KeyCorp (NYSE: KEY), one of the nation’s largest bank-based financial services companies, today, July 22, 2025, announced its financial results for the second quarter of 2025. The bank reported net income from continuing operations attributable to Key common shareholders of $387 million, or $0.35 per diluted common share. This represents a significant increase compared to both the prior quarter and the prior year. These results reflect strong business momentum, driven by revenue growth, efficient cost management, and continuous improvement in credit quality.

Financial Highlights: Strong Top-Line and Bottom-Line Growth

KeyCorp recorded revenue of $1.8 billion in the second quarter of 2025, up 21% year-over-year. Net interest income (NII) increased by 4% quarter-over-quarter and by 27.9% year-over-year to $1.150 billion. The net interest margin (TE) increased by 8 basis points quarter-over-quarter to 2.66%. This increase primarily reflects the impact of lower deposit costs, reinvestment of proceeds from maturing low-yielding investment securities, fixed-rate loans and swaps repricing into higher-yielding investments, the repositioning of the available-for-sale portfolio during the third and fourth quarters of 2024, and an improved funding mix as lower-cost deposits increased while wholesale borrowings declined.

Noninterest income increased by 10.0% year-over-year to $690 million. This increase was primarily driven by a $52 million increase in investment banking and debt placement fees, reflecting higher syndications, commercial real estate, and equity issuance activity. The bank also continued to see momentum across wealth management and commercial payments.

Total noninterest expense increased by 7.0% year-over-year to $1.154 billion. Despite this, the bank achieved significant positive operating leverage on both a total and fee basis year-over-year.

The diluted earnings per share of $0.35 in the second quarter of 2025 reflects a 40.0% increase compared to $0.25 in the corresponding quarter last year. Compared to the first quarter of 2025, net income increased by 4.6%, from $370 million to $387 million.

Stable Credit Quality and Loan Portfolio Growth

KeyCorp reported positive credit quality metrics. Net charge-offs declined by 8% quarter-over-quarter, and other credit metrics remained stable to improved. The provision for credit losses was $138 million, compared to $100 million in the second quarter of 2024 and $118 million in the first quarter of 2025. The increase from the year-ago quarter reflects higher net loan charge-offs and a larger reserve build.

Period-end loans were up $1.6 billion quarter-over-quarter. Commercial loans grew by $3.3 billion, or 5%, year-to-date. Key’s nonperforming loans totaled $696 million at June 30, 2025, representing 0.65% of period-end portfolio loans. This compares to 0.66% at June 30, 2024, and 0.65% at March 31, 2025.

Strong Capital Ratios and Growth Initiatives

KeyCorp’s estimated risk-based capital ratios continued to exceed all “well-capitalized” regulatory benchmarks at June 30, 2025. Key’s estimated Common Equity Tier 1 (CET1) capital ratio stood at 11.7% at June 30, 2025, and its Tier 1 risk-based capital ratio was 13.4%. The total risk-based capital ratio was 15.7%. Book value per share at period end was $15.32, a 17.0% increase compared to the prior year.

The bank declared a dividend in May 2025 of $0.205 per common share, payable in the second quarter of 2025.

Chairman and CEO Comments and Organic Potential

Chris Gorman, Chairman and CEO of KeyCorp, commented that “Our second quarter results demonstrate continued strong momentum”. He highlighted that “Revenue was up 21% year-over-year driven by our clearly defined net interest income tailwinds and 10% growth in noninterest income, while expenses grew 7%”. Gorman noted that “Credit quality continues to trend in a positive direction with overall credit migration improving for the sixth consecutive quarter”.

He emphasized ongoing investments in “people and technology that will drive future growth for our company”. The bank remains on target to increase its front-line bankers – investment bankers, middle market relationship managers, payments advisors, and wealth managers – by 10% in 2025. Gorman stated that he is “energized by our momentum as we win and take share in the marketplace” and remains “confident that we will continue to execute against our compelling organic growth opportunities”.

The Consumer Bank’s total revenue (TE) increased by 20.3% compared to the second quarter of 2024, reaching $912 million. The Commercial Bank’s total revenue (TE) increased by 26.8% compared to the second quarter of 2024, reaching $974 million.

Summary: KeyCorp – A Strong Bank with Diversified Growth and Disciplined Risk Management

KeyCorp presents strong second-quarter 2025 results, indicating financial resilience and impressive growth in revenues and profitability. The increase in net interest income, alongside significant growth in noninterest income (particularly from investment banking), points to a diversified and flexible business model. The bank successfully manages its expenses efficiently while investing in people and technology, and its credit quality remains stable. Strong capital ratios support its growth strategy. The CEO’s commitment to organic growth and disciplined risk management positions KeyCorp as a stable bank with potential for continued shareholder value creation in a changing economic environment. This information is provided for professional review purposes only and does not constitute financial or investment advice.