Safe and Sound

KeyBank National Association

Cleveland, OH
5
Star Rating
KeyBank National Association is a Cleveland, OH-based, FDIC-insured bank that opened its doors in 1849. Regulatory filings show the bank having equity of $15.13 billion on $133,555,222,000 in assets, as of June 30, 2017.

Thanks to the work of 19,017 full-time employees in 1,243 offices in multiple states, the bank has amassed loans and leases worth $88.81 billion, including $36.30 billion worth of real estate loans. The bank currently holds $105.34 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, KeyBank National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial strength. It works as a buffer against losses and as protection for accountholders during times of financial trouble for the bank. From a safety and soundness perspective, more capital is preferred.
KeyBank National Association received a score of 10 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. KeyBank National Association's Tier 1 capital ratio was 11.12 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather economic difficulties.

Overall, KeyBank National Association held equity amounting to 11.33 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due loans.

A bank with a large number of these types of assets may eventually be required to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, KeyBank National Association scored 40 out of a possible 40 points, better than the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 0.79 percent of KeyBank National Association's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on KeyBank National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

On Bankrate's earnings test, KeyBank National Association scored 20 out of a possible 30, beating the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. KeyBank National Association's most recent annualized quarterly return on equity was 10.43 percent, above the national average of 9.28 percent.

The bank reported net income of $772.4 million on total equity of $15.13 billion for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.16 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.