Q3 2024 KeyCorp Earnings Call Transcript
Key Points
- KeyCorp (KEY) received an initial $821 million investment from Scotiabank, which was used to reposition their securities portfolio, potentially adding over $40 million to quarterly net interest income in the fourth quarter.
- Net interest income increased by 7% quarter over quarter, driven by proactive management of funding costs and maturing low-yielding swaps and treasuries.
- Investment banking and debt placement fees were strong, reaching $171 million, with pipelines remaining at historically elevated levels.
- Assets under management in the wealth segment reached an all-time high of $61 billion, up 16% from the prior year.
- KeyCorp (KEY) demonstrated a conservative credit risk profile with non-performing assets and loans remaining stable and criticized loans declining by $132 million.
- KeyCorp (KEY) reported a negative earnings per share of $0.47, impacted by a $0.77 loss from securities portfolio repositioning.
- Average loans declined by 2.5% sequentially, reflecting continued weak client demand and intentional runoff of low-yielding consumer loans.
- Non-interest income was negative $269 million due to a $918 million loss related to securities repositioning.
- Net charge-offs increased to $154 million, driven by three specific credits in consumer goods and equipment manufacturing.
- The company anticipates a higher deposit beta on the initial Fed rate cut than previously modeled, which could impact future net interest income.
Thank you everyone for standing by. Welcome to the 2024 third quarter earnings call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to Brian Mauney, KeyCorp Director of Investor Relations. Please go ahead.
Thank you, operator, and good morning everyone. I'd like to thank you for joining KeyCorp's third quarter, 2024 earnings conference call. I'm here with Chris Gorman, our Chairman and Chief Executive Officer; and Clark Khayat, our Chief Financial Officer. As usual, we will reference our earnings presentation slides which can be found on the investor relations section of the key.com website.
In the back of the presentation, you will find our statement on forward-looking disclosures and certain financial measures including non-GAAP measures. This covers our earnings materials as well as remarks made on this morning's call. Actual results may differ materially from forward-looking statements and those statements speak only as of today,
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