Bank stocks tumbled on Monday amid a wider sell-off as investors' concerns mounted that wage growth could lead to inflation, higher borrowing costs for businesses and a slowdown in Fed rate hikes.
Several banks suffered fourth-quarter hits when they reduced the value of certain energy investments. Still, renewable energy could remain a viable business thanks to other benefits embedded in the tax law.
Profits fell 42% at the Birmingham, Ala., bank because of a $121 million tax charge in the fourth quarter, but net interest income and noninterest income each rose 14%, softening the blow of the one-time tax hit.
The company, which has been actively curbing growth to avoid becoming a systemically important financial institution, reported lower loan balances and reduced fee income after exiting the residential wholesale mortgage business.
Kim Manigault, who previously was chief financial officer for the company’s technology and operations organization, will be responsible for ensuring that Key continues to make diversity and inclusion a priority in hiring.
The Texas bank also capitalized on rising rates and a positive adjustment to deferred taxes tied to tax reform in reporting a double-digit gain to profits in the fourth quarter.
