01—Abstract
Summary
Summary of the 10-K filed February 21, 2025. Cited figures are marked; the original filing is the authoritative source.
KeyCorp reported a 2024 net loss of $161 milliona, or a loss of $0.32 per common share from continuing operations attributable to common shareholders, driven primarily by a $1.8 billion pre-tax loss on the sale of securities available for sale as part of a strategic repositioning of its securities portfolio.
Excluding that repositioning, the filing presents adjusted noninterest income of $2.645 billionb and adjusted noninterest expense of $4.520 billion. Net interest income (TE) was $3.81 billion, down $133 million from 2023, with the net interest margin at 2.16%. Average loans declined to $107.7 billion from $118.0 billion, and total loans at year-end were $104.3 billion, while deposits rose to $149.8 billion.
The balance sheet was strengthened by Scotiabank's strategic minority investment of approximately $2.8 billionc, completed in two closings in August and December 2024, which gave Scotiabank about 14.9% of common shares outstanding. Total assets were $187.2 billion at year-end. The Common Equity Tier 1 ratio rose to 11.92% from 10.02%, tangible book value per common share increased to $11.70 from $10.02, and the tangible common equity ratio rose to 7.0% from 5.1%.
KeyCorp did not repurchase shares in the open market in 2024 and has no Board-approved repurchase authorizations outstanding; the quarterly dividend remained $0.205d per share. The filing also outlines 2025 guidance on an operating basis: average loans down 2% to 5%, ending loans flat versus year-end 2024, net interest income (TE) up about 20%, adjusted noninterest income up 5% or more, and adjusted noninterest expense up 3% to 5%. Net charge-offs were 0.41% of average loans in 2024, and nonperforming loans rose to $758 million from $574 million.
02—Key points
Key Highlights
- Reported net loss of $161 million for 2024 (loss of $0.32 per common share from continuing operations), compared with net income of $967 million in 2023, reflecting a $1.8 billion pre-tax loss on securities repositioning.
- Net interest income (TE) was $3.81 billion, down $133 million year over year; net interest margin was 2.16%, relatively stable versus 2.17% in 2023.
- Scotiabank invested approximately $2.8 billion in KeyCorp at $17.17 per share, owning approximately 14.9% of common shares after the December 27, 2024 second closing.
- Common Equity Tier 1 ratio improved to 11.92% from 10.02%; tangible common equity to tangible assets rose to 7.0% from 5.1%.
- Total loans fell to $104.3 billion from $112.6 billion as balance sheet optimization reduced commercial and consumer balances, while deposits grew to $149.8 billion from $145.6 billion.
- Nonperforming loans increased to $758 million from $574 million; net loan charge-offs rose to $440 million (0.41% of average loans) from $244 million.
- 2025 guidance (operating basis) calls for net interest income (TE) up about 20%, adjusted noninterest income up 5% or more, and adjusted noninterest expense up 3% to 5%.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 21, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $4.62B$6.41B | −28.0% |
| Operating Income | -$163.00M$964.00M | −116.9% |
| Net Income | -$161.00M$967.00M | −116.6% |
| EPS (Basic) | $-0.32$0.89 | −136.0% |
| EPS (Diluted) | $-0.32$0.88 | −136.4% |
| Shares Outstanding (Basic) | 949.56M927.22M | +2.4% |
| Shares Outstanding (Diluted) | 949.56M932.76M | +1.8% |
05—Questions
Frequently Asked Questions
Why did KeyCorp report a net loss in 2024?
The loss was driven mainly by a strategic repositioning of the available-for-sale securities portfolio, which produced a pre-tax loss of about $1.8 billion from selling low-yielding securities. The filing states that the repositioning was intended to enhance future earnings, with proceeds reinvested at higher yields. Net loss was $161 million, compared with net income of $967 million in 2023.
What was the purpose and size of the Scotiabank investment?
Scotiabank agreed to make a strategic minority investment of approximately $2.8 billion at a fixed price of $17.17 per share, representing about 14.9% pro forma common stock ownership. The initial purchase of about $821 million closed on August 30, 2024, and the final purchase of about $2.0 billion closed on December 27, 2024. Scotiabank may designate up to two directors to the Board, and two such directors were appointed.
What is KeyCorp's dividend and share repurchase posture?
The Board declared a quarterly dividend of $0.205 per common share in each quarter of 2024, totaling $0.82 for the year. KeyCorp completed no open market share repurchases in 2024 and has no Board-approved repurchase authorizations outstanding. The only repurchases were $28 million of shares related to equity compensation programs.
What does the filing guide for 2025?
On an operating basis, KeyCorp expects average loans to decline 2% to 5% and ending loans to be flat versus year-end 2024. It expects net interest income (TE) to increase about 20%, adjusted noninterest income to rise 5% or more, and adjusted noninterest expense to increase 3% to 5%. Net charge-offs are guided to 40 to 45 basis points of average loans.
How strong is KeyCorp's capital position?
As of December 31, 2024, the Common Equity Tier 1 ratio was 11.92%, Tier 1 risk-based capital ratio 13.69%, total risk-based capital ratio 16.15%, and leverage ratio 10.03%. KeyBank (consolidated) qualified as well capitalized under the prompt corrective action framework. The stress capital buffer is 3.1% and became effective October 1, 2024.
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