Taxable-equivalent net interest income grew 5.9% to $1 billion and net interest margin rose to 3.16% from 3.09% in the year-ago quarter, reflecting benefits from higher interest rates and higher earning asset balances. Noninterest income dropped 1.7% to $645 million. Noninterest expense dropped 7.8% to $1 billion during the quarter.
Average loans grew 3.8% to $89.3 billion from last year while average deposits rose 4% to $108 billion. The growth in average loans reflected broad-based growth in commercial and industrial loans and the growth in average deposits reflected growth in higher-yielding deposit products along with strength in the retail banking franchise and growth from commercial relationships.
Also see: KeyCorp Q4 2018 Earnings Transcript
Provision for credit losses increased to $59 million from $49 million in the prior-year period. Net loan charge-offs totaled $60 million versus $52 million last year. At quarter-end, the company’s tangible common equity ratio was 8.30%.
Revenue from continuing operations increased 6.3% for the Key Community Bank segment while for the Key Corporate Bank, it declined 4%. Profits for the Key Community Bank segment increased 71.7% helped by momentum in core businesses, expense discipline and a lower tax rate. In the Key Corporate Bank segment, profits dropped 3.6%.