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KeyCorp Q3 Earnings Beat Estimates on Higher Revenues, Stock Gains
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Key Takeaways
KeyCorp's 3Q25 EPS of 41 cents beat estimates, rising 36.7% from the prior-year quarter.
Revenue grew to $1.89B, driven by stronger NII and a sharp rebound in non-interest income.
Capital ratios strengthened, though higher expenses and provisions partly offset gains.
KeyCorp’s (KEY - Free Report) third-quarter 2025 adjusted earnings per share from continuing operations of 41 cents surpassed the Zacks Consensus Estimate of 38 cents. The bottom line reflected a 36.7% jump from the prior-year quarter.
Shares of KeyCorp gained 1.4% in the early-market trading on better-than-expected results. A full day’s trading session will depict a clearer picture.
Results primarily benefited from higher net interest income (NII) and a substantial rise in non-interest income. The average loan balance increased sequentially, which was another positive. However, higher expenses and a rise in provisions were the undermining factors.
Net income from continuing operations attributable to common shareholders was $454 million, against a net loss of $447 million in the prior-year quarter.
KEY’s Revenues Improve, Expenses Rise
Total revenues increased significantly year over year to $1.89 billion. Moreover, the top line beat the Zacks Consensus Estimate of $1.88 billion.
NII (on a tax-equivalent or TE basis) increased 23.8% on a year-over-year basis to $1.19 billion. The net interest margin (NIM) (TE basis) from continuing operations expanded 58 basis points (bps) to 2.75%. Both metrics benefited from lower deposit costs, the reinvestment of proceeds from maturing low-yielding investment securities, fixed-rate loans and swaps repricing into higher-yielding investments, and the repositioning of the available-for-sale portfolio during the third and fourth quarters of 2024.
These benefits were partially offset by the impacts of lower interest rates on variable-rate earning assets. Our estimates for NII (TE) and NIM were $1.17 billion and 2.71%, respectively.
Non-interest income was $702 million, up significantly from the prior-year quarter. The rise was primarily driven by a 99.4% decline in net securities losses. In the third quarter of 2024, the company recorded a $918 million loss on the sale of securities as part of the strategic repositioning of portfolio, which had drastically hurt fee income. In the reported quarter, net securities losses were only $6 million. Our estimate for total non-interest income was $710.1 million.
Non-interest expenses increased 7.4% year over year to $1.18 billion. The rise was due to an increase in almost all cost components except for operating lease expenses and net occupancy costs. We projected the metric to be $1.20 billion.
KeyCorp’s Loans & Deposits Rise
At the end of the third quarter, average total loans were $106.23 billion, up marginally from the previous quarter. We had anticipated average total loans of $106.19 billion.
Average total deposits were $150.37 billion, up 2% from the prior-quarter end. Our estimate for the metric was $148.31 billion.
KEY’s Credit Quality: A Mixed Bag
The provision for credit losses was $107 million, up 12.6% year over year. Our estimate for provision for credit losses was $105.7 million.
However, net loan charge-offs, as a percentage of average total loans, declined 16 bps year over year to 0.42%. The allowance for loan and lease losses was $1.44 billion, down 3.3% from the prior-year quarter. Non-performing assets, as a percentage of period-end portfolio loans, other real estate-owned property assets, and other non-performing assets, were 0.63%, down 7 bps year over year.
KeyCorp’s Capital Ratios Improve
KEY's tangible common equity to tangible assets ratio was 8.1% as of Sept. 30, 2025, up from 6.2% in the corresponding period of 2024. The Tier 1 risk-based capital ratio was 13.5%, up from 12.6%. The Common Equity Tier 1 ratio was 11.8%, up from 10.8% as of Sept. 30, 2024.
Our Take on KEY
Decent loan balances, balance sheet repositioning efforts, strategic buyouts and relatively higher interest rates will likely support KeyCorp’s revenues in the near term. Weakening asset quality amid a tough macroeconomic backdrop is concerning.
Impressive trading and investment banking (IB) performance drove JPMorgan’s (JPM - Free Report) third-quarter 2025 earnings of $5.07 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.83.
JPM’s markets revenues exceeded management's expectations of growth in the high-teens percentage rate. The metric grew 25% year over year to $8.9 billion. Specifically, fixed-income markets’ revenues jumped 21% to $5.6 billion, while equity markets’ numbers increased 33% to $3.3 billion.
Also, the IB business performance was far stronger than that expected by management.
JPMorgan recorded an increase in NII, driven by higher yields and a 7% year-over-year jump in total loans.
Citigroup Inc. (C - Free Report) reported third-quarter 2025 adjusted net income per share of $2.24, up 48.3% from the year-ago period. The metric also surpassed the Zacks Consensus Estimate by 17.3%.
Citigroup’s results benefited from an increase in NII and non-interest revenues, alongside lower provisions. The company also registered a year-over-year increase of 17% in IB revenues, reflecting growth in advisory and equity capital markets. However, increased expenses and a weak capital position were the undermining factors for Citigroup.
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KeyCorp Q3 Earnings Beat Estimates on Higher Revenues, Stock Gains
Key Takeaways
KeyCorp’s (KEY - Free Report) third-quarter 2025 adjusted earnings per share from continuing operations of 41 cents surpassed the Zacks Consensus Estimate of 38 cents. The bottom line reflected a 36.7% jump from the prior-year quarter.
Shares of KeyCorp gained 1.4% in the early-market trading on better-than-expected results. A full day’s trading session will depict a clearer picture.
Results primarily benefited from higher net interest income (NII) and a substantial rise in non-interest income. The average loan balance increased sequentially, which was another positive. However, higher expenses and a rise in provisions were the undermining factors.
Net income from continuing operations attributable to common shareholders was $454 million, against a net loss of $447 million in the prior-year quarter.
KEY’s Revenues Improve, Expenses Rise
Total revenues increased significantly year over year to $1.89 billion. Moreover, the top line beat the Zacks Consensus Estimate of $1.88 billion.
NII (on a tax-equivalent or TE basis) increased 23.8% on a year-over-year basis to $1.19 billion. The net interest margin (NIM) (TE basis) from continuing operations expanded 58 basis points (bps) to 2.75%. Both metrics benefited from lower deposit costs, the reinvestment of proceeds from maturing low-yielding investment securities, fixed-rate loans and swaps repricing into higher-yielding investments, and the repositioning of the available-for-sale portfolio during the third and fourth quarters of 2024.
These benefits were partially offset by the impacts of lower interest rates on variable-rate earning assets. Our estimates for NII (TE) and NIM were $1.17 billion and 2.71%, respectively.
Non-interest income was $702 million, up significantly from the prior-year quarter. The rise was primarily driven by a 99.4% decline in net securities losses. In the third quarter of 2024, the company recorded a $918 million loss on the sale of securities as part of the strategic repositioning of portfolio, which had drastically hurt fee income. In the reported quarter, net securities losses were only $6 million. Our estimate for total non-interest income was $710.1 million.
Non-interest expenses increased 7.4% year over year to $1.18 billion. The rise was due to an increase in almost all cost components except for operating lease expenses and net occupancy costs. We projected the metric to be $1.20 billion.
KeyCorp’s Loans & Deposits Rise
At the end of the third quarter, average total loans were $106.23 billion, up marginally from the previous quarter. We had anticipated average total loans of $106.19 billion.
Average total deposits were $150.37 billion, up 2% from the prior-quarter end. Our estimate for the metric was $148.31 billion.
KEY’s Credit Quality: A Mixed Bag
The provision for credit losses was $107 million, up 12.6% year over year. Our estimate for provision for credit losses was $105.7 million.
However, net loan charge-offs, as a percentage of average total loans, declined 16 bps year over year to 0.42%. The allowance for loan and lease losses was $1.44 billion, down 3.3% from the prior-year quarter. Non-performing assets, as a percentage of period-end portfolio loans, other real estate-owned property assets, and other non-performing assets, were 0.63%, down 7 bps year over year.
KeyCorp’s Capital Ratios Improve
KEY's tangible common equity to tangible assets ratio was 8.1% as of Sept. 30, 2025, up from 6.2% in the corresponding period of 2024. The Tier 1 risk-based capital ratio was 13.5%, up from 12.6%. The Common Equity Tier 1 ratio was 11.8%, up from 10.8% as of Sept. 30, 2024.
Our Take on KEY
Decent loan balances, balance sheet repositioning efforts, strategic buyouts and relatively higher interest rates will likely support KeyCorp’s revenues in the near term. Weakening asset quality amid a tough macroeconomic backdrop is concerning.
KeyCorp Price, Consensus and EPS Surprise
KeyCorp price-consensus-eps-surprise-chart | KeyCorp Quote
KeyCorp currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Major Banks
Impressive trading and investment banking (IB) performance drove JPMorgan’s (JPM - Free Report) third-quarter 2025 earnings of $5.07 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.83.
JPM’s markets revenues exceeded management's expectations of growth in the high-teens percentage rate. The metric grew 25% year over year to $8.9 billion. Specifically, fixed-income markets’ revenues jumped 21% to $5.6 billion, while equity markets’ numbers increased 33% to $3.3 billion.
Also, the IB business performance was far stronger than that expected by management.
JPMorgan recorded an increase in NII, driven by higher yields and a 7% year-over-year jump in total loans.
Citigroup Inc. (C - Free Report) reported third-quarter 2025 adjusted net income per share of $2.24, up 48.3% from the year-ago period. The metric also surpassed the Zacks Consensus Estimate by 17.3%.
Citigroup’s results benefited from an increase in NII and non-interest revenues, alongside lower provisions. The company also registered a year-over-year increase of 17% in IB revenues, reflecting growth in advisory and equity capital markets. However, increased expenses and a weak capital position were the undermining factors for Citigroup.