Keyp(KEY) - 2024 Q1 - Quarterly Results

Net Income and Profitability - KeyCorp reported a net income of $183 million for Q1 2024, with a $0.02 per diluted common share impact from the FDIC special assessment[2] - KeyCorp reported a net income of $219 million for the first quarter of 2024, compared to $65 million in the previous quarter and $312 million in the same quarter last year[20] - Net income attributable to Key for Consumer Bank in Q1 2024 was $55 million, a significant decrease of 38.2% compared to Q1 2023[6] - Net income attributable to Key for Commercial Bank in Q1 2024 was $200 million, an increase of 39.9% compared to Q4 2023 but a decrease of 21.6% compared to Q1 2023[6] - Net income from continuing operations attributable to Key common shareholders was $183 million, or $0.20 per diluted common share, for Q1 2024, compared to $30 million, or $0.03 per diluted common share, for Q4 2023, and $275 million, or $0.30 per diluted common share, for Q1 2023[71] - Net income attributable to Key decreased by 38.2% to $55 million in 1Q24 compared to 1Q23[89] - Commercial Bank's net income attributable to Key decreased to $200 million in 1Q24 compared to $255 million in 1Q23[106] - Net income attributable to Key common shareholders for Q1 2024 was $183 million, compared to $30 million in Q4 2023 and $276 million in Q1 2023[111] Net Interest Income and Margin - Taxable-equivalent net interest income decreased by $42 million compared to Q4 2023, and the net interest margin declined by five basis points[3] - Net interest income for Q1 2024 was $875 million, a decrease from $921 million in Q4 2023 and $1,099 million in Q1 2023[18] - Total interest income for Q1 2024 was $2,032 million, compared to $2,050 million in Q4 2023 and $1,824 million in Q1 2023[20] - Total interest expense rose to $1,157 million in Q1 2024, up from $1,129 million in Q4 2023 and $725 million in Q1 2023[20] - Taxable-equivalent net interest income decreased by $63 million (10.3%) compared to Q1 2023, driven by a shift in funding mix and balance sheet optimization[25] - Net interest income (TE) for Q1 2024 was $886 million, down from $928 million in Q4 2023 and $1,106 million in Q1 2023[37] - Net interest income (TE) for Q1 2024 was $886 million, a decrease of 4.5% compared to Q4 2023 and 19.9% compared to Q1 2023[48] - Taxable-equivalent net interest income was $886 million for Q1 2024, a decrease of $220 million compared to Q1 2023, with a net interest margin of 2.02%, down 45 basis points year-over-year[75] - Net interest income (TE) decreased by 1.6% to $549 million in 1Q24 compared to 4Q23, and by 10.3% compared to 1Q23[89] - Commercial Bank's taxable-equivalent net interest income decreased by 18.2% to $87 million in 1Q24 compared to 1Q23[106] - Net interest income (TE) for Q1 2024 was $886 million, compared to $928 million in Q4 2023 and $1,106 million in Q1 2023[111] Loan Performance and Credit Quality - Net loan charge-offs increased to $81 million in Q1 2024, up from $76 million in Q4 2023, representing 0.29% of average total loans[4] - The allowance for loan and lease losses rose to $1,542 million in Q1 2024, compared to $1,508 million in Q4 2023, representing 1.40% of period-end loans[4] - Nonperforming loans increased to $658 million in Q1 2024, up from $574 million in Q4 2023, representing 0.60% of period-end portfolio loans[4] - Commercial and industrial nonperforming loans rose to $360 million in Q1 2024, compared to $297 million in Q4 2023[5] - Total nonperforming assets increased to $674 million in Q1 2024, up from $591 million in Q4 2023[5] - Accruing loans past due 90 days or more increased to $119 million in Q1 2024, compared to $107 million in Q4 2023[5] - Loans placed on nonaccrual status totaled $243 million in Q1 2024, down from $297 million in Q4 2023[5] - The allowance for credit losses stood at $1,823 million in Q1 2024, representing 1.66% of period-end loans[4] - Net loan charge-offs for Consumer Bank in Q1 2024 were $44 million, an increase of 10.0% compared to Q4 2023 and 83.3% compared to Q1 2023[6] - Net loan charge-offs for Commercial Bank in Q1 2024 were $37 million, an increase of 5.7% compared to Q4 2023 and 76.2% compared to Q1 2023[6] - Provision for credit losses decreased by $62 million compared to Q1 2023, driven by balance sheet optimization and an improving economic outlook[25] - The provision for credit losses was $101 million in Q1 2024, slightly down from $102 million in Q4 2023 and $139 million in Q1 2023[20] - Net loan charge-offs for Q1 2024 totaled $81 million, or 0.29% of average total loans, compared to $45 million (0.15%) in Q1 2023 and $76 million (0.26%) in Q4 2023[58] - Allowance for credit losses was $1.8 billion, or 1.66% of total period-end loans at March 31, 2024, compared to 1.38% at March 31, 2023[58] - Provision for credit losses was $101 million in Q1 2024, compared to $139 million in Q1 2023 and $102 million in Q4 2023[82] - Nonperforming loans totaled $658 million, or 0.60% of period-end portfolio loans, as of March 31, 2024, compared to 0.35% at March 31, 2023, and 0.51% at December 31, 2023[83] - Provision for credit losses decreased by 140.0% to -$2 million in 1Q24 compared to 4Q23, and by 103.3% compared to 1Q23[89] - Commercial Bank's provision for credit losses increased by $22 million in 1Q24 compared to 1Q23[106] - Provision for credit losses for Q1 2024 was $101 million, down from $102 million in Q4 2023 and $139 million in Q1 2023[111] - Net loan charge-offs for Q1 2024 were $81 million, compared to $76 million in Q4 2023 and $45 million in Q1 2023[111] Loan and Lease Balances - Average loans and leases for Consumer Bank in Q1 2024 were $40.446 billion, down 2.3% from Q4 2023 and 6.1% from Q1 2023[6] - Average loans and leases for Commercial Bank in Q1 2024 were $70.099 billion, down 2.8% from Q4 2023 and 8.1% from Q1 2023[6] - Average loans and leases decreased by $2.6 billion (6.1%) from Q1 2023, with broad-based declines across loan categories[25] - Total loans for Q1 2024 were $111,034 million, a decrease from $113,948 million in Q4 2023 and $119,837 million in Q1 2023[37] - Average loans for Q1 2024 were $111.0 billion, a decrease of $8.8 billion compared to Q1 2023, driven by lower commercial and industrial loans and consumer loans[54] - Average loans decreased by $2.9 billion compared to Q4 2023, with commercial loans declining by $2.2 billion and consumer loans declining by $750 million[79] - Total loans decreased by 2.4% to $109.885 billion as of March 31, 2024, compared to $112.606 billion on December 31, 2023, and decreased by 8.4% compared to $119.971 billion on March 31, 2023[116] - Commercial and industrial loans decreased by 1.8% to $54.793 billion as of March 31, 2024, compared to $55.815 billion on December 31, 2023, and decreased by 9.5% compared to $60.565 billion on March 31, 2023[116] - Total commercial real estate loans decreased by 3.8% to $17.553 billion as of March 31, 2024, compared to $18.253 billion on December 31, 2023, and decreased by 7.3% compared to $18.938 billion on March 31, 2023[116] - Residential prime loans decreased by 1.7% to $27.609 billion as of March 31, 2024, compared to $28.097 billion on December 31, 2023, and decreased by 5.9% compared to $29.338 billion on March 31, 2023[116] - Total consumer loans decreased by 2.2% to $34.234 billion as of March 31, 2024, compared to $35.015 billion on December 31, 2023, and decreased by 6.7% compared to $36.705 billion on March 31, 2023[116] - Commercial lease financing decreased by 6.2% to $3.305 billion as of March 31, 2024, compared to $3.523 billion on December 31, 2023, and decreased by 12.2% compared to $3.763 billion on March 31, 2023[116] - Credit card loans decreased by 6.7% to $935 million as of March 31, 2024, compared to $1.002 billion on December 31, 2023, and decreased by 3.5% compared to $969 million on March 31, 2023[116] - Other consumer loans decreased by 3.8% to $5.690 billion as of March 31, 2024, compared to $5.916 billion on December 31, 2023, and decreased by 11.1% compared to $6.398 billion on March 31, 2023[116] - Construction loans increased by 16.3% to $3.013 billion as of March 31, 2024, compared to $2.590 billion on March 31, 2023, despite a slight decrease of 1.7% from $3.066 billion on December 31, 2023[116] - Commercial credit card balances increased to $214 million as of March 31, 2024, compared to $207 million on December 31, 2023, and $185 million on March 31, 2023[116] Noninterest Income and Expense - Noninterest income increased to $647 million in Q1 2024, up from $610 million in Q4 2023 and $608 million in Q1 2023[18] - Noninterest income decreased by $4 million from Q1 2023, primarily due to declines in service charges on deposit accounts and cards and payments income[25] - Total noninterest income for Q1 2024 was $400 million, a 14.3% increase from Q4 2023 and a 9.3% increase from Q1 2023[26] - Noninterest income increased by 6% year-over-year and linked quarter, driven by investment banking and debt placement fees[42] - Noninterest income for Q1 2024 was $647 million, up from $610 million in Q4 2023 and $608 million in Q1 2023[111] - Noninterest income increased by $37 million compared to Q4 2023, driven by a $34 million increase in investment banking and debt placement fees[76] - Noninterest expense increased by $40 million from Q1 2023, primarily due to the FDIC special assessment charge[25] - Noninterest expense decreased by $229 million compared to Q4 2023, primarily due to the absence of $275 million in charges related to the FDIC special assessment, efficiency-related expenses, and a pension settlement charge[77] - Cash efficiency ratio (non-GAAP) for Q1 2024 was 74.0%, compared to 88.6% in Q4 2023 and 68.0% in Q1 2023[113] Deposits and Funding - Average deposits decreased by $320 million (0.4%) from Q1 2023[25] - Total interest-bearing deposits increased to $113,479 million in Q1 2024 from $113,429 million in Q4 2023 and $104,062 million in Q1 2023[37] - Customer deposits increased by 2% year-over-year, with relationship households and commercial clients growing by 2.5% and 6%, respectively[46] - Average deposits decreased by $2.2 billion compared to Q4 2023, driven by seasonal deposit outflows and a decrease in wholesale deposit balances[80] Capital and Liquidity - The tangible common equity to tangible assets ratio was 5.04% as of March 31, 2024, slightly down from 5.06% at the end of 2023[18] - KeyCorp's average tangible common equity was $9,347 million in Q1 2024, up from $8,160 million in Q4 2023 and $8,476 million in Q1 2023[18] - Common Equity Tier 1 ratio rose to 10.3% in Q1 2024, reflecting an organic capital build of approximately 120 basis points over the past twelve months[42] - Tangible common equity ratio was 5.0% at March 31, 2024[60] - Common Equity Tier 1 ratio increased 120 basis points year-over-year to 10.3% as of March 31, 2024[71] - Key's Common Equity Tier 1 ratio was 10.3% as of March 31, 2024, exceeding all "well-capitalized" regulatory benchmarks[85] Assets and Liabilities - KeyCorp's total assets stood at $187,485 million as of March 31, 2024, down from $188,281 million at the end of 2023[18] - Loans held for sale decreased to $228 million as of March 31, 2024, from $483 million at December 31, 2023, and $1.211 billion at March 31, 2023[36] - Securities available for sale increased to $37,089 million in Q1 2024 from $35,576 million in Q4 2023 and $39,172 million in Q1 2023[37] - Total assets for Q1 2024 were $186,197 million, slightly down from $187,243 million in Q4 2023 and $191,270 million in Q1 2023[37] - Key shareholders' equity increased to $14,649 million in Q1 2024 from $13,471 million in Q4 2023 and $13,817 million in Q1 2023[37] - Total earning assets for Q1 2024 were $170,023 million, slightly down from $170,905 million in Q4 2023 and $174,689 million in Q1 2023[37] - KeyCorp's total assets were approximately $187 billion as of March 31, 2024[27] Other Financial Metrics - The return on average tangible common equity from continuing operations was 7.87% in Q1 2024, compared to 1.46% in Q4 2023 and 13.16% in Q1 2023[18] - Total revenue (TE) for Consumer Bank in Q1 2024 was $773 million, a decrease of 1.7% compared to Q4 2023 and 8.0% compared to Q1 2023[6] - Total revenue (TE) for Commercial Bank in Q1 2024 was $791 million, a slight decrease of 0.4% compared to Q4 2023 and 6.3% compared to Q1 2023[6] - Trust and investment services income for Consumer Bank in Q1 2024 was $109 million, an increase of 3.8% compared to Q4 2023 and 7.9% compared to Q1 2023[8] - Time deposits for Consumer Bank in Q1 2024 were $11.809 billion, an increase of 15.0% compared to Q4 2023 and 171.4% compared to Q1 2023[8] - Total revenue (TE) declined by 1.7% to $773 million in 1Q24 compared to 4Q23, and by 8.0% compared to 1Q23[89] - Assets under management increased by 4.5% to $57.305 billion in 1Q24 compared to 4Q23, and by 6.7% compared to 1Q23[89] - Commercial Bank's average loan and lease balances decreased by 8.1% to $6.2 billion in 1Q24 compared to 1Q23[106] - Total revenue (TE) for Q1 2024 was $1,533 million, compared to $1,538 million in Q4 2023 and $1,714 million in Q1