Start Time: 10:00 January 1, 0000 11:03 AM ET
KeyCorp (NYSE:KEY)
Q3 2023 Earnings Conference Call
October 19, 2023, 10:00 AM ET
Company Participants
Chris Gorman - Chairman and CEO
Clark Khayat - CFO
Conference Call Participants
Scott Siefers - Piper Sandler
Erika Najarian - UBS
Peter Winter - D.A. Davidson
Ken Usdin - Jefferies
Gerard Cassidy - RBC
John Pancari - Evercore
Manan Gosalia - Morgan Stanley
Matt O’Connor - Deutsche Bank
Ebrahim Poonawala - Bank of America
Bill Carcache - Wolfe Research
Steven Alexopoulos - JPMorgan
Operator
Good morning, and welcome to KeyCorp's Third Quarter Earnings Conference Call. As a reminder, this conference is being recorded.
I would now like to turn the conference over to the Chairman and CEO, Chris Gorman. Please go ahead.
Chris Gorman
Thank you for joining us for KeyCorp's third quarter 2023 earnings conference call. Joining me on the call today are Clark Khayat, our Chief Financial Officer; and Mark Midkiff, our Chief Risk Officer.
On Slide 2, you will find our statement on forward-looking disclosure and certain financial measures, including non-GAAP measures. These statements cover our presentation materials and comments as well as the question-and-answer segment of our call.
I am now moving to Slide 3. This morning, we reported earnings of $266 million or $0.29 per share. Our results reflect broad-based growth across our franchise supported by our strong balance sheet and disciplined risk management.
We continue to benefit from our focus on relationship banking and primacy, namely having our client’s primary operating account. We continue to add and deepen relationships in both our consumer and commercial businesses as well as improved both the quality and diversity of our deposits.
Average deposits increased relative to the prior quarter and the year-ago period. Our focus on relationship continues to guide our balance sheet optimization efforts. This quarter, we reduced average loans by over $3 billion as we deemphasized credit only and other non-relationship business.
Importantly, our common equity Tier 1 ratio increased by 50 basis points to 9.8% as a result of our proactive balance sheet management. Risk weighted assets decreased by $7 billion in the third quarter and $9 billion from the beginning of the year, which is approaching our 2023 full year target of $10 billion.
The increase in our common equity Tier 1 ratio this quarter moves us above our current targeted capital range of 9% to 9.5% where we would expect to remain for the foreseeable future. Other capital ratios were relatively stable this quarter, including our tangible common equity ratio, which was down 10 basis points, despite the impact of higher interest rates.