Financial Data and Key Metrics Changes - The company reported record adjusted net income of $37 million, or $2.21 per diluted share for Q4 2025, and $130 million, or $7.64 per diluted share for the full year 2025, driven by significant growth in net interest income and capital markets revenue [17][29] - Net interest income increased by $4 million, or 22% annualized in Q4, and $23 million, or 10% for the year, supported by margin expansion [17][18] - The net interest margin (NIM) increased by 6 basis points from Q3, nearing the upper end of guidance, with a 14% increase in average earning assets [18][19] Business Line Data and Key Metrics Changes - The wealth management business added nearly 500 new client relationships, bringing in over $1 billion in new assets under management, with a five-year compound annual growth rate of 10% for both assets and revenue [8][9] - The LIHTC lending platform performed exceptionally well, with the company adding 18 new developer partners and benefiting from strong demand for affordable housing [9][10] Market Data and Key Metrics Changes - The company experienced strong organic growth and enhanced profitability in traditional banking operations, with total loans growing by $304 million, or 17% annualized in Q4 [24][25] - Total criticized loans decreased by $5 million in Q4 and $20 million for the full year, reflecting a 12% reduction, indicating improved asset quality [26][27] Company Strategy and Development Direction - The company aims to continue advancing its digital transformation, expand its wealth management business, and grow its LIHTC lending platform, supported by a positive NIM outlook and solid loan and deposit pipelines [16][19] - The multi-charter model allows the company to outperform competitors and gain market share, with a focus on improving balance sheet efficiency and enhancing service capabilities through technology investments [7][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum into 2026, with expectations for continued growth in net interest income and capital markets revenue [5][16] - The company anticipates additional core margin expansion in Q1 2026, supported by repricing opportunities and a favorable deposit mix [20][21] Other Important Information - The company executed share repurchases totaling approximately $13 million in Q4, returning nearly $22 million to shareholders for the full year [27][28] - The effective tax rate for Q4 was 8%, down from 10% in the prior quarter, reflecting a favorable mix of tax-exempt income [29] Q&A Session Summary Question: Guidance on capital markets revenues - Management indicated that Q1 is historically the slowest quarter for capital markets revenue, setting expectations accordingly [34][36] Question: Update on securitization plans - The company expects to securitize approximately $300 million-$350 million in loans before June 30, 2026, despite some delays in the process [37] Question: Earning assets starting point for Q1 - Earning assets heading into Q1 will be consistent with the end of Q4, with robust loan growth anticipated throughout the year [43][45] Question: Deposit gathering expectations - The company is focused on improving core deposit growth and enhancing the mix, with strategies in place to attract new retail checking accounts and private banking clients [54][55] Question: LIHTC business growth opportunities - Management expressed optimism about the LIHTC business, emphasizing the importance of maintaining a balanced growth approach across all business segments [66][70]

Financial Data and Key Metrics Changes - The company reported record adjusted net income of $37 million, or $2.21 per diluted share for Q4 2025, and $130 million, or $7.64 per diluted share for the full year [17] - Net interest income increased by $4 million, or 22% annualized in Q4, and $23 million, or 10% for the year, driven by margin expansion [17][18] - The net interest margin (NIM) increased by 6 basis points from the previous quarter, supported by a 14% increase in average earning assets [18] Business Line Data and Key Metrics Changes - The wealth management business added nearly 500 new client relationships, bringing in over $1 billion in new assets under management, with a 5-year compound annual growth rate of 10% for both assets and revenue [8] - The LIHTC lending platform performed exceptionally well, with significant demand for affordable housing and the addition of 18 new developer partners [9][10] Market Data and Key Metrics Changes - Total loans grew by $304 million, or 17% annualized in Q4, with traditional loan portfolio growth of $92 million, or 8% annualized [24] - Core deposits increased by $64 million, or 4% annualized in Q4, with average deposit balances rising by $237 million, or 13% annualized compared to Q3 [25] Company Strategy and Development Direction - The company aims to advance its digital transformation, expand its wealth management business, and continue growing its LIHTC lending platform [16] - The multi-charter model allows the company to outperform competitors and gain market share, with a focus on enhancing service capabilities and client experience through technology upgrades [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong financial performance, supported by a positive NIM outlook and solid loan and deposit pipelines [16] - The company anticipates continued growth in net interest income and capital markets revenue, with guidance for capital markets revenue set at $55 million-$70 million over the next four quarters [10][21] Other Important Information - The company executed share repurchases totaling approximately $13 million in Q4, returning nearly $22 million to shareholders for the full year [27] - The effective tax rate for Q4 was 8%, down from 10% in the prior quarter, reflecting a favorable mix of tax-exempt income [29] Q&A Session Summary Question: Guidance on capital markets revenues and seasonality - Management noted that Q1 is historically the slowest quarter for capital markets revenue, with expectations set accordingly [34][36] Question: Update on securitization plans - The company expects to securitize approximately $300 million-$350 million in loans before June 30, 2026 [37] Question: Guidance for earning assets in Q1 - Earning assets are expected to be consistent with the end of Q4, with robust loan growth anticipated throughout the year [44][45] Question: Deposit gathering expectations - The company is focused on improving core deposit growth and enhancing the deposit mix, with strategies in place to attract new retail checking accounts and private banking clients [55][56] Question: Impact of recent M&A activity on market share - Management is actively targeting clients from a competitor's recent acquisition, expecting to gain market share in the Cedar Rapids area [60]

Financial Data and Key Metrics Changes - The company finished the year strong with robust loan and core deposit growth, net interest margin expansion, and higher fee income [4] - Net interest margin expanded by 12 basis points to 2.75%, with net interest income increasing by 5% during the quarter [6][11] - Core deposits grew by 9% in the fourth quarter and 8% for the full year, while loans grew at an 11% pace [7] - Tangible book value per share grew 16.5% annualized and was up 15.3% year-over-year [7] Business Line Data and Key Metrics Changes - The company saw strong revenue growth from both spread and fee perspectives, with non-interest income bouncing back due to increases in swap fees and letter of credit fees [16] - Core deposit growth was driven by strong non-interest-bearing deposit growth, which increased by $100 million during the fourth quarter [18] - Loan balances were up 8.9% annualized in the fourth quarter and 11.4% for the year, with construction being the largest driver of growth [20][22] Market Data and Key Metrics Changes - The company is now the second-largest locally led bank in the Twin Cities, positioning itself well to capture market share amid M&A disruptions [9] - The multifamily portfolio continues to perform well, with only $62,000 in net charge-offs recorded since the bank's founding [23] - Non-performing assets increased modestly to 0.41% of assets, driven by isolated issues [24] Company Strategy and Development Direction - The company aims to optimize profitable growth while aligning loan growth with core deposit growth and expanding net interest margin [30] - There is a focus on gaining market share in the Twin Cities and expanding the affordable housing vertical both locally and nationally [31] - The company plans to leverage technology investments to support growth and organizational efficiencies, including a strategy around AI [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to continue driving net interest income growth and achieving a 3% net interest margin by the end of 2026 [12][29] - The company is monitoring the impact of recent events in the Twin Cities on team members and clients, emphasizing support for the community [9] - Management remains confident in the strength of the asset quality profile despite a modest uptick in non-performing assets and net charge-offs [7][24] Other Important Information - The company closed one of the two branches added through the First Minnetonka City Bank acquisition due to proximity to other branches, with minimal deposit attrition post-merger [8] - The company has a strong capital position, with a CET1 ratio increasing slightly from 9.08% to 9.17% [27] Q&A Session Summary Question: Can you unpack some of the deposit growth in the quarter? - Management noted that Q4 tends to be a seasonally high watermark for deposit growth, with a strong deposit pipeline overall [36][39] Question: Can you discuss the cadence of loan repricing? - Management indicated that loan repricing is well laid out and not concentrated in any one quarter, supporting the margin target [40][41] Question: What are the expectations for expenses in 2026? - Management expects expenses to grow in the high single digits, aligning with asset growth [42] Question: What is the company's appetite for potential acquisitions? - Management continues to engage in conversations with local bank owners and remains optimistic about future acquisition opportunities [55] Question: How does the company view the affordable housing vertical's growth potential? - Management expressed confidence in the affordable housing space, indicating it currently represents about 15% of the loan book and is expected to grow [59][60]

Financial Data and Key Metrics Changes - Earnings per share for the December quarter was $1.62, an increase of $0.24 or 17.4% from the linked September quarter, and up $0.32 or 24.6% from the December 2024 quarter [3] - Provision for credit loss expense decreased by $2.8 million to approximately $1.7 million compared to the linked September quarter [4] - Net interest margin (NIM) for the quarter was 3.57%, unchanged from the linked September quarter, and up from 3.34% reported for the year-ago period [6][18] - Tangible book value per share increased by $5.74 or almost 15% over the last 12 months, reaching $44.65 [8] Business Line Data and Key Metrics Changes - Gross loan balances increased by $35 million during the second quarter, and are up almost $200 million or 5% compared to December 31st of the prior year [4] - Loan originations reached nearly $312 million, marking the strongest quarter in several years, although growth was slowed by seasonal agricultural paydowns and larger loan payoffs [5] - Deposit balances increased by about $28 million in the second quarter and by $98 million or 2.3% compared to December 31st of the prior year [5] Market Data and Key Metrics Changes - The company experienced strong growth in its East region, followed by good growth in the West region [4] - Over the last 12 months, brokered deposits decreased by $72 million, while core deposit growth was approximately $170 million or 4.3% [6] Company Strategy and Development Direction - The company is focused on maintaining disciplined execution, prudent risk management, and thoughtful capital deployment to deliver consistent returns for shareholders [27] - A new share repurchase program was approved to repurchase up to 550,000 shares, approximately 5% of shares outstanding, indicating a commitment to returning capital to shareholders while preserving capacity for future growth [26] - The company is optimistic about potential M&A opportunities as market conditions stabilize, with a focus on banks within its footprint or adjacent markets [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of current profitability levels and the strength of the franchise, while remaining vigilant on credit quality [25] - The company anticipates limited net loan growth in the March quarter due to normal seasonality but expects a typical pickup in growth in the fourth quarter, aiming for mid-single-digit growth for fiscal year 2026 [5][36] - Management noted that while there are pressures on loan yields due to declining interest rates, there are opportunities for further improvement in funding costs [19] Other Important Information - The allowance for credit losses totaled $54.5 million, representing 1.29% of gross loans, an increase from the previous quarter [23] - Non-interest income increased by 3.1% compared to the linked quarter, driven by higher wealth management fees and increased interchange income [20] Q&A Session Summary Question: Loan growth and paydowns - Management noted that there were several unexpected paydowns, including a larger C&I relationship that moved to a larger bank, and overall prepayment rates are anticipated to be higher than historically seen [32][33] Question: Outlook on net interest margin - Management indicated that while they do not provide specific guidance on NIM, there is potential for increased spread due to decreased deposit costs [38] Question: Personnel costs expectations - Management expects a mid-single-digit increase in personnel costs due to annual merit increases, with no major deviations in run rates anticipated [45][46] Question: Charge-offs on commercial real estate loans - Management does not anticipate much in the way of additional charge-offs beyond historical averages, indicating a return to more normalized charge-off levels [53][54]

Core Insights - KeyCorp reported better-than-expected earnings for Q3, with adjusted earnings of 41 cents per share, surpassing market estimates of 38 cents per share [1] - Quarterly sales reached $1.895 billion, exceeding expectations of $1.881 billion [1] Financial Performance - Adjusted revenue increased by 17% year-over-year [2] - The company achieved over 1,000 basis points of operating leverage in the quarter [2] - Revenue growth was attributed to net interest income tailwinds and an 8% increase in adjusted noninterest income, which outpaced expense growth [2] - Tangible book value per share grew by 4% sequentially and 14% year-over-year [2] Stock Performance - KeyCorp shares rose by 0.6%, trading at $16.88 following the earnings announcement [2] Analyst Ratings - Truist Securities analyst Brian Foran maintained a Hold rating and lowered the price target from $20 to $19 [5] - DA Davidson analyst Peter Winter maintained a Buy rating and reduced the price target from $22 to $21 [5]

Financial Data and Key Metrics Changes - The company reported a fully diluted EPS of $0.38, a 65% increase over the prior year [4] - Net income for the quarter was $0.38 per diluted share, up 65% over the prior year [8] - Return on average assets was 1.19% and return on average equity was 14.15% [9] - Net interest margin (NIM) was 3.1%, down slightly from the prior quarter [9] - The efficiency ratio improved to 52.79% [9] - Tangible book value per share increased by $0.42 to $11.23 [9] Business Line Data and Key Metrics Changes - Average loans increased by $205.3 million or 11.5% compared to Q1 2024 [5] - Average deposits grew by $166.6 million or 8.1% compared to the same quarter last year [5] - The loan pipeline remains robust and diversified, with expectations for high single-digit to low double-digit loan and deposit growth in Q2 [6] Market Data and Key Metrics Changes - The Florida economy is forecasted to grow steadily in 2025, with a growing labor force and low unemployment [5] - The company surpassed the $2 billion loan mark, achieving a significant milestone [8] Company Strategy and Development Direction - The company emphasizes relationship-driven organic growth and has onboarded additional senior bankers to support business lending and deposit production [6][29] - The strategic focus is on maintaining credit quality and carefully vetting new loan production amid economic uncertainties [4][29] - The company plans for disciplined expense control to improve operating leverage [29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment, particularly in light of recent trade deal progress [4] - The company anticipates continued growth in loans and deposits, tempered by economic uncertainties related to trade policies [29] - The management team is focused on maintaining a strong balance sheet while returning capital to investors through dividends [6][28] Other Important Information - The Board of Directors declared a cash dividend of $0.10 per share, to be paid on June 5, 2025 [6] - Noninterest income was 16.3% of total revenue, consistent with prior quarters [25] Q&A Session Summary Question: What drove the deposit growth in the quarter? - Management noted positive growth in Correspondent Banking and business banking, contributing to balanced deposit growth [36] Question: What is the outlook for NIM given the current conditions? - Management expects NIM to be flat to slightly up, anticipating potential rate cuts that could benefit deposit costs [38][40] Question: What is the impact of specialty verticals on deposits? - New hires in various verticals are expected to enhance deposit growth, particularly in HOA and business banking [46][48] Question: How should the expense base be viewed moving forward? - The expense base is expected to gradually increase due to new hires and performance-based bonuses [50] Question: What is the focus regarding capital growth? - The focus remains on organic growth rather than buybacks, given solid growth prospects [52]