CLEVELAND ( TheStreet) -- KeyCorp ( RF) on Tuesday reported fourth-quarter net income available to common shareholders of $279 million, or 32 cents a share, which beat the estimate of 13 cents a share, among analysts polled by Thomson Reuters.

The shares were up 1% to $8.70 in early trading Tuesday.

In comparison, KeyCorp reported net income to common shareholders of $178 million, or 20 cents a share, in the third quarter and a loss to common shareholders of $1.6 billion, or $2.34 a share, in the fourth quarter of 2009.

Earnings available to common shareholders exclude dividends paid on preferred shares, including $2.5 billion held by the government for bailout assistance provided in November 2008 through the Troubled Assets Relief Program, or TARP.

The increase in fee income that TheStreet highlighted last quarter as part of our coverage of 10 Banks with Real Earnings Improvement continued. Total noninterest income was $526 million in the fourth quarter, increasing from $486 million the previous quarter and $469 million a year earlier.

The biggest area of improvement was investment banking and capital markets income, which totaled $63 million in the fourth quarter, increasing from $42 million in the third quarter and a loss of $47 million in the fourth quarter of 2009.

KeyCorp's fourth-quarter provision for loan losses of $97 million, up slightly from $94 million the previous quarter but down from $756 million a year earlier. With net charge-offs - loan losses less recoveries - totaling $256 million, the company "released" $159 million in reserves during the fourth quarter, which directly boosted the bottom line.

The fourth-quarter ratio of net charge-offs to average loans was an annualized 2.00%, improving from 2.69% the previous quarter and 4.64% a year earlier. Reserves covered 3.20% of total loans as of December 31.

Key's net interest margin - essentially the average yield on loans and investments less the average cost of funds - was 3.31% for the fourth quarter, compared to 3.35% the previous quarter and 3.04% a year earlier.

The company's return on average assets for the fourth quarter was 1.36%, which is a solid number in the current environment.

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