KEYCORP REPORTS THIRD QUARTER 2024 NET LOSS OF $(447) MILLION, OR $(.47) PER DILUTED COMMON SHARE, AND ADJUSTED NET INCOME OF $290 MILLION, OR $.30 PER DILUTED COMMON SHARE(a)

Received initial $821 million tranche of strategic minority investment from Scotiabank; Common Equity Tier 1 ratio of 10.8% and Tangible Common Equity ratio of 6.2%(b)

Net interest income up 7% quarter-over-quarter, with average deposits up 2.5%; Client deposits were up 4% year-over-year

Continued strong fee momentum across investment banking, commercial mortgage servicing, commercial payments, and wealth management

Nonperforming assets and provision for credit losses were stable to improved quarter-over-quarter

CLEVELAND, Oct. 17, 2024 /PRNewswire/ -- KeyCorp (NYSE:KEY) today announced net loss from continuing operations attributable to Key common shareholders of $(447) million, or $(.47) per diluted common share, or adjusted net income of $290 million or $.30 per diluted common share(a), for the third quarter of 2024. Included in the third quarter of 2024 are $(737) million, or $(.77) per diluted common share, after-tax, of charges related to the loss on the sale of securities(c). Net income from continuing operations attributable to Key common shareholders was $237 million, or $.25 per diluted common share, for the second quarter of 2024 and $266 million, or $.29 per diluted common share, for the third quarter of 2023.

Comments from Chairman and CEO, Chris Gorman

"Key performed well in the third quarter. EPS was impacted by a previously communicated securities portfolio repositioning that will enhance future earnings, capital, and liquidity starting in the fourth quarter. Underlying results were solid as relationship clients, deposits, and business-related fees all demonstrated continued momentum. As anticipated, we saw a meaningful increase in net interest income, up 7% quarter-over-quarter, as substantial portions of low-yielding securities and swaps matured. Concurrently, both our credit risk profile and expenses remained stable.

We continue to make progress regarding our $2.8 billion capital raise from Scotiabank, completing the initial $821 million investment tranche this quarter. As a result of this initial investment and the meaningful decline in interest rates in the third quarter, our tangible common equity ratio improved by 100 basis points quarter-over-quarter, and our reported CET1 ratio further strengthened to 10.8%. We continue to expect to complete the final tranche of the equity financing in the first quarter of 2025, subject to Fed approval.

Our fee-based pipelines continue to build. Investment banking and debt placement pipelines remain near record levels. Wealth management and commercial payments continue to demonstrate momentum.

Given the combination of our strong pipelines, further expected net interest income tailwinds in the quarters ahead, and a stable-to-improved credit outlook, I remain optimistic with respect to the trajectory of our business and our ability to drive value for all of our stakeholders."

(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" 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) September 30, 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 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

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

$    (447)

$      237

$      266

(288.6) %

(268.0) %

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

(.47)

.25

.29

(288.0)

(262.1)

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

(16.98) %

10.39 %

12.40 %

N/A

N/A

Return on average total assets from continuing operations

(.87)

.59

.62

N/A

N/A

Common Equity Tier 1 ratio (b)

10.8

10.5

9.8

N/A

N/A

Book value at period end

$   14.53

$   13.09

$   11.65

11.0

24.7

Net interest margin (TE) from continuing operations

2.17 %

2.04 %

2.01 %

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)

September 30, 2024 ratio is estimated.

TE = Taxable Equivalent, N/A = Not Applicable

 

INCOME STATEMENT HIGHLIGHTS

Revenue

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Net interest income (TE)

$        964

$        899

$        923

7.2 %

4.4 %

Noninterest income

(269)

627

643

(142.9)

(141.8)

Total revenue (TE)

$        695

$      1,526

$      1,566

(54.5) %

(55.6) %

TE = Taxable Equivalent

 

Taxable-equivalent net interest income was $964 million for the third quarter of 2024 and the net interest margin was 2.17%. Compared to the third quarter of 2023, net interest income increased by $41 million, and the net interest margin increased by 16 basis points. Both net interest income and the net interest margin benefited from the reinvestment of proceeds from maturing investment securities into higher yielding investments, the maturity of lower-yielding interest rate swaps with negative carry, and a shift in funding mix from higher-cost wholesale borrowings to lower-cost interest-bearing deposits. In addition, during the third quarter of 2024, Key began the repositioning of the available-for-sale portfolio, which involved the sale of approximately $7.0 billion of lower-yielding mortgaged-backed securities and reinvestment of the proceeds into higher-yielding investments. These benefits were partially offset by a decline in loan balances and higher deposit costs relative to a year ago.

Compared to the second quarter of 2024, taxable-equivalent net interest income increased by $65 million, and the net interest margin increased by 13 basis points. Both net interest income and the net interest margin benefited from the reinvestment of proceeds from maturing investment securities into higher yielding investments, continued amortization of low-yielding interest rate swaps that had been terminated in 2023, the repositioning of the available-for-sale portfolio, and an improved funding mix. Lower loan balances and higher interest-bearing deposit costs somewhat offset the increase.

Noninterest Income

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Trust and investment services income

$        140

$        139

$        130

.7 %

7.7 %

Investment banking and debt placement fees

171

126

141

35.7

21.3

Cards and payments income

84

85

90

(1.2)

(6.7)

Service charges on deposit accounts

67

66

69

1.5

(2.9)

Corporate services income

69

68

73

1.5

(5.5)

Commercial mortgage servicing fees

73

61

46

19.7

58.7

Corporate-owned life insurance income

36

34

35

5.9

2.9

Consumer mortgage income

12

16

15

(25.0)

(20.0)

Operating lease income and other leasing gains

16

21

22

(23.8)

(27.3)

Other income

(937)

11

22

N/M

N/M

Total noninterest income

$       (269)

$        627

$        643

(142.9) %

(141.8) %

N/M = Not Meaningful

 

Compared to the third quarter of 2023, noninterest income decreased by $912 million. The decrease was driven primarily by a $918 million loss on the sale of securities as part of a strategic repositioning of the portfolio in the third quarter of 2024. See the Selected Items Impact on Earnings table on page 25 for more information. The decline was partly offset by a $30 million increase in investment banking and debt placement fees, reflective of stronger syndication, debt, and equity underwriting fees, as well as a $27 million increase in commercial mortgage servicing fees reflecting higher active special servicing balances and overall growth of the servicing portfolio.

Compared to the second quarter of 2024, noninterest income decreased by $896 million. The decrease was driven primarily by the loss on the sale of securities referenced above. The decline was partly offset by a $45 million increase in investment banking and debt placement fees, reflective of stronger syndication and equity underwriting fees, as well as a $12 million increase in commercial mortgage servicing fees.

Noninterest Expense

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Personnel expense

$        670

$        636

$        663

5.3 %

1.1 %

Net occupancy

66

66

67

—

(1.5)

Computer processing

104

101

89

3.0

16.9

Business services and professional fees

41

37

38

10.8

7.9

Equipment

20

20

20

—

—

Operating lease expense

14

17

18

(17.6)

(22.2)

Marketing

21

21

28

—

(25.0)

Other expense

158

181

187

(12.7)

(15.5)

Total noninterest expense

$      1,094

$      1,079

$      1,110

1.4 %

(1.4) %

 

Compared to the third quarter of 2023, noninterest expense decreased $16 million. The decline in noninterest expense was driven by a $7 million decrease in marketing expense, and a reduction in the estimated FDIC special assessment in the third quarter of 2024. See the Selected Items Impact on Earnings table on page 25 for more information. Partly offsetting the decline was an increase in computer processing expense of $15 million, due to technology investments, and a $7 million increase in personnel expense due to an increase in incentive and stock-based compensation related to strong capital markets activity and a higher stock price compared to the year-ago period.

Compared to the second quarter of 2024, noninterest expense increased by $15 million. The increase was driven by a $34 million increase in personnel expense, primarily from incentive and stock-based compensation, reflecting stronger capital markets activity. The increase was partly offset by a decline in other expense of $23 million, related to a reduction of the estimated FDIC special assessment charge recognized in the third quarter of 2024 when compared to the second quarter of 2024. See the Selected Items Impact on Earnings table on page 25 for more information.

BALANCE SHEET HIGHLIGHTS

Average Loans

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Commercial and industrial (a)

$    53,121

$    54,599

$    59,187

(2.7) %

(10.2) %

Other commercial loans

19,929

20,500

22,371

(2.8)

(10.9)

Total consumer loans

33,194

33,862

36,069

(2.0)

(8.0)

Total loans

$  106,244

$  108,961

$  117,627

(2.5) %

(9.7) %

(a)

Commercial and industrial average loan balances include $215 million, $218 million, and $202 million of assets from commercial credit cards at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

 

Average loans were $106.2 billion for the third quarter of 2024, a decrease of $11.4 billion compared to the third quarter of 2023, reflective of Key's planned balance sheet optimization efforts in 2023, and continued tepid client loan demand. The decline in average loans was mostly driven by a $8.5 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 $2.9 billion, reflective of broad-based declines across all consumer loan categories.

Compared to the second quarter of 2024, average loans decreased by $2.7 billion. Average commercial loans declined by $2.0 billion, primarily driven by a decrease in commercial and industrial loans and commercial mortgage real estate loans. Average consumer loans declined $668 million, driven by broad-based declines across all consumer loan categories.

Average Deposits

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Non-time deposits

$  129,901

$  128,161

$  129,743

1.4 %

0.1 %

Time deposits

17,870

16,019

15,082

11.6

18.5

Total deposits

$  147,771

$  144,180

$  144,825

2.5 %

2.0 %

Cost of total deposits

2.39 %

2.28 %

1.88 %

N/A

N/A

N/A = Not Applicable

 

Average deposits totaled $147.8 billion for the third quarter of 2024, an increase of $2.9 billion compared to the year-ago quarter, reflecting growth in both consumer and commercial deposits.

Compared to the second quarter of 2024, average deposits increased by $3.6 billion, driven by an increase in both consumer and commercial deposit balances.

ASSET QUALITY

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Net loan charge-offs

$      154

$       91

$       71

69.2 %

116.9 %

Net loan charge-offs to average total loans

.58 %

.34 %

.24 %

N/A

N/A

Nonperforming loans at period end

$      728

$      710

$      455

2.5

60.0

Nonperforming assets at period end

741

727

471

1.9

57.3

Allowance for loan and lease losses

1,494

1,547

1,488

(3.4)

0.4

Allowance for credit losses

1,774

1,833

1,778

(3.2)

(0.2)

Provision for credit losses

95

100

81

(5.0)

17.3

Allowance for loan and lease losses to nonperforming loans

205 %

218 %

327 %

N/A

N/A

Allowance for credit losses to nonperforming loans

244

258

391

N/A

N/A

N/A = Not Applicable

 

Key's provision for credit losses was $95 million, compared to $81 million in the third quarter of 2023 and $100 million in the second quarter of 2024. The increase from the year-ago period reflects continued, but slowing, credit portfolio migration, higher net charge-offs, and changes in the economic outlook, partly offset by balance sheet optimization efforts.

Net loan charge-offs for the third quarter of 2024 totaled $154 million, or 0.58% of average total loans. These results compare to $71 million, or 0.24%, for the third quarter of 2023 and $91 million, or 0.34%, for the second quarter of 2024. Key's allowance for credit losses was $1.8 billion, or 1.68% of total period-end loans at September 30, 2024, compared to 1.54% at September 30, 2023, and 1.71% at June 30, 2024.

At September 30, 2024, Key's nonperforming loans totaled $728 million, which represented 0.69% of period-end portfolio loans. These results compare to 0.39% at September 30, 2023, and 0.66% at June 30, 2024. Nonperforming assets at September 30, 2024, totaled $741 million, and represented 0.70% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.41% at September 30, 2023, and 0.68% at June 30, 2024.

CAPITAL

Key's estimated risk-based capital ratios, included in the following table, continued to exceed all "well-capitalized" regulatory benchmarks at September 30, 2024.

Capital Ratios

9/30/2024

6/30/2024

9/30/2023

Common Equity Tier 1 (a)

10.8 %

10.5 %

9.8 %

Tier 1 risk-based capital (a)

12.6

12.2

11.4

Total risk-based capital (a)

15.1

14.7

13.8

Tangible common equity to tangible assets (b)

6.2

5.2

4.4

Leverage (a)

9.2

9.1

8.9

(a)

September 30, 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 third quarter of 2024. As shown in the preceding table, at September 30, 2024, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 10.8% and 12.6%, respectively. Key's tangible common equity ratio was 6.2% at September 30, 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 is now in the three-year transition period. 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 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Shares outstanding at beginning of period

943,200

942,776

935,733

— %

.8 %

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

222

424

428

(47.6)

(48.1)

Shares issued under Scotiabank investment agreement

47,829

—

—

N/M

N/M

Shares outstanding at end of period

991,251

943,200

936,161

5.1 %

5.9 %

N/M = Not Meaningful

 

Key declared a dividend of $.205 per common share for the third quarter of 2024.

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 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Revenue from continuing operations (TE)

Consumer Bank

$         814

$         769

$         775

5.9 %

5.0 %

Commercial Bank

868

770

809

12.7

7.3

Other (a)

(987)

(13)

(18)

N/M

N/M

Total

$         695

$       1,526

$       1,566

(54.5) %

(55.6) %

Income (loss) from continuing operations attributable to Key

Consumer Bank

$           86

$           67

$           65

28.4 %

32.3 %

Commercial Bank

300

207

240

44.9

25.0

Other (a)

(797)

(1)

(3)

N/M

N/M

Total

$        (411)

$         273

$         302

(250.5) %

(236.1) %

(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 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Summary of operations

Net interest income (TE)

$         584

$         535

$         534

9.2 %

9.4 %

Noninterest income

230

234

241

(1.7)

(4.6)

Total revenue (TE)

814

769

775

5.9

5.0

Provision for credit losses

52

33

14

57.6

271.4

Noninterest expense

649

648

676

.2

(4.0)

Income (loss) before income taxes (TE)

113

88

85

28.4

32.9

Allocated income taxes (benefit) and TE adjustments

27

21

20

28.6

35.0

Net income (loss) attributable to Key

$           86

$           67

$           65

28.4 %

32.3 %

Average balances

Loans and leases

$     38,332

$     39,174

$     41,610

(2.1) %

(7.9) %

Total assets

41,188

42,008

44,429

(2.0)

(7.3)

Deposits

86,431

85,397

82,683

1.2

4.5

Assets under management at period end

$     61,122

$     57,602

$     52,516

6.1 %

16.4 %

TE = Taxable Equivalent

 

Additional Consumer Bank Data

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Noninterest income

Trust and investment services income

$       114

$       112

$       105

1.8 %

8.6 %

Service charges on deposit accounts

34

34

39

—

(12.8)

Cards and payments income

60

61

65

(1.6)

(7.7)

Consumer mortgage income

12

16

15

(25.0)

(20.0)

Other noninterest income

10

11

17

(9.1)

(41.2)

Total noninterest income

$       230

$       234

$       241

(1.7) %

(4.6) %

Average deposit balances

Money market deposits

$  30,805

$  30,229

$  28,638

1.9 %

7.6 %

Demand deposits

22,310

22,292

22,526

.1

(1.0)

Savings deposits

4,553

4,791

5,676

(5.0)

(19.8)

Time deposits

13,927

13,038

8,752

6.8

59.1

Noninterest-bearing deposits

14,836

15,047

17,091

(1.4)

(13.2)

Total deposits

$  86,431

$  85,397

$  82,683

1.2 %

4.5 %

Other data

Branches

944

946

959

Automated teller machines

1,194

1,199

1,249

 

Consumer Bank Summary of Operations (3Q24 vs. 3Q23)

Key's Consumer Bank recorded net income attributable to Key of $86 million for the third quarter of 2024, compared to $65 million for the year-ago quarter

Taxable-equivalent net interest income increased by $50 million, or 9.4%, compared to the third quarter of 2023

Average loans and leases decreased $3.3 billion, or 7.9%, from the third quarter of 2023, driven by broad-based declines across all loan categories

Average deposits increased $3.7 billion, or 4.5%, from the third quarter of 2023, driven by growth in retail deposits

Provision for credit losses increased $38 million compared to the third quarter of 2023, driven by changes in economic outlook and higher net charge-offs, partly offset by planned balance sheet optimization efforts

Noninterest income decreased $11 million from the year-ago quarter, driven by declines in service charges on deposit accounts and cards and payments income

Noninterest expense decreased $27 million from the year-ago quarter, reflective of lower marketing expense

 

Commercial Bank

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Summary of operations

Net interest income (TE)

$         460

$         411

$         446

11.9 %

3.1 %

Noninterest income

408

359

363

13.6

12.4

Total revenue (TE)

868

770

809

12.7

7.3

Provision for credit losses

41

87

68

(52.9)

(39.7)

Noninterest expense

445

432

433

3.0

2.8

Income (loss) before income taxes (TE)

382

251

308

52.2

24.0

Allocated income taxes and TE adjustments

82

44

68

86.4

20.6

Net income (loss) attributable to Key

$         300

$         207

$         240

44.9 %

25.0 %

Average balances

Loans and leases

$     67,452

$     69,248

$     75,598

(2.6) %

(10.8) %

Loans held for sale

998

522

1,268

91.2

(21.3)

Total assets

76,395

78,328

85,930

(2.5)

(11.1)

Deposits

58,696

57,360

56,078

2.3 %

4.7 %

TE = Taxable Equivalent

 

Additional Commercial Bank Data

Dollars in millions

Change 3Q24 vs.

3Q24

2Q24

3Q23

2Q24

3Q23

Noninterest income

Trust and investment services income

$           26

$           26

$           25

— %

4.0 %

Investment banking and debt placement fees

171

126

141

35.7

21.3

Cards and payments income

22

21

18

4.8

22.2

Service charges on deposit accounts

32

31

29

3.2

10.3

Corporate services income

62

61

64

1.6

(3.1)

Commercial mortgage servicing fees

73

61

45

19.7

62.2

Operating lease income and other leasing gains

16

21

22

(23.8)

(27.3)

Other noninterest income

6

12

19

(50.0)

(68.4)

Total noninterest income

$         408

$         359

$         363

13.6 %

12.4 %

 

Commercial Bank Summary of Operations (3Q24 vs. 3Q23)

Key's Commercial Bank recorded net income attributable to Key of $300 million for the third quarter of 2024 compared to $240 million for the year-ago quarter

Taxable-equivalent net interest income increased by $14 million, or 3.1%, compared to the third quarter of 2023

Average loan and lease balances decreased $8.1 billion, or 10.8%, compared to the third quarter of 2023, driven by a decline in commercial and industrial loans

Average deposit balances increased $2.6 billion compared to the third quarter of 2023, driven by our focus on growing deposits across our commercial businesses

Provision for credit losses decreased $27 million compared to the third quarter of 2023, driven by the impact of balance sheet optimization efforts, partly offset by slowing credit portfolio migration, changes in economic outlook, and higher net charge-offs

Noninterest income increased $45 million compared to the third quarter of 2023, primarily driven by an increase in investment banking and debt placement fees and commercial mortgage servicing fees

Noninterest expense increased $12 million compared to the third quarter of 2023, driven by higher incentive compensation related to stronger investment banking and debt placement fees

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

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 $190 billion at September 30, 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 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 9:00 a.m. ET, on October 17, 2024. A replay of the call will be available on our website through October 17, 2025.

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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KeyCorpThird Quarter 2024Financial 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 MeasuresThis 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).

Annualized DataCertain 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 EquivalentIncome 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 municipal securities, and certain lease assets, on a common basis that facilitates comparison of results to results of peers.

Earnings Per Share EquivalentCertain 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

9/30/2024

6/30/2024

9/30/2023

Summary of operations

Net interest income (TE)

$           964

$           899

$           923

Noninterest income

(269)

627

643

Total revenue (TE)

695

1,526

1,566

Provision for credit losses

95

100

81

Noninterest expense

1,094

1,079

1,110

Income (loss) from continuing operations attributable to Key

(411)

273

302

Income (loss) from discontinued operations, net of taxes

1

1

1

Net income (loss) attributable to Key

(410)

274

303

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

(447)

237

266

Income (loss) from discontinued operations, net of taxes

1

1

1

Net income (loss) attributable to Key common shareholders

(446)

238

267

Per common share