KeyCorp Reports Operating Results (10-Q)
Keycorp has a market cap of $7.55 billion; its shares were traded at around $8.54 with and P/S ratio of 1.3. The dividend yield of Keycorp stocks is 0.4%.KEY is in the portfolios of Martin Whitman of Third Avenue Value Fund, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Third Avenue Management, RS Investment Management, Brian Rogers of T Rowe Price Equity Income Fund, Charles Brandes of Brandes Investment, Bruce Kovner of Caxton Associates, Manning & Napier Advisors, Inc, Irving Kahn of Kahn Brothers & Company Inc., David Dreman of Dreman Value Management, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:Figure 17, which appears later in this report in the Loans and loans held for sale section, shows the diversity of our commercial real estate lending business based on industry type and location. The homebuilder loan portfolio within the National Banking group has been adversely affected by the downturn in the U.S. housing market. Deteriorating market conditions in the residential properties segment of the commercial real estate construction portfolio, principally in Florida and southern California, caused nonperforming loans and net charge-offs to increase significantly since mid-2007. As previously reported we have ceased all new lending to homebuilders and we have reduced outstanding balances in the residential properties segment of the commercial real estate construction loan portfolio by $2.5 billion, or 72%, to $978 million. Additional information about loan sales is included in the Credit risk management section.
During the first quarter of 2009, we determined that the estimated fair value of the National Banking reporting unit was less than the carrying amount. As a result, we recorded an after-tax noncash accounting charge of $187 million. As a result of this charge and a similar after-tax charge of $420
At March 31, 2010, $20.2 billion, or 22%, of our total assets were measured at fair value on a recurring basis. Approximately 93% of these assets were classified as Level 1 or Level 2 within the fair value hierarchy. At March 31, 2010, $2.0 billion, or 2%, of our total liabilities were measured at fair value on a recurring basis. Substantially all of these liabilities were classified as Level 1 or Level 2.
For the first quarter of 2010, we announced a first quarter net loss from continuing operations attributable to Key common shareholders of $98 million, or $.11 per common share. These results compare to a net loss from continuing operations attributable to Key common shareholders of $507 million, or $1.03 per common share, for the first quarter of 2009. The first quarter of 2009 was negatively impacted by an $847 ($529 million after-tax) million loan loss provision and a $196 million ($164 million after-tax) intangible assets impairment charge.
Net charge-offs declined by $186 million, and nonperforming loans showed continued improvement, decreasing by $122 million from December 31, 2009, primarily attributable to continued stabilization in the commercial loan portfolio.
Additionally, we made significant progress on strengthening our liquidity and funding positions. Our consolidated loan to deposit ratio was 93% for the first quarter 2010 compared to 115% for the first quarter of 2009. This improvement was accomplished by growing deposits, reducing our reliance on wholesale funding, exiting nonrelationship businesses and increasing the portion of our earning assets invested in highly liquid securities. During the first quarter of 2010, we originated approximately $5.3 billion in new or renewed lending commitments and our average domestic deposits grew by approximately $600 million, compared to the year ago quarter.
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