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KeyCorp Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 12, 2004
Period End
December 31, 2003
In the record · 2016–202610-K1110-Q348-K141

KEY filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 141 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’16Aug ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K filed March 12, 2004. Cited figures are marked; the original filing is the authoritative source.

KeyCorp, organized in 1958 under Ohio law and headquartered in Cleveland, reported consolidated total assets of $84.5 billiona at December 31, 2003, and described itself as one of the nation's largest bank-based financial services companies.

Its three major business groups are Consumer Banking, Corporate and Investment Banking, and Investment Management Services, served through 906 KeyCenters, a telephone banking call center group and 2,167 ATMs in 17 states. Net income for 2003 was $903 millionb, or $2.12 per diluted common share, compared with $976 million, or $2.27 per share, in 2002. Return on average equity was 13.08% for 2003, versus 14.96% for 2002.

The filing shows improving asset quality alongside weak revenue growth. Nonperforming loans were at their lowest level since March 31, 2001, and net loan charge-offs were $548 millionc, or .87% of average loans, down from $780 million, or 1.23%, in 2002. Taxable-equivalent net interest income fell $73 million, or 3%, as the net interest margin contracted 17 basis points to 3.80%, while noninterest income was essentially unchanged at $1.76 billion.

Management cited weak commercial loan demand and the June 2003 Federal Reserve rate cut. Average core deposits grew more than 10%d over the past twelve months. Capital remained strong, with a Tier 1 risk-based capital ratio of 8.35%, a total risk-based capital ratio of 12.57%, and a leverage ratio of 8.55% at year-end.

Tangible equity to tangible assets was 6.94%. The quarterly dividend was raised to $.31 in January 2004, the thirty-ninth consecutive annual increase, and 11.5 million common shares were repurchased during 2003 at an average price of $26.33.

02—Key points

Key Highlights

  1. Consolidated total assets of $84.5 billion at December 31, 2003, with 906 KeyCenters and 2,167 ATMs in 17 states.
  2. Net income of $903 million, or $2.12 per diluted share, versus $976 million, or $2.27, in 2002.
  3. Return on average equity of 13.08% for 2003, compared with 14.96% for 2002.
  4. Net loan charge-offs of $548 million, or .87% of average loans, down from $780 million, or 1.23%, in 2002.
  5. Taxable-equivalent net interest income declined $73 million, or 3%, with the net interest margin falling to 3.80% from 3.97%.
  6. Tier 1 risk-based capital ratio of 8.35% and total risk-based capital ratio of 12.57% at year-end 2003.
  7. Quarterly dividend increased to $.31 from $.305 effective with the March 2004 payment, and 11,500,000 shares repurchased in 2003 at an average of $26.33.

03—Questions

Frequently Asked Questions

  1. How did KeyCorp's profitability change in 2003?

    Net income fell to $903 million, or $2.12 per diluted share, from $976 million, or $2.27, in 2002. Return on average equity declined to 13.08% from 14.96%. Management attributed the decline mainly to lower net interest income, as weak commercial loan demand and a June 2003 Federal Reserve rate cut pressured margins.

  2. Is KeyCorp's credit quality improving?

    Yes. Nonperforming loans were at their lowest level since March 31, 2001, at December 31, 2003. Net loan charge-offs fell to $548 million, or .87% of average loans, from $780 million, or 1.23%, in 2002. Nonperforming assets totaled $753 million, or 1.20% of loans, OREO and other nonperforming assets, compared with $993 million, or 1.59%, a year earlier.

  3. Is KeyCorp well capitalized?

    The filing says KeyCorp's capital position remains strong. At December 31, 2003, the Tier 1 risk-based capital ratio was 8.35%, the total risk-based capital ratio was 12.57%, and the leverage ratio was 8.55%. Both affiliate banks were rated well capitalized under FDIC-defined categories. Tangible equity to tangible assets was 6.94%, above management's targeted range of 6.25% to 6.75%.

  4. What are KeyCorp's shareholder return actions?

    In January 2004 the board increased the quarterly dividend to $.31 per share, the thirty-ninth consecutive annual increase. During 2003 KeyCorp repurchased 11.5 million common shares at an average price of $26.33, and 21,000,000 shares remained authorized for repurchase under the September 2003 program.

  5. What are KeyCorp's long-term financial goals?

    KeyCorp's stated long-term goals are an annual return on average equity of 16% to 18% and annual growth in earnings per common share of 7% to 8%. For 2003, the return on average equity of 13.08% was below the stated range.

04—Continue

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