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KeyCorp Q1 income down because of First Niagara acquisition

Staff writer ▼ | April 25, 2016
KeyCorp announced first quarter net income from continuing operations attributable to Key common shareholders of $182 million, or $.22 per common share.
KeyCorp   Q1 net income was $182 million
This compares to $224 million, or $.27 per common share, for the fourth quarter of 2015, and $222 million, or $.26 per common share, for the first quarter of 2015.

During the first quarter of 2016, Key incurred merger-related expense totaling $24 million, or $.02 per common share, compared to $6 million in the fourth quarter of 2015. Excluding merger-related expense, earnings per common share were $.24 for the first quarter of 2016.

"While the operating environment remains challenging, our results reflect continued momentum in our core businesses and progress on our strategic initiatives," said chairman and chief executive officer Beth Mooney.

"Excluding merger-related expense, we generated positive operating leverage relative to the same period last year, driven by a 3% increase in revenue and well-controlled expenses. Net interest income was up 6% from last year, benefiting from growth in average loans of 5%.

"Noninterest income reflects positive trends in several of our core fee-based businesses where we have continued to make investments, such as consumer and commercial payments.

"Our market sensitive businesses were impacted this quarter by the industry-wide slowdown in capital markets activity. Expenses also reflect the lower level of market-related activity and our ongoing efforts to improve efficiency."

"Credit quality measures this quarter were impacted by credit migration in our oil and gas portfolio, reflecting current market conditions. Net charge-offs remained below our targeted range," added Mooney.

"We also continue to make progress on our First Niagara Financial Group acquisition, including reaching an important milestone of shareholders from both companies approving the merger.

"We are excited about the opportunity we have as we prepare to bring these two companies together, and we remain confident in our ability to deliver on our commitments and financial targets."