Q4 2025 KeyCorp Earnings Call Transcript
Key Points
- KeyCorp (KEY) reported fourth-quarter earnings of $0.43 per share, with revenue exceeding $2 billion, marking a 12% year-over-year growth on an adjusted basis.
- The company achieved a significant improvement in asset quality metrics, with declines in net charge-offs, non-performing assets (NPAs), criticized loans, and delinquencies.
- KeyCorp (KEY) committed to a more substantial return of capital to shareholders, repurchasing $200 million of common stock in the fourth quarter, double the original commitment.
- The company maintained strong capital ratios, ending the quarter with a 10.3% marked CET1 ratio, and plans to manage this ratio down to the higher end of their targeted range by the end of 2026.
- KeyCorp (KEY) experienced favorable deposit dynamics, with client deposits up 2% and disciplined pricing, contributing to a 3% sequential increase in tax-equivalent net interest income.
- Despite the positive results, KeyCorp (KEY) faces challenges in maintaining its growth momentum, with some concerns about the conservatism of its growth guidance for 2026.
- The company anticipates a modest growth in average loans of only 1 to 2% for 2026, with commercial loans expected to grow at about 5%, indicating potential limitations in loan growth.
- KeyCorp (KEY) is experiencing a runoff of low-yielding consumer loans, which could impact the overall growth of average earning assets.
- The company faces uncertainties in the macroeconomic environment, which could affect its ability to achieve its financial targets, particularly in investment banking and middle market M&A activities.
- KeyCorp (KEY) is investing heavily in technology and AI, but it is too early to claim significant efficiencies or cost savings from these investments.
Good morning and welcome to Key Corp's 4th quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. If you would like to ask a question during that time, simply press followed by 1 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Brian Mauney, Key Corp director of investor relations. Please go ahead.
Thank you, operator, and good morning, everyone. I'd like to thank you for joining Key Corp's fourth quarter 2025 earnings conference call. I am here with Chris Gorman, our Chairman and Chief Executive Officer, Clark Khayat, our Chief Financial Officer, and Mo Romani, our Chief Risk Officer. As usual, we will reference our earnings presentation slides which can be found in 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
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