KeyCorp (NYSE: KEY) on Thursday reported that it earned $224 million, or 27 cents a share, in the fourth quarter. That’s down slightly from $246 million, or 28 cents, in the year-ago period.
During the fourth quarter of 2015, Key incurred merger-related costs and a pension settlement charge totaling $10 million, or 1 cent a share, the banking company said in its earnings release posted on its website.
Cleveland, Ohio–based KeyCorp on Oct. 30 announced plans to acquire Buffalo–based First Niagara Financial Group in a $4.1 billion deal.
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Key also incurred pension-settlement charges of $19 million, or 1 cent per common share, during the third quarter of 2015, and $3 million during the fourth quarter of 2014, which affected earnings comparisons.
For all of 2015, KeyCorp earned $892 million, or $1.05 per share, compared to $917 million, or $1.04 a share, for the same period a year ago.
KeyCorp is “pleased” with its fourth quarter and full-year results, Beth Mooney, chairman and CEO, said in the banking company’s release.
“Our fourth quarter results reflect continued revenue growth, well-managed expenses, and strong credit quality,” said Mooney.
Key’s full-year results “reflect positive operating leverage,” driven by a 3 percent revenue increase, benefiting from loan growth and “ongoing momentum” in its fee-based businesses.
“Investment banking and debt placement fees had another record year, and our cards and payments income was up 10 percent. Expenses reflect the ongoing investments we have made in our businesses to drive revenue growth, including the addition of client-facing personnel across our franchise,” said Mooney. “Capital ratios also remain strong, and reflect $460 million of common share repurchases and a 16 percent increase in our common share dividend for the year.”
Mooney also used the earnings report to provide an update on KeyCorp’s pending acquisition of First Niagara, saying the company’s made “good progress.”
“Integration teams, including some of the top talent at both Key and First Niagara, are focused on the approval process and ensuring a smooth transition and sustained momentum,” Mooney added.
The deal, if approved by regulators, will combine the number 3 and number 5 banks in the Syracuse metro area, respectively, ranked by deposit market share. The banks currently operate 40 branches combined in the Syracuse market.
The banks have not thus far not publicly announced any planned branch closures and job cuts, which are almost always a part of such mergers where the companies operate in similar areas.
The deal is the subject of two class-action shareholder lawsuits, claiming the pending sale doesn’t fairly compensate First Niagara shareholders, according to a report on the website for Buffalo Business First, a business publication serving Western New York.
Contact Reinhardt at ereinhardt@cnybj.com
