KeyCorp Stock Hits 1-Week Low After Swinging To Q4 Loss, Triggers Some Bearish Retail Chatter
The bank’s fourth-quarter revenue slumped nearly 44% to $865 million, well short of the market estimate of $1.75 billion.
FollowKeyCorp (KEY) shares slipped nearly 5% on Tuesday morning to a one-week low after the bank swung to a fourth-quarter loss due to a securities portfolio reshuffle.
The company reported a net loss of $279 million or $0.28 per share for the three months ended Dec. 31, compared with a profit of $30 million or $0.03 per share last year.
On an adjusted basis, the company reported earnings of $0.38 per share, beating the average analyst's estimate of $0.32 per share, according to FinChat data.
Its fourth-quarter revenue slumped nearly 44% to $865 million, well short of the market estimate of $1.75 billion.
The bank’s non-interest income slumped to $806 million, hurt by a $915 million loss on the sale of securities as part of a strategic repositioning of the bank’s portfolio. This was slightly offset by a spike in investment banking revenue underwriting fees and merger and acquisition fees.
The company said its total loans fell 8%, hurt by a decline in average commercial loans due to lower commercial and industrial loans and commercial mortgage real estate loans.
Peer Fifth Third Bancorp had also flagged lower commercial and industrial loans on Tuesday.
KeyCorp’s net interest income (NII) rose 14.3% to $1.06 billion, primarily on the back of the reinvestment of proceeds from maturing investment securities into higher-yielding investments and the maturity of lower-yielding interest rate swaps with negative carry that were terminated in 2023.
The company’s assets under management touched a record $61 billion in 2024.
The Cleveland-based company’s provision fell to $39 million for the fourth quarter, compared with $102 million last year, due to lower loan balances, slowing asset quality migration, and alterations in net charge-off levels.
The lender forecasts about a 20% rise in net interest income in 2025. However, it projected a 2% to 4% decline in average loans this year.
Some bearish chatter about the results started to emerge on KeyCorp’s stream on Stocktwits.
Major Wall Street banks, including JP Morgan & Chase, Bank of America, Citigroup, and Morgan Stanley, topped market expectations last week.
Over the past year, KEY has gained nearly 24%.
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