KeyCorp (NYSE:KEY) Q3 2024 Earnings Conference Call October 17, 2024 9:00 AM ET

Company Participants

Brian Mauney - Director, IR
Christopher Gorman - Chairman and CEO
Clark H. I. Khayat - CFO

Conference Call Participants

Scott Siefers - Piper Sandler
Mike Mayo - Wells Fargo
Gerard Cassidy - RBC
John Pancari - Evercore
Nathan Stein - Deutsche Bank
Zach Westerlind - UBS
Manan Gosalia - Morgan Stanley
Peter Winter - D.A. Davidson

Operator

Thank you, everyone for standing by. Welcome to the 2024 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to Brian Mauney, KeyCorp Director of Investor Relations. Please go ahead.

Brian Mauney

Thank you, operator, and good morning, everyone. I'd like to thank you for joining KeyCorp's third quarter 2024 earnings conference call. I'm here with Chris Gorman, our Chairman and Chief Executive Officer; and Clark Khayat, our Chief Financial Officer.

As usual, we will reference our earnings presentation slides, which can be found on the Investor Relations section of the key.com website. In the back of the presentation, you will find our statement on forward-looking disclosures and certain financial measures, including non-GAAP measures. This covers our earnings materials as well as remarks made on this morning's call. Actual results may differ materially from forward-looking statements, and those statements speak only as of today, October 17, 2024 and will not be updated.

With that, I will turn it over to Chris.

Christopher Gorman

Thank you, Brian, and good morning, everyone.

I'm on Slide 2. Before I hand it over to Clark to review our financial results, I want to provide my perspective on a quarter that represented significant progress for Key as we position ourselves for the future.

First, we received the initial $821 million, a little less than one-third of the anticipated minority investment from Scotiabank at the end of August. We used approximately $700 million of the proceeds to reposition our securities portfolio. In retrospect, this trade was fortuitously timed. Long-dated securities were sold near recent bond market highs in mid-September, which enabled us to sell over $7 billion of market value securities out of a total available-for-sale portfolio of $37 billion.

At this point, we have fully invested the proceeds at better-than-anticipated yields. In more liquid, less capital-intensive, shorter-duration agency, CMBS. We anticipate these actions will add over $40 million to quarterly net interest income in the fourth quarter. As for the remainder of the $2.8 billion Scotiabank minority investment, we are now through the public comment period and we continue to expect to receive regulatory approval by the first quarter of 2025.