Core Insights - KeyCorp's second-quarter 2025 earnings per share from continuing operations was 35 cents, exceeding the Zacks Consensus Estimate by one cent and reflecting a 40% increase year-over-year [1][10] - The results were driven by a rise in net interest income (NII) and non-interest income, although higher expenses and increased provisions posed challenges [1][10] Financial Performance - Net income from continuing operations attributable to common shareholders reached $387 million, marking a 63.3% year-over-year increase [2] - Total revenues rose 20.9% year-over-year to $1.83 billion, surpassing the Zacks Consensus Estimate of $1.80 billion [3] - NII (on a tax-equivalent basis) increased 27.9% year-over-year to $1.15 billion, with the net interest margin expanding 62 basis points to 2.66% [4] - Non-interest income was $690 million, up 10% year-over-year, driven by increases in most fee income components [6] - Non-interest expenses increased 7% year-over-year to $1.15 billion, attributed to rising costs across nearly all components [7] Loan and Deposit Trends - Average total loans at the end of the second quarter were $105.72 billion, up 1.3% from the previous quarter [8] - Average total deposits were $147.45 billion, showing a slight decline due to reduced higher-cost commercial client balances and retail CDs [8] Credit Quality - The provision for credit losses was $138 million, up 38% year-over-year, with net loan charge-offs as a percentage of average total loans rising to 0.39% [9][10] - The allowance for loan and lease losses decreased by 6.5% year-over-year to $1.45 billion, while non-performing assets as a percentage of total loans fell to 0.66% [11] Capital Ratios - KeyCorp's tangible common equity to tangible assets ratio improved to 7.8% as of June 30, 2025, up from 5.2% in the same period of 2024 [12] - The Tier 1 risk-based capital ratio increased to 13.4%, up from 12.2%, and the Common Equity Tier 1 ratio rose to 11.7%, up from 10.5% [12] Strategic Outlook - The company is expected to benefit from decent loan balances, balance sheet repositioning efforts, strategic buyouts, and relatively higher interest rates in the near term [13]

Core Insights - KeyCorp reported $1.83 billion in revenue for Q2 2025, a year-over-year increase of 20.9% [1] - The EPS for the same period was $0.35, up from $0.25 a year ago, exceeding the consensus estimate of $0.34 [1] - The revenue surpassed the Zacks Consensus Estimate of $1.8 billion, resulting in a surprise of +1.74% [1] Financial Metrics - Net Interest Margin (Proforma) was 2.7%, matching the average estimate by analysts [4] - Net loan charge-offs to average loans stood at 0.4%, consistent with analyst estimates [4] - Cash Efficiency Ratio (non-GAAP) was 62.4%, slightly better than the average estimate of 63.5% [4] - Average balance of total earning assets was $170 billion, slightly below the average estimate of $171.16 billion [4] - Book value at period end was $15.32, exceeding the average estimate of $15.08 [4] - Leverage Ratio was 10.3%, above the average estimate of 10.2% [4] - Tier 1 Risk-based Capital Ratio was 13.4%, matching the average estimate [4] - Total nonperforming assets were $707 million, better than the average estimate of $744.86 million [4] - Total Risk-based Capital Ratio was 15.7%, slightly above the average estimate of 15.6% [4] - Nonperforming loans at period-end were $696 million, better than the average estimate of $738.47 million [4] - Total Noninterest Income was $690 million, exceeding the average estimate of $671.92 million [4] - Corporate services income was $76 million, above the average estimate of $65.91 million [4] Stock Performance - KeyCorp shares returned +10.9% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - Earnings per share for the second quarter were reported at $0.35, with revenues increasing by 21% year-over-year and expenses rising by approximately 6% excluding charitable contributions [5][14] - Pre-provision net revenue (PPNR) increased by $44 million sequentially, marking a 60% growth since Q1 2024 [5][6] - Tax equivalent net interest income rose by 4% sequentially and 28% year-over-year, while noninterest income increased by 10% year-over-year [14][20] Business Line Data and Key Metrics Changes - Commercial loan growth achieved the full-year target of $3 billion by June 30, 2025, with strong backlogs in institutional and middle market segments [6][10] - Investment banking fees increased by 41% year-over-year, with the first half of 2025 being the second-best in the company's history [22] - Assets under management reached a record $64 billion, with commercial mortgage servicing balances also at record levels [9][24] Market Data and Key Metrics Changes - Average loans increased by $1.4 billion sequentially, with C&I loans growing by $1.7 billion and CRE loans by $500 million [16][18] - Average deposits declined by less than 1% from the previous quarter, but total deposits increased by 2% year-over-year [18][19] - Noninterest-bearing deposits accounted for 19% of total deposits, remaining stable compared to the first quarter [19] Company Strategy and Development Direction - The company is focused on maintaining low to mid-single-digit expense growth while investing significantly in frontline bankers and technology [11][29] - There is a commitment to increasing the number of frontline bankers and client advisers by approximately 10% this year [11][78] - The company is positioned to take advantage of market dislocations due to its strong capital position and ample liquidity [13][27] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding client sentiment, noting that many clients feel good about their business despite macro concerns [35][36] - The company anticipates a significant ramp-up in capital expenditures in the second half of the year, driven by favorable tax policies [40] - Credit metrics are stable to improving, with net charge-offs and criticized loans declining [25][48] Other Important Information - The company plans to revise its 2025 guidance upwards, expecting net interest income growth of 20% to 22% [27][28] - The CET1 ratio was reported at 11.7%, indicating a strong capital position relative to peers [27] - The company is actively managing its deposit costs, which are now below 2% [6][19] Q&A Session Summary Question: Client sentiment and eagerness to borrow - Management noted that clients are cautiously optimistic, with many feeling good about their business despite macroeconomic concerns [35][36] Question: NII and loan growth outlook - The company revised its NII growth guidance to 20% to 22%, driven by strong performance in the first half and healthy pipelines [44][45] Question: Deposit pricing strategy - Management indicated that they have room to manage deposit costs and are observing competitive pricing in the market [60][62] Question: Capital management and share repurchases - The company plans to resume modest share repurchases in Q3, with a more significant increase expected in Q4 [70][71] Question: Loan and deposit pricing competition - Management acknowledged increased competition in loan pricing but noted that their pricing has remained flat year-over-year [99][101]

Financial Data and Key Metrics Changes - Earnings per share for Q2 2025 were reported at $0.35, with revenues increasing by 21% year-over-year and expenses rising by approximately 6% excluding charitable contributions [4][13]. - Pre-provision net revenue (PPNR) increased by $44 million sequentially, marking a 60% growth since Q1 2024 [4][5]. - Tax equivalent net interest income rose by 4% sequentially and 28% year-over-year, while noninterest income increased by 10% year-over-year [13][19]. Business Line Data and Key Metrics Changes - Commercial loan growth achieved the full-year target of $3 billion by June 30, 2025, with strong backlogs in institutional and middle market segments [5][8]. - Investment banking fees increased by 41% year-over-year, with Q2 2025 being the second-best first half in the company's history [21]. - Assets under management reached a record $64 billion, with commercial mortgage servicing balances also at record levels [7][22]. Market Data and Key Metrics Changes - Average loans increased by $1.4 billion sequentially, with commercial and industrial (C&I) loans growing by $1.7 billion [15]. - Average deposits declined by less than 1% from the previous quarter, but total deposits increased by 2% year-over-year [16][17]. - Noninterest-bearing deposits accounted for 19% of total deposits, remaining stable compared to the first quarter [17]. Company Strategy and Development Direction - The company is focused on maintaining low to mid-single-digit expense growth while investing significantly in frontline bankers and technology [10][12]. - There is a commitment to increasing the number of frontline bankers and client advisers by approximately 10% this year [10][73]. - The company is optimistic about meeting or exceeding full-year financial targets due to strong client engagement and healthy pipelines [8][12]. Management's Comments on Operating Environment and Future Outlook - Management noted that clients are cautiously optimistic, with many seeing the current environment as an opportunity for growth despite macroeconomic concerns [34][36]. - The company is maintaining a strong capital position and ample liquidity, allowing it to take advantage of market dislocations [12][63]. - Future guidance for net interest income growth has been revised to 20% to 22%, reflecting strong first-half performance and encouraging pipelines [26][29]. Other Important Information - The company added $36 million to its loan loss reserves this quarter, with net charge-offs of $102 million [4][14]. - The CET1 ratio was reported at 11.7%, indicating a strong capital position among peers [25]. - The company plans to resume modest share repurchases in Q3 2025, with a more significant increase expected in Q4 [65]. Q&A Session Summary Question: Client sentiment and financial outlook - Management indicated that clients are cautiously optimistic, with many feeling good about their business despite macro concerns. This sentiment is expected to translate into higher net interest income and loan growth [32][34]. Question: Deposit pricing strategy - The company is managing deposit costs effectively, with a slight decline in interest-bearing deposit costs. There is flexibility due to a low loan-to-deposit ratio [56][58]. Question: Capital and share repurchase plans - The company is at the high end of its CET1 target and plans to resume share repurchases modestly in Q3, increasing in Q4 based on market opportunities [62][65]. Question: Loan growth guidance - The company expects average loans to be down 1% to 3% for the full year, with commercial loans projected to grow about 5% [28][111]. Question: Credit quality and reserve ratio - Credit metrics are stable to improving, and there is potential for reserve reductions if the economic environment continues to improve [101][103].

Financial Performance - KeyCorp's EPS reached $0.35, a 6% increase QoQ and a 40% increase YoY[6] - Revenue increased to $1.84 billion, up 4% QoQ and 21% YoY[6] - Net interest income (TE) was $1.15 billion, reflecting a 4.1% increase QoQ and a 27.9% increase YoY[6] - Noninterest income grew to $690 million, up 3.3% QoQ and 10% YoY[6] Balance Sheet Strength - Common Equity Tier 1 (CET1) ratio stood at 11.7%, up approximately 120 bps YoY[3] - Marked Common Equity Tier 1 reached 10%, up approximately 270 bps YoY[3] - Tangible book value per common share increased by 26.7% YoY to $12.83[6] Loan and Deposit Portfolio - Average loans increased by $1.4 billion QoQ[10] - Commercial loans grew by 2.7% QoQ, driven by C&I loans[10] - Average deposits decreased slightly by 0.7% QoQ, but client deposits increased by 2% YoY[13] Credit Quality - Net charge-offs (NCOs) to average loans were 39 bps, down 4 bps QoQ[3] - Nonperforming assets (NPAs) to loans plus OREO were 66 bps, down 1 bp QoQ[3] Outlook - KeyCorp projects ending loans to be up approximately 2% vs YE 2024[35] - Net interest income (TE) is expected to increase by 20-22%[35]

Group 1: Earnings Performance - KeyCorp reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and up from $0.25 per share a year ago, representing an earnings surprise of +2.94% [1] - The company posted revenues of $1.83 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.74%, compared to $1.51 billion in the same quarter last year [2] - KeyCorp has surpassed consensus EPS estimates for four consecutive quarters [2] Group 2: Stock Performance and Outlook - KeyCorp shares have increased approximately 6.7% since the beginning of the year, while the S&P 500 has gained 7.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.37 on revenues of $1.86 billion, and for the current fiscal year, it is $1.43 on revenues of $7.33 billion [7] Group 3: Industry Context - The Banks - Major Regional industry, to which KeyCorp belongs, is currently ranked in the top 11% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact KeyCorp's stock performance [5][6]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Overview](index=1&type=section&id=2Q25%20Performance%20Overview) KeyCorp's Q2 2025 featured significant year-over-year net income growth, a 21% revenue increase, and improved credit quality Key Financial Highlights (2Q25 vs. Prior Periods) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :------------------------------------------------ | :--- | :--- | :--- | :------------------- | :------------------- | | Net Income (attributable to common shareholders) | $387M | $370M | $237M | 4.6% | 63.3% | | Diluted EPS | $0.35 | $0.33 | $0.25 | 6.1% | 40.0% | | Revenue | $1.8B | - | - | - | 21% | | Net Interest Income (NII) | - | - | - | 4% QoQ | - | | Net Interest Margin (NIM) | - | - | - | 8 bps QoQ | - | | Period-end Loans | Up $1.6B | - | - | Up $1.6B QoQ | - | | Commercial Loans (YTD) | Up $3.3B | - | - | - | 5% YTD | | Net Charge-offs | Down 8% | - | - | Down 8% QoQ | - | - Revenue increased **21% year-over-year**, driven by net interest income tailwinds and **10% growth** in noninterest income, while expenses grew **7%**[2](index=2&type=chunk) - Credit quality improved for the **sixth consecutive quarter**[2](index=2&type=chunk) - Client deposits and relationship households increased **2% year-over-year**, with deposit costs managed **below 2%**[3](index=3&type=chunk) - Assets under management reached a **record $64 billion**[3](index=3&type=chunk) - KeyCorp plans to increase front-line bankers by **10% in 2025**[4](index=4&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) [Income Statement Highlights](index=2&type=section&id=Income%20Statement%20Highlights) KeyCorp's Q2 2025 income statement showed robust growth in total revenue, driven by increases in both net interest and noninterest income Consolidated Income Statement Highlights (Dollars in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :---------------------- | :--- | :--- | :--- | :------------------- | :------------------- | | Net interest income (TE) | $1,150 | $1,105 | $899 | 4.1% | 27.9% | | Noninterest income | $690 | $668 | $627 | 3.3% | 10.0% | | Total revenue (TE) | $1,840 | $1,773 | $1,526 | 3.8% | 20.6% | | Noninterest expense | $1,154 | $1,131 | $1,079 | 2.0% | 7.0% | [Net Interest Income (NII) and Net Interest Margin (NIM)](index=2&type=section&id=Net%20Interest%20Income%20(NII)%20and%20Net%20Interest%20Margin%20(NIM)) Taxable-equivalent net interest income and margin increased due to lower deposit costs and reinvestment into higher-yielding assets Net Interest Income and Margin (TE) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :---------------------- | :--- | :--- | :--- | :------------------- | :------------------- | | Net interest income (TE) | $1,150M | $1,105M | $899M | 4.1% | 27.9% | | Net interest margin (TE) | 2.66% | 2.58% | 2.04% | 8 bps | 62 bps | - Year-over-year increase in NII and NIM reflects **lower deposit costs**, reinvestment of maturing low-yielding securities, and an improved funding mix[6](index=6&type=chunk) - Quarter-over-quarter increase in NII and NIM was driven by **declining funding costs**, redeployment of low-yielding investments, and growth in commercial loans[7](index=7&type=chunk) [Noninterest Income Breakdown](index=3&type=section&id=Noninterest%20Income%20Breakdown) Noninterest income grew year-over-year and quarter-over-quarter, led by strong investment banking and corporate services income Noninterest Income (Dollars in millions) | Category | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :-------------------------------- | :--- | :--- | :--- | :------------------- | :------------------- | | Trust and investment services income | $146 | $139 | $139 | 5.0% | 5.0% | | Investment banking and debt placement fees | $178 | $175 | $126 | 1.7% | 41.3% | | Cards and payments income | $85 | $82 | $85 | 3.7% | — | | Service charges on deposit accounts | $73 | $69 | $66 | 5.8% | 10.6% | | Corporate services income | $76 | $65 | $68 | 16.9% | 11.8% | | Commercial mortgage servicing fees | $70 | $76 | $61 | (7.9)% | 14.8% | | Total noninterest income | $690 | $668 | $627 | 3.3% | 10.0% | - Year-over-year increase of **$63 million** was driven by a **$52 million increase** in investment banking and debt placement fees[8](index=8&type=chunk) - Quarter-over-quarter increase of **$22 million** was driven by an **$11 million increase** in corporate services income and a **$7 million increase** in trust and investment services income[9](index=9&type=chunk) [Noninterest Expense Breakdown](index=3&type=section&id=Noninterest%20Expense%20Breakdown) Noninterest expense increased due to higher personnel costs from incentive compensation and investments in people and technology Noninterest Expense (Dollars in millions) | Category | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :-------------------------------- | :--- | :--- | :--- | :------------------- | :------------------- | | Personnel expense | $705 | $680 | $636 | 3.7% | 10.8% | | Business services and professional fees | $48 | $40 | $37 | 20.0% | 29.7% | | Computer processing | $107 | $107 | $101 | — | 5.9% | | Total noninterest expense | $1,154 | $1,131 | $1,079 | 2.0% | 7.0% | - Year-over-year increase of **$75 million** was primarily due to a **$69 million increase** in personnel expense and higher technology-related expenses[10](index=10&type=chunk) - Quarter-over-quarter increase of **$23 million** was primarily due to a **$25 million increase** in personnel expense and higher technology-related fees[11](index=11&type=chunk) [Balance Sheet Highlights](index=4&type=section&id=Balance%20Sheet%20Highlights) The balance sheet showed increased average loans driven by commercial growth, while average deposits slightly decreased [Average Loans](index=4&type=section&id=Average%20Loans) Average loans grew quarter-over-quarter from commercial and industrial loans but decreased year-over-year from declines in other categories Average Loans (Dollars in millions) | Category | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :---------------------- | :--- | :--- | :--- | :------------------- | :------------------- | | Commercial and industrial | $55,604 | $53,746 | $54,599 | 3.5% | 1.8% | | Total consumer loans | $31,403 | $31,989 | $33,862 | (1.8)% | (7.3)% | | Total loans | $105,715 | $104,354 | $108,961 | 1.3% | (3.0)% | - Compared to 1Q25, average loans increased by **$1.4 billion**, driven by a **$1.9 billion increase** in average commercial loans[14](index=14&type=chunk) - Compared to 2Q24, average loans decreased by **$3.2 billion**, with commercial loans declining by **$787 million** and consumer loans by **$2.5 billion**[13](index=13&type=chunk) [Average Deposits](index=4&type=section&id=Average%20Deposits) Average deposits decreased slightly quarter-over-quarter due to a reduction in higher-cost balances, lowering the overall cost of deposits Average Deposits (Dollars in millions) | Category | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :---------------- | :--- | :--- | :--- | :------------------- | :------------------- | | Non-time deposits | $131,845 | $131,917 | $128,161 | (0.1)% | 2.9% | | Time deposits | $15,601 | $16,625 | $16,019 | (6.2)% | (2.6)% | | Total deposits | $147,446 | $148,542 | $144,180 | (0.7)% | 2.3% | | Cost of total deposits | 1.99% | 2.06% | 2.28% | N/A | N/A | - Compared to 1Q25, average deposits decreased by **$1.1 billion**, driven by a reduction in higher-cost commercial client balances and retail CDs[16](index=16&type=chunk) - The overall cost of deposits declined by **7 basis points to 1.99%** quarter-over-quarter[16](index=16&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) Asset quality metrics were mixed, with an increased provision for credit losses reflecting loan growth and a deteriorating macroeconomic outlook Asset Quality Metrics (Dollars in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :------------------- | :------------------- | | Net loan charge-offs | $102 | $110 | $91 | (7.3)% | 12.1% | | Net loan charge-offs to average total loans | 0.39% | 0.43% | 0.34% | N/A | N/A | | Nonperforming loans at period end | $696 | $686 | $710 | 1.5% | (2.0)% | | Nonperforming assets at period end | $707 | $700 | $727 | 1.0% | (2.8)% | | Allowance for credit losses | $1,743 | $1,707 | $1,833 | 2.1% | (4.9)% | | Provision for credit losses | $138 | $118 | $100 | 16.9% | 38.0% | - The increase in provision for credit losses reflects a **larger reserve build** and higher net loan charge-offs compared to the prior year[17](index=17&type=chunk) - Key added **$36 million** to its allowance for credit losses in Q2 2025 due to loan growth, changes in loan mix, and a deteriorating macroeconomic outlook[17](index=17&type=chunk) - Nonperforming loans as a percentage of period-end portfolio loans remained **stable at 0.65%** compared to 1Q25[19](index=19&type=chunk) [Capital](index=5&type=section&id=Capital) KeyCorp maintained a strong regulatory capital position, with all risk-based capital ratios exceeding 'well-capitalized' benchmarks Capital Ratios | Ratio | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :-------------------------- | :-------- | :-------- | :-------- | | Common Equity Tier 1 | 11.7% | 11.8% | 10.5% | | Tier 1 risk-based capital | 13.4% | 13.5% | 12.2% | | Total risk-based capital | 15.7% | 16.0% | 14.7% | | Tangible common equity to tangible assets | 7.8% | 7.4% | 5.2% | | Leverage | 10.3% | 10.2% | 9.1% | - Key's estimated risk-based capital ratios continued to **exceed all 'well-capitalized' regulatory benchmarks** at June 30, 2025[20](index=20&type=chunk) [Shareholder Information](index=6&type=section&id=Shareholder%20Information) Common shares outstanding increased year-over-year, and the company declared a consistent quarterly dividend of $0.205 per share Summary of Changes in Common Shares Outstanding (in thousands) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :-------------------------------------------------- | :------- | :------- | :------- | :------------------- | :------------------- | | Shares outstanding at beginning of period | 1,111,986 | 1,106,786 | 942,776 | 0.5% | 17.9% | | Shares issued under employee compensation plans (net) | 467 | 5,200 | 424 | (91.0)% | 10.1% | | Shares outstanding at end of period | 1,112,453 | 1,111,986 | 943,200 | — % | 17.9% | - Key declared a dividend of **$0.205 per common share** in May 2025, payable in the second quarter of 2025[24](index=24&type=chunk) [Line of Business Results](index=6&type=section&id=Line%20of%20Business%20Results) [Major Business Segments Overview](index=6&type=section&id=Major%20Business%20Segments%20Overview) Both Consumer and Commercial Bank segments showed strong year-over-year growth in revenue and net income Major Business Segments (Dollars in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :------------------- | :------------------- | | **Revenue from continuing operations (TE):** | | | | | | | Consumer Bank | $912 | $871 | $758 | 4.7% | 20.3% | | Commercial Bank | $974 | $942 | $768 | 3.4% | 26.8% | | Total | $1,840 | $1,773 | $1,526 | 3.8% | 20.6% | | **Income (loss) from continuing operations attributable to Key:** | | | | | | | Consumer Bank | $122 | $116 | $59 | 5.2% | 106.8% | | Commercial Bank | $349 | $321 | $206 | 8.7% | 69.4% | | Total | $423 | $406 | $273 | 4.2% | 54.9% | [Consumer Bank](index=7&type=section&id=Consumer%20Bank) The Consumer Bank's net income rose significantly year-over-year, driven by strong growth in net interest income Consumer Bank Summary of Operations (Dollars in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :------------------- | :------------------- | | Net income attributable to Key | $122 | $116 | $59 | 5.2% | 106.8% | | Total revenue (TE) | $912 | $871 | $758 | 4.7% | 20.3% | | Net interest income (TE) | $676 | $646 | $523 | 4.6% | 29.3% | | Noninterest income | $236 | $225 | $235 | 4.9% | 0.4% | | Provision for credit losses | $55 | $43 | $33 | 27.9% | 66.7% | | Average loans and leases | $36,137 | $36,819 | $39,174 | (1.9)% | (7.8)% | | Average deposits | $88,002 | $88,306 | $85,397 | (0.3)% | 3.1% | | Assets under management at period end | $64,244 | $61,053 | $57,602 | 5.2% | 11.5% | - Net income **more than doubled year-over-year**, primarily due to a **29.3% increase** in taxable-equivalent net interest income[30](index=30&type=chunk) - Average deposits increased by **$2.6 billion (3.1%)** year-over-year, driven by growth in money market and demand deposits[30](index=30&type=chunk) - Provision for credit losses increased by **$22 million** year-over-year, reflecting changes in reserve levels due to economic outlook deterioration[30](index=30&type=chunk) [Commercial Bank](index=8&type=section&id=Commercial%20Bank) The Commercial Bank delivered strong net income growth, supported by increased net interest and noninterest income Commercial Bank Summary of Operations (Dollars in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | Change 2Q25 vs. 1Q25 | Change 2Q25 vs. 2Q24 | | :------------------------------------------ | :--- | :--- | :--- | :------------------- | :------------------- | | Net income attributable to Key | $349 | $321 | $206 | 8.7% | 69.4% | | Total revenue (TE) | $974 | $942 | $768 | 3.4% | 26.8% | | Net interest income (TE) | $556 | $534 | $411 | 4.1% | 35.3% | | Noninterest income | $418 | $408 | $357 | 2.5% | 17.1% | | Provision for credit losses | $84 | $75 | $87 | 12.0% | (3.4)% | | Average loans and leases | $69,087 | $67,056 | $69,248 | 3.0% | (0.2)% | | Average deposits | $55,886 | $57,436 | $57,360 | (2.7)% | (2.6)% | - Net income increased by **69.4% year-over-year**, driven by a **35.3% increase** in taxable-equivalent net interest income[34](index=34&type=chunk) - Noninterest income increased by **$61 million** year-over-year, primarily due to higher investment banking and commercial mortgage servicing fees[34](index=34&type=chunk) - Average deposit balances decreased by **$1.5 billion** year-over-year, mainly due to a reduction in higher-cost client balances[34](index=34&type=chunk) [Company Information](index=9&type=section&id=Company%20Information) KeyCorp is a major US bank-based financial services company with approximately $185 billion in assets - KeyCorp's roots trace back **200 years** to Albany, New York, and it is headquartered in Cleveland, Ohio[36](index=36&type=chunk) - Key is one of the nation's largest bank-based financial services companies, with approximately **$185 billion in assets** at June 30, 2025[36](index=36&type=chunk) - The company provides services to individuals and businesses in **15 states** through KeyBank National Association and KeyBanc Capital Markets[37](index=37&type=chunk) [Additional Information](index=10&type=section&id=Additional%20Information) This section provides contact information, investor relations details, and disclosures regarding forward-looking statements - The earnings release contains **forward-looking statements** subject to assumptions, risks, and uncertainties[40](index=40&type=chunk) - A live Internet broadcast of KeyCorp's conference call is accessible via the **Investor Relations section** of their website[41](index=41&type=chunk) [Financial Supplement](index=11&type=section&id=Financial%20Supplement) [Basis of Presentation](index=12&type=section&id=Basis%20of%20Presentation) This section clarifies the use of GAAP and non-GAAP financial measures and defines key calculation methodologies - **Non-GAAP financial measures** are used to help understand Key's results and are reconciled to comparable GAAP measures[46](index=46&type=chunk) - **Forward-looking non-GAAP financial measures** cannot be reconciled to GAAP due to the complexity of forecasting[47](index=47&type=chunk) - **Taxable-equivalent adjustments** are applied to tax-exempt income to facilitate comparison with taxable investments[49](index=49&type=chunk) [Detailed Financial Highlights](index=13&type=section&id=Detailed%20Financial%20Highlights) This section provides comprehensive tables of KeyCorp's financial performance, ratios, and asset quality metrics Summary of Operations (Three months ended) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :---------------------------------------------------------- | :-------- | :-------- | :-------- | | Net interest income (TE) | $1,150 | $1,105 | $899 | | Noninterest income | $690 | $668 | $627 | | Total revenue (TE) | $1,840 | $1,773 | $1,526 | | Provision for credit losses | $138 | $118 | $100 | | Noninterest expense | $1,154 | $1,131 | $1,079 | | Net income (loss) attributable to Key common shareholders | $389 | $369 | $238 | | Diluted EPS | $0.35 | $0.33 | $0.25 | | Return on average tangible common equity | 11.09% | 11.24% | 10.39% | | Net interest margin (TE) | 2.66% | 2.58% | 2.04% | | Common Equity Tier 1 | 11.7% | 11.8% | 10.5% | | Net loan charge-offs | $102 | $110 | $91 | | Nonperforming loans at period-end | $696 | $686 | $710 | Summary of Operations (Six months ended) | Metric | 6/30/2025 | 6/30/2024 | | :---------------------------------------------------------- | :-------- | :-------- | | Net interest income (TE) | $2,255 | $1,785 | | Noninterest income | $1,358 | $1,274 | | Total revenue (TE) | $3,613 | $3,059 | | Provision for credit losses | $256 | $201 | | Noninterest expense | $2,285 | $2,222 | | Net income (loss) attributable to Key common shareholders | $758 | $421 | | Diluted EPS | $0.69 | $0.45 | | Return on average tangible common equity | 11.16% | 9.12% | | Net interest margin (TE) | 2.62% | 2.03% | | Net loan charge-offs | $212 | $172 | [GAAP to Non-GAAP Reconciliations](index=15&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section reconciles non-GAAP measures like tangible common equity and pre-provision net revenue to their GAAP counterparts - **Tangible common equity ratios** assist in analyzing Key's capital position without the effects of intangible assets and preferred stock[57](index=57&type=chunk) - **Pre-provision net revenue** helps analyze results by eliminating the effects of the provision for credit losses and significant items[58](index=58&type=chunk) - The **cash efficiency ratio** removes intangible asset amortization to provide greater consistency and comparability with peer banks[59](index=59&type=chunk) Tangible Common Equity to Tangible Assets at Period-End (Dollars in millions) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :------------------------------------ | :-------- | :-------- | :-------- | | Key shareholders' equity (GAAP) | $19,484 | $19,003 | $14,789 | | Tangible common equity (non-GAAP) | $14,268 | $13,783 | $9,550 | | Total assets (GAAP) | $185,499 | $188,691 | $187,450 | | Tangible assets (non-GAAP) | $182,729 | $185,917 | $184,657 | | Tangible common equity to tangible assets ratio (non-GAAP) | 7.81% | 7.41% | 5.17% | [Consolidated Financial Statements](index=17&type=section&id=Consolidated%20Financial%20Statements) This section presents detailed consolidated balance sheets and income statements for a comprehensive financial overview [Consolidated Balance Sheets](index=17&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $185.5 billion and total deposits of $146.9 billion as of June 30, 2025 Consolidated Balance Sheet (Dollars in millions) | Category | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :------------------------------------------ | :-------- | :-------- | :-------- | | Total assets | $185,499 | $188,691 | $187,450 | | Loans | $106,389 | $104,809 | $107,078 | | Total deposits | $146,905 | $150,737 | $145,720 | | Total liabilities | $166,015 | $169,688 | $172,661 | | Key shareholders' equity | $19,484 | $19,003 | $14,789 | | Common shares outstanding (000) | 1,112,453 | 1,111,986 | 943,200 | [Consolidated Statements of Income](index=18&type=section&id=Consolidated%20Statements%20of%20Income) The income statements detail strong revenue growth contributing to increased net income for the period Consolidated Statements of Income (Three months ended, Dollars in millions) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :---------------------------------------------------------- | :-------- | :-------- | :-------- | | Total interest income | $2,107 | $2,070 | $2,088 | | Total interest expense | $966 | $974 | $1,201 | | Net interest income | $1,141 | $1,096 | $887 | | Total noninterest income | $690 | $668 | $627 | | Total noninterest expense | $1,154 | $1,131 | $1,079 | | Net income (loss) attributable to Key common shareholders | $389 | $369 | $238 | | Diluted EPS | $0.35 | $0.33 | $0.25 | [Consolidated Average Balance Sheets, Net Interest Income and Yields/Rates](index=19&type=section&id=Consolidated%20Average%20Balance%20Sheets%2C%20Net%20Interest%20Income%20and%20Yields%2FRates) This section details average balances, net interest income, and associated yields, highlighting the net interest margin Consolidated Average Balance Sheets (2Q25, Dollars in millions) | Category | Average Balance | Interest | Yield/Rate | | :-------------------------------- | :-------------- | :------- | :--------- | | Total loans | $105,715 | $1,452 | 5.51% | | Total earning assets | $170,000 | $2,116 | 4.90% | | Total interest-bearing deposits | $119,973 | $730 | 2.44% | | Total interest-bearing liabilities | $135,764 | $966 | 2.86% | | Net interest income (TE) | $1,150 | - | 2.66% | | Interest rate spread (TE) | - | - | 2.04% | - The average yield on total earning assets for 2Q25 was **4.90%**, while the average rate on total interest-bearing liabilities was **2.86%**[72](index=72&type=chunk) [Detailed Expense and Loan Data](index=21&type=section&id=Detailed%20Expense%20and%20Loan%20Data) This section provides a detailed breakdown of noninterest expenses and loan portfolio composition [Noninterest Expense Breakdown](index=21&type=section&id=Noninterest%20Expense%20Breakdown) Personnel expense remains the largest cost component, showing increases alongside technology-related spending Noninterest Expense (Dollars in millions) | Category | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | Personnel | $705 | $680 | $636 | | Net occupancy | $69 | $67 | $66 | | Computer processing | $107 | $107 | $101 | | Business services and professional fees | $48 | $40 | $37 | | Total noninterest expense | $1,154 | $1,131 | $1,079 | | Average full-time equivalent employees | 17,105 | 16,989 | 16,646 | [Personnel Expense Breakdown](index=21&type=section&id=Personnel%20Expense%20Breakdown) Increased salaries and incentive compensation were the primary drivers of higher personnel expense Personnel Expense (Dollars in millions) | Category | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | Salaries and contract labor | $427 | $405 | $394 | | Incentive and stock-based compensation | $168 | $158 | $143 | | Employee benefits | $108 | $109 | $98 | | Total personnel expense | $705 | $680 | $636 | [Loan Composition](index=21&type=section&id=Loan%20Composition) The loan portfolio saw quarter-over-quarter growth in commercial loans, while consumer loans experienced a slight decline Loan Composition (Dollars in millions) | Category | 6/30/2025 | 3/31/2025 | 6/30/2024 | Change 6/30/2025 vs. 3/31/2025 | Change 6/30/2025 vs. 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------------------------- | :----------------------------- | | Commercial and industrial | $56,058 | $54,378 | $53,129 | 3.1% | 5.5% | | Total commercial loans | $75,222 | $73,122 | $73,525 | 2.9% | 2.3% | | Total consumer loans | $31,167 | $31,687 | $33,553 | (1.6)% | (7.1)% | | Total loans | $106,389 | $104,809 | $107,078 | 1.5% | (0.6)% | [Loans Held for Sale Composition](index=21&type=section&id=Loans%20Held%20for%20Sale%20Composition) Total loans held for sale decreased significantly quarter-over-quarter, driven by reductions in commercial categories Loans Held for Sale Composition (Dollars in millions) | Category | 6/30/2025 | 3/31/2025 | 6/30/2024 | Change 6/30/2025 vs. 3/31/2025 | Change 6/30/2025 vs. 6/30/2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------------------------- | :----------------------------- | | Commercial and industrial | $158 | $252 | $72 | (37.3)% | 119.4% | | Real estate — commercial mortgage | $290 | $473 | $354 | (38.7)% | (18.1)% | | Total loans held for sale | $530 | $811 | $517 | (34.6)% | 2.5% | [Detailed Asset Quality Data](index=22&type=section&id=Detailed%20Asset%20Quality%20Data) This section provides granular details on loan loss experience, nonperforming assets, and past due loans [Summary of Changes in Loans Held for Sale](index=22&type=section&id=Summary%20of%20Changes%20in%20Loans%20Held%20for%20Sale) Loans held for sale decreased in Q2 2025 as higher loan sales offset new originations Summary of Changes in Loans Held for Sale (Dollars in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | | :-------------------------- | :--- | :--- | :--- | | Balance at beginning of period | $811 | $797 | $228 | | New originations | $1,806 | $1,840 | $1,532 | | Loan sales | $(2,012) | $(1,695) | $(1,234) | | Balance at end of period | $530 | $811 | $517 | [Summary of Loan and Lease Loss Experience](index=22&type=section&id=Summary%20of%20Loan%20and%20Lease%20Loss%20Experience) Net loan charge-offs decreased quarter-over-quarter, while the allowance for loan and lease losses increased slightly Loan and Lease Loss Experience (Three months ended, Dollars in millions) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :------------------------------------------ | :-------- | :-------- | :-------- | | Average loans outstanding | $105,715 | $104,354 | $108,961 | | Total loans charged off | $127 | $126 | $131 | | Total recoveries | $25 | $16 | $40 | | Net loan charge-offs | $(102) | $(110) | $(91) | | Provision (credit) for loan and lease losses | $119 | $130 | $96 | | Allowance for loan and lease losses at end of period | $1,446 | $1,429 | $1,547 | | Total allowance for credit losses at end of period | $1,743 | $1,707 | $1,833 | | Net loan charge-offs to average total loans | 0.39% | 0.43% | 0.34% | [Summary of Nonperforming Assets and Past Due Loans](index=23&type=section&id=Summary%20of%20Nonperforming%20Assets%20and%20Past%20Due%20Loans) Nonperforming loans and assets remained relatively stable, with slight improvements year-over-year Nonperforming Assets and Past Due Loans (Dollars in millions) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :---------------------------------------------------------- | :-------- | :-------- | :-------- | | Total nonperforming loans | $696 | $686 | $710 | | Total nonperforming assets | $707 | $700 | $727 | | Accruing loans past due 90 days or more | $74 | $86 | $137 | | Nonperforming loans to period-end portfolio loans | 0.65% | 0.65% | 0.66% | | Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets | 0.66% | 0.67% | 0.68% | [Selected Items Impact on Earnings](index=24&type=section&id=Selected%20Items%20Impact%20on%20Earnings) This section details the impact of selected items, such as FDIC special assessments, which are excluded from adjusted non-GAAP measures - **No selected items** impacted earnings for the three and six months ended June 30, 2025[104](index=104&type=chunk) - The **FDIC special assessment** amounts reflect adjustments from initial estimates based on quarterly invoices received from the FDIC[106](index=106&type=chunk) Selected Items Impact on Earnings (Dollars in millions, except per share amounts) | Item | Period | Pretax Amount | After-tax Net Income Impact | EPS Impact | | :------------------------------------------ | :------- | :------------ | :-------------------------- | :--------- | | FDIC special assessment (other expense) | 3 months ended 6/30/2024 | $(5) | $(4) | $0.00 | | FDIC special assessment (other expense) | 6 months ended 6/30/2024 | $(34) | $(26) | $(0.02) |

Core Insights - KeyCorp reported a revenue of $1.8 billion for Q2 2025, reflecting a 21% increase year-over-year, driven by a 10% growth in noninterest income and a 4% increase in net interest income [1][2][6] - The net income attributable to Key common shareholders for Q2 2025 was $387 million, or $0.35 per diluted common share, compared to $370 million, or $0.33 per diluted common share in Q1 2025, and $237 million, or $0.25 per diluted common share in Q2 2024 [1][5][49] - The company experienced a decline in net loan charge-offs by 8% quarter-over-quarter, indicating stable to improved credit metrics [1][20] Revenue and Income - Total revenue for Q2 2025 was $1.84 billion, up 20.6% from $1.526 billion in Q2 2024, with net interest income at $1.15 billion, a 27.9% increase year-over-year [6][49] - Noninterest income reached $690 million, a 10% increase from $627 million in Q2 2024, driven by higher investment banking and debt placement fees [10][11][49] Expenses - Noninterest expenses increased to $1.154 billion, a 7% rise from $1.079 billion in Q2 2024, primarily due to higher personnel expenses related to incentive compensation [13][14][49] - The company managed to keep deposit costs below 2%, with average deposits totaling $147.4 billion, reflecting a 2.3% increase year-over-year [18][19] Asset Quality - Net loan charge-offs for Q2 2025 were $102 million, or 0.39% of average total loans, compared to $91 million, or 0.34%, in Q2 2024 [20][22] - Nonperforming loans at the end of Q2 2025 totaled $696 million, representing 0.65% of period-end portfolio loans, stable compared to previous quarters [23][22] Capital Position - KeyCorp's Common Equity Tier 1 ratio was 11.7% as of June 30, 2025, maintaining a strong capital position above regulatory benchmarks [25][27] - The company declared a dividend of $0.205 per common share in May 2025, consistent with previous quarters [28][49] Business Segments Performance - The Consumer Bank segment generated $912 million in revenue, a 20.3% increase from Q2 2024, with net income of $122 million [32][35] - The Commercial Bank segment reported $974 million in revenue, up 26.8% year-over-year, with net income of $349 million [31][38]

Core Viewpoint - KeyCorp (KEY) is positioned favorably for an upcoming earnings report, with positive trends indicating a potential earnings beat [1][5]. Earnings Estimate Revisions - Recent earnings estimate revisions for KeyCorp have been favorable, suggesting analysts are optimistic about the company's performance ahead of the earnings report [2][5]. - The Most Accurate Estimate for the current quarter exceeds the Zacks Consensus Estimate of 34 cents per share, indicating a positive adjustment in analysts' expectations [3]. Earnings ESP and Historical Performance - KeyCorp has a Zacks Earnings ESP of +0.61%, which is a positive indicator for potential earnings surprises [3]. - Historical data shows that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of delivering positive surprises and have averaged over 28% in annual returns [4]. Investment Consideration - Given the positive earnings estimate revisions and a Zacks Rank of 3, KeyCorp is a stock that investors may want to consider prior to the earnings announcement [5].

Wall Street analysts forecast that KeyCorp (KEY) will report quarterly earnings of $0.34 per share in its upcoming release, pointing to a year-over-year increase of 36%. It is anticipated that revenues will amount to $1.8 billion, exhibiting an increase of 18.9% compared to the year-ago quarter.The consensus EPS estimate for the quarter has been revised 1.2% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estima ...