KeyCorp (NYSE: KEY) in the first quarter of FY18 has posted the net income from continuing operations attributable to key common shareholders of $402 million, compared to $181 million, for the fourth quarter of 2017 and $296 million for the first quarter of 2017. KEY’s reported results in the fourth quarter of 2017 had included the merger-related charges and the estimated impact of tax reform and related actions, resulting in a net impact of $.19 per common share. KEY’s performance in the first quarter of 2017 has included merger-related charges, resulting in an impact of $.05 per common share
KEY in the first quarter of FY18 has reported the adjusted earnings per share of $0.38, which is in line with the analysts’ estimates for the adjusted earnings per share of $0.38. The company had reported the adjusted revenue growth of 3 percent to $1.55 billion in the first quarter of FY18, beating the analysts’ estimates for revenue of $1.56 billion. The revenue grew due to a higher net interest income, strong loan growth and stronger fee income. The growth in average loans in the first quarter 2018 was broad-based and primarily in commercial and industrial balances, which were up in excess of 3% linked quarter, as the company continued to grow and expand the middle-market relationships.
Moreover, for the first quarter of FY 18, the taxable-equivalent net interest income was $952 million, and the net interest margin was 3.15%, compared to taxable-equivalent net interest income of $929 million and a net interest margin of 3.13% for the first quarter of 2017, which reflects the benefit from higher interest rates and low deposit betas. The first quarter 2018 net interest income included $33 million of purchase accounting accretion, which is a fall of $20 million from the first quarter of 2017.
Further, compared to the fourth quarter of 2017, the taxable-equivalent net interest income was stable, and the net interest margin increased by six basis points. Both net interest income and the net interest margin have benefited from higher interest rates and Key’s asset sensitive balance sheet position, as well as an expected reduction from elevated liquidity levels in the fourth quarter. These benefits were offset by two fewer days in the first quarter of 2018, a lower taxable-equivalent adjustment resulting from the Tax Cuts and Jobs Act, and a decline in purchase accounting accretion.