Keycorp
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.76%.
Did KEY Beat Earnings? Q3 2025 Results
KeyCorp posted a solid third-quarter 2025 earnings beat, with adjusted EPS of $0.41 clearing the $0.38 consensus by 7.61% and revenue of $1.90 billion edging ahead of the $1.88 billion estimate, up 1.6% from a year ago. The headline numbers told only part of the story, however, as the quarter marked a sharp swing from the year-ago period's net loss of $447 million, which had been weighed down by $918 million in pretax securities repositioning charges. The more telling driver this quarter was net interest margin expansion, with NIM climbing 9 basis points sequentially to 2.75% as low-cost core deposits displaced wholesale borrowings and maturing low-yielding assets repriced higher, pushing tax-equivalent net interest income up 24% year-over-year. Assets under management reached $67.86 billion, up 11% year-over-year, adding further momentum to fee income. Looking ahead, management tightened its full-year guidance, now targeting net interest income growth of roughly 22% and projecting NIM of 2.75% to 2.80% in the fourth quarter, with medium-term ambitions of a 15%-plus return on tangible common equity.
- Net interest income increased 24% YoY driven by lower deposit costs, reinvestment of maturing low-yielding securities, and favorable balance sheet mix shift
- Net interest margin expanded 58 bps YoY and 9 bps QoQ to 2.75%
- Adjusted noninterest income grew 8% YoY led by investment banking and trust services
- More than 1,000 basis points of positive operating leverage year-over-year
- Average deposits grew 2% QoQ with total deposit costs declining 2 bps to 1.97%
- Commercial and industrial loan growth of 6.5% YoY
- Assets under management reached record $68 billion, up 11% YoY
- Fixed-rate securities and swap repricing into higher-yielding investments
“Our third quarter results demonstrate continued strong momentum. Adjusted revenue was up 17% year-over-year, and we generated more than 1,000 basis points of operating leverage again this quarter. Revenue growth was driven by our clearly defined net interest income tailwinds and adjusted noninterest income growth of 8%, which continues to grow faster than expenses. At the same time, we continue to make meaningful investments in front line bankers and technology that will drive future growth. Tangible book value per share grew 4% sequentially and 14% year-over-year.”
KeyCorp CEO, on the earnings call
Forward Guidance & Outlook
KeyCorp updated its FY2025 outlook: Average loans expected down 1-3% vs. 2024 baseline of $107.7 billion; ending period-end commercial loans expected up ~5% vs. $71.9 billion baseline; net interest income (TE) expected up ~22% (previously 20-22%), with NIM of 2.75-2.80% in Q4 2025 (previously ~2.75%) and 13%+ Q4 2025 vs. Q4 2024; adjusted noninterest income expected up 5-6% (previously 5%+) vs. $2,645 million baseline; adjusted noninterest expense expected up ~4% (previously 3-5%) vs. $4,520 million baseline; GAAP tax rate ~21%; net charge-offs to average loans of 40-45 bps. Medium-term targets include NIM of ~3.00% by Q4 2026 and 3.25% expected run rate by year-end 2027, with return on tangible common equity of 15%+ within the next few years.
KEY YoY Financials
KEY Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.