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KeyCorp gains after 3rd-qtr results beat estimates

Thursday, 18 Oct 2012 | 9:46 AM ET

CLEVELAND -- KeyCorp's net income rose in the third quarter, as the regional bank operator generated more revenue from fees and interest on loans.

The results beat analysts' expectations, and KeyCorp stock gained in morning trading.

The bank's net income attributable to common shareholders for the three months ended Sept. 30 rose to $214 million, or 23 cents per share, from $212 million, or 22 cents per share in the same period a year earlier.

The gain was limited by new rules that forced the bank to mark down an additional $45 million on loans whose borrowers had filed for bankruptcy protection.

KeyCorp's total revenue rose 2 percent, to $1.12 billion from $1.04 billion in the same period a year earlier.

Net interest income, a measure of the bank's ability to profit from lending, rose 4 percent, to $578 million from $555 million. Net interest income combines interest paid to the bank by borrowers and interest paid by the bank to depositors and other creditors.

The bank received a bigger boost from noninterest income, which includes fees and other kinds of revenue. Noninterest income jumped nearly 13 percent, to $544 million from $483 million. Much of that was a one-time gain of $54 million related to KeyCorp's redeeming during the quarter of certain trust preferred securities held by investors.

The results were better than Wall Street expected. On average, analysts surveyed by FactSet expected earnings of 21 cents per share, on revenue of $1.03 billion.

KeyCorp is the holding company for KeyBank, whose financial services offerings across 14 states include deposit and investment products, personal finance services, lending and asset management.

KeyCorp shares gained 42 cents, or 5 percent, to $8.83 in morning trading. It has traded between $6.24 and $9.12 over the past 52 weeks, and is up about 9 percent since the start of the year.

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