KeyCorp (KEY) Q4 2024 earnings summary

Executive summary

• Reported Q4 2024 adjusted EPS of $0.38, with a GAAP loss of $0.28 per share, reflecting non-recurring securities repositioning and a $915M pretax loss on securities sales.

• Adjusted revenue grew 16% year-over-year and 11% sequentially, with double-digit growth in net interest income and strong fee-based business performance.

• Tangible book value per share increased 17% year-over-year to $11.70.

• Relationship households and client deposits both grew 3-4% year-over-year.

• Regulatory approval received and closed for Scotiabank's minority investment.

Financial highlights

• Adjusted Q4 revenue up 16% year-over-year and 11% sequentially; adjusted noninterest income up 18% year-over-year.

• Net interest income was $1.1B in Q4, up 10% sequentially; NIM increased to 2.41% from 2.17% in Q3.

• Full-year net charge-offs were 41 bps of average loans; provision for credit losses was $39M in Q4.

• CET1 ratio at 12.0%, up 120 bps sequentially and 200 bps year-over-year; tangible common equity ratio at 7.0%.

• Book value per share at $14.21, up 9.1% year-over-year.

Outlook and guidance

• 2025 average loans expected to decline 2%-5%, with year-end balances flat to 2024.

• Net interest income projected to rise 2%-4% for 2025; adjusted noninterest income up 3%-5%.

• Expenses expected to rise 3%-5% depending on fee environment; tax rate guidance at 21%-22% GAAP, 23%-24% tax-equivalent.

• Full-year net charge-off ratio expected at 40-45 bps, with improving NPAs and criticized loans.

• Management expects continued profitable growth in 2025, citing strong capital position and performance momentum.