KeyCorp
Q2 2022 Earnings Call
Jul 21, 2022, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to KeyCorp second quarter 2022 earnings conference call. As a reminder, this conference is being recorded. I would now like to turn the conference over to the chairman and CEO, Chris Gorman. Please go ahead.
Chris Gorman -- Chairman and Chief Executive Officer
Thank you for joining us for KeyCorp second quarter 2022 earnings conference call. Joining me on the call today are Don Kimble, our chief financial officer; Clark Khayat, our chief strategy officer; and Mark Midkiff, our chief risk officer. On slide 2, you will find our statement on forward-looking disclosure and non-GAAP financial measures. It covers our presentation materials and comments, as well as the question-and-answer segment of our call.
I am now moving to slide 3. This morning we reported earnings of $504 million or $0.54 per share. We delivered positive operating leverage compared to the prior quarter and the year-ago period. Our results reflect the resiliency of both our business model and our teammates, as we continue to successfully navigate a rapidly changing environment.
Pre-provision net revenue was up 14% from the first quarter, with a 6% increase in revenue and relatively stable expenses. Revenue was driven by growth in net interest income, which benefited from higher interest rates and strong loan growth. Importantly, we will continue to benefit from higher interest rates over the next several years, as our hedges and short-term investments continue to reprice. Our balance sheet also benefits from our strong, stable deposit base.
Approximately 60% of our deposits are in stable retail and escrow balances. In our commercial business, approximately 85% of our deposits are from core operating accounts. As I mentioned, loan growth continues to be strong. Average loans were up 5% from the last quarter and 8% from the year-ago period.
Adjusting for the planned runoff of PPP and the sale of our indirect auto business, average loans grew by 21% year-over-year. Our growth was driven by both our consumer and our commercial businesses. We continue to add clients and support our existing relationships. In our consumer business, we generated over $3.6 billion in loan originations in the quarter from consumer mortgages and Laurel Road.
Let me spend just a moment on Laurel Road. We continue to see good momentum in this business, and that is despite the continuation of the federal student loan payment holiday. In May, we launched a new offering for nurses, the largest segment of the healthcare industry. While early, we are very encouraged with the response to our expanded offering.