CLEVELAND - KeyCorp (NYSE: NYSE:KEY) today announced its financial results for the first quarter of 2024, reporting earnings per share (EPS) of $0.20, which fell slightly short of the analyst consensus estimate of $0.22.
Despite the miss on EPS, the company's revenue for the quarter was $1.53 billion, surpassing the consensus estimate of $1.51 billion. The revenue beat, which was up 6% year-over-year (YoY), was primarily driven by strength in investment banking and debt placement fees.
The company's stock responded positively to the news, with shares rising 1.52% premarket. This modest uptick reflects investor sentiment buoyed by the revenue beat, despite the earnings miss. Chairman and CEO Chris Gorman commented on the quarter's performance, noting the best first quarter in the company's history for Investment Banking and a solid start to the year. Gorman also highlighted the company's balance sheet strength, with a Common Equity Tier 1 ratio of 10.3%, up 120 basis points YoY.
KeyCorp's net interest income for the quarter was $886 million, a decrease of 19.9% YoY, while the net interest margin contracted by 45 basis points to 2.02%. The decline was attributed to a higher interest rate environment and balance sheet optimization efforts, which led to planned reductions in loan balances. Noninterest income saw an increase of 6.4% YoY, with investment banking and debt placement fees rising $25 million due to robust commercial mortgage and debt capital markets activity.
On the expense side, noninterest expense decreased by 2.8% YoY to $1.143 billion, reflecting lower personnel expenses due to efficiency actions taken in the previous year. The first quarter also included a $29 million charge related to the FDIC special assessment.
Looking forward, KeyCorp did not provide specific financial guidance in the press release. However, the company's strong capital position and CEO Gorman's optimistic outlook suggest a focus on delivering profitable growth moving forward.
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