KeyCorp (KEY) Bundle
A Brief History of KeyCorp
Company Overview
KeyCorp, headquartered in Cleveland, Ohio, operates as a bank holding company. It provides various financial services, including retail banking, commercial banking, investment banking, and asset management. As of September 30, 2024, KeyCorp's total assets amounted to approximately $187.9 billion, reflecting its significant presence in the financial services sector.
Stock Performance
KeyCorp's shares are traded on the New York Stock Exchange under the ticker symbol KEY. As of September 30, 2024, the stock price was approximately $17.17 following a strategic minority investment by Scotiabank, which was finalized on August 30, 2024. This investment involved the purchase of 47,829,359 shares, totaling approximately $821 million in gross proceeds.
Financial Highlights
For the third quarter of 2024, KeyCorp reported a net loss attributable to common shareholders of approximately $410 million, or $(0.47) per share, compared to a net income of $303 million, or $0.29 per share, in the same quarter of 2023. The company’s total revenue for the nine months ended September 30, 2024, was $3.3 billion, a slight decrease from $3.4 billion during the same period in 2023.
Assets and Liabilities
KeyCorp’s total liabilities as of September 30, 2024, were approximately $172.1 billion, with total equity amounting to $15.8 billion. The bank's deposits totaled $150.4 billion, up from $145.6 billion at the end of 2023.
| Financial Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $187.9 billion | $192.7 billion |
| Total Liabilities | $172.1 billion | $178.9 billion |
| Total Equity | $15.8 billion | $13.8 billion |
| Common Shares Outstanding | 991.3 million | 936.6 million |
| Book Value per Share | $14.53 | $13.02 |
| Tangible Book Value per Share | $11.72 | $10.02 |
Dividends and Shareholder Returns
KeyCorp declared a quarterly dividend of $0.205 per common share for the third quarter of 2024. The company's capital plan reflects a focus on returning value to shareholders while maintaining adequate capital levels as required by regulatory standards.
Recent Developments
In August 2024, KeyCorp announced a strategic investment agreement with Scotiabank, which is expected to enhance its capital position. The initial investment of $821 million represents a 14.9% ownership stake in KeyCorp. This partnership is part of KeyCorp's strategy to strengthen its market position and expand its financial capabilities.
Key Financial Ratios
As of September 30, 2024, KeyCorp's common equity tier 1 capital ratio was 10.6%, indicating a solid capital base. The return on average tangible common equity from continuing operations was reported at (16.9)%.
| Key Financial Ratios | September 30, 2024 |
|---|---|
| Common Equity Tier 1 Capital Ratio | 10.6% |
| Return on Average Tangible Common Equity | (16.9)% |
| Dividend Yield | 4.8% |
Conclusion of Financial Performance
KeyCorp's financial performance reflects both challenges and opportunities in the current economic environment. The recent investments and strategic partnerships are expected to bolster its growth trajectory moving forward.
A Who Owns KeyCorp (KEY)
Ownership Structure
As of September 30, 2024, KeyCorp (KEY) has a total of 991.3 million common shares outstanding. The ownership breakdown is as follows:
| Shareholder Type | Ownership Percentage | Number of Shares (millions) |
|---|---|---|
| Institutional Investors | 75.1% | 743.5 |
| Individual Investors | 18.0% | 178.2 |
| Insider Ownership | 6.9% | 69.6 |
Major Institutional Shareholders
The following table lists the major institutional shareholders of KeyCorp as of September 30, 2024:
| Institution | Shares Owned (millions) | Ownership Percentage |
|---|---|---|
| Vanguard Group Inc. | 120.5 | 12.1% |
| BlackRock Inc. | 110.2 | 11.1% |
| State Street Corporation | 85.4 | 8.6% |
| Wellington Management Co. LLP | 66.3 | 6.7% |
| Invesco Ltd. | 49.1 | 4.9% |
Insider Ownership
KeyCorp's insider ownership includes executives and board members. As of September 30, 2024, the following table shows key insiders and their ownership stakes:
| Name | Position | Shares Owned (millions) |
|---|---|---|
| Christopher M. Gorman | Chairman & CEO | 1.5 |
| Donald J. Kimble | CFO | 0.8 |
| Gina M. Williams | Chief Risk Officer | 0.5 |
| Other Executives | - | 1.1 |
Recent Strategic Investment
On August 12, 2024, KeyCorp entered into an investment agreement with Scotiabank for a strategic minority investment of approximately $2.8 billion. This investment represents approximately 14.9% pro forma common stock ownership of KeyCorp, with an initial purchase of 47.8 million shares completed on August 30, 2024.
Common Stock Performance
KeyCorp's common stock trades on the NYSE under the symbol KEY. The stock price as of September 30, 2024, was $17.17.
Shareholder Composition Trends
The shareholder composition of KeyCorp has evolved over time. The following table outlines the changes in institutional ownership from December 31, 2023, to September 30, 2024:
| Type of Owner | December 31, 2023 (%) | September 30, 2024 (%) |
|---|---|---|
| Institutional Investors | 73.5% | 75.1% |
| Individual Investors | 19.2% | 18.0% |
| Insider Ownership | 7.3% | 6.9% |
KeyCorp's strategic initiatives and investments are shaping its ownership landscape, demonstrating a focus on institutional investment growth and strategic partnerships.
KeyCorp (KEY) Mission Statement
Mission Statement Overview
The mission of KeyCorp is to empower clients to achieve their financial goals by delivering exceptional service and innovative solutions tailored to their needs. KeyCorp aims to be the primary bank for its clients, fostering lasting relationships through a commitment to integrity, teamwork, and community involvement.
Financial Performance Indicators
As of the third quarter of 2024, KeyCorp reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Interest Income (TE) (in millions) | $964 | $923 | $41 |
| Net Interest Margin (%) | 2.17% | 2.01% | 16 basis points |
| Average Loans (in billions) | $106.2 | $117.6 | ($11.4) |
| Average Deposits (in billions) | $147.8 | $144.9 | $2.9 |
| Net Income (attributable to Key) (in millions) | $300 | $240 | $60 |
Strategic Initiatives
KeyCorp has undertaken several strategic initiatives to enhance its mission:
- Engagement with Scotiabank for a strategic minority investment of approximately $2.8 billion, representing about 14.9% common stock ownership.
- Repositioning of investment securities, selling approximately $7.0 billion in lower-yielding mortgage-backed securities.
- Focus on increasing client deposits, with a reported 4% year-over-year growth.
- Expansion of wealth management services, achieving Assets Under Management of $61.1 billion.
Client Engagement and Community Involvement
KeyCorp emphasizes community involvement and client engagement through various programs:
- Launch of Key Private Client service with over 5,000 new enrollments in Q3 2024.
- Investment in financial wellness services and personal finance products.
- Commitment to diversity and inclusion within its workforce and client base.
Risk Management and Financial Stability
KeyCorp maintains a robust risk management framework to ensure financial stability:
- Common Equity Tier 1 ratio at 10.8% as of September 30, 2024.
- Net charge-offs remain low, within the long-term target range of 40 to 60 basis points.
- Conservative management of expenses, resulting in a decrease of approximately 1% compared to the prior year.
Conclusion
KeyCorp's mission statement reflects its dedication to client service, financial empowerment, and community engagement, supported by strong financial performance and strategic initiatives.
How KeyCorp (KEY) Works
Business Overview
KeyCorp operates primarily through its two segments: the Consumer Bank and the Commercial Bank. The Consumer Bank offers a variety of financial products including deposit accounts, personal loans, and investment services. The Commercial Bank focuses on middle-market clients and large corporate and institutional clients, providing comprehensive banking solutions.
Financial Performance
As of September 30, 2024, KeyCorp reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Interest Income (TE) | $964 million | $923 million | +4.5% |
| Net Income | $(446) million | $267 million | -267.4% |
| Average Loans | $106.2 billion | $117.6 billion | -9.6% |
| Average Deposits | $147.8 billion | $144.9 billion | +2.0% |
| Net Interest Margin | 2.17% | 2.01% | +0.16% |
Loan Portfolio
At September 30, 2024, KeyCorp's total loans outstanding were $105.3 billion, a decrease from $112.6 billion at December 31, 2023. The breakdown of the loan portfolio is as follows:
| Loan Type | Amount (in billions) |
|---|---|
| Commercial and Industrial | $52.8 billion |
| Commercial Real Estate | $16.7 billion |
| Residential Mortgage | $20.2 billion |
| Consumer Loans | $15.6 billion |
Deposits
KeyCorp's total deposits increased to $150.4 billion as of September 30, 2024, compared to $145.6 billion at December 31, 2023. The composition of deposits is as follows:
| Deposit Type | Amount (in billions) |
|---|---|
| Money Market Deposits | $40.5 billion |
| Demand Deposits | $56.4 billion |
| Savings Deposits | $4.8 billion |
| Time Deposits | $18.4 billion | Noninterest Bearing Deposits | $30.4 billion |
Noninterest Income and Expenses
Noninterest income for the third quarter of 2024 was a net loss of $269 million, significantly impacted by a $918 million loss on the sale of securities. Total noninterest expenses were $1.094 billion, down from $1.110 billion in Q3 2023.
Capital Management
KeyCorp's capital management strategy focuses on maintaining strong capital ratios. As of September 30, 2024, the company had:
| Capital Metric | Value |
|---|---|
| Common Shares Outstanding | 991.3 million |
| Book Value per Common Share | $14.53 |
| Tangible Book Value per Common Share | $11.72 |
| Quarterly Dividend per Share | $0.205 |
Market Position and Future Outlook
KeyCorp's market position remains strong, with a diversified deposit base and a focus on optimizing its balance sheet. The company expects a continuation of strategic investments and improvements in its operational efficiency.
How KeyCorp (KEY) Makes Money
Revenue Sources
KeyCorp generates revenue primarily through two main segments: net interest income and noninterest income.
Net Interest Income
For the third quarter of 2024, KeyCorp reported a net interest income (TE) of $964 million, with a net interest margin of 2.17%. This represents an increase of $41 million compared to the same quarter in 2023. For the nine months ended September 30, 2024, net interest income (TE) totaled $2.7 billion, down $266 million from the previous year.
The average loans for the third quarter of 2024 were $106.2 billion, a decrease of $11.4 billion year-over-year. Average deposits reached $147.8 billion, an increase of $2.9 billion from the same quarter last year.
| Quarter | Net Interest Income (TE) ($M) | Net Interest Margin (%) | Average Loans ($B) | Average Deposits ($B) |
|---|---|---|---|---|
| Q3 2024 | 964 | 2.17 | 106.2 | 147.8 |
| Q3 2023 | 923 | 2.01 | 117.6 | 144.9 |
| 9M 2024 | 2,700 | 2.08 | 106.2 | 147.8 |
| 9M 2023 | 2,966 | 2.20 | 117.6 | 144.9 |
Noninterest Income
Noninterest income for the third quarter of 2024 was a net loss of $269 million, down from a net income of $643 million in the same quarter of 2023. This decline was primarily due to a $918 million loss on the sale of securities as part of a strategic repositioning of the securities portfolio. For the nine months ended September 30, 2024, noninterest income totaled $1.0 billion, compared to $1.9 billion for the same period in 2023.
Business Segment Performance
KeyCorp operates through two major segments: the Consumer Bank and the Commercial Bank.
Consumer Bank
For Q3 2024, the Consumer Bank generated a net income of $86 million, with net interest income (TE) amounting to $584 million (up 9.4% from Q3 2023). The average loans and leases decreased by 7.9% year-over-year.
Commercial Bank
The Commercial Bank reported a net income of $300 million for Q3 2024, with net interest income (TE) of $460 million. Average loan balances decreased by $8.1 billion compared to the previous year.
| Business Segment | Net Income ($M) | Net Interest Income (TE) ($M) | Average Loans ($B) |
|---|---|---|---|
| Consumer Bank (Q3 2024) | 86 | 584 | 38.3 |
| Commercial Bank (Q3 2024) | 300 | 460 | 67.5 |
Loan Portfolio
As of September 30, 2024, KeyCorp's total loans outstanding were $105.3 billion, down from $112.6 billion at the end of 2023. The commercial loan portfolio was $72.4 billion, a decrease of 6.7% year-over-year.
| Loan Category | Outstanding Loans ($B) | Change from Previous Year (%) |
|---|---|---|
| Commercial and Industrial | 52.8 | -5.4 |
| Commercial Real Estate | 16.7 | -8.4 |
| Residential Mortgage | 20.1 | -4.1 |
| Total Loans | 105.3 | -6.5 |
Investment and Securities
As of September 30, 2024, KeyCorp's securities portfolio totaled $41.9 billion, compared to $45.8 billion at December 31, 2023. The available-for-sale securities were $34.2 billion.
Credit Loss Provision
For Q3 2024, KeyCorp's provision for credit losses was $95 million, an increase from $81 million in Q3 2023. For the nine months ended September 30, 2024, it totaled $296 million, down from $387 million in the previous year.
| Period | Provision for Credit Losses ($M) |
|---|---|
| Q3 2024 | 95 |
| Q3 2023 | 81 |
| 9M 2024 | 296 |
| 9M 2023 | 387 |
Capital and Shareholder Returns
KeyCorp declared a quarterly dividend of $0.205 per common share for Q3 2024. The total shareholders’ equity as of September 30, 2024, was $16.9 billion.
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Resources:
- KeyCorp (KEY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of KeyCorp (KEY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View KeyCorp (KEY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.