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The company reported net loss attributable to Key shareholders of $438 million or $0.52 per share, compared with a loss of $48 million or $0.10 per share last year.
Net loss from continuing operations attributable to the company's common shareholders was $422 million, or $0.50 per share, compared to a net loss from continuing operations attributable to Key common shareholders of $9 million, or $0.02 per common share in the prior-year quarter.
On average, 24 analysts polled by Thomson Reuters expected the company to report a loss of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.
For the second quarter, the company's net loss attributable to common shareholders was $390 million or $0.68 per share.
The company said that loss for the current quarter is mainly due to an increase in the provision for loan losses, write-downs of certain real estate related investments, higher costs associated with other real estate owned, or OREO, and the write-off of certain intangible assets.
During the third quarter, the company continued to increase its loan loss reserves by taking a $733 million provision for loan losses, which exceeded net charge-offs by $146 million. As of the end of the quarter, KeyCorp's allowance for loan losses was $2.5 billion, or 4.00% of total loans, up from $1.4 billion, or 1.90%, one year ago.
Provision for loan losses totaled $733 million in the quarter, up from $336 million for the year-ago quarter.
KeyCorp's total revenue for the quarter fell to $981 million from $1.28 billion in the previous year. Fourteen Wall Street analysts expected revenues of $1.11 billion for the quarter. The company's revenue for the second quarter was $1.31 billion.
Commenting on the results, Chief Executive Officer Henry Meyer III of KeyCorp, stated, "While our results continue to be impacted by the difficult operating environment, we believe the aggressive actions we've taken to address credit quality, strengthen capital and liquidity, and reshape our business mix position us to meet the challenges posed by the current environment and to emerge as a more competitive company when the economy rebounds."
Key's average deposits grew 6% from last year, and the company originated approximately $8.5 billion in new or renewed loans and commitments to consumers and businesses in the third quarter.
The company also reported taxable-equivalent net interest income from continuing operations of $599 million for the third quarter, down from $684 million in the prior-year quarter.
Key's non-interest income was $382 million for the third quarter of 2009, compared to $390 million for the year-ago quarter. Both the third quarter of 2009 and 2008 were impacted by market related conditions.
Based on business segments, Community Banking's revenue from continuing operations declined 5.1% to $618 million from $651 million a year ago. Community Banking recorded a net loss attributable to the company of $7 million, compared to a net income of $98 million for the year-ago quarter, hurt by higher provision for loan losses and noninterest expense, coupled with decreases in net interest income and noninterest income.
National Banking revenues rose to $461 million from $460 million in the prior-year quarter. The business recorded a loss from continuing operations attributable to the company of $352 million, wider than a loss of $90 million for the same period a year ago.
Other Segments revenues were negative $56 million, compared with negative $9 million last year.
For the nine-month period, the company's net loss attributable to KeyCorp was $1.11 billion or $2.14 per share, compared with $944 million or $2.19 per share in the previous year. Net interest income for the period rose to $1.75 billion from $1.70 billion a year ago. Total noninterest income was $1.57 billion, up from $1.46 billion in the previous year period.
KeyCorp also stated that as part of a multi-year investment in its 14-state branch network, the company has opened 32 new branches including relocations in 8 markets in 2009. The company also expects to open an additional 6 branches by the end of the year. In addition, KeyCorp stated that it will complete renovations on approximately 160 branches over the past two years by the end of 2009.
KEY is trading at $6.73, up $0.19, or 2.91%, on a volume of 7.24 million shares.
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