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1. Company Snapshot

1.a. Company Description

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States.It operates in two segments, Consumer Bank and Commercial Bank.The company offers various deposits, investment products and services; and personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, investment, cash management, portfolio management, and trust and related services to individuals and small and medium-sized businesses.


It also provides a suite of banking and capital market products, such as syndicated finance, debt and equity capital market products, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory, and public finance, as well as commercial mortgage loans comprising consumer, energy, healthcare, industrial, public sector, real estate, and technology loans for middle market clients.In addition, the company offers community development financing, securities underwriting, brokerage, and investment banking services.As of December 31, 2021, it operated through a network of approximately 999 branches and 1,317 ATMs in 15 states, as well as additional offices, online and mobile banking capabilities, and a telephone banking call center.


KeyCorp was founded in 1849 and is headquartered in Cleveland, Ohio.

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1.b. Last Insights on KEY

KeyCorp's recent performance was negatively impacted by concerns surrounding its credit quality, despite reporting a Q3 earnings beat. The company's net interest income grew 4% quarter-over-quarter, but its net interest margin expansion was modest, at 2.75%. Additionally, while nonperforming assets decreased 6% sequentially, net charge-offs remained stable at 42 bps. Some analysts have raised concerns about the company's exposure to private credit, but others view it as a "Buy" due to its strong value and improving credit quality. KEY's capital strength is exceptional.

1.c. Company Highlights

2. KeyCorp's Q3 2025 Earnings: A Strong Performance

KeyCorp reported earnings per share of 41¢ for the third quarter of 2025, with return on assets surpassing 1%. Pre-provision net revenue was up $33 million quarter over quarter, or 5%, marking the sixth straight quarter of improvement. Revenues, adjusted for last year's securities portfolio repositioning, grew 17%. The net interest income continues to benefit from strong business dynamics across deposits and loans, with a 2.75% NIM achieved in the quarter, reaching the year-end target one quarter ahead of schedule.

Publication Date: Oct -17

📋 Highlights
  • Q3 2025 Earnings & ROA:: Earnings per share of 41¢, with return on assets exceeding 1%.
  • Pre-Provision Revenue Growth:: $33M (+5%) QoQ increase, sixth consecutive quarter of improvement.
  • Net Interest Margin (NIM) Achievement:: 2.75% NIM reached, hitting year-end target one quarter early.
  • Capital & Dividend Flexibility:: CET1 ratio near 12%, $100M stock buybacks in Q4, and $100M raised for clients.
  • 2027 ROTCE Target:: Aim for 15%+ return on tangible common equity via 3.25%+ NIM and 50bps beta expansion.

Asset Quality and Capital Position

Asset quality metrics trended positively, with NPAs and criticized loans declining while net charge-offs were relatively stable. The net charge-off ratio year-to-date is within the full-year target range of 40 to 45 basis points. The CET1 ratio approached 12% at quarter-end, with excess capital providing flexibility and optionality. The company's strong capital position is expected to support its growth plans and return capital to shareholders.

Business Performance and Growth

The company raised a robust $50 billion in capital on behalf of clients in the third quarter and is on track to deliver its second-best year in investment banking in its history. Relationship households and commercial clients grew at about 2% this year, with assets under management reaching a record $68 billion. The company's investment banking business is seeing significant growth in energy and healthcare sectors, and plans to continue investing in these areas.

Outlook and Valuation

KeyCorp expects to achieve a return on tangible common equity of 15% or better on a run-rate basis by 2027, driven by improving NIM by another 50 basis points, compounding fee advantages, maintaining expense discipline, and share repurchases. With a current Price-to-Tangible Book Value (P/TBV) ratio of around 0.92, the stock appears to be reasonably valued. The Dividend Yield stands at 4.89%, providing a relatively attractive income stream. Analysts estimate next year's revenue growth at 6.9%, which could support the stock's current valuation.

Management's Strategy and Guidance

The company is focused on organic growth and sees M&A as a lower priority, with a strict screen for potential deals prioritizing cultural fit, strategic alignment, and financial metrics. Management has guided for 4% growth in expenses this year and expects 2-3% growth in the medium term. They also plan to be more aggressive with share repurchases, with $100 million in buybacks expected in the fourth quarter. Chris Gorman, CEO, mentioned that they have largely completed their hiring and investment initiatives, with a focus on growing their wealth business and middle market.

3. NewsRoom

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KEYCORP TO PRESENT AT THE GOLDMAN SACHS FINANCIAL SERVICES CONFERENCE

Dec -02

Source: prnewswire.com

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8 'Safer' Dividend Buys In Barron's 23 Better November Bets Than T-Bills

Nov -28

Source: seekingalpha.com

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3 Bank Stocks With Solid Dividend Yield to Keep an Eye On

Nov -28

Source: zacks.com

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KEYBANK NATIONAL ASSOCIATION ANNOUNCES REDEMPTION OF SENIOR BANK NOTES DUE JANUARY 26, 2026

Nov -25

Source: prnewswire.com

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KEYCORP DECLARES QUARTERLY CASH DIVIDEND ON COMMON SHARES AND PREFERRED STOCKS

Nov -20

Source: prnewswire.com

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ONE BIG BEAUTIFUL BILL ACT POISED TO DRIVE MIDDLE MARKET GROWTH: 89% OF COMPANIES EXPECT SIGNIFICANT LONG-TERM BUSINESS IMPACT

Nov -20

Source: prnewswire.com

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October Readers Identified 10 Ideal "Safer" Dividends In 39 Dogs

Nov -19

Source: seekingalpha.com

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Keyera Corp. (KEY:CA) Q3 2025 Earnings Call Transcript

Nov -15

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.59%)

6. Segments

Commercial Bank

Expected Growth: 6.4%

KeyCorp's 6.4% growth is driven by strong loan growth, fueled by a robust commercial and industrial lending pipeline, as well as solid deposit growth. Additionally, the bank's focus on digital transformation, cost savings initiatives, and strategic acquisitions have contributed to its growth momentum.

Consumer Bank

Expected Growth: 4.77%

KeyCorp's Consumer Bank segment growth of 4.77% is driven by increasing consumer spending, low unemployment rates, and rising wages. Additionally, the bank's strategic investments in digital transformation, expansion of its branch network, and targeted marketing efforts have contributed to the growth. Furthermore, the bank's focus on customer experience and relationship-building has led to increased customer loyalty and retention.

Other

Expected Growth: 5.83%

KeyCorp's 5.83% growth is driven by strategic acquisitions, expansion into high-growth markets, and a focus on digital transformation. Additionally, the company's diversified revenue streams, including investment banking and wealth management, contribute to its growth. Furthermore, KeyCorp's strong risk management practices and solid capital position enable it to invest in growth initiatives.

7. Detailed Products

Consumer Banking

KeyCorp's consumer banking segment offers a range of personal banking products and services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

KeyCorp's commercial banking segment provides financial solutions to small and medium-sized businesses, including cash management, lending, and treasury services.

Corporate Banking

KeyCorp's corporate banking segment offers customized financial solutions to large corporations, including capital markets, treasury services, and risk management.

Investment Banking

KeyCorp's investment banking segment provides advisory services, capital markets, and transaction execution to corporations, governments, and financial institutions.

Wealth Management

KeyCorp's wealth management segment offers investment management, trust services, and financial planning to individuals, families, and institutions.

8. KeyCorp's Porter Forces

Forces Ranking

Threat Of Substitutes

KeyCorp operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

KeyCorp's customers have significant bargaining power due to the availability of alternative banking services. The company needs to maintain strong relationships with its customers to retain their business.

Bargaining Power Of Suppliers

KeyCorp has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power in supplier relationships.

Threat Of New Entrants

The banking industry has significant barriers to entry, including regulatory hurdles and capital requirements. This limits the threat of new entrants and allows KeyCorp to maintain its market position.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. KeyCorp needs to maintain its competitive edge through innovative products and services to stay ahead of its rivals.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.74%
Debt Cost 8.57%
Equity Weight 39.26%
Equity Cost 10.36%
WACC 9.27%
Leverage 154.71%

11. Quality Control: KeyCorp passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Regions Financial

A-Score: 6.6/10

Value: 5.1

Growth: 4.8

Quality: 7.8

Yield: 8.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
First Horizon

A-Score: 6.4/10

Value: 5.8

Growth: 4.7

Quality: 5.8

Yield: 7.0

Momentum: 9.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
FNB

A-Score: 6.4/10

Value: 5.9

Growth: 5.3

Quality: 5.4

Yield: 7.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Zions Bank

A-Score: 6.3/10

Value: 6.7

Growth: 7.0

Quality: 5.8

Yield: 6.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Comerica

A-Score: 6.1/10

Value: 5.8

Growth: 4.6

Quality: 5.6

Yield: 8.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Key

A-Score: 5.6/10

Value: 5.2

Growth: 2.7

Quality: 5.2

Yield: 8.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.26$

Current Price

19.26$

Potential

-0.00%

Expected Cash-Flows