On April 18, 2024, KeyCorp (KEY, Financial) released its 8-K filing, detailing the financial outcomes for the first quarter of 2024. The Ohio-based financial institution, managing over $180 billion in assets and operating predominantly in Ohio and New York, reported a net income of $183 million, or $0.20 per diluted common share. This performance includes a $0.02 per share impact from the FDIC special assessment. Despite a promising increase in noninterest income, primarily from investment banking and debt placement fees, both net income and EPS fell short of analyst expectations.
KeyCorp's strategic efforts this quarter emphasized strengthening its balance sheet by reducing reliance on more volatile funding sources. The company reported a significant improvement in its Common Equity Tier 1 ratio, which increased by 120 basis points year-over-year to 10.3%. This metric is crucial as it indicates the bank's financial strength and stability, providing a buffer against potential losses.
The bank experienced a decrease in net interest income, which dropped by 19.9% compared to the same quarter last year, settling at $886 million. This decline was attributed to the higher interest rate environment and strategic balance sheet adjustments, including planned reductions in loan balances. Despite these challenges, KeyCorp managed to control expenses effectively, with noninterest expenses decreasing by 16.7% compared to the previous quarter.
"We are off to a solid start in 2024," stated Chris Gorman, Chairman and CEO of KeyCorp. "Investment Banking posted its best first quarter in our history, net interest income was within the range of guidance that we provided in January, and expenses remained well controlled."
However, the bank did face challenges, including a decrease in average loans and deposits compared to previous periods. This was partly due to a shift in funding mix from noninterest-bearing deposits to higher-cost deposits and borrowings, reflecting broader economic changes and internal strategic decisions.
Looking ahead, KeyCorp is focused on leveraging its strong foundation to drive future growth, emphasizing enhancements in its fee-based businesses and strategic partnerships aimed at expanding its commercial platform. The bank's ability to navigate the complexities of the current economic environment while maintaining robust capital and liquidity positions it well for ongoing resilience and profitability.
For more detailed financial information and future updates, visit KeyCorp's investor relations page.
Explore the complete 8-K earnings release (here) from KeyCorp for further details.
