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KeyCorp posts 11% decline in profit amid expenses to cut jobs

By Laura Marcinek
Bloomberg News

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KeyCorp, Ohio’s second-largest bank, said Thursday that its second-quarter profit declined 11 percent on costs related to a job-cutting program.

Operating net income fell to $193 million, or 21 cents a share, from $217 million, or 23 cents, a year earlier, the Cleveland-based lender said. The average estimate of 25 analysts was for earnings of 20 cents a share.

“Compared to the first quarter, cautious client behavior led to slower loan growth” and “greater-than-anticipated pressure on our net interest margin,” Chief Executive Officer Beth Mooney said in the statement.

Mooney said the bank incurred charges of $37 million with a large portion related to the realignment of the community bank and consolidation of 33 branches. In the second half of the year, the bank said it had another 14 branches identified for closure, which would bring the total to approximately 7 percent of its total branches.

In the Akron area, no additional branches are slated to close, said spokesman Dan Davis.

There have been three branch closures: The branch at 875 E. Market St. in Akron closed on May 10 and consolidated with the branch at 548 Canton Road in Akron. The branch at 119 Public Square in Medina closed on April 19 and consolidated with the branch at 1030 N. Court Street in Medina. Last August, KeyBank closed its Rolling Acres branch and consolidated it with the Highland Square branch in Akron. Davis said no jobs were eliminated in the closures.

KeyBank employs about 300 in its Eastern Ohio Division, with 40 in its downtown Akron regional headquarters. KeyCorp shares closed up 17 cents Thursday to $11.83. The stock is up 40.5 percent in 2013, compared with a 28 percent advance of the 24-company KBW Bank Index.

Beacon Journal business writer Betty Lin-Fisher contributed to this report.


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