Beth Mooney, the Chairman and CEO of KeyCorp (NYSE:KEY), reported that 3Q2016 was pivotal for firm in terms of both financial report and executing their strategic plans. The company closed its acquisition of First Niagara bringing more than $35 billion in assets, 1 million new clients and 300 new branches to Key.
The highlights
Although a lot of resources and time have been devoted to ensure conversion and acquisition went smoothly, they have also stayed focused on sustaining the momentum in core operations. Importantly, both Corporate Bank and Community Bank posted strong performance in this quarter. The company remain confident in fulfilling its commitments, including the accomplishment of the financial targets for the acquisition. As the company moves forward, it will be posting consolidated results with First Niagara and Key combined, but in this report, the management thought it would be beneficial to offer additional detail.
The Corporate Bank and the Community Bank are performing well and KeyCorp is realizing advantages from the investments it has made in recent years. As reported in recent earnings release, the EPS was $0.16, and it stands at $0.30 excluding the effect of merger-related costs.
First Niagara businesses were comparatively neutral to EPS this quarter. From the year-ago period, the company posted positive operating leverage and they are well positioned as they progress as a combined firm having reported positive operating leverage for almost nine of the last 11 quarters on an individual basis.
The standalone performance
Revenue surged 6% from the preceding year, as the firm benefited from a quarter of robust deposit and loan growth and a jump of 8% in non-interest income. The achievements in the quarter cover a record level of debt placement fees and investment banking together with double-digit growth in payments and cards income.
Expenses remain to be well managed and showed improved performance-based compensation in reported quarter together with a better FDIC assessment. The company posted another robust quarter in respect of credit quality with net charge-off ratio trading below targeted range. The performance of First Niagara after acquisition report release has surpassed initial projections and KeyCorp remains very thrilled about the prospect to grow this new section of the company.
