KeyCorp earns 51 cents a share on record revenue, lowers 2026 charge-off forecast

KeyCorp posted record revenue in the third quarter as lending and dealmaking fees grew and credit losses eased. The Cleveland-based bank said Tuesday net income from continuing operations attributable to common shareholders rose to $537 million, or 51 cents a diluted share, from $454 million, or 41 cents, a year earlier.

Diluted earnings per share rose 24% from a year earlier and were up from 44 cents in the second quarter, according to its earnings release filed with an 8-K.

Total revenue reached $2.04 billion, up 8% from $1.89 billion. Net interest income grew 9.8% to $1.30 billion, and the net interest margin widened 20 basis points to 2.95%.

"We delivered record revenue and record pre-provision net revenue," Chairman and CEO Chris Gorman said, adding that the results "reinforce our confidence" in reaching and sustaining a return on tangible common equity of 15% or more by the end of 2027. The bank's return on tangible common equity was 15.11% in the quarter.

Fees and credit

Noninterest income rose 6% to $744 million. Investment banking and debt placement fees climbed to $214 million, up 27% from the second quarter and 16% from a year ago.

Credit costs fell. Net loan charge-offs dropped to $89 million, or 0.32% of average loans, from $114 million, or 0.42%, a year earlier. The provision for credit losses fell to $61 million from $107 million, and nonperforming loans declined to $618 million.

Average loans rose 5% to $111.6 billion, driven by commercial and industrial lending, while average deposits increased $3.6 billion from the second quarter to $151.2 billion.

Outlook and buybacks

In its earnings presentation, KeyCorp lowered its 2026 net charge-off forecast to 37 to 39 basis points of average loans from 40 to 45 basis points. It now expects full-year net interest income to rise about 10%, versus a prior range of 9% to 11%, and average loans to grow about 5%, versus 4% to 5% before. The bank expects revenue up about 8% and a fourth-quarter net interest margin exit rate of about 3.00%.

KeyCorp repurchased $320 million of common shares in the quarter at an average price of $22.57 and said it expects to buy back $1.3 billion in 2026. It declared a quarterly dividend of 20.5 cents a share. The estimated Common Equity Tier 1 ratio was 11.1%, down from 11.8% a year earlier.

By the numbers

• Diluted EPS: $0.51, vs. $0.41
• Revenue: $2.04 billion, up 8%
• Net interest margin: 2.95%, up 20 basis points
• Net charge-off ratio: 0.32%, vs. 0.42%
• Q3 buybacks: $320 million
• 2026 buyback expectation: $1.3 billion

Sources

1. KeyCorp, Form 8-K (Item 2.02) with Exhibit 99.1 earnings release, Exhibit 99.2 earnings presentation and Exhibit 99.3 financial statements for the third quarter of 2026, filed Oct. 20, 2026, accession 0000091576-26-000020

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