Skip to content
AnalystLens

KeyCorp Annual Report, Year Ended Dec 31, 2023

Filing Date
Filed February 22, 2024
Period End
December 31, 2023
In the record · 2016–202610-K1110-Q348-K141

KEY filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 141 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’16Aug ’16
  2. Leadership change8-K · Dec ’21Dec ’21
  3. Leadership change8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 10-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.

KeyCorp reported consolidated total assets of approximately $188.3 billiona at December 31, 2023, and net income attributable to Key of $967 million for 2023, down from $1.917 billion in 2022.

Net interest income (TE) was $3.9 billionb, with a net interest margin of 2.17%, down 47 basis points from the prior year, driven by higher interest-bearing deposit costs and a shift in funding mix to higher-cost deposits and borrowings. Noninterest income was $2.5 billion, down from $2.7 billion, while noninterest expense rose to $4.7 billion from $4.4 billion, including a $190 million FDIC special assessment tied to the 2023 bank failures. The provision for credit losses was $489 million versus $502 million in 2022, and net loan charge-offs rose to 0.21% of average loans from 0.14%.

Total loans declined to $112.6 billionc from $119.4 billion, reflecting planned balance sheet optimization, while deposits grew to $145.6 billion. Common Equity Tier 1 and Tier 1 risk-based capital ratios were 10.02% and 11.67%, respectively, and all capital ratios exceeded regulatory requirements. Moody's, S&P, and Fitch each downgraded KeyCorp's and KeyBank's long-term debt ratings during 2023.

For 2024, management guides to average loans down 5% to 7%, net interest income (TE) down 2% to 5%, and noninterest income up 5% or more, with noninterest expense relatively stable. The filing also discloses a $10 milliond SEC settlement over off-channel communications record-keeping, a pending Gurevitch securities class action filed in August 2023, and related shareholder derivative suits. Annual dividends were $0.82 per common share for 2023, and the share repurchase authorization expired September 30, 2023 without open-market repurchases in the fourth quarter.

02—Key points

Key Highlights

  1. Net income attributable to Key fell to $967 million in 2023 from $1.917 billion in 2022, as net interest income declined to $3.913 billion GAAP from $4.527 billion.
  2. Net interest margin compressed to 2.17% from 2.64%, a 47 basis point decline driven by higher interest-bearing deposit costs and a shift toward higher-cost deposits and borrowings.
  3. Noninterest expense rose to $4.734 billion from $4.410 billion, including a $190 million FDIC special assessment related to the 2023 bank failures.
  4. Total loans declined 5.7% to $112.6 billion as management pursued planned balance sheet optimization, while deposits increased to $145.6 billion.
  5. Credit quality metrics weakened modestly: net loan charge-offs were 0.21% of average loans versus 0.14%, and nonperforming loans rose to $574 million from $387 million.
  6. Capital remained above requirements, with a Common Equity Tier 1 ratio of 10.02% and a Tier 1 risk-based ratio of 11.67% at December 31, 2023.
  7. Moody's, S&P, and Fitch each downgraded KeyCorp's and KeyBank's long-term debt ratings during 2023, and the company faces a pending securities class action (Gurevitch) and related derivative suits.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2023filed February 22, 2024
Revenue$6.41BNet Income$967.00M15.1% Net MarginEPS (Diluted)$0.88Total Assets$188.28BCash & Equivalents$941.00MFree Cash Flow$2.90B

Financial Statements

FY2023 against FY2022

Line itemFY2023FY2022Change
Revenue$6.41B$7.27B−11.8%
Operating Income$964.00M$1.91B−49.6%
Interest Expense$4.01B$885.00M+353.6%
Net Income$967.00M$1.92B−49.6%
EPS (Basic)$0.89$1.94−54.1%
EPS (Diluted)$0.88$1.93−54.4%
Shares Outstanding (Basic)927.22M924.36M+0.3%
Shares Outstanding (Diluted)932.76M933.06M0.0%

05—Questions

Frequently Asked Questions

  1. How did KeyCorp's profitability change in 2023?

    Net income attributable to Key was $967 million in 2023, compared with $1.917 billion in 2022. The decline was driven by lower net interest income from higher deposit costs, lower noninterest income, and higher noninterest expense that included a $190 million FDIC special assessment.

  2. What drove the decline in net interest margin?

    The net interest margin fell to 2.17% from 2.64%. The filing attributes the decline to higher interest-bearing deposit costs and a shift in funding mix toward higher-cost deposits and borrowings, partly offset by higher earning asset balances and yields.

  3. What is KeyCorp's 2024 outlook?

    For full-year 2024 versus 2023, management expects average loans to decline 5% to 7%, average deposits to be flat to down 2%, net interest income (TE) to decline 2% to 5%, and noninterest income to rise 5% or more. Noninterest expense is expected to be relatively stable.

  4. Did KeyCorp's credit quality change?

    Credit metrics weakened modestly. Net loan charge-offs were 0.21% of average loans in 2023 versus 0.14% in 2022, and nonperforming loans increased to $574 million from $387 million, though the company described its overall credit quality as strong.

  5. What legal and regulatory matters are disclosed?

    KeyBanc Capital Markets and Key Investment Services agreed to a $10 million SEC penalty on February 9, 2024 to resolve a record-keeping investigation. A putative class action, Gurevitch v. KeyCorp, was filed in August 2023, and two shareholder derivative lawsuits were filed in late 2023.

06—Continue

← View all 10-K filings