KeyCorp Reports Q2/16 Operating Lease Assets Up 35% Y/Y

KeyCorp announced Q2/16 net income from continuing operations attributable to Key common shareholders of $193 million compared to $230 million for Q2/15. During Q2/16, Key incurred merger-related expense totaling $45 million.

The following highlights were excerpted from the news release:

  • Operating lease assets at the end of Q2/16 of $399 million was up almost 35% from $296 million at the end of the same quarter in 2015.
  • Average commercial lease financing assets of $3,949 million in Q2/16 compared to $3,981 million in Q2/15. Interest and yield of $37 million and 3.77%, respectively compared to $36 million and 3.58% in Q2/15.
  • Average loans of $61.1 billion were up 5.5% in Q2/16 compared to Q2/15, driven by 12.5% growth in commercial, financial and agricultural loans
  • Net interest income of $605 million was up $14 million in Q2/16 compared to the same quarter one year ago as higher earning asset balances and yields were partially offset by lower reinvestment yields
  • Q2/16 net interest margin was 2.76% compared to 2.88% in Q2/15.
  • The First Niagara Financial Group acquisition is scheduled to close on August 1, 2016.

“During the second quarter, we maintained positive momentum in our core businesses and made significant progress on our upcoming acquisition of First Niagara,” said Beth Mooney, chairman and CEO. “Excluding merger-related expense, we generated positive operating leverage relative to the year-ago period. Revenue was stable compared with the same period last year and up 3% from last quarter, despite lower interest rates and challenging market conditions. Expenses continue to be well managed, which allows us to make ongoing investments in our businesses. Credit quality remained solid, with net charge-offs to average loans below our targeted range.”

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