KeyCorp (KEY) Q3 2025 earnings summary

Executive summary

• Q3 2025 net income from continuing operations was $454 million, or $0.41 per diluted share, reflecting strong client growth, record assets under management of $68 billion, and a 17% year-over-year revenue increase.

• EPS rose 17% sequentially and 37% year-over-year, with return on assets above 1% and tangible book value per share up 14% year-over-year.

• Noninterest income increased 8% year-over-year, driven by investment banking, trust, and payment fees, while noninterest expenses rose 7% year-over-year, mainly due to personnel and technology investments.

• Credit quality remained stable or improved, with nonperforming assets declining and an allowance for loan and lease losses at 1.36%.

• Fitch upgraded both long and short-term ratings by one notch; Moody's outlook remains positive.

Financial highlights

• Net interest income (TE) was $1.19 billion, up 4% sequentially and 24% year-over-year; net interest margin reached 2.75%, up 9 bps sequentially and 58 bps year-over-year.

• Noninterest income was $702 million, up 8% year-over-year, driven by fee businesses and the absence of prior-year securities losses.

• Noninterest expense increased 7% year-over-year to $1.18 billion, mainly due to higher personnel and technology investments.

• Provision for credit losses was $107 million, with net charge-offs of $114 million, or 0.42% of average loans.

• CET1 ratio at quarter end was 11.8%, marked CET1 at 10.3%, both improved sequentially.

Outlook and guidance

• FY2025 guidance: average loans expected to decline 1–3%, ending loans up ~2%, net interest income (TE) up 22%, adjusted noninterest income up 5–6%, adjusted noninterest expense up ~4%.

• Q4 NIM projected in the 2.75%-2.8% range; NII and NIM expected to grow modestly in Q4.

• Net charge-offs to average loans expected at 40–45 bps for FY2025.

• Record revenue anticipated for 2025, with positive operating leverage above 10%.

• Medium-term targets include ROTCE of 15%+ and NIM of 3.25%+ by end of 2027.