<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15d of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 15, 1998
[KEYCORP LOGO]
--------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Ohio 0-850 34-6542451
- - ------------------------------- ------------------------------------ -------------------------------------
(State or other jurisdiction of Commission File Number (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
127 Public Square, Cleveland, Ohio 44114-1306
- - --------------------------------------- ----------------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (216) 689-6300
<PAGE> 2
ITEM 5. OTHER EVENTS
------------
On January 15, 1998, the Registrant issued two press releases. In its first
press release, the Registrant announced the earning results for the three and
twelve month periods ended December 31, 1997. This press release, dated January
15, 1998, is attached as Exhibit 99.1 to this report.
In the second press release issued on January 15, 1998, the Registrant
announced: (i) a declaration of a quarterly cash dividend in the amount of $0.47
per common share of the Registrant ($0.235 per common share on a post-split
basis), (ii) a two-for-one stock split by means of a 100% stock dividend payable
on common shares, and (iii) a repurchase authorization of up to 5 million (10
million on a post-split basis) common shares from time to time. This press
release dated January 15, 1998, is attached as Exhibit 99.2 to this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(c) Exhibits
--------
99.1 The Registrant's January 15, 1998, press release announcing its
earnings results for the three and twelve month periods ended December 31, 1997.
99.2 The Registrant's January 15, 1998, press release announcing: (i) a
declaration of a quarterly cash dividend increase, (ii) a two-for-one stock
split, and (iii) a repurchase authorization of up to 5 million (10 million on a
post-split basis) common shares.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEYCORP
--------------------------------------
(Registrant)
Date: January 21, 1998 /s/ Lee Irving
--------------------------------------
By: Lee Irving
Executive Vice President
and Chief Accounting Officer
<PAGE> 1
EXHIBIT 99.1
MEDIA CONTACTS: ANALYST CONTACTS:
John Fuller (216) 689-8140 Lee Irving (216) 689-3564
Bill Murschel (216) 689-0457 Vern Patterson (216) 689-0520
WEB SITE: http://www.keybank.com
FOR IMMEDIATE RELEASE
KEYCORP REPORTS RECORD EARNINGS
-------------------------------
- - - EPS OF $1.13 SETS RECORD FOR THE THIRD CONSECUTIVE QUARTER
- - - YEAR END EFFICIENCY RATIO GOAL OF 55 PERCENT ACHIEVED
- - - COMMERCIAL LOAN GROWTH CONTINUES, UP AN ANNUALIZED 15 PERCENT FROM THE
THIRD QUARTER
CLEVELAND, January 15, 1998 -- KeyCorp (NYSE: KEY) today reported
record fourth quarter earnings of $248 million, or $1.13 per common share, up
from $151 million, or $0.67 per common share, in the fourth quarter of 1996.
This represents a 69 percent increase in earnings per common share from the
year-ago quarter. In the fourth quarter of 1996, KeyCorp recorded a $100 million
($66 million after tax, or $0.29 per common share) restructuring charge in
connection with strategic actions subsequently taken in its transformation to a
nationwide, bank-based financial services company. Excluding that one-time
charge, earnings for the 1996 fourth quarter were $217 million, or $0.96 per
common share, and the 1997 fourth quarter earnings per share increase would be
18 percent on this basis.
Earnings for the full year were a record $919 million, or $4.19 per
common share, compared with $783 million, or $3.37 per common share, in 1996.
Excluding the restructuring charge and Key's share of a government-mandated
assessment to recapitalize the Savings Association Insurance Fund recorded in
the 1996 third quarter, net income and earnings per common share in 1996 were
$860 million and $3.71, respectively. Full year 1997 earnings per share would be
13 percent higher than that of 1996 on this basis.
"Key's quarter-to-quarter earnings improvement in 1997 was
outstanding," said Robert W. Gillespie, KeyCorp chairman and chief executive
officer. "With record earnings for the third
- more -
<PAGE> 2
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 2
consecutive quarter, we are realizing the payoff from significant re-engineering
and investments at Key during the last few years. We are benefiting from an
aggressive sales force supported by technology and marketing. Our re-engineering
of commercial lending functions, begun early in 1996, was a major factor in our
sales staff's ability to generate strong growth in middle market commercial
lending throughout 1997.
"Furthermore, Key is a leader in investing in both innovative new
delivery channels and business lines with high growth potential while
identifying and divesting low-growth traditional branch offices," Gillespie
said. "For example, lease financing, boosted by originations by our new
affiliate Leasetec, was also a strong contributor to growth in our commercial
loan portfolio during the fourth quarter. This occurred while we continued to
revamp our distribution channels to increase operating efficiency. During the
fourth quarter, we sold 55 KeyCenters, or branches, and completed the program to
consolidate approximately 140 KeyCenters into other KeyCenters in accordance
with plans announced a year ago. As of the 1997 year end, we had 1,015
KeyCenters, down from 1,239 at mid-year 1996."
Gillespie noted that Key's effort toward achieving a 55 percent
efficiency ratio (exclusive of acquisitions) by the end of 1997 was realized
during the fourth quarter. The ratio for the full fourth quarter improved to
55.65 percent from 56.92 percent in the third quarter (both ratios exclusive of
acquisitions) and nearly 61 percent a year ago.
Commenting on financial performance, K. Brent Somers, KeyCorp senior
executive vice president and chief financial officer, said, "Our
quarter-to-quarter earnings improvement reflects growth in recurring sources of
noninterest income, as well as benefits derived from the execution of expense
control and capital management initiatives. Also contributing to our improved
performance was the continuation of the year-long trend of strong commercial
loan growth. Growth within the total loan portfolio was moderated by our
seasonal education loan securitization and the securitization of $1.2 billion of
auto loans, more than 80 percent of which were prime credits with lower returns
than the portfolio remaining on our balance sheet. This securitization is
consistent with Key's focus on achieving a 20 percent return on equity. Assets
failing to meet that standard will continue to be considered for divestiture."
Key's fourth quarter return on average total assets was 1.38 percent,
compared with 1.33 percent (excluding the restructuring charge) in the year-ago
quarter and 1.34 percent in the 1997 third quarter. On a comparable basis, the
return on average common equity was 19.2 percent,
<PAGE> 3
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 3
up from 18.0 percent in the prior-year quarter and little changed from 19.4
percent in the previous quarter.
Net interest income for the fourth quarter of 1997 totaled $705
million, up slightly from the prior quarter as a $1.2 billion increase in
average earning assets more than offset an 8 basis point reduction in the net
interest margin. During the fourth quarter, growth in earning assets, which
included continued strong commercial loan originations, was substantially offset
by a record level of securitizations. These securitizations included the $1.2
billion of auto loans as well as $744 million of education loans about to enter
repayment status. The annualized internal growth rate of loans (which excludes
the impact of acquisitions, sales and securitizations and divestitures) was 12
percent in the fourth quarter. The reduction in the margin was due largely to
higher cost borrowings, following a decrease in core deposits stemming from the
branch sales. Relative to the fourth quarter of 1996, net interest income rose
$22 million, or 3 percent, as the 10 percent (11 percent on an internally
generated basis) growth in average earning assets more than countered the effect
of a 30 basis point decline in the net interest margin.
Noninterest income for the 1997 fourth quarter totaled $366 million, up
$81 million, or 28 percent, from the year-ago quarter. Included in fourth
quarter 1997 results were $62 million in branch divestiture gains and a $36
million loss on the securitization of low-return prime auto loans. Excluding
these items, the quarter's noninterest income exceeded that of the prior year
quarter by $55 million, or 19 percent. This improvement reflected growth across
almost all major categories, including increases in income from various
investment banking activities (up $22 million), corporate owned life insurance
income (up $9 million), insurance and brokerage income (up $6 million) and trust
and asset management income (up $5 million). Noninterest income, excluding
branch sale gains from both quarters and the prime auto loan securitization
loss, rose $26 million in the fourth quarter as compared with the third quarter.
For the full year, noninterest income was up $123 million from 1996, after
excluding the branch sale gains and prime auto loan securitization loss in 1997
and gains from the sales of a credit card portfolio and Key's Florida savings
bank in the prior year.
Noninterest expense for the 1997 fourth quarter totaled $630 million,
down 10 percent from $700 million recorded a year ago. Excluding the impact of
certain fourth quarter nonrecurring charges of $15 million in 1997 and $100
million in 1996, capital securities distributions of $14 million and $3 million
in the fourth quarter of 1997 and 1996, respectively, and year 2000 expenses of
$8 million recorded in the fourth quarter of 1997, noninterest expense was below
the
- more -
<PAGE> 4
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 4
prior year level by $4 million, or 1 percent. This slight decrease reflected the
decline in professional fees and various other operating expenses, offset in
part by the impact of the Leasetec and Champion acquisitions ($20 million) and
incentive accruals related to various investment banking activities. Compared
with the prior quarter, core noninterest expense increased $13 million, or 2
percent, also reflecting the impact of the Champion acquisition and incentive
accruals. For the full year, core noninterest expense decreased $42 million, or
2 percent, from 1996.
Key repurchased 1 million of its common shares during the fourth
quarter of 1997. This brings the total number of shares repurchased under the
1997 program, which expired on December 31, 1997, to 10 million of the 12
million shares authorized by the Board.
The provision for loan losses for the 1997 fourth quarter was reduced
to $76 million from $102 million in the previous quarter in response to a lower
level of net charge-offs. Net loan charge-offs of $76 million, or 0.57 percent
of average loans for the quarter, were down from $85 million, or 0.64 percent,
for the prior quarter. Nonperforming assets ended the fourth quarter at $431
million, or 0.81 percent of loans plus other real estate owned and other
nonperforming assets, compared with $411 million, or 0.77 percent, at September
30, 1997. At December 31, 1997, the allowance for loan losses was 1.69 percent
of period end loans, with the nonperforming loan coverage ratio at 236 percent.
- - --------------------------------------------------------------------------------
This news release contains forward-looking statements which are subject to
numerous assumptions, risks and uncertainties. Actual results could differ
materially from those contained in or implied by such statements for a variety
of factors including: sharp and/or rapid changes in interest rates, significant
changes in the economic scenario from the current anticipated scenario which
could materially change anticipated credit quality trends and the ability to
generate loans, significant delay in or inability to execute strategic
initiatives designed to grow revenues and/or control expenses, and significant
changes in accounting, tax, or regulatory practices or requirements.
- - --------------------------------------------------------------------------------
# # #
<PAGE> 5
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 5
FINANCIAL HIGHLIGHTS
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Three months ended
-------------------------------------------------------
12-31-97 9-30-97 12-31-96
--------------- ---------------- ---------------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS
Net interest income (TE) $716 $715 $695
Provision for loan losses 76 102 57
Noninterest income 366 393 285
Noninterest expense 630 648 700
Net income 248 236 151
PER COMMON SHARE
Net income $ 1.13 $ 1.08 $ .67
Net income - assuming dilution 1.11 1.07 .66
Cash dividends .42 .42 .38
Book value at period end 23.65 23.11 21.84
Market price at period end 70.81 63.63 50.50
AT PERIOD END
Full-time equivalent employees 24,595 25,622 27,689
Full-service banking offices 1,015 1,088 1,205
PERFORMANCE RATIOS
Return on average total assets 1.38% 1.34% .92%
Return on average equity 19.16 19.41 12.53
Efficiency (1) 56.81 56.75 60.92
Overhead (2) 36.17 37.76 44.89
Net interest margin (TE) 4.50 4.58 4.80
CAPITAL RATIOS AT PERIOD END
Equity to assets (3) 7.03% 7.04% 7.22%
Tangible equity to tangible assets (3) 5.52 5.46 5.88
Tier 1 risk-adjusted capital (4) 6.86 6.73 7.98
Total risk-adjusted capital (4) 11.12 11.10 13.01
Leverage (4) 6.44 6.33 6.93
<FN>
(1) Calculated as noninterest expense (excluding certain nonrecurring charges
and distributions on capital securities) divided by taxable-equivalent net
interest income plus noninterest income (excluding net securities
transactions and gains on branch sales).
(2) Calculated as noninterest expense (excluding certain nonrecurring charges
and distributions on capital securities) less noninterest income (excluding
net securities transactions and gains on branch sales) divided by
taxable-equivalent net interest income.
(3) Including capital securities receiving Tier I treatment, these ratios at
12-31-97 are 7.71% and 6.21%, respectively, at 9-30-97 are 7.74% and 6.16%,
respectively, and at 12-31-96 are 7.96% and 6.63%, respectively.
(4) 12-31-97 ratio is estimated.
TE = Taxable Equivalent
</TABLE>
<PAGE> 6
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 6
FINANCIAL HIGHLIGHTS
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Three months ended
----------------------------------------------------
12-31-97 9-30-97 12-31-96
--------------- ---------------- ---------------
<S> <C> <C> <C>
ASSET QUALITY
Net loan charge-offs $76 $85 $57
Net loan charge-offs to average loans .57% .64% .46%
Allowance for loan losses $900 $900 $870
Allowance for loan losses to
period end loans 1.69% 1.68% 1.77%
Allowance for loan losses to
nonperforming loans 236.22 247.25 249.28
Nonperforming loans at period end $381 $364 $349
Nonperforming assets at period end 431 411 400
Nonperforming loans to period end loans .71% .68% .71%
Nonperforming assets to period end loans plus
OREO and other nonperforming assets .81 .77 .81
</TABLE>
<TABLE>
<CAPTION>
Twelve months ended
----------------------------------
12-31-97 12-31-96
---------------- ---------------
<S> <C> <C>
SUMMARY OF OPERATIONS
Net interest income (TE) $2,838 $2,767
Provision for loan losses 320 197
Noninterest income 1,306 1,087
Noninterest expense 2,435 2,464
Net income 919 783
PER COMMON SHARE
Net income $4.19 $3.37
Net income - assuming dilution 4.13 3.34
Cash dividends 1.68 1.52
PERFORMANCE RATIOS
Return on average total assets 1.33% 1.21%
Return on average common equity 18.89 15.73
Return on average total equity 18.89 15.64
Efficiency (1) 57.50 60.84
Overhead (2) 39.64 45.46
Net interest margin (TE) 4.62 4.78
ASSET QUALITY
Net loan charge-offs $293 $195
Net loan charge-offs to average loans .57% .40%
</TABLE>
<PAGE> 7
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 7
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
<TABLE>
<CAPTION>
ASSETS 12-31-97 9-30-97 12-31-96
--------------- ---------------- ---------------
<S> <C> <C> <C>
Loans $53,380 $53,676 $49,235
Investment securities 1,230 1,344 1,601
Securities available for sale 7,708 7,563 7,728
Short-term investments 1,928 1,217 696
--------------- ---------------- ---------------
Total earning assets 64,246 63,800 59,260
Allowance for loan losses (900) (900) (870)
Cash and due from banks 3,651 2,940 3,444
Premises and equipment 985 993 1,084
Goodwill 1,071 1,095 824
Other intangible assets 105 112 137
Corporate owned life insurance 1,895 1,583 1,515
Other assets 2,646 2,454 2,227
--------------- ---------------- ---------------
TOTAL ASSETS $73,699 $72,077 $67,621
=============== ================ ===============
LIABILITIES
Deposits in domestic offices:
Noninterest-bearing $ 9,368 $ 8,965 $ 9,524
Interest-bearing 32,005 32,733 34,455
Deposits in foreign offices-interest-bearing 3,700 2,172 1,338
--------------- ---------------- ---------------
Total deposits 45,073 43,870 45,317
Federal funds purchased and securities
sold under repurchase agreements 6,979 6,662 6,925
Bank notes and other short-term borrowings 5,967 6,053 3,969
Other liabilities 2,303 2,099 1,816
Long-term debt 7,446 7,567 4,213
--------------- ---------------- ---------------
TOTAL LIABILITIES 67,768 66,251 62,240
Capital securities of subsidiary trusts 750 750 500
SHAREHOLDERS' EQUITY 5,181 5,076 4,881
TOTAL LIABILITIES, CAPITAL SECURITIES
OF SUBSIDIARY TRUSTS AND --------------- ---------------- ---------------
SHAREHOLDERS' EQUITY $73,699 $72,077 $67,621
=============== ================ ===============
Common Shares outstanding (000) 219,032 219,666 223,454
</TABLE>
<PAGE> 8
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 8
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Three months ended
----------------------------------------------------
12-31-97 9-30-97 12-31-96
--------------- ---------------- ---------------
<S> <C> <C> <C>
INTEREST INCOME $1,365 $1,347 $1,243
INTEREST EXPENSE 660 643 560
--------------- ---------------- ---------------
NET INTEREST INCOME 705 704 683
Provision for loan losses 76 102 57
--------------- ---------------- ---------------
629 602 626
NONINTEREST INCOME
Service charges on deposit accounts 77 77 75
Trust and asset management income 72 66 67
Credit card fees 23 25 25
Insurance and brokerage income 24 22 18
Corporate owned life insurance income 25 20 16
Loan securitization income (loss) (31) 15 17
Net securities gains 1 -- --
Other income 175 168 67
--------------- ---------------- ---------------
Total noninterest income 366 393 285
NONINTEREST EXPENSE
Personnel 309 299 301
Net occupancy 58 54 56
Equipment 46 44 42
Amortization of intangibles 22 23 23
Professional fees 13 10 23
Marketing 21 22 20
Restructuring charge -- -- 100
Other expense 161 196 135
--------------- ---------------- ---------------
Total noninterest expense 630 648 700
--------------- ---------------- ---------------
INCOME BEFORE INCOME TAXES 365 347 211
Income taxes 117 111 60
--------------- ---------------- ---------------
NET INCOME $ 248 $ 236 $ 151
=============== ================ ===============
Net income applicable to Common Shares $248 $236 $151
Net income per Common Share 1.13 1.08 .67
Net income per Common Share - assuming dilution 1.11 1.07 .66
Wtd. avg. Common Shares (000) 219,373 218,107 225,562
Wtd. avg. Common Shares and equivalents (000) 222,576 221,025 228,126
Taxable-equivalent adjustment $11 $11 $12
</TABLE>
<PAGE> 9
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 9
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Twelve months ended
----------------------------------
12-31-97 12-31-96
---------------- ---------------
<S> <C> <C>
INTEREST INCOME $5,262 $4,951
INTEREST EXPENSE 2,468 2,234
---------------- ---------------
NET INTEREST INCOME 2,794 2,717
Provision for loan losses 320 197
---------------- ---------------
2,474 2,520
NONINTEREST INCOME
Service charges on deposit accounts 299 293
Trust and asset management income 266 247
Credit card fees 96 93
Insurance and brokerage income 88 70
Corporate owned life insurance income 85 58
Loan securitization income (loss) (12) 62
Net securities gains 1 1
Other income 483 263
---------------- ---------------
Total noninterest income 1,306 1,087
NONINTEREST EXPENSE
Personnel 1,181 1,190
Net occupancy 222 219
Equipment 177 161
Amortization of intangibles 87 88
Professional fees 47 70
Marketing 86 88
Restructuring charge -- 100
Other expense 635 548
---------------- ---------------
Total noninterest expense 2,435 2,464
---------------- ---------------
INCOME BEFORE INCOME TAXES 1,345 1,143
Income taxes 426 360
---------------- ---------------
NET INCOME $ 919 $ 783
================ ===============
Net income applicable to Common Shares $919 $775
Net income per Common Share 4.19 3.37
Net income per Common Share - assuming dilution 4.13 3.34
Wtd. avg. Common Shares (000) 219,521 229,905
Wtd. avg. Common Shares and equivalents (000) 222,272 232,141
Taxable-equivalent adjustment $44 $50
</TABLE>
<PAGE> 10
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 10
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
(in millions)
<TABLE>
<CAPTION>
Three months ended
----------------------------------------------------
ASSETS 12-31-97 9-30-97 12-31-96
--------------- ---------------- ---------------
<S> <C> <C> <C>
Loans $53,304 $52,708 $48,319
Investment securities 1,270 1,413 1,615
Securities available for sale 7,502 7,399 7,271
Short-term investments 1,404 807 678
--------------- ---------------- ---------------
Total earning assets 63,480 62,327 57,883
Allowance for loan losses (893) (873) (866)
Cash and due from banks 2,738 2,633 2,624
Other assets 6,165 6,025 5,422
--------------- ---------------- ---------------
TOTAL ASSETS $71,490 $70,112 $65,063
=============== ================ ===============
LIABILITIES
Deposits in domestic offices:
Noninterest-bearing $ 8,750 $ 8,551 $ 8,615
Interest-bearing 32,433 32,977 34,736
Deposits in foreign offices-interest-bearing 1,663 2,065 793
--------------- ---------------- ---------------
Total deposits 42,846 43,593 44,144
Federal funds purchased and securities
sold under repurchase agreements 7,335 6,939 6,087
Bank notes and other short-term borrowings 5,678 5,001 3,568
Other liabilities 2,304 2,125 1,793
Long-term debt 7,443 6,879 4,567
--------------- ---------------- ---------------
TOTAL LIABILITIES 65,606 64,537 60,159
Capital securities of subsidiary trusts 750 750 111
SHAREHOLDERS' EQUITY 5,134 4,825 4,793
TOTAL LIABILITIES, CAPITAL SECURITIES
OF SUBSIDIARY TRUSTS AND --------------- ---------------- ---------------
SHAREHOLDERS' EQUITY $71,490 $70,112 $65,063
=============== ================ ===============
</TABLE>
<PAGE> 11
KEYCORP REPORTS FOURTH QUARTER 1997 EARNINGS
JANUARY 15, 1998
PAGE 11
CONSOLIDATED YEAR-TO-DATE AVERAGE BALANCE SHEETS
(in millions)
<TABLE>
<CAPTION>
Twelve months ended
----------------------------------
ASSETS 12-31-97 12-31-96
---------------- ---------------
<S> <C> <C>
Loans $51,415 $48,216
Investment securities 1,474 1,671
Securities available for sale 7,629 7,423
Short-term investments 782 535
---------------- ---------------
Total earning assets 61,300 57,845
Allowance for loan losses (875) (872)
Cash and due from banks 2,623 2,594
Other assets 5,902 5,252
---------------- ---------------
TOTAL ASSETS $68,950 $64,819
================ ===============
LIABILITIES
Deposits in domestic offices:
Noninterest-bearing $ 8,536 $ 8,374
Interest-bearing 33,425 35,353
Deposits in foreign offices-interest-bearing 1,812 996
---------------- ---------------
Total deposits 43,773 44,723
Federal funds purchased and securities
sold under repurchase agreements 6,942 5,843
Bank notes and other short-term borrowings 4,741 3,279
Other liabilities 2,074 1,644
Long-term debt 5,906 4,296
---------------- ---------------
TOTAL LIABILITIES 63,436 59,785
Capital securities of subsidiary trusts 648 28
SHAREHOLDERS' EQUITY
Preferred stock -- 79
Common equity 4,866 4,927
---------------- ---------------
TOTAL SHAREHOLDERS' EQUITY 4,866 5,006
TOTAL LIABILITIES, CAPITAL SECURITIES
OF SUBSIDIARY TRUSTS AND ---------------- ---------------
SHAREHOLDERS' EQUITY $68,950 $64,819
================ ===============
</TABLE>
<PAGE> 1
EXHIBIT 99.2
MEDIA CONTACTS: ANALYST CONTACTS:
John Fuller 216/689-8140 Lee Irving 216/689-3564
Bill Murschel 216/689-0457 Vern Patterson 216/689-0520
KEYCORP DECLARES TWO-FOR-ONE STOCK SPLIT, INCREASES QUARTERLY
DIVIDEND 12 PERCENT, AND ANNOUNCES STOCK REPURCHASE
DIVIDEND INCREASE REPRESENTS 33RD CONSECUTIVE YEARLY RISE
CLEVELAND, January 15, 1998 - KeyCorp's (NYSE: KEY) Board of Directors
today declared a two-for-one stock split in the form of a 100 percent stock
dividend on its common shares, payable on March 6, 1998, to stockholders of
record on February 18, 1998.
The Board also increased the quarterly dividend by 12 percent -- from
$0.42 to $0.47 per share ( $0.235 per share on a post-split basis). 1998 marks
the 33rd consecutive year that the company's dividend has been increased.
The next dividend is payable February 27, 1998, to stockholders of
record February 17, 1998.
The Board also authorized the purchase of up to 5 million shares (10
million shares on a post-split basis) of common stock from time to time. The
timing and amount of purchases, if any, under the program will be dependent upon
availability and alternate uses of capital, market conditions, and other
factors. Repurchased shares will be placed in treasury and subsequently reissued
for stock options, other employee benefit plans, acquisitions or other corporate
purposes.
"These decisions by our Board reflect our strong operating results and
confidence in the strategies we've put in place," said Robert W. Gillespie,
KeyCorp chairman and chief executive officer. "Our consecutive-quarter earnings
growth in 1997 was particularly strong, setting new records.
"The stock split will bring the price of KeyCorp common stock into a
range we believe is desirable to a wider range of investors," Gillespie added.
"Our stock price has nearly tripled since the end of 1994."
KeyCorp presently has approximately 219 million common shares
outstanding, which will increase to some 438 million following the split.
Earlier today, Key reported record fourth-quarter and full-year
earnings per share (on a pre-split basis) of $1.13 and $4.19, respectively.
-- more --
<PAGE> 2
PAGE 2 - KEYCORP ANNOUNCES STOCK SPLIT
- - --------------------------------------
Over the last two years, KeyCorp has undergone a significant
transformation, acquiring a number of financial-services businesses while
selling or consolidating more than 200 low-growth branch offices and lowering
its expense base significantly. In August 1997, Key linked its coast-to-coast
KeyCenter and ATM networks, creating the first single, nationwide branch system
in the U.S. The re-engineering is designed to transform the company from a
traditional bank into a diversified bank-based financial services company,
operated on a national basis.
KeyCorp is one of the nation's largest financial services companies
with assets of approximately $74 billion. Through four principal lines of
business - corporate banking, consumer finance, community banking, and capital
partners - the Cleveland-based company provides retail and wholesale banking,
investment, financing, and money management services to individuals and
companies across the U.S. Key companies have a presence in 46 states from Maine
to Alaska, including its network of KeyCenters, 1,900 ATM's, affiliate offices,
and four telebanking centers (1-800-KEY2YOU) that provide financial products and
services 24 hours a day, every day of the year. KeyCorp's web site can be found
at http://www.keybank.com.
# # # #
