KeyCorp reported a net income of $370 million for the first quarter of 2025, translating to diluted earnings per share of $0.33, a significant increase from $183 million or $0.20 per share in the same period last year. The bank's net interest income on a taxable-equivalent basis rose to $1.1 billion, up $219 million year-over-year, driven by a 56 basis point increase in the net interest margin to 2.58%. This growth was attributed to lower deposit costs and a favorable funding mix, despite a decline in average loans, which fell to $104.4 billion, down from $111 billion a year earlier.
KeyCorp's total deposits increased by $5.7 billion to $148.5 billion, reflecting a 4% year-over-year rise in client deposits and a 2% growth in net new relationship households. The bank's Assets Under Management reached $61.1 billion, bolstered by new enrollments in Key Private Client services. Additionally, the bank's Common Equity Tier 1 ratio improved to 11.8%, up approximately 150 basis points from the previous year, indicating a strong capital position to support client needs.
In terms of operational developments, KeyCorp announced a $1 billion share repurchase authorization, with plans to commence purchases in the second half of 2025, contingent on market conditions and regulatory requirements. The bank's focus on maintaining risk discipline is evident, as net charge-offs remained at the low end of its long-term target range, and nonperforming loans decreased by 9% quarter-over-quarter.
Looking ahead, KeyCorp anticipates a slight decline in average loans for the full year 2025, projecting a decrease of 2% to 5% compared to 2024. However, net interest income is expected to rise by approximately 20%, supported by a favorable interest rate environment. The bank also expects adjusted noninterest income to increase by over 5%, while adjusted noninterest expenses are projected to rise by 3% to 5%. KeyCorp's management remains optimistic about navigating the current economic landscape, emphasizing their commitment to serving as clients' primary bank.
About KEYCORP /NEW/
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