Keyp(US:KEY)2025-11-04 20:38Financial Performance - Net interest income rose to $1,184 million for the three months ended September 30, 2025, up 24.4% from $952 million in the same period of 2024[273]. - Net income for the three months ended September 30, 2025, was $489 million, a turnaround from a loss of $410 million in the same quarter of 2024[273]. - Comprehensive income for the three months ended September 30, 2025, was $841 million, compared to $1,453 million in Q3 2024, indicating a decrease of 42.1%[276]. - The net income for the period ending September 30, 2025, was reported at $1,319 million, compared to a net income of $489 million for the previous quarter, indicating a significant increase[278]. - Basic earnings per share for the nine months ended September 30, 2025, was $1.10, compared to a loss of $0.03 in 2024[291]. Asset and Equity Growth - Total assets increased to $187,409 million as of September 30, 2025, compared to $187,168 million at December 31, 2024, reflecting a growth of 0.13%[269]. - As of September 30, 2025, total shareholders' equity increased to $20,102 million, up from $19,484 million as of June 30, 2025, reflecting a growth of approximately 3.15%[278]. - Retained earnings increased to $15,111 million as of September 30, 2025, compared to $14,584 million at December 31, 2024, reflecting a growth of 3.6%[269]. Loan and Deposit Activity - Total loans increased to $105,902 million as of September 30, 2025, up from $104,260 million at the end of 2024[294]. - Total deposits grew to $150,765 million as of September 30, 2025, up from $149,760 million at December 31, 2024, marking a 0.67% increase[269]. - Net increase in deposits was $1,005 million, down from $4,766 million in the previous year[282]. Credit Loss Provisions - The provision for credit losses increased to $107 million in Q3 2025, compared to $95 million in Q3 2024, indicating a cautious approach to potential loan defaults[273]. - Provision for credit losses increased to $363 million in 2025 from $296 million in 2024, indicating a rise in expected credit losses[282]. Securities and Derivatives - Total securities available for sale reached $40,456 million as of September 30, 2025, up from $37,707 million at the end of 2024, indicating a growth of approximately 4.7%[360]. - The company's total derivative assets were valued at $559 million on September 30, 2025, compared to $612 million on December 31, 2024, showing a decrease of about 8.7%[360]. - The company had derivative instruments with a total notional amount of $155.868 billion as of September 30, 2025, with net derivative amounts of $227 million in assets and $636 million in liabilities[391]. Nonperforming Loans and Risk Ratings - As of September 30, 2025, 48% of nonperforming loans were contractually current, an increase from 43% as of December 31, 2024[334]. - The carrying amount of commercial nonperforming loans represented 70% of their original contractual amount owed as of September 30, 2025[332]. - For commercial and industrial loans, the "Pass" risk rating category saw an increase to $53,025 million in 2025 from $48,905 million in 2024, a rise of about 8%[318]. Tax and Legal Matters - The effective tax rate for Q3 2025 was 18.7%, slightly lower than 18.8% for Q3 2024, primarily due to income from tax-advantaged investments[444]. - The company continually monitors and reassesses the potential materiality of litigation matters, indicating that no current matters are expected to materially affect financial condition[460]. Economic Outlook - The expected U.S. GDP growth rate is projected at 1.7% for both 2025 and 2026, indicating a slowing growth outlook[311]. - The national unemployment rate is forecasted to peak at 4.5% in mid-2026, reflecting potential economic challenges ahead[311].