Should You Worry About KeyCorp's Earnings Announcement?

The KeyCorp (NYSE: KEY  ) earnings announcement is right around the corner, and investors are facing a big question: Will CEO Beth E. Mooney and crew deliver good news? Or should investors be fretting the upcoming release?

Fear not, Fool!
If the third quarter was any indication, KeyCorp investors should expect to see some strong results for the fourth quarter. Nonperforming assets were on a downward slide, and KeyCorp was among the leaders in increased mortgage lending during 2012, a combination that can boost results. Should we see similar improvement in both metrics during the fourth quarter, KeyCorp could be poised to jump after releasing earnings.

The third quarter also saw a sizable increase in net interest margin at the bank, rising 17 basis points  from the second to the third quarter to 3.23%. Though another such increase should not be expected, any increase would be cause for celebration among investors. However, the bank has also been showing robust growth in its noninterest income over the past year, and noninterest income is on the verge  of contributing as much to Key's top line as net interest income.

Finally, third quarter results were directly affected by $8 million in costs associated with the acquisition of branches during the quarter. Now that those one-time costs are behind the bank, it should be looking to convert those new branches into a larger deposit base and income generation, which will only help to increase bottom-line results. While investors should be mindful of the results KeyCorp is set to release, I personally don't think there is much to worry about. I guess we will know for sure on Thursday morning.

The road to post-crisis recovery hasn't been as fast for all regional banks as it has for KeyCorp. Regions Financial is showing signs of life in the wake of the lumps it took during the downturn, but does that mean that its stock is a buy today? To help you figure that out, I invite you to read our premium research report on the company today. Click here now for instant access!


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