Back to top

Analyst Blog

Moody's Investors Service, a rating arm of Moody’s Corp. (MCO - Analyst Report), recently completed the rating review of KeyCorp. (KEY - Analyst Report) and its subsidiaries. The rating agency maintained the long-term ratings of KeyCorp and projected its outlook as “Stable”.

While KeyCorp was reaffirmed at Baa1, the company’s bank subsidiary – KeyBank National Association – remains at A3 for long-term deposits and Prime-2 for short-term obligations. Further, KeyBank National Association has a standalone bank financial strength rating of C and the baseline credit assessment of a3.

The rating agency reaffirmed its rating based on KeyCorp’s strength in asset quality, capital position and liquidity, offset by rising expenses and persistent pressure on net interest margin (NIM).

In second-quarter 2013, KeyCorp’s nonperforming assets, as a percentage of period-end portfolio loans, OREO assets and other nonperforming assets were 1.30%, falling 21 basis points (bps) year over year. Moreover, net charge-offs, as a percentage of average loans, decreased 29 bps year over year to 0.34%.

However, the company’s non-interest expense inched up 2.6% from the prior-year quarter to $711 million. Though NIM increased 7 bps year over year to 3.13%, the pace of improvement remains sluggish.

Further, KeyCorp has been working hard to lower its risk profile. Though the company’s commercial real estate (CRE) concentration has declined from what it was before the financial crisis, it still remains a matter of concern.

KeyCorp, currently carries a Zacks Rank #3 (Hold). Some better-performing banks include BankUnited, Inc. (BKU - Analyst Report) and Wells Fargo & Company (WFC - Analyst Report). While BankUnited carries a Zacks Rank #1 (Strong Buy), Wells Fargo has a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%