third quarter of 2026
Filed Oct 20, 2026KEYCORP REPORTS THIRD QUARTER 2026 NET INCOME OF $537 MILLION, OR $0.51 PER DILUTED COMMON SHARE; DILUTED EPS INCREASED 24% YEAR-OVER-YEAR
Record total revenue of $2.04 billion, expanding net interest margin, growth in commercial lending and deposits, sharply lower credit costs, and $320 million of share repurchases drove higher earnings.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, Q3 2026GAAP | $2.04B | 4.5% | 8.4% |
| Total revenue (TE), Q3 2026non-GAAP | $2.05B | 4.5% | 8.3% |
| Net interest income, Q3 2026GAAP | $1.3B | 4.0% | 9.8% |
| Net interest income (TE), Q3 2026non-GAAP | $1.31B | 4.0% | 9.6% |
| Net interest margin (TE), Q3 2026non-GAAP | 2.95% | 6 bps | 20 bps |
| Noninterest income, Q3 2026GAAP | $744M | 5.4% | 6.0% |
| Investment banking and debt placement fees, Q3 2026GAAP | $214M | 26.6% | 16.3% |
| Trust and investment services income, Q3 2026GAAP | $165M | 3.8% | 10.0% |
| Cards and payments income, Q3 2026GAAP | $93M | (1.1)% | 8.1% |
| Commercial mortgage servicing fees, Q3 2026GAAP | $53M | 8.2% | (27.4)% |
| Total noninterest expense, Q3 2026GAAP | $1.25B | 2.3% | 5.8% |
| Personnel expense, Q3 2026GAAP | $815M | 3.7% | 9.8% |
| Provision for credit losses, Q3 2026GAAP | $61M | (33.7)% | (43.0)% |
| Income from continuing operations attributable to Key common shareholders, Q3 2026GAAP | $537M | 13.8% | 18.3% |
| Net income attributable to Key common shareholders, Q3 2026GAAP | $537M | – | – |
| Diluted EPS from continuing operations attributable to Key common shareholders, Q3 2026GAAP | $0.51 | 15.9% | 24.4% |
| Diluted EPS from continuing operations attributable to Key common shareholders, adjusted, Q3 2026non-GAAP | $0.51 | – | – |
| Pre-provision net revenue from continuing operations, Q3 2026non-GAAP | $807M | – | – |
| Return on average tangible common equity from continuing operations, Q3 2026non-GAAP | 15.11% | 222 bps | 260 bps |
| Return on average total assets from continuing operations, Q3 2026GAAP | 1.21% | 13 bps | 17 bps |
| Cash efficiency ratio, Q3 2026non-GAAP | 60.6 | – | – |
| Average loans held for investment, Q3 2026other | $111.6B | 1.4% | 5.0% |
| Average commercial and industrial loans, Q3 2026other | $64.42B | 3.7% | 13.9% |
| Average consumer loans, Q3 2026other | $28.51B | (2.0)% | (7.5)% |
| Average deposits, Q3 2026other | $151.2B | 2.4% | 0.5% |
| Cost of total deposits, Q3 2026other | 1.66% | 3 bps | (31) bps |
| Net loan charge-offs, Q3 2026GAAP | $89M | (22.6)% | (21.9)% |
| Net loan charge-offs to average total loans, Q3 2026other | 0.32% | (10) bps | (10) bps |
| Nonperforming loans at period endother | $618M | (23.6)% | (6.1)% |
| Nonperforming assets at period endother | $627M | (23.3)% | (6.1)% |
| Allowance for credit lossesGAAP | $1.69B | (1.6)% | (2.4)% |
| Allowance for credit losses to period-end loansother | 1.50% | (6) bps | (14) bps |
| Common Equity Tier 1 ratioother | 11.1% | (10) bps | (70) bps |
| Total assets at period endGAAP | $193.1B | – | – |
| Total deposits at period endGAAP | $153.8B | – | – |
| Total loans at period endGAAP | $113.0B | 2.3% | 6.7% |
| Net interest income (TE), nine months ended September 30, 2026non-GAAP | $3.80B | – | – |
| Total revenue (TE), nine months ended September 30, 2026non-GAAP | $5.97B | – | – |
| Income from continuing operations attributable to Key common shareholders, nine months ended September 30, 2026GAAP | $1.50B | – | – |
| Diluted EPS from continuing operations attributable to Key common shareholders, nine months ended September 30, 2026GAAP | $1.39 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Consumer BankTaxable-equivalent net interest income increased by $45 million, or 6.0%, while noninterest income increased $13 million, primarily driven by higher trust and investment services income. | $1.05B | 3.9% | 5.9% |
| Commercial BankTaxable-equivalent net interest income increased by $62 million, or 9.0%, and noninterest income increased $24 million, primarily driven by higher investment banking and debt placement fees and service charges on deposit accounts. | $1.20B | 8.4% | 7.7% |
| OtherOther includes corporate treasury, the principal investing unit, exit portfolios, reconciling items, and the residual net impact of internal funds transfer pricing methodology. | −$198M | (28.6)% | 6.2% |
Capital returns
- Repurchased $320 million of common shares during the quarter.
- During the third quarter of 2026, Key declared a dividend of $.205 per common share.
- Shares outstanding at end of period were 1,058,176 thousand, compared to 1,072,035 thousand at June 30, 2026 and 1,112,952 thousand at September 30, 2025.
What drove it
- Net interest income benefited from lower deposit costs, proactive deposit beta management, reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher-yielding investments, balance-sheet expansion, and a shift toward higher-yielding commercial and industrial loans.
- Average deposits increased by $3.6 billion sequentially, driven primarily by demand deposits and money market deposits, as well as an increase in noninterest-bearing deposits.
- Investment banking and debt placement fees increased $45 million sequentially and $30 million year over year.
- Commercial Bank provision for credit losses decreased $60 million year over year, driven by a reserve release reflective of portfolio changes and lower net charge-offs.
- Nonperforming assets, nonperforming loans, net charge-offs, and provision for credit losses all declined from both the second quarter of 2026 and the third quarter of 2025.
Concerns
- Total noninterest expense increased $68 million year over year, predominantly due to a $73 million increase in personnel expense related to investments in people, employee benefits, and incentive compensation.
- Average consumer loans decreased $2.3 billion year over year and $586 million sequentially, reflecting continued and intentional run-off of low-yielding consumer loans.
- Commercial mortgage servicing fees declined $20 million year over year.
- Common Equity Tier 1 ratio declined to 11.1% from 11.8% at September 30, 2025 and 11.2% at June 30, 2026.
- Total deposits at period end were $153,814 million, while interest-bearing deposits increased to $125,594 million from $122,425 million at September 30, 2025.
What to watch
- The durability of net interest margin expansion after the reported 20 basis point year-over-year and 6 basis point sequential increases.
- Commercial and industrial loan growth, which drove the $7.7 billion year-over-year increase in average commercial loans.
- Whether investment banking and debt placement fees sustain their $214 million quarterly level.
- The trajectory of personnel expense and total noninterest expense following continued investments in people, technology, and incentive compensation.
- Credit trends after the decline in allowance for credit losses to 1.50% of period-end loans and the reduction in the CET1 ratio to 11.1%.
Balance sheet and cash flow
- Cash and due from banks were $1,540 million at September 30, 2026, compared to $1,711 million at June 30, 2026 and $1,938 million at September 30, 2025.
- Long-term debt was $11,473 million at September 30, 2026, compared to $10,967 million at June 30, 2026 and $10,917 million at September 30, 2025.
- Total assets were $193,102 million and Key shareholders’ equity was $17,809 million at September 30, 2026.
- No operating cash flow or free cash flow was reported.
Analysis
KeyCorp reported record Q3 2026 revenue of $2,044 million on a GAAP basis and $2,052 million on a taxable-equivalent basis. GAAP revenue rose 8.4% from the third quarter of 2025 and 4.5% from the second quarter of 2026. Net interest income increased to $1,300 million, while taxable-equivalent net interest income reached $1,308 million. Net interest margin expanded to 2.95% from 2.75% a year earlier and 2.89% in the prior quarter, supported by deposit-cost management, reinvestment into higher-yielding assets, commercial and industrial loan growth, and higher deposit balances.
Fee income also contributed to growth. Noninterest income was $744 million, up 6.0% year over year and 5.4% sequentially. Investment banking and debt placement fees were $214 million, increasing 16.3% year over year and 26.6% sequentially. Trust and investment services income increased to $165 million. The Commercial Bank generated revenue of $1,201 million, up 7.7% year over year, and its net income attributable to Key rose to $516 million from $440 million. Consumer Bank revenue increased to $1,049 million, but average loans and leases declined 7.9% year over year amid continued consumer loan runoff.
Expense growth remained elevated but trailed revenue growth. Total noninterest expense was $1,245 million, up 5.8% year over year and 2.3% sequentially. Personnel expense increased 9.8% year over year to $815 million, reflecting investments in people, employee benefits, and incentive compensation associated with noninterest income growth. Pre-provision net revenue from continuing operations was $807 million, compared with $718 million in the third quarter of 2025 and $747 million in the second quarter of 2026. The cash efficiency ratio was 60.6, compared with 61.8 a year earlier.
Credit quality improved broadly. Net loan charge-offs fell to $89 million, or 0.32% of average total loans, from $114 million, or 0.42%, a year earlier. Provision for credit losses declined to $61 million from $107 million, while nonperforming loans declined to $618 million and nonperforming assets declined to $627 million. Average loans held for investment increased to $111,585 million, led by 13.9% year-over-year growth in average commercial and industrial loans. Average deposits increased to $151,175 million, including a $3.6 billion sequential increase.
Income from continuing operations attributable to Key common shareholders was $537 million, or $0.51 per diluted common share, compared with $454 million, or $0.41 per diluted common share, in the third quarter of 2025. Return on average tangible common equity from continuing operations reached 15.11%. Key repurchased $320 million of common shares and declared a dividend of $.205 per common share. Its estimated CET1 ratio was 11.1% at September 30, 2026, down from 11.8% a year earlier and 11.2% in the preceding quarter. The release provided no quantitative forward guidance, while management reiterated confidence in achieving and sustaining a return on tangible common equity of 15%+ by the end of 2027.
Management, verbatim
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.
Chris Gorman, Chairman and CEO
We delivered record revenue and record pre-provision net revenue, while generating a return on tangible common equity exceeding 15%.
Chris Gorman, Chairman and CEO
These results reinforce our confidence in achieving and sustaining a return on tangible common equity of 15%+ by the end of 2027.
Chris Gorman, Chairman and CEO
Not in the filing
stated, not guessed- Forward quantitative guidance was not provided.
- Previous outlook was not provided, so no comparison of actual results with prior guidance is available.
- Gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- A tax rate was not reported.
- No CFO commentary was provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.