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)
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) December31, 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 HighlightsDollars in millions, except per share data Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Income (loss) from continuing operations attributable to Key common shareholders $ (279) $ (447) $ 30 37.6% N/MIncome (loss) from continuing operations attributable to Key common shareholders per (.28) (.47) .03 40.4 N/Mcommon share – assuming dilutionReturn on average tangible common equity from continuing operations (a) (9.69)% (16.98)% 1.46% N/A N/AReturn on average total assets from continuing operations (.52) (.87) .14 N/A N/ACommon Equity Tier 1 ratio (b) 12.0 10.8 10.0 N/A N/ABook value at period end $ 14.21 $ 14.53 $ 13.02 (2.2) 9.1Net 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 HIGHLIGHTSRevenueDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Net 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)%
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 $133million, 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 IncomeDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Trust and investment services income $ 142 $ 140 $ 132 1.4% 7.6%Investment banking and debt placement fees 221 171 136 29.2 62.5Cards and payments income 85 84 84 1.2 1.2Service charges on deposit accounts 65 67 65 (3.0) -Corporate services income 69 69 67 – 3.0Commercial mortgage servicing fees 68 73 48 (6.8) 41.7Corporate-owned life insurance income 36 36 36 – -Consumer mortgage income 16 12 11 33.3 45.5Operating 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/MTotal noninterest income $ (196) $ (269) $ 610 27.1% (132.1)%
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 relativeto the prior quarter, reflecting gains from other investment activity in the fourth quarter.
Noninterest ExpenseDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Personnel expense $ 734 $ 670 $ 674 9.6% 8.9%Net occupancy 67 66 65 1.5 3.1Computer processing 107 104 92 2.9 16.3Business services and professional fees 55 41 44 34.1 25.0Equipment 20 20 24 – (16.7)Operating lease expense 15 14 18 7.1 (16.7)Marketing 33 21 31 57.1 6.5Other 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 $143million. 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-basedcompensation, 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 HIGHLIGHTSAverage LoansDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Commercial 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 $6.5billion decline in average commercial loans, due to lower commercial and industrial loans and commercial mortgage real estate loans. Additionally, average consumer loans declined by $2.7billion, 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 DepositsDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Non-time deposits $ 132,092 $ 129,901 $ 130,750 1.7% 1.0%Time deposits 17,641 17,870 14,326 (1.3) 23.1Total 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
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 QUALITYDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Net loan charge-offs $ 114 $ 154 $ 76 (26.0)% 50.0%Net loan charge-offs to average total loans .43% .58% .26% N/A N/ANonperforming loans at period end $ 758 $ 728 $ 574 4.1 32.1Nonperforming assets at period end 772 741 591 4.2 30.6Allowance 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/AAllowance for credit losses to nonperforming loans 224 244 314 N/A N/A
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'snonperforming loans totaled $758 million, which represented 0.73% of period-end portfolio loans. These results compare to 0.51% at December31, 2023, and 0.69% at September30, 2024. Nonperforming assets at December31, 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 December31, 2023, and 0.70% at September30, 2024.
CAPITAL
Key's estimated risk-based capital ratios, included in the following table, continued to exceed all “well-capitalized” regulatory benchmarks at December31, 2024.
Capital Ratios 12/31/2024 9/30/2024 12/31/2023Common Equity Tier 1 (a) 12.0% 10.8% 10.0%Tier 1 risk-based capital (a) 13.7 12.6 11.7Total risk-based capital (a) 16.2 15.1 14.2Tangible common equity to tangible assets (b) 7.0 6.2 5.1Leverage (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 December31, 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 December31, 2024.
Key elected theCECL 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 OutstandingIn thousands Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Shares 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 22.3Shares 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%
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 SegmentsDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Revenue from continuing operations (TE)Consumer Bank $ 872 $ 814 $ 770 7.1% 13.2%Commercial Bank 999 868 804 15.1 24.3Other (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 KeyConsumer Bank $ 88 $ 86 $ (11) 2.3% 900.0%Commercial Bank 379 300 150 26.3 152.7Other (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 EquivalentN/M = Not Meaningful
Consumer BankDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Summary of operationsNet interest income (TE) $ 637 $ 584 $ 544 9.1% 17.1%Noninterest income 235 230 226 2.2 4.0Total revenue (TE) 872 814 770 7.1 13.2Provision for credit losses 43 52 5 (17.3) 760.0Noninterest expense 713 649 779 9.9 (8.5)Income (loss) before income taxes (TE) 116 113 (14) 2.7 928.6Allocated income taxes (benefit) and TE adjustments 28 27 (3) 3.7 N/MNet income (loss) attributable to Key $ 88 $ 86 $ (11) 2.3% 900.0%Average balancesLoans 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 4.7Assets under management at period end $ 61,361 $ 61,122 $ 54,859 .4% 11.9%
TE = Taxable Equivalent, N/M = Not Meaningful
Additional Consumer Bank DataDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Noninterest incomeTrust 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 3.2Consumer mortgage income 16 12 11 33.3 45.5Other noninterest income 8 10 11 (20.0) (27.3)Total noninterest income $ 235 $ 230 $ 226 2.2% 4.0%Average deposit balancesMoney market deposits $ 31,968 $ 30,805 $ 29,546 3.8% 8.2%Demand deposits 22,442 22,310 22,323 .6 .5Savings deposits 4,391 4,553 5,238 (3.6) (16.2)Time deposits 13,979 13,927 10,261 .4 36.2Noninterest-bearing deposits 14,696 14,836 16,189 (.9) (9.2)Total deposits $ 87,476 $ 86,431 $ 83,557 1.2% 4.7%Other dataBranches 944 944 959Automated 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 BankDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Summary of operationsNet interest income (TE) $ 537 $ 460 $ 452 16.7% 18.8%Noninterest income 462 408 352 13.2 31.3Total revenue (TE) 999 868 804 15.1 24.3Provision 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 27.2 167.0Allocated income taxes and TE adjustments 107 82 32 30.5 234.4Net income (loss) attributable to Key $ 379 $ 300 $ 150 26.3% 152.7%Average balancesLoans and leases $ 66,691 $ 67,452 $ 72,713 (1.1)% (8.3)%Loans held for sale 1,247 998 635 24.9 96.4Total assets 76,433 76,395 82,026 – (6.8)Deposits 59,687 58,696 58,196 1.7% 2.6%
Additional Commercial Bank DataDollars in millions Change 4Q24 vs. 4Q24 3Q24 4Q23 3Q24 4Q23Noninterest incomeTrust and investment services income $ 27 $ 25 $ 27 8.0% -%Investment banking and debt placement fees 220 171 135 28.7 63.0Cards and payments income 18 22 20 (18.2) (10.0)Service charges on deposit accounts 32 32 28 – 14.3Corporate services income 67 62 61 8.1 9.8Commercial mortgage servicing fees 67 73 49 (8.2) 36.7Operating lease income and other leasing gains 15 16 21 (6.3) (28.6)Other noninterest income 16 7 11 128.6 45.5Total 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
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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 December31, 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 January21, 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.
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KeyCorp Fourth Quarter 2024 Financial Supplement
Page12 Basis of Presentation13 Financial Highlights15 GAAP to Non-GAAP Reconciliation17 Consolidated Balance Sheets18 Consolidated Statements of Income19 Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations21 Noninterest Expense21 Personnel Expense22 Loan Composition22 Loans Held for Sale Composition22 Summary of Changes in Loans Held for Sale22 Summary of Loan and Lease Loss Experience From Continuing Operations24 Asset Quality Statistics From Continuing Operations24 Summary of Nonperforming Assets and Past Due Loans From Continuing Operations24 Summary of Changes in Nonperforming Loans From Continuing Operations25 Line of Business Results25 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 managementbelieves 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 12/31/2023Summary 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) 30Per 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 14.40Performance 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 77.9Capital 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 9.0Asset 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 .52Trust assets Assets under management $ 61,361 $ 61,122 $ 54,859Other 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 12/31/2023Summary 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) 824Per 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 .82Performance 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 2.17Asset 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 17,692Taxable-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 thefinancial 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 12/31/2023Tangible common equity to tangible assets at period-endKey shareholders' equity (GAAP) $ 18,176 $ 16,852 $ 14,637Less: Intangible assets (a) 2,779 2,786 2,806Preferred Stock(b) 2,446 2,446 2,446Tangible common equity (non-GAAP) $ 12,951 $ 11,620 $ 9,385Total assets (GAAP) $ 187,168 $ 189,763 $ 188,281Less: Intangible assets(a) 2,779 2,786 2,806Tangible assets (non-GAAP) $ 184,389 $ 186,977 $ 185,475Tangible common equity to tangible assets ratio (non-GAAP) 7.02% 6.21% 5.06%Pre-provision net revenueNet interest income (GAAP) $ 1,051 $ 952 $ 921 $ 3,765 $ 3,913Plus: Taxable-equivalent adjustment 10 12 7 45 30Noninterest income (196) (269) 610 809 2,470Less: Noninterest expense 1,229 1,094 1,372 4,545 4,734Pre-provision net revenue from continuing operations (non-GAAP) $ (364) $ (399) $ 166 $ 74 $ 1,513Average tangible common equityAverage Key shareholders' equity (GAAP) $ 16,732 $ 15,759 $ 13,471 $ 15,408 $ 13,881Less: Intangible assets (average) (c) 2,783 2,789 2,811 2,793 2,831Preferred stock (average) 2,500 2,500 2,500 2,500 2,500Average tangible common equity (non-GAAP) $ 11,449 $ 10,470 $ 8,160 $ 10,115 $ 8,689Return on average tangible common equity from continuing operationsNet income (loss) from continuing operations attributable to Key common $ (279) $ (447) $ 30 $ (306) $ 821shareholders (GAAP)Average tangible common equity (non-GAAP) 11,449 10,470 8,160 10,115 8,689Return 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 consolidatedNet income (loss) attributable to Key common shareholders (GAAP) $ (279) $ (446) $ 30 $ (304) $ 824Average tangible common equity (non-GAAP) 11,449 10,470 8,160 10,115 8,689Return 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 12/31/2023Cash efficiency ratioNoninterest expense (GAAP) $ 1,229 $ 1,094 $ 1,372 $ 4,545 $ 4,734Less: Intangible asset amortization 7 7 10 29 39Adjusted noninterest expense (non-GAAP) $ 1,222 $ 1,087 $ 1,362 $ 4,516 $ 4,695Net interest income (GAAP) $ 1,051 $ 952 $ 921 $ 3,765 $ 3,913Plus: Taxable-equivalent adjustment 10 12 7 45 30Net interest income TE (non-GAAP) 1,061 964 928 3,810 3,943Noninterest income (GAAP) (196) (269) 610 809 2,470Total taxable-equivalent revenue (non-GAAP) $ 865 $ 695 $ 1,538 $ 4,619 $ 6,413Cash efficiency ratio (non-GAAP) 141.3% 156.4% 88.6% 97.8% 73.2%Adjusted taxable-equivalent revenueNoninterest income (GAAP) $ (196) $ (269) $ 610 $ 809 $ 2,470Plus: Selected items(d) 918 918 – 1,836 -Adjusted noninterest income (non-GAAP) $ 722 $ 649 $ 610 $ 2,645 $ 2,470Net interest income TE (non-GAAP) 1,061 964 928 3,810 3,943Total adjusted taxable-equivalent revenue (non-GAAP) $ 1,783 $ 1,613 $ 1,538 $ 6,455 $ 6,413Noninterest expense adjusted for selected itemsNoninterest expense (GAAP) $ 1,229 $ 1,094 $ 1,372 $ 4,545 $ 4,734Plus: Selected items(d) 3 6 (275) (25) (339)Noninterest expense adjusted for selected items (non-GAAP) $ 1,232 $ 1,100 $ 1,097 $ 4,520 $ 4,395Adjusted income (loss) available from continuing operations attributable toKey common shareholdersIncome (loss) from continuing operations attributable to Key common shareholders (GAAP) $ (279) $ (447) $ 30 $ (306) $ 821Plus: Selected items (net of tax)(d) 657 732 209 1,415 258Adjusted income (loss) available from continuing operations attributable to $ 378 $ 285 $ 239 $ 1,109 $ 1,079Key common shareholders (non-GAAP)Diluted earnings per common share (EPS) – adjustedDiluted EPS from continuing operations attributable to Key common shareholders (GAAP) $ (.28) $ (.47) $ .03 $ (.32) $ .88Plus: EPS impact of selected items(d) .66 .77 .22 1.48 .27Diluted EPS from continuing operations attributable to Key common $ .38 $ .30 $ .25 $ 1.16 $ 1.15shareholders – adjusted (non-GAAP)
(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 25GAAP = U.S. generally accepted accounting principles
Consolidated Balance Sheets(Dollars in millions) 12/31/2024 9/30/2024 12/31/2023Assets 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 $ 188,281Liabilities 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 168,992 172,911 173,644Equity 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 14,637Total liabilities and equity $ 187,168 $ 189,763 $ 188,281Common 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 12/31/2023Interest 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 7,927Interest 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 4,014Net interest income 1,051 952 921 3,765 3,913Provision for credit losses 39 95 102 335 489Net interest income after provision for credit losses 1,012 857 819 3,430 3,424Noninterest 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 2,470Noninterest 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 4,734Income (loss) from continuing operations before income taxes (413) (506) 57 (306) 1,160 Income taxes (benefit) (169) (95) (8) (143) 196Income (loss) from continuing operations (244) (411) 65 (163) 964 Income (loss) from discontinued operations, net of taxes – 1 – 2 3Net income (loss) $ (244) $ (410) $ 65 $ (161) $ 967Income (loss) from continuing operations attributable to Key common shareholders $ (279) $ (447) $ 30 $ (306) $ 821Net income (loss) attributable to Key common shareholders (279) (446) 30 (304) 824Per common shareIncome (loss) from continuing operations attributable to Key common shareholders $ (.28) $ (.47) $ .03 $ (.32) $ .88Income (loss) from discontinued operations, net of taxes – – – – -Net income (loss) attributable to Key common shareholders (a) (.28) (.47) .03 (.32) .89Per common share – assuming dilutionIncome (loss) from continuing operations attributable to Key common shareholders $ (.28) $ (.47) $ .03 $ (.32) $ .88Income (loss) from discontinued operations, net of taxes – – – – -Net income (loss) attributable to Key common shareholders(a) (.28) (.47) .03 (.32) .88Cash dividends declared per common share $ .205 $ .205 $ .205 $ .820 $ .820Weighted-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 – 5,542Weighted-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 $ 187,243Liabilities 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 84 1 3.99 98 1 4.48 56 – 2.29 under repurchase agreements 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 $ 173,772Equity Total equity $ 16,732 $ 15,759 $ 13,471 Total liabilities and equity $ 187,456 $ 187,893 $ 187,243Interest 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, Twelve months ended December 31, 2024 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 $ 192,011Liabilities 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 $ 178,130Equity Total equity $ 15,408 $ 13,881 Total liabilities and equity $ 187,111 $ 192,011Interest 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 12/31/2023Personnel (a) $ 734 $ 670 $ 674 $ 2,714 $ 2,660Net occupancy 67 66 65 266 267Computer processing 107 104 92 414 368Business services and professional fees 55 41 44 174 168Equipment 20 20 24 80 88Operating lease expense 15 14 18 63 77Marketing 33 21 31 94 109Other expense 198 158 424 740 997Total noninterest expense $ 1,229 $ 1,094 $ 1,372 $ 4,545 $ 4,734Average 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 12/31/2023Salaries and contract labor $ 418 $ 408 $ 399 $ 1,609 $ 1,649Incentive and stock-based compensation 197 162 139 661 525Employee benefits 119 99 97 442 405Severance – 1 39 2 81Total 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 12/31/2023Commercial 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 12/31/2023Commercial and industrial $ 88 $ 250 $ 50 (64.8)% 76.0%Real estate – commercial mortgage 616 747 382 (17.5) 61.3Real estate – residential mortgage 93 61 51 52.5 82.4Total 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 4Q23Balance at beginning of period $ 1,058 $ 517 $ 228 $ 483 $ 730New originations 2,915 2,473 1,532 1,738 1,879Transfers 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 12/31/2023Average loans outstanding $ 104,711 $ 106,244 $ 113,948 $ 107,724 $ 118,004Allowance for loan and lease losses at the beginning of the period $ 1,494 $ 1,547 $ 1,488 $ 1,508 $ 1,337Loans charged off:Commercial and industrial 84 131 49 363 188Real estate – commercial mortgage 18 7 24 40 39Real estate – construction – – – – -Total commercial real estate loans 18 7 24 40 39Commercial lease financing 1 – – 7 -Total commercial loans 103 138 73 410 227Real estate – residential mortgage 1 – – 3 1Home equity loans – 1 (2) 2 2Other consumer loans 15 17 14 64 51Credit cards 12 11 10 47 37Total consumer loans 28 29 22 116 91Total loans charged off 131 167 95 526 318Recoveries:Commercial and industrial 12 7 11 58 44Real estate – commercial mortgage – 1 1 2 2Real estate – construction – – 1 – 1Total commercial real estate loans – 1 2 2 3Commercial lease financing – – 1 5 5Total commercial loans 12 8 14 65 52Real estate – residential mortgage 1 1 1 5 4Home equity loans – 1 – 2 3Other consumer loans 2 2 1 8 8Credit cards 2 1 3 6 7Total consumer loans 5 5 5 21 22Total recoveries 17 13 19 86 74Net loan charge-offs (114) (154) (76) (440) (244)Provision (credit) for loan and lease losses 29 101 96 341 415Allowance for loan and lease losses at end of period $ 1,409 $ 1,494 $ 1,508 $ 1,409 $ 1,508Liability for credit losses on lending-related commitments at beginning of period $ 280 $ 286 $ 290 $ 296 $ 225Provision (credit) for losses on lending-related commitments 10 (6) 6 (6) 74Other – – – – (3)Liability for credit losses on lending-related commitments at end of period (a) $ 290 $ 280 $ 296 $ 290 $ 296Total allowance for credit losses at end of period $ 1,699 $ 1,774 $ 1,804 $ 1,699 $ 1,804Net 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 1.34Allowance for credit losses to period-end loans 1.63 1.68 1.60 1.63 1.60Allowance for loan and lease losses to nonperforming loans 186 205 263 186 263Allowance for credit losses to nonperforming loans 224 244 314 224 314Discontinued operations – education lending business:Loans charged off $ 1 $ 1 $ 1 $ 4 $ 4Recoveries – – – 1 1Net 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 4Q23Net loan charge-offs $ 114 $ 154 $ 91 $ 81 $ 76Net 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 $ 1,508Allowance for credit losses (a) 1,699 1,774 1,833 1,823 1,804Allowance 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 1.60Allowance for loan and lease losses to nonperforming loans 186 205 218 234 263Allowance for credit losses to nonperforming loans 224 244 258 277 314Nonperforming loans at period end $ 758 $ 728 $ 710 $ 658 $ 574Nonperforming assets at period end 772 741 727 674 591Nonperforming 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 12/31/2023Commercial and industrial $ 322 $ 365 $ 358 $ 360 $ 297Real estate – commercial mortgage 243 176 173 113 100Real estate – construction – – – – -Total commercial real estate loans 243 176 173 113 100Commercial lease financing – – 1 1 -Total commercial loans 565 541 532 474 397Real estate – residential mortgage 92 87 77 79 71Home equity loans 89 90 91 95 97Other Consumer loans 5 4 4 4 4Credit cards 7 6 6 6 5Total consumer loans 193 187 178 184 177Total nonperforming loans (a) 758 728 710 658 574OREO 14 13 17 16 17Nonperforming loans held for sale – – – – -Other nonperforming assets – – – – -Total nonperforming assets $ 772 $ 741 $ 727 $ 674 $ 591Accruing loans past due 90 days or more $ 90 $ 166 $ 137 $ 119 $ 107Accruing loans past due 30 through 89 days 206 184 282 242 222Nonperforming assets from discontinued operations – education lending business 2 2 3 2 3Nonperforming 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 4Q23Balance at beginning of period $ 728 $ 710 $ 658 $ 574 $ 455Loans placed on nonaccrual status 309 271 317 243 297Charge-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 4Q23Consumer BankSummary of operationsTotal revenue (TE) $ 872 $ 814 $ 769 $ 757 $ 770 7.1% 13.2%Provision for credit losses 43 52 33 (2) 5 (17.3) 760.0Noninterest expense 713 649 648 704 779 9.9 (8.5)Net income (loss) attributable to Key 88 86 67 41 (11) 2.3 900.0Average 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 4.7Net loan charge-offs 63 54 45 44 40 16.7 57.5Net loan charge-offs to average total loans .67% .56% .46% .44% .39% 19.6 71.8Nonperforming assets at period end $ 201 $ 195 $ 190 $ 196 $ 190 3.1 5.8Return on average allocated equity 10.85% 10.34% 7.93% 4.69% (1.28)% 4.9 947.7Commercial BankSummary of operationsTotal 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 26.3 152.7Average 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 96.4Average deposits 59,687 58,696 57,360 56,331 58,196 1.7 2.6Net loan charge-offs 52 99 64 37 35 (47.5) 48.6Net loan charge-offs to average total loans .31% .58% .37% .21% .19% (46.6) 63.2Nonperforming assets at period end $ 571 $ 546 $ 537 $ 478 $ 401 4.6 42.4Return on average allocated equity 15.50% 11.98% 8.31% 8.24% 5.88% 29.4 163.6
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, 2024Loss 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, 2024Loss on sale of securities(b) (918) (737) (0.77)FDIC special assessment (other expense)(d) 6 5 -Three months ended June 30, 2024FDIC special assessment (other expense)(d) (5) (4) -Three months ended March 31, 2024FDIC special assessment (other expense)(d) (29) (22) (0.02)Three months ended December 31, 2023Efficiency 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 resultsTwelve months ended December 31, 2024Loss 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, 2023Efficiency 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.
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