KeyCorp. (NYSE:KEY) Q4 2015 Earnings Conference Call - Final Transcript

Jan 21, 2016 • 10:00 am ET

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KeyCorp. (NYSE:KEY) Q4 2015 Earnings Conference Call - Final Transcript

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Presentation
Executive
Beth Mooney

Company last year. Importantly, we remain committed to further improvement in the targets that we have established. Credit quality remained a good story in 2015 with non-performing loans down for the year and net charge-offs of 24 basis points, which is below our targeted range. We remain committed to strong risk management practices and staying true to our relationship focus. The final item on the slide is capital.

Our Common Equity Tier 1 ratio remained strong at 11%, which we believe positions us well for the 2016 CCAR process and we expect both share repurchases and a dividend increase to be part of the capital plan we will submit. I'm now moving to slide 4, which provides some highlights of our announced acquisition of First Niagara. We continue to make good progress as we move toward our anticipated closing in the third quarter of this year. Under the leadership of Chris Gorman, we have established integration teams with some of the top talent from both Key and First Niagara and these teams have been focused on developing detailed assessments and moving forward with our integration plans.

As we move through these early stages, I'm even more confident in this being the right opportunity for Key in our ability to realize the cost savings. The combined company will generate attractive financial returns and create value for our shareholders and accelerate our progress towards becoming a high performing regional bank. And although not included in our financial projections, we will realize additional value from revenue synergies that will also add to the financial performance. We look forward to sharing more developments with you in the coming quarters as we move towards closing.

Before I turn the call over to Don, I would like to close my remarks by saying that it was a good year for Key. We executed against our strategic and financial goals and took steps to accelerate our progress going forward. I'm proud of our team and of our performance and I'm excited about the opportunities that we have ahead. Now, I'll turn the call over to Don to discuss the details of our fourth quarter results. Don?

Executive
Don Kimble

Thanks and I'm on slide 6. As Beth said, we had a good year finishing with fourth quarter net income from continuing operations of $0.27 per common share. This compared to $0.28 in the year-ago period and $0.26 in the third quarter. In the fourth quarter Key incurred $10 million of charges related to pension settlement and the acquisition of First Niagara. The combined impact was $0.01 per common share. Excluding these items, net income from continuing operations was $0.28 per common share, the same as the year-ago quarter. However, it is worth noting in comparison with the year-ago period that the current quarter includes $23 million in higher provision expense and $18 million in lower principal investing gains giving us a strong finish to the year.

Also, not on the slide is the revenue growth. For the quarter, revenue was