KeyCorp. (NYSE:KEY) Q1 2017 Earnings Conference Call - Final Transcript

Apr 20, 2017 • 09:00 am ET

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KeyCorp. (NYSE:KEY) Q1 2017 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

Thank you. (Operator Instructions) Matt O'Connor, Deutsche Bank.

Analyst
Matt O'Connor

I was wondering if you could just elaborate on the trust line actually, that was quite positive and just any more color in terms of what was driving that?

Executive
Don Kimble

We are continuing to invest in this area and reflected the growth in our investment services business along with the benefit of certain trading activity that occurred during the quarter as well and so we view that as a area of ongoing focus for us.

Analyst
Matt O'Connor

And then -- sorry it's been a very long and early days here, just in terms of progression on the purchase accounting accretion, I know you commented on that earlier but how should we think about that kind of invest this year and then looking ahead in terms of how quickly it burns off?

Executive
Don Kimble

Sure, what we've talked about is that from fourth quarter to first quarter we saw a decline from $58 million to $53 million. We would expect that same type of decline to occur on a quarterly basis going forward. We are down about $5 million a quarter and we always said for the full year, we expected the accretion to be in the $180 million to $190 million range and just to give you a perspective. We would expect that same type of decline occur prospectively in quarters after that the remainder of 2017 as well.

Operator
operator

John Pancari, Evercore.

Analyst
Sam Ross

This is actually Sam Ross on for John. Thanks for taking the question, just had a couple of quick ones. The first is, I know you guys gave some color on your commercial portfolio based on the outstandings, and I'm just wondering if you can size it to your exposure to the retail industry specifically to the mall factor.

Executive
Don Kimble

One, it's a fairly small portfolio for the overall we referred questions about regional malls and also direct exposure to retail businesses. And I would say that our outstanding balances are less than $1 billion on that combined portfolio to fairly small ports overall and we've been very pleased with the performance so far.

Analyst
Sam Ross

And then maybe just as a follow-up, just want to hear your general sense of both line utilization and maybe just borrower appetite, I know that some of your competitors talked about still borrowers being on the sidelines, I just wanted to get your updated thoughts on what you guys are seeing in the market?

Executive
Beth Mooney

Sam, this is Beth Mooney. We have seen line utilization remain relatively consistent now for several quarters and I would tell you that borrowers -- what I would tell you the sentiment that we're hearing is canteen towards optimism but not yet translating into different behaviors or activities as it relates to their borrowing and banking activities but there is level of emerging confidence that I think if it is not with some level of fiscal stimulus, as well as other legislative and tax reform out of Washington that could translate into increased and heightened activity.

Operator
operator

Scott Siefers,