KeyCorp's third-quarter 2014 earnings missed the Zacks Consensus Estimate. Weak revenue generation resulted in the poor quarterly performance. However, prudent expense management along with a fall in provisions slightly salvaged the results. The company's restructuring initiatives are expected to further strengthen its credit quality and liquidity position going forward. Moreover, the company's robust capital position, enhancement in asset quality and steady capital deployment activities continue to boost investors' confidence. Also, sustained growth in loan and deposits will likely ease the pressure triggered by a persistent low interest rate environment, elevated competition and stringent regulations to some extent.
Cleveland-based KeyCorp, a bank-oriented financial services company, provides a wide range of products and services, such as commercial and retail banking, commercial leasing, investment management, consumer finance as well as investment banking products to individual, corporate and institutional clients throughout the U.S. and, for certain businesses, internationally.
The company operates through the following business segments:
Key Community Bank serves consumers and small to mid-sized businesses by offering a variety of deposit, investment as well as lending and wealth management products and services. These products and services are provided through a 12-state branch network organized into 9 internally defined geographic regions: Oregon and Alaska, Washington, Rocky Mountains, Indiana, Western Ohio and Michigan, Eastern Ohio, Eastern New York, New England, and Western New York.
Key Corporate Bank is a full-service corporate and investment bank, focused largely on serving the needs of middle market clients in six industry sectors: consumer, energy, healthcare, industrial, public sector and real estate. The segment offers a wide-range of products to its clients, including syndicated finance, debt and equity capital markets, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory and public finance.
Other Segments consists of Corporate Treasury, Principal Investing and a diverse range of exit portfolios.
In addition to the customary banking services, KeyCorp's bank , its registered investment advisor, and its trust company subsidiaries offer personal and corporate trust services, personal financial services, access to mutual funds, cash management services, investment banking and capital markets products as well as international banking services. KeyCorp also provides other financial services, both within and beyond its primary banking markets, through non-bank subsidiaries. These services include accident, health and credit-life insurance on loans, principal investing, community development financing, securities underwriting and brokerage as well as other financial services. The company is also an equity participant in a joint venture with Key Merchant Services LCC.
In 2008, the company acquired U.S.B. Holding Co. Inc., the holding company for Orangeburg, N.Y.-based Union State Bank, expanding KeyCorp's presence in Hudson Valley markets.
In 2012, KeyCorp acquired 37 retail banking branches in Buffalo and Rochester, N.Y. from First Niagara Financial Group by paying a 4.4% premium on deposits or nearly $95 million.
In 2013, KeyCorp divested Victory Capital Management and its broker dealer affiliate, Victory Capital Advisers. The company realized a net after tax gain of $92 million from the deal.
In Sep 2014, KeyCorp completed the acquisition of Pacific Crest Securities, Portland, OR-based technology-focused investment bank and capital markets firm. The financial terms of the agreement were not disclosed.
As of Sep 30, 2014, KeyCorp had a network of 997 full-service retail banking branches and about 1,290 ATMs. Further, the company had total assets of $89.8 billion, total earning assets of $78.3 billion, total deposits of $68.5 billion and total equity of $10.5 billion, as of the same date.