Loading company profile...

Expand full investment commentary ▼

📘 KeyCorp (KEY) — Investment Overview

🧩 Business Model Overview

KeyCorp operates as one of America’s prominent regional bank-based financial services companies. Its principal subsidiary, KeyBank, provides a broad slate of banking products and services targeting a wide array of clients, including retail consumers, small and mid-sized businesses, corporate clients, and institutions. The company’s operations span commercial banking, consumer banking, and wealth management, with a footprint concentrated primarily in the Midwest, Northeast, and Pacific Northwest. KeyCorp serves customers through a blended approach of brick-and-mortar branches, digital platforms, and dedicated client relationship teams, focusing on localized service and deep community banking roots.

💰 Revenue Model & Ecosystem

KeyCorp’s multi-stream revenue engine encompasses both interest-based and fee-based income sources. Core lending activities generate net interest through a suite of personal and commercial loans, mortgages, and credit lines. In parallel, non-interest revenue arises from a variety of services, including treasury management, investment banking, wealth advisory, payments, and deposit-related fees. The company’s ecosystem also leverages cross-selling opportunities, embedding financial products within client relationships to drive recurring engagement and loyalty across the consumer and institutional base.

🧠 Competitive Advantages

  • Brand strength: KeyCorp carries longstanding brand equity, particularly in regional markets where it has deep community ties and recognition.
  • Switching costs: Integrated solutions for commercial customers and specialized lending (such as equipment finance) raise client switching barriers, often embedding KeyCorp within clients’ financial operations.
  • Ecosystem stickiness: Cross-selling of banking products, wealth management, and advisory services creates holistic client relationships, increasing customer retention and share-of-wallet.
  • Scale + supply chain leverage: As one of the largest regional banks in its operating regions, KeyCorp benefits from scale in both technology investment and back-office efficiency, competing effectively with both smaller community banks and larger national players.

🚀 Growth Drivers Ahead

KeyCorp’s growth prospects center around digital transformation, ongoing expansion of commercial banking services, and deepening penetration within high-potential client segments such as middle-market companies and affluent individuals. Investments in digital capabilities and fintech partnerships are enhancing customer acquisition and operating efficiency. Additionally, inorganic growth through selective acquisitions and niche lending verticals enable KeyCorp to enter new markets or augment its service toolkit. The company also stands to benefit from broader trends in business formation, regional economic development, and increased demand for personalized banking solutions.

⚠ Risk Factors to Monitor

KeyCorp faces business risks including intense competition from traditional banks, digital disruptors, and non-bank financial entities. Regulatory changes can impact lending practices, capital requirements, and compliance costs. The interest rate environment directly affects lending margins and the value of deposits. Macroeconomic downturns or shifts in credit quality can pressure asset values and loan performance. Additionally, ongoing digital disruption and evolving customer expectations require sustained investment in technology and innovation to retain relevance.

📊 Valuation Perspective

The market generally values KeyCorp in relation to its regional banking peers, considering factors like capitalization, risk profile, and geographic diversification. While the company’s valuation often reflects its scale and relative stability in core markets, the presence of larger money-center banks and faster-growing fintech lenders can contribute to a valuation discount. Conversely, differentiated fee income streams, successful digital initiatives, or prudent credit management can command a relative premium during favorable industry cycles.

🔍 Investment Takeaway

KeyCorp offers investors exposure to a regionally diversified, full-service banking franchise with opportunities to benefit from ongoing digital transformation and targeted market expansion. The company's strong community presence, cross-selling ecosystem, and scale provide defensive qualities, while technology investments and new service lines offer a path to growth. However, persistent margin pressures, regulatory risks, and rising competition from fintech challengers require ongoing vigilance. The investment thesis hinges on management’s ability to navigate industry shifts while preserving KeyCorp’s local-market strengths and diversified revenue base.


⚠ AI-generated research summary — not financial advice. Validate using official filings & independent analysis.

📢 Show latest earnings summary

📢 Earnings Summary — KEY

KeyCorp delivered a strong Q3 with EPS of $0.41, ROA above 1%, and continued PPNR and revenue growth, aided by rising NII and resilient, diversified fee income. NIM rose to 2.75%, deposit costs declined, and asset quality improved with lower NPAs and stable charge-offs within target. Capital remains peer-leading with CET1 at 11.8%, enabling a resumption of share repurchases (~$100M in Q4) and supporting a medium-term 15%+ ROTCE target by 2027. Management raised 2025 guidance, expects record revenue and strong operating leverage, and sees modest NIM/NII upside into Q4. Pipelines in investment banking and commercial lending are strong, though M&A conversion and CRE servicing fee normalization pose near-term variability. Overall tone was confident, emphasizing disciplined execution, fee compounding, and balance sheet optimization.

📈 Growth Highlights

  • Adjusted revenue +17% year over year; sixth straight quarter of PPNR improvement (+$33M, +5% QoQ)
  • EPS $0.41; ROA >1%
  • Tax-equivalent NII +4% sequentially; NIM up 9 bps to 2.75% (achieved year-end target early)
  • Average loans +$5B QoQ; C&I +2% with spot C&I +$700M; modest CRE growth; planned runoff of ~$600M low-yield consumer loans
  • Average deposits +2% and period-end deposits +3% QoQ; average consumer deposits ex-CDs +1%
  • Fee income up high single digits vs 2024; Investment banking/debt placement fees $184M (+8% YoY; YTD +15%)
  • Wealth AUM record $68B; TBVPS +4% QoQ and +14% YoY
  • Relationship households and commercial clients each up ~2% YTD; commercial pipelines nearly 2x vs prior year

🔨 Business Development

  • Raised ~$50B of client capital in Q3; retained ~15% on balance sheet
  • Mass affluent business since 2023: +50,000 households, +$3B AUM, +$6B total client assets
  • Frontline staffing to increase ~10% in 2025; expected payback in 12–18 months
  • Continued investment in relationship bankers, client advisers, and technology platforms
  • Portfolio remix from low-yield consumer mortgages to relationship C&I with healthy risk-adjusted returns

💵 Financial Performance

  • EPS $0.41; ROA >1%; PPNR +$33M (+5% QoQ)
  • Adjusted revenue +17% YoY; adjusted noninterest income +8% YoY (includes ~$8M Visa settlement charge)
  • Tax-equivalent NII +4% QoQ; NIM 2.75% (+9 bps QoQ)
  • Investment banking and debt placement fees $184M (+8% YoY); strong DCM/ECM; middle-market M&A pipelines materially improved late in quarter
  • Commercial mortgage servicing fees $73M (near historic highs); active special servicing balances >$11B (+48% YoY); fees expected to decline to $60–$65M in Q4
  • Service charges and corporate service fees up sharply YoY (both ~124%), driven by commercial payments momentum and client loan/derivatives activity
  • Provision $107M; net charge-offs $114M (42 bps of avg loans); modest reserve release; YTD NCO ratio 41 bps (within 40–45 bps target)
  • NPAs -6% QoQ; NPA ratio 0.63% (-3 bps); criticized loans -$200M (-3% QoQ)
  • Noninterest expense $1.2B (+2% QoQ, +7% YoY), driven by higher headcount and incentive comp; includes $8M charitable foundation contribution

🏦 Capital & Funding

  • CET1 ratio 11.8%; marked CET1 (incl. AFS/pension) 10.3% (+30 bps QoQ), both near top of peer group
  • Plan to repurchase ~$100M of common stock in Q4; expect to continue repurchases in 2026 while maintaining strong CET1
  • Average noninterest-bearing deposits 19% of total (23% adjusted for hybrid accounts); total deposit cost 1.97% (-2 bps QoQ)
  • Cumulative interest-bearing deposit beta ~55%; interest-bearing funding costs -8 bps QoQ; cumulative funding beta ~74%
  • Fitch upgraded long- and short-term ratings one notch; senior unsecured now A-; Moody’s outlook remains positive

🧠 Operations & Strategy

  • Medium-term target: 15%+ ROTCE by 2027; NIM targeted at 3.25%+ (additional ~50 bps uplift)
  • NIM drivers: ~50% from fixed asset repricing and swaps (forward starters ~$34B at ~3.8–3.9% turning beneficial as rates fall); ~50% from organic growth and primacy-led relationship lending
  • Compound fee advantages across capital markets, commercial payments, wealth, and mortgage servicing
  • Maintain expense discipline via continuous improvement while funding growth and tech
  • “Crawl, walk, run” approach to buybacks; balance sheet optimization via runoff of low-yield consumer loans and lower-cost funding

🌍 Market Outlook

  • Expect modest NII and NIM growth in Q4; balance sheet positioned to be fairly neutral to additional near-term Fed cuts
  • Full-year 2025 NII growth ~22% (high end of prior 20–22% range); Q4 exit-rate NII expected to be 13%+ above 2024
  • Q4 NIM expected 2.75–2.80% with relatively flat balance sheet vs Q3
  • Full-year fee growth 5–6%, likely at high end if M&A pipeline converts and markets remain favorable; Q4 fees expected similar to strong Q4 2024
  • Full-year expense growth ~4% (midpoint of prior range); Q4 expenses to increase on hiring, tech, activity, and seasonality; GAAP tax rate ~22% in Q4
  • On track for record 2025 revenue, >100 bps fee-based operating leverage, and >10% positive operating leverage; expecting outsized revenue and earnings growth in 2026

⚠ Risks & Headwinds

  • Middle-market M&A volumes remain tepid industry-wide (pipelines improving but timing uncertain)
  • Commercial mortgage servicing fees expected to decline in Q4; special servicing balances elevated (> $11B), indicating ongoing CRE workout activity
  • Expenses rising near term due to hiring, incentive compensation, technology, and year-end seasonality
  • Line utilization down to ~31% overall (large corporate commitments up), which could temper near-term loan growth if not drawn
  • Macro and rate-path uncertainty; competitive deposit markets (though currently rational) could pressure funding costs
  • Credit normalization continues with NCOs in 40–45 bps range (within guidance)

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.

📊 KeyCorp (KEY) — AI Scoring Summary

📊 AI Stock Rating — Summary

For the quarter ending September 30, 2025, KeyCorp reported revenue of $2.83 billion and net income of $489 million, resulting in an EPS of $0.41. The net margin stands at 17.3%. The company holds assets worth $187.4 billion against liabilities of $167.3 billion, with equity totaling $20.1 billion. Although free cash flow details were not disclosed, the absence of operating cash flow and capital expenditure in the report suggests a potential focus on liquidity management. KeyCorp continues to display strong shareholder returns; a positive price movement of 35% over the past 6 months signals investor confidence. The stock is moderately valued with a P/E of 11.3, supported by a steady dividend yield of 5.49%. Analysts have set price targets as high as $25, indicating possible future growth. Despite moderate return on equity (ROE) of 2.18%, the company maintains a balanced debt-to-equity ratio of 0.76, demonstrating solid financial health. These factors contribute to a stable, potentially appealing investment for the regional banking sector.

AI Score Breakdown

Revenue Growth — Score: 7/10

Revenue of $2.83 billion indicates stable growth with a primary focus on regional banking services. Growth appears steady but not exceptional.

Profitability — Score: 6/10

Net margin of 17.3% and modest EPS of $0.41 reflect fair profitability. ROE of 2.18% is lower than industry average, highlighting room for improvement in efficiency.

Cash Flow Quality — Score: 5/10

Free cash flow details are absent; the lack of reported operating and capital cash flows suggests efforts to maintain liquidity, but clarity on cash use is needed.

Leverage & Balance Sheet — Score: 8/10

With a debt-to-equity ratio at 0.76 and substantial equity of $20.1 billion, KeyCorp displays a strong and resilient balance sheet.

Shareholder Returns — Score: 8/10

Share price increased by 35% over 6 months and 10.64% over the year, underscoring solid returns. Dividend yield of 5.49% further enhances investor benefits, despite a lack of buybacks.

Analyst Sentiment & Valuation — Score: 7/10

Analyst targets, with a median of $23.5, suggest further upside. Valuation appears fair with a P/E of 11.3 and a healthy FCF yield of 6.32%.

⚠ AI-generated — informational only, not financial advice.

SEC Filings

Related Companies in Financial Services

HOOD logo

ROBINHOOD MARKETS INC CLASS A (HOOD)

Financial Services

$105.91B

IBKR logo

INTERACTIVE BROKERS GROUP INC CLAS (IBKR)

Financial Services

$123.26B

COIN logo

COINBASE GLOBAL INC CLASS A (COIN)

Financial Services

$65.47B

APO logo

APOLLO GLOBAL MANAGEMENT INC (APO)

Financial Services

$83.62B

ERIE logo

Erie Indemnity Company (ERIE)

Financial Services

$13.11B

KKR logo

KKR AND CO INC (KKR)

Financial Services

$117.73B