ITHACA, N.Y. — Linda Lacewell, superintendent of the New York State Department of Financial Services (DFS), has appointed Lisa Whitaker, president and CEO of Ithaca–based CFCU Community Credit Union, to serve a three-year term on the department’s New York State Charter Advisory Board. 

The board seeks to foster economic development in New York through “prudent” regulations and supervision, consumer protection against fraud or unethical conduct, and consumer education.

“I’m honored to serve on the advisory board and look forward to assisting with the continued strengthening of our local economy and protection of consumers,” Whitaker said in a news release from the New York Credit Union Association (NYCUA).

Board members consider and make recommendations to the DFS superintendent on the following matters:

• Preserving the New York State Charter for depository financial-services institutions as a viable and attractive option to current and potential state-chartered financial institutions;

• Promoting state-charter retention and new charters;

• Encouraging the offerings of diverse financial products and services throughout the state;

• New laws, rules, or regulations; and,

• Amendments or repeals of current laws, rules, or regulations.

CFCU Community Credit Union serves residents in Tompkins, Cortland, Seneca, Cayuga, and Ontario counties. Whitaker also serves on the Federal Reserve Bank of New York’s Depository Institutions Advisory Committee. NYCUA named her the 2013 Outstanding Professional for credit unions with more than $250 million in assets. 

Whitaker has a lot of board member and committee experience. She served nine years on the United Way of Tompkins County board of directors and is currently serving on the Tompkins Cortland Foundation board and the Investment Committee at the Sciencenter in Ithaca. 

— CEO and manager of Peru Federal Credit Union in Peru in Clinton County — was elected to a three-year term by NYCUA’s membership. Pope was elected in the asset tier of credit unions with up to $25 million in assets.

Pope is one of two new directors appointed to the NYCUA board.

Eric Hepkins, CEO of Cornerstone Community Federal Credit Union in Lockport in Niagara County, was also appointed. Hepkins fills a vacant seat in the asset tier for credit unions with more than $100 million in assets. 

Hepkins’ term will last for one year, at which point he will have the opportunity to run for a full three-year term, NYCUA said in a news release.

“Both Maggie and Eric are exceptional credit union leaders with an undeniable dedication to our statewide movement,” William Mellin, president and CEO of NYCUA, said. “Maggie and Eric’s experience will make our board, our association and New York’s credit unions stronger. I look forward to working with them to advance our mission and the entire statewide credit union movement.”

Additionally, the board also appointed four directors to serve one-year terms as officers. 

They include Ann Hynes, CEO of SPX Federal Credit Union in Rochester who was appointed board chair; Robyn Young, CEO of Great Erie Federal Credit Union in Orchard Park, who was appointed vice chair; Tony Rohrmeier, EVP & COO of Hudson Valley Credit Union in Poughkeepsie, who was appointed treasurer; and John Gibardi, president and CEO of Entertainment Industries Federal Credit Union in Brooklyn, who was appointed board secretary.

The NYCUA board also includes Laurie Baker, CEO of Summit Federal Credit Union, which is headquartered in Rochester and operates branches in Central New York.

Besides Baker, the NYCUA board also includes Marie Betti, CEO and treasurer of Western New York Federal Credit Union in West Seneca; Vicky Burdick, manager and CEO of Jamestown Area Federal Credit Union in Jamestown; Frank DeGraw, president and CEO of Sunmark Credit Union in Latham; and Mark Welshoff, president and CEO of O&R Utilities Employees Federal Credit Union in Monroe.

KeyCorp (NYSE: KEY) — parent of KeyBank, which ranks No. 2 in deposit market share in the 16-county Central New York region — reported that its net income from continuing operations fell to $159 million, or  16 cents a share, in the second quarter from $403 million, or 40 cents per share, in the year-ago quarter. 

Key’s earnings per share this quarter beat the consensus analyst estimate of 15 cents, according to Zacks Equity Research.

The banking company’s financial results reflected the current expected credit losses (CECL) accounting methodology, as well as the impact of the COVID-19 crisis.

Key’s total revenue grew nearly 7 percent year over year to $1.72 billion, topping the Zacks consensus estimate of $1.6 billion.

“We are pleased with Key’s second quarter results, which demonstrated the resiliency of our team and business, the strength of our balance sheet, and our strong risk-management practices. Our results also reflected a significant build in our allowance for loan and lease losses, with our provision for credit losses exceeding net charge-offs by $386 million,” Chris Gorman, chairman and CEO of Cleveland, Ohio–based Key, said in the banking company’s July 22 earnings report. “Importantly, we generated positive operating leverage versus the year-ago quarter and a record level of pre-provision net revenue. Our results included strong balance-sheet trends, with double-digit growth in both loans and deposits. Our fee businesses also benefitted from broad-based growth, driven by strength in capital markets-related income, cards and payments, and consumer mortgage. Expenses this quarter reflected higher production-related variable costs, expenses related to our payments business, and COVID-19 related expenses…”

Gorman said KeyBank was “very active” in the Paycheck Protection Program, processing more than 40,000 loans, providing more than $8 billion of funding to clients.

Income

Key’s taxable-equivalent net interest income was $1 billion in the second quarter of 2020, compared to taxable-equivalent net interest income of $989 million in the second quarter of 2019. The increase in net interest income reflects higher earning-asset balances partially offset by a lower net interest margin. The net interest margin was impacted by lower interest rates, a lag in deposit pricing as interest rates declined, and a change in balance-sheet mix, including elevated levels of liquidity and Key’s participation in the Paycheck Protection Program.

Compared to the second quarter of 2019, noninterest income increased by $70 million, led by a $47 million rise in consumer-mortgage income, driven by a record level of loan originations and related fees in the second quarter of 2020, Key noted. Additionally, cards and payments income increased $18 million related to prepaid-card activity and operating-lease income increased $16 million, led by gains from the sale of leveraged leases. These benefits were partially offset by a decline of $15 million in service charges on deposit accounts, the banking company said.

Expense

Key’s noninterest expense was $1 billion for the second quarter of 2020, a decrease of $6 million from the year-ago period. The second quarter of 2019 included notable items of $52 million, primarily personnel-related from Key’s efficiency initiatives, per the report. Excluding notable items in the year-ago period, expenses increased $46 million. The rise is primarily related to higher other expense, from $25 million of payments-related expenses incurred in the current period, as well as COVID-19-related costs related to steps that the banking company has taken to protect its employees.

Average loans were $107.9 billion for the second quarter of 2020, an increase of $17.2 billion compared to the year-prior period. Commercial loans increased $13.3 billion, reflecting growth from participation in the Paycheck Protection Program during the current quarter, as well as core broad-based growth in commercial and industrial loans and increased utilization compared to the year-ago period. Consumer loans increased $3.8 billion, driven by strength from its Laurel Road unit and Key’s consumer-mortgage business.

Key’s average deposits totaled $128 billion for the second quarter of 2020, an increase of $18.4 billion compared to the year-ago quarter, reflecting growth from consumer and commercial clients, partially offset by a decline in time deposits.

Credit losses

Key’s provision for credit losses was $482 million for the second quarter of 2020, compared to $74 million in the second quarter of 2019. The provision for credit losses reflects the adoption of a new accounting standard, often referred to as Current Expected Credit Losses (CECL), beginning in the first quarter of 2020. This framework requires that management estimate credit losses over the full remaining expected life and consider expected future changes in macroeconomic conditions, Key explained.

The provision for credit losses exceeded net charge-offs by $386 million. Net loan charge-offs in the second quarter of 2020 totaled $96 million, or 0.36 percent of average total loans. These results compare to $65 million, or 0.29 percent, for the second quarter of 2019. Key’s allowance for loan and lease losses was $1.7 billion, or 1.61 percent of total period-end loans as of June 30, 2020, compared to 0.97 percent as of June 30, 2019.

As of June 30, Key’s nonperforming loans totaled $760 million, which represented 0.72 percent of period-end portfolio loans. These results compare to 0.61 percent as of June 30, 2019. 

KeyCorp, which says its roots trace back 190 years to Albany, has assets of more than $171 billion. KeyBank has more than 1,000 branches in 15 states. It operates several dozen branches in Central New York.