KeyCorp swung to an unexpected second-quarter profit as loan-loss provisions plummeted and revenue rose.

"Continued improvement in credit quality across most of our businesses was the principal contributor to the quarterly performance," said Chief Executive Henry Meyer III.

The Ohio-based regional bank had posted a string of losses since early 2008, but its performance has improved of late as it has benefited from cost cuts and reduced exposure to higher risk loans, including those for commercial real estate.

For the second quarter, KeyCorp posted a profit of $29 million, or 3 cents a share, compared with a year-earlier loss of $390 million, or 68 cents a share. Revenue rose 3.1% to $1.12 billion.

Analysts polled by Thomson Reuters had most recently forecast a loss of 11 cents on $1.08 billion in revenue.

Loan-loss provisions were $228 million, down from $823 million a year earlier and $413 million in the prior quarter. Net charge-offs, or loans lenders don't think are collectible, were 3.18% of average loans, compared with 2.93% and 3.67%, respectively. Nonperforming loans, those near default, fell to 3.19% from 3.25% and 3.69%.

Total loans slid 21%, a bigger decline than seen at other banks, while deposits were 8% lower, a potentially troubling sign.

Shares closed Wednesday at $7.54 and were inactive premarket.

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