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KeyCorp (NYSE:KEY) stock slid as much as 3.7% in Thursday premarket trading after its Q4 earnings fell short of the average Wall Street estimate and dropped Q/Q and Y/Y, highlighting a climb in the cost of deposits and a larger-than-expected build in its allowance for credit losses.
Q4 EPS of $0.38, missing the $0.54 average analyst estimate, fell from $0.55 in Q3 and from $0.65 in the year-ago quarter. Total revenue of $1.90B, trailing the $1.93B consensus, increased slightly from $1.89B in Q3 and fell from $1.95B in Q4 2021.
Net interest income (taxable equivalent) climbed to $1.23B, falling short of the $1.26B Visible Alpha consensus, from $1.20B in the prior quarter and from $1.04B a year earlier, driven by higher earning asset balances and higher interest rates, offset by higher interest-bearing deposit costs and lower loan fees from the Paycheck Protection Program.
Net interest margin (taxable equivalent) of 2.73% edged down from 2.74% in Q3 and rose from 2.44% in Q4 2021.
Total noninterest income came in at $671M, down from $683M in Q3 and from $909M in Q4 2021. Total noninterest expense of $1.16B vs. $1.11B in Q3 and $1.12B a year ago.
Provision for credit losses was $265M, compared with the $124.5M Visible Alpha consensus, jumped from $109M in Q3 and from $4M in Q4 2021.
Average loans were $117.7B, up 2.9% from Q3 and +18.4% from Q4 2021. Average deposits of $145.67B gained 1.0% from Q3 and slid 3.5% from Q4 2021. The cost of deposits accelerated to 0.51% from 0.16% in Q3 and from 0.04% a year before.
Conference call at 10:00 a.m. ET.
Earlier, KeyCorp GAAP EPS of $0.38 misses by $0.16, revenue of $1.89B misses by $40M.
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