KeyCorp's Third-Quarter EPS Rises 24% From A Year Ago, On Record Revenue Of $2.04 Billion
The Cleveland bank also lifted its 2026 loan outlook and lowered its expected charge-off rate, according to its earnings presentation.
KeyCorp earned $537 million from continuing operations for common shareholders in the third quarter, or $0.51 per diluted share, according to an 8-K filed Tuesday. That is up 24% from $0.41 a year earlier and about 16% from $0.44 in the second quarter.
What the results show
Revenue hit a record $2.04 billion, up 8% from a year ago and 4% from the second quarter, the earnings release says. Net interest income was $1.3 billion and noninterest income was $744 million.
The net interest margin, a measure of lending profit, was 2.95%, up 20 basis points from a year earlier and 6 basis points from the second quarter. Return on tangible common equity was 15.11%, against 12.89% in the second quarter.
Investment banking and debt placement fees rose 27% from the second quarter to $214 million, which the company's slides tie to higher merger-advisory fees and syndications. Average deposits grew $3.6 billion from the second quarter, while average loans held for investment rose $1.5 billion.
Credit improved. Net charge-offs, loans written off as uncollectable, fell to $89 million from $115 million in the second quarter. Nonperforming loans dropped to $618 million from $809 million.
What changes: outlook and capital
In its earnings presentation, KeyCorp now expects 2026 average loans to rise about 5%, versus 4% to 5% before. It sees net charge-offs of 37 to 39 basis points of average loans, down from a prior 40 to 45.
It repurchased $320 million of common shares in the quarter at an average $22.57, and expects $1.3 billion of buybacks in 2026. The estimated Common Equity Tier 1 ratio was 11.1%, versus 11.2% at the end of June.
Chairman and CEO Chris Gorman said the results "reinforce our confidence in achieving and sustaining a return on tangible common equity of 15%+ by the end of 2027."
What to watch
KeyCorp targets a fourth-quarter net interest margin exit rate of about 3.00%. Its fourth-quarter 2027 targets are a margin of 3.25% or more and a return on tangible common equity of 15% or more.
The company's slides put the fourth-quarter margin exit rate at about 3.00%, against 2.95% in the third quarter.
Sources
- 8-K Filing — KEYCORP /NEW/ (KEY) — SEC EDGAR
- Exhibit a3q26earningsrelease.htm — KEYCORP /NEW/ 8-K exhibit — SEC EDGAR
- Exhibit a3q26earningspresentatio.htm — KEYCORP /NEW/ 8-K exhibit — SEC EDGAR
- Exhibit a3q26erex993.htm — KEYCORP /NEW/ 8-K exhibit — SEC EDGAR
