Core Viewpoint - KeyCorp, a U.S. regional lender, is opting not to pursue acquisitions despite ongoing consolidation in the banking industry and plans to utilize its excess capital for share buybacks [1] Group 1 - KeyCorp's CEO, Chris Gorman, stated that the company will not seek acquisitions [1] - The decision comes in the context of industry consolidation [1] - KeyCorp intends to use its excess capital primarily for share buybacks [1]

KeyCorp Conference Call Summary Company Overview - **Company**: KeyCorp (NYSE: KEY) - **Event**: Conference Call on December 09, 2025 - **Speaker**: Chris Gorman, Chairman and CEO Key Accomplishments and Goals - KeyCorp celebrated its 200th anniversary in 2025, emphasizing a focus on customer engagement and sales organization transformation [3][4] - The company achieved significant margin expansion and fee growth, leading to best-in-class operating leverage [1] - Aiming for a 15% Return on Tangible Common Equity (ROTCE) by year-end 2027, with share repurchase as a capital return strategy [1][6] Financial Performance - **Revenue Growth**: Expected to be a record year with revenue growth exceeding 22% [19] - **Fee Growth**: Anticipated to exceed $750 million in Q4, with full-year fees projected to be comfortably above 6.5%, up from prior guidance of 5%-6% [18] - **Loan Growth**: Commercial and Industrial (C&I) loans grew by approximately 9%, with total commercial growth at 5% [14][15] - **Charge-offs**: Consumer charge-offs remained stable at 27 basis points over the last decade [10] Economic and Market Outlook - Positive consumer sentiment with consumers holding 20% more money in accounts compared to pre-COVID levels, and spending increasing by 2%-3% year-over-year [10] - Commercial clients are optimistic, with 60% expecting benefits from recent tax legislation [11] - The bank is well-positioned for middle-market transactions, with a strong credit book and capital position [9] Strategic Focus for 2026 - Continued investment in sales forces, particularly in fee-based areas, with a 10% increase achieved in 2025 [4] - Emphasis on organic growth rather than acquisitions, specifically in the Pacific Northwest [46][49] - Plans to maintain high single-digit revenue growth and improve ROTCE from 12% to 15% by 2027 [28][59] Capital Management - KeyCorp plans to buy back $200 million in stock in Q4, with an additional $800 million available for future buybacks [31][55] - The company is not pursuing any depository acquisitions and is focused on organic growth and stock repurchases [49][50] - The current CET1 ratio is at 10.3%, with potential to reduce capital levels to enhance ROTCE [58][60] Credit Quality and Risk Management - Strong credit posture with a focus on consumer and commercial credit quality [80] - Monitoring healthcare sector closely due to potential government reimbursement changes [81] - NDFI portfolio primarily consists of investment-grade assets, with a strong track record of low charge-offs [82] Misunderstandings and Market Perception - KeyCorp's unique business model and growth trajectory are often misunderstood by investors, leading to undervaluation [86] - The company emphasizes its ability to return capital to investors while maintaining strong credit quality and growth potential [87] Conclusion - KeyCorp is positioned for continued growth with a focus on organic expansion, strong financial performance, and effective capital management strategies. The company aims to enhance its ROTCE while maintaining a robust credit profile and returning capital to shareholders.

Financial Performance & Targets - KeyCorp expects a record revenue year in 2025, with FY Adjusted Total Revenue (TE) growth up by 15%+ YoY[9] - The company anticipates Net Interest Income (TE) growth of 22%+ [9] - Adjusted Noninterest Income is projected to grow by 6.5%+ [9] - KeyCorp aims for a ROTCE target of 15%+ by 4Q27[10] Capital Allocation - KeyCorp's Common Equity Tier 1 ratio was 10.3% in 3Q25[9] - The company plans to repurchase ~$200 million in shares during 4Q25, with ~$800 million remaining on the existing authorization[9] - KeyCorp is not pursuing depository institution acquisitions[9] Non-GAAP Measures & Forward-Looking Statements - The presentation includes forward-looking statements subject to risks and uncertainties[4] - Annualized, pro forma, projected, and estimated numbers are for illustrative purposes only and may not reflect actual results[6] - The presentation may include non-GAAP measures, which are not alternatives to GAAP measures[7]

Core Viewpoint - KeyBank CEO Chris Gorman emphasizes alignment with activist investor HoldCo Asset Management on key themes, including a focus on capital return and a moratorium on acquisitions [2][3]. Group 1: Company Strategy - Gorman stated that KeyBank is committed to a "no acquisitions" policy, responding to HoldCo's call for his ouster and their concerns about capital deployment [3][5]. - The bank aims to improve its return on tangible common equity from the current 12.5% to 15% or above by Q4 2027, with long-term targets of 16% to 19% [5]. - KeyBank is investing in technology and personnel while exploring cost-cutting opportunities, particularly in artificial intelligence [4]. Group 2: Market Position - Gorman highlighted that KeyBank is experiencing organic growth of about 5% in the Pacific Northwest, which is higher than the national average growth of 2% to 3% [7]. - The CEO reiterated that KeyBank has no interest in acquiring any depositories, emphasizing a focus on organic growth rather than mergers and acquisitions [6].

Core Thesis - The article presents a bullish thesis for KeyCorp (KEY), a diversified bank based in Ohio, highlighting three key bullish themes for the company [1]. Investment Strategy - The focus is on building financial assets for retirement, with an interest in both long and short trading strategies, including the use of inverse ETFs to capitalize on market declines [1]. Trading Goals - The objective is to execute a trading plan effectively and achieve absolute investing results, with the articles serving as a means to maintain focus on developing successful trades [1].

Core Thesis - KeyCorp is presented as a diversified bank based in Ohio with a bullish outlook supported by three key themes [1] Investment Strategy - The article emphasizes the importance of having both long-term and short-term trading strategies to build financial assets for retirement [1]

Core Insights - U.S. markets are experiencing a notable upswing, driven by expectations of further interest rate cuts by the Federal Reserve, positive global economic growth outlooks, and improving investor sentiment [1] Group 1: Investment Opportunities - Investors are advised to focus on fundamentally solid banks that offer robust dividend yields, specifically U.S. Bancorp (USB), KeyCorp (KEY), and Columbia Banking System (COLB) [2] - These banks have been identified using the Zacks Stocks Screener, with USB having a Zacks Rank 2 (Buy) and KEY and COLB both holding a Zacks Rank 3 (Hold) [3] Group 2: U.S. Bancorp (USB) - U.S. Bancorp has shown strong growth in total loans and deposits, supported by stabilizing funding costs and strategic acquisitions [7][8] - The company is focusing on artificial intelligence and digital infrastructure to enhance profitability, with a current dividend yield of 4.3% [8][10] - USB's long-term debt is $62.5 billion, with $15.4 billion in short-term borrowings and cash and due from banks totaling $66.6 billion as of September 30, 2025 [9] Group 3: KeyCorp (KEY) - KeyCorp is positioned to benefit from solid loan and deposit balances, with expectations of a 22% increase in net interest income (NII) and a 2% rise in period-end loans by 2025 [13] - The company maintains a decent liquidity position with total debt of $16.5 billion and cash and short-term investments of $15.3 billion as of September 30, 2025 [15] - KeyCorp has a dividend yield of 4.5% and has increased its dividend payout twice in the last five years [15] Group 4: Columbia Banking System (COLB) - Columbia Banking focuses on relationship banking and has expanded its footprint through strategic acquisitions, including the recent acquisition of Pacific Premier [18] - The company expects a net interest margin (NIM) of just over 3.90% in Q4 2025, with strong capital generation supporting growth [19] - COLB has a dividend yield of 5.1% and has increased its dividend payout three times in the last five years [20]

Core Points - KeyCorp's subsidiary, KeyBank National Association, announced a redemption notice for its 4.700% Fixed Rate Senior Bank Notes due January 26, 2026, to be redeemed on December 29, 2025, at 100% of the principal amount plus accrued interest [1] Company Overview - KeyCorp is one of the largest bank-based financial services companies in the U.S., with approximately $187 billion in assets as of September 30, 2025 [2] - KeyBank operates in 15 states, providing a range of services including deposit, lending, cash management, and investment services through around 1,000 branches and 1,200 ATMs [3] Investment Banking Services - KeyBanc Capital Markets, the investment banking unit of KeyCorp, offers sophisticated corporate and investment banking products, including merger and acquisition advice, public and private debt and equity, syndications, and derivatives to middle market companies across the U.S. [3]

Core Viewpoint - KeyCorp Inc. shares are currently trading at $17.93, showing a slight increase of 0.61% in the current session, but have experienced an 8.77% decline over the past year, raising questions about potential undervaluation despite current performance [1]. Group 1: Stock Performance - KeyCorp shares have increased by 1.96% over the past month, but the annual decline stands at 8.77% [1]. - The current trading price of KeyCorp is $17.93, reflecting a recent uptick of 0.61% [1]. Group 2: P/E Ratio Analysis - KeyCorp has a P/E ratio of 22.0, which is higher than the Banks industry average P/E ratio of 12.84, suggesting that the market may expect better future performance from KeyCorp compared to its peers [6]. - A lower P/E ratio could indicate that shareholders do not expect better future performance or that the company is undervalued [5]. - While a higher P/E ratio may suggest overvaluation, it could also imply stronger growth expectations [6]. Group 3: Investment Considerations - The P/E ratio is a useful metric for evaluating market performance but should be used cautiously, as it may indicate weak growth prospects or financial instability [9][10]. - Investors should consider the P/E ratio alongside other financial metrics, industry trends, and qualitative factors for a comprehensive analysis of a company's financial health [10].

Core Insights - Analysts at the Bank of Nova Scotia have expanded their list of stock recommendations following the announcement of six new major infrastructure projects by Prime Minister Mark Carney, adding to an initial five projects [1] Group 1: New Infrastructure Projects - The new projects include an electricity transmission corridor, a floating liquefied natural gas (LNG) terminal in northern British Columbia, a critical mineral mine in New Brunswick, a nickel mine in Ontario, a graphite mine in Quebec, and a hydro line to the Arctic [1] Group 2: Beneficiary Companies - Snowline Gold Corp. (TSX:SGD) may benefit from lower energy costs due to the B.C. electricity project [1] - Enbridge Inc. (TSX:ENB) is expected to play a role in the LNG terminal, potentially assisting in building a pipeline for the project [1] - Alberta gas companies such as AltaGas Ltd. (TSX:ALA), Keyera Corp. (TSX:KEY), and Pembina Pipeline Corp. (TSX:PPL) could also benefit from the LNG terminal [1] - TC Energy Corp. (TSX:TCL) may be involved in further large-scale pipeline investments in the region [1] Group 3: Engineering and Construction Stocks - Several engineering and construction companies have been highlighted, including AtkinsRealis Group Inc. (TSX:ATRL), Stantec Inc. (TSX:STN), and WSP Global Inc. (TSX:WSP) [1] - Equipment dealers such as Finning International Inc. (TSX:FTT) and Toromont Industries Ltd. (TSX:TIH) are also noted as potential beneficiaries [1] Group 4: Transportation Companies - Transportation companies like Canadian National Railway Co. (TSX:CNR) and Canadian Pacific Kansas City Ltd. (TSX:CP) may see upside from these infrastructure developments [1]