Section: Portfolio,  Page: C8

Date: Monday, November 10, 2008


Headquarters: 127 Public Square, Cleveland

Founded: Dates to 1825 founding of Commercial Bank of Albany and 1849 founding of Society for Savings in Cleveland; KeyCorp and Society Corp. merged in 1994

Activities: Financial services holding company with 986 bank branches in 13 states, including 51 KeyBank N.A. offices in the Capital Region

Employees: 18,250, including 1,400 locally

Performance: KeyCorp stock underperformed both the Standard & Poor's 500 index and a peer group of banks over a five-year period ended Dec. 31. A $100 investment in Key in 2002 grew to about $120 by year-end 2007; it rose to about $130 for the peer group and to about $185 on the S&P.

Special notes: Key announced Oct. 24 that it had received preliminary approval from the U.S. Treasury to participate in the capital purchase program of the Troubled Asset Relief Program -- the government's $700 billion plan to shore up the financial industry. The Treasury would purchase $2.5 billion of senior preferred stock and warrants to purchase common shares of Key. Key expected to issue the stock and warrants to the Treasury within 30 days.

On Jan. 1, Key acquired USB Holding Co. Inc., the holding company for Union State Bank of Orangeburg, Rockland County, with 31 branches and assets of $2.8 billion. The acquisition expanded Key's presence in the Hudson Valley.

Jeffrey Stone was named president of KeyBank's Capital Region NY District in early February. He formerly was president of Key's Northern Indiana District.

Market outlook

KeyCorp reported a loss of $36 million, or 10 cents a share, in the third quarter on revenue of $1.09 billion. That compares with a profit of $210 million, or 57 cents, a year earlier on revenue of $1.15 billion. The company said it added $133 million to its $1.55 billion loan-loss reserves, which contributed to the loss in the quarter. And Key said it is in the process of exiting lending for boats and recreational vehicles, and will limit new student loans to those backed by government guarantees. The third quarter loss followed a loss in the second quarter, too, which was the first seen by Key in seven years.

Analyst coverage/recommendation:

Citigroup (Keith Horowitz): Buy

FTN MidWest Securities (Peyton Green): Neutral

Keefe, Bruyette & Woods (David Konrad): Market perform

Merrill Lynch (Edward Najarian): Underperform

RBC Capital Markets (Gerard Cassidy): Sector perform

Sandler O'Neil & Partners LP (R. Scott Siefers): Hold

Stifel Nicolaus (Anthony R. Davis): Hold

Total shares of common stock outstanding as of March 18 record date: 399,924,963

Price per share:

Nov. 7: $11.24

Market value:

Nov. 7: $5.6 billion

52-week high: $28.52

52-week low: $5.75

Price/earnings ratio:

Nov. 7: 37.47

2007 dividend per common share: $1.84

Stock holdings

Control of common stock by 15 officers and directors: 4,635,316

Shares personally and beneficially owned:

By executive officers and 2 inside directors:

Henry L. Meyer III, 58, chairman, president and CEO: 2,487,348

omas C. Stevens, 58, vice chairman, chief administrative officer and director: 662,158

Thomas W. Bunn, 54, vice chairman: 437,042

Beth E. Mooney, 52, vice chairman: 60,832

Jeffrey B. Weeden, 51, senior executive vice president and chief financial officer: 370,895

By outside directors:

Ralph Alvarez, 52, president and chief operating officer, McDonald's Corp.: 2,998

William G. Bares, 66, retired chairman and CEO, The Lubrizol Corp.: 90,465

Edward P. Campbell, 58, chairman, CEO and president, Nordson Corp.: 41,298

Carol A. Cartwright, 66, retired president, Kent State University: 47,677

Alexander M. Cutler, 56, chairman and CEO, Eaton Corp.: 33,998

H. James Dallas, 49, senior vice president and chief information officer, Medtronic Inc.: 10,059

Lauralee E. Martin, 57, chief operating and financial officer, Jones Lang LaSalle Inc.: 13,118

Eduardo R. Menasce, 62, retired president, Enterprise Solutions Group, Verizon Communications Inc.: 8,957

Bill R. Sanford, 63, chairman, Symark LLC: 50,957

Peter G. Ten Eyck II, 69, president, Indian Ladder Farms: 58,936

Executive cash compensation (2007)

(salary + bonus + other pay)

H. Meyer: $1,725,464

J. Weeden: $879,233

T. Stevens: $988,999

B. Mooney: $1,268,983

T. Bunn: $1,023,644

Total of top 5 compensated officers: $5,886,323

-- Betsy Feldstein


Financial snapshot

In millions, except per-share data, for fiscal year ended Dec. 31.

2007 2006 2005

Interest income $5,644 $5,380 $4,383

Noninterest income $2,229 $2,127 $2,067

Interest expense $2,875 $2,565 $1,727

Noninterest $3,248 $3,149 $3,054


Net income (loss) $919 $1,055 $1,129

Net income (loss) per share $2.32 $2.57 2.73