Lowering Our Fair Value Estimate for KeyCorp to $24 From $26 on Lower Fee Growth

KeyCorp was hurt during the financial crisis largely because of its ventures into higher-risk commercial real estate lending in out-of-footprint states. Since the crisis, KeyCorp has wound down most of its construction-related commercial real estate business and refocused on its core corporate banking operations and capital markets services. With increasing credit quality and declining credit-related costs, along with significant operational improvements, KeyCorp has returned to healthy profitability. The bank's First Niagara acquisition back in 2016 has also helped improve the bank's operating efficiency and scale.