Average deposits up $1.3 billion compared to the prior quarter and
the second quarter of 2023, with client deposits up 5%
year-over-year
Disciplined expense management: expenses
declined approximately 6% from the prior quarter and were stable
versus the year-ago period
Common Equity Tier 1 ratio rose 20 basis
points to 10.5%(a)
Credit quality remains solid: net charge-offs
to average loans of 34 basis points
CLEVELAND, July 18,
2024 /PRNewswire/ -- KeyCorp (NYSE: KEY) today
announced net income from continuing operations attributable to Key
common shareholders of $237 million,
or $.25 per diluted common share, for
the second quarter of 2024. Net income from continuing operations
attributable to Key common shareholders was $183 million, or $.20 per diluted common share, for the first
quarter of 2024 and $250 million, or
$.27 per diluted common share, for
the second quarter of 2023.
Comments from Chairman and CEO, Chris
Gorman
"This was a solid quarter for Key as we continued to execute
on our clearly defined path to enhanced profitability.
Sequentially, net interest income grew as we benefited from fixed
asset repricing and continued to grow client deposits while the
pace of deposit repricing slowed. Client deposits were up 5% from
the prior year. Loan demand remained tepid, however, we
are optimistic that we will begin to see growth in the second half
of the year.
We continued to make progress against our most important
strategic fee-based initiatives where we benefit from a
differentiated value proposition. We demonstrated momentum in
Wealth Management and Commercial Payments. Additionally, our
Investment Banking pipelines are meaningfully higher from prior
periods.
Expenses continue to be well-managed, and net charge-offs
remained low. We built our Common Equity Tier 1 ratio another 23
basis points to 10.5%, bringing our organic capital build to
approximately 120 basis points over the past twelve
months.
I am excited for our path forward and energized by our
momentum which positions us to deliver sound, profitable
growth."
|
(a)
|
June 30, 2024 ratio is
estimated and reflects Key's election to adopt the CECL optional
transition provision.
|
|
Selected Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions,
except per share data
|
|
|
|
|
Change 2Q24
vs.
|
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$ 237
|
$ 183
|
$ 250
|
|
29.5 %
|
(5.2) %
|
|
Income (loss) from
continuing operations attributable to Key common shareholders per
common share — assuming dilution
|
.25
|
.20
|
.27
|
|
25.0
|
(7.4)
|
|
Return on average
tangible common equity from continuing operations
(a)
|
10.39 %
|
7.87 %
|
11.04 %
|
|
N/A
|
N/A
|
|
Return on average total
assets from continuing operations
|
.59
|
.47
|
.58
|
|
N/A
|
N/A
|
|
Common Equity Tier 1
ratio (b)
|
10.5
|
10.3
|
9.3
|
|
N/A
|
N/A
|
|
Book value at period
end
|
$
13.09
|
$
12.84
|
$
12.18
|
|
1.9
|
7.5
|
|
Net interest margin
(TE) from continuing operations
|
2.04 %
|
2.02 %
|
2.12 %
|
|
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)
|
June 30, 2024 ratio is
estimated.
|
|
TE = Taxable
Equivalent, N/A = Not Applicable
|
|
INCOME STATEMENT
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Net interest income
(TE)
|
$
899
|
$
886
|
$
986
|
|
1.5 %
|
(8.8) %
|
|
Noninterest
income
|
627
|
647
|
609
|
|
(3.1)
|
3.0
|
|
Total revenue
(TE)
|
$
1,526
|
$ 1,533
|
$ 1,595
|
|
(.5) %
|
(4.3) %
|
|
|
|
|
|
|
|
Taxable-equivalent net interest income was $899 million for the second quarter of 2024 and
the net interest margin was 2.04%. Compared to the second quarter
of 2023, net interest income decreased by $87 million, and the net interest margin
decreased by eight basis points. Both net interest income and the
net interest margin benefited from the reinvestment of proceeds
from maturing investment securities into higher yielding but still
liquid investments, and the replacement of low-yielding interest
rate swaps with higher-yield interest rate swaps. Net interest
income and the net interest margin declined year-over-year,
however, reflecting lower loan balances from Key's balance sheet
optimization actions during 2023 and higher deposit costs in the
higher interest rate environment relative to a year ago.
Additionally, the balance sheet experienced a shift in funding mix
from noninterest-bearing deposits to higher-cost deposits and
borrowings.
Compared to the first quarter of 2024, taxable-equivalent net
interest income increased by $13
million, and the net interest margin increased by two basis
points for the second quarter of 2024. Both net interest income and
the net interest margin benefited from the reinvestment of proceeds
from maturing investment securities into higher yielding but still
liquid investments, and the replacement of low-yielding interest
rate swaps with higher-yield interest rate swaps. Lower loan
balances, higher funding costs, and an unfavorable funding mix
partly offset the increase in net interest income and the net
interest margin from higher yielding reinvestments.
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Trust and investment
services income
|
$
139
|
$
136
|
$
126
|
|
2.2 %
|
10.3 %
|
|
Investment banking and
debt placement fees
|
126
|
170
|
120
|
|
(25.9)
|
5.0
|
|
Cards and payments
income
|
85
|
77
|
85
|
|
10.4
|
—
|
|
Service charges on
deposit accounts
|
66
|
63
|
69
|
|
4.8
|
(4.3)
|
|
Corporate services
income
|
68
|
69
|
86
|
|
(1.4)
|
(20.9)
|
|
Commercial mortgage
servicing fees
|
61
|
56
|
50
|
|
8.9
|
22.0
|
|
Corporate-owned life
insurance income
|
34
|
32
|
32
|
|
6.3
|
6.3
|
|
Consumer mortgage
income
|
16
|
14
|
14
|
|
14.3
|
14.3
|
|
Operating lease income
and other leasing gains
|
21
|
24
|
23
|
|
(12.5)
|
(8.7)
|
|
Other income
|
11
|
6
|
4
|
|
83.3
|
175.0
|
|
Total noninterest
income
|
$
627
|
$
647
|
$
609
|
|
(3.1) %
|
3.0 %
|
|
|
|
|
|
|
|
Compared to the second quarter of 2023, noninterest income
increased by $18 million. The
increase was driven by trust and investment services, up
$13 million, reflective of strong
market performance as well as an increase in commercial mortgage
servicing fees, which increased $11
million.
Compared to the first quarter of 2024, noninterest income
decreased by $20 million. The
decrease was driven by investment banking and debt placement fees,
down $44 million, reflective of
strong merger and acquisition advisory fees and syndication fees in
the first quarter. The decline was partly offset by an $8 million increase in cards and payments income
due to higher seasonal transactions in debit and credit cards and a
$5 million increase in commercial
mortgage servicing fees.
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Personnel
expense
|
$
636
|
$
674
|
$
622
|
|
(5.6) %
|
2.3 %
|
|
Net
occupancy
|
66
|
67
|
65
|
|
(1.5)
|
1.5
|
|
Computer
processing
|
101
|
102
|
95
|
|
(1.0)
|
6.3
|
|
Business services and
professional fees
|
37
|
41
|
41
|
|
(9.8)
|
(9.8)
|
|
Equipment
|
20
|
20
|
22
|
|
—
|
(9.1)
|
|
Operating lease
expense
|
17
|
17
|
21
|
|
—
|
(19.0)
|
|
Marketing
|
21
|
19
|
29
|
|
10.5
|
(27.6)
|
|
Other
expense
|
181
|
203
|
181
|
|
(10.8)
|
.0
|
|
Total noninterest
expense
|
$
1,079
|
$ 1,143
|
$ 1,076
|
|
(5.6) %
|
.3 %
|
|
|
|
|
|
|
|
Compared to the second quarter of 2023, noninterest expense
increased $3 million, driven by a $14
million increase in personnel expense, reflective of a
higher stock price compared to the year-ago period. The increase
was partly offset by lower marketing expense and lower business
services and professional fees.
Compared to the first quarter of 2024, noninterest expense
decreased by $64 million. The
decrease was driven by a $38 million decline in personnel
expense, related to lower incentive compensation and lower employee
benefits. The decline in noninterest expense was also reflective of
a higher FDIC special assessment in the prior quarter. For more
information on the FDIC special assessment, see the Selected Items
Impact on Earnings table on page 25.
|
BALANCE SHEET
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Commercial and
industrial (a)
|
$
54,599
|
$
55,220
|
$
61,426
|
|
(1.1) %
|
(11.1) %
|
|
Other commercial
loans
|
20,500
|
21,222
|
22,623
|
|
(3.4)
|
(9.4)
|
|
Total consumer
loans
|
33,862
|
34,592
|
36,623
|
|
(2.1)
|
(7.5)
|
|
Total loans
|
$
108,961
|
$
111,034
|
$
120,672
|
|
(1.9) %
|
(9.7) %
|
|
|
|
|
|
|
|
|
(a)
|
Commercial and
industrial average loan balances include $218 million, $211
million, and $194 million of assets from commercial credit cards at
June 30, 2024, March 31, 2024, and June 30, 2023,
respectively.
|
Average loans were $109.0 billion
for the second quarter of 2024, a decrease of $11.7 billion compared to the second quarter of
2023, reflective of Key's planned balance sheet optimization
efforts in 2023. The decline in average loans was mostly driven by
a $9.0 billion decline in average
commercial loans, driven by lower commercial and industrial loans
and commercial mortgage real estate loans. Additionally, average
consumer loans declined by $2.8
billion, driven by declines across all consumer loan
categories.
Compared to the first quarter of 2024, average loans decreased
by $2.1 billion. Average commercial
loans declined by $1.3 billion,
primarily driven by a decrease in commercial and industrial loans
and commercial mortgage real estate loans. Additionally, average
consumer loans declined $730 million,
driven by declines across all consumer loan categories.
|
Average
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Non-time
deposits
|
$
128,161
|
$
128,448
|
$
127,687
|
|
(.2) %
|
0.4 %
|
|
Time
deposits
|
16,019
|
14,430
|
15,216
|
|
11.0
|
5.3
|
|
Total
deposits
|
$
144,180
|
$
142,878
|
$
142,903
|
|
.9 %
|
.9 %
|
|
|
|
|
|
|
|
|
Cost of total
deposits
|
2.28 %
|
2.20 %
|
1.49 %
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
Average deposits totaled $144.2
billion for the second quarter of 2024, an increase of
$1.3 billion compared to the year-ago
quarter. The increase was reflective of growth in retail deposit
balances and our focus on growing deposits across our commercial
businesses.
Compared to the first quarter of 2024, average deposits
increased by $1.3 billion. The
increase was reflective of growth in retail certificate of deposit
balances and stronger commercial deposit balances.
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Net loan
charge-offs
|
$
91
|
$ 81
|
$ 52
|
|
12.3 %
|
75.0 %
|
|
Net loan charge-offs to
average total loans
|
.34 %
|
.29 %
|
.17 %
|
|
N/A
|
N/A
|
|
Nonperforming loans at
period end
|
$ 710
|
$ 658
|
$ 431
|
|
7.9
|
64.7
|
|
Nonperforming assets at
period end
|
727
|
674
|
462
|
|
7.9
|
57.4
|
|
Allowance for loan and
lease losses
|
1,547
|
1,542
|
1,480
|
|
0.3
|
4.5
|
|
Allowance for credit
losses
|
1,833
|
1,823
|
1,771
|
|
0.5
|
3.5
|
|
Provision for credit
losses
|
100
|
101
|
167
|
|
(1.0)
|
(40.1)
|
|
|
|
|
|
|
|
|
Allowance for loan and
lease losses to nonperforming loans
|
218 %
|
234 %
|
343 %
|
|
N/A
|
N/A
|
|
Allowance for credit
losses to nonperforming loans
|
258
|
277
|
411
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
Key's provision for credit losses was $100 million, compared to $167 million in the second quarter of 2023 and
$101 million in the first quarter of
2024. The decline from the year-ago period reflects a more stable
economic outlook and the impact of balance sheet optimization
efforts, partly offset by credit portfolio migration.
Net loan charge-offs for the second quarter of 2024 totaled
$91 million, or 0.34% of average
total loans. These results compare to $52
million, or 0.17%, for the second quarter of 2023 and
$81 million, or 0.29%, for the first
quarter of 2024. Key's allowance for credit losses was $1.8 billion, or 1.71% of total period-end loans
at June 30, 2024, compared to 1.49%
at June 30, 2023, and 1.66% at
March 31, 2024.
At June 30, 2024,
Key's nonperforming loans totaled $710
million, which represented 0.66% of period-end portfolio
loans. These results compare to 0.36% at June 30, 2023, and
0.60% at March 31, 2024. Nonperforming assets at June 30,
2024, totaled $727 million, and
represented 0.68% of period-end portfolio loans and OREO and other
nonperforming assets. These results compare to 0.39% at
June 30, 2023, and 0.61% at March 31, 2024.
CAPITAL
Key's estimated risk-based capital ratios, included in the
following table, continued to exceed all "well-capitalized"
regulatory benchmarks at June 30,
2024.
|
Capital
Ratios
|
|
|
|
|
|
|
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
Common Equity Tier 1
(a)
|
10.5 %
|
10.3 %
|
9.3 %
|
|
Tier 1 risk-based
capital (a)
|
12.2
|
12.0
|
10.8
|
|
Total risk-based
capital (a)
|
14.7
|
14.5
|
13.1
|
|
Tangible common equity
to tangible assets (b)
|
5.2
|
5.0
|
4.5
|
|
Leverage
(a)
|
9.1
|
9.1
|
8.7
|
|
|
|
|
|
(a)
|
June 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 second
quarter of 2024. As shown in the preceding table, at June 30, 2024, Key's estimated Common Equity Tier
1 and Tier 1 risk-based capital ratios stood at 10.5% and 12.2%,
respectively. Key's tangible common equity ratio was 5.2% at
June 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 four basis
points.
|
Summary of Changes
in Common Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
thousands
|
|
|
|
|
Change 2Q24
vs.
|
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Shares outstanding at
beginning of period
|
942,776
|
936,564
|
935,229
|
|
.7 %
|
.8 %
|
|
Shares issued under
employee compensation plans (net of cancellations and
returns)
|
424
|
6,212
|
504
|
|
(93.2)
|
(16)
|
|
Shares outstanding at
end of period
|
943,200
|
942,776
|
935,733
|
|
— %
|
.8 %
|
|
|
|
|
|
|
|
|
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 2Q24
vs.
|
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Revenue from
continuing operations (TE)
|
|
|
|
|
|
|
|
Consumer
Bank
|
$
769
|
$
757
|
$
787
|
|
1.6 %
|
(2.3) %
|
|
Commercial
Bank
|
769
|
799
|
823
|
|
(3.8)
|
(6.6)
|
|
Other
(a)
|
(12)
|
(23)
|
(15)
|
|
47.8
|
20.0
|
|
Total
|
$
1,526
|
$
1,533
|
$
1,595
|
|
(.5) %
|
(4.3) %
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key
|
|
|
|
|
|
|
|
Consumer
Bank
|
$
67
|
$
41
|
$
71
|
|
63.4 %
|
(5.6) %
|
|
Commercial
Bank
|
207
|
205
|
227
|
|
1.0
|
(8.8)
|
|
Other
(a)
|
(1)
|
(27)
|
(12)
|
|
96.3
|
91.7
|
|
Total
|
$
273
|
$
219
|
$
286
|
|
24.7 %
|
(4.5) %
|
|
|
|
|
|
|
|
|
|
(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.
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 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Summary of
operations
|
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
535
|
$
532
|
$
544
|
|
.6 %
|
(1.7) %
|
|
Noninterest
income
|
234
|
225
|
243
|
|
4.0
|
(3.7)
|
|
Total revenue
(TE)
|
769
|
757
|
787
|
|
1.6
|
(2.3)
|
|
Provision for credit
losses
|
33
|
(2)
|
32
|
|
N/M
|
3.1
|
|
Noninterest
expense
|
648
|
704
|
662
|
|
(8.0)
|
(2.1)
|
|
Income (loss) before
income taxes (TE)
|
88
|
55
|
93
|
|
60.0
|
(5.4)
|
|
Allocated income taxes
(benefit) and TE adjustments
|
21
|
14
|
22
|
|
50.0
|
(4.5)
|
|
Net income (loss)
attributable to Key
|
$
67
|
$
41
|
$
71
|
|
63.4 %
|
(5.6) %
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
|
Loans and
leases
|
$ 39,174
|
$ 39,919
|
$ 42,297
|
|
(1.9) %
|
(7.4) %
|
|
Total assets
|
42,008
|
42,710
|
45,116
|
|
(1.6)
|
(6.9)
|
|
Deposits
|
85,397
|
84,075
|
81,406
|
|
1.6
|
4.9
|
|
|
|
|
|
|
|
|
Assets under
management at period end
|
$ 57,602
|
$ 57,305
|
$ 53,952
|
|
.5 %
|
6.8 %
|
|
|
|
|
|
|
|
|
TE = Taxable
Equivalent
|
|
N/M = Not
Meaningful
|
|
Additional Consumer
Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Trust and investment
services income
|
$
112
|
$ 110
|
$ 101
|
|
1.8 %
|
10.9 %
|
|
Service charges on
deposit accounts
|
34
|
33
|
40
|
|
3.0
|
(15.0)
|
|
Cards and payments
income
|
61
|
57
|
65
|
|
7.0
|
(6.2)
|
|
Consumer mortgage
income
|
16
|
14
|
14
|
|
14.3
|
14.3
|
|
Other noninterest
income
|
11
|
11
|
23
|
|
—
|
(52.2)
|
|
Total noninterest
income
|
$
234
|
$ 225
|
$ 243
|
|
4.0 %
|
(3.7) %
|
|
|
|
|
|
|
|
|
Average deposit
balances
|
|
|
|
|
|
|
|
Money market
deposits
|
$
30,229
|
$
29,875
|
$
27,217
|
|
1.2 %
|
11.1 %
|
|
Demand
deposits
|
22,292
|
22,213
|
23,322
|
|
.4
|
(4.4)
|
|
Savings
deposits
|
4,791
|
4,986
|
6,294
|
|
(3.9)
|
(23.9)
|
|
Time
deposits
|
13,039
|
11,808
|
6,413
|
|
10.4
|
103.3
|
|
Noninterest-bearing
deposits
|
15,047
|
15,193
|
18,160
|
|
(1.0)
|
(17.1)
|
|
Total
deposits
|
$
85,398
|
$
84,075
|
$
81,406
|
|
1.6 %
|
4.9 %
|
|
|
|
|
|
|
|
|
Other
data
|
|
|
|
|
|
|
|
Branches
|
946
|
957
|
965
|
|
|
|
|
Automated teller
machines
|
1,199
|
1,214
|
1,255
|
|
|
|
|
|
|
|
|
|
|
Consumer Bank Summary of Operations (2Q24 vs. 2Q23)
- Key's Consumer Bank recorded net income attributable to Key of
$67 million for the second quarter of
2024, compared to $71 million for the
year-ago quarter
- Taxable-equivalent net interest income decreased by
$9 million, or 1.7%, compared to the
second quarter of 2023, primarily reflective of a decline in loan
spreads as a result of lower loan balances
- Average loans and leases decreased $3.1
billion, or 7.4%, from the second quarter of 2023, driven by
broad-based declines across loan categories
- Average deposits increased $4.0
billion, or 4.9%, from the second quarter of 2023, driven by
strong retail deposit growth
- Provision for credit losses increased $1
million compared to the second quarter of 2023
- Noninterest income decreased $9
million from the year-ago quarter, driven by declines in
service charges on deposit accounts and cards and payments
income
- Noninterest expense decreased $14
million from the year-ago quarter, reflective of lower
marketing expense
|
Commercial
Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Summary of
operations
|
|
|
|
|
|
|
|
Net interest income
(TE)
|
$
411
|
$
397
|
$
475
|
|
3.5 %
|
(13.5) %
|
|
Noninterest
income
|
358
|
402
|
348
|
|
(10.9)
|
2.9
|
|
Total revenue
(TE)
|
769
|
799
|
823
|
|
(3.8)
|
(6.6)
|
|
Provision for credit
losses
|
87
|
102
|
134
|
|
(14.7)
|
(35.1)
|
|
Noninterest
expense
|
431
|
443
|
406
|
|
(2.7)
|
6.2
|
|
Income (loss) before
income taxes (TE)
|
251
|
254
|
283
|
|
(1.2)
|
(11.3)
|
|
Allocated income taxes
and TE adjustments
|
44
|
49
|
56
|
|
(10.2)
|
(21.4)
|
|
Net income (loss)
attributable to Key
|
$
207
|
$
205
|
$
227
|
|
1.0 %
|
(8.8) %
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
|
Loans and
leases
|
$ 69,248
|
$ 70,633
|
$ 77,922
|
|
(2.0) %
|
(11.1) %
|
|
Loans held for
sale
|
522
|
840
|
1,014
|
|
(37.9)
|
(48.5)
|
|
Total assets
|
78,328
|
80,000
|
87,759
|
|
(2.1)
|
(10.7)
|
|
Deposits
|
57,360
|
56,331
|
52,512
|
|
1.8 %
|
9.2 %
|
|
|
|
|
|
|
|
|
Additional
Commercial Bank Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
2Q23
|
|
1Q24
|
2Q23
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Trust and investment
services income
|
$
27
|
$
26
|
$
25
|
|
3.8 %
|
8.0 %
|
|
Investment banking and
debt placement fees
|
126
|
170
|
120
|
|
(25.9)
|
5.0
|
|
Cards and payments
income
|
21
|
20
|
23
|
|
5.0
|
(8.7)
|
|
Service charges on
deposit accounts
|
31
|
29
|
28
|
|
6.9
|
10.7
|
|
Corporate services
income
|
61
|
63
|
77
|
|
(3.2)
|
(20.8)
|
|
Commercial mortgage
servicing fees
|
61
|
56
|
50
|
|
8.9
|
22.0
|
|
Operating lease income
and other leasing gains
|
21
|
24
|
24
|
|
(12.5)
|
(12.5)
|
|
Other noninterest
income
|
10
|
13
|
1
|
|
(23.1)
|
900.0
|
|
Total noninterest
income
|
$
358
|
$
401
|
$
348
|
|
(10.7) %
|
2.9 %
|
|
|
|
|
|
|
|
Commercial Bank Summary of Operations (2Q24 vs. 2Q23)
- Key's Commercial Bank recorded net income attributable to Key
of $207 million for the second
quarter of 2024 compared to $227
million for the year-ago quarter
- Taxable-equivalent net interest income decreased by
$64 million, or 13.5%, compared to
the second quarter of 2023, primarily reflecting higher
interest-bearing deposit costs and a shift in funding mix to
higher-cost deposits, as well as a decline in loan balances
- Average loan and lease balances decreased $8.7 billion, or 11.1%, compared to the second
quarter of 2023, driven by a decline in commercial and industrial
loans
- Average deposit balances increased $4.8
billion compared to the second quarter of 2023, driven by
our focus on growing deposits across our commercial businesses
- Provision for credit losses decreased $47 million compared to the second quarter of
2023, driven by a more stable economic outlook and the impact of
balance sheet optimization efforts, partly offset by credit
portfolio migration
- Noninterest income increased $10
million from the year-ago quarter, primarily driven by an
increase in investment banking and debt placement fees and
commercial mortgage servicing fees
- Noninterest expense increased $25
million compared to the second quarter of 2023, driven by
higher business services and professional fees and broad-based
increases across other expense categories
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 June 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 July 18, 2024. A replay of the call will be
available on our website through July 18,
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.
KeyCorp
Second Quarter
2024
Financial Supplement
|
Page
|
|
|
13
|
Basis of
Presentation
|
|
14
|
Financial
Highlights
|
|
16
|
GAAP to Non-GAAP
Reconciliation
|
|
18
|
Consolidated Balance
Sheets
|
|
19
|
Consolidated Statements
of Income
|
|
20
|
Consolidated Average
Balance Sheets, and Net Interest Income and Yields/Rates From
Continuing Operations
|
|
22
|
Noninterest
Expense
|
|
22
|
Personnel
Expense
|
|
23
|
Loan
Composition
|
|
23
|
Loans Held for Sale
Composition
|
|
23
|
Summary of Changes in
Loans Held for Sale
|
|
23
|
Summary of Loan and
Lease Loss Experience From Continuing Operations
|
|
25
|
Asset Quality
Statistics From Continuing Operations
|
|
25
|
Summary of
Nonperforming Assets and Past Due Loans From Continuing
Operations
|
|
25
|
Summary of Changes in
Nonperforming Loans From Continuing Operations
|
|
26
|
Line of Business
Results
|
|
26
|
Selected Items Impact
on Earnings
|
Basis of Presentation
Use of Non-GAAP Financial Measures
This document
contains GAAP financial measures and non-GAAP financial measures
where management believes it to be helpful in understanding Key's
results of operations or financial position. Where non-GAAP
financial measures are used, the comparable GAAP financial measure,
as well as the reconciliation to the comparable GAAP financial
measure, can be found in this document, the financial supplement,
or conference call slides related to this document, all of which
can be found on Key's website (www.key.com/ir).
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
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 municipal securities, and certain lease assets,
on a common basis that facilitates comparison of results to results
of 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, 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
|
|
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
Summary of
operations
|
|
|
|
|
Net interest income
(TE)
|
$
899
|
$
886
|
$
986
|
|
Noninterest
income
|
627
|
647
|
609
|
|
|
Total revenue
(TE)
|
1,526
|
1,533
|
1,595
|
|
Provision for credit
losses
|
100
|
101
|
167
|
|
Noninterest
expense
|
1,079
|
1,143
|
1,076
|
|
Income (loss) from
continuing operations attributable to Key
|
273
|
219
|
286
|
|
Income (loss) from
discontinued operations, net of taxes
|
1
|
—
|
1
|
|
Net income (loss)
attributable to Key
|
274
|
219
|
287
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
237
|
183
|
250
|
|
Income (loss) from
discontinued operations, net of taxes
|
1
|
—
|
1
|
|
Net income (loss)
attributable to Key common shareholders
|
238
|
183
|
251
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
.25
|
$
.20
|
$
.27
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
—
|
—
|
|
Net income (loss)
attributable to Key common shareholders (a)
|
.25
|
.20
|
.27
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.25
|
.20
|
.27
|
|
Income (loss) from
discontinued operations, net of taxes — assuming
dilution
|
—
|
—
|
—
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(a)
|
.25
|
.20
|
.27
|
|
|
|
|
|
|
|
Cash dividends
declared
|
.205
|
.205
|
.205
|
|
Book value at period
end
|
13.09
|
12.84
|
12.18
|
|
Tangible book value at
period end
|
10.13
|
9.87
|
9.16
|
|
Market price at period
end
|
14.21
|
15.81
|
9.24
|
|
|
|
|
|
|
|
Performance
ratios
|
|
|
|
|
From continuing
operations:
|
|
|
|
|
Return on average total
assets
|
.59 %
|
.47 %
|
.58 %
|
|
Return on average
common equity
|
7.96
|
6.06
|
8.42
|
|
Return on average
tangible common equity (b)
|
10.39
|
7.87
|
11.04
|
|
Net interest margin
(TE)
|
2.04
|
2.02
|
2.12
|
|
Cash efficiency ratio
(b)
|
70.2
|
74.0
|
66.8
|
|
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
|
Return on average total
assets
|
.59 %
|
.47 %
|
.58 %
|
|
Return on average
common equity
|
7.99
|
6.06
|
8.45
|
|
Return on average
tangible common equity (b)
|
10.43
|
7.87
|
11.09
|
|
Net interest margin
(TE)
|
2.04
|
2.02
|
2.12
|
|
Loan to deposit
(c)
|
74.0
|
76.6
|
83.0
|
|
|
|
|
|
|
|
Capital ratios at
period end
|
|
|
|
|
Key shareholders'
equity to assets
|
7.9 %
|
7.8 %
|
7.1 %
|
|
Key common
shareholders' equity to assets
|
6.6
|
6.5
|
5.8
|
|
Tangible common equity
to tangible assets (b)
|
5.2
|
5.0
|
4.5
|
|
Common Equity Tier 1
(d)
|
10.5
|
10.3
|
9.3
|
|
Tier 1 risk-based
capital (d)
|
12.2
|
12.0
|
10.8
|
|
Total risk-based
capital (d)
|
14.7
|
14.5
|
13.1
|
|
Leverage
(d)
|
9.1
|
9.1
|
8.7
|
|
|
|
|
|
|
|
Asset quality — from
continuing operations
|
|
|
|
|
Net loan
charge-offs
|
$
91
|
$
81
|
$
52
|
|
Net loan charge-offs to
average loans
|
.34 %
|
.29 %
|
.17 %
|
|
Allowance for loan and
lease losses
|
$
1,547
|
$
1,542
|
$
1,480
|
|
Allowance for credit
losses
|
1,833
|
1,823
|
1,771
|
|
Allowance for loan and
lease losses to period-end loans
|
1.44 %
|
1.40 %
|
1.24 %
|
|
Allowance for credit
losses to period-end loans
|
1.71
|
1.66
|
1.49
|
|
Allowance for loan and
lease losses to nonperforming loans
|
218
|
234
|
343
|
|
Allowance for credit
losses to nonperforming loans
|
258
|
277
|
411
|
|
Nonperforming loans at
period-end
|
$
710
|
$
658
|
$
431
|
|
Nonperforming assets at
period-end
|
727
|
674
|
462
|
|
Nonperforming loans to
period-end portfolio loans
|
.66 %
|
.60 %
|
.36 %
|
|
Nonperforming assets to
period-end portfolio loans plus OREO and other nonperforming
assets
|
.68
|
.61
|
.39
|
|
|
|
|
|
|
|
Trust
assets
|
|
|
|
|
Assets under
management
|
$
57,602
|
$
57,305
|
$
53,952
|
|
Other
data
|
|
|
|
|
Average full-time
equivalent employees
|
16,646
|
16,752
|
17,754
|
|
Branches
|
946
|
957
|
965
|
|
Taxable-equivalent
adjustment
|
$
12
|
$
11
|
$
8
|
|
|
|
|
|
Financial Highlights
(continued)
|
|
(Dollars in millions,
except per share amounts)
|
|
|
Six months
ended
|
|
|
6/30/2024
|
6/30/2023
|
|
Summary of
operations
|
|
|
|
Net interest income
(TE)
|
$
1,785
|
$
2,092
|
|
Noninterest
income
|
1,274
|
1,217
|
|
Total revenue
(TE)
|
3,059
|
3,309
|
|
Provision for credit
losses
|
201
|
306
|
|
Noninterest
expense
|
2,222
|
2,252
|
|
Income (loss) from
continuing operations attributable to Key
|
492
|
597
|
|
Income (loss) from
discontinued operations, net of taxes
|
1
|
2
|
|
Net income (loss)
attributable to Key
|
493
|
599
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
420
|
525
|
|
Income (loss) from
discontinued operations, net of taxes
|
1
|
2
|
|
Net income (loss)
attributable to Key common shareholders
|
421
|
527
|
|
|
|
|
|
Per common
share
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
.45
|
$
.57
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
—
|
|
Net income (loss)
attributable to Key common shareholders (a)
|
.45
|
.57
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common shareholders —
assuming dilution
|
.45
|
.56
|
|
Income (loss) from
discontinued operations, net of taxes — assuming
dilution
|
—
|
—
|
|
Net income (loss)
attributable to Key common shareholders — assuming dilution
(a)
|
.45
|
.57
|
|
|
|
|
|
Cash dividends
paid
|
.41
|
.41
|
|
|
|
|
|
Performance
ratios
|
|
|
|
From continuing
operations:
|
|
|
|
Return on average total
assets
|
.53 %
|
.62 %
|
|
Return on average
common equity
|
7.00
|
9.11
|
|
Return on average
tangible common equity (b)
|
9.12
|
12.06
|
|
Net interest margin
(TE)
|
2.03
|
2.29
|
|
Cash efficiency ratio
(b)
|
72.1
|
67.5
|
|
|
|
|
|
From consolidated
operations:
|
|
|
|
Return on average total
assets
|
.53 %
|
.62 %
|
|
Return on average
common equity
|
7.02
|
9.15
|
|
Return on average
tangible common equity (b)
|
9.14
|
12.10
|
|
Net interest margin
(TE)
|
2.03
|
2.29
|
|
|
|
|
|
Asset quality — from
continuing operations
|
|
|
|
Net loan
charge-offs
|
$
172
|
$
97
|
|
Net loan charge-offs to
average total loans
|
.31 %
|
.16 %
|
|
|
|
|
|
Other
data
|
|
|
|
Average full-time
equivalent employees
|
16,699
|
17,987
|
|
|
|
|
|
Taxable-equivalent
adjustment
|
23
|
15
|
|
(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)
|
June 30, 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," and "cash efficiency
ratio."
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.
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
|
|
Six months
ended
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
6/30/2024
|
6/30/2023
|
|
Tangible common
equity to tangible assets at period-end
|
|
|
|
|
|
|
|
Key shareholders'
equity (GAAP)
|
$
14,789
|
$
14,547
|
$
13,844
|
|
|
|
|
Less: Intangible
assets (a)
|
2,793
|
2,799
|
2,826
|
|
|
|
|
Preferred
Stock (b)
|
2,446
|
2,446
|
2,446
|
|
|
|
|
Tangible common equity
(non-GAAP)
|
$ 9,550
|
$ 9,302
|
$ 8,572
|
|
|
|
|
Total assets
(GAAP)
|
$
187,450
|
$ 187,485
|
$ 195,037
|
|
|
|
|
Less: Intangible
assets (a)
|
2,793
|
2,799
|
2,826
|
|
|
|
|
Tangible assets
(non-GAAP)
|
$
184,657
|
$ 184,686
|
$ 192,211
|
|
|
|
|
Tangible common equity
to tangible assets ratio (non-GAAP)
|
5.17 %
|
5.04 %
|
4.46 %
|
|
|
|
|
Pre-provision net
revenue
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
887
|
$
875
|
$
978
|
|
$
1,762
|
$
2,077
|
|
Plus:
Taxable-equivalent adjustment
|
12
|
11
|
8
|
|
23
|
15
|
|
Noninterest
income
|
627
|
647
|
609
|
|
1,274
|
1,217
|
|
Less: Noninterest
expense
|
1,079
|
1,143
|
1,076
|
|
2,222
|
2,252
|
|
Pre-provision net
revenue from continuing operations (non-GAAP)
|
$
447
|
$
390
|
$
519
|
|
$
837
|
$
1,679
|
|
Average tangible
common equity
|
|
|
|
|
|
|
|
Average Key
shareholders' equity (GAAP)
|
$
14,474
|
$
14,649
|
$
14,412
|
|
$
14,561
|
$
14,116
|
|
Less: Intangible
assets (average) (c)
|
2,796
|
2,802
|
2,831
|
|
2,798
|
2,836
|
|
Preferred stock
(average)
|
2,500
|
2,500
|
2,500
|
|
2,500
|
2,500
|
|
Average tangible
common equity (non-GAAP)
|
$ 9,178
|
$ 9,347
|
$ 9,081
|
|
$
9,263
|
$
8,780
|
|
Return on average
tangible common equity from continuing operations
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations attributable to Key common shareholders
(GAAP)
|
$
237
|
$
183
|
$
250
|
|
$
420
|
$ 525
|
|
Average tangible
common equity (non-GAAP)
|
9,178
|
9,347
|
9,081
|
|
9,263
|
8,780
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity from continuing operations
(non-GAAP)
|
10.39 %
|
7.87 %
|
11.04 %
|
|
9.12 %
|
12.06 %
|
|
Return on average
tangible common equity consolidated
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Key common shareholders (GAAP)
|
$
238
|
$
183
|
$
251
|
|
$
421
|
$ 527
|
|
Average tangible
common equity (non-GAAP)
|
9,178
|
9,347
|
9,081
|
|
9,263
|
8,780
|
|
|
|
|
|
|
|
|
Return on average
tangible common equity consolidated (non-GAAP)
|
10.43 %
|
7.87 %
|
11.09 %
|
|
9.14 %
|
12.10 %
|
|
GAAP to Non-GAAP
Reconciliations (continued)
|
|
(Dollars in
millions)
|
|
Three months
ended
|
|
Six months
ended
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
6/30/2024
|
6/30/2023
|
|
Cash efficiency
ratio
|
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
$ 1,079
|
$ 1,143
|
$ 1,076
|
|
$
2,222
|
$
2,252
|
|
Less: Intangible asset
amortization
|
7
|
8
|
10
|
|
15
|
20
|
|
Adjusted noninterest
expense (non-GAAP)
|
$ 1,072
|
$ 1,135
|
$ 1,066
|
|
$
2,207
|
$
2,232
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
$
887
|
$ 875
|
$ 978
|
|
$
1,762
|
$
2,077
|
|
Plus:
Taxable-equivalent adjustment
|
12
|
11
|
8
|
|
23
|
15
|
|
Net interest income TE
(non-GAAP)
|
899
|
886
|
986
|
|
1,785
|
2,092
|
|
Noninterest income
(GAAP)
|
627
|
647
|
609
|
|
1,274
|
1,217
|
|
Total
taxable-equivalent revenue (non-GAAP)
|
$ 1,526
|
$ 1,533
|
$ 1,595
|
|
$
3,059
|
$
3,309
|
|
|
|
|
|
|
|
|
Cash efficiency ratio
(non-GAAP)
|
70.2 %
|
74.0 %
|
66.8 %
|
|
72.1 %
|
67.5 %
|
|
|
|
|
|
|
|
|
(a)
|
For the three months
ended June 30, 2024, March 31, 2024, and June 30, 2023, intangible
assets exclude less than $1 million, $1 million, and $1 million,
respectively, of period-end purchased credit card
receivables.
|
|
(b)
|
Net of capital
surplus.
|
|
(c)
|
For the three months
ended June 30, 2024, March 31, 2024, and June 30, 2023, average
intangible assets exclude less than $1 million, $1 million, and $1
million, respectively, of average purchased credit card
receivables.
|
|
GAAP = U.S. generally
accepted accounting principles
|
|
Consolidated Balance
Sheets
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
Assets
|
|
|
|
|
Loans
|
$
107,078
|
$
109,885
|
$
119,011
|
|
Loans held for
sale
|
517
|
228
|
1,130
|
|
Securities available
for sale
|
37,460
|
37,298
|
37,908
|
|
Held-to-maturity
securities
|
7,968
|
8,272
|
9,189
|
|
Trading account
assets
|
1,219
|
1,171
|
1,177
|
|
Short-term
investments
|
15,536
|
13,205
|
8,959
|
|
Other
investments
|
1,259
|
1,247
|
1,474
|
|
|
Total earning
assets
|
171,037
|
171,306
|
178,848
|
|
Allowance for loan and
lease losses
|
(1,547)
|
(1,542)
|
(1,480)
|
|
Cash and due from
banks
|
1,326
|
1,247
|
758
|
|
Premises and
equipment
|
631
|
650
|
652
|
|
Goodwill
|
2,752
|
2,752
|
2,752
|
|
Other intangible
assets
|
41
|
48
|
75
|
|
Corporate-owned life
insurance
|
4,382
|
4,392
|
4,378
|
|
Accrued income and
other assets
|
8,532
|
8,314
|
8,668
|
|
Discontinued
assets
|
296
|
318
|
386
|
|
|
Total
assets
|
$
187,450
|
$
187,485
|
$
195,037
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits in domestic
offices:
|
|
|
|
|
|
Interest-bearing
deposits
|
$
117,570
|
$
114,593
|
$
111,766
|
|
|
Noninterest-bearing
deposits
|
28,150
|
29,638
|
33,366
|
|
|
Total
deposits
|
145,720
|
144,231
|
145,132
|
|
Federal funds purchased
and securities sold under repurchase agreements
|
25
|
27
|
1,702
|
|
Bank notes and other
short-term borrowings
|
5,292
|
2,896
|
6,949
|
|
Accrued expense and
other liabilities
|
4,755
|
5,008
|
5,339
|
|
Long-term
debt
|
16,869
|
20,776
|
22,071
|
|
|
Total
liabilities
|
172,661
|
172,938
|
181,193
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Preferred
stock
|
2,500
|
2,500
|
2,500
|
|
Common
shares
|
1,257
|
1,257
|
1,257
|
|
Capital
surplus
|
6,185
|
6,164
|
6,231
|
|
Retained
earnings
|
15,706
|
15,662
|
15,759
|
|
Treasury stock, at
cost
|
(5,715)
|
(5,722)
|
(5,859)
|
|
Accumulated other
comprehensive income (loss)
|
(5,144)
|
(5,314)
|
(6,044)
|
|
|
Key shareholders'
equity
|
14,789
|
14,547
|
13,844
|
|
Total liabilities
and equity
|
$
187,450
|
$
187,485
|
$
195,037
|
|
|
|
|
|
|
|
Common shares
outstanding (000)
|
943,200
|
942,776
|
935,733
|
|
Consolidated
Statements of Income
|
|
(Dollars in millions,
except per share amounts)
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
6/30/2024
|
6/30/2023
|
|
Interest
income
|
|
|
|
|
|
|
|
Loans
|
$
1,524
|
$
1,538
|
$
1,576
|
|
$
3,062
|
$
3,052
|
|
Loans held for
sale
|
8
|
14
|
17
|
|
22
|
30
|
|
Securities available
for sale
|
259
|
232
|
194
|
|
491
|
388
|
|
Held-to-maturity
securities
|
73
|
75
|
81
|
|
148
|
155
|
|
Trading account
assets
|
16
|
14
|
15
|
|
30
|
27
|
|
Short-term
investments
|
192
|
142
|
111
|
|
334
|
153
|
|
Other
investments
|
16
|
17
|
16
|
|
33
|
29
|
|
|
Total interest
income
|
2,088
|
2,032
|
2,010
|
|
4,120
|
3,834
|
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
817
|
782
|
531
|
|
1,599
|
881
|
|
Federal funds purchased
and securities sold under repurchase agreements
|
1
|
1
|
48
|
|
2
|
70
|
|
Bank notes and other
short-term borrowings
|
51
|
46
|
104
|
|
97
|
182
|
|
Long-term
debt
|
332
|
328
|
349
|
|
660
|
624
|
|
|
Total interest
expense
|
1,201
|
1,157
|
1,032
|
|
2,358
|
1,757
|
|
Net interest
income
|
887
|
875
|
978
|
|
1,762
|
2,077
|
|
Provision for credit
losses
|
100
|
101
|
167
|
|
201
|
306
|
|
Net interest income
after provision for credit losses
|
787
|
774
|
811
|
|
1,561
|
1,771
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Trust and investment
services income
|
139
|
136
|
126
|
|
275
|
254
|
|
Investment banking and
debt placement fees
|
126
|
170
|
120
|
|
296
|
265
|
|
Cards and payments
income
|
85
|
77
|
85
|
|
162
|
166
|
|
Service charges on
deposit accounts
|
66
|
63
|
69
|
|
129
|
136
|
|
Corporate services
income
|
68
|
69
|
86
|
|
137
|
162
|
|
Commercial mortgage
servicing fees
|
61
|
56
|
50
|
|
117
|
96
|
|
Corporate-owned life
insurance income
|
34
|
32
|
32
|
|
66
|
61
|
|
Consumer mortgage
income
|
16
|
14
|
14
|
|
30
|
25
|
|
Operating lease income
and other leasing gains
|
21
|
24
|
23
|
|
45
|
48
|
|
Other income
|
11
|
6
|
4
|
|
17
|
4
|
|
|
Total noninterest
income
|
627
|
647
|
609
|
|
1,274
|
1,217
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Personnel
|
636
|
674
|
622
|
|
1,310
|
1,323
|
|
Net
occupancy
|
66
|
67
|
65
|
|
133
|
135
|
|
Computer
processing
|
101
|
102
|
95
|
|
203
|
187
|
|
Business services and
professional fees
|
37
|
41
|
41
|
|
78
|
86
|
|
Equipment
|
20
|
20
|
22
|
|
40
|
44
|
|
Operating lease
expense
|
17
|
17
|
21
|
|
34
|
41
|
|
Marketing
|
21
|
19
|
29
|
|
40
|
50
|
|
Other
expense
|
181
|
203
|
181
|
|
384
|
386
|
|
|
Total noninterest
expense
|
1,079
|
1,143
|
1,076
|
|
2,222
|
2,252
|
|
Income (loss) from
continuing operations before income taxes
|
335
|
278
|
344
|
|
613
|
736
|
|
Income taxes
|
62
|
59
|
58
|
|
121
|
139
|
|
Income (loss) from
continuing operations
|
273
|
219
|
286
|
|
492
|
597
|
|
Income (loss) from
discontinued operations, net of taxes
|
1
|
—
|
1
|
|
1
|
2
|
|
Net income
(loss)
|
274
|
219
|
287
|
|
493
|
599
|
|
Net income (loss)
attributable to Key
|
$
274
|
$
219
|
$
287
|
|
$
493
|
$
599
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
237
|
$
183
|
$
250
|
|
$
420
|
$
525
|
|
Net income (loss)
attributable to Key common shareholders
|
238
|
183
|
251
|
|
421
|
527
|
|
Per common
share
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
.25
|
$
.20
|
$
.27
|
|
$
.45
|
$
.57
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
—
|
—
|
|
—
|
—
|
|
Net income (loss)
attributable to Key common shareholders (a)
|
.25
|
.20
|
.27
|
|
.45
|
.57
|
|
Per common share —
assuming dilution
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Key common
shareholders
|
$
.25
|
$
.20
|
$
.27
|
|
$
.45
|
$
.56
|
|
Income (loss) from
discontinued operations, net of taxes
|
—
|
—
|
—
|
|
—
|
—
|
|
Net income (loss)
attributable to Key common
shareholders (a)
|
.25
|
.20
|
.27
|
|
.45
|
.57
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per common share
|
$
.205
|
$
.205
|
$
.205
|
|
$
.410
|
$
.410
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding (000)
|
931,726
|
929,692
|
926,741
|
|
930,776
|
926,807
|
|
Effect of common share
options and other stock awards
|
6,761
|
7,319
|
3,713
|
|
7,040
|
5,513
|
|
Weighted-average common
shares and potential common shares outstanding
(000) (b)
|
938,487
|
937,011
|
930,454
|
|
937,816
|
932,320
|
|
(a)
|
Earnings per share may
not foot due to rounding.
|
|
(b)
|
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)
|
|
|
|
Second Quarter
2024
|
|
First Quarter
2024
|
|
Second 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)
|
$
54,599
|
$
860
|
6.34 %
|
|
$
55,220
|
$
853
|
6.22 %
|
|
$
61,426
|
$
881
|
5.76 %
|
|
Real estate —
commercial mortgage
|
14,287
|
217
|
6.10
|
|
14,837
|
229
|
6.21
|
|
16,226
|
235
|
5.80
|
|
Real estate —
construction
|
3,020
|
56
|
7.51
|
|
3,039
|
57
|
7.50
|
|
2,641
|
44
|
6.64
|
|
Commercial lease
financing
|
3,193
|
28
|
3.46
|
|
3,346
|
27
|
3.23
|
|
3,756
|
29
|
3.07
|
|
Total commercial
loans
|
75,099
|
1,161
|
6.22
|
|
76,442
|
1,166
|
6.14
|
|
84,049
|
1,189
|
5.67
|
|
Real estate —
residential mortgage
|
20,515
|
169
|
3.30
|
|
20,814
|
171
|
3.29
|
|
21,659
|
176
|
3.25
|
|
Home equity
loans
|
6,817
|
102
|
5.98
|
|
7,024
|
104
|
5.97
|
|
7,620
|
109
|
5.75
|
|
Other consumer
loans
|
5,597
|
70
|
5.00
|
|
5,800
|
72
|
4.99
|
|
6,360
|
77
|
4.86
|
|
Credit cards
|
933
|
34
|
14.63
|
|
954
|
36
|
14.93
|
|
984
|
33
|
13.49
|
|
Total consumer
loans
|
33,862
|
375
|
4.44
|
|
34,592
|
383
|
4.44
|
|
36,623
|
395
|
4.33
|
|
Total loans
|
108,961
|
1,536
|
5.66
|
|
111,034
|
1,549
|
5.61
|
|
120,672
|
1,584
|
5.26
|
|
Loans held for
sale
|
599
|
8
|
5.42
|
|
888
|
14
|
6.15
|
|
1,087
|
17
|
6.16
|
|
Securities available
for sale (b), (e)
|
36,764
|
259
|
2.42
|
|
37,089
|
232
|
2.17
|
|
38,899
|
194
|
1.74
|
|
Held-to-maturity
securities (b)
|
8,123
|
73
|
3.59
|
|
8,423
|
75
|
3.57
|
|
9,371
|
81
|
3.47
|
|
Trading account
assets
|
1,231
|
16
|
5.38
|
|
1,110
|
14
|
5.21
|
|
1,244
|
15
|
4.64
|
|
Short-term
investments
|
13,729
|
192
|
5.62
|
|
10,243
|
142
|
5.59
|
|
7,798
|
111
|
5.73
|
|
Other investments
(e)
|
1,234
|
16
|
5.19
|
|
1,236
|
17
|
5.39
|
|
1,566
|
16
|
4.03
|
|
Total earning
assets
|
170,641
|
2,100
|
4.77
|
|
170,023
|
2,043
|
4.67
|
|
180,637
|
2,018
|
4.34
|
|
Allowance for loan and
lease losses
|
(1,534)
|
|
|
|
(1,505)
|
|
|
|
(1,379)
|
|
|
|
Accrued income and
other assets
|
17,476
|
|
|
|
17,350
|
|
|
|
17,202
|
|
|
|
Discontinued
assets
|
305
|
|
|
|
329
|
|
|
|
394
|
|
|
|
Total
assets
|
$
186,888
|
|
|
|
$
186,197
|
|
|
|
$
196,854
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market
deposits
|
$
39,364
|
$
290
|
2.97 %
|
|
$
37,659
|
$
264
|
2.82 %
|
|
$
32,419
|
$
123
|
1.53 %
|
|
Demand
deposits
|
54,629
|
340
|
2.50
|
|
56,137
|
357
|
2.56
|
|
53,569
|
256
|
1.91
|
|
Savings
deposits
|
5,189
|
2
|
.19
|
|
5,253
|
1
|
.07
|
|
6,592
|
1
|
.04
|
|
Time
deposits
|
16,019
|
185
|
4.64
|
|
14,430
|
160
|
4.45
|
|
15,216
|
151
|
3.99
|
|
Total interest-bearing
deposits
|
115,201
|
817
|
2.85
|
|
113,479
|
782
|
2.77
|
|
107,796
|
531
|
1.98
|
|
Federal funds purchased
and securities sold under repurchase agreements
|
124
|
1
|
4.76
|
|
106
|
1
|
4.03
|
|
3,767
|
48
|
5.07
|
|
Bank notes and other
short-term borrowings
|
3,617
|
51
|
5.57
|
|
3,325
|
46
|
5.63
|
|
7,982
|
104
|
5.22
|
|
Long-term debt
(f)
|
19,219
|
332
|
6.91
|
|
19,537
|
328
|
6.72
|
|
22,284
|
349
|
6.26
|
|
Total interest-bearing
liabilities
|
138,161
|
1,201
|
3.49
|
|
136,447
|
1,157
|
3.41
|
|
141,829
|
1,032
|
2.91
|
|
Noninterest-bearing
deposits
|
28,979
|
|
|
|
29,399
|
|
|
|
35,107
|
|
|
|
Accrued expense and
other liabilities
|
4,969
|
|
|
|
5,373
|
|
|
|
5,112
|
|
|
|
Discontinued
liabilities (f)
|
305
|
|
|
|
329
|
|
|
|
394
|
|
|
|
Total
liabilities
|
$
172,414
|
|
|
|
$
171,548
|
|
|
|
$
182,442
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
$
14,474
|
|
|
|
$
14,649
|
|
|
|
$
14,412
|
|
|
|
Noncontrolling
interests
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Total
equity
|
14,474
|
|
|
|
14,649
|
|
|
|
14,412
|
|
|
|
Total liabilities
and equity
|
$
186,888
|
|
|
|
$
186,197
|
|
|
|
$
196,854
|
|
|
|
Interest rate spread
(TE)
|
|
|
1.28 %
|
|
|
|
1.26 %
|
|
|
|
1.43 %
|
|
Net interest income
(TE) and net interest margin (TE)
|
|
$
899
|
2.04 %
|
|
|
$
886
|
2.02 %
|
|
|
$
986
|
2.12 %
|
|
TE adjustment
(b)
|
|
12
|
|
|
|
11
|
|
|
|
8
|
|
|
Net interest income,
GAAP basis
|
|
$
887
|
|
|
|
$
875
|
|
|
|
$
978
|
|
|
(a)
|
Results are from
continuing operations. Interest excludes the interest associated
with the liabilities referred to in (g) 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 June 30, 2024, March 31,
2024, and June 30, 2023.
|
|
(c)
|
For purposes of these
computations, nonaccrual loans are included in average loan
balances.
|
|
(d)
|
Commercial and
industrial average balances include $218 million, $211 million, and
$194 million of assets from commercial credit cards for the three
months ended June 30, 2024, March 31, 2024, and June 30, 2023,
respectively.
|
|
(e)
|
Yield presented is
calculated on the basis of amortized cost. The average amortized
cost for securities available for sale was $42.8 billion, $42.7
billion, and $44.6 billion for the three months ended June 30,
2024, March 31, 2024, and June 30, 2023, respectively. Yield based
on the fair value of securities available for sale was 2.82%,
2.50%, and 2.00% for the three months ended June 30, 2024, March
31, 2024, and June 30, 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)
|
|
|
|
Six months ended
June 30, 2024
|
|
Six months ended
June 30, 2023
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
|
|
Balance
|
Interest
(a)
|
Rate (a)
|
|
Balance
|
Interest
(a)
|
Rate (a)
|
|
Assets
|
|
|
|
|
|
|
|
|
Loans: (b),
(c)
|
|
|
|
|
|
|
|
|
Commercial and
industrial (d)
|
$
54,909
|
$
1,714
|
6.28 %
|
|
$
60,857
|
$
1,688
|
5.59 %
|
|
Real estate —
commercial mortgage
|
14,562
|
446
|
6.16
|
|
16,347
|
459
|
5.66
|
|
Real estate —
construction
|
3,030
|
113
|
7.51
|
|
2,583
|
83
|
6.47
|
|
Commercial lease
financing
|
3,269
|
55
|
3.34
|
|
3,770
|
56
|
2.97
|
|
Total commercial
loans
|
75,770
|
2,328
|
6.18
|
|
83,557
|
2,286
|
5.51
|
|
Real estate —
residential mortgage
|
20,664
|
340
|
3.30
|
|
21,548
|
348
|
3.23
|
|
Home equity
loans
|
6,921
|
206
|
5.98
|
|
7,749
|
215
|
5.61
|
|
Other consumer
loans
|
5,699
|
142
|
5.00
|
|
6,419
|
153
|
4.78
|
|
Credit cards
|
943
|
69
|
14.78
|
|
984
|
65
|
13.43
|
|
Total consumer
loans
|
34,227
|
757
|
4.44
|
|
36,700
|
781
|
4.28
|
|
Total loans
|
109,997
|
3,085
|
5.64
|
|
120,257
|
3,067
|
5.14
|
|
Loans held for
sale
|
744
|
22
|
5.86
|
|
997
|
30
|
6.02
|
|
Securities available
for sale (b), (e)
|
36,926
|
491
|
2.29
|
|
39,034
|
388
|
1.73
|
|
Held-to-maturity
securities (b)
|
8,273
|
148
|
3.58
|
|
9,152
|
155
|
3.40
|
|
Trading account
assets
|
1,171
|
30
|
5.30
|
|
1,123
|
27
|
4.74
|
|
Short-term
investments
|
11,986
|
334
|
5.61
|
|
5,677
|
153
|
5.44
|
|
Other investments
(e)
|
1,235
|
33
|
5.29
|
|
1,438
|
29
|
4.02
|
|
Total earning
assets
|
170,332
|
4,143
|
4.72
|
|
177,678
|
3,849
|
4.22
|
|
Allowance for loan and
lease losses
|
(1,519)
|
|
|
|
(1,357)
|
|
|
|
Accrued income and
other assets
|
17,412
|
|
|
|
17,351
|
|
|
|
Discontinued
assets
|
317
|
|
|
|
406
|
|
|
|
Total
assets
|
$
186,542
|
|
|
|
$
194,078
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Money market
deposits
|
$
38,512
|
$
554
|
2.89
|
|
$
33,110
|
$
201
|
1.23
|
|
Other demand
deposits
|
55,383
|
697
|
2.53
|
|
52,993
|
440
|
1.67
|
|
Savings
deposits
|
5,221
|
3
|
.13
|
|
6,967
|
1
|
.04
|
|
Time
deposits
|
15,225
|
345
|
4.55
|
|
12,870
|
239
|
3.75
|
|
Total interest-bearing
deposits
|
114,341
|
1,599
|
2.81
|
|
105,940
|
881
|
1.68
|
|
Federal funds purchased
and securities sold under repurchase agreements
|
115
|
2
|
4.42
|
|
2,932
|
70
|
4.81
|
|
Bank notes and other
short-term borrowings
|
3,471
|
97
|
5.60
|
|
7,293
|
182
|
5.03
|
|
Long-term debt
(f)
|
19,378
|
660
|
6.81
|
|
21,218
|
624
|
5.88
|
|
Total interest-bearing
liabilities
|
137,305
|
2,358
|
3.45
|
|
137,383
|
1,757
|
2.57
|
|
Noninterest-bearing
deposits
|
29,189
|
|
|
|
37,213
|
|
|
|
Accrued expense and
other liabilities
|
5,170
|
|
|
|
4,960
|
|
|
|
Discontinued
liabilities (f)
|
317
|
|
|
|
406
|
|
|
|
Total
liabilities
|
$
171,981
|
|
|
|
$
179,962
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Key shareholders'
equity
|
$
14,561
|
|
|
|
$
14,116
|
|
|
|
Noncontrolling
interests
|
—
|
|
|
|
—
|
|
|
|
Total
equity
|
14,561
|
|
|
|
14,116
|
|
|
|
Total liabilities
and equity
|
$
186,542
|
|
|
|
$
194,078
|
|
|
|
Interest rate spread
(TE)
|
|
|
1.27 %
|
|
|
|
1.65 %
|
|
Net interest income
(TE) and net interest margin (TE)
|
|
$
1,785
|
2.03 %
|
|
|
$
2,092
|
2.29 %
|
|
TE adjustment
(b)
|
|
23
|
|
|
|
15
|
|
|
Net interest income,
GAAP basis
|
|
$
1,762
|
|
|
|
$
2,077
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Results are from
continuing operations. Interest excludes the interest
associated with the liabilities referred to in (g) 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 six months ended June 30, 2024, and June 30,
2023, respectively.
|
|
(c)
|
For purposes of these
computations, nonaccrual loans are included in average loan
balances.
|
|
(d)
|
Commercial and
industrial average balances include $214 million and $186 million
of assets from commercial credit cards for the six months ended
June 30, 2024, and June 30, 2023, respectively.
|
|
(e)
|
Yield presented is
calculated on the basis of amortized cost. The average amortized
cost for securities available for sale was $42.8 billion and $45.0
billion for the six months ended June 30, 2024, and June 30, 2023,
respectively. Yield based on the fair value of securities available
for sale was 2.66% and 1.99% for the six months ended June 30,
2024, and June 30, 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
|
|
Six months
ended
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
6/30/2024
|
6/30/2023
|
|
Personnel
(a)
|
$
636
|
$
674
|
$
622
|
|
$
1,310
|
$
1,323
|
|
Net
occupancy
|
66
|
67
|
65
|
|
133
|
135
|
|
Computer
processing
|
101
|
102
|
95
|
|
203
|
187
|
|
Business services and
professional fees
|
37
|
41
|
41
|
|
78
|
86
|
|
Equipment
|
20
|
20
|
22
|
|
40
|
44
|
|
Operating lease
expense
|
17
|
17
|
21
|
|
34
|
41
|
|
Marketing
|
21
|
19
|
29
|
|
40
|
50
|
|
Other
expense
|
181
|
203
|
181
|
|
384
|
386
|
|
Total noninterest
expense
|
$
1,079
|
$
1,143
|
$
1,076
|
|
$
2,222
|
$
2,252
|
|
Average full-time
equivalent employees (b)
|
16,646
|
16,752
|
17,754
|
|
16,699
|
17,987
|
|
(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
|
|
Six months
ended
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
6/30/2024
|
6/30/2023
|
|
Salaries and contract
labor
|
$
394
|
$
389
|
$
416
|
|
$
783
|
$
835
|
|
Incentive and
stock-based compensation
|
143
|
159
|
93
|
|
302
|
245
|
|
Employee
benefits
|
98
|
126
|
103
|
|
224
|
202
|
|
Severance
|
1
|
—
|
10
|
|
1
|
41
|
|
Total personnel
expense
|
$
636
|
$
674
|
$
622
|
|
$
1,310
|
$
1,323
|
|
Loan
Composition
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Change 6/30/2024
vs.
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
3/31/2024
|
6/30/2023
|
|
Commercial and
industrial (a)(b)
|
$
53,129
|
$
54,793
|
$
60,059
|
|
(3.0) %
|
(11.5) %
|
|
Commercial real
estate:
|
|
|
|
|
|
|
|
Commercial
mortgage
|
14,218
|
14,540
|
16,048
|
|
(2.2)
|
(11.4)
|
|
Construction
|
3,077
|
3,013
|
2,646
|
|
2.1
|
16.3
|
|
Total commercial real
estate loans
|
17,295
|
17,553
|
18,694
|
|
(1.5)
|
(7.5)
|
|
Commercial lease
financing (b)
|
3,101
|
3,305
|
3,801
|
|
(6.2)
|
(18.4)
|
|
Total commercial
loans
|
73,525
|
75,651
|
82,554
|
|
(2.8)
|
(10.9)
|
|
Residential — prime
loans:
|
|
|
|
|
|
|
|
Real estate —
residential mortgage
|
20,380
|
20,704
|
21,637
|
|
(1.6)
|
(5.8)
|
|
Home equity
loans
|
6,729
|
6,905
|
7,529
|
|
(2.5)
|
(10.6)
|
|
Total residential —
prime loans
|
27,109
|
27,609
|
29,166
|
|
(1.8)
|
(7.1)
|
|
Other consumer
loans
|
5,514
|
5,690
|
6,290
|
|
(3.1)
|
(12.3)
|
|
Credit cards
|
930
|
935
|
1,001
|
|
(.5)
|
(7.1)
|
|
Total consumer
loans
|
33,553
|
34,234
|
36,457
|
|
(2.0)
|
(8.0)
|
|
Total loans (c),
(d)
|
$
107,078
|
$ 109,885
|
$ 119,011
|
|
(2.6) %
|
(10.0) %
|
|
(a)
|
Loan balances include
$217 million, $214 million, and $200 million of commercial credit
card balances at June 30, 2024, March 31, 2024, and June 30, 2023,
respectively.
|
|
(b)
|
Commercial and
industrial includes receivables held as collateral for a secured
borrowing of $285 million at June 30, 2024, $349 million at March
31, 2024 and no amounts held as collateral for a secured borrowing
at June 30, 2023. Commercial lease financing includes receivables
held as collateral for a secured borrowing of $5 million, $6
million, and $5 million at June 30, 2024, March 31, 2024, and June
30, 2023, respectively. Principal reductions are based on the cash
payments received from these related receivables.
|
|
(c)
|
Total loans exclude
loans of $291 million at June 30, 2024, $313 million at March 31,
2024, and $381 million at June 30, 2023, related to the
discontinued operations of the education lending
business.
|
|
(d)
|
Accrued interest of
$502 million, $522 million, and $500 million at June 30, 2024,
March 31, 2024, and June 30, 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 6/30/2024
vs.
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
3/31/2024
|
6/30/2023
|
|
Commercial and
industrial
|
$
72
|
$
—
|
$
221
|
|
N/M
|
(67.4) %
|
|
Real estate —
commercial mortgage
|
354
|
155
|
829
|
|
128.4
|
(57.3)
|
|
Commercial lease
financing
|
—
|
—
|
13
|
|
—
|
(100.0)
|
|
Real estate —
residential mortgage
|
91
|
73
|
67
|
|
24.7
|
35.8
|
|
Total loans held for
sale
|
$
517
|
$
228
|
$
1,130
|
|
126.8 %
|
(54.2) %
|
|
Summary of Changes
in Loans Held for Sale
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
2Q24
|
1Q24
|
4Q23
|
3Q23
|
2Q23
|
|
Balance at beginning of
period
|
$
228
|
$
483
|
$
730
|
$
1,130
|
$
1,211
|
|
New
originations
|
1,532
|
1,738
|
1,879
|
3,035
|
1,798
|
|
Transfers from (to)
held to maturity, net
|
(1)
|
(105)
|
(31)
|
(94)
|
(52)
|
|
Loan sales
|
(1,234)
|
(1,893)
|
(2,095)
|
(3,312)
|
(1,798)
|
|
Loan draws (payments),
net
|
(7)
|
4
|
—
|
(29)
|
(28)
|
|
Valuation and other
adjustments
|
(1)
|
1
|
—
|
—
|
(1)
|
|
Balance at end of
period
|
$
517
|
$
228
|
$
483
|
$
730
|
$
1,130
|
|
Summary of Loan and
Lease Loss Experience From Continuing Operations
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
6/30/2024
|
3/31/2024
|
6/30/2023
|
|
6/30/2024
|
6/30/2023
|
|
Average loans
outstanding
|
$
108,961
|
$ 111,034
|
$ 120,672
|
|
$
109,997
|
$ 120,257
|
|
Allowance for loan and
lease losses at the beginning of the period
|
$ 1,542
|
$ 1,508
|
$ 1,380
|
|
1,508
|
1,337
|
|
Loans charged
off:
|
|
|
|
|
|
|
|
Commercial and
industrial
|
86
|
62
|
42
|
|
148
|
77
|
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
10
|
5
|
9
|
|
15
|
14
|
|
Real estate —
construction
|
—
|
—
|
—
|
|
—
|
—
|
|
Total commercial real
estate loans
|
10
|
5
|
9
|
|
15
|
14
|
|
Commercial lease
financing
|
6
|
—
|
1
|
|
6
|
—
|
|
Total commercial
loans
|
102
|
67
|
52
|
|
169
|
91
|
|
Real estate —
residential mortgage
|
1
|
1
|
1
|
|
2
|
1
|
|
Home equity
loans
|
—
|
1
|
2
|
|
1
|
3
|
|
Other consumer
loans
|
16
|
16
|
12
|
|
32
|
23
|
|
Credit
cards
|
12
|
12
|
9
|
|
24
|
18
|
|
Total consumer
loans
|
29
|
30
|
24
|
|
59
|
45
|
|
Total loans charged
off
|
131
|
97
|
76
|
|
228
|
136
|
|
Recoveries:
|
|
|
|
|
|
|
|
Commercial and
industrial
|
31
|
8
|
15
|
|
39
|
23
|
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
1
|
—
|
1
|
|
1
|
1
|
|
Real estate —
construction
|
—
|
—
|
—
|
|
—
|
—
|
|
Total commercial real
estate loans
|
1
|
—
|
1
|
|
1
|
1
|
|
Commercial lease
financing
|
3
|
2
|
2
|
|
5
|
3
|
|
Total commercial
loans
|
35
|
10
|
18
|
|
45
|
27
|
|
Real estate —
residential mortgage
|
1
|
2
|
1
|
|
3
|
2
|
|
Home equity
loans
|
—
|
1
|
1
|
|
1
|
2
|
|
Other consumer
loans
|
2
|
2
|
2
|
|
4
|
5
|
|
Credit
cards
|
2
|
1
|
2
|
|
3
|
3
|
|
Total consumer
loans
|
5
|
6
|
6
|
|
11
|
12
|
|
Total
recoveries
|
40
|
16
|
24
|
|
56
|
39
|
|
Net loan
charge-offs
|
(91)
|
(81)
|
(52)
|
|
(172)
|
(97)
|
|
Provision (credit) for
loan and lease losses
|
96
|
115
|
152
|
|
211
|
240
|
|
Allowance for loan and
lease losses at end of period
|
$ 1,547
|
$ 1,542
|
$ 1,480
|
|
$
1,547
|
$
1,480
|
|
|
|
|
|
|
|
|
Liability for credit
losses on lending-related commitments at beginning of
period
|
$
281
|
$ 296
|
$ 276
|
|
$
296
|
$ 225
|
|
Provision (credit) for
losses on lending-related commitments
|
4
|
(14)
|
15
|
|
(10)
|
66
|
|
Other
|
1
|
(1)
|
—
|
|
—
|
—
|
|
Liability for credit
losses on lending-related commitments at end of period
(a)
|
$
286
|
$ 281
|
$ 291
|
|
$
286
|
$ 291
|
|
|
|
|
|
|
|
|
Total allowance for
credit losses at end of period
|
$ 1,833
|
$ 1,823
|
$ 1,771
|
|
$
1,833
|
$
1,771
|
|
|
|
|
|
|
|
|
Net loan charge-offs to
average total loans
|
.34 %
|
.29 %
|
.17 %
|
|
.31 %
|
.16 %
|
|
Allowance for loan and
lease losses to period-end loans
|
1.44
|
1.40
|
1.24
|
|
1.44
|
1.24
|
|
Allowance for credit
losses to period-end loans
|
1.71
|
1.66
|
1.49
|
|
1.71
|
1.49
|
|
Allowance for loan and
lease losses to nonperforming loans
|
218
|
234
|
343
|
|
218
|
343
|
|
Allowance for credit
losses to nonperforming loans
|
258
|
277
|
411
|
|
258
|
411
|
|
|
|
|
|
|
|
|
Discontinued operations
— education lending business:
|
|
|
|
|
|
|
|
Loans charged
off
|
$
1
|
$
1
|
$
2
|
|
$
2
|
$
3
|
|
Recoveries
|
1
|
—
|
1
|
|
1
|
1
|
|
Net loan
charge-offs
|
$
—
|
$
(1)
|
$
(1)
|
|
$
(1)
|
$
(2)
|
|
(a) Included in "Accrued
expense and other liabilities" on the balance sheet.
|
|
Asset Quality
Statistics From Continuing Operations
|
|
(Dollars in
millions)
|
|
|
2Q24
|
1Q24
|
4Q23
|
3Q23
|
2Q23
|
|
Net loan
charge-offs
|
$
91
|
$
81
|
$
76
|
$
71
|
$
52
|
|
Net loan charge-offs to
average total loans
|
.34 %
|
.29 %
|
.26 %
|
.24 %
|
.17 %
|
|
Allowance for loan and
lease losses
|
$
1,547
|
$
1,542
|
$
1,508
|
$
1,488
|
$
1,480
|
|
Allowance for credit
losses (a)
|
1,833
|
1,823
|
1,804
|
1,778
|
1,771
|
|
Allowance for loan and
lease losses to period-end loans
|
1.44 %
|
1.40 %
|
1.34 %
|
1.29 %
|
1.24 %
|
|
Allowance for credit
losses to period-end loans
|
1.71
|
1.66
|
1.60
|
1.54
|
1.49
|
|
Allowance for loan and
lease losses to nonperforming loans
|
218
|
234
|
263
|
327
|
343
|
|
Allowance for credit
losses to nonperforming loans
|
258
|
277
|
314
|
391
|
411
|
|
Nonperforming loans at
period end
|
$
710
|
$ 658
|
$ 574
|
$ 455
|
$ 431
|
|
Nonperforming assets at
period end
|
727
|
674
|
591
|
471
|
462
|
|
Nonperforming loans to
period-end portfolio loans
|
.66 %
|
.60 %
|
.51 %
|
.39 %
|
.36 %
|
|
Nonperforming assets to
period-end portfolio loans plus OREO and other nonperforming
assets
|
.68
|
.61
|
.52
|
.41
|
.39
|
|
(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)
|
|
|
6/30/2024
|
3/31/2024
|
12/31/2023
|
9/30/2023
|
6/30/2023
|
|
Commercial and
industrial
|
$
358
|
$ 360
|
$ 297
|
$ 214
|
$ 188
|
|
|
|
|
|
|
|
Real estate —
commercial mortgage
|
173
|
113
|
100
|
63
|
65
|
|
Real estate —
construction
|
—
|
—
|
—
|
—
|
—
|
|
Total commercial real
estate loans
|
173
|
113
|
100
|
63
|
65
|
|
Commercial lease
financing
|
1
|
1
|
—
|
1
|
1
|
|
Total commercial
loans
|
532
|
474
|
397
|
278
|
254
|
|
Real estate —
residential mortgage
|
77
|
79
|
71
|
72
|
73
|
|
Home equity
loans
|
91
|
95
|
97
|
97
|
97
|
|
Other Consumer
loans
|
4
|
4
|
4
|
4
|
4
|
|
Credit cards
|
6
|
6
|
5
|
4
|
3
|
|
Total consumer
loans
|
178
|
184
|
177
|
177
|
177
|
|
Total nonperforming
loans (a)
|
710
|
658
|
574
|
455
|
431
|
|
OREO
|
17
|
16
|
17
|
16
|
15
|
|
Nonperforming loans
held for sale
|
—
|
—
|
—
|
—
|
16
|
|
Other nonperforming
assets
|
—
|
—
|
—
|
—
|
—
|
|
Total nonperforming
assets
|
$
727
|
$ 674
|
$ 591
|
$ 471
|
$ 462
|
|
Accruing loans past due
90 days or more
|
$
137
|
$ 119
|
$ 107
|
$
52
|
$
73
|
|
Accruing loans past due
30 through 89 days
|
282
|
242
|
222
|
178
|
139
|
|
Nonperforming assets
from discontinued operations — education lending
business
|
3
|
2
|
3
|
2
|
2
|
|
Nonperforming loans to
period-end portfolio loans
|
.66 %
|
.60 %
|
.51 %
|
.39 %
|
.36 %
|
|
Nonperforming assets to
period-end portfolio loans plus OREO and other nonperforming
assets
|
.68
|
.61
|
.52
|
.41
|
.39
|
|
Summary of Changes
in Nonperforming Loans From Continuing Operations
|
|
(Dollars in
millions)
|
|
|
2Q24
|
1Q24
|
4Q23
|
3Q23
|
2Q23
|
|
Balance at beginning of
period
|
$
658
|
$
574
|
$
455
|
$
431
|
$
416
|
|
Loans placed on
nonaccrual status
|
317
|
243
|
297
|
159
|
169
|
|
Charge-offs
|
(131)
|
(97)
|
(95)
|
(87)
|
(76)
|
|
Loans sold
|
(22)
|
(5)
|
(9)
|
(4)
|
(23)
|
|
Payments
|
(76)
|
(35)
|
(56)
|
(25)
|
(20)
|
|
Transfers to
OREO
|
(1)
|
(2)
|
(2)
|
(3)
|
(2)
|
|
Loans returned to
accrual status
|
(35)
|
(20)
|
(16)
|
(16)
|
(33)
|
|
Balance at end of
period
|
$
710
|
$
658
|
$
574
|
$
455
|
$
431
|
|
Line of Business
Results
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change 2Q24
vs.
|
|
2Q24
|
1Q24
|
4Q23
|
3Q23
|
2Q23
|
|
1Q24
|
2Q23
|
|
Consumer
Bank
|
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
769
|
$
757
|
$
770
|
$
775
|
$
787
|
|
1.6 %
|
(2.3) %
|
|
Provision for credit
losses
|
33
|
(2)
|
5
|
14
|
32
|
|
N/M
|
3.1
|
|
Noninterest
expense
|
648
|
704
|
779
|
676
|
662
|
|
(8.0)
|
(2.1)
|
|
Net income (loss)
attributable to Key
|
67
|
41
|
(11)
|
65
|
71
|
|
63.4
|
(5.6)
|
|
Average loans and
leases
|
39,174
|
39,919
|
40,763
|
41,610
|
42,297
|
|
(1.9)
|
(7.4)
|
|
Average
deposits
|
85,397
|
84,075
|
83,557
|
82,683
|
81,406
|
|
1.6
|
4.9
|
|
Net loan
charge-offs
|
45
|
44
|
40
|
36
|
32
|
|
2.3
|
40.6
|
|
Net loan charge-offs to
average total loans
|
.46 %
|
.44 %
|
.39 %
|
.34 %
|
.30 %
|
|
4.5
|
53.3
|
|
Nonperforming assets at
period end
|
$
190
|
$
196
|
$
190
|
$
190
|
$
193
|
|
(3.1)
|
(1.6)
|
|
Return on average
allocated equity
|
7.93 %
|
4.69 %
|
(1.28) %
|
7.42 %
|
8.00 %
|
|
69.1
|
(.9)
|
|
|
|
|
|
|
|
|
|
|
Commercial
Bank
|
|
|
|
|
|
|
|
|
|
Summary of
operations
|
|
|
|
|
|
|
|
|
|
Total revenue
(TE)
|
$
769
|
$
799
|
$
804
|
$
809
|
$
823
|
|
(3.8) %
|
(6.6) %
|
|
Provision for credit
losses
|
87
|
102
|
96
|
68
|
134
|
|
(14.7)
|
(35.1)
|
|
Noninterest
expense
|
431
|
443
|
526
|
433
|
406
|
|
(2.7)
|
6.2
|
|
Net income (loss)
attributable to Key
|
207
|
205
|
150
|
240
|
227
|
|
1.0
|
(8.8)
|
|
Average loans and
leases
|
69,248
|
70,633
|
72,713
|
75,598
|
77,922
|
|
(2.0)
|
(11.1)
|
|
Average loans held for
sale
|
522
|
840
|
635
|
1,268
|
1,014
|
|
(37.9)
|
(48.5)
|
|
Average
deposits
|
57,360
|
56,331
|
58,196
|
56,078
|
52,512
|
|
1.8
|
9.2
|
|
Net loan
charge-offs
|
64
|
37
|
35
|
35
|
20
|
|
73.0
|
220.0
|
|
Net loan charge-offs to
average total loans
|
.37 %
|
.21 %
|
.19 %
|
.18 %
|
.10 %
|
|
76.2
|
270.0
|
|
Nonperforming assets at
period end
|
$
537
|
$
479
|
$
401
|
$
281
|
$
269
|
|
12.1
|
99.6
|
|
Return on average
allocated equity
|
8.31 %
|
8.24 %
|
5.88 %
|
9.11 %
|
8.61 %
|
|
.8
|
(3.5)
|
|
TE = Taxable
Equivalent; N/M = Not Meaningful
|
|
Selected Items
Impact on Earnings(a)
|
|
(Dollars in millions,
except per share amounts)
|
|
|
Pretax(b)
|
|
After-tax at
marginal rate(b)
|
|
Quarter to date
results
|
Amount
|
|
Net
Income
|
EPS(c)
|
|
Three months ended
June 30, 2024
|
|
|
|
|
|
FDIC special assessment
(other expense)(d)
|
$
(5)
|
|
$
(4)
|
$
—
|
|
Three months ended
March 31, 2024
|
|
|
|
|
|
FDIC special assessment
(other expense)(d)
|
(29)
|
|
(22)
|
(0.02)
|
|
Three months ended
June 30, 2023
|
|
|
|
|
|
No items
|
—
|
|
—
|
—
|
|
|
|
|
|
|
(a)
|
Includes items
impacting results or trends during the period but are not
considered non-GAAP adjustments.
|
|
(b)
|
Favorable (unfavorable)
impact.
|
|
(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. In June 2024, Key
received its quarterly invoice from the FDIC which included
amounts due under the special assessment. As such, Key recorded an
additional expense in the second quarter of 2024 to true-up initial
estimates to the invoiced amount.
|
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SOURCE KeyCorp