
|
)
|
(185
|
)
|
||
|
Accumulated gains (losses) on cash flow hedges, net of deferred taxes
|
(76
|
)
|
(52
|
)
|
||
|
Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes
|
(335
|
)
|
(339
|
)
|
||
|
Total Common Equity Tier 1 capital
|
$
|
11,973
|
|
$
|
11,612
|
|
TIER 1 CAPITAL
|
|
|
|||||
Common Equity Tier 1
|
$
|
11,973
|
|
$
|
11,612
|
|
|
Additional Tier 1 capital instruments and related surplus
|
1,009
|
|
1,640
|
|
|||
Non-qualifying capital instruments subject to phase-out
|
—
|
|
—
|
|
|||
Less:
|
Deductions
|
3
|
|
3
|
|
||
|
Total Tier 1 capital
|
12,979
|
|
13,249
|
|
||
TIER 2 CAPITAL
|
|
|
|||||
Tier 2 capital instruments and related surplus
|
1,409
|
|
1,450
|
|
|||
Allowance for losses on loans and liability for losses on lending-related commitments
(b)
|
943
|
|
939
|
|
|||
Net unrealized gains on available-for-sale preferred stock classified as an equity security
|
—
|
|
—
|
|
|||
Less:
|
Deductions
|
—
|
|
—
|
|
||
|
Total Tier 2 capital
|
2,352
|
|
2,389
|
|
||
|
Total risk-based capital
|
$
|
15,331
|
|
$
|
15,638
|
|
RISK-WEIGHTED ASSETS
|
|
|
|||||
Risk-weighted assets on balance sheet
|
$
|
94,554
|
|
$
|
94,959
|
|
|
Risk-weighted off-balance sheet exposure
|
25,416
|
|
25,848
|
|
|||
Market risk-equivalent assets
|
882
|
|
864
|
|
|||
Gross risk-weighted assets
|
120,852
|
|
121,671
|
|
|||
Less:
|
Excess allowance for loan and lease losses
|
—
|
|
—
|
|
||
|
Net risk-weighted assets
|
$
|
120,852
|
|
$
|
121,671
|
|
AVERAGE QUARTERLY TOTAL ASSETS
|
$
|
132,260
|
|
$
|
133,795
|
|
|
CAPITAL RATIOS
|
|
|
|||||
Tier 1 risk-based capital
|
10.74
|
%
|
10.89
|
%
|
|||
Total risk-based capital
|
12.69
|
|
12.85
|
|
|||
Leverage
(c)
|
9.81
|
|
9.90
|
|
|||
Common Equity Tier 1
(d)
|
9.91
|
|
9.54
|
|
|||
|
|
|
|
(a)
|
Net of capital surplus.
|
(b)
|
The ALLL included in Tier 2 capital is limited by regulation to 1.25% of the institution’s standardized total risk-weighted assets (excluding its standardized market risk-weighted assets). The ALLL includes $23 million and $24 million of allowance classified as “discontinued assets” on the balance sheet at
March 31, 2017
, and
December 31, 2016
, respectively.
|
(c)
|
This ratio is Tier 1 capital divided by average quarterly total assets as defined by the Federal Reserve less: (i) goodwill, (ii) the disallowed intangible and deferred tax assets, and (iii) other deductions from assets for leverage capital purposes.
|
(d)
|
Non-GAAP measure: see Figure
6
for reconciliation.
|
•
|
Fixed income includes those instruments associated with our capital markets business and the trading of securities as a dealer. These instruments may include positions in municipal bonds, bonds backed by the U.S. government, agency and corporate bonds, certain mortgage-backed securities, securities issued by the U.S. Treasury, money markets, and certain CMOs. The activities and instruments within the fixed income portfolio create exposures to interest rate and credit spread risks.
|
•
|
Interest rate derivatives include interest rate swaps, caps, and floors, which are transacted primarily to accommodate the needs of commercial loan clients. In addition, we enter into interest rate derivatives to offset or mitigate the interest rate risk related to the client positions. The activities within this portfolio create exposures to interest rate risk.
|
•
|
Credit derivatives generally include credit default swap indices, which are used to manage the credit risk exposure associated with anticipated sales of certain commercial real estate loans. The transactions within the credit derivatives portfolio result in exposure to counterparty credit risk and market risk.
|
|
2017
|
|
2016
|
||||||||||||||||||||||
|
Three months ended March 31,
|
|
|
Three months ended March 31,
|
|
||||||||||||||||||||
in millions
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
1.4
|
|
$
|
.7
|
|
$
|
1.1
|
|
$
|
1.2
|
|
|
$
|
.9
|
|
$
|
.4
|
|
$
|
.6
|
|
$
|
.7
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
.2
|
|
.1
|
|
$
|
.1
|
|
$
|
.1
|
|
|
$
|
.1
|
|
—
|
|
$
|
.1
|
|
$
|
.1
|
|
||
Credit
|
.6
|
|
$
|
.1
|
|
.2
|
|
.6
|
|
|
.5
|
|
$
|
—
|
|
.3
|
|
.1
|
|
|
2017
|
|
2016
|
||||||||||||||||||||||
|
Three months ended March 31,
|
|
|
Three months ended March 31,
|
|
||||||||||||||||||||
in millions
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|
||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
3.8
|
|
$
|
1.9
|
|
$
|
2.6
|
|
$
|
2.6
|
|
|
$
|
1.8
|
|
$
|
.8
|
|
$
|
1.4
|
|
$
|
1.4
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
.3
|
|
$
|
.1
|
|
$
|
.2
|
|
$
|
.2
|
|
|
$
|
.2
|
|
$
|
.1
|
|
$
|
.1
|
|
$
|
.2
|
|
Credit
|
1.2
|
|
.1
|
|
.4
|
|
1.1
|
|
|
2.6
|
|
.1
|
|
1.4
|
|
.2
|
|
•
|
Reprice risk
is the exposure to changes in the level of interest rates and occurs when the volume of interest-bearing liabilities and the volume of interest-earning assets they fund (e.g., deposits used to fund loans) do not mature or reprice at the same time.
|
•
|
Basis risk
is the exposure to asymmetrical changes in interest rate indices and occurs when floating-rate assets and floating-rate liabilities reprice at the same time, but in response to different market factors or indices.
|
•
|
Yield curve risk
is the exposure to nonparallel changes in the slope of the yield curve (where the yield curve depicts the relationship between the yield on a particular type of security and its term to maturity) and occurs when interest-bearing liabilities and the interest-earning assets that they fund do not price or reprice to the same term point on the yield curve.
|
•
|
Option risk
is the exposure to a customer or counterparty’s ability to take advantage of the interest rate environment and terminate or reprice one of our assets, liabilities, or off-balance sheet instruments prior to contractual maturity without a penalty. Option risk occurs when exposures to customer and counterparty early withdrawals or prepayments are not mitigated with an offsetting position or appropriate compensation.
|
March 31, 2017
|
|
|
|
|
|
Basis point change assumption (short-term rates)
|
-100
|
|
|
+200
|
|
Tolerance level
|
-5.50
|
|
%
|
-5.50
|
%
|
Interest rate risk assessment
|
-4.03
|
|
%
|
1.05
|
%
|
March 31, 2016
|
|
|
|
|
|
Basis point change assumption (short-term rates)
|
-50
|
|
|
+200
|
|
Tolerance level
|
-4.00
|
|
%
|
-4.00
|
%
|
Interest rate risk assessment
|
-3.19
|
|
%
|
2.23
|
%
|
|
March 31, 2017
|
|
|
|
|
||||||||||||||||
|
|
|
|
Weighted-Average
|
|
March 31, 2016
|
|
||||||||||||||
dollars in millions
|
Notional
Amount
|
Fair
Value
|
|
Maturity
(Years)
|
Receive
Rate
|
Pay
Rate
|
|
Notional
Amount
|
Fair
Value
|
|
|||||||||||
Receive fixed/pay variable — conventional A/LM
(a)
|
$
|
16,150
|
|
$
|
(84
|
)
|
|
1.9
|
|
1.1
|
%
|
.8
|
%
|
|
$
|
13,530
|
|
$
|
115
|
|
|
Receive fixed/pay variable — conventional debt
|
8,616
|
|
59
|
|
|
3.0
|
|
1.6
|
|
.9
|
|
|
7,491
|
|
303
|
|
|
||||
Pay fixed/receive variable — conventional debt
|
50
|
|
(6
|
)
|
|
11.3
|
|
1.0
|
|
3.6
|
|
|
50
|
|
(10
|
)
|
|
||||
Total portfolio swaps
|
$
|
24,816
|
|
$
|
(31
|
)
|
(b), (c)
|
2.3
|
|
1.3
|
%
|
.9
|
%
|
|
$
|
21,071
|
|
$
|
408
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Portfolio swaps designated as A/LM are used to manage interest rate risk tied to both assets and liabilities.
|
(b)
|
Excludes accrued interest of $109 million and $45 million at
March 31, 2017
, and
March 31, 2016
, respectively.
|
(c)
|
Excludes variation margin payments for CME-cleared trades of $58 million at
March 31, 2017
.
|
March 31, 2017
|
Short-Term
Borrowings
|
Long-Term
Deposits
|
Senior
Long-Term
Debt
|
Subordinated
Long-Term
Debt
|
Capital
Securities
|
Preferred
Stock
|
KEYCORP (THE PARENT COMPANY)
|
|
|
|
|
|
|
Standard & Poor’s
|
A-2
|
N/A
|
BBB+
|
BBB
|
BB+
|
BB+
|
Moody’s
|
P-2
|
N/A
|
Baa1
|
Baa1
|
Baa2
|
Baa3
|
Fitch Ratings, Inc.
|
F1
|
N/A
|
A-
|
BBB+
|
BB+
|
BB
|
DBRS, Inc.
|
R-2(high)
|
N/A
|
BBB(high)
|
BBB
|
BBB
|
BB(high)
|
|
|
|
|
|
|
|
KEYBANK
|
|
|
|
|
|
|
Standard & Poor’s
|
A-2
|
N/A
|
A-
|
BBB+
|
N/A
|
N/A
|
Moody’s
|
P-1
|
Aa3
|
A3
|
Baa1
|
N/A
|
N/A
|
Fitch Ratings, Inc.
|
F1
|
A
|
A-
|
BBB+
|
N/A
|
N/A
|
DBRS, Inc.
|
R-1(low)
|
A(low)
|
A(low)
|
BBB(high)
|
N/A
|
N/A
|
|
2017
|
|
2016
|
|||||||||||||
dollars in millions
|
First
|
|
Fourth
|
Third
|
Second
|
First
|
||||||||||
Net loan charge-offs
|
$
|
58
|
|
|
$
|
72
|
|
$
|
44
|
|
$
|
43
|
|
$
|
46
|
|
Net loan charge-offs to average total loans
|
.27
|
%
|
|
.34
|
%
|
.23
|
%
|
.28
|
%
|
.31
|
%
|
|||||
Allowance for loan and lease losses
|
$
|
870
|
|
|
$
|
858
|
|
$
|
865
|
|
$
|
854
|
|
$
|
826
|
|
Allowance for credit losses
(a)
|
918
|
|
|
913
|
|
918
|
|
904
|
|
895
|
|
|||||
Allowance for loan and lease losses to period-end loans
|
1.01
|
%
|
|
1.00
|
%
|
1.01
|
%
|
1.38
|
%
|
1.37
|
%
|
|||||
Allowance for credit losses to period-end loans
|
1.07
|
|
|
1.06
|
|
1.07
|
|
1.46
|
|
1.48
|
|
|||||
Allowance for loan and lease losses to nonperforming loans
(b)
|
151.8
|
|
|
137.3
|
|
119.6
|
|
138.0
|
|
122.2
|
|
|||||
Allowance for credit losses to nonperforming loans
(b)
|
160.2
|
|
|
146.1
|
|
127.0
|
|
146.0
|
|
132.4
|
|
|||||
Nonperforming loans at period end
(b)
|
$
|
573
|
|
|
$
|
625
|
|
$
|
723
|
|
$
|
619
|
|
$
|
676
|
|
Nonperforming assets at period end
(b)
|
623
|
|
|
676
|
|
760
|
|
637
|
|
692
|
|
|||||
Nonperforming loans to period-end portfolio loans
(b)
|
.67
|
%
|
|
.73
|
%
|
.85
|
%
|
1.00
|
%
|
1.12
|
%
|
|||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
(b)
|
.72
|
|
|
.79
|
|
.89
|
|
1.03
|
|
1.14
|
|
|||||
|
|
|
|
|
|
|
(a)
|
Includes the ALLL plus the liability for credit losses on lending-related unfunded commitments.
|
(b)
|
Nonperforming loan balances exclude
$812 million
, $865 million, $959 million, $11 million, and $11 million of PCI loans at
March 31, 2017
,
December 31, 2016
,
September 30, 2016
,
June 30, 2016
, and
March 31, 2016
, respectively.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
dollars in millions
|
Amount
|
|
Percent of
Allowance to
Total Allowance
|
|
Percent of
Loan Type to
Total Loans
|
|
|
Amount
|
|
Percent of
Allowance to
Total Allowance
|
|
Percent of
Loan Type to
Total Loans
|
|
||
Commercial and industrial
|
$
|
512
|
|
58.9
|
%
|
46.6
|
%
|
|
$
|
508
|
|
59.2
|
%
|
46.2
|
%
|
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage
|
146
|
|
16.8
|
|
17.7
|
|
|
144
|
|
16.8
|
|
17.6
|
|
||
Construction
|
29
|
|
3.3
|
|
2.6
|
|
|
22
|
|
2.6
|
|
2.7
|
|
||
Total commercial real estate loans
|
175
|
|
20.1
|
|
20.3
|
|
|
166
|
|
19.4
|
|
20.3
|
|
||
Commercial lease financing
|
40
|
|
4.6
|
|
5.4
|
|
|
42
|
|
4.9
|
|
5.4
|
|
||
Total commercial loans
|
727
|
|
83.6
|
|
72.3
|
|
|
716
|
|
83.5
|
|
71.9
|
|
||
Real estate — residential mortgage
|
18
|
|
2.1
|
|
6.4
|
|
|
17
|
|
2.0
|
|
6.5
|
|
||
Home equity loans
|
53
|
|
6.1
|
|
14.6
|
|
|
54
|
|
6.3
|
|
14.7
|
|
||
Consumer direct loans
|
24
|
|
2.7
|
|
2.0
|
|
|
24
|
|
2.8
|
|
2.1
|
|
||
Credit cards
|
38
|
|
4.4
|
|
1.2
|
|
|
38
|
|
4.4
|
|
1.3
|
|
||
Consumer indirect loans
|
10
|
|
1.1
|
|
3.5
|
|
|
9
|
|
1.0
|
|
3.5
|
|
||
Total consumer loans
|
143
|
|
16.4
|
|
27.7
|
|
|
142
|
|
16.5
|
|
28.1
|
|
||
Total loans
(a)
|
$
|
870
|
|
100.0
|
%
|
100.0
|
%
|
|
$
|
858
|
|
100.0
|
%
|
100.0
|
%
|
|
|
|
|
|
|
|
|
(a)
|
Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of
$23 million
, and $24 million at
March 31, 2017
, and
December 31, 2016
, respectively.
|
|
2017
|
|
2016
|
|||||||||||||
dollars in millions
|
First
|
|
Fourth
|
Third
|
Second
|
First
|
||||||||||
Commercial and industrial
|
$
|
27
|
|
|
$
|
37
|
|
$
|
15
|
|
$
|
32
|
|
$
|
23
|
|
Real estate — Commercial mortgage
|
—
|
|
|
2
|
|
(1
|
)
|
(4
|
)
|
(1
|
)
|
|||||
Real estate — Construction
|
(1
|
)
|
|
—
|
|
8
|
|
—
|
|
(1
|
)
|
|||||
Commercial lease financing
|
5
|
|
|
—
|
|
5
|
|
1
|
|
3
|
|
|||||
Total commercial loans
|
31
|
|
|
39
|
|
27
|
|
29
|
|
24
|
|
|||||
Real estate — Residential mortgage
|
(4
|
)
|
|
2
|
|
—
|
|
1
|
|
—
|
|
|||||
Home equity loans
|
5
|
|
|
4
|
|
2
|
|
3
|
|
7
|
|
|||||
Consumer direct loans
|
9
|
|
|
8
|
|
5
|
|
4
|
|
5
|
|
|||||
Credit cards
|
10
|
|
|
9
|
|
8
|
|
7
|
|
7
|
|
|||||
Consumer indirect loans
|
7
|
|
|
10
|
|
2
|
|
(1
|
)
|
3
|
|
|||||
Total consumer loans
|
27
|
|
|
33
|
|
17
|
|
14
|
|
22
|
|
|||||
Total net loan charge-offs
|
$
|
58
|
|
|
$
|
72
|
|
$
|
44
|
|
$
|
43
|
|
$
|
46
|
|
Net loan charge-offs to average loans
|
.27
|
%
|
|
.34
|
%
|
.23
|
%
|
.28
|
%
|
.31
|
%
|
|||||
Net loan charge-offs from discontinued operations — education lending business
|
$
|
4
|
|
|
$
|
4
|
|
$
|
3
|
|
$
|
4
|
|
$
|
6
|
|
|
|
|
|
|
|
|
(a)
|
Credit amounts indicate that recoveries exceeded charge-offs.
|
|
Three months ended March 31,
|
|||||
dollars in millions
|
2017
|
2016
|
||||
Average loans outstanding
|
$
|
86,133
|
|
$
|
60,156
|
|
Allowance for loan and lease losses at beginning of period
|
$
|
858
|
|
$
|
796
|
|
Loans charged off:
|
|
|
||||
Commercial and industrial
|
32
|
|
26
|
|
||
|
|
|
||||
Real estate — commercial mortgage
|
—
|
|
1
|
|
||
Real estate — construction
|
—
|
|
—
|
|
||
Total commercial real estate loans
(a)
|
—
|
|
1
|
|
||
Commercial lease financing
|
7
|
|
3
|
|
||
Total commercial loans
(b)
|
39
|
|
30
|
|
||
Real estate — residential mortgage
|
(2
|
)
|
2
|
|
||
Home equity loans
|
8
|
|
10
|
|
||
Consumer direct loans
|
10
|
|
6
|
|
||
Credit cards
|
11
|
|
8
|
|
||
Consumer indirect loans
|
11
|
|
4
|
|
||
Total consumer loans
|
38
|
|
30
|
|
||
Total loans charged off
|
77
|
|
60
|
|
||
Recoveries:
|
|
|
||||
Commercial and industrial
|
5
|
|
3
|
|
||
|
|
|
||||
Real estate — commercial mortgage
|
—
|
|
2
|
|
||
Real estate — construction
|
1
|
|
1
|
|
||
Total commercial real estate loans
(a)
|
1
|
|
3
|
|
||
Commercial lease financing
|
2
|
|
—
|
|
||
Total commercial loans
(b)
|
8
|
|
6
|
|
||
Real estate — residential mortgage
|
2
|
|
2
|
|
||
Home equity loans
|
3
|
|
3
|
|
||
Consumer direct loans
|
1
|
|
1
|
|
||
Credit cards
|
1
|
|
1
|
|
||
Consumer indirect loans
|
4
|
|
1
|
|
||
Total consumer loans
|
11
|
|
8
|
|
||
Total recoveries
|
19
|
|
14
|
|
||
Net loan charge-offs
|
(58
|
)
|
(46
|
)
|
||
Provision (credit) for loan and lease losses
|
70
|
|
76
|
|
||
Allowance for loan and lease losses at end of period
|
$
|
870
|
|
$
|
826
|
|
Liability for credit losses on lending-related commitments at beginning of period
|
$
|
55
|
|
$
|
56
|
|
Provision (credit) for losses on lending-related commitments
|
(7
|
)
|
13
|
|
||
Liability for credit losses on lending-related commitments at end of period
(c)
|
$
|
48
|
|
$
|
69
|
|
Total allowance for credit losses at end of period
|
$
|
918
|
|
$
|
895
|
|
Net loan charge-offs to average total loans
|
.27
|
%
|
.31
|
%
|
||
Allowance for loan and lease losses to period-end loans
|
1.01
|
|
1.37
|
|
||
Allowance for credit losses to period-end loans
|
1.07
|
|
1.48
|
|
||
Allowance for loan and lease losses to nonperforming loans
|
151.8
|
|
122.2
|
|
||
Allowance for credit losses to nonperforming loans
|
160.2
|
|
132.4
|
|
||
|
|
|
||||
Discontinued operations — education lending business:
|
|
|
||||
Loans charged off
|
$
|
6
|
|
$
|
9
|
|
Recoveries
|
2
|
|
3
|
|
||
Net loan charge-offs
|
$
|
(4
|
)
|
$
|
(6
|
)
|
|
|
|
(a)
|
See Figure
18
entitled “
Commercial Real Estate Loans
” and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio.
|
(b)
|
See Figure
17
entitled “
Commercial Loans by Industry
” and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio.
|
(c)
|
Included in “accrued expense and other liabilities” on the balance sheet.
|
dollars in millions
|
March 31, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
|
|||||
Commercial and industrial
|
$
|
258
|
|
$
|
297
|
|
$
|
335
|
|
$
|
321
|
|
$
|
380
|
|
Real estate — commercial mortgage
|
32
|
|
26
|
|
32
|
|
14
|
|
16
|
|
|||||
Real estate — construction
|
2
|
|
3
|
|
17
|
|
25
|
|
12
|
|
|||||
Total commercial real estate loans
(a)
|
34
|
|
29
|
|
49
|
|
39
|
|
28
|
|
|||||
Commercial lease financing
|
5
|
|
8
|
|
13
|
|
10
|
|
11
|
|
|||||
Total commercial loans
(b)
|
297
|
|
334
|
|
397
|
|
370
|
|
419
|
|
|||||
Real estate — residential mortgage
|
54
|
|
56
|
|
72
|
|
54
|
|
59
|
|
|||||
Home equity loans
|
207
|
|
223
|
|
225
|
|
189
|
|
191
|
|
|||||
Consumer direct loans
|
3
|
|
6
|
|
2
|
|
1
|
|
1
|
|
|||||
Credit cards
|
3
|
|
2
|
|
3
|
|
2
|
|
2
|
|
|||||
Consumer indirect loans
|
9
|
|
4
|
|
24
|
|
3
|
|
4
|
|
|||||
Total consumer loans
|
276
|
|
291
|
|
326
|
|
249
|
|
257
|
|
|||||
Total nonperforming loans
(c)
|
573
|
|
625
|
|
723
|
|
619
|
|
676
|
|
|||||
OREO
|
49
|
|
51
|
|
35
|
|
15
|
|
14
|
|
|||||
Other nonperforming assets
|
1
|
|
—
|
|
2
|
|
3
|
|
2
|
|
|||||
Total nonperforming assets
(c)
|
$
|
623
|
|
$
|
676
|
|
$
|
760
|
|
$
|
637
|
|
$
|
692
|
|
Accruing loans past due 90 days or more
|
$
|
79
|
|
$
|
87
|
|
$
|
49
|
|
$
|
70
|
|
$
|
70
|
|
Accruing loans past due 30 through 89 days
|
312
|
|
404
|
|
317
|
|
203
|
|
237
|
|
|||||
Restructured loans — accruing and nonaccruing
(d)
|
302
|
|
280
|
|
304
|
|
277
|
|
283
|
|
|||||
Restructured loans included in nonperforming loans
(d)
|
161
|
|
141
|
|
149
|
|
133
|
|
151
|
|
|||||
Nonperforming assets from discontinued operations — education lending business
|
4
|
|
5
|
|
5
|
|
5
|
|
6
|
|
|||||
Nonperforming loans to period-end portfolio loans
(c)
|
.67
|
%
|
.73
|
%
|
.85
|
%
|
1.00
|
%
|
1.12
|
%
|
|||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
(c)
|
.72
|
|
.79
|
|
.89
|
|
1.03
|
|
1.14
|
|
|||||
|
|
|
|
|
|
(a)
|
See Figure
18
and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio.
|
(b)
|
See Figure
17
and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio.
|
(c)
|
Nonperforming loan balances exclude $
812 million
, $865 million, $959 million, $11 million, and $11 million of PCI loans at March 31, 2017, December 31, 2016, September, 30 2016, June 30, 2016, and March 31, 2016, respectively.
|
(d)
|
Restructured loans (i.e., TDRs) 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.
|
|
2017
|
|
2016
|
|||||||||||||
in millions
|
First
|
|
Fourth
|
Third
|
Second
|
First
|
||||||||||
Balance at beginning of period
|
$
|
625
|
|
|
$
|
723
|
|
$
|
619
|
|
$
|
676
|
|
$
|
387
|
|
Loans placed on nonaccrual status
|
218
|
|
|
170
|
|
78
|
|
124
|
|
406
|
|
|||||
Nonperforming loans acquired from First Niagara
|
—
|
|
|
(31
|
)
|
150
|
|
—
|
|
—
|
|
|||||
Charge-offs
|
(77
|
)
|
|
(81
|
)
|
(53
|
)
|
(64
|
)
|
(60
|
)
|
|||||
Loans sold
|
(8
|
)
|
|
(9
|
)
|
—
|
|
—
|
|
(11
|
)
|
|||||
Payments
|
(59
|
)
|
|
(30
|
)
|
(32
|
)
|
(75
|
)
|
(8
|
)
|
|||||
Transfers to OREO
|
(11
|
)
|
|
(21
|
)
|
(5
|
)
|
(6
|
)
|
(4
|
)
|
|||||
Transfers to other nonperforming assets
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Loans returned to accrual status
|
(115
|
)
|
|
(96
|
)
|
(34
|
)
|
(36
|
)
|
(34
|
)
|
|||||
Balance at end of period
(a)
|
$
|
573
|
|
|
$
|
625
|
|
$
|
723
|
|
$
|
619
|
|
$
|
676
|
|
|
|
|
|
|
|
|
(a)
|
Nonperforming loan balances exclude $
812 million
, $865 million, $959 million, $11 million, and $11 million of PCI loans at March 31, 2017, December 31, 2016, September, 30 2016, June 30, 2016, and March 31, 2016, respectively.
|
|
2017
|
|
2016
|
|||||||||||||
in millions
|
First
|
|
Fourth
|
Third
|
Second
|
First
|
||||||||||
Balance at beginning of period
|
$
|
51
|
|
|
$
|
35
|
|
$
|
15
|
|
$
|
14
|
|
$
|
14
|
|
Properties acquired — First Niagara
|
—
|
|
|
—
|
|
19
|
|
—
|
|
—
|
|
|||||
Properties acquired — nonperforming loans
|
11
|
|
|
21
|
|
5
|
|
6
|
|
4
|
|
|||||
Valuation adjustments
|
(2
|
)
|
|
(2
|
)
|
(2
|
)
|
(2
|
)
|
(1
|
)
|
|||||
Properties sold
|
(11
|
)
|
|
(3
|
)
|
(2
|
)
|
(3
|
)
|
(3
|
)
|
|||||
Balance at end of period
|
$
|
49
|
|
|
$
|
51
|
|
$
|
35
|
|
$
|
15
|
|
$
|
14
|
|
|
|
|
|
|
|
|
March 31, 2017
|
Short-and Long-
Term Commercial
Total
(a)
|
Foreign Exchange
and Derivatives
with Collateral (b) |
Net
Exposure
|
||||||
in millions
|
|||||||||
France:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
$
|
(1
|
)
|
$
|
(1
|
)
|
|
Nonsovereign non-financial institutions
|
$
|
9
|
|
—
|
|
9
|
|
||
Total
|
9
|
|
(1
|
)
|
8
|
|
|||
Germany:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
179
|
|
—
|
|
179
|
|
|||
Total
|
179
|
|
—
|
|
179
|
|
|||
Italy:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
16
|
|
—
|
|
16
|
|
|||
Total
|
16
|
|
—
|
|
16
|
|
|||
Netherlands:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
6
|
|
—
|
|
6
|
|
|||
Total
|
6
|
|
—
|
|
6
|
|
|||
Spain:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
8
|
|
—
|
|
8
|
|
|||
Total
|
8
|
|
—
|
|
8
|
|
|||
Switzerland:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
(2
|
)
|
(2
|
)
|
|||
Nonsovereign non-financial institutions
|
59
|
|
—
|
|
59
|
|
|||
Total
|
59
|
|
(2
|
)
|
57
|
|
|||
United Kingdom:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
189
|
|
189
|
|
|||
Nonsovereign non-financial institutions
|
65
|
|
—
|
|
65
|
|
|||
Total
|
65
|
|
189
|
|
254
|
|
|||
Other Europe:
(c)
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
62
|
|
—
|
|
62
|
|
|||
Total
|
62
|
|
—
|
|
62
|
|
|||
Total Europe:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
186
|
|
186
|
|
|||
Nonsovereign non-financial institutions
|
404
|
|
—
|
|
404
|
|
|||
Total
|
$
|
404
|
|
$
|
186
|
|
$
|
590
|
|
|
|
|
|
(a)
|
Represents our outstanding leases.
|
(b)
|
Represents contracts to hedge our balance sheet asset and liability needs, and to accommodate our clients’ trading and/or hedging needs. Our derivative mark-to-market exposures are calculated and reported on a daily basis. These exposures are largely covered by cash or highly marketable securities collateral with daily collateral calls.
|
(c)
|
Other Europe consists of the following countries: Austria, Belarus, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Sweden, and Ukraine. 100% of our current exposure in Other Europe is in Belgium, Finland, and Sweden.
|
Item 3.
|
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Calendar month
|
Total number of shares
purchased (a) |
|
Average price paid
per share
|
|
Total number of shares purchased as
part of publicly announced plans or
programs
|
|
Maximum number of shares that may
yet be purchased as part of publicly
announced plans or programs
(b)
|
|||||
January
|
2,093,363
|
|
|
$
|
18.10
|
|
|
1,963,820
|
|
|
16,381,019
|
|
February
|
6,534,315
|
|
|
18.53
|
|
|
3,880,430
|
|
|
9,232,758
|
|
|
March
|
45,469
|
|
|
20.37
|
|
|
—
|
|
|
9,694,757
|
|
|
Total
|
8,673,147
|
|
|
$
|
18.43
|
|
|
5,844,250
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes common shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations.
|
(b)
|
Calculated using the remaining general repurchase amount divided by the closing price of KeyCorp common shares as follows: on January 31, 2017, at
$17.97
; on February 28, 2017, at
$18.77
; and on March 31, 2017, at
$17.78.
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
The following materials from KeyCorp’s Form 10-Q Report for the quarterly period ended March 31, 2017, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income and Consolidated Statements of Comprehensive Income; (iii) the Consolidated Statements of Changes in Equity; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements.
|
*
|
Furnished herewith.
|
|
KEYCORP
|
|
(Registrant)
|
|
|
Date: May 5, 2017
|
/s/ Douglas M. Schosser
|
|
By: Douglas M. Schosser
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|---|---|---|
Aperio Group, LLC | 843,358 | 13,840 | |
Janney Montgomery Scott LLC | 166,262 | 2,659 | |
Russell Investments Group, Ltd. | 32,013 | 548,708 | |
Gifford Fong Associates | 30,000 | 514 | |
Empire Financial Management Company, LLC | 26,026 | 446,094 | |
Integrated Wealth Concepts LLC | 24,679 | 422,999 | |
IHT Wealth Management, LLC | 19,839 | 340,042 | |
BESSEMER GROUP INC | 17,471 | 279 | |
Kohmann Bosshard Financial Services, LLC | 16,979 | 291,020 | |
Fiduciary Trust Co | 14,245 | 244,159 | |
LAZARD ASSET MANAGEMENT LLC | 14,053 | 240 | |
CARRET ASSET MANAGEMENT, LLC | 12,860 | 205,631 | |
GREENLEAF TRUST | 12,047 | 192,632 | |
First Horizon Advisors, Inc. | 5,273 | 84,315 | |
CI INVESTMENTS INC. | 4,184 | 72 | |
Crews Bank & Trust | 3,003 | 48,018 | |
TRUST CO OF VERMONT | 2,029 | 32,444 | |
CONCOURSE FINANCIAL GROUP SECURITIES, INC. | 1,724 | 29,825 | |
Fourth Dimension Wealth, LLC | 1,650 | 26,384 | |
ORG Wealth Partners, LLC | 1,432 | 22,624 | |
THURSTON, SPRINGER, MILLER, HERD & TITAK, INC. | 1,400 | 22,386 | |
Archer Investment Corp | 1,000 | 15,990 | |
GPS Wealth Strategies Group, LLC | 992 | 15,863 | |
Golden State Wealth Management, LLC | 529 | 8,459 | |
ORG Partners LLC | 513 | 8,104 | |
Game Plan Financial Advisors, LLC | 510 | 8,759 | |
Graney & King, LLC | 324 | 5,549 | |
United Community Bank | 289 | 4,621 | |
Salomon & Ludwin, LLC | 262 | 4,189 | |
WestEnd Advisors, LLC | 29 | 464 | |
NCP Inc. | 24 | 384 | |
TD AMERITRADE INVESTMENT MANAGEMENT, LLC | 0 | 0 |
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|---|---|---|
Mr. Vasos is a director and has served as Chief Executive Officer of Dollar General Corporation, a publicly-held variety retail company, since October 2023. Mr. Vasos previously served as Senior Business Advisor following his initial retirement as Chief Executive Officer in November 2022. Mr. Vasos served as Chief Executive Officer of Dollar General Corporation from 2015 to 2022. Prior to his election as Chief Executive Officer, Mr. Vasos served as Chief Operating Officer from 2013 to 2015 and as Executive Vice President, Division President and Chief Merchandising Officer from 2008 to 2013. Prior to joining Dollar General, Mr. Vasos served in executive positions with Longs Drug Stores Corporation for seven years, as well as in leadership positions at Phar-Mor Food and Drug Inc. and Eckerd Corporation. Mr. Vasos is a director of the Retail Industry Leaders Association. | |||
Mr. Khanna is has served as a Co-Executive Chairman of Apexon, Inc., a digital-first technology services firm focused on accelerating business transformation and delivering human-centric digital experience, since June 2024. Prior to joining Apexon, Mr. Khanna co-led the Global Banking and Securities Practice at McKinsey & Company Inc., a multinational strategy and management consulting firm, from 2018 until 2023, and served as a Client Service Team Leader from 2007 to 2024. From 2014 to 2018, he lead McKinsey Digital for Financial Services globally, supporting banking and insurance companies on productivity transformation, digital strategy, sales, marketing, operations, technology, and risk management. He led McKinsey’s New York office from 2011 to 2012 and the Property and Casualty Insurance Practice from 2009 to 2011. Prior to joining McKinsey in 2000, Mr. Khanna served as the Chief Executive Officer of a digital business at eCredit, a provider of online solutions for credit and collections professionals. | |||
* Ms. Gillis and Mr. Vasos previously served as members of the committee until July 1, 2024. Ms. Allard and Mr. Highsmith were appointed to the committee effective December 27, 2024, and July 1, 2024, respectively. | |||
Mr. Hayes has served as Chief Executive Officer of Airbus Americas, Inc., the North American affiliate of a global aerospace and defense manufacturing company, since June 2024. Prior to this, Mr. Hayes served as Chief Executive Officer of JetBlue Airways Corporation, a publicly-held airline and passenger carrier company, from 2015 to 2024. Prior to his appointment as JetBlue’s Chief Executive Officer in 2015, Mr. Hayes served as President from 2014 to 2015 and Chief Commercial Officer from 2008 to 2014. Mr. Hayes also worked in various management capacities over a 19-year career with British Airways Plc. Mr. Hayes is a director of Make-a-Wish Connecticut. He is also a member of the board of directors of KeyBank National Association. | |||
Mr. Tobin has served as Chairman, President, and Chief Executive Officer of Dover Corporation, a publicly-held diversified global manufacturer and solutions provider, since May 2018 and a director since 2016. Prior to joining Dover Corporation, Mr. Tobin served as Chief Executive Officer and a director of CNH Industrial N.V., an equipment and services company, from 2013 to 2018. Prior to the integration of Fiat Industrial S.p.A. and CNH Global N.V. into CNH Industrial N.V., Mr. Tobin was Group Chief Operating Officer of Fiat Industrial S.p.A. and President and Chief Executive Officer of CNH Global N.V., a role he assumed in 2012 after two years as Chief Financial Officer of CNH Global N.V., and Chief Financial Officer and Head of Information Technology at SGS S.A. from 2004 to 2010. Mr. Tobin is a director of the National Association of Manufacturers and a director of Shedd Aquarium. | |||
Mr. Hipple retired as Executive Chairman of Materion Corporation, a publicly-held manufacturer of highly engineered advanced materials and related services, in December 2017. Mr. Hipple previously served as Chairman of the Board and Chief Executive Officer of Materion Corporation from 2006 to 2017 and President from 2005 to 2017. Prior to that, Mr. Hipple served in the steel industry for 26 years in a number of capacities, including project engineer, strategic planning, supply chain management, operations, sales and marketing, and executive management. Mr. Hipple is trustee of the board of trustees of the Cleveland Institute of Music. He is also a member of the board of directors of KeyBank National Association. | |||
Chair: Elizabeth R. Gile Other Members*: H. James Dallas Somesh Khanna Devina A. Rankin David K. Wilson Number of Meetings in 2024: 13 * Mr. Hayes and Mr. Highsmith previously served as members of the committee until July 1, 2024. Mr. Dallas and Ms. Rankin were appointed to the committee effective July 1, 2024, and Mr. Khanna was appointed effective December 27, 2024. | |||
Ms. Allard is the Group Head of the Global Wealth Management Division at Scotiabank, a publicly held Canadian multinational financial services provider, where she leads Scotiabank’s global asset management and wealth advisory businesses in Canada and across Scotiabank’s international footprint in Latin America and the Caribbean. Prior to joining Scotiabank in September 2023, she served as an Executive Vice President, Personal Financing Products and International Banking, at the Royal Bank of Canada, a publicly held Canadian multinational financial services company (“RBC”), from January 2019 to July 2023, where she was responsible for leading RBC’s consumer lending businesses in Canada. She also served as Senior Vice President, Head of Strategy, Performance & Marketing, at RBC from February 2016 to January 2019. Prior to joining RBC, Ms. Allard held positions of increasing responsibility at Manulife Financial, a publicly held Canadian multinational insurance company and financial services provider, and State Street Corporation, a global financial services and bank holding company. | |||
Chair: Elizabeth R. Gile Other Members*: H. James Dallas Somesh Khanna Devina A. Rankin David K. Wilson Number of Meetings in 2024: 13 * Mr. Hayes and Mr. Highsmith previously served as members of the committee until July 1, 2024. Mr. Dallas and Ms. Rankin were appointed to the committee effective July 1, 2024, and Mr. Khanna was appointed effective December 27, 2024. | |||
Select Qualifications and Experience: • As Executive Vice President and Chief Financial Officer of Waste Management, Inc., Ms. Rankin is responsible for all finance functions of the company, as well as enterprise risk management, internal audit, investor relations, supply chain, capital planning, and information technology. • With an extensive career in corporate finance and as a certified public accountant licensed in Texas, Ms. Rankin qualifies as an “audit committee financial expert” as defined by the SEC. | |||
Until his retirement in January 2014, Mr. Wilson served in a variety of positions with the Office of the Comptroller of the Currency (“OCC”) over the course of a 32-year career, including as Examiner-In-Charge (“EIC”) of two global banks and in a number of policy focused roles. In 2009, Mr. Wilson transitioned from Large Bank EIC into policy work, initially as Senior National Bank Examiner and co-chair of the OCC’s National Risk Committee. In 2010, he was appointed Deputy Comptroller for Credit and Market Risk. He then briefly served as Senior Deputy Comptroller and Chief National Bank Examiner before returning to the field as an EIC. Mr. Wilson also has served as an independent consultant focusing on bank regulatory and risk strategy matters. He is also a member of the board of directors of KeyBank National Association. | |||
Mr. Gorman was elected Chairman, Chief Executive Officer, and President of KeyCorp on May 1, 2020. Mr. Gorman joined KeyCorp in 1998 when it acquired McDonald Investments, a registered broker-dealer, where Mr. Gorman held various leadership roles. Since joining KeyCorp, Mr. Gorman has served in numerous capacities including Chief Operating Officer from 2019 to 2020, President of Banking and Vice Chairman from 2017 to 2019, as Merger Integration Executive leading KeyCorp’s integration of First Niagara Financial Group, Inc. from 2016 to 2017, and as President of Key Corporate Bank from 2010 to 2016. Mr. Gorman is a member of the Supervisory Board of The Clearing House, Chairman of the Ohio Business Roundtable, a member of the U.S. Business Roundtable, a member of the Executive Committee of the Greater Cleveland Partnership, and serves as a board member of the University Hospital Health System and the Cleveland Museum of Art. | |||
Mr. Highsmith joined the Board in August 2016 in connection with the First Niagara merger. He was a member of the board of directors of First Niagara since 2011, serving on the Governance/Nominating Committee and the Audit Committee. He previously served on the board of directors of NewAlliance Bancshares from 2006 until it was acquired by First Niagara in 2011. Mr. Highsmith was founder, Chief Executive Officer, and Chairman of The Specialized Packaging Group (“SPG”). He grew SPG into one of the largest designers, printers, and manufacturers of paperboard and paperboard composite packaging for consumer products in North America before merging the company with PaperWorks Industries in 2009. Mr. Highsmith is Vice Chairman of the board of trustees of Quinnipiac University, trustee of the Yale New Haven Health System, Chairman of the Connecticut Center for Arts & Technology (“ConnCAT”), and Board Chair of the Connecticut Community Outreach Revitalization Program (“ConnCORP”). | |||
* Ms. Snyder served as committee chair until the appointment of Mr. Vasos effective July 1, 2024. Mr. Tobin previously served as a member of the committee until July 1, 2024. Mr. Highsmith was appointed to the committee effective July 1, 2024. | |||
Mr. Cutler is KeyCorp’s independent Lead Director. From 2000 through May 2016, he was Chairman and Chief Executive Officer of Eaton Corporation plc, a publicly-held, global, diversified power management company with approximately 94,000 employees that sells products to customers in more than 160 countries. He is an honorary trustee of the Musical Arts Association and a life director of the United Way of Greater Cleveland. |
Name and Principal Position |
Year |
Salary
($) |
Bonus
($) |
Stock
Awards ($) |
Option
Awards ($) |
Non-Equity
Incentive Plan Compensation ($) |
Change in
Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other
Compensation ($) (See chart below) |
Total
($) |
|||||||||||||||||||
Christopher M. Gorman Chairman and CEO |
2024 | 1,200,000 | — | 13,870,278 | 699,998 | 2,700,000 | 40,879 | 127,457 | 18,638,612 | |||||||||||||||||||
2023 | 1,200,000 | — | 6,299,986 | 699,997 | 1,890,000 | 27,606 | 151,129 | 10,268,718 | ||||||||||||||||||||
2022 | 1,150,000 | — | 6,479,961 | 719,997 | 2,025,000 | 14,895 | 73,774 | 10,463,627 | ||||||||||||||||||||
Clark Khayat CFO |
2024 | 600,000 | — | 4,278,958 | 149,997 | 1,800,000 | — | 23,000 | 6,851,955 | |||||||||||||||||||
2023 | 600,000 | 1,079,965 | 119,997 | 825,000 | — | 22,500 | 2,647,462 | |||||||||||||||||||||
Andrew J. “Randy” Paine III Head of Institutional Bank |
2024 | 600,000 | — | 4,593,538 | 219,997 | 2,100,000 | 31,405 | 23,000 | 7,567,940 | |||||||||||||||||||
2023 | 600,000 | — | 2,159,948 | 239,998 | 1,425,000 | 21,208 | 22,500 | 4,468,654 | ||||||||||||||||||||
2022 | 600,000 | — | 2,249,972 | 249,997 | 1,425,000 | 10,389 | 18,300 | 4,553,658 | ||||||||||||||||||||
Angela G. Mago CHRO |
2024 | 600,000 | — | 3,692,672 | 189,998 | 1,100,000 | 21,216 | 23,000 | 5,626,886 | |||||||||||||||||||
2023 | 600,000 | — | 1,710,000 | 189,999 | 1,125,000 | 14,327 | 22,500 | 3,661,826 | ||||||||||||||||||||
2022 | 600,000 | — | 1,709,982 | 189,994 | 1,125,000 | 2,066 | 18,300 | 3,645,342 | ||||||||||||||||||||
Amy G. Brady Chief Information Officer |
2024 | 700,000 | — | 2,972,174 | 149,997 | 1,200,000 | — | 23,000 | 5,045,171 | |||||||||||||||||||
2023 | 700,000 | — | 1,349,980 | 149,996 | 910,000 | — | 22,500 | 3,132,476 | ||||||||||||||||||||
2022 | 700,000 | — | 1,349,963 | 149,997 | 975,000 | — | 18,300 | 3,193,260 |
Customers
Customer name | Ticker |
---|---|
Simon Property Group, Inc. | SPG |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|---|---|---|
BANK OF NOVA SCOTIA | - | 162,984,000 | 0 |
Gorman Christopher M. | - | 799,718 | 5,060 |
Paine Andrew J III | - | 335,414 | 445 |
CUTLER ALEXANDER M | - | 284,433 | 0 |
Mago Angela G | - | 257,158 | 0 |
Paine Andrew J III | - | 214,068 | 24,977 |
Mago Angela G | - | 194,280 | 0 |
Alexander Victor B | - | 129,385 | 9,996 |
Khayat Clark H | - | 126,632 | 0 |
Dallas H James | - | 125,397 | 0 |
Alexander Victor B | - | 117,196 | 9,497 |
Gavrity Kenneth C | - | 98,120 | 0 |
Brady Amy G. | - | 94,106 | 0 |
Brady Amy G. | - | 82,648 | 0 |
Hipple Richard J | - | 81,641 | 0 |
Evans Trina M | - | 81,622 | 0 |
GILLIS RUTH ANN M | - | 62,970 | 39,500 |
Waters James L | - | 56,391 | 0 |
Gile Elizabeth R. | - | 40,881 | 0 |
Wilson David K | - | 40,806 | 0 |
Highsmith Carlton L | - | 37,864 | 0 |
Waters James L | - | 35,202 | 0 |
Snyder Barbara R | - | 35,014 | 0 |
VASOS TODD J | - | 25,529 | 0 |
Kidik Allyson M | - | 22,072 | 0 |
Schosser Douglas M | - | 19,795 | 4,423 |
Hayes Robin | - | 18,236 | 0 |
Kidik Allyson M | - | 17,798 | 0 |
Ramani Mohit | - | 10,000 | 0 |
Rankin Devina A | - | 10,000 | 0 |
Allard Jacqui | - | 180 | 0 |