KeyCorp ( KEY) beat second-quarter targets and guided in line for the third quarter and full year.The Cleveland-based bank made $308 million, or 75 cents a share, for the latest quarter, up from the year-ago $291 million, or 70 cents a share. Analysts surveyed by Thomson Financial were looking for a 71-cent profit. Return on average equity was 16.11% for the second quarter of 2006, compared to 16.15% for the same period last year and 15.48% for the first quarter of 2006. "Key's improved performance in the second quarter was driven by revenue growth and solid asset quality," said CEO Henry L. Meyer III. "Relative to last year's second quarter, Key's taxable-equivalent revenue rose by $90 million. This increase was due largely to solid commercial loan growth, higher income from our fee-based businesses and growth in core deposits, which increased 10% from the second quarter of 2005. The growth in fee income was broad-based and included increases in trust and investment services income, investment banking fees, income from operating leases, and net gains from both principal investing and the initial public offering by MasterCard. "With regard to asset quality, both nonperforming loans and net loan charge-offs were down from both the prior and year-ago quarters. For the second quarter of 2006, net loan charge-offs represented 0.21% of Key's average total loans." The company expects earnings to be in the range of 70 to 74 cents a share for the third quarter of 2006 and $2.85 to $2.95 per share for the full year. Analysts are forecasting 72 cents for the quarter and $2.86 for the year.