Core Viewpoint - KeyCorp is undergoing significant changes to its board of directors following criticism from activist investor HoldCo Asset Management regarding the bank's performance and calls for CEO Chris Gorman's dismissal [1][3]. Group 1: Board Changes - KeyCorp appointed Todd Vasos, CEO of Dollar General, as the bank's lead independent director, succeeding Alexander M. "Sandy" Cutler, who has served for 10 years [2]. - Directors Carlton Highsmith and Ruth Ann Gillis will retire at the bank's annual meeting on May 14, 2023 [2]. - KeyCorp has nominated Antonio DeSpirito, a former BlackRock executive, and Christopher Henson, a former Truist executive, to replace Highsmith and Gillis [3][4]. Group 2: Investor Criticism - HoldCo Asset Management, which holds a $140 million stake in KeyCorp, criticized the board's performance, claiming that Cutler has overseen significant underperformance over the past 25 years [3]. - The activist investor asserted that "every single director" at KeyCorp has failed their constituents [3]. Group 3: Strategic Goals - The new nominees are expected to support KeyCorp's strategy aimed at driving disciplined growth, enhanced profitability, and shareholder value [5]. - Gorman emphasized that the new board members bring expertise in capital markets, banking operations, and financial oversight, which aligns with KeyCorp's priorities [4].

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Core Viewpoint - KeyCorp reported strong financial performance with earnings per share (EPS) of $0.43, exceeding estimates, but faced stock decline due to increased provisions for credit losses and broader market trends [2][3][5] Financial Performance - KeyCorp's EPS was $0.43, surpassing the estimated $0.38, marking a 7.9% increase year-over-year [2] - The company's revenue reached approximately $2.01 billion, exceeding the estimated $1.97 billion, driven by higher net interest income and average loan growth [2][5] Market Reaction - Despite positive earnings, KeyCorp's stock declined over 2% in early-market trading due to a significant rise in provisions for credit losses, which increased to $108 million [3][5] - Bearish trends in the broader market also contributed to the stock's decline [3] Valuation Metrics - KeyCorp has a price-to-earnings (P/E) ratio of approximately 12.54, indicating market valuation of its earnings [4] - The price-to-sales ratio stands at about 2.05, reflecting market valuation of its revenue [4] - The debt-to-equity ratio is 0.54, suggesting a moderate level of debt relative to equity, while a current ratio of 38.17 indicates a strong liquidity position [4]

Core Viewpoint - KeyCorp reported strong fourth-quarter earnings, exceeding analyst expectations due to increased net interest income and robust investment banking activity [1][2]. Financial Performance - Net income from continuing operations attributable to common shareholders was $474 million, or $0.43 per diluted share, surpassing analyst estimates of $0.39 [1]. - Revenue for the quarter reached $2.0 billion, exceeding the consensus forecast of $1.96 billion [1]. - For the full year, revenue hit a record $7.5 billion, reflecting a 16% year-over-year increase when adjusted for selected items [2]. Key Metrics - There was a 3% sequential increase in net interest income and a 7 basis point improvement in net interest margin to 2.82% [2]. - Investment banking and debt placement fees rose 33% quarter over quarter to $243 million [2]. - Noninterest income increased 11.4% sequentially to $782 million, while nonperforming assets declined 6% from the prior quarter [2]. Capital Management - KeyCorp maintained strong capital levels, reporting a Common Equity Tier 1 ratio of 11.7% [3]. - The bank repurchased $200 million of common stock during the quarter while maintaining peer-leading capital ratios [3].

Group 1 - KeyCorp (KEY) experienced a decline of 0.8% in after-hours trading on Tuesday [1][2] - The key points from the company's Q4 2025 earnings call include strong revenue growth and strategic investments [1][2]

Core Insights - KeyCorp's fourth-quarter 2025 adjusted earnings per share from continuing operations were 41 cents, exceeding the Zacks Consensus Estimate of 38 cents, reflecting a 7.9% increase from the prior-year quarter [1][9] - Despite better-than-expected results, KeyCorp's shares fell over 2% in early trading due to bearish market trends and a significant rise in provisions [1] Financial Performance - The quarterly results were bolstered by higher net interest income (NII) and non-interest income, alongside an increase in average loans and deposits [2] - Total revenues for the fourth quarter reached $2 billion, a 12.5% year-over-year increase, surpassing the Zacks Consensus Estimate of $1.94 billion [4] - For the full year 2025, total revenues were $7.51 billion, up 16.4% from the previous year, also exceeding the consensus estimate of $7.43 billion [4] Income and Expenses - NII on a taxable-equivalent basis rose 15.3% year over year to $1.22 billion, with the net interest margin expanding 41 basis points to 2.82% [5] - Adjusted non-interest income increased by 8.3% to $782 million, driven by higher investment banking and corporate services income [6] - Non-interest expenses rose nearly 1% to $1.24 billion, with adjusted expenses increasing 2.4% to $1.26 billion [6] Loan and Deposit Growth - Average total loans were $106.32 billion, showing a slight increase from the previous quarter, while average total deposits were $150.71 billion, also up marginally [7] Credit Quality - Provisions for credit losses surged to $108 million from $39 million in the prior-year quarter, impacting investor sentiment despite solid earnings [8][9] - Net loan charge-offs as a percentage of average total loans decreased by 4 basis points year over year to 0.39%, and non-performing assets as a percentage of the portfolio declined by 15 basis points to 0.59% [10] Capital Ratios - KeyCorp's tangible common equity to tangible assets ratio improved to 8.4% as of December 31, 2025, up from 7% in the same period of 2024 [11] - The Tier 1 risk-based capital ratio was 13.4%, down from 13.7%, while the Common Equity Tier 1 ratio decreased to 11.7% from 11.9% [11] Share Repurchases - During the reported quarter, KeyCorp repurchased shares worth $200 million [12] Strategic Outlook - The company is expected to benefit from decent loan balances, balance sheet repositioning efforts, and stabilizing funding costs, although weak asset quality remains a concern [13]

Core Insights - KeyCorp reported strong financial performance in Q4 2025, with earnings of $0.43 per share and revenue exceeding $2 billion, reflecting a 12% year-over-year growth on an adjusted basis [3][7] - The company emphasized improved profitability, credit trends, and a capital return plan, with plans for significant share buybacks in 2026 [4][5] Financial Performance - Non-interest income increased by 8% year-over-year, with investment banking and debt placement fees rising to $243 million, a 10% increase [1] - Tax-equivalent net interest income rose 15% year-over-year, with a net interest margin (NIM) of 2.82%, exceeding the target range [2] - Total revenue for the year increased by 16%, with net interest income growing 23% and fees up 7.5% [8] Capital Management - KeyCorp repurchased $200 million in Q4 and plans to repurchase at least $1.2 billion in 2026, managing CET1 toward the high end of its 9.5%–10% target [5][13] - The CET1 ratio was reported at 11.7% on a reported basis, with plans for continued capital generation to support buybacks [14] Credit Quality - Provision for credit losses was $108 million in Q4, with a net charge-off ratio of 39 basis points, indicating improving asset quality [6][9] - Non-performing assets decreased by 6% sequentially, and criticized loans fell by $500 million [9] Strategic Focus - The company is focusing on middle market and payments, investment banking, and wealth management, with increased investments in technology and AI [14] - KeyCorp is not pursuing bank acquisitions but is interested in complementary fee-based acquisitions [16] Board Changes - KeyCorp announced significant board changes, including new nominations and retirements, indicating a shift in governance [17]

Core Viewpoint - KeyCorp (KEY) shares have performed strongly over the past year, with a gain of 19% [1] Financial Performance - The decision to raise capital in 2024 has been beneficial for KeyCorp, allowing the company to accelerate its balance sheet transformation and improve margins [1]

Core Viewpoint - KeyCorp (KEY) has shown strong performance over the past year, with a 19% increase in its stock price, attributed to its decision to raise capital in 2024, which has facilitated balance sheet transformation and margin improvement [1] Company Performance - KeyCorp's stock has gained 19% over the past year, indicating robust market performance [1] - The decision to raise capital in 2024 has been beneficial, allowing the company to enhance its balance sheet and improve profit margins [1]

Financial Data and Key Metrics Changes - The company reported fourth quarter earnings of $0.43 per share, with revenue exceeding $2 billion, growing 12% year-over-year on an adjusted basis, while expenses grew by 2% [3][4] - Full-year record revenue increased by 16% compared to the prior year, with net interest income and fee revenue both exceeding projections [6][16] - The fourth quarter net interest margin (NIM) was 2.82%, an increase of 7 basis points sequentially, and above the previously indicated target of 2.75%-2.8% [21][25] Business Line Data and Key Metrics Changes - Loan growth was particularly strong in commercial and industrial (C&I) loans, which grew by 9%, while consumer loans were intentionally reduced [6][18] - Fee income growth was 7.5%, with all priority fee-based businesses growing at a high single or low double-digit rate [6][10] - Investment banking fees increased by 10% year-over-year, driven by debt capital markets and commercial mortgage debt placement activity [22] Market Data and Key Metrics Changes - The company raised nearly $140 billion of capital on behalf of clients in 2025, retaining 20% on its balance sheet [9] - Assets under management in wealth management reached a record $70 billion, with significant growth in the mass affluent segment [9][10] - Commercial payments fee-equivalent revenue grew by 11% in 2025, reflecting successful investments in bankers and new geographies [10] Company Strategy and Development Direction - The company aims to achieve a 15%-plus return on tangible common equity by year-end 2027, focusing on organic growth in middle market, payments, investment banking, and wealth management [8][32] - Investments in technology, particularly in AI, are a priority, with spending increasing from $900 million to $1 billion [34] - The company plans to repurchase at least $300 million of stock in the first quarter and anticipates similar amounts in subsequent quarters throughout 2026 [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of outsized revenue and earnings growth, supported by favorable macro conditions and strong business momentum [11][28] - The company expects to continue growing priority fee-based businesses at a mid to high single-digit pace, capitalizing on strong pipelines [8][10] - Management noted that the current environment plays well to the company's strengths, with expectations for improved middle market M&A activity in 2026 [9][11] Other Important Information - The company announced changes to its board, nominating two new directors with extensive experience in financial services [12][13] - The lead independent director role transitioned to Todd Vassos, with other board members retiring [14] Q&A Session Summary Question: Strategic priorities for 2026 - Management emphasized organic growth in middle market, payments, investment banking, and wealth management, alongside a focus on return on capital and technology investments [30][32] Question: Investment banking fee guidance - Management acknowledged the competitive hiring environment and expressed caution regarding visibility for investment banking fees, despite recent positive trends [36][38] Question: Expectations for growth and banker productivity - Management highlighted the importance of recent hires and backlogs, expressing optimism for growth as new bankers ramp up productivity [41][43] Question: Deposit beta assumptions and margin expectations - Management indicated a stable deposit base with expectations for low-to-mid 50s beta throughout the year, with a focus on remixing brokered deposits into client deposits [55][56] Question: Capital priorities and acquisition appetite - Management reiterated a focus on supporting clients, investing in technology, and pursuing complementary acquisitions, while maintaining a cautious stance on bank acquisitions [66][68]