KeyCorp posts $173 million profit after repaying TARP funds
Bank and lender KeyCorp (KEY), parent of KeyBank, posted a profit of $173 million, or 19 cents per share, for the first quarter of fiscal 2011 — a month after announcing it had repaid all of the Troubled Asset Relief Program funds it borrowed from the government in the heat of the financial crisis. That compares to a net loss of $96 million, or 11 cents per share, a year earlier. Revenue fell from $1.08 billion in the first quarter of last year to $1.06 billion in the most recent quarter. KeyCorp says first quarter results "reflect improvement in noninterest expense and lower credit costs from the same period one-year ago." The lender said by the end of the first quarter, nonperforming loans represented only 1.82% of all period-end loans. Net charge-offs — or writedowns on debt unlikely to be repaid — fell by $193 million, representing only 1.59% of average loan balances for the quarter. During the period, KeyCorp repurchased $2.5 billion of preferred stock related to its participation in TARP, the relief program designed by the Treasury in the wake of the financial crisis to provide banks with liquidity. The bank's first-quarter profit is a far-cry from one of the financial institution's low points in 2009 when it recorded a net loss of $438 million in the third quarter of 2009. During that period, more than a year ago, the bank was forced to record a $733 million provision for loan losses. Write to Kerri Panchuk.