01—Abstract
Summary
Summary of the 10-Q filed August 5, 2025. Cited figures are marked; the original filing is the authoritative source.
KeyCorp (KEY) reported net income from continuing operations attributable to Key common shareholders of $387 milliona, or diluted earnings per share of $0.35, for the second quarter of 2025.
Net interest income (TE) was $1.15 billionb with a net interest margin of 2.66%, up $251 million and 62 basis points from the second quarter of 2024. Noninterest income was $690 million, compared to $627 million a year earlier, and noninterest expense was $1.2 billion. The provision for credit losses rose to $138 million from $100 million, reflecting higher net loan charge-offs and a higher reserve build tied to the worsening macroeconomic outlook.
Total loans from continuing operations were $106.4 billionc at June 30, 2025, up from $104.3 billion at December 31, 2024, with commercial loans up $3.3 billion, or 4.6%, offset by a $1.2 billion, or 3.7%, decline in consumer loans. Deposits fell to $146.9 billion from $149.8 billion, and uninsured deposits were $61.8 billion, or 42% of total deposits. Assets under management reached a record $64.2 billion.
The Common Equity Tier 1 ratio was 11.72%d at June 30, 2025, an estimate, and the company paid a quarterly common dividend of $.205 per share. Management guided to full-year 2025 average loans down 1% to 3%, net interest income (TE) up 20% to 22%, and adjusted noninterest expense up 3% to 5% compared with 2024. The filing also notes that the One Big Beautiful Bill Act was signed into law on July 4, 2025, and that Key does not expect a material change to its ongoing tax rate.
02—Key points
Key Highlights
- Q2 2025 net income from continuing operations attributable to Key common shareholders of $387 million, or diluted EPS of $0.35, versus $237 million in Q2 2024.
- Net interest income (TE) of $1.15 billion, up $251 million year over year, with net interest margin of 2.66%, up 62 basis points.
- Noninterest income of $690 million, up from $627 million, driven by investment banking and debt placement fees of $178 million versus $126 million.
- Provision for credit losses of $138 million, up from $100 million, reflecting higher net loan charge-offs and reserve builds for the worsening economic outlook.
- Deposits declined to $146.9 billion from $149.8 billion at December 31, 2024, while uninsured deposits were $61.8 billion, or 42% of deposits.
- Common Equity Tier 1 ratio of 11.72% at June 30, 2025 (estimated), and tangible book value per common share of $12.83.
- Full-year 2025 guidance: average loans down 1% to 3%, net interest income (TE) up 20% to 22%, and adjusted noninterest expense up 3% to 5%.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 5, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $1.84B$1.53B | +20.6% |
| Operating Income | $829.00M$492.00M | +68.5% |
| Net Income | $425.00M$274.00M | +55.1% |
| EPS (Basic) | $0.35$0.25 | +40.0% |
| EPS (Diluted) | $0.35$0.25 | +40.0% |
| Shares Outstanding (Basic) | 1.10B931.73M | +18.1% |
| Shares Outstanding (Diluted) | 1.11B938.49M | +18.0% |
05—Questions
Frequently Asked Questions
How did KeyCorp's core earnings drivers change in the second quarter of 2025?
Net interest income (TE) was $1.15 billion, up $251 million from the second quarter of 2024, and net interest margin rose to 2.66% from 2.04%. The filing attributes this mainly to lower deposit costs, reinvestment into higher-yielding investments, and an improved funding mix. Noninterest income rose to $690 million from $627 million, while noninterest expense increased to $1.15 billion from $1.08 billion.
What is driving the increase in the provision for credit losses?
The provision for credit losses was $138 million for the second quarter of 2025 versus $100 million a year earlier. The filing says the increase reflects higher net loan charge-offs and a higher reserve build to capture loan growth and the worsening macroeconomic outlook, partly offset by changes in portfolio mix. Net loan charge-offs were $102 million, or 0.39% of average loans, for the quarter.
How did the loan and deposit balances change?
Total loans were $106.4 billion at June 30, 2025, up from $104.3 billion at December 31, 2024. Commercial loans rose $3.3 billion, or 4.6%, while consumer loans fell $1.2 billion, or 3.7%, reflecting the intentional run-off of lower-yielding loans. Deposits totaled $146.9 billion, down $2.9 billion from year-end 2024, and wholesale funds increased to $14.8 billion.
What did management guide for full-year 2025?
Compared with full-year 2024, management expects average loans to be down 1% to 3%, ending loans up about 2% versus year-end 2024, and net interest income (TE) up 20% to 22%. Adjusted noninterest income is expected to rise 5% or more, and adjusted noninterest expense is expected to rise 3% to 5%. The net charge-off ratio is expected to be 40 to 45 basis points.
06—Continue