Lower taxes and a recent acquisition of an investment banking firm contributed to a big jump in KeyCorp’s first-quarter profits.

The $137 billion-asset company said Thursday that its profit was $404 million, up roughly 36% from a year earlier, as its income tax bill fell roughly 34% to $62 million.

Revenue increased 3% to $1.6 billion as noninterest income rose 4% to $601 million from a year earlier. Key’s acquisition last fall of Cain Brothers, a boutique investment bank focused on the health care industry, was a big contributor to the more than 12% uptick in investment banking and debt placement fees, the Cleveland company said.

Keycorp Chairman and CEO Beth Mooney.
Interest in noninterest
Chairman and CEO Beth Mooney emphasized the importance of KeyCorp's fee-income businesses, especially off-balance sheet financing alternatives through its investment banking unit. Bloomberg News

"Our fee-based businesses continue to demonstrate our ability to offer a full range of solutions to our clients, including off-balance-sheet financing alternatives that helped drive our investment banking and debt placement business," Chairman and CEO Beth Mooney said.

Net interest income totaled $952 million, a more than 2% increase from a year earlier. Commercial and industrial loans surged almost 7% to $42.7 billion, while other commercial loans dropped by more than 6% to $20.7 billion, and home equity loans fell by almost 6% to $11.9 billion.

Noninterest expenses rose about 8% to $1 billion as personnel costs climbed nearly 7% to $594 million, mainly from recent acquisitions, KeyCorp said. Nonpersonnel costs fell nearly 10%, to $412 million.

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