KeyCorp (KEY) reported slightly higher fourth-quarter income even after recording a charge related to a previously announced efficiency plan.
The Cleveland company posted earnings of $197 million, up about 1.5% from a year earlier. Its earnings per share of 21 cents met the expectations of analysts polled by Bloomberg. For the year, the company earned $836 million, up almost 3% from 2011.
KeyCorp, which has assets of $89.2 billion, incurred $16 million, or 1 cent per share, in costs related to an efficiency plan announced during the third quarter. It pledged to close up to 5% of its branches, cut expenses by $150 million to $200 million and reduce its efficiency ratio to between 60% and 65%.
In the fourth quarter, KeyCorp's efficiency ratio was 69.34%, down from 73.29% a year earlier. Its noninterest expense climbed more than 5%, to $756 million, from a year earlier partially because of the costs tied to the efficiency plan.
KeyCorp's net interest margin was 3.37%, up 14 basis points from the third quarter and 24 basis points a year earlier. Its net interest income rose almost 8%, to $607 million, year over year while its noninterest income increased more than 12%, to $466 million.