Key Financial Results and Metrics

1Strategic Updates and Business Highlights

Loan Portfolio:: Shifted from low-yielding consumer mortgages to higher-yielding commercial and industrial (C&I) loans, with C&I loans growing by 8% year-over-year.

Deposit Growth:: Total deposits increased by 2%, with a notable rise in commercial deposits, while consumer deposits remained stable.

Wealth Management:: Assets under management reached a record $68 billion, with strong growth in the mass affluent segment.

Investment Banking:: Strong performance with $184 million in fees, up 8% year-over-year, and a robust pipeline for M&A activity.

Hiring Initiatives:: Continued investment in frontline staff, with a target of a 10% increase in headcount this year.

2Forward Guidance and Outlook

Full-Year NII Growth:: Expected to be at the high end of the 20-22% range, with fourth-quarter exit rate NII growth anticipated at 13% or more compared to 2024.

Fee Growth:: Projected to grow between 5-6% in the fourth quarter, contingent on favorable market conditions.

Medium-Term Targets:: Aiming for a return on tangible common equity (RoTCE) of 15% or better by 2027, with a focus on improving NIM to 3.25% or higher.

3Bad News, Challenges, or Points of Concern

Credit Quality:: While metrics are stable, there is ongoing scrutiny regarding exposure to non-depository financial institutions (NDFIs) and potential risks associated with warehouse lending.

Market Competition:: Concerns about competitive pressures in deposit pricing and the impact on net interest income.

M&A Activity:: The bank remains cautious about pursuing significant acquisitions due to high tangible book value dilution risks and a focus on organic growth.

4Notable Q&A Insights

M&A Strategy:: Management emphasized a high bar for any potential bank acquisitions, focusing on strategic fit and cultural compatibility, with a preference for organic growth.

Capital Management:: Plans to repurchase approximately $100 million of common stock in Q4, with discussions around future buybacks contingent on achieving financial targets.

Investment Banking Outlook:: Management noted a potential uptick in middle-market M&A activity, which could enhance revenue streams in the coming quarters.

Regulatory Environment:: Positive changes in regulatory interactions were highlighted, with a shift towards a focus on safety and soundness rather than procedural compliance. This summary encapsulates KeyCorp's Q3 2025 earnings call, highlighting key financial metrics, strategic initiatives, forward guidance, and areas of concern, along with insights from the Q&A session.