Keycorp
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.91%.
Did KEY Beat Earnings? Q2 2026 Results
KeyCorp posted a stronger-than-expected second quarter in 2026, with earnings per share of $0.44 beating the $0.42 analyst consensus by 4.41%, extending the regional bank's streak of topping EPS estimates to four consecutive quarters. Net income from continuing operations attributable to common shareholders reached $472 million, up 26% year-over-year, even as total revenue of $1.96 billion came in just shy of the $1.97 billion consensus, a modest miss of 0.39%, and reflected a 29.8% decline from the prior year period. The primary engine behind the earnings strength was net interest income, which climbed 9% year-over-year to $1.26 billion on a taxable-equivalent basis, as falling deposit costs and the reinvestment of maturing low-yielding securities into higher-yielding assets pushed the net interest margin up 23 basis points to 2.89%. Looking ahead, management raised its full-year revenue growth outlook to 7-8% and lifted commercial loan growth guidance to 8-10%, with a fourth-quarter net interest margin target of 3.00-3.05% and a return on tangible common equity exceeding 15% by year-end 2027.
- Reduction in deposit costs from declining interest rates and proactive deposit beta management
- Reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher yielding investments
- Shift in balance sheet composition toward higher-yielding commercial and industrial loans
- Strong commercial and industrial loan growth of 11.7% year-over-year
- Double-digit year-over-year growth in commercial payments fee income
- Assets under management grew to $74 billion, up 15.5% year-over-year
- Approximately 130 basis points of positive operating leverage year-over-year
- Cumulative down interest-bearing deposit beta of approximately 56%
- 91% of commercial loans made to clients who do additional business with Key
- 3% relationship household growth year-over-year
“Our second quarter results reflect the strength of our franchise, disciplined execution, and sustained momentum across our businesses. We delivered 7% revenue growth and generated approximately 130 basis points of operating leverage on a year-over-year basis. We expanded net interest margin and grew net interest income both sequentially and year-over-year.”
KeyCorp CEO, on the earnings call
Forward Guidance & Outlook
KeyCorp raised its full-year 2026 revenue growth outlook to 7–8% (from approximately 7%), with net interest income expected to grow 9–11% (up from 9–10%) and a 4Q NIM exit rate of 3.00–3.05%. Average earning assets are expected to grow $1–2 billion from Q2 2026. Average loan growth was raised to 4–5% (from 2–4%), with commercial loan growth upgraded to 8–10% (from 6–8%). Noninterest income is expected to grow 3–4%, or 5–6% on an adjusted basis. Adjusted noninterest expense growth is targeted at 3–4%. Net charge-offs are projected at 40–45 basis points. The company expects to repurchase at least $1.3 billion in common shares in 2026 ($341 million already completed in Q2). Long-term ROTCE targets are 16–19%, with marked CET1 of 9.5–10%. The 4Q27 target is NIM of 3.25%+ and ROTCE exceeding 15%. CEO Chris Gorman expressed confidence in achieving a return on tangible common equity exceeding 15% by year-end 2027.
KEY YoY Financials
KEY Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.