This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

10 Most Profitable Banks Trading Below Book Value

2. KeyCorp

Shares of KeyCorp (KEY - Get Report) of Cleveland closed at $9.40 Thursday, returning 12% during January, following a 12% gain last year. The shares were trading just below tangible book value, and for 9.9 times the consensus 2014 EPS estimate of 95 cents. The consensus 2013 EPS estimate is 85 cents.

Based on a quarterly payout of 5 cents, the shares have a dividend yield of 2.13%.

KeyCorp had $89.2 billion in total assets as of Dec. 31. The company's 2012 ROA was 0.99%.

The company reported fourth-quarter net income attributable to common shareholders of $197 million, or 21 cents a share, compared to $214 million, or 23 cents a share, in the third quarter, and $194 million, or 20 cents a share, in the fourth quarter of 2011. Earnings declined sequentially because the company in the third quarter recorded a $54 million gain on the redemption of trust preferred securities. Fourth-quarter earnings were also lowered by $16 million, or a penny a share, from expenses associated with the company's cost-cutting program.

The fourth-quarter bright spot for KeyCorp was an increase in net interest income to $607 million, from $578 million the previous quarter and $563 million a year earlier. The net interest margin expanded to 3.37%, from 3.23% in the third quarter, and 3.13% in the fourth quarter of 2011. The margin expanded mainly resulted from an improving funding mix, as trust preferred shares were redeemed, long-term debt matured, and higher-paying CD deposits matured.

Mosby rates KeyCorp a "buy," with a price target of $11.50, and estimates the company will earn 82 cents a share this year, increasing to 90 cents a share in 2014. The analyst said in a report on Jan. 28 that the company has "two critical strategic objectives: derisk the business model and rebuild its profitability."

Mosby said that KeyCorp was "well under way" in accomplishing the first objective, by shrinking its portfolio of "troubled portfolio of homebuilder, RV, leases, HELOC, and marine loans," by roughly 50% over the past three years, to "under $3 billion."

"By implementing over $150 million in efficiency initiatives, deploying excess capital to rein in the outstanding share count at discount prices, and looking for strategic growth opportunities, we believe KEY can start to improve profitability levels in 2013," he said.

KEY Chart KEY data by YCharts

Interested in more on KeyCorp? See TheStreet Ratings' report card for this stock.

10 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BAC $15.81 0.00%
BPOP $34.51 0.00%
C $52.42 0.00%
KEY $13.93 0.00%
SNV $27.99 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs