KeyBank parent announces share-repurchase program, plans to evaluate dividend increase

KeyCorp (NYSE: KEY) has announced plans for a common-share repurchase program of up to $725 million.

It’s part of the banking company’s proposed capital plan, which occurs over a five-quarter period.

KeyCorp announced details in a news release posted to its website on Wednesday.

Cleveland, Ohio–based KeyCorp is the parent company of KeyBank. The bank ranked third in deposit market share in the 16-county Central New York area, with a share of less than 9 percent, as of June 30, 2014, according to the latest FDIC data available.

The plan also includes an increase in the quarterly common-share dividend from 65 cents per share up to 75 cents per share. Key’s board of directors will consider the “potential” dividend increase in May, the company said in the news release.

The plan also includes an additional “potential” increase in the quarterly common-share dividend, up to 85 cents per share. The company’s board of directors will consider the additional increase in 2016 for the fifth quarter of the 2015 capital plan.

Key’s board of directors has authorized share repurchases under the capital plan. They include repurchases to offset issuances of common shares under Key’s employee-compensation plans, the company said.

Key intends to repurchase its common shares through the open market or in privately negotiated transactions over a five quarter time-period, which differs from prior-year authorizations that occurred over a four quarter time-period.

The banking company anticipates repurchasing common shares under the 2015 capital plan through June 30, 2016.

It will hold the reacquired shares as treasury shares and may be reissued for various corporate purposes, KeyCorp said.

KeyCorp is “pleased” that the Federal Reserve had “no objection” to the company’s capital plan, Beth Mooney, chairman and CEO of KeyCorp, said in the company’s news release.

“This provides us with the ability to increase our dividends and continue to repurchase common shares, consistent with our capital priorities.  After returning 82 percent of net income to shareholders in 2014, Key remains one of the best capitalized banks in its peer group.  We are well positioned to execute on our strategic priorities and grow our businesses, while remaining disciplined in managing capital for our shareholders,” said Mooney.

KeyBank ranked third in deposit-market share in the 16-county Central New York area, with a share of less than 9 percent, as of June 30, 2014, according to the latest FDIC data available.

KeyCorp had total assets of nearly $94 billion, according to its news release. 

Contact Reinhardt at ereinhardt@cnybj.com