Loading...
01/10 18:47
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A reflect a positive sentiment. KeyCorp's revised guidance for net interest income and improved loan growth are promising. The cautious approach to M&A and focus on organic growth indicate strategic prudence. The company's strong capital position and plans for share buybacks, despite being cautious, suggest confidence in financial health. The focus on fee growth, expense management, and ROTCE improvement further enhances the positive outlook. While some responses lacked detail, the overall strategic direction and financial metrics suggest a likely positive stock price movement in the short term.
Earnings Per Share (EPS) $0.41, surpassing 1% return on assets. Reasons: Steady progress in profitability and returns.
Pre-Provision Net Revenue (PPNR) Up $33 million quarter-over-quarter (5%), marking the sixth straight quarter of improvement. Reasons: Revenue growth and net interest income tailwinds.
Revenue Up 17% year-over-year (adjusted for last year's securities portfolio repositioning). Reasons: Net interest income growth and fee income increase.
Fee Income Up high single digits compared to 2024 for both the quarter and year-to-date. Reasons: Differentiation in fee income and strong business dynamics.
Net Interest Margin (NIM) Achieved 2.75%, reaching year-end target one quarter early. Reasons: Portfolio remixing and strong execution in deposits and loans.
Net Charge-Off Ratio Year-to-date within 40 to 45 basis points target range. Reasons: Stable asset quality metrics and no direct exposure to recent auto industry bankruptcies.
Common Equity Tier 1 (CET1) Ratio Approaching 12% at quarter end. Reasons: Peer-leading capital ratios and flexibility for future growth.
Assets Under Management (AUM) Reached a record $68 billion. Reasons: Growth in wealth management and mass affluent segment.
Commercial Pipelines Nearly double the levels from one year ago. Reasons: Increased investment banking and M&A activity.
Investment Banking and Debt Placement Fees $184 million, up 8% year-over-year. Year-to-date up 15%. Reasons: Broad-based debt and equity capital markets activity.
Noninterest Income Increased 8% year-over-year. Reasons: Growth in investment banking, trust and investment services, and commercial mortgage servicing fees.
Noninterest Expenses $1.2 billion, up 7% year-over-year. Reasons: Higher personnel expenses, incentive compensation, and technology investments.
Net Charge-Offs $114 million or 42 basis points of average loans. Reasons: Stable credit quality and reductions in nonperforming assets.
Deposit Costs Declined by 2 basis points to 1.97%. Reasons: Lower loan-to-deposit ratio and rational competition in markets.
Tangible Book Value Per Share Increased 4% sequentially and 14% year-over-year. Reasons: Strong earnings generation and balance sheet optimization.
Mass affluent segment growth: Since launching in 2023, added 50,000 households, $3 billion in AUM, and over $6 billion in total client assets.
Commercial pipelines: Nearly doubled compared to one year ago, with significant growth in M&A pipeline.
Investment banking: Raised $50 billion in capital in Q3, retaining 15% on balance sheet. On track for second-best year in investment banking history.
Net interest margin (NIM): Achieved 2.75% NIM, reaching year-end target one quarter early.
Deposit and loan dynamics: Deposit balances increased while cost of deposits decreased. Shifted portfolio from low-yielding consumer mortgages to relationship C&I loans.
Asset quality: NPAs and criticized loans declined, net charge-offs stable within target range of 40-45 basis points.
Capital ratios: CET1 ratio approached 12%, providing flexibility for share repurchases and balance sheet restructuring.
Medium-term targets: Aiming for 15% return on tangible common equity by 2027 through NIM improvement, fee growth, expense discipline, and share repurchases.
Share repurchases: Plan to repurchase $100 million of common stock in Q4 2025.
Market Conditions: Potential risks from macroeconomic uncertainties, including interest rate fluctuations and potential Fed rate cuts, which could impact net interest income and net interest margin.
Regulatory Environment: The company faces regulatory risks, including maintaining high CET1 ratios and adhering to evolving financial regulations.
Credit Quality: While credit quality is stable, there is a risk of increased net charge-offs or criticized loans, which could impact financial performance.
Loan Portfolio: The planned runoff of low-yielding consumer loans and reliance on commercial loans could pose risks if market conditions or client demand change.
Expense Management: Increased expenses due to hiring, technology investments, and incentive compensation could pressure margins if revenue growth does not keep pace.
Investment Banking and M&A: Dependence on favorable market conditions for M&A and investment banking pipelines could pose risks if market conditions deteriorate.
Special Servicing Fees: Expected decline in special servicing fees in the fourth quarter could impact noninterest income.
Return on Tangible Common Equity: KeyCorp aims to achieve a return on tangible common equity of 15% or better on a run rate basis by the end of 2027. This will be driven by improving net interest margin (NIM) by 50 basis points to 3.25% or better, compounding fee advantages, maintaining expense discipline, and share repurchases.
Net Interest Margin (NIM): The company expects to improve NIM to 3.25% or better by the end of 2027, with half of the improvement coming from fixed asset repricing and the other half from strong execution in business operations.
Share Repurchases: KeyCorp plans to repurchase approximately $100 million of common stock in the fourth quarter of 2025 and continue share buybacks in 2026, leveraging its strong capital position.
Revenue and Earnings Growth for 2026: The company anticipates another year of outsized revenue and earnings growth in 2026, supported by strong momentum and healthy pipelines.
Investment Banking Performance: KeyCorp expects fourth-quarter fees to be similar to the strong performance of the fourth quarter of 2024, driven by robust investment banking pipelines, particularly in M&A.
Commercial Payments Growth: Fee equivalent revenue in commercial payments is expected to continue growing at a high single-digit rate.
Frontline Staff Expansion: The company plans to increase frontline staff by approximately 10% in 2025, with expected payback from these hires over the next 12 to 18 months.
Full-Year 2025 Guidance: KeyCorp has increased its full-year 2025 guidance, expecting net interest income growth of about 22%, fees to grow between 5% and 6%, and full-year expenses to increase by approximately 4%.
Share Repurchase Plan: KeyCorp plans to repurchase approximately $100 million of common stock in the fourth quarter of 2025. This decision is supported by the company's strong capital position, with a CET1 ratio of 11.8% at the end of the third quarter. The repurchase aligns with the company's strategy to maintain its CET1 ratios at relatively high levels while enhancing shareholder returns. The company also indicated that it could accelerate share repurchases in the future, depending on market conditions and capital position.
The earnings call summary and Q&A reflect a positive sentiment. KeyCorp's revised guidance for net interest income and improved loan growth are promising. The cautious approach to M&A and focus on organic growth indicate strategic prudence. The company's strong capital position and plans for share buybacks, despite being cautious, suggest confidence in financial health. The focus on fee growth, expense management, and ROTCE improvement further enhances the positive outlook. While some responses lacked detail, the overall strategic direction and financial metrics suggest a likely positive stock price movement in the short term.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
