Financial Data and Key Metrics Changes - The company reported fourth quarter earnings of $0.43 per share, with revenue exceeding $2 billion, growing 12% year-over-year on an adjusted basis, while expenses grew by 2% [3][4] - Full-year record revenue increased by 16% compared to the prior year, with net interest income and fee revenue both exceeding projections [6][16] - The fourth quarter net interest margin (NIM) was 2.82%, an increase of 7 basis points sequentially, and above the previously indicated target of 2.75%-2.8% [21][25] Business Line Data and Key Metrics Changes - Loan growth was particularly strong in commercial and industrial (C&I) loans, which grew by 9%, while consumer loans were intentionally reduced [6][18] - Fee income growth was 7.5%, with all priority fee-based businesses growing at a high single or low double-digit rate [6][10] - Investment banking fees increased by 10% year-over-year, driven by debt capital markets and commercial mortgage debt placement activity [22] Market Data and Key Metrics Changes - The company raised nearly $140 billion of capital on behalf of clients in 2025, retaining 20% on its balance sheet [9] - Assets under management in wealth management reached a record $70 billion, with significant growth in the mass affluent segment [9][10] - Commercial payments fee-equivalent revenue grew by 11% in 2025, reflecting successful investments in bankers and new geographies [10] Company Strategy and Development Direction - The company aims to achieve a 15%-plus return on tangible common equity by year-end 2027, focusing on organic growth in middle market, payments, investment banking, and wealth management [8][32] - Investments in technology, particularly in AI, are a priority, with spending increasing from $900 million to $1 billion [34] - The company plans to repurchase at least $300 million of stock in the first quarter and anticipates similar amounts in subsequent quarters throughout 2026 [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of outsized revenue and earnings growth, supported by favorable macro conditions and strong business momentum [11][28] - The company expects to continue growing priority fee-based businesses at a mid to high single-digit pace, capitalizing on strong pipelines [8][10] - Management noted that the current environment plays well to the company's strengths, with expectations for improved middle market M&A activity in 2026 [9][11] Other Important Information - The company announced changes to its board, nominating two new directors with extensive experience in financial services [12][13] - The lead independent director role transitioned to Todd Vassos, with other board members retiring [14] Q&A Session Summary Question: Strategic priorities for 2026 - Management emphasized organic growth in middle market, payments, investment banking, and wealth management, alongside a focus on return on capital and technology investments [30][32] Question: Investment banking fee guidance - Management acknowledged the competitive hiring environment and expressed caution regarding visibility for investment banking fees, despite recent positive trends [36][38] Question: Expectations for growth and banker productivity - Management highlighted the importance of recent hires and backlogs, expressing optimism for growth as new bankers ramp up productivity [41][43] Question: Deposit beta assumptions and margin expectations - Management indicated a stable deposit base with expectations for low-to-mid 50s beta throughout the year, with a focus on remixing brokered deposits into client deposits [55][56] Question: Capital priorities and acquisition appetite - Management reiterated a focus on supporting clients, investing in technology, and pursuing complementary acquisitions, while maintaining a cautious stance on bank acquisitions [66][68]

Financial Data and Key Metrics Changes - The company reported fourth quarter earnings of $0.43 per share, with revenue exceeding $2 billion, growing 12% year-over-year on an adjusted basis, while expenses grew by 2% [3][4] - Full-year record revenue increased by 16% compared to the prior year, with net interest income and fee revenue both exceeding projections [6] - The net interest margin (NIM) for the fourth quarter was 2.82%, an increase of 7 basis points sequentially, and above the target range of 2.75%-2.8% [21] Business Line Data and Key Metrics Changes - Loan growth was particularly strong in commercial and industrial (C&I) loans, which grew by 9%, while consumer loans were intentionally reduced [6][18] - Fee income growth was 7.5%, with all priority fee-based businesses growing at a high single or low double-digit rate [6] - Investment banking fees increased by 10% year-over-year, driven by debt capital markets and commercial mortgage debt placement activity [22] Market Data and Key Metrics Changes - The company raised nearly $140 billion of capital on behalf of clients in 2025, retaining 20% on its balance sheet [9] - Assets under management in wealth management reached a record $70 billion, with significant growth in the mass affluent segment [9] - Commercial payments fee-equivalent revenue grew by 11% in 2025, reflecting successful investments in bankers and new geographies [10] Company Strategy and Development Direction - The company aims to achieve a 15% return on tangible common equity by year-end 2027, focusing on organic growth in middle market, payments, investment banking, and wealth management [8][30] - Investments in technology, particularly in AI, are prioritized to enhance operational efficiency and client experience [34] - The company plans to repurchase at least $300 million of stock in the first quarter of 2026 and anticipates similar amounts in subsequent quarters [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of outsized revenue and earnings growth, supported by favorable macro conditions and strong business momentum [11][28] - The company expects to grow priority fee-based businesses at a mid to high single-digit pace, capitalizing on strong pipelines [8][11] - Management noted that the current environment plays to the company's strengths, with expectations for continued growth in investment banking and M&A activity [9][11] Other Important Information - The company announced changes to its board, nominating two new directors with extensive experience in financial services [12][13] - The lead independent director role transitioned to Todd Vassos, with a focus on strong corporate governance [14] Q&A Session Summary Question: What are the strategic priorities for 2026? - The company is focused on organic growth in middle market, payments, investment banking, and wealth management, with significant investments in technology and AI [30][32] Question: Why is the investment banking fee guidance conservative? - The company is cautious due to limited visibility beyond the first quarter, despite recent improvements in middle market M&A activity [36][38] Question: What are the expectations for growth as new bankers start producing? - The company anticipates a positive impact from recent hires, with historically high backlogs and a hospitable market for deals [44][46] Question: What is the deposit beta assumption for margin expectations? - The company expects a low-to-mid 50s beta throughout the year, with a focus on remixing brokered deposits into client deposits [56] Question: What is the outlook for middle market M&A activity? - Management believes that recent market conditions will lead to increased activity, with visibility improving for the first quarter [70][72]

Financial Data and Key Metrics Changes - The company reported fourth quarter earnings of $0.43 per share, with revenue exceeding $2 billion, growing 12% year-over-year on an adjusted basis, while expenses grew by 2% [3][15] - Full-year record revenue increased by 16% compared to the prior year, with net interest income and fee revenue both exceeding projections [5][15] - The fourth quarter net interest margin (NIM) was 2.82%, an increase of 7 basis points sequentially, above the previously indicated target of 2.75%-2.8% [20][25] Business Line Data and Key Metrics Changes - Loan growth was particularly strong in commercial and industrial (C&I) loans, which grew by 9%, while consumer loans were intentionally reduced [5][18] - Fee income growth was 7.5%, with all priority fee-based businesses growing at a high single or low double-digit rate [5][15] - Investment banking fees increased by 10% year-over-year, driven by debt capital markets and commercial mortgage debt placement activity [20][22] Market Data and Key Metrics Changes - The company raised nearly $140 billion of capital on behalf of clients in 2025, retaining 20% on its balance sheet [9] - Assets under management in wealth management reached a record $70 billion, with significant growth in the mass affluent segment [9][22] - Commercial payments fee-equivalent revenue grew by 11% in 2025, reflecting successful investments in bankers and new geographies [10] Company Strategy and Development Direction - The company aims to achieve a 15%-plus return on tangible common equity by year-end 2027, focusing on organic growth in middle market, payments, investment banking, and wealth management [8][29] - Investments in technology have increased from $900 million to $1 billion, with a focus on enhancing customer-facing capabilities and operational efficiency [6][31] - The company plans to repurchase at least $300 million of stock in the first quarter of 2026 and anticipates similar amounts in subsequent quarters [4][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of outsized revenue and earnings growth, supported by favorable macro conditions and strong business momentum [8][11] - The company expects to continue growing priority fee-based businesses at a mid to high single-digit pace, capitalizing on strong pipelines [8][11] - Management noted that the current environment plays well to the company's strengths, with expectations for improved middle market M&A activity in 2026 [9][11] Other Important Information - The company announced changes to its board, nominating two new directors with extensive experience in financial services [12][13] - The lead independent director role transitioned to Todd Vassos, with a focus on strong corporate governance and long-term shareholder value [12][13] Q&A Session Summary Question: What are the strategic priorities for 2026? - The company is focused on organic growth in middle market, payments, investment banking, and wealth management, with significant investments in technology and talent [28][29] Question: Why is the investment banking fee guidance conservative? - The company is cautious due to limited visibility beyond the first quarter, despite recent improvements in middle market M&A activity [32][33] Question: What are the expectations for loan growth and banker productivity? - The company anticipates continued hiring and expects new bankers to contribute to growth, with optimism about the market conditions [34][36] Question: What is the outlook for net interest margin and earning assets? - The company expects to see a bottoming out of earning assets, with a gradual increase throughout the year, driven by a remixing of loan types [40][41] Question: What is the appetite for bank acquisitions? - The company remains focused on organic growth and technology investments rather than pursuing bank acquisitions, despite board changes [46][49]

KeyCorp Fourth Quarter 2025 Earnings Review January 20, 2026 Chris Gorman Chairman and Chief Executive Officer Clark Khayat Chief Financial Officer Delivering Value to Our Shareholders - Strong Positioning for the Future Building Momentum in 2025 and Beyond +16% Revenue (TE)(1) YoY growth +23% Net interest income (TE) +11.8% 2025 operating leverage(1) +26% 2025 total shareholder return, #2 rank amongst peers(2) Taking Action to Execute Substantial ROTCE Growth Plan ROTCE targets with limited execution risk ...

Group 1 - KeyCorp exceeded Wall Street expectations for fourth-quarter profit, driven by increased interest income and investment banking fees [1] - The U.S. lender reported a strong performance in its financial services, indicating robust demand in the market [1] - The results reflect a positive trend in the banking sector, highlighting the potential for growth in interest-related earnings [1]

Core Insights - KeyCorp announced changes to its Board of Directors, including the nomination of Antonio DeSpirito and Christopher Henson for election at the 2026 Annual Meeting, reflecting a commitment to strong corporate governance and long-term shareholder value creation [1][2] Board Composition Changes - The Board will nominate Antonio "Tony" DeSpirito and Christopher L. "Chris" Henson as directors, following a comprehensive search process to ensure a balance of experience and fresh perspectives [2] - With the addition of DeSpirito and Henson, the Board will have added eight new directors over the past six years [2] Leadership Appointments - Todd Vasos has been appointed as Lead Independent Director, succeeding Alexander M. "Sandy" Cutler, who will remain an independent director [3][4] - Vasos expressed his commitment to providing strong independent oversight and supporting the execution of the Company's strategy [4] Retirements - Carlton Highsmith and Ruth Ann Gillis will retire from the Board effective at the Annual Meeting, with appreciation for their contributions to KeyCorp [5] Board Size and Governance - Following these changes, the size of the Board will remain at 14 directors, with ongoing evaluations to enhance the Board's composition in support of the Company's strategy [5] Background of New Directors - Antonio DeSpirito has extensive experience as a Managing Director at BlackRock, focusing on public markets and long-term value creation [6] - Christopher Henson is a former senior banking executive with significant experience in leading large financial institutions, enhancing the Board's oversight of banking operations and risk management [7] Company Overview - KeyCorp, headquartered in Cleveland, Ohio, is one of the largest bank-based financial services companies in the U.S., with assets of approximately $184 billion as of December 31, 2025 [8] - The company provides a range of financial services, including deposit, lending, cash management, and investment services through approximately 950 branches and 1,200 ATMs [9]

Financial Performance - KeyCorp reported a net income of $474 million for Q4 2025, or $0.43 per diluted common share, compared to a net loss of $(279) million in Q4 2024[3]. - Total revenue for Q4 2025 was $2.0 billion, marking a 5.8% increase from Q3 2025 and a 131.8% increase from Q4 2024[9]. - Total revenue from continuing operations for Q4 2025 was $2.005 billion, a 131.8% increase compared to Q4 2024[29]. - KeyCorp reported net income attributable to Key of $410 million for Q4 2025, an increase of 7.6% from $381 million in Q4 2024[36]. - Net income attributable to Key for the three months ended December 31, 2025, was $510 million, compared to a loss of $244 million in the same period last year, marking a turnaround[54]. - Net income attributable to Key common shareholders for the twelve months ended December 31, 2025, was $1,686 million, compared to a loss of $304 million in the previous year[72]. Revenue Breakdown - Pre-provision net revenue increased by $46 million quarter-over-quarter, with a full-year increase of 44% year-over-year[2]. - Net interest income for Q4 2025 was $1.22 billion, up 2.5% from Q3 2025 and up 15.3% from Q4 2024, with a net interest margin of 2.82%[9]. - Noninterest income reached $782 million in Q4 2025, an 11.4% increase from Q3 2025, driven by a significant rise in investment banking and debt placement fees[11]. - Noninterest income for the twelve months ended December 31, 2025, was $2,842 million, a substantial increase from $809 million in the previous year, reflecting a growth of 250.3%[56]. - Noninterest income for Q4 2025 was $782 million, compared to a loss of $196 million in Q4 2024, showcasing a strong recovery[68]. Loan and Deposit Metrics - Average loans for Q4 2025 were $106.3 billion, a slight increase of $1.6 billion compared to Q4 2024, with commercial and industrial loans driving the growth[16]. - Average deposits totaled $150.7 billion for Q4 2025, an increase of $977 million or 0.7% year-over-year, driven by growth in commercial deposits[18]. - Total loans for Q4 2025 reached $106.316 billion, with a net interest income of $1.215 billion, reflecting a yield of 5.41%[74]. - Total commercial loans reached $76,509 million, reflecting a 1.6% increase from the previous quarter and a 6.4% increase year-over-year[89]. - Average loans and leases in the Consumer Bank decreased by 7.7% year-over-year to $34,683 million in Q4 2025[110]. Asset Quality and Credit Losses - Net loan charge-offs for Q4 2025 were $104 million, or 0.39% of average total loans, down from $114 million or 0.43% in Q4 2024[20]. - Nonperforming loans at period end totaled $615 million, representing 0.58% of period-end portfolio loans, down from 0.73% a year ago[22]. - Key's allowance for credit losses was $1.7 billion, or 1.63% of total period-end loans, stable compared to previous quarters[21]. - The allowance for loan and lease losses at period-end was $1,427 million, slightly up from $1,409 million in the previous year, indicating a cautious approach to asset quality[54]. - The provision for credit losses for the three months ended December 31, 2025, was $108 million, slightly up from $107 million in the previous quarter[72]. Capital Management - The Common Equity Tier 1 ratio stood at 11.7% as of December 31, 2025, reflecting strong capital ratios[3]. - Tangible book value per share grew 3% sequentially and 18% year-over-year, demonstrating effective capital management[4]. - The tangible common equity to tangible assets ratio improved to 8.36% in Q4 2025, up from 7.02% in Q4 2024[66]. - Average tangible common equity increased to $15,126 million in Q4 2025, up from $11,449 million in Q4 2024, indicating stronger capital position[66]. Shareholder Returns - KeyCorp repurchased $200 million of common shares in Q4 2025, indicating a commitment to returning capital to shareholders[4]. - Key declared a dividend of $0.205 per common share during Q4 2025, with a reduction in share count driven by $200 million of common shares repurchased[27]. - Cash dividends declared per common share remained stable at $0.205 for both the current and previous quarters[72]. Future Outlook - The company anticipates strong organic revenue and earnings growth in 2026, supported by strategic investments in technology and front-line bankers[5].

Core Insights - KeyCorp reported a record full-year revenue of $7.5 billion, reflecting a 16% year-over-year increase, with fourth-quarter revenue exceeding $2 billion [1][3][31] - The company achieved a net income of $474 million for the fourth quarter of 2025, compared to a net loss of $(279) million in the same quarter of 2024 [2][36] - KeyCorp's strong performance is attributed to strategic investments in technology and front-line bankers, leading to significant organic growth [5][40] Financial Performance - Fourth-quarter pre-provision net revenue increased by $46 million quarter-over-quarter, with a full-year increase of 44% year-over-year [1][3] - Net interest income rose by 3% quarter-over-quarter, with a net interest margin of 2.82%, up 7 basis points [1][9] - Noninterest income for the fourth quarter was $782 million, an increase of 11.4% from the previous quarter [12][40] Asset Quality - Nonperforming assets decreased by 6% quarter-over-quarter, with net charge-offs down to 39 basis points [1][22] - KeyCorp's allowance for credit losses was $1.7 billion, stable compared to previous quarters, reflecting improving credit quality trends [24][25] Capital Management - The Common Equity Tier 1 ratio stood at 11.7%, with the company repurchasing $200 million of common shares during the quarter [2][26] - KeyCorp's capital ratios exceeded regulatory benchmarks, indicating a strong capital position [26][28] Business Segments - The Consumer Bank segment generated $948 million in revenue, a 1.4% increase from the previous quarter, while the Commercial Bank segment reported $1.1 billion in revenue, up 9.4% [31][37] - Investment banking and debt placement fees recorded strong performance, contributing to the overall revenue growth [5][40] Future Outlook - The company anticipates continued organic revenue and earnings growth in 2026, supported by strong business momentum and strategic investments [5][40]

Core Viewpoint - KeyCorp is expected to report earnings per share (EPS) of $0.38 and revenue of approximately $1.97 billion in its upcoming quarterly earnings release on January 20, 2026, driven by strong demand in commercial and industrial loans and a rise in investment banking fees [1][6]. Group 1: Financial Performance - The anticipated strong performance is attributed to robust demand for commercial and industrial loans, which constitute about 50% of KeyCorp's average loan balances [2]. - KeyCorp's net interest income (NII) for the fourth quarter is projected to increase by 14% year-over-year, driven by loan growth and stabilizing deposit costs [2]. - The Zacks Consensus Estimate for KeyCorp's average earning assets in the fourth quarter is $171.65 billion, reflecting a slight increase from the previous year [4]. Group 2: Investment Banking Sector - KeyCorp expects a significant rise in investment banking fees, supported by active initial public offerings (IPOs), bond issuance, and increased trading activities [3][6]. - This robust deal activity is anticipated to play a crucial role in enhancing KeyCorp's earnings [3]. Group 3: Financial Metrics - KeyCorp has a price-to-earnings (P/E) ratio of approximately 21.74 and a price-to-sales ratio of about 2.27 [5]. - The enterprise value to sales ratio is around 3.29, while the enterprise value to operating cash flow ratio stands at approximately 10.42 [5]. - The debt-to-equity ratio is 0.61, and the current ratio is about 0.11, indicating the company's ability to cover short-term liabilities [5].

Core Viewpoint - KeyCorp (KEY) is expected to report strong fourth-quarter and 2025 results, driven by robust lending activities and solid demand for commercial and industrial loans, as well as consumer loans [1][11]. Lending and Earnings - The demand for commercial and industrial (C&I) loans, which constitute about 50% of KeyCorp's average loan balances, was solid in the quarter [1]. - The Zacks Consensus Estimate for KEY's average earning assets for the fourth quarter is $171.65 billion, reflecting a slight increase from the previous year [2]. - Management anticipates a 2% increase in period-end loans for 2025, with commercial loans expected to rise by 5% [1]. Net Interest Income (NII) - The consensus estimate for fourth-quarter NII (on a fully tax-equivalent basis) is $1.21 billion, indicating a year-over-year increase of 14% [4]. - Management expects NII to grow by 13% or more year-over-year, with a projected 22% increase for 2025 [4]. - Despite interest rate cuts, the company's net interest margin (NIM) is expected to improve, supported by loan growth and stabilizing deposit costs, with an expected NIM of 2.75-2.8% in the fourth quarter of 2025 [5][4]. Non-Interest Income - Mortgage rates declined significantly in the fourth quarter, leading to improved refinancing activities and origination volumes, positively impacting KeyCorp's mortgage banking income [6]. - The consensus estimate for commercial mortgage servicing fees is $69 million, reflecting a 1.5% year-over-year increase, while consumer mortgage income is estimated at $13.99 million, indicating a 12.6% decline [7]. - The total non-interest income estimate is pegged at $748 million, showing improvement from negative income reported in the prior year [13]. Investment Banking and Trading - The investment banking business is expected to benefit from robust deal-making activities, with a consensus estimate for investment banking and debt placement fees of $230 million, indicating a 4.1% year-over-year rise [9]. - Increased trading activities, influenced by market volatility and a significant U.S. government shutdown, are anticipated to positively impact KeyCorp's trading business [8]. Expenses and Asset Quality - KeyCorp's cost-saving measures and operational efficiency initiatives are likely to have curbed expense growth, although investments in technology may lead to a rise in total non-interest expenses [14]. - The consensus estimate for non-performing assets (NPAs) is $689 million, indicating a 10.8% year-over-year decline, while non-performing loans (NPLs) are estimated at $691 million, reflecting an 8.8% decline [16]. Earnings Expectations - The Zacks Consensus Estimate for fourth-quarter earnings is 38 cents per share, unchanged from the prior year, while the estimate for 2025 earnings is $1.47, indicating a 26.7% increase [18]. - The consensus estimate for quarterly sales is $1.94 billion, reflecting a year-over-year rise of 10.3%, with full-year sales estimated at $7.43 billion, indicating 16% growth from 2024 [19].