KEY.NYSEKeycorp /NEW/
10-K: KeyCorp Achieves Record 2025 Revenue, Bolsters Capital
Sentiment:
Annual Report
KeyCorp reported record total revenue in 2025, driven by significant growth in net interest income and fee revenue, while maintaining a strong capital position and improving credit quality.
Delay expectedThe CFPB issued a final rule delaying compliance with the 1071 rule for all institutions covered by the rule. Compliance with the revised rule would be delayed until January 1, 2028.KeyBank's compliance with the OCC's recovery planning guidelines testing requirement was delayed until January 1, 2027.
Better than expectedRecord total revenue of $7,513 million in 2025, exceeding projections.Net income attributable to common shareholders significantly improved to $1,686 million in 2025 from a loss of $(304) million in 2024.Net interest income (TE) increased by $861 million, and net interest margin increased by 53 basis points.Strong capital ratios (CET1 at 11.78%, Tier 1 at 13.46%) well above regulatory minimums.Nonperforming assets decreased, and net charge-offs remained stable, indicating improved credit quality trends.Assets under management reached a record high of $70.0 billion.
Summary
- Net income attributable to Key common shareholders was $1,686 million in 2025, a substantial improvement from a loss of $(304) million in 2024.
- Total revenue (taxable-equivalent) reached a record $7,513 million in 2025, up from $4,619 million in 2024.
- Net interest income (taxable-equivalent) increased by $861 million to $4,671 million in 2025.
- Net interest margin expanded by 53 basis points to 2.69% in 2025.
- Noninterest income was $2,842 million in 2025, compared to $809 million in 2024 (which included a $1.8 billion loss from investment portfolio repositioning).
- Provision for credit losses increased to $471 million in 2025 from $335 million in 2024, driven by economic uncertainty and loan growth.
- Noninterest expense rose to $4,703 million in 2025 from $4,545 million in 2024.
- Common Equity Tier 1 ratio stood at 11.78% and Tier 1 risk-based capital ratio at 13.46% as of December 31, 2025, both well above regulatory minimums.
- Average loans decreased by $2.1 billion to $105.7 billion in 2025, primarily due to the intentional run-off of low-yielding consumer loans.
- Average deposits increased by $3.1 billion to $149.3 billion in 2025, reflecting growth in consumer deposits.
- The voluntary employee turnover rate decreased to 12.7% in 2025, down from 13.2% in 2024 and below the five-year historical average of 15.3%.
- A $1.0 billion share repurchase program was authorized in March 2025, with $200 million completed in the fourth quarter of 2025.
- Quarterly dividends of $0.205 per common share were declared for each quarter of 2025, totaling $0.82 annually.
- Nonperforming assets decreased by $145 million during 2025, and net loan charge-offs remained stable at 41 basis points.
Sentiment
Score: 8
Explanation: StockSavvy.ai views this as a strong performance, with KeyCorp achieving record revenue and significant improvements in profitability and capital adequacy. The positive outlook for 2026 and medium-term targets further bolster confidence, despite some ongoing economic uncertainties and regulatory changes.
Positives
- Achieved record total revenue of $7,513 million in 2025, exceeding initial projections.
- Generated significant positive operating leverage in 2025.
- Net interest income (taxable-equivalent) increased by $861 million, or 20.6%, in 2025.
- Net interest margin increased by 53 basis points to 2.69% in 2025.
- Strong capital position with Common Equity Tier 1 ratio of 11.78% and Tier 1 risk-based capital ratio of 13.46% at December 31, 2025, both exceeding regulatory minimums.
- Nonperforming assets decreased by $145 million in 2025, and net loan charge-offs remained stable at 41 basis points, indicating favorable credit quality trends.
- Investment banking and debt placement fees increased by $92 million, or 13.5%, in 2025.
- Trust and investment services income increased by $34 million, or 6.1%, driven by higher assets under management.
- Assets under management or administration reached a record high of $70.0 billion at December 31, 2025.
- Voluntary employee turnover rate decreased to 12.7% in 2025, lower than the 2024 rate and the previous five-year historical average.
- KeyBank (consolidated) qualified for the 'well capitalized' prompt corrective action capital category at December 31, 2025.
- Parent company maintained strong liquidity with $4.9 billion in cash and short-term investments, sufficient to meet projected obligations for the next 24 months.
- Maintained substantial unused secured borrowing capacity at the Federal Reserve Bank of Cleveland ($39.5 billion) and the FHLB ($18.9 billion).
Negatives
- Average loans decreased by $2.1 billion in 2025, primarily due to the intentional run-off of low-yielding consumer loans.
- Provision for credit losses increased to $471 million in 2025 from $335 million in 2024, driven by elevated economic uncertainty and loan growth.
- Operating lease income and other leasing gains decreased by $33 million, or 43.4%, in 2025.
- Total deposits decreased by $1.0 billion to $148.7 billion at December 31, 2025.
- Uninsured deposits increased to $66.2 billion at December 31, 2025, from $64.4 billion at December 31, 2024, representing 45% of total deposits.
- Wholesale funds decreased to $11.0 billion at December 31, 2025, from $14.2 billion at December 31, 2024.
Risks
- Extensive regulation of the U.S. financial services industry.
- Complex and evolving laws and regulations regarding privacy and cybersecurity.
- Operational or risk management failures by KeyCorp or critical third parties.
- Breaches of security or failures of technology systems due to technological or other factors and cybersecurity threats.
- An ineffective risk management framework.
- Negative outcomes from claims, litigation, arbitration, investigations, or governmental proceedings.
- Failure or circumvention of controls and procedures.
- Exposure to a wide range of climate-related physical risks across different geographical areas.
- Evolving capital and liquidity standards under applicable regulatory rules.
- Disruption of the U.S. and global financial system and markets, including the impact of inflation, tariffs or other trade policies, political instability, a prolonged shutdown of the U.S. government, and a potential global economic downturn or recession.
- Unanticipated changes in liquidity position, including changes in access to or cost of funding and ability to secure alternative funding sources.
- Ability to receive dividends from subsidiaries, including KeyBank.
- Downgrades in credit ratings for KeyCorp or KeyBank.
- A worsening of the U.S. economy due to financial, political or other shocks.
- Ability to anticipate interest rate changes and manage interest rate risk.
- Deterioration of economic conditions in geographic regions where KeyCorp operates.
- The soundness of other financial institutions, including instability in the financial industry.
- Concentrated credit exposure in commercial and industrial loans.
- Deterioration of commercial real estate market fundamentals.
- Defaults by loan clients or counterparties.
- Adverse changes in credit quality trends.
- Declining asset prices.
- Various factors may cause the allowance for loan and lease losses to increase or be inadequate.
- Geopolitical destabilization could adversely impact loan portfolios.
- Inaccurate assumptions or estimates underlying consolidated financial statements.
- Changes in accounting policies, standards, and interpretations.
- Impairment of goodwill.
- Inability to realize expected benefits of strategic initiatives.
- Highly competitive industry.
- Inability to adapt products and services to industry standards and consumer preferences.
- Inability to attract and retain talented executives and employees.
- Unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses.
- Potential impact of Scotiabank's significant equity interest and influence.
- Damage to reputation.
- Differing views on corporate responsibility and sustainability.
- Reliance on quantitative models (model risk).
- Development and use of AI, including through third parties, exposes KeyCorp to inherent risks.
Future Outlook
KeyCorp expects full year 2026 revenue (TE) to be up approximately 7% compared to 2025, with net interest income (TE) projected to increase by 8% to 10% and noninterest income by 3% to 4% (5% to 6% on an adjusted basis). The net interest margin exit rate for Q4 2026 is anticipated to be between 3.00% and 3.05%. Average loans are expected to increase by 1% to 2%, with commercial loans up approximately 5%. Net charge-offs to average loans are forecasted to be 40 to 45 basis points, and the effective tax rate around 22% (23% TE). Medium-term targets by the end of 2027 include a Return on tangible common equity of 15.0%+ and a Net Interest Margin of 3.25%+.
Management Comments
- Our results for 2025 saw us meet or exceed all of our financial targets communicated at the beginning of the year.
- We delivered full year record revenue with both net interest income and fee revenue growing greater than projected.
- As a result, we generated significant positive operating leverage.
- We are well positioned as we enter 2026.
- We added nearly 10% to our frontline banker staff across wealth management, commercial payments, middle market, and investment banking.
- We invested an additional $100 million in technology focused on customer-facing capabilities that make it easier for our clients to bank at Key.
- We continued to maintain our strong risk discipline.
- We remained committed to our strategy to engage a high-performing and talented workforce and fostering an inclusive environment for all.
- Key Consumer Bank's focus on durable, long-term client relationships centered in core checking has been evident through the execution of our strategic priorities through focus areas such as developing a core Consumer relationship product suite and driving long-term deposits and fee income through new and enhanced products and services.
- Building relationships and delivering complex solutions for middle market and larger clients requires a distinctive operating model that understands their business and can provide a broad set of product capabilities.
- Our business model is positioned to meet our client needs because our focus is not on being a universal bank, but rather being the right bank for our clients.
Industry Context
StockSavvy.ai notes that KeyCorp's strong 2025 performance, particularly in net interest income and fee revenue, contrasts with the broader banking industry's challenges in a volatile interest rate environment. The focus on digital transformation and targeted client relationships aligns with industry trends towards specialized services and enhanced customer experience. The increase in uninsured deposits and the ongoing regulatory scrutiny on capital and liquidity standards, as evidenced by the FDIC's special assessment and proposed changes to capital rules, reflect systemic pressures faced by all large financial institutions. The competitive landscape, with increasing pressure from non-bank financial technology companies, underscores the importance of KeyCorp's continued investment in technology and adaptation of products and services.
Comparison to Industry Standards
- KeyCorp's voluntary turnover rate of 12.7% in 2025 is lower than its previous five-year historical average of 15.3%, indicating strong employee retention relative to its own past performance.
- KeyBank (consolidated) met all regulatory capital requirements and qualified for the 'well capitalized' prompt corrective action capital category at December 31, 2025, demonstrating strong financial health compared to regulatory benchmarks.
- The projected Return on Tangible Common Equity (ROTCE) of 15.0%+ by end of 2027 is a competitive target within the banking sector, aiming for strong shareholder returns.
- The projected Net Interest Margin (NIM) of 3.25%+ by end of 2027 indicates an expectation to outperform the 2025 NIM of 2.69% and potentially align with or exceed top-tier regional bank performance in a favorable rate environment.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Risk Officer | NA | Mohit Ramani | January 2025 | Appointment |
| Chief Human Resources Officer | Head of Commercial Bank | Angela G. Mago | November 2023 | Role change |
| Head of Commercial Bank | Head of Enterprise Payments | Kenneth C. Gavrity | November 2023 | Role change |
| Chief Financial Officer | Chief Strategy Officer | Clark H.I. Khayat | March 2023 | Role change |
| Chief Accounting Officer | Corporate Controller | Stacy L. Gilbert | March 2024 | Appointment |
| General Counsel and Secretary | General Counsel and Corporate Secretary of Cullen/Frost Bankers, Inc. | James L. Waters | July 2021 | Appointment |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Policy Update | KeyCorp adopted a majority voting standard in uncontested elections of directors and plurality voting in contested elections. | NA | Enhances shareholder influence in director elections. |
| Bylaw Amendment | Fourth Amended and Restated Regulations of KeyCorp became effective, including provisions for special shareholder meetings, advance notice for proposals/nominations, and proxy access for director nominations. | September 21, 2023 | Increases shareholder rights and transparency in corporate governance, while also establishing clear procedures and limitations for shareholder actions. |
| Policy Update | The Board of Directors or the shareholders may from time to time fix or change the size of the Board of Directors to a total number of no fewer than 12 and no more than 17 directors. | NA | Provides flexibility in board size management while setting clear boundaries. |
| Policy Update | Affirmative vote of at least two-thirds of the entire authorized Board of Directors required for approval or recommendation of certain significant transactions (e.g., mergers with interested shareholders, large asset dispositions, issuance of voting stock >15%). | NA | Strengthens board oversight and provides anti-takeover protection for significant corporate actions. |
| Policy Update | KeyCorp's Articles provide that Section 1701.831 of the ORC (Ohio Control Share Acquisition Act) will not apply to control share acquisitions of shares of KeyCorp. | NA | Opt-out of certain Ohio anti-takeover provisions, potentially making control changes easier under specific circumstances. |
| Policy Update | KeyCorp's Articles and Regulations include anti-takeover provisions such as authorizing the Board to issue Preferred Stock, requiring holders of at least 15% of Common Stock to call a special meeting, establishing advance notice procedures for shareholder proposals/nominations, allowing directors to establish board size and fill vacancies, and allowing Board to amend Regulations without shareholder approval. | NA | These provisions may delay or discourage transactions involving a change in control or management, potentially protecting current management but limiting shareholder ability to effect change. |
| Policy Update | KeyCorp's Insider Trading Policy prohibits the use of Rule 10b5-1 plans for transactions in KeyCorp Securities by employees. | NA | Aims to avoid the appearance of impropriety and reduce insider trading risks, potentially limiting flexibility for employees' personal trading strategies. |
Legal Proceedings
- KeyCorp and its subsidiaries are subject to various litigation, investigations, and administrative proceedings in the ordinary course of business.
- These matters may involve claims for substantial monetary or non-monetary relief and may present novel claims or legal theories.
- KeyCorp does not believe there is any matter that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on its financial condition.
- Accruals for probable and estimable losses are maintained and assessed quarterly.
- The outcome of a particular matter, or a combination of matters, may be material to results of operations for a particular period.
- Increased number of investigations and proceedings in the financial services industry may lead to inquiries or investigations of KeyCorp.
Related Party Transactions
- KeyCorp entered into an Investment Agreement with The Bank of Nova Scotia (Scotiabank) in August 2024, pursuant to which Scotiabank purchased approximately 14.9% of KeyCorp's issued and outstanding common shares.
- Pursuant to the Investment Agreement, Scotiabank is entitled to designate up to two directors to KeyCorp's Board of Directors, and currently has two such directors.
- KeyCorp entered into an agreement with Scotiabank in February 2025 to permit Scotiabank to participate, through a periodic true-up right, in any repurchase by KeyCorp of its common stock on a pro rata basis.
- In Q4 2025, KeyCorp repurchased $17 million (approximately 0.9 million shares) from Scotiabank under this agreement.
- KeyCorp owns the outstanding common stock of business trusts that issued corporation-obligated mandatorily redeemable trust preferred securities, which are treated as Tier 2 capital.
- KeyCorp, KeyBank, and certain affiliates are parties to various intercompany guarantees that facilitate ongoing business activities of other affiliates.
Stakeholder Impact
- Shareholders: Positive impact from record revenue, increased net interest income, strong capital position, share repurchase program, and consistent dividends. Potential influence from Scotiabank's significant equity interest.
- Employees: Benefits from investments in frontline banker staff, competitive total rewards program (including 401(k) match, paid parental leave, discounted stock purchase plan, wellness incentives), career development opportunities, and a lower voluntary turnover rate.
- Customers: Benefits from investments in technology for customer-facing capabilities, a relationship-based business model, and a wide range of banking and financial services. Potential impact from evolving regulatory landscape (e.g., CFPB rules, debit card interchange fees).
- Regulators: KeyCorp's compliance with capital and liquidity requirements, and ongoing monitoring of regulatory developments, demonstrates adherence to supervisory expectations. Ongoing regulatory changes (e.g., Capital Proposal, CRA rule, Heightened Standards) will require continuous adaptation.
- Creditors: Strong capital and liquidity positions enhance KeyCorp's ability to meet obligations. Credit ratings are important for access to funding markets.
Next Steps
- Monitor developments regarding the revised Capital Proposal from federal banking agencies.
- Monitor developments in lawsuits challenging the CFPB's 1071 rule and the CFPB's operational status.
- Monitor developments regarding the OCC's proposal to rescind recovery planning guidelines.
- Monitor developments regarding the FDIC's proposed changes to the resolution plan rule in 2026.
- Monitor developments regarding the Federal Reserve's proposal to lower the maximum debit card interchange fee.
- Monitor developments regarding the CFPB's revamped 1033 rule as an interim final rule.
- KeyCorp expects to file the 2026 Proxy Statement with the SEC on or about March 27, 2026.
- KeyCorp expects to reissue treasury shares as needed in connection with stock-based compensation awards and for other corporate purposes.
- KeyCorp expects to make minimal discretionary contributions to the VEBA trust in 2026, if any.
- KeyCorp expects to recognize $9 million in net pension cost for 2026 related to pension plans.
- KeyCorp expects to recognize a $2 million credit in net postretirement benefit cost for 2026 related to postretirement benefit plan.
Key Dates
| Date | Description |
|---|---|
| September 9, 2016 | Deposit Agreement for Series D Preferred Stock filed. |
| December 12, 2016 | Deposit Agreement for Series E Preferred Stock filed. |
| July 30, 2018 | Deposit Agreement for Series F Preferred Stock filed. |
| April 29, 2019 | Deposit Agreement for Series G Preferred Stock filed. |
| August 24, 2022 | Deposit Agreement for Series H Preferred Stock filed. |
| September 21, 2023 | Fourth Amended and Restated Regulations of KeyCorp became effective. |
| October 24, 2023 | Federal banking agencies adopted a final rule to substantially revise their regulations implementing the CRA. |
| October 25, 2023 | Federal Reserve issued a proposal to lower the maximum debit card interchange fee. |
| November 16, 2023 | FDIC issued a final rule to impose a special assessment on IDIs to recover losses from SVB and Signature Bank failures. |
| January 16, 2024 | Comments on the long-term debt requirement proposal were due. |
| March 29, 2024 | Court issued a preliminary injunction barring federal banking agencies from enforcing the CRA final rule. |
| May 12, 2024 | Comments on the debit card interchange fee cap proposal were due. |
| August 12, 2024 | KeyCorp entered into an Investment Agreement with The Bank of Nova Scotia (Scotiabank). |
| August 13, 2024 | Investment Agreement with Scotiabank filed as Exhibit 10.1 to Form 8-K. |
| August 30, 2024 | Scotiabank completed the initial purchase of 47,829,359 KeyCorp Common Shares for approximately $821 million. |
| October 1, 2024 | FDIC's final rule to amend and restate its resolution plan rule became effective. |
| October 21, 2024 | OCC adopted revisions to its recovery planning guidelines, lowering the threshold for applicability to banks with at least $100 billion in average total consolidated assets. |
| October 22, 2024 | CFPB issued a final rule to implement Section 1033 of the Dodd-Frank Act regarding personal financial data rights. |
| December 27, 2024 | Scotiabank completed the final purchase of 115,042,316 KeyCorp Common Shares for approximately $2.0 billion, bringing total ownership to 14.9%. |
| January 1, 2025 | CECL optional transition provision fully phased-in. KeyBank was required to be in compliance with OCC recovery planning guidelines (except testing requirement). |
| February 2025 | KeyCorp entered into an agreement with Scotiabank to permit pro rata participation in common stock repurchases. |
| March 13, 2025 | KeyCorp's Board of Directors authorized a share repurchase program of up to $1.0 billion of common shares. |
| May 23, 2025 | CFPB filed a status report with the court agreeing with plaintiffs in a lawsuit challenging the 1071 rule. |
| May 30, 2025 | Parties challenging the 1071 rule and the CFPB filed a motion for summary judgment asking the court to invalidate the rule. |
| June 27, 2025 | Federal Reserve announced the results of its supervisory stress test for 22 large BHCs (KeyCorp did not participate). |
| June 29, 2025 | Financial Technology Association filed a summary judgment motion asking the court to uphold the 1071 rule. |
| July 4, 2025 | New U.S. tax legislation, OBBBA, was signed into law. |
| July 16, 2025 | Federal banking agencies issued a proposal for public comment to rescind the CRA final rule from October 2023 and reinstate the prior framework. |
| July 29, 2025 | Court granted CFPB's request to stay litigation challenging the 1033 rule. |
| August 21, 2025 | CFPB issued an advance notice of proposed rulemaking related to the 1033 rule. |
| August 29, 2025 | Federal Reserve published updated stress capital buffer requirements for large BHCs, including KeyCorp's 3.2% buffer. |
| October 1, 2025 | KeyCorp's updated stress capital buffer of 3.2% became effective and will remain in effect until September 30, 2026. |
| October 7, 2025 | OCC and FDIC issued a joint proposal for public comment to define 'unsafe or unsound practice'. |
| October 21, 2025 | Comments on the CFPB's advance notice of proposed rulemaking related to the 1033 rule were due. |
| October 24, 2025 | OCC requested public comment on a proposal to rescind its recovery planning guidelines. |
| November 5, 2025 | Federal Reserve finalized revisions to the LFI Rating System. |
| November 13, 2025 | CFPB issued a proposal to streamline the 1071 rule and delay compliance until January 1, 2028. |
| November 18, 2025 | Federal Reserve issued a statement of supervisory operating principles regarding MRAs. |
| December 15, 2025 | Comments on the CFPB's proposal to streamline the 1071 rule were due. |
| December 16, 2025 | FDIC issued an interim final rule to reduce the quarterly rate of the special assessment. |
| December 17, 2025 | District of Columbia Court of Appeals granted the plaintiffs' request for an en banc rehearing of the CFPB dismantling decision. |
| December 23, 2025 | OCC issued a proposal to raise the threshold for applying Heightened Standards to $700 billion in average total consolidated assets. |
| December 29, 2025 | All KeyBank outstanding 4.700% Fixed Rate Senior Bank Notes due January 26, 2026 were called for redemption. |
| December 30, 2025 | District Court ruled that the CFPB must request and accept new funds from the Federal Reserve to stay operational. |
| December 31, 2025 | Fiscal year ended. |
| January 1, 2026 | KeyBank's compliance with the OCC recovery planning guidelines testing requirement delayed until this date. |
| January 20, 2026 | Forward guidance for full year 2026 results provided. |
| January 22, 2026 | Comments on the Federal Reserve's proposal to codify supervisory stress test models and scenarios were due. |
| January 28, 2026 | KeyCorp issued $750 million of 5.305% Fixed-to-Floating Rate Senior Notes due January 28, 2037. |
| February 19, 2026 | 1,089,647,432 Common Shares outstanding. |
| February 23, 2026 | Date of the audit report and filing of the 10-K. |
| March 2, 2026 | Comments on the OCC's proposal to rescind recovery planning guidelines are due. |
| March 27, 2026 | KeyCorp expects to file the 2026 Proxy Statement with the SEC on or about this date. |
| September 30, 2026 | KeyCorp's updated stress capital buffer will remain in effect until this date. |
| January 1, 2028 | Compliance with the revised 1071 rule would be delayed until this date. |
| September 30, 2028 | Statutory deadline for the FDIC to restore the DIF reserve ratio to 1.35%. |
| February 17, 2029 | Vesting Date for Cash Performance Shares Award Agreement (2026-2028). |
| January 28, 2037 | Maturity date for $750 million of 5.305% Fixed-to-Floating Rate Senior Notes issued by KeyCorp. |
Recommendation
buyKeyCorp's 2025 performance, marked by record revenue, substantial growth in net interest income and margin, and robust capital ratios, indicates strong operational execution and financial health. The proactive management of credit quality, evidenced by decreasing nonperforming assets and stable charge-offs, along with strategic investments in technology and talent, positions the company for continued profitable growth. The positive outlook for 2026 and ambitious medium-term targets suggest sustained momentum. While regulatory changes and economic uncertainties persist, KeyCorp's ability to exceed financial targets and maintain a 'well capitalized' status makes it an attractive investment for long-term growth.
Keywords
Banking, Financial Services, Commercial Banking, Consumer Banking, SEC Filing, 10-K, KeyCorp, KeyBank, Financial Performance, Net Interest Income, Noninterest Income, Capital Adequacy, Credit Quality, Loan Portfolio, Deposits, Share Repurchase, Dividends, Risk Management, Cybersecurity, Corporate Governance, Regulatory Compliance, Investment Banking, Wealth Management, AI Risk, Scotiabank
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