KeyCorp Revenue Climbs on First Niagara Deal

Regional lender KeyCorp said third-quarter revenue climbed in the latest period on its merger with First Niagara Financial Group Inc.

The Ohio-based regional bank announced plans last fall to buy First Niagara for about $4.1 billion, and the deal closed over the summer.

Over all, the Cleveland-based bank reported a profit of $172 million, or 17 cents a share, down from $219 million, or 25 cents a share, a year earlier. Merger-related charges dented profit by 14 cents a share, the company said.

Revenue rose 25% to $1.34 billion.

Noninterest income rose 17% to to $549 million, helped by Investment banking and debt placement fees as well as cards and payments income.

Like many other lenders, Key has moved to cut costs and has closed some branches. Deal-related costs added up to $189 million in the quarter, but excluding merger-related charges and the impact of adding in First Niagara, noninterest expense rose 4% from a year ago.

KeyCorp's net interest margin—a gauge of lending profitability that measures how much a bank earns from the difference between what it pays on deposits and what it takes in on loans and investments—was 2.83%, up from 2.74% in the prior quarter but down slightly from 2.84% a year ago.

KeyCorp shares, which have risen 12% in the past three months, were inactive premarket.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 08:05 ET (12:05 GMT)

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