Shareholders' Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Shareholders' Equity

23. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2016 capital plan (which is effective through the second quarter of 2017) submitted to and not objected to by the Federal Reserve, we had authority to repurchase up to $350 million of our common shares, which include repurchases to offset issuances of common shares under our employee compensation plans. During 2016, we repurchased $133 million of common shares under our 2016 capital plan authorization.

Our Board declared a quarterly dividend of $.075 per common share for the first quarter of 2016. Consistent with our 2016 capital plan, the Board declared a quarterly dividend of $.085 per common share for the second, third, and fourth quarters of 2016, which brought our annual dividend to $.330 per common share for 2016. Our 2016 capital plan proposed an increase in our quarterly common share dividend, up to $.095 per share, which will be considered by the Board for the second quarter of 2017.

Preferred Stock

We have $290 million of 7.75% Noncumulative Perpetual Convertible Series A Preferred Stock outstanding at December 31, 2016. Our Series A Preferred Stock has a $1 par value and a $100 liquidation preference. There were 7,475,000 shares authorized and 2,900,234 shares outstanding at December 31, 2016, and December 31, 2015. We made quarterly dividend payments of $1.9375 per share on our Series A Preferred Stock during each quarter of 2016 for a total of $22 million.

On August 1, 2016, we issued $350 million of Fixed-to-Floating Rate Perpetual Noncumulative Series C Preferred Stock. Our Series C Preferred Stock was issued in connection with the First Niagara acquisition to replace First Niagara's outstanding preferred stock. Our Series C Preferred Stock has a $1 par value with a $25 liquidation preference. There are 14,000,000 shares authorized and 14,000,000 shares outstanding at December 31, 2016. During the fourth quarter of 2016, we made payments of $0.539063 per share on our Series C Preferred Stock for a total of $8 million. On February 15, 2017, the Series C Preferred Stock was redeemed. For more information on this redemption, see Note 26 (“Subsequent Events”).

On September 9, 2016, we issued $525 million of depositary shares, each representing a 1/25^th ownership interest in a share of our Fixed-to-Floating Rate Perpetual Noncumulative Series D Preferred Stock. Our Series D Preferred Stock has a $1 par value with a $25,000 liquidation preference. There are 21,000 shares authorized and 21,000 shares outstanding at December 31, 2016. We made payments of $13.33 per depositary share on the depositary shares related to our Series D Preferred Stock during the fourth quarter of 2016 for a total of $7 million.

On December 12, 2016, we issued $500 million of depositary shares, each representing a 1/40^th ownership interest in a share of our Fixed-to-Floating Rate Perpetual Noncumulative Series E Preferred Stock. Our Series E Preferred Stock has a $1 par value with a $1,000 liquidation preference. There are 500,000 shares authorized and 500,000 shares outstanding at December 31, 2016.

Capital Adequacy

KeyCorp and KeyBank (consolidated) must meet specific capital requirements imposed by federal banking regulators. Sanctions for failure to meet applicable capital requirements may include regulatory enforcement actions that restrict dividend payments, require the adoption of remedial measures to increase capital, terminate FDIC deposit insurance, and mandate the appointment of a conservator or receiver in severe cases. In addition, failure to maintain a “well capitalized” status affects how regulators evaluate applications for certain endeavors, including acquisitions, continuation and expansion of existing activities, and commencement of new activities, and could make clients and potential investors less confident. As of December 31, 2016, KeyCorp and KeyBank (consolidated) met all regulatory capital requirements.

KeyBank (consolidated) qualified for the “well capitalized” prompt corrective action capital category at December 31, 2016, because its capital and leverage ratios exceeded the prescribed threshold ratios for that capital category and it was not subject to any written agreement, order, or directive to meet and maintain a specific capital level for any capital measure. Since that date, we believe there has been no change in condition or event that has occurred that would cause the capital category for KeyBank (consolidated) to change.

BHCs are not assigned to any of the five prompt corrective action capital categories applicable to insured depository institutions. If, however, those categories applied to BHCs, we believe that KeyCorp would satisfy the criteria for a “well capitalized” institution at December 31, 2016, and since that date, we believe there has been no change in condition or event that has occurred that would cause such capital category to change.

Because the regulatory capital categories under the prompt corrective action regulations serve a limited supervisory function, investors should not use them as a representation of the overall financial condition or prospects of KeyBank or KeyCorp.

For additional information on capital adequacy, see “Supervision and Regulation” in Item 1 of this report.

At December 31, 2016, Key and KeyBank (consolidated) had regulatory capital in excess of all current minimum risk-based capital (including all adjustments for market risk) and leverage ratio requirements as shown in the following table.

	Actual				To Meet Minimum Capital Adequacy Requirements				To Qualify as Well Capitalized Under Federal Deposit Insurance Act
dollars in millions	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2016
TOTAL CAPITAL TO NET RISK-WEIGHTED ASSETS
Key	$	15,638	12.85	%	$	9,734	8.00	%	N/A		N/A
KeyBank (consolidated)	14,291		12.36		9,251		8.00		$	11,564	10.00	%
TIER 1 CAPITAL TO NET RISK-WEIGHTED ASSETS
Key	$	13,249	10.89	%	$	7,300	6.00	%	N/A		N/A
KeyBank (consolidated)	12,439		10.76		6,939		6.00		$	6,939	6.00	%
TIER 1 CAPITAL TO AVERAGE QUARTERLY TANGIBLE ASSETS
Key	$	13,249	9.90	%	$	5,442	4.00	%	N/A		N/A
KeyBank (consolidated)	12,439		9.46		5,353		4.00		$	6,691	5.00	%
December 31, 2015
TOTAL CAPITAL TO NET RISK-WEIGHTED ASSETS
Key	$	11,671	12.97	%	$	7,198	8.00	%	N/A		N/A
KeyBank (consolidated)	10,454		12.34		6,776		8.00		$	8,470	10.00	%
TIER 1 CAPITAL TO NET RISK-WEIGHTED ASSETS
Key	$	10,212	11.35	%	$	5,399	6.00	%	N/A		N/A
KeyBank (consolidated)	9,197		10.86		5,082		6.00		$	5,082	6.00	%
TIER 1 CAPITAL TO AVERAGE QUARTERLY TANGIBLE ASSETS
Key	$	10,212	10.72	%	$	3,811	4.00	%	N/A		N/A
KeyBank (consolidated)	9,197		9.89		3,718		4.00		$	4,647	5.00	%