KeyCorp (NYSE: KEY) remains on track to cut $150 million to $200 million in annual expenses by December 2013. The Cleveland–based banking company’s plans include closing up to 5 percent of its nationwide branch-office network, reducing staffing levels, and examining its contracts with third-party vendors, Key leaders said during a conference call Oct. 18, discussing […]
KeyCorp (NYSE: KEY) remains on track to cut $150 million to $200 million in annual expenses by December 2013.
The Cleveland–based banking company’s plans include closing up to 5 percent of its nationwide branch-office network, reducing staffing levels, and examining its contracts with third-party vendors, Key leaders said during a conference call Oct. 18, discussing the company’s latest quarterly results. The branch closures are expected to have an incremental impact in Key’s Central New York region, according to the bank.
KeyBank recently opened a new branch in Manlius after closing a location in Dannemora (Clinton County) earlier this year and one in Syracuse in September. Key has also relocated branches in Cazenovia and Fayetteville to new sites in recent years.
Key has more than 1,000 branches in 14 states and assets of $87 billion. The bank closed 16 branch offices in the third quarter and has plans to shutter another three in the fourth quarter, Senior Executive Vice President and CFO Jeffrey Weeden said during the conference call.
Savings are on pace to reach $30 million to $50 million by the end of 2012 with cost-cutting efforts continuing next year, Weeden said. He also said the bank will continue to invest in other areas to ensure future growth.
“Our efforts are not all about cost cutting,” he said. “They are about improving profitability.”
Key is the number two bank in the Syracuse metro area deposit market with 27 branches, more than $1.8 billion in deposits, and a market share of 16.8 percent, according to the latest statistics from the Federal Deposit Insurance Corp. The bank has two offices, more than $58 million in deposits, and a market share of 1.58 percent in the Utica–Rome area.
Third-quarter net income from continuing operations attributable to common shareholders at Key totaled $214 million, down from $229 million a year earlier. Earnings per share totaled 23 cents, down from 24 cents a year earlier.
The bank closed an acquisition of 37 former HSBC branches in the Buffalo and Rochester markets during the period. The locations were involved in First Niagara Bank’s deal for 195 HSBC locations in upstate New York and Connecticut.
First Niagara completed that deal in May and divested some of the locations to Key and others to comply with anti-trust rules.
Also during the third quarter, Key re-entered the credit-card business by acquiring a $725 million Key-branded credit-card portfolio made up of its own customers. The bank also started to self-issue cards.
Net interest income in the third quarter totaled $578 million, up from $555 million a year earlier. Noninterest income totaled $544 million in the latest quarter, up from $483 million.
Noninterest expense totaled $734 million in the third quarter, up from $692 million in the same period last year.
Key had more than $51.4 billion in loans as of Sept. 30, up from $48.2 billion a year earlier. Deposits at the end of the quarter totaled $64.2 billion, up from $61 billion a year earlier.
The bank’s provision for loan losses was $109 million for the third quarter, compared with $10 million a year earlier. Net charge-offs for the period totaled $109 million, even with the third quarter of 2011.
Nonperforming loans at the end of the quarter totaled $653 million, down from $788 million at the end of the same period last year.
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