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  4. KEYCORP REPORTS FOURTH QUARTER 2024 NET LOSS OF $(279) MILLION, OR $(.28) PER DILUTED COMMON SHARE, AND ADJUSTED NET INCOME OF $378 MILLION, OR $.38 PER DILUTED COMMON SHARE(a)

KEYCORP REPORTS FOURTH QUARTER 2024 NET LOSS OF $(279) MILLION, OR $(.28) PER DILUTED COMMON SHARE, AND ADJUSTED NET INCOME OF $378 MILLION, OR $.38 PER DILUTED COMMON SHARE(a)

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KeyCorp (NYSE: KEY) reported a Q4 2024 net loss of $(279) million, or $(0.28) per diluted share, with adjusted net income of $378 million, or $0.38 per diluted share. The quarter included $(657) million after-tax charges related to securities sale losses.

Revenue reached $865 million, with adjusted revenue up 16% year-over-year. Net interest income increased 10% quarter-over-quarter, while investment banking, payments, and wealth management fees grew 27% year-over-year. The Common Equity Tier 1 ratio improved by 120 basis points to 12%.

Key's performance showed positive trends with client deposits up 4%, Assets Under Management reaching a record $61 billion, and net charge-offs down 26% quarter-over-quarter. The company completed Scotiabank's minority investment during the quarter and marked strong momentum across investment banking, commercial payments, and wealth management segments.

KeyCorp (NYSE: KEY) ha riportato una perdita netta di $(279) milioni per il quarto trimestre del 2024, ovvero $(0.28) per azione diluita, con un reddito netto rettificato di $378 milioni, ovvero $0.38 per azione diluita. Il trimestre ha incluso $(657) milioni di oneri fiscali postali legati a perdite dalla vendita di titoli.

I ricavi hanno raggiunto $865 milioni, con un aumento del 16% anno su anno nei ricavi rettificati. Il reddito netto da interessi è aumentato del 10% rispetto al trimestre precedente, mentre le commissioni di investment banking, pagamenti e gestione patrimoniale sono cresciute del 27% anno su anno. Il rapporto Common Equity Tier 1 è migliorato di 120 punti base, portandosi al 12%.

Le performance di Key hanno mostrato tendenze positive con i depositi dei clienti in aumento del 4%, gli Assets Under Management che hanno raggiunto un record di $61 miliardi, e le cancellazioni nette diminuite del 26% rispetto al trimestre precedente. L'azienda ha completato l'investimento di minoranza di Scotiabank durante il trimestre e ha segnato un forte slancio nei segmenti di investment banking, pagamenti commerciali e gestione patrimoniale.

KeyCorp (NYSE: KEY) informó una pérdida neta de $(279) millones en el cuarto trimestre de 2024, o $(0.28) por acción diluida, con un ingreso neto ajustado de $378 millones, o $0.38 por acción diluida. El trimestre incluyó cargos después de impuestos de $(657) millones relacionados con pérdidas por la venta de valores.

Los ingresos alcanzaron los $865 millones, con un aumento del 16% interanual en los ingresos ajustados. Los ingresos netos por intereses aumentaron un 10% respecto al trimestre anterior, mientras que las tarifas de banca de inversión, pagos y gestión de riqueza crecieron un 27% interanual. El índice de Common Equity Tier 1 mejoró en 120 puntos base, alcanzando el 12%.

El desempeño de Key mostró tendencias positivas, con depósitos de clientes aumentando un 4%, Activos Bajo Gestión alcanzando un récord de $61 mil millones, y las cancelaciones netas disminuyendo un 26% respecto al trimestre anterior. La empresa completó la inversión de minoría de Scotiabank durante el trimestre y marcó un fuerte impulso en los segmentos de banca de inversión, pagos comerciales y gestión de riqueza.

KeyCorp (NYSE: KEY)는 2024년 4분기에 $(279) 백만의 순손실을 보고하였으며, 이는 주당 $(0.28) 희석 주당 순이익으로, 조정된 순이익은 $378 백만, 즉 주당 $0.38입니다. 해당 분기에는 증권 판매 손실과 관련된 $(657) 백만의 세후 비용이 포함되었습니다.

수익은 $865 백만에 도달했으며, 조정된 수익은 전년 대비 16% 증가했습니다. 순이자 수익은 전 분기 대비 10% 증가하였고, 투자은행, 결제 및 자산 관리 수수료는 전년 대비 27% 증가했습니다. 기본 자본 비율(Common Equity Tier 1)은 120 기본 포인트 개선되어 12%에 이르렀습니다.

Key의 실적은 고객 예치금이 4% 증가하고, 관리 자산이 610억 달러로 기록을 세우며, 순손실이 전 분기 대비 26% 감소하는 등의 긍정적인 추세를 보였습니다. 회사는 분기 동안 Scotiabank의 소수 지분 투자를 완료하였으며, 투자은행, 상업 결제 및 자산 관리 세그먼트 전반에 걸쳐 강한 모멘텀을 기록했습니다.

KeyCorp (NYSE: KEY) a annoncé une perte nette de $(279) millions pour le quatrième trimestre 2024, soit $(0.28) par action diluée, avec un revenu net ajusté de $378 millions, soit $0.38 par action diluée. Le trimestre a inclus des charges après impôt de $(657) millions liées aux pertes sur ventes de titres.

Le chiffre d'affaires a atteint $865 millions, avec un chiffre d'affaires ajusté en hausse de 16% par rapport à l'année précédente. Le revenu net d'intérêts a augmenté de 10% par rapport au trimestre précédent, tandis que les frais de banque d'investissement, de paiements et de gestion de patrimoine ont augmenté de 27% par rapport à l'année précédente. Le ratio de Common Equity Tier 1 s'est amélioré de 120 points de base pour atteindre 12%.

Les performances de Key ont montré des tendances positives avec une augmentation des dépôts des clients de 4%, des actifs sous gestion atteignant un record de $61 milliards, et des pertes nettes en baisse de 26% par rapport au trimestre précédent. L'entreprise a terminé l'investissement minoritaire de Scotiabank au cours du trimestre et a enregistré un fort élan dans les segments de la banque d'investissement, des paiements commerciaux et de la gestion de patrimoine.

KeyCorp (NYSE: KEY) berichtete für das vierte Quartal 2024 einen Nettoverlust von $(279) Millionen, oder $(0.28) pro verwässerter Aktie, mit einem bereinigten Nettoeinkommen von $378 Millionen, oder $0.38 pro verwässerter Aktie. Das Quartal beinhaltete $(657) Millionen nach Steuern an Belastungen, die mit Verlusten aus dem Verkauf von Wertpapieren verbunden sind.

Der Umsatz belief sich auf $865 Millionen, wobei der bereinigte Umsatz um 16% im Jahresvergleich stieg. Das Zinsnettoeinkommen erhöhte sich um 10% im Quartalsvergleich, während die Gebühren für Investment Banking, Zahlungen und Vermögensverwaltung im Jahresvergleich um 27% wuchsen. Die Common Equity Tier 1 Quote verbesserte sich um 120 Basispunkte auf 12%.

Die Leistung von Key zeigte positive Trends mit einem Anstieg der Kundeneinlagen um 4%, verwalteten Vermögen, die ein Rekordhoch von $61 Milliarden erreichten, und einem Rückgang der Nettoabschreibungen um 26% im Quartalsvergleich. Das Unternehmen schloss während des Quartals die Minderheitsinvestition von Scotiabank ab und verzeichnete eine starke Dynamik in den Bereichen Investment Banking, kommerzielle Zahlungen und Vermögensverwaltung.

Positive
  • Net interest income increased 10% quarter-over-quarter
  • Investment banking, payments, and wealth management fees up 27% year-over-year
  • Common Equity Tier 1 ratio improved to 12%, up 120 basis points
  • Client deposits increased 4% year-over-year
  • Assets Under Management reached record $61 billion
  • Net charge-offs decreased 26% quarter-over-quarter
Negative
  • Reported net loss of $(279) million in Q4 2024
  • $(657) million after-tax charges from securities sale losses
  • Average loans decreased 8.1% year-over-year to $104.7 billion
  • Nonperforming loans increased 32.1% year-over-year

Insights

KeyCorp's Q4 2024 results present a complex picture. The reported net loss of $279 million ($0.28 per share) masks an adjusted net income of $378 million ($0.38 per share), with the difference mainly due to a $657 million after-tax charge from securities portfolio repositioning.

Key performance metrics show mixed trends: Revenue grew 16% year-over-year on an adjusted basis, with net interest income up 10% quarter-over-quarter. The bank's Common Equity Tier 1 ratio strengthened to 12%, up 120 basis points, indicating improved capital position. However, average loans decreased 8.1% year-over-year to $104.7 billion, reflecting weak loan demand.

Notable positives include strong fee income growth in investment banking (+62.5% YoY) and improved credit metrics with net charge-offs down 26% quarter-over-quarter. The completion of Scotiabank's minority investment adds strategic value.

The strategic repositioning of KeyCorp's securities portfolio, while causing short-term earnings volatility, positions the bank for improved net interest income going forward. The net interest margin expanded to 2.41%, up 34 basis points year-over-year, demonstrating better earnings potential from core banking operations.

Deposit trends are encouraging with total deposits up 3.2% YoY to $149.7 billion, showing stability in funding sources despite industry challenges. The cost of deposits at 2.18% reflects competitive but manageable funding costs. Asset quality metrics, while showing some deterioration with NPLs at 0.73% of loans (up from 0.51% YoY), remain within acceptable ranges.

The completion of the two-tranche securities portfolio restructuring, totaling $10 billion, should enhance future earnings through higher-yielding investments, though at the cost of near-term losses.

Revenue of $865 million; Adjusted for selected items(a), revenue up 16% year-over-year

Net interest income up 10% linked quarter

Momentum across investment banking, payments, and wealth management fees up 27% year-over-year

Common Equity Tier 1 ratio increased 120 basis points quarter-over-quarter to 12%(b)

CLEVELAND, Jan. 21, 2025 /PRNewswire/ -- KeyCorp (NYSE: KEY) today announced a net loss from continuing operations attributable to Key common shareholders of $(279) million, or $(.28) per diluted common share, or adjusted net income of $378 million or $.38 per diluted common share(a), for the fourth quarter of 2024. Included in the fourth quarter of 2024 are $(657) million, or $(.66) per diluted common share, after-tax, of charges related to the loss on the sale of securities(c). For the third quarter of 2024, KeyCorp reported a net loss from continuing operations attributable to Key common shareholders of $(447) million, or $(.47) per diluted common share, or adjusted net income of $285 million or $.30 per diluted common share(a). Net income from continuing operations attributable to Key common shareholders was $30 million, or $.03 per diluted common share, or adjusted net income of $239 million or $.25 per diluted common share(a), for the fourth quarter of 2023. During the quarter, Key and Scotiabank received regulatory approval to complete Scotiabank's minority investment in Key as announced on August 12, 2024.

Comments from Chairman and CEO, Chris Gorman

"Our fourth quarter results marked a strong finish to the year. EPS and revenue were impacted by the previously communicated completion of our securities portfolio repositioning. On an adjusted basis(a), revenues were up 16% year-over-year and 11% sequentially. Net interest income was up 10% quarter-over-quarter and fees (as adjusted(a)), were up meaningfully versus comparable periods. We achieved year-over-year positive operating leverage for a second consecutive quarter. On a linked quarter basis, net charge-offs were down 26% and criticized loans down 7%. 

Our strong financial results are a function of continued client momentum. Relationship households were up 3%, client deposits were up 4%, and AUM increased to a record level of $61 billion in 2024. We continued to drive significant progress in each of our strategic, fee-based businesses – wealth management, commercial payments, and investment banking. 

I am very proud of all that our team accomplished in 2024. As we turn the page to 2025, we celebrate KeyBank's 200th anniversary, a remarkable milestone that reflects the hard work of our teammates over the past two centuries, and their collective dedication to our clients. With strong performance momentum and a leading capital position, we are well positioned for sound, profitable growth in 2025 and beyond."

(a) The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "adjusted earnings per share", "adjusted taxable-equivalent revenues", "adjusted noninterest income", and "adjusted net income." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
(b) December 31, 2024 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.
(c) See table on page 25 for more information on Selected Items Impact on Earnings.

 

Selected Financial Highlights















Dollars in millions, except per share data





Change 4Q24 vs.



4Q24

3Q24

4Q23


3Q24

4Q23

Income (loss) from continuing operations attributable to Key common shareholders

$    (279)

$    (447)

$       30


37.6 %

N/M

Income (loss) from continuing operations attributable to Key common shareholders per
  common share — assuming dilution

(.28)

(.47)

.03


40.4

N/M

Return on average tangible common equity from continuing operations (a)

(9.69) %

(16.98) %

1.46 %


N/A

N/A

Return on average total assets from continuing operations

(.52)

(.87)

.14


N/A

N/A

Common Equity Tier 1 ratio (b)

12.0

10.8

10.0


N/A

N/A

Book value at period end

$   14.21

$   14.53

$   13.02


(2.2)

9.1

Net interest margin (TE) from continuing operations

2.41 %

2.17 %

2.07 %


N/A

N/A









(a)     

The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "tangible common equity." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(b)  

December 31, 2024 ratio is estimated.

TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful

 

INCOME STATEMENT HIGHLIGHTS














Revenue














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Net interest income (TE)

$      1,061

$        964

$        928


10.1 %

14.3 %

Noninterest income

(196)

(269)

610


27.1

(132.1)

Total revenue (TE)

$        865

$        695

$      1,538


24.5 %

(43.8) %








TE = Taxable Equivalent

Taxable-equivalent net interest income was $1.1 billion for the fourth quarter of 2024 and the net interest margin was 2.41%. Compared to the fourth quarter of 2023, net interest income increased by $133 million, and the net interest margin increased by 34 basis points. The increase in net interest income and the net interest margin reflect the reinvestment of proceeds from maturing investment securities into higher yielding investments, the maturity of lower-yielding interest rate swaps with negative carry that were terminated in 2023, and the first tranche of the repositioning of the available-for-sale portfolio of $7.0 billion during the third quarter of 2024. In addition, during the fourth quarter of 2024, Key completed the second tranche of the available-for-sale portfolio repositioning, which involved the sale and reinvestment of approximately $3.0 billion of lower-yielding mortgaged-backed securities into higher-yielding investments. Net interest income and the net interest margin also benefited from an increase in lower-cost deposits, which contributed to the decline in wholesale borrowings. These benefits were partially offset by a decline in loan balances and the impact of lower interest rates on repricing earning assets.

Compared to the third quarter of 2024, taxable-equivalent net interest income increased by $97 million, and the net interest margin increased by 24 basis points. Net interest income and the net interest margin benefited from the reinvestment of proceeds from maturing investment securities into higher-yielding investments, the repositioning of the available-for-sale portfolio, the maturity of amortizing interest rate swaps with negative carry, and an improved funding mix.

Noninterest Income














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Trust and investment services income

$        142

$        140

$        132


1.4 %

7.6 %

Investment banking and debt placement fees

221

171

136


29.2

62.5

Cards and payments income

85

84

84


1.2

1.2

Service charges on deposit accounts

65

67

65


(3.0)

—

Corporate services income

69

69

67


—

3.0

Commercial mortgage servicing fees

68

73

48


(6.8)

41.7

Corporate-owned life insurance income

36

36

36


—

—

Consumer mortgage income

16

12

11


33.3

45.5

Operating lease income and other leasing gains

15

16

22


(6.3)

(31.8)

Other income

(5)

(2)

13


150.0

(138.5)

Net securities gains (losses)

(908)

(935)

(4)


2.9

N/M

Total noninterest income

$       (196)

$       (269)

$        610


27.1 %

(132.1) %








N/M = Not Meaningful

Compared to the fourth quarter of 2023, noninterest income decreased by $806 million. The decrease was driven by a $915 million loss on the sale of securities as part of a strategic repositioning of the portfolio, as well as a $3 million loss related to the Scotiabank investment agreement valuation in the fourth quarter of 2024. See the Selected Items Impact on Earnings table on page 25 for more information. The decline was partly offset by an $85 million increase in investment banking and debt placement fees, reflective of stronger syndication fees, underwriting fees, and merger and acquisition fees, as well as a $20 million increase in commercial mortgage servicing fees.

Compared to the third quarter of 2024, noninterest income increased by $73 million, primarily driven by a $50 million increase in investment banking and debt placement fees, reflective of stronger syndication fees and merger and acquisition advisory fees. Additionally, net securities losses declined relative to the prior quarter, reflecting gains from other investment activity in the fourth quarter.

Noninterest Expense














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Personnel expense

$        734

$        670

$        674


9.6 %

8.9 %

Net occupancy

67

66

65


1.5

3.1

Computer processing

107

104

92


2.9

16.3

Business services and professional fees

55

41

44


34.1

25.0

Equipment

20

20

24


—

(16.7)

Operating lease expense

15

14

18


7.1

(16.7)

Marketing

33

21

31


57.1

6.5

Other expense

198

158

424


25.3

(53.3)

Total noninterest expense

$      1,229

$      1,094

$      1,372


12.3 %

(10.4) %








Compared to the fourth quarter of 2023, noninterest expense decreased $143 million. The decline was driven by selected items that impacted earnings in the fourth quarter of 2023, which included the FDIC special assessment, efficiency related expenses, and a pension settlement charge in the fourth quarter of 2023, which collectively totaled $275 million. See the Selected Items Impact on Earnings table on page 25 for more information. Partly offsetting the decline was an increase in personnel expense of $60 million due to an increase in incentive and stock-based compensation related to strong capital markets activity, as well as an increase in technology investments.

Compared to the third quarter of 2024, noninterest expense increased by $135 million. The increase was driven by a $64 million increase in personnel expense, primarily related to incentive and stock-based compensation, reflective of stronger capital markets activity, as well as an increase in employee benefits. Additionally, there was a $40 million increase in other expense, largely related to seasonal miscellaneous expenses such as charitable donations.

BALANCE SHEET HIGHLIGHTS














Average Loans














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Commercial and industrial (a)

$    52,887

$    53,121

$    56,664


(.4) %

(6.7) %

Other commercial loans

19,202

19,929

21,942


(3.6)

(12.5)

Total consumer loans

32,622

33,194

35,342


(1.7)

(7.7)

Total loans

$  104,711

$  106,244

$  113,948


(1.4) %

(8.1) %








(a)     

Commercial and industrial average loan balances include $216 million, $215 million, and $210 million of assets from commercial credit cards at December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

Average loans were $104.7 billion for the fourth quarter of 2024, a decrease of $9.2 billion compared to the fourth quarter of 2023, reflective of continued tepid client loan demand. The decline in average loans was mostly driven by a $6.5 billion decline in average commercial loans, due to lower commercial and industrial loans and commercial mortgage real estate loans. Additionally, average consumer loans declined by $2.7 billion, reflective of broad-based declines across all consumer loan categories.

Compared to the third quarter of 2024, average loans decreased by $1.5 billion. Average commercial loans declined by $961 million, primarily driven by a decrease in commercial mortgage real estate loans and commercial and industrial loans. Average consumer loans declined $572 million, driven by lower consumer mortgage and home equity loan balances.

Average Deposits














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Non-time deposits

$  132,092

$  129,901

$  130,750


1.7 %

1.0 %

Time deposits

17,641

17,870

14,326


(1.3)

23.1

Total deposits

$  149,733

$  147,771

$  145,076


1.3 %

3.2 %








Cost of total deposits

2.18 %

2.39 %

2.06 %


N/A

N/A








N/A = Not Applicable

Average deposits totaled $149.7 billion for the fourth quarter of 2024, an increase of $4.7 billion compared to the year-ago quarter, reflecting growth in both consumer and commercial deposits.

Compared to the third quarter of 2024, average deposits increased by $2.0 billion, driven by an increase in both consumer and commercial deposit balances.

ASSET QUALITY














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Net loan charge-offs

$      114

$      154

$       76


(26.0) %

50.0 %

Net loan charge-offs to average total loans

.43 %

.58 %

.26 %


N/A

N/A

Nonperforming loans at period end

$      758

$      728

$      574


4.1

32.1

Nonperforming assets at period end

772

741

591


4.2

30.6

Allowance for loan and lease losses

1,409

1,494

1,508


(5.7)

(6.6)

Allowance for credit losses

1,699

1,774

1,804


(4.2)

(5.8)

Provision for credit losses

39

95

102


(58.9)

(61.8)








Allowance for loan and lease losses to nonperforming loans

186 %

205 %

263 %


N/A

N/A

Allowance for credit losses to nonperforming loans

224

244

314


N/A

N/A








N/A = Not Applicable

Key's provision for credit losses was $39 million, compared to $102 million in the fourth quarter of 2023 and $95 million in the third quarter of 2024. The decrease from prior periods primarily reflects lower loan balances, slowing asset quality migration, and changes in net charge-off levels.

Net loan charge-offs for the fourth quarter of 2024 totaled $114 million, or 0.43% of average total loans. These results compare to $76 million, or 0.26%, for the fourth quarter of 2023 and $154 million, or 0.58%, for the third quarter of 2024. Key's allowance for credit losses was $1.7 billion, or 1.63% of total period-end loans at December 31, 2024, compared to 1.60% at December 31, 2023, and 1.68% at September 30, 2024.

At December 31, 2024, Key's nonperforming loans totaled $758 million, which represented 0.73% of period-end portfolio loans. These results compare to 0.51% at December 31, 2023, and 0.69% at September 30, 2024. Nonperforming assets at December 31, 2024, totaled $772 million, and represented 0.74% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.52% at December 31, 2023, and 0.70% at September 30, 2024.

CAPITAL

Key's estimated risk-based capital ratios, included in the following table, continued to exceed all "well-capitalized" regulatory benchmarks at December 31, 2024.

Capital Ratios









12/31/2024

9/30/2024

12/31/2023

Common Equity Tier 1 (a)

12.0 %

10.8 %

10.0 %

Tier 1 risk-based capital (a)

13.7

12.6

11.7

Total risk-based capital (a)

16.2

15.1

14.2

Tangible common equity to tangible assets (b)

7.0

6.2

5.1

Leverage (a)

10.1

9.2

9.0





(a)  

December 31, 2024 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.

(b)     

The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "tangible common equity." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

Key's regulatory capital position remained strong in the fourth quarter of 2024. As shown in the preceding table, at December 31, 2024, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 12.0% and 13.7%, respectively. Key's tangible common equity ratio was 7.0% at December 31, 2024.

Key elected the CECL phase-in option provided by regulatory guidance which delayed for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. Effective for the first quarter 2022, Key entered a three-year transition period, and the full impact of the CECL standard was phased-in to regulatory capital through December 31, 2024. In the first quarter of 2025, CECL will be fully reflected in regulatory capital. On a fully phased-in basis, Key's Common Equity Tier 1 ratio would be reduced by five basis points.

Summary of Changes in Common Shares Outstanding













In thousands





Change 4Q24 vs.



4Q24

3Q24

4Q23


3Q24

4Q23

Shares outstanding at beginning of period

991,251

943,200

936,161


5.1 %

5.9 %

Shares issued under employee compensation plans (net of cancellations and returns)

493

222

403


122.1

22.3

Shares issued under Scotiabank investment agreement

115,042

47,829

—


N/M

N/M


Shares outstanding at end of period

1,106,786

991,251

936,564


11.7 %

18.2 %









N/M = Not Meaningful

Key declared a dividend in January of 2025 of $.205 per common share, payable in the first quarter of 2025. 

LINE OF BUSINESS RESULTS

The following table shows the contribution made by each major business segment to Key's taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.

Major Business Segments















Dollars in millions





Change 4Q24 vs.



4Q24

3Q24

4Q23


3Q24

4Q23

Revenue from continuing operations (TE)







Consumer Bank

$         872

$         814

$         770


7.1 %

13.2 %

Commercial Bank

999

868

804


15.1

24.3

Other (a)

(1,006)

(987)

(36)


(1.9)

N/M


Total

$         865

$         695

$       1,538


24.5 %

(43.8) %









Income (loss) from continuing operations attributable to Key







Consumer Bank

$           88

$           86

$          (11)


2.3 %

900.0 %

Commercial Bank

379

300

150


26.3

152.7

Other (a)

(711)

(797)

(74)


10.8

N/M


Total

$        (244)

$        (411)

$           65


40.6 %

(475.4) %









(a)     

Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Corporate treasury includes realized gains and losses from transactions associated with Key's investment securities portfolio. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.

TE = Taxable Equivalent

N/M = Not Meaningful

 

Consumer Bank














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Summary of operations







Net interest income (TE)

$         637

$         584

$         544


9.1 %

17.1 %

Noninterest income

235

230

226


2.2

4.0

Total revenue (TE)

872

814

770


7.1

13.2

Provision for credit losses

43

52

5


(17.3)

760.0

Noninterest expense

713

649

779


9.9

(8.5)

Income (loss) before income taxes (TE)

116

113

(14)


2.7

928.6

Allocated income taxes (benefit) and TE adjustments

28

27

(3)


3.7

N/M

Net income (loss) attributable to Key

$           88

$           86

$          (11)


2.3 %

900.0 %








Average balances







Loans and leases

$     37,567

$     38,332

$     40,763


(2.0) %

(7.8) %

Total assets

40,563

41,188

43,551


(1.5)

(6.9)

Deposits

87,476

86,431

83,557


1.2

4.7








Assets under management at period end

$     61,361

$     61,122

$     54,859


.4 %

11.9 %








TE = Taxable Equivalent, N/M = Not Meaningful

 

Additional Consumer Bank Data














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Noninterest income







Trust and investment services income

$       115

$       114

$       105


.9 %

9.5 %

Service charges on deposit accounts

32

34

37


(5.9)

(13.5)

Cards and payments income

64

60

62


6.7

3.2

Consumer mortgage income

16

12

11


33.3

45.5

Other noninterest income

8

10

11


(20.0)

(27.3)

Total noninterest income

$       235

$       230

$       226


2.2 %

4.0 %








Average deposit balances







Money market deposits

$  31,968

$  30,805

$  29,546


3.8 %

8.2 %

Demand deposits

22,442

22,310

22,323


.6

.5

Savings deposits

4,391

4,553

5,238


(3.6)

(16.2)

Time deposits

13,979

13,927

10,261


.4

36.2

Noninterest-bearing deposits

14,696

14,836

16,189


(.9)

(9.2)

Total deposits

$  87,476

$  86,431

$  83,557


1.2 %

4.7 %








Other data







Branches

944

944

959




Automated teller machines

1,182

1,194

1,217











Consumer Bank Summary of Operations (4Q24 vs. 4Q23)

  • Key's Consumer Bank recorded net income attributable to Key of $88 million for the fourth quarter of 2024, compared to a loss of $11 million for the year-ago quarter
  • Taxable-equivalent net interest income increased by $93 million, or 17.1%, compared to the fourth quarter of 2023
  • Average loans and leases decreased $3.2 billion, or 7.8%, from the fourth quarter of 2023, driven by broad-based declines across all loan categories
  • Average deposits increased $3.9 billion, or 4.7%, from the fourth quarter of 2023, driven by growth in money market deposits and certificates of deposit
  • Provision for credit losses increased $38 million compared to the fourth quarter of 2023, largely driven by higher net charge-offs
  • Noninterest income increased $9 million from the year-ago quarter, driven by increases in trust and investment services, consumer mortgage, and cards and payments income
  • Noninterest expense decreased $66 million from the year-ago quarter, primarily driven by a FDIC special assessment charge in the fourth quarter of 2023

Commercial Bank














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Summary of operations







Net interest income (TE)

$         537

$         460

$         452


16.7 %

18.8 %

Noninterest income

462

408

352


13.2

31.3

Total revenue (TE)

999

868

804


15.1

24.3

Provision for credit losses

(3)

41

96


(107.3)

(103.1)

Noninterest expense

516

445

526


16.0

(1.9)

Income (loss) before income taxes (TE)

486

382

182


27.2

167.0

Allocated income taxes and TE adjustments

107

82

32


30.5

234.4

Net income (loss) attributable to Key

$         379

$         300

$         150


26.3 %

152.7 %








Average balances







Loans and leases

$     66,691

$     67,452

$     72,713


(1.1) %

(8.3) %

Loans held for sale

1,247

998

635


24.9

96.4

Total assets

76,433

76,395

82,026


—

(6.8)

Deposits

59,687

58,696

58,196


1.7 %

2.6 %








TE = Taxable Equivalent

 

Additional Commercial Bank Data














Dollars in millions





Change 4Q24 vs.


4Q24

3Q24

4Q23


3Q24

4Q23

Noninterest income







Trust and investment services income

$           27

$           25

$           27


8.0 %

— %

Investment banking and debt placement fees

220

171

135


28.7

63.0

Cards and payments income

18

22

20


(18.2)

(10.0)

Service charges on deposit accounts

32

32

28


—

14.3

Corporate services income

67

62

61


8.1

9.8

Commercial mortgage servicing fees

67

73

49


(8.2)

36.7

Operating lease income and other leasing gains

15

16

21


(6.3)

(28.6)

Other noninterest income

16

7

11


128.6

45.5

Total noninterest income

$         462

$         408

$         352


13.2 %

31.3 %








Commercial Bank Summary of Operations (4Q24 vs. 4Q23)

  • Key's Commercial Bank recorded net income attributable to Key of $379 million for the fourth quarter of 2024 compared to $150 million for the year-ago quarter
  • Taxable-equivalent net interest income increased by $85 million, or 18.8%, compared to the fourth quarter of 2023
  • Average loan and lease balances decreased $6.0 billion, or 8.3%, compared to the fourth quarter of 2023, driven by a decline in commercial and industrial loans and commercial real estate loans
  • Average deposit balances increased $1.5 billion compared to the fourth quarter of 2023, driven by our focus on growing deposits across our commercial businesses
  • Provision for credit losses decreased $99 million compared to the fourth quarter of 2023, driven by lower loan balances, slowing asset quality migration, and changes in the economic outlook
  • Noninterest income increased $110 million compared to the fourth quarter of 2023, primarily driven by an increase in investment banking and debt placement fees and commercial mortgage servicing fees
  • Noninterest expense decreased $10 million compared to the fourth quarter of 2023, driven by a FDIC special assessment charge in the fourth quarter of 2023, partly offset by higher incentive compensation from an increase in investment banking activity

*******************************************

KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $187 billion at December 31, 2024.

Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,200 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts.  Forward-looking statements usually can be identified by the use of words such as "goal," "objective," "plan," "expect," "assume," "anticipate," "intend," "project," "believe," "estimate," or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Key's actual results to differ from those described in the forward-looking statements can be found in KeyCorp's Form 10-K for the year ended December 31, 2023, Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and in KeyCorp's subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the "SEC") and are or will be available on Key's website (www.key.com/ir) and on the SEC's website (www.sec.gov). These factors may include, among others, deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a worsening of the U.S. economy due to financial, political, or other shocks, the extensive regulation of the U.S. financial services industry, the soundness of other financial institutions and the impact of changes in the interest rate environment. Any forward-looking statements made by us or on our behalf speak only as of the date they are made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.

Notes to Editors:
A live Internet broadcast of KeyCorp's conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts' questions can be accessed through the Investor Relations section at https://www.key.com/ir at 8:00 a.m. ET, on January 21, 2025. A replay of the call will be available on our website through January 21, 2026.

For up-to-date company information, media contacts, and facts and figures about Key's lines of business, visit our Media Newsroom at https://www.key.com/newsroom. 

*****

KeyCorp
Fourth Quarter 2024
Financial Supplement

Page


12

Basis of Presentation

13

Financial Highlights

15

GAAP to Non-GAAP Reconciliation

17

Consolidated Balance Sheets

18

Consolidated Statements of Income

19

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

21

Noninterest Expense

21

Personnel Expense

22

Loan Composition

22

Loans Held for Sale Composition

22

Summary of Changes in Loans Held for Sale

22

Summary of Loan and Lease Loss Experience From Continuing Operations

24

Asset Quality Statistics From Continuing Operations

24

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

24

Summary of Changes in Nonperforming Loans From Continuing Operations

25

Line of Business Results

25

Selected Items Impact on Earnings

Basis of Presentation

Use of Non-GAAP Financial Measures
This document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Key's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, the financial supplement, or conference call slides related to this document, all of which can be found on Key's website (www.key.com/ir).

Forward-Looking Non-GAAP Financial Measures 
From time to time Key may discuss forward-looking non-GAAP financial measures. Key is unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because Key is unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant for future results.

Annualized Data
Certain returns, yields, performance ratios, or quarterly growth rates are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts.

Taxable Equivalent
The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at the federal statutory rate. This adjustment puts all earning assets, most notably tax-exempt loans, and certain lease assets, on a common basis that facilitates comparison of results to peers.

Earnings Per Share Equivalent 
Certain income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total consolidated earnings per share performance excluding the impact of such items. When the impact of certain income or expense items is disclosed separately, the after-tax amount is computed using the marginal tax rate, unless otherwise specified, with this then being the amount used to calculate the earnings per share equivalent.

Financial Highlights

(Dollars in millions, except per share amounts)




Three months ended




12/31/2024

9/30/2024

12/31/2023

Summary of operations





Net interest income (TE)

$         1,061

$           964

$           928


Noninterest income

(196)

(269)

610



Total revenue (TE)

865

695

1,538


Provision for credit losses

39

95

102


Noninterest expense

1,229

1,094

1,372


Income (loss) from continuing operations attributable to Key

(244)

(411)

65


Income (loss) from discontinued operations, net of taxes

—

1

—


Net income (loss) attributable to Key

(244)

(410)

65








Income (loss) from continuing operations attributable to Key common shareholders

(279)

(447)

30


Income (loss) from discontinued operations, net of taxes

—

1

—


Net income (loss) attributable to Key common shareholders

(279)

(446)

30







Per common share





Income (loss) from continuing operations attributable to Key common shareholders

$           (.28)

$           (.47)

$            .03


Income (loss) from discontinued operations, net of taxes

—

—

—


Net income (loss) attributable to Key common shareholders (a)

(.28)

(.47)

.03








Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution

(.28)

(.47)

.03


Income (loss) from discontinued operations, net of taxes — assuming dilution

—

—

—


Net income (loss) attributable to Key common shareholders — assuming dilution (a)

(.28)

(.47)

.03








Cash dividends declared

.205

.205

.205


Book value at period end

14.21

14.53

13.02


Tangible book value at period end

11.70

11.72

10.02


Market price at period end

17.14

16.75

14.40







Performance ratios





From continuing operations:





Return on average total assets

(.52) %

(.87) %

.14 %


Return on average common equity

(7.80)

(13.41)

1.08


Return on average tangible common equity (b)

(9.69)

(16.98)

1.46


Net interest margin (TE)

2.41

2.17

2.07


Cash efficiency ratio (b)

141.3

156.4

88.6








From consolidated operations:





Return on average total assets

(.52) %

(.87) %

.14 %


Return on average common equity

(7.80)

(13.38)

1.08


Return on average tangible common equity (b)

(9.69)

(16.95)

1.46


Net interest margin (TE)

2.41

2.17

2.07


Loan to deposit (c)

70.3

71.0

77.9







Capital ratios at period end





Key shareholders' equity to assets

9.7 %

8.9 %

7.8 %


Key common shareholders' equity to assets

8.4

7.6

6.5


Tangible common equity to tangible assets (b)

7.0

6.2

5.1


Common Equity Tier 1 (d)

12.0

10.8

10.0


Tier 1 risk-based capital (d)

13.7

12.6

11.7


Total risk-based capital (d)

16.2

15.1

14.2


Leverage (d)

10.1

9.2

9.0







Asset quality — from continuing operations





Net loan charge-offs

$           114

$           154

$             76


Net loan charge-offs to average loans

.43 %

.58 %

.26 %


Allowance for loan and lease losses

$         1,409

$         1,494

$         1,508


Allowance for credit losses

1,699

1,774

1,804


Allowance for loan and lease losses to period-end loans

1.35 %

1.42 %

1.34 %


Allowance for credit losses to period-end loans

1.63

1.68

1.60


Allowance for loan and lease losses to nonperforming loans

186

205

263


Allowance for credit losses to nonperforming loans

224

244

314


Nonperforming loans at period-end

$           758

$           728

$           574


Nonperforming assets at period-end

772

741

591


Nonperforming loans to period-end portfolio loans

.73 %

.69 %

.51 %


Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets

.74

.70

.52







Trust assets





Assets under management

$       61,361

$       61,122

$       54,859

Other data





Average full-time equivalent employees

16,810

16,805

17,129


Branches

944

944

959


Taxable-equivalent adjustment

$             10

$             12

$              7

 





Financial Highlights (continued)

(Dollars in millions, except per share amounts)



Twelve months ended



12/31/2024

12/31/2023

Summary of operations




Net interest income (TE)

$                  3,810

$                  3,943


Noninterest income

809

2,470


Total revenue (TE)

4,619

6,413


Provision for credit losses

335

489


Noninterest expense

4,545

4,734


Income (loss) from continuing operations attributable to Key

(163)

964


Income (loss) from discontinued operations, net of taxes

2

3


Net income (loss) attributable to Key

(161)

967






Income (loss) from continuing operations attributable to Key common shareholders

(306)

821


Income (loss) from discontinued operations, net of taxes

2

3


Net income (loss) attributable to Key common shareholders

(304)

824





Per common share




Income (loss) from continuing operations attributable to Key common shareholders

$                    (.32)

$                     .88


Income (loss) from discontinued operations, net of taxes

—

—


Net income (loss) attributable to Key common shareholders (a)

(.32)

.89






Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution

(.32)

.88


Income (loss) from discontinued operations, net of taxes — assuming dilution

—

—


Net income (loss) attributable to Key common shareholders — assuming dilution (a)

(.32)

.88






Cash dividends paid

.82

.82





Performance ratios




From continuing operations:




Return on average total assets

(.09) %

.50 %


Return on average common equity

(2.37)

7.21


Return on average tangible common equity (b)

(3.03)

9.60


Net interest margin (TE)

2.16

2.17


Cash efficiency ratio (b)

97.8

73.2






From consolidated operations:




Return on average total assets

(.09) %

.50 %


Return on average common equity

(2.36)

7.24


Return on average tangible common equity (b)

(3.01)

9.63


Net interest margin (TE)

2.16

2.17





Asset quality — from continuing operations




Net loan charge-offs

$                     440

$                     244


Net loan charge-offs to average total loans

.41 %

.21 %





Other data




Average full-time equivalent employees

16,753

17,692





Taxable-equivalent adjustment

45

30

(a)  

Earnings per share may not foot due to rounding.

(b)     

The following table entitled "GAAP to Non-GAAP Reconciliations" presents the computations of certain financial measures related to "tangible common equity" and "cash efficiency." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(c)  

Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.

(d)  

December 31, 2024, ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.

GAAP to Non-GAAP Reconciliations
(Dollars in millions)

The table below presents certain non-GAAP financial measures related to "tangible common equity," "return on average tangible common equity," "pre-provision net revenue," "cash efficiency ratio," "adjusted taxable-equivalent revenue," "noninterest expense adjusted for selected items," "adjusted income (loss) available from continuing operations attributable to Key common shareholders," and "diluted earnings per share - adjusted."

The tangible common equity ratio and the return on average tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key's capital position without regard to the effects of intangible assets and preferred stock.

The table also shows the computation for pre-provision net revenue, which is not formally defined by GAAP. Management believes that eliminating the effects of the provision for credit losses makes it easier to analyze the results by presenting them on a more comparable basis.

The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash efficiency ratio performance measure removes the impact of Key's intangible asset amortization from the calculation. Management believes this ratio provides greater consistency and comparability between Key's results and those of its peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis.

Adjusted taxable-equivalent revenue is a non-GAAP measure in that it adjusts revenue for certain tax-exempt instruments and selected items. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest income, we use interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable instruments. Additionally, management believes adjusting for the selected items provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of the financial impacts related to those selected items.

Noninterest expense adjusted for selected items is a non-GAAP measure in that it excludes selected items. Management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects on noninterest expense related to those selected items.

Adjusted income (loss) available from continuing operations attributable to Key common shareholders (or "adjusted net income") and diluted earnings per share - adjusted (or "adjusted earnings per share") are non-GAAP in that these measures exclude selected items, net of tax. Management believes these measures provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of the financial impacts related to the selected items.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.


Three months ended


Twelve months ended


12/31/2024

9/30/2024

12/31/2023


12/31/2024

12/31/2023

Tangible common equity to tangible assets at period-end







Key shareholders' equity (GAAP)

$   18,176

$   16,852

$   14,637




Less: Intangible assets (a)

2,779

2,786

2,806




Preferred Stock (b)

2,446

2,446

2,446




Tangible common equity (non-GAAP)

$   12,951

$   11,620

$     9,385




Total assets (GAAP)

$ 187,168

$ 189,763

$ 188,281




Less: Intangible assets (a)

2,779

2,786

2,806




Tangible assets (non-GAAP)

$ 184,389

$ 186,977

$ 185,475




Tangible common equity to tangible assets ratio (non-GAAP)

7.02 %

6.21 %

5.06 %




Pre-provision net revenue







Net interest income (GAAP)

$     1,051

$        952

$        921


$    3,765

$    3,913

Plus: Taxable-equivalent adjustment

10

12

7


45

30

Noninterest income

(196)

(269)

610


809

2,470

Less: Noninterest expense

1,229

1,094

1,372


4,545

4,734

Pre-provision net revenue from continuing operations (non-GAAP)

$      (364)

$      (399)

$        166


$        74

$    1,513

Average tangible common equity







Average Key shareholders' equity (GAAP)

$   16,732

$   15,759

$   13,471


$  15,408

$  13,881

Less: Intangible assets (average) (c)

2,783

2,789

2,811


2,793

2,831

Preferred stock (average)

2,500

2,500

2,500


2,500

2,500

Average tangible common equity (non-GAAP)

$   11,449

$   10,470

$     8,160


$  10,115

$    8,689

Return on average tangible common equity from continuing operations







Net income (loss) from continuing operations attributable to Key common
   shareholders (GAAP)

$      (279)

$      (447)

$         30


$     (306)

$       821

Average tangible common equity (non-GAAP)

11,449

10,470

8,160


10,115

8,689








Return on average tangible common equity from continuing operations (non-GAAP)

(9.69) %

(16.98) %

1.46 %


(3.03) %

9.60 %

Return on average tangible common equity consolidated







Net income (loss) attributable to Key common shareholders (GAAP)

$      (279)

$      (446)

$         30


$     (304)

$       824

Average tangible common equity (non-GAAP)

11,449

10,470

8,160


10,115

8,689








Return on average tangible common equity consolidated (non-GAAP)

(9.69) %

(16.95) %

1.46 %


(3.01) %

9.63 %

 

GAAP to Non-GAAP Reconciliations (continued)

(Dollars in millions)


Three months ended


Twelve months ended


12/31/2024

9/30/2024

12/31/2023


12/31/2024

12/31/2023

Cash efficiency ratio







Noninterest expense (GAAP)

$     1,229

$     1,094

$     1,372


$    4,545

$    4,734

Less: Intangible asset amortization

7

7

10


29

39

Adjusted noninterest expense (non-GAAP)

$     1,222

$     1,087

$     1,362


$    4,516

$    4,695








Net interest income (GAAP)

$     1,051

$       952

$       921


$    3,765

$    3,913

Plus: Taxable-equivalent adjustment

10

12

7


45

30

Net interest income TE (non-GAAP)

1,061

964

928


3,810

3,943

Noninterest income (GAAP)

(196)

(269)

610


809

2,470

Total taxable-equivalent revenue (non-GAAP)

$       865

$       695

$     1,538


$    4,619

$    6,413








Cash efficiency ratio (non-GAAP)

141.3 %

156.4 %

88.6 %


97.8 %

73.2 %








Adjusted taxable-equivalent revenue







Noninterest income (GAAP)

$      (196)

$      (269)

$       610


$       809

$    2,470

Plus: Selected items(d)

918

918

—


1,836

—

Adjusted noninterest income (non-GAAP)

$       722

$       649

$       610


$    2,645

$    2,470

Net interest income TE (non-GAAP)

1,061

964

928


3,810

3,943

Total adjusted taxable-equivalent revenue (non-GAAP)

$     1,783

$     1,613

$     1,538


$    6,455

$    6,413

Noninterest expense adjusted for selected items







Noninterest expense (GAAP)

$     1,229

$     1,094

$     1,372


$    4,545

$    4,734

Plus: Selected items(d)

3

6

(275)


(25)

(339)

Noninterest expense adjusted for selected items (non-GAAP)

$     1,232

$     1,100

$     1,097


$    4,520

$    4,395

Adjusted income (loss) available from continuing operations attributable to
  Key common shareholders







Income (loss) from continuing operations attributable to Key common shareholders (GAAP)

$      (279)

$      (447)

$         30


$     (306)

$       821

Plus: Selected items (net of tax)(d)

657

732

209


1,415

258

Adjusted income (loss) available from continuing operations attributable to
  Key common shareholders (non-GAAP)

$       378

$       285

$       239


$    1,109

$    1,079

Diluted earnings per common share (EPS) - adjusted







Diluted EPS from continuing operations attributable to Key common shareholders (GAAP)

$       (.28)

$       (.47)

$        .03


$      (.32)

$       .88

Plus: EPS impact of selected items(d)

.66

.77

.22


1.48

.27

Diluted EPS from continuing operations attributable to Key common
  shareholders - adjusted (non-GAAP)

$        .38

$        .30

$        .25


$      1.16

$      1.15

(a)  

For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, intangible assets exclude less than $1 million, less than $1 million, and $1 million, respectively, of period-end purchased credit card receivables. 

(b)  

Net of capital surplus.

(c)   

For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, average intangible assets exclude less than $1 million, less than $1 million, and $1 million, respectively, of average purchased credit card receivables.

(d)  

Additional detail provided in Selected Items table on page 25

GAAP = U.S. generally accepted accounting principles

 

Consolidated Balance Sheets

(Dollars in millions)










12/31/2024

9/30/2024

12/31/2023

Assets





Loans

$       104,260

$       105,346

$       112,606


Loans held for sale

797

1,058

483


Securities available for sale

37,707

34,169

37,185


Held-to-maturity securities

7,395

7,702

8,575


Trading account assets

1,283

1,404

1,142


Short-term investments

17,504

22,796

10,817


Other investments

1,041

1,117

1,244



Total earning assets

169,987

173,592

172,052


Allowance for loan and lease losses

(1,409)

(1,494)

(1,508)


Cash and due from banks

1,743

1,276

941


Premises and equipment

614

624

661


Goodwill

2,752

2,752

2,752


Other intangible assets

27

34

55


Corporate-owned life insurance

4,394

4,379

4,383


Accrued income and other assets

8,797

8,323

8,601


Discontinued assets

263

277

344



Total assets

$       187,168

$       189,763

$       188,281







Liabilities





Deposits in domestic offices:






Interest-bearing deposits

$       120,132

$       119,995

$       114,859



Noninterest-bearing deposits

29,628

30,358

30,728



Total deposits

149,760

150,353

145,587


Federal funds purchased and securities sold under repurchase agreements 

14

44

38


Bank notes and other short-term borrowings

2,130

2,359

3,053


Accrued expense and other liabilities

4,983

4,478

5,412


Long-term debt

12,105

15,677

19,554



Total liabilities

168,992

172,911

173,644







Equity





Preferred stock

2,500

2,500

2,500


Common shares

1,257

1,257

1,257


Capital surplus

6,038

6,149

6,281


Retained earnings

14,584

15,066

15,672


Treasury stock, at cost

(2,733)

(4,839)

(5,844)


Accumulated other comprehensive income (loss)

(3,470)

(3,281)

(5,229)



Key shareholders' equity

18,176

16,852

14,637

Total liabilities and equity

$       187,168

$       189,763

$       188,281







Common shares outstanding (000)

1,106,786

991,251

936,564

 

Consolidated Statements of Income

(Dollars in millions, except per share amounts)




Three months ended


Twelve months ended




12/31/2024

9/30/2024

12/31/2023


12/31/2024

12/31/2023

Interest income








Loans

$             1,448

$             1,516

$             1,574


$             6,026

$             6,219


Loans held for sale

20

18

12


60

61


Securities available for sale

353

298

213


1,142

793


Held-to-maturity securities

66

70

78


284

312


Trading account assets

16

15

13


61

55


Short-term investments

214

244

138


792

414


Other investments

15

14

22


62

73



Total interest income

2,132

2,175

2,050


8,427

7,927

Interest expense








Deposits

821

887

754


3,307

2,322


Federal funds purchased and securities sold under repurchase agreements

1

1

—


4

79


Bank notes and other short-term borrowings

24

43

45


164

308


Long-term debt

235

292

330


1,187

1,305



Total interest expense

1,081

1,223

1,129


4,662

4,014

Net interest income

1,051

952

921


3,765

3,913

Provision for credit losses

39

95

102


335

489

Net interest income after provision for credit losses

1,012

857

819


3,430

3,424

Noninterest income








Trust and investment services income

142

140

132


557

516


Investment banking and debt placement fees

221

171

136


688

542


Cards and payments income

85

84

84


331

340


Service charges on deposit accounts

65

67

65


261

270


Corporate services income

69

69

67


275

302


Commercial mortgage servicing fees

68

73

48


258

190


Corporate-owned life insurance income

36

36

36


138

132


Consumer mortgage income

16

12

11


58

51


Operating lease income and other leasing gains

15

16

22


76

92


Other income

(5)

(2)

13


23

46


Net securities gains (losses)

(908)

(935)

(4)


(1,856)

(11)



Total noninterest income

(196)

(269)

610


809

2,470

Noninterest expense








Personnel

734

670

674


2,714

2,660


Net occupancy

67

66

65


266

267


Computer processing

107

104

92


414

368


Business services and professional fees

55

41

44


174

168


Equipment

20

20

24


80

88


Operating lease expense

15

14

18


63

77


Marketing

33

21

31


94

109


Other expense

198

158

424


740

997



Total noninterest expense

1,229

1,094

1,372


4,545

4,734

Income (loss) from continuing operations before income taxes

(413)

(506)

57


(306)

1,160


Income taxes (benefit)

(169)

(95)

(8)


(143)

196

Income (loss) from continuing operations

(244)

(411)

65


(163)

964


Income (loss) from discontinued operations, net of taxes

—

1

—


2

3

Net income (loss)

$              (244)

$              (410)

$                  65


$              (161)

$                967










Income (loss) from continuing operations attributable to Key common shareholders

$              (279)

$              (447)

$                  30


$              (306)

$                821

Net income (loss) attributable to Key common shareholders

(279)

(446)

30


(304)

824

Per common share







Income (loss) from continuing operations attributable to Key common shareholders

$               (.28)

$               (.47)

$                 .03


$               (.32)

$                 .88

Income (loss) from discontinued operations, net of taxes

—

—

—


—

—

Net income (loss) attributable to Key common shareholders (a)

(.28)

(.47)

.03


(.32)

.89

Per common share — assuming dilution







Income (loss) from continuing operations attributable to Key common shareholders

$               (.28)

$               (.47)

$                 .03


$               (.32)

$                 .88

Income (loss) from discontinued operations, net of taxes

—

—

—


—

—

Net income (loss) attributable to Key common shareholders (a)

(.28)

(.47)

.03


(.32)

.88










Cash dividends declared per common share

$               .205

$               .205

$               .205


$               .820

$               .820










Weighted-average common shares outstanding (000)

986,829

948,979

927,517


949,561

927,217


Effect of common share options and other stock awards(b)

—

—

6,529


—

5,542

Weighted-average common shares and potential common shares outstanding (000) (c)

986,829

948,979

934,046


949,561

932,759

(a)

Earnings per share may not foot due to rounding.

(b)

For periods ended in a loss from continuing operations attributable to Key common shareholders, anti-dilutive instruments have been excluded from the calculation of diluted earnings per share.

(c)

Assumes conversion of common share options and other stock awards, as applicable.

 

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(Dollars in millions)



Fourth Quarter 2024


Third Quarter 2024


Fourth Quarter 2023



Average


Yield/


Average


Yield/


Average


Yield/



Balance

Interest (a)

Rate (a)


Balance

Interest (a)

Rate (a)


Balance

Interest (a)

Rate (a)

Assets













Loans: (b), (c)













Commercial and industrial (d)

$       52,887

$              817

6.15 %


$       53,121

$              847

6.34 %


$       56,664

$              870

6.09 %


Real estate — commercial mortgage

13,343

202

6.01


13,864

225

6.46


15,346

234

6.05


Real estate — construction

3,033

55

7.23


3,077

59

7.65


3,028

54

7.05


Commercial lease financing

2,826

24

3.51


2,988

26

3.46


3,568

30

3.34


Total commercial loans

72,089

1,098

6.07


73,050

1,157

6.30


78,606

1,188

6.00


Real estate — residential mortgage

19,990

166

3.32


20,215

167

3.30


21,113

174

3.30


Home equity loans

6,445

93

5.75


6,634

100

5.98


7,227

108

5.93


Other consumer loans

5,256

67

5.08


5,426

69

5.08


6,015

75

4.94


Credit cards

931

34

14.36


919

35

15.22


987

36

14.47


Total consumer loans

32,622

360

4.40


33,194

371

4.46


35,342

393

4.43


Total loans

104,711

1,458

5.55


106,244

1,528

5.73


113,948

1,581

5.51


Loans held for sale

1,327

20

6.05


1,098

18

6.54


695

12

6.85


Securities available for sale (b), (e)

37,952

353

3.38


36,700

298

2.87


35,576

213

1.99


Held-to-maturity securities (b)

7,541

66

3.50


7,838

70

3.58


8,714

78

3.56


Trading account assets

1,215

16

4.98


1,142

15

5.08


1,104

13

4.93


Short-term investments

17,575

214

4.83


17,773

244

5.47


9,571

138

5.72


Other investments (e)

1,045

15

5.72


1,193

14

4.77


1,297

22

6.91


Total earning assets

171,366

2,142

4.87


171,988

2,187

4.93


170,905

2,057

4.60


Allowance for loan and lease losses

(1,486)




(1,533)




(1,484)




Accrued income and other assets

17,308




17,154




17,471




Discontinued assets

268




284




351




Total assets

$    187,456




$    187,893




$    187,243



Liabilities













Money market deposits

$       40,676

$              283

2.77 %


$       40,379

$              309

3.04 %


$       36,648

$              251

2.72 %


Demand deposits

57,653

341

2.35


56,087

365

2.59


56,963

348

2.42


Savings deposits

4,635

1

.07


4,967

3

.22


5,492

1

.05


Time deposits

17,641

196

4.43


17,870

210

4.68


14,326

154

4.26


Total interest-bearing deposits

120,605

821

2.71


119,303

887

2.96


113,429

754

2.63


Federal funds purchased and securities sold
  under repurchase agreements

84

1

3.99


98

1

4.48


56

—

2.29


Bank notes and other short-term borrowings

1,832

24

5.19


3,172

43

5.44


3,199

45

5.62


Long-term debt (f)

13,984

235

6.70


16,422

292

7.09


19,921

330

6.64


Total interest-bearing liabilities

136,505

1,081

3.15


138,995

1,223

3.50


136,605

1,129

3.29


Noninterest-bearing deposits

29,128




28,468




31,647




Accrued expense and other liabilities

4,823




4,387




5,169




Discontinued liabilities (f)

268




284




351




Total liabilities

$    170,724




$    172,134




$    173,772



Equity













Total equity

$       16,732




$       15,759




$       13,471




Total liabilities and equity

$    187,456




$    187,893




$    187,243



Interest rate spread (TE)



1.72 %




1.43 %




1.31 %

Net interest income (TE) and net interest margin (TE)


$           1,061

2.41 %



$              964

2.17 %



$              928

2.07 %

TE adjustment (b)


10




12




7



Net interest income, GAAP basis


$           1,051




$              952




$              921


(a)

Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (f) below, calculated using a matched funds transfer pricing methodology.

(b)

Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023.   

(c)

For purposes of these computations, nonaccrual loans are included in average loan balances.

(d)

Commercial and industrial average balances include $216 million, $215 million, and $210 million of assets from commercial credit cards for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

(e)

Yield presented is calculated on the basis of amortized cost excluding fair value hedge basis adjustments. The average amortized cost for securities available for sale was $41.8 billion, $41.6 billion, and $42.6 billion for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Yield based on the fair value of securities available for sale was 3.73%, 3.25%, and 2.39% for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

(f) 

A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key's matched funds transfer pricing methodology to discontinued operations.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles.

 

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates  From Continuing Operations

(Dollars in millions)



Twelve months ended December 31,
2024


Twelve months ended December 31,
2023



Average


Yield/


Average


Yield/



Balance

Interest (a)

Rate (a)


Balance

Interest (a)

Rate (a)

Assets









Loans: (b), (c)









Commercial and industrial (d)

$        53,951

$          3,378

6.26 %


$         59,379

$           3,444

5.80 %


Real estate — commercial mortgage

14,080

873

6.20


15,968

931

5.83


Real estate — construction

3,042

227

7.48


2,755

185

6.71


Commercial lease financing

3,087

105

3.41


3,703

116

3.13


Total commercial loans

74,160

4,583

6.18


81,805

4,676

5.72


Real estate — residential mortgage

20,382

674

3.31


21,428

699

3.26


Home equity loans

6,729

398

5.92


7,522

433

5.76


Other consumer loans

5,519

278

5.04


6,263

305

4.86


Credit cards

934

138

14.78


986

136

13.88


Total consumer loans

33,564

1,488

4.43


36,199

1,573

4.35


Total loans

107,724

6,071

5.64


118,004

6,249

5.30


Loans held for sale

979

60

6.11


1,012

61

6.06


Securities available for sale (b), (e)

37,127

1,142

2.71


37,718

793

1.80


Held-to-maturity securities (b)

7,980

284

3.56


9,008

312

3.46


Trading account assets

1,175

61

5.16


1,138

55

4.85


Short-term investments

14,846

792

5.33


7,349

414

5.63


Other investments (e)

1,177

62

5.25


1,392

73

5.28


Total earning assets

171,008

8,472

4.81


175,621

7,957

4.37


Allowance for loan and lease losses

(1,515)




(1,419)




Accrued income and other assets

17,322




17,425




Discontinued assets

296




384




Total assets

$      187,111




$       192,011



Liabilities









Money market deposits

$        39,525

$          1,146

2.90 %


$         34,539

$               666

1.93 %


Other demand deposits

56,130

1,402

2.50


54,711

1,102

2.01


Savings deposits

5,010

7

.14


6,343

3

.04


Time deposits

16,497

752

4.56


13,794

551

4.00


Total interest-bearing deposits

117,162

3,307

2.82


109,387

2,322

2.12


Federal funds purchased and securities sold under repurchase agreements

103

4

4.35


1,647

79

4.81


Bank notes and other short-term borrowings

2,984

164

5.49


5,890

308

5.24


Long-term debt (f)

17,279

1,187

6.87


20,983

1,305

6.22


Total interest-bearing liabilities

137,528

4,662

3.39


137,907

4,014

2.91


Noninterest-bearing deposits

28,993




34,672




Accrued expense and other liabilities

4,886




5,167




Discontinued liabilities (f)

296




384




Total liabilities

$      171,703




$       178,130



Equity









Total equity

$        15,408




$         13,881




Total liabilities and equity

$      187,111




$       192,011



Interest rate spread (TE)



1.42 %




1.46 %

Net interest income (TE) and net interest margin (TE)


$          3,810

2.16 %



$           3,943

2.17 %

TE adjustment (b)


45




30



Net interest income, GAAP basis


$          3,765




$           3,913











(a)

Results are from continuing operations.  Interest excludes the interest associated with the liabilities referred to in (f) below, calculated using a matched funds transfer pricing methodology.

(b)

Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the twelve months ended December 31, 2024, and December 31, 2023, respectively.  

(c)

For purposes of these computations, nonaccrual loans are included in average loan balances.

(d)

Commercial and industrial average balances include $215 million and $196 million of assets from commercial credit cards for the twelve months ended December 31, 2024, and December 31, 2023, respectively.

(e)

Yield presented is calculated on the basis of amortized cost excluding fair value hedge basis adjustments. The average amortized cost for securities available for sale was $42.2 billion and $44.0 billion for the twelve months ended December 31, 2024, and December 31, 2023, respectively. Yield based on the fair value of securities available for sale was 3.08% and 2.10% for the twelve months ended December 31, 2024, and December 31, 2023, respectively.

(f) 

A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key's matched funds transfer pricing methodology to discontinued operations.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

 

Noninterest Expense

(Dollars in millions)









Three months ended


Twelve months ended


12/31/2024

9/30/2024

12/31/2023


12/31/2024

12/31/2023

Personnel (a)

$            734

$            670

$            674


$         2,714

$         2,660

Net occupancy

67

66

65


266

267

Computer processing

107

104

92


414

368

Business services and professional fees

55

41

44


174

168

Equipment

20

20

24


80

88

Operating lease expense

15

14

18


63

77

Marketing

33

21

31


94

109

Other expense

198

158

424


740

997

Total noninterest expense

$         1,229

$         1,094

$         1,372


$         4,545

$         4,734

Average full-time equivalent employees (b)

16,810

16,805

17,129


16,753

17,692

(a) 

Additional detail provided in Personnel Expense table below.

(b)

The number of average full-time equivalent employees has not been adjusted for discontinued operations.

 

Personnel Expense

(Dollars in millions)









Three months ended


Twelve months ended


12/31/2024

9/30/2024

12/31/2023


12/31/2024

12/31/2023

Salaries and contract labor

$            418

$            408

$           399


$         1,609

$         1,649

Incentive and stock-based compensation

197

162

139


661

525

Employee benefits

119

99

97


442

405

Severance

—

1

39


2

81

Total personnel expense

$            734

$            670

$           674


$         2,714

$         2,660

 

Loan Composition

(Dollars in millions)











Change 12/31/2024 vs.


12/31/2024

9/30/2024

12/31/2023


9/30/2024

12/31/2023

Commercial and industrial (a)(b)

$        52,909

$        52,774

$        55,815


.3 %

(5.2) %

Commercial real estate:







Commercial mortgage

13,310

13,637

15,187


(2.4)

(12.4)

Construction

2,936

3,093

3,066


(5.1)

(4.2)

Total commercial real estate loans

16,246

16,730

18,253


(2.9)

(11.0)

Commercial lease financing (b)

2,736

2,913

3,523


(6.1)

(22.3)

Total commercial loans

71,891

72,417

77,591


(.7)

(7.3)

Residential — prime loans:







Real estate — residential mortgage

19,886

20,122

20,958


(1.2)

(5.1)

Home equity loans

6,358

6,555

7,139


(3.0)

(10.9)

Total residential — prime loans

26,244

26,677

28,097


(1.6)

(6.6)

Other consumer loans

5,167

5,338

5,916


(3.2)

(12.7)

Credit cards

958

914

1,002


4.8

(4.4)

Total consumer loans

32,369

32,929

35,015


(1.7)

(7.6)

Total loans (c), (d)

$      104,260

$      105,346

$      112,606


(1.0) %

(7.4) %

(a)

Loan balances include $212 million, $219 million, and $207 million of commercial credit card balances at December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

(b)

Commercial and industrial includes receivables held as collateral for a secured borrowing of $211 million at December 31, 2024, $261 million at September 30, 2024 and no amounts held as collateral for a secured borrowing at December 31, 2023. Commercial lease financing includes receivables held as collateral for a secured borrowing of $3 million, $3 million, and $7 million at December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Principal reductions are based on the cash payments received from these related receivables.

(c)

Total loans exclude loans of $257 million at December 31, 2024, $272 million at September 30, 2024, and $339 million at December 31, 2023, related to the discontinued operations of the education lending business.

(d)

Accrued interest of $456 million, $480 million, and $522 million at December 31, 2024, September 30, 2024, and December 31, 2023, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

 

Loans Held for Sale Composition

(Dollars in millions)













Change 12/31/2024 vs.


12/31/2024

9/30/2024

12/31/2023


9/30/2024

12/31/2023

Commercial and industrial

$              88

$            250

$              50


(64.8) %

76.0 %

Real estate — commercial mortgage

616

747

382


(17.5)

61.3

Real estate — residential mortgage

93

61

51


52.5

82.4

Total loans held for sale

$            797

$         1,058

$            483


(24.7) %

65.0 %

 

Summary of Changes in Loans Held for Sale

(Dollars in millions)








4Q24

3Q24

2Q24

1Q24

4Q23

Balance at beginning of period

$          1,058

$            517

$            228

$            483

$            730

New originations

2,915

2,473

1,532

1,738

1,879

Transfers from (to) held to maturity, net

—

(16)

(1)

(105)

(31)

Loan sales

(3,039)

(1,889)

(1,234)

(1,893)

(2,095)

Loan draws (payments), net

(136)

(28)

(7)

4

—

Valuation and other adjustments

(1)

1

(1)

1

—

Balance at end of period

$            797

$         1,058

$            517

$            228

$            483

 

Summary of Loan and Lease Loss Experience From Continuing Operations

(Dollars in millions)









Three months ended


Twelve months ended


12/31/2024

9/30/2024

12/31/2023


12/31/2024

12/31/2023

Average loans outstanding

$ 104,711

$ 106,244

$ 113,948


$ 107,724

$ 118,004

Allowance for loan and lease losses at the beginning of the period

$     1,494

$     1,547

$     1,488


$    1,508

$    1,337

Loans charged off:







Commercial and industrial

84

131

49


363

188








Real estate — commercial mortgage

18

7

24


40

39

Real estate — construction

—

—

—


—

—

Total commercial real estate loans

18

7

24


40

39

Commercial lease financing

1

—

—


7

—

Total commercial loans

103

138

73


410

227

Real estate — residential mortgage

1

—

—


3

1

Home equity loans

—

1

(2)


2

2

Other consumer loans

15

17

14


64

51

Credit cards

12

11

10


47

37

Total consumer loans

28

29

22


116

91

Total loans charged off

131

167

95


526

318

Recoveries:







Commercial and industrial

12

7

11


58

44








Real estate — commercial mortgage

—

1

1


2

2

Real estate — construction

—

—

1


—

1

Total commercial real estate loans

—

1

2


2

3

Commercial lease financing

—

—

1


5

5

Total commercial loans

12

8

14


65

52

Real estate — residential mortgage

1

1

1


5

4

Home equity loans

—

1

—


2

3

Other consumer loans

2

2

1


8

8

Credit cards

2

1

3


6

7

Total consumer loans

5

5

5


21

22

Total recoveries

17

13

19


86

74

Net loan charge-offs

(114)

(154)

(76)


(440)

(244)

Provision (credit) for loan and lease losses

29

101

96


341

415

Allowance for loan and lease losses at end of period

$     1,409

$     1,494

$     1,508


$    1,409

$    1,508








Liability for credit losses on lending-related commitments at beginning of period

$       280

$       286

$       290


$       296

$       225

Provision (credit) for losses on lending-related commitments

10

(6)

6


(6)

74

Other

—

—

—


—

(3)

Liability for credit losses on lending-related commitments at end of period (a)

$       290

$       280

$       296


$       290

$       296








Total allowance for credit losses at end of period

$     1,699

$     1,774

$     1,804


$    1,699

$    1,804








Net loan charge-offs to average total loans

.43 %

.58 %

.26 %


.41 %

.21 %

Allowance for loan and lease losses to period-end loans

1.35

1.42

1.34


1.35

1.34

Allowance for credit losses to period-end loans

1.63

1.68

1.60


1.63

1.60

Allowance for loan and lease losses to nonperforming loans

186

205

263


186

263

Allowance for credit losses to nonperforming loans

224

244

314


224

314








Discontinued operations — education lending business:







Loans charged off

$           1

$           1

$           1


$          4

$          4

Recoveries

—

—

—


1

1

Net loan charge-offs

$         (1)

$         (1)

$         (1)


$         (3)

$         (3)

(a)

Included in "Accrued expense and other liabilities" on the balance sheet.

 

Asset Quality Statistics From Continuing Operations

(Dollars in millions)


4Q24

3Q24

2Q24

1Q24

4Q23

Net loan charge-offs

$       114

$       154

$         91

$         81

$         76

Net loan charge-offs to average total loans

.43 %

.58 %

.34 %

.29 %

.26 %

Allowance for loan and lease losses

$    1,409

$    1,494

$    1,547

$    1,542

$    1,508

Allowance for credit losses (a)

1,699

1,774

1,833

1,823

1,804

Allowance for loan and lease losses to period-end loans

1.35 %

1.42 %

1.44 %

1.40 %

1.34 %

Allowance for credit losses to period-end loans

1.63

1.68

1.71

1.66

1.60

Allowance for loan and lease losses to nonperforming loans

186

205

218

234

263

Allowance for credit losses to nonperforming loans

224

244

258

277

314

Nonperforming loans at period end

$       758

$       728

$       710

$       658

$       574

Nonperforming assets at period end

772

741

727

674

591

Nonperforming loans to period-end portfolio loans

.73 %

.69 %

.66 %

.60 %

.51 %

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets

.74

.70

.68

.61

.52

(a)

Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related commitments.

 

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(Dollars in millions)


12/31/2024

9/30/2024

6/30/2024

3/31/2024

12/31/2023

Commercial and industrial

$       322

$       365

$       358

$       360

$       297







Real estate — commercial mortgage

243

176

173

113

100

Real estate — construction

—

—

—

—

—

Total commercial real estate loans

243

176

173

113

100

Commercial lease financing

—

—

1

1

—

Total commercial loans

565

541

532

474

397

Real estate — residential mortgage

92

87

77

79

71

Home equity loans

89

90

91

95

97

Other Consumer loans

5

4

4

4

4

Credit cards

7

6

6

6

5

Total consumer loans

193

187

178

184

177

Total nonperforming loans (a)

758

728

710

658

574

OREO

14

13

17

16

17

Nonperforming loans held for sale

—

—

—

—

—

Other nonperforming assets

—

—

—

—

—

Total nonperforming assets

$       772

$       741

$       727

$       674

$       591

Accruing loans past due 90 days or more

$         90

$       166

$       137

$       119

$       107

Accruing loans past due 30 through 89 days

206

184

282

242

222

Nonperforming assets from discontinued operations — education lending business 

2

2

3

2

3

Nonperforming loans to period-end portfolio loans

.73 %

.69 %

.66 %

.60 %

.51 %

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets

.74

.70

.68

.61

.52

 

Summary of Changes in Nonperforming Loans From Continuing Operations

(Dollars in millions)


4Q24

3Q24

2Q24

1Q24

4Q23

Balance at beginning of period

$          728

$          710

$          658

$          574

$          455

Loans placed on nonaccrual status

309

271

317

243

297

Charge-offs

(131)

(167)

(131)

(97)

(95)

Loans sold

(13)

(32)

(22)

(5)

(9)

Payments

(111)

(37)

(76)

(35)

(56)

Transfers to OREO

(2)

(1)

(1)

(2)

(2)

Loans returned to accrual status

(22)

(16)

(35)

(20)

(16)

Balance at end of period

$          758

$          728

$          710

$          658

$          574

 

Line of Business Results

(Dollars in millions)

















Change 4Q24 vs.


4Q24

3Q24

2Q24

1Q24

4Q23


3Q24

4Q23

Consumer Bank









Summary of operations









Total revenue (TE)

$             872

$             814

$             769

$             757

$             770


7.1 %

13.2 %

Provision for credit losses

43

52

33

(2)

5


(17.3)

760.0

Noninterest expense

713

649

648

704

779


9.9

(8.5)

Net income (loss) attributable to Key

88

86

67

41

(11)


2.3

900.0

Average loans and leases

37,567

38,332

39,174

39,919

40,763


(2.0)

(7.8)

Average deposits

87,476

86,431

85,397

84,075

83,557


1.2

4.7

Net loan charge-offs

63

54

45

44

40


16.7

57.5

Net loan charge-offs to average total loans

.67 %

.56 %

.46 %

.44 %

.39 %


19.6

71.8

Nonperforming assets at period end

$             201

$             195

$             190

$             196

$             190


3.1

5.8

Return on average allocated equity

10.85 %

10.34 %

7.93 %

4.69 %

(1.28) %


4.9

947.7










Commercial Bank









Summary of operations









Total revenue (TE)

$             999

$             868

$             769

$             798

$             804


15.1 %

24.3 %

Provision for credit losses

(3)

41

87

102

96


(107.3)

(103.1)

Noninterest expense

516

445

431

442

526


16.0

(1.9)

Net income (loss) attributable to Key

379

300

207

205

150


26.3

152.7

Average loans and leases

66,691

67,452

69,248

70,633

72,713


(1.1)

(8.3)

Average loans held for sale

1,247

998

522

840

635


24.9

96.4

Average deposits

59,687

58,696

57,360

56,331

58,196


1.7

2.6

Net loan charge-offs

52

99

64

37

35


(47.5)

48.6

Net loan charge-offs to average total loans

.31 %

.58 %

.37 %

.21 %

.19 %


(46.6)

63.2

Nonperforming assets at period end

$             571

$             546

$             537

$             478

$             401


4.6

42.4

Return on average allocated equity

15.50 %

11.98 %

8.31 %

8.24 %

5.88 %


29.4

163.6

TE = Taxable Equivalent

 

Selected Items Impact on Earnings

(Dollars in millions, except per share amounts)


Pretax(a)


After-tax at marginal rate(a)

Quarter to date results

Amount


Net Income

EPS(c)(f)

Three months ended December 31, 2024





Loss on sale of securities(b)

$              (915)


$              (657)

$             (0.66)

Scotiabank investment agreement valuation (other income)

(3)


(2)

—

FDIC special assessment (other expense)(d)

3


2

—

Three months ended September 30, 2024





Loss on sale of securities(b)

(918)


(737)

(0.77)

FDIC special assessment (other expense)(d)

6


5

—

Three months ended June 30, 2024





FDIC special assessment (other expense)(d)

(5)


(4)

—

Three months ended March 31, 2024





FDIC special assessment (other expense)(d)

(29)


(22)

(0.02)

Three months ended December 31, 2023





Efficiency related expenses(e)

(67)


(51)

(0.05)

Pension settlement (other expense)

(18)


(14)

(0.02)

FDIC special assessment (other expense)(d)

(190)


(144)

(0.15)






Year to date results





Twelve months ended December 31, 2024





Loss on sale of securities

(1,833)


(1,394)

(1.45)

Scotiabank investment agreement valuation (other income)

(3)


(2)

—

FDIC special assessment (other expense)(d)

(25)


(19)

(0.02)

Total selected items(f)

$            (1,861)


$           (1,415)

$             (1.48)






Twelve months ended December 31, 2023





Efficiency related expenses(e)

(131)


(100)

(0.10)

Pension settlement (other expense)

(18)


(14)

(0.02)

FDIC special assessment (other expense)(d)

(190)


(144)

(0.15)

Total selected items(f)

$              (339)


$              (258)

$             (0.27)











(a)

Favorable (unfavorable) impact.

(b)

After-tax loss on sale of securities for the three months ended September 30, 2024 adjusted to reflect impact of GAAP accounting for income taxes in interim periods, with related adjustments recorded in the fourth quarter of 2024.

(c)

Impact to EPS reflected on a fully diluted basis.

(d)

In November 2023, the FDIC issued a final rule implementing a special assessment on insured depository institutions to recover the loss to the FDIC's deposit insurance fund (DIF) associated with protecting uninsured depositors following the 2023 closures of Silicon Valley Bank and Signature Bank. KeyCorp recorded the initial loss estimate related to the special assessment during the fourth quarter of 2023. In late February 2024, the FDIC provided updated estimates on the uninsured deposit losses and recoverable assets related to the 2023 closures of Silicon Valley Bank and Signature Bank. KeyCorp recorded the additional expense related to the revised special assessment during the first quarter of 2024. Amounts reflected for the three-months ended June 30, 2024, September 30, 2024, and December 31, 2024, represent adjustments from initial estimates based on quarterly invoices received from the FDIC.

(e)

Efficiency related expenses for the three-months ended December 31, 2023, consist primarily of $39 million of severance recorded in personnel expense and $24 million of corporate real estate related rationalization and other contract termination or renegotiation costs recorded in other expense. Efficiency related expenses for the twelve-months ended December 31, 2023, consist primarily of $70 million of severance recorded in personnel expense and $52 million of corporate real estate related rationalization and other contract termination or renegotiation costs recorded in other expense.

(f) 

Earnings per share may not foot due to rounding.

 

(PRNewsfoto/KeyCorp)

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/keycorp-reports-fourth-quarter-2024-net-loss-of-279-million-or-28-per-diluted-common-share-and-adjusted-net-income-of-378-million-or-38-per-diluted-common-sharea-302356066.html

SOURCE KeyCorp

FAQ

What was KeyCorp's (KEY) Q4 2024 adjusted earnings per share?

KeyCorp's adjusted earnings per share for Q4 2024 was $0.38, compared to $0.25 in Q4 2023.

How much did KEY's net interest income grow in Q4 2024?

KEY's net interest income grew 10% quarter-over-quarter and 14.3% year-over-year in Q4 2024.

What was the impact of securities sale losses on KEY's Q4 2024 results?

The securities sale losses resulted in after-tax charges of $(657) million, or $(0.66) per diluted share in Q4 2024.

How did KEY's loan portfolio perform in Q4 2024?

Average loans decreased by 8.1% year-over-year to $104.7 billion, with declines in both commercial and consumer loans.

What was KEY's Common Equity Tier 1 ratio in Q4 2024?

KEY's Common Equity Tier 1 ratio increased to 12% in Q4 2024, up 120 basis points from the previous quarter.

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