KEYCORP REPORTS THIRD QUARTER 2026 NET INCOME OF $537 MILLION, OR $0.51 PER DILUTED COMMON SHARE; DILUTED EPS INCREASED 24% YEAR-OVER-YEAR
EmitenTrust.com Record revenue of $2.04 billion, up 8% year-over-year and 4% sequentially
Net interest margin of 2.95%, up 20 basis points year-over-year and 6 basis points sequentially
Deposit growth outpaced loan growth - average deposits increased $3.6 billion sequentially while average loans held for investment increased $1.5 billion
Investment banking and debt placement fees up 27% sequentially
Common Equity Tier 1 ratio of 11.1%
Generated a return on tangible common equity
CLEVELAND, Oct. 20, 2026 /PRNewswire/ -- KeyCorp (NYSE: KEY) announced third quarter of 2026 net income from continuing operations attributable to Key common shareholders of $537 million, or $0.51 per diluted common share. For the second quarter of 2026, net income from continuing operations attributable to Key common shareholders was $472 million, or $0.44 per diluted common share. For the third quarter of 2025, KeyCorp reported net income from continuing operations attributable to Key common shareholders of $454 million, or $0.41 per diluted common share, or adjusted net income of $450 million, or $0.41 per diluted common share
Comments from Chairman and CEO, Chris Gorman
"Our third quarter results reflect the strength of Key's relationship-driven franchise, the disciplined execution of our strategy, and the momentum we are building across the business. We delivered record revenue and record pre-provision net revenue
Our performance this quarter demonstrates the power of our balanced business model. Average deposit balances increased $3.6 billion sequentially, supporting continued net interest margin expansion. Our capital markets team delivered strong results with investment banking and debt placement fees increasing 27% sequentially. Concurrently, we maintained our disciplined approach to risk management, evidenced by broad-based improvement in credit quality metrics, including lower net charge-offs and nonperforming assets.
Client engagement remains strong, supported by a constructive economic environment and continued confidence among the businesses and communities we serve. We continue to see opportunities to deepen client relationships, capture additional share of wallet, and drive sustainable growth across the franchise. Key is well positioned to perform across a broad range of economic scenarios, supported by our solid capital levels, strong liquidity profile, and well-diversified business mix.
The ongoing investments we have made in teammates and technology are translating into stronger performance today while concurrently positioning us for greater value in the future. Looking ahead, we remain focused on executing with discipline, capturing the significant organic growth opportunities across our franchise, and delivering significant value for all our stakeholders."
Taxable-equivalent net interest income was $1.31 billion for the third quarter of 2026 and the net interest margin was 2.95%. Compared to the third quarter of 2025, net interest income increased by $115 million, and the net interest margin increased by 20 basis points. These increases reflect a reduction in deposit costs as a result of declining interest rates and proactive deposit beta management, the reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher yielding investments, an expanding balance sheet, and a continued strategic shift towards higher-yielding commercial and industrial loans. These benefits were partially offset by the impact of lower interest rates on repricing earning assets.
Compared to the second quarter of 2026, taxable-equivalent net interest income increased by $50 million, and the net interest margin increased by 6 basis points. These increases reflect growth in commercial and industrial loans and higher deposit balances, the reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher-yielding investments, and the impact of higher interest rates on repricing earning assets. Additionally, net interest income benefited from one additional day in the third quarter of 2026 compared to the second quarter of 2026.
Compared to the third quarter of 2025, noninterest income increased by $42 million. The increase was driven by a $30 million increase in investment banking and debt placement fees, a $15 million increase in trust and investment services income, and a $7 million increase in cards and payments income. These were partially offset by a $20 million decrease in commercial mortgage servicing fees.
Compared to the second quarter of 2026, noninterest income increased by $38 million. The increase was driven by a $45 million increase in investment banking and debt placement fees, and a $6 million increase in trust and investment services income. These were partially offset by an $8 million decrease in corporate services income and a $6 million decrease in other income.
Compared to the third quarter of 2025, noninterest expense increased by $68 million. The increase was predominantly driven by a $73 million increase in personnel expense primarily related to continued investments in people, employee benefits, and incentive compensation associated with noninterest income growth. These were partially offset by a $19 million decrease in other expense, despite a $5 million benefit associated with the updated FDIC special assessment in the third quarter of 2025.
Compared to the second quarter of 2026, noninterest expense increased by $28 million. The increase was predominantly driven by a $29 million increase in personnel expense, primarily related to incentive compensation and continued investments in people. These were partially offset by a $7 million decrease in other expense.
Average loans held for investment were $111.6 billion for the third quarter of 2026, an increase of $5.4 billion compared to the third quarter of 2025. Average commercial loans increased by $7.7 billion, driven by an increase in commercial and industrial loans. Average consumer loans declined by $2.3 billion, reflecting continued run-off across all consumer loan categories.
Compared to the second quarter of 2026, average loans held for investment increased by $1.5 billion. Average commercial loans increased $2.1 billion, driven by an increase in commercial and industrial loans. Average consumer loans declined by $586 million, reflective of the intentional run-off of low-yielding loans.
Average deposits totaled $151.2 billion for the third quarter of 2026, an increase of $801 million compared to the year-ago quarter, reflecting growth in demand deposits and money market deposits, partially offset by a decline in time deposits. The rate paid on interest-bearing deposits decreased 39 basis points to 2.04%, while the overall cost of deposits declined 31 basis points to 1.66%.
Compared to the second quarter of 2026, average deposits increased by $3.6 billion. The increase was primarily driven by growth in demand deposits and money market deposits, as well as an increase in noninterest-bearing deposits. The rate paid on interest-bearing deposits increased 3 basis points, and the overall cost of deposits increased 3 basis points.
Net loan charge-offs for the third quarter of 2026 totaled $89 million, or 0.32% of average total loans. These results compare to $114 million, or 0.42%, for the third quarter of 2025, and $115 million, or 0.42%, for the second quarter of 2026.
Key's allowance for credit losses was $1.7 billion, or 1.50% of total period-end loans at September 30, 2026, compared to 1.64% at September 30, 2025, and 1.56% at June 30, 2026. Provision for credit losses were $61 million, compared to $107 million for the third quarter of 2025, and $92 million for the second quarter of 2026.
At September 30, 2026, Key's nonperforming loans totaled $618 million, which represented 0.55% of period-end portfolio loans. These results compare to 0.62% at September 30, 2025, and 0.73% at June 30, 2026. Nonperforming assets at September 30, 2026, totaled $627 million, and represented 0.55% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.63% at September 30, 2025, and 0.74% at June 30, 2026.
CAPITAL
Key's estimated risk-based capital ratios, included in the following table, continued to exceed all "well-capitalized" regulatory benchmarks at September 30, 2026.
Key's regulatory capital position remained strong in the third quarter of 2026. As shown in the preceding table, at September 30, 2026, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 11.1% and 12.3%, respectively.
During the third quarter of 2026, Key declared a dividend of $.205 per common share. Shares outstanding decreased 1.3% from the second quarter of 2026, driven by $320 million of common share repurchases.
LINE OF BUSINESS RESULTS
The following table shows the contribution made by each major business segment to Key's taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.
Consumer Bank Summary of Operations (3Q26 vs. 3Q25)
- Key's Consumer Bank recorded net income attributable to Key of $211 million for the third quarter of 2026, compared to $208 million for the year-ago quarter
- Taxable-equivalent net interest income increased by $45 million, or 6.0%
- Average loans and leases decreased $2.8 billion, or 7.9%, reflective of the continued run-off across all consumer loan categories
- Average deposits decreased $351 million, or 0.4%, driven by lower time deposits, partially offset by an increase in money market deposits
- Provision for credit losses increased $15 million, primarily reflecting a reserve build as a result of economic conditions
- Noninterest income increased $13 million, primarily driven by higher trust and investment services income
- Noninterest expense increased $39 million, primarily driven by an increase in personnel expense
Commercial Bank Summary of Operations (3Q26 vs. 3Q25)
- Key's Commercial Bank recorded net income attributable to Key of $516 million for the third quarter of 2026, compared to $440 million from the year-ago quarter
- Taxable-equivalent net interest income increased by $62 million, or 9.0%
- Average loan and lease balances increased $8.2 billion, or 11.7%, driven by an increase in commercial and industrial loans
- Average deposit balances increased $2.2 billion, reflecting higher client deposit balances
- Provision for credit losses decreased $60 million, driven by a reserve release reflective of portfolio changes and lower net charge-offs
- Noninterest income increased $24 million, primarily driven by higher investment banking and debt placement fees, and service charges on deposit accounts
- Noninterest expense increased $43 million, driven by an increase in personnel expense
KeyCorp's roots trace back more than 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $193 billion at September 30, 2026.
Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 950 branches and approximately 1,100 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank Member FDIC.
A live Internet broadcast of KeyCorp's conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts' questions can be accessed through the Investor Relations section at https://www.key.com/ir at 8:00 a.m. ET, on October 20, 2026. A replay of the call will be available on our website through October 20, 2027.
For up-to-date company information, media contacts, and facts and figures about Key's lines of business, visit our Media Newsroom at https://www.key.com/newsroom.
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KeyCorp
Third Quarter 2026
Financial Supplement
Basis of Presentation
Use of Non-GAAP Financial Measures
This document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Key's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, the financial supplement, or conference call slides related to this document, all of which can be found on Key's website (www.key.com/ir).
Forward-Looking Non-GAAP Financial Measures
From time to time Key may discuss forward-looking non-GAAP financial measures. Key is unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because Key is unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant for future results.
Annualized Data
Certain returns, yields, performance ratios, or quarterly growth rates are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts.
Taxable Equivalent
The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at the federal statutory rate. This adjustment puts all earning assets, most notably tax-exempt loans, and certain lease assets, on a common basis that facilitates comparison of results to peers.
Earnings Per Share Equivalent
Certain income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total consolidated earnings per share performance excluding the impact of such items. When the impact of certain income or expense items is disclosed separately, the after-tax amount is computed using the marginal tax rate, unless otherwise specified, with this then being the amount used to calculate the earnings per share equivalent.
GAAP to Non-GAAP Reconciliations
(Dollars in millions)
The table below presents certain non-GAAP financial measures defined and described below.
The tangible common equity ratio and the return on average tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key's capital position without regard to the effects of intangible assets and preferred stock. Adjusted return on average tangible common equity excludes significant or unusual items that management does not consider indicative of ongoing financial performance. Management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods.
The table also shows the computation for pre-provision net revenue and adjusted pre-provision net revenue, which are not formally defined by GAAP. Management believes that eliminating the effects of the provision for credit losses makes it easier to analyze the results by presenting them on a more comparable basis. Further, management believes that adjusting pre-provision net revenue for significant or unusual items that management does not consider indicative of ongoing financial performance provides a greater understanding of ongoing operations and enhances comparability of results with prior periods.
The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash efficiency ratio performance measure removes the impact of Key's intangible asset amortization from the calculation. Management believes this ratio provides greater consistency and comparability between Key's results and those of its peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis. The adjusted cash efficiency ratio excludes significant or unusual items that management does not consider indicative of ongoing financial performance
Adjusted taxable-equivalent revenue or adjusted revenue is a non-GAAP measure in that it adjusts revenue for certain tax-exempt instruments and selected items. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest income, we use interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable instruments. Additionally, management believes adjusting for the selected items provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of the financial impacts related to those selected items.
Adjusted noninterest income and adjusted noninterest expense are non-GAAP measures in that they exclude significant or unusual items that management does not consider indicative of ongoing financial performance. Management believes these measures provide a greater understanding of ongoing operations and enhances comparability of results with prior periods.
Adjusted income (loss) available from continuing operations attributable to Key common shareholders (or "adjusted net income") and diluted earnings per share - adjusted (or "adjusted earnings per share") are non-GAAP in that these measures exclude significant or unusual items, net of tax, that management does not consider indicative of ongoing financial performance . Management believes these measures provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods.
Marked CET1 ratio is a non-GAAP measure and is calculated based on Common Equity Tier 1 capital, inclusive of the AOCI impact from securities and pension. The marked CET1 ratio differs from the defined CET1 regulatory capital ratio by including the impact of AFS and pension accumulated other comprehensive income (loss) (AOCI) amounts in the calculation of the capital ratio. These ratios are not defined in GAAP or federal banking regulations. As a result, these non-regulatory capital ratios disclosed may be considered non-GAAP financial measures. Management believes this measure provides useful information in light of the potential for change in the regulatory capital framework.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
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