KeyCorp (KEY) shares tumbled around 5% in pre-market trading on Tuesday, following the regional bank's fourth-quarter 2024 earnings report that showed a net loss due to charges from repositioning its securities portfolio. However, the company's adjusted earnings actually increased year-over-year.

The Cleveland-based financial services firm reported a net loss of $244 million, or 28 cents per share, compared to a profit of $65 million in Q4 2023. Total revenue declined to $865 million from $1.54 billion a year ago. These results were significantly impacted by a $657 million charge related to the sale of low-yielding investment securities and reinvestment of the proceeds into higher-yielding securities.

Excluding this one-time charge, KeyCorp's adjusted earnings per share came in at $0.38, surpassing analysts' expectations of $0.33. The company's Common Equity Tier 1 capital ratio, a key measure of financial strength, increased by 120 basis points to 12% from the previous quarter, reflecting a stronger capital position.

While KeyCorp reiterated its forecast for a 20% increase in interest income for 2025 compared to 2024 levels, this outlook fell short of Wall Street expectations. Analysts had projected a 22% jump in the bank's interest income for the current year. This disappointing guidance, along with the impact of the portfolio restructuring charges, likely contributed to the stock's pre-market decline.