KeyCorp's third-quarter income from continuing operations available to common shareholders rose 18% to $537 million, supported by higher net interest income as the Cleveland-based financial services company paid less for deposits.
The comparable figure was $454 million a year earlier, KeyCorp said in results furnished with an Oct. 20 SEC filing. Diluted earnings per share increased to $0.51 from $0.41, and revenue grew to $2.044 billion from $1.886 billion.
Net interest income rose $116 million to $1.300 billion from $1.184 billion. Gross interest income, by comparison, increased just $2 million to $2.133 billion. KeyCorp attributed the net interest gain in part to lower deposit costs, reinvestment at higher yields and a shift toward commercial and industrial loans.
Average deposits climbed $3.6 billion from the second quarter to $151.2 billion. Their overall cost was 1.66%, down from 1.97% a year earlier but up from 1.63% in the previous quarter.
KeyCorp's provision for credit losses fell to $61 million from $107 million a year earlier. Net loan charge-offs declined to $89 million from $114 million, while noninterest expenses increased to $1.245 billion from $1.177 billion, led by higher personnel costs.
The company estimated its Common Equity Tier 1 capital ratio at 11.1% as of Sept. 30, down from 11.8% a year earlier. It repurchased $320 million of common shares during the quarter.
KeyCorp Chairman and CEO Chris Gorman said the results gave him greater confidence in the company's goal of reaching a return on tangible common equity of at least 15% by the end of 2027 and maintaining that level.
