Overview

• U.S. regional bank's Q2 revenue rose 7% yr/yr, net income up 22%

• Adjusted EPS for Q2 increased to $0.44 from $0.35 a year ago

• Company repurchased $341 mln of common shares in Q2

Outlook

• KeyCorp aims to generate return on tangible common equity exceeding 15% by year-end 2027

Result Drivers

• NET INTEREST INCOME - Growth driven by lower deposit costs, reinvestment into higher-yielding assets, and a shift toward more commercial and industrial loans

• NONINTEREST INCOME MIX - Modest year-over-year growth led by trust and investment services, partly offset by lower commercial mortgage servicing fees

• HIGHER EXPENSES - Personnel expense rose due to incentive compensation and continued investments in staff

Company press release: ID:nPn9vMLxWa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Net Interest Income		$1.26 bln
Q2 CET1 Capital Ratio		11.20%
Q2 Net Income continuing operations		$472 mln
Q2 Net Interest Margin		2.89%

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 11 "strong buy" or "buy", 9 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for KeyCorp is $25.00, about 7.2% above its July 20 closing price of $23.32

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• July 20 - Zions Bancorp Q2 adjusted EPS misses estimates as one-time gains lift net profit

• July 20 - Wintrust Q2 net interest income rises on growth in average earning assets

• July 20 - ServisFirst Bancshares Q2 EPS rises 40% on loan growth, higher net interest margin

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