KeyCorp Reports Q3/17 Lease Finance, C&I & Operating Lease Growth

KeyCorp reported Q3/17 net interest income included $48 million of purchase accounting accretion related to the acquisition of First Niagara. Taxable-equivalent net interest income was $962 million for the third quarter of 2017, and the net interest margin was 3.15%, compared to taxable-equivalent net interest income of $788 million and a net interest margin of 2.85% for Q3/16, reflecting the benefit from the First Niagara acquisition, including purchase accounting accretion, as well as higher earning asset yields and balances.

The following highlights on commercial lease financing, C&I and operating lease assets were excerpted from the news release:

  • Commercial lease finance (CLF) average balances of $4,694 million in Q3/17 were up 4.1% from $4,508 million a year earlier. Key noted a 3.89% yield on Q3/17 CLF average balances compared to a 3.33% yield a year earlier.
  • Operating lease assets at September 30, 2017 of $736 million were up 71.2% from $430 million at the end of the same year-ago period.
  • C&I average loan balances in Q3/17 of $41.4 billion, were up 11.0% from $37.3 billion in the same quarter a year earlier.
  • Key noted the average C&I loan yield in Q3/17 of 3.97% was up 59 basis points from 3.38% for the same quarter a year earlier.

Beth Mooney, chairman and CEO, said, “Third quarter results reflect strong returns and the seventh consecutive quarter of positive operating leverage compared to the prior year, as we continue to execute on our strategic priorities, grow our businesses and deliver on the commitments we have made.

“We continue to invest for growth in support of our relationship strategy, including the recent HelloWallet and merchant services acquisitions, as well as Cain Brothers, which closed early in the fourth quarter. These investments enhance our focus on organic growth by investing in our people, products and capabilities to continue to drive positive operating leverage and future growth.”

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