KeyBank 2007 Annual Report Download - page 59

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57
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS KEYCORP AND SUBSIDIARIES
2007 Quarters 2006 Quarters
dollars in millions, except per share amounts Fourth Third Second First Fourth Third Second First
FOR THE QUARTER
Interest income $1,447 $1,434 $1,395 $1,368 $1,413 $1,389 $1,327 $1,251
Interest expense 737 740 709 689 701 684 623 557
Net interest income 710 694 686 679 712 705 704 694
Provision for loan losses 363 69 53 44 53 35 23 39
Noninterest income 488 438 649 654 558 543 545 481
Noninterest expense 896 753 815 784 809 790 798 752
(Loss) income from continuing operations
before income taxes and cumulative
effect of accounting change (61) 310 467 505 408 423 428 384
Income from continuing operations before
cumulative effect of accounting change 22 224 337 358 311 305 303 274
Income (loss) from discontinued operations,
net of taxes 3 (14) (3) (8) (165) 7 5 10
Income before cumulative effect
of accounting change 25 210 334 350 146 312 308 284
Net income 25 210 334 350 146 312 308 289
PER COMMON SHARE
Income from continuing operations before
cumulative effect of accounting change $ .06 $ .58 $ .86 $ .90 $ .77 $ .76 $ .75 $ .67
Income (loss) from discontinued operations .01 (.03) (.01) (.02) (.41) .02 .01 .02
Income before cumulative effect
of accounting change .06 .54 .85 .88 .36 .77 .76 .70
Net income .06 .54 .85 .88 .36 .77 .76 .71
Income from continuing operations before
cumulative effect of accounting
change — assuming dilution .06 .57 .85 .89 .76 .74 .74 .66
Income (loss) from discontinued operations —
assuming dilution .01 (.03) (.01) (.02) (.40) .02 .01 .02
Income before cumulative effect of accounting
change — assuming dilution .06 .54 .84 .87 .36 .76 .75 .69
Net income — assuming dilution .06 .54 .84 .87 .36 .76 .75 .70
Cash dividends paid .365 .365 .365 .365 .345 .345 .345 .345
Book value at period end 19.92 20.12 19.78 19.57 19.30 19.73 19.21 18.85
Market price:
High 34.05 37.09 38.96 39.90 38.63 38.15 38.31 37.67
Low 21.04 31.38 34.15 35.94 35.73 34.48 34.24 32.68
Close 23.45 32.33 34.33 37.47 38.03 37.44 35.68 36.80
Weighted-average common shares
outstanding (000) 388,940 389,319 392,045 397,875 402,329 403,780 404,528 407,386
Weighted-average common shares and
potential common shares outstanding (000) 389,911 393,164 396,918 403,478 407,828 409,428 410,559 413,140
AT PERIOD END
Loans $70,823 $68,999 $66,692 $65,711 $65,826 $65,551 $67,408 $66,980
Earning assets 86,841 84,973 82,328 81,263 80,090 83,132 81,737 81,087
Total assets 99,983 97,366 94,076 93,219 92,337 96,155 94,794 93,391
Deposits 63,099 63,714 60,599 59,773 59,116 61,429 60,838 59,402
Long-term debt 11,957 11,549 12,581 13,061 14,533 13,654 14,050 14,032
Shareholders’ equity 7,746 7,820 7,701 7,719 7,703 7,947 7,737 7,638
PERFORMANCE RATIOS
From continuing operations:
Return on average total assets .09% .93% 1.45% 1.58% 1.33% 1.31% 1.33% 1.23%
Return on average equity 1.11 11.50 17.66 19.06 15.63 15.52 15.85 14.67
Net interest margin (taxable equivalent) 3.48 3.40 3.46 3.50 3.66 3.61 3.68 3.72
From consolidated operations:
Return on average total assets .10% .88% 1.43% 1.54% .61% 1.30% 1.32% 1.26%
Return on average equity 1.26 10.79 17.50 18.63 7.34 15.88 16.11 15.48
Net interest margin (taxable equivalent) 3.48 3.40 3.46 3.51 3.69 3.63 3.69 3.77
CAPITAL RATIOS AT PERIOD END
Equity to assets 7.75% 8.03% 8.19% 8.28% 8.34% 8.26% 8.16% 8.18%
Tangible equity to tangible assets 6.46 6.78 6.89 6.97 7.01 6.81 6.68 6.71
Tier 1 risk-based capital 7.44 7.94 8.14 8.15 8.24 8.02 7.90 7.64
Total risk-based capital 11.38 11.76 12.15 12.20 12.43 12.13 12.08 11.91
Leverage 8.39 8.96 9.11 9.17 8.98 8.89 8.82 8.52
TRUST AND BROKERAGE ASSETS
Assets under management $85,442 $88,100 $85,592 $82,388 $84,699 $84,060 $80,349 $79,558
Nonmanaged and brokerage assets 33,918 33,273 33,485 32,838 56,292 55,221 57,682 56,944
OTHER DATA
Average full-time equivalent employees 18,500 18,567 18,888 19,801 20,100 20,264 19,931 19,694
Branches 955 954 954 950 950 949 946 945
Note 3 (“Acquisitions and Divestitures”), which begins on page 74, contains specific information about the acquisitions and divestitures that Key completed during the past three years to help
in understanding how those transactions may have impacted Key’s financial condition and results of operations.
FIGURE 38. SELECTED QUARTERLY FINANCIAL DATA