Keycorp: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 16 October 2025: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Net income reached $454 million: Income from continuing operations attributable to common shareholders was $454 million, or $.41 diluted EPS, up from $387 million in the second quarter. Adjusted net income was $450 million. Source
• Revenue rose 17% on an adjusted basis: Total revenue was $1.9 billion, up 17% from a year earlier after adjusting for last year's securities repositioning, with positive operating leverage on total and fee bases. Source
• Net interest margin reached 2.75%: Net interest margin was 2.75%, up 9 basis points sequentially and 58 basis points from a year earlier. Lower deposit costs and reinvested investments drove the gain, partly offset by lower rates on variable-rate assets. Source
• Deposit costs eased to 1.97%: The overall cost of deposits fell 2 basis points to 1.97%, and the rate on interest-bearing deposits fell 1 basis point. Average deposits rose 2% to $150.4 billion. Source
• Commercial Bank earnings rose 5%: Commercial Bank net income was $367 million, up from $349 million in the second quarter, on revenue of $1.01 billion. Average loans rose to $70.3 billion. Source
• Nonperforming assets decreased: Nonperforming assets fell to $668 million, down 6% sequentially as the release reports. Criticized loans also declined, and nonperforming loans were 0.62% of period-end portfolio loans. Source
• Investment banking pipelines grew: Investment banking pipelines grew from already elevated levels, with M&A pipelines up materially. Year-to-date investment banking and debt placement fees were the second best in company history. Source

“Credit quality continues to trend in a positive direction as both nonperforming assets and criticized loans declined”

Chris Gorman, Chairman and CEO

Guidance

Results and growth drivers

• Net income reached $454 million: Income from continuing operations attributable to common shareholders was $454 million, or $.41 diluted EPS, up from $387 million in the second quarter. Adjusted net income was $450 million. Source
• Revenue rose 17% on an adjusted basis: Total revenue was $1.9 billion, up 17% from a year earlier after adjusting for last year's securities repositioning, with positive operating leverage on total and fee bases. Source
• Net interest income rose on funding mix: Net interest income rose 4% sequentially, driven by a funding mix shift toward low-cost core deposits, redeployed maturing investments and commercial and industrial loan growth. Source
• Fee income grew on investment banking: Noninterest income was $702 million, up $12 million from the second quarter, led by investment banking and debt placement fees, which rose $6 million. Source

Margin, deposits and funding

• Net interest margin reached 2.75%: Net interest margin was 2.75%, up 9 basis points sequentially and 58 basis points from a year earlier. Lower deposit costs and reinvested investments drove the gain, partly offset by lower rates on variable-rate assets. Source
• Deposit costs eased to 1.97%: The overall cost of deposits fell 2 basis points to 1.97%, and the rate on interest-bearing deposits fell 1 basis point. Average deposits rose 2% to $150.4 billion. Source
• Wholesale borrowings declined: The funding mix improved as low-cost core deposits grew and wholesale borrowings fell. Long-term debt was $10.9 billion at period end, down from $12.1 billion at June 30. Source

“Business momentum with clients and prospects continues to build.”

Chris Gorman, Chairman and CEO

Business segments and client assets

• Commercial Bank earnings rose 5%: Commercial Bank net income was $367 million, up from $349 million in the second quarter, on revenue of $1.01 billion. Average loans rose to $70.3 billion. Source
• Consumer Bank profit more than doubled: Consumer Bank net income was $152 million, up from $75 million a year earlier. Taxable-equivalent net interest income rose 21.4% over the same period. Source
• Assets under management reached a record: Assets under management reached a record $68 billion, up 11% year-over-year. Consumer Bank assets under management were $67.9 billion at period end. Source

Costs and efficiency

• Expenses rose on incentive pay: Noninterest expense was $1,177 million, up $23 million sequentially. Personnel costs rose on incentive pay tied to fee growth and continued investment in people. Source
• Non-personnel costs fell from second quarter: Non-personnel costs fell $14 million from the second quarter, mainly on lower occupancy and professional fees. A $5 million FDIC special assessment benefit also reduced expense. Source
• Technology spending lifted some costs: Business services, professional fees and computer processing rose year over year, which management attributed to technology-related investments. Source

“As I look ahead, I remain confident that we will continue to deliver outsized EPS growth.”

Chris Gorman, Chairman and CEO

Credit quality and reserves

• Nonperforming assets decreased: Nonperforming assets fell to $668 million, down 6% sequentially as the release reports. Criticized loans also declined, and nonperforming loans were 0.62% of period-end portfolio loans. Source
• Net charge-offs held near 0.42%: Net loan charge-offs were 0.42% of average total loans, against 0.39% in the second quarter and 0.58% a year earlier. Source
• Provision eased with small reserve release: Provision for credit losses was $107 million, compared with $138 million in the second quarter, and included a $7 million reserve release. Source
• Allowance covered 264% of nonperforming loans: The allowance for credit losses was 1.64% of period-end loans and covered 264% of nonperforming loans. Source

Loan book

• Average loans edged up 0.5%: Average loans were $106.2 billion, up $512 million from the second quarter. Commercial loans rose $1.1 billion while consumer loans fell $573 million on intentional run-off of low-yielding loans. Source
• Commercial and industrial loans drove growth: Average commercial loan growth came mainly from commercial and industrial loans. Period-end commercial and industrial balances were $56.8 billion. Source
• Consumer loans down year on year: Average consumer loans were $2.4 billion lower than a year earlier, with declines across all consumer loan categories. Source

Capital and shareholder returns

• CET1 ratio reached 11.8%: The estimated CET1 ratio was 11.8%, up from 11.7%. The company said all its risk-based capital ratios remained above well-capitalized benchmarks. Source
• Tangible book value grew 4% quarterly: Tangible book value per share was $13.38 at period end, up 4% from the second quarter and 14% from a year earlier, per management. Source
• Dividend held at $.205: The company declared a $.205 quarterly dividend on July 15, payable in the third quarter. Shares outstanding were 1,112,952 thousand at period end. Source

Client activity and capital markets

• Raised $50 billion for clients: The company raised $50 billion of capital for clients in the quarter and retained 15% of it on its own balance sheet. Source
• Investment banking pipelines grew: Investment banking pipelines grew from already elevated levels, with M&A pipelines up materially. Year-to-date investment banking and debt placement fees were the second best in company history. Source
• Client deposits and households grew: Client deposits grew 2% quarter-over-quarter, and relationship households grew at a 2% annualized rate. Source

Strategy, investment and leadership

• Investment in bankers and technology: Management said it continues to invest in front-line bankers and technology that it expects will drive future growth. Source
• Active balance sheet management: Management said continued active management of the business and the balance sheet is how it expects to keep delivering EPS growth. Source
• Operating leverage above 1,000 basis points: Management said the company generated more than 1,000 basis points of operating leverage again in the quarter, with adjusted fee growth ahead of expense growth. Source

Figures management reported

Risks management discussed

• External: Lower interest rates reduced yields on variable-rate earning assets, which partly offset the net interest income gains. Source
• Operational: Continued investment in people and technology adds to expense growth, which management tied to incentive pay on fee growth. Source

Earlier plans management reported on

• On track: Management said the company is on track to deliver record revenue in 2025. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.