01—Abstract
Summary
Summary of the 10-Q filed May 5, 2026. Cited figures are marked; the original filing is the authoritative source.
KeyCorp reported net income from continuing operations attributable to Key common shareholders of $486 milliona, or diluted earnings per share of $0.44, for the first quarter of 2026.
Net interest income (TE) was $1.23 billionb with a net interest margin of 2.87%, up 29 basis points from the first quarter of 2025. Noninterest income rose to $723 million from $668 million, led by trust and investment services and investment banking fees, while noninterest expense increased to $1.18 billion from $1.13 billion. The provision for credit losses fell to $106 million from $118 million, and total assets were $188.66 billion at March 31, 2026.
Capital and balance sheet activity included $389 millionc in common share repurchases during the quarter, with the Common Equity Tier 1 ratio at 11.40% (estimated) compared with 11.78% at December 31, 2025. Total deposits declined $898 million to $147.8 billion, while wholesale funds rose to $17.1 billion from $11.0 billion, reflecting higher bank notes and short-term borrowings and new long-term debt issuance. Nonperforming assets increased $65 million to $692 million, which management attributed to two idiosyncratic exposures in the utilities and multifamily sectors.
Management reaffirmed its 2026 outlook, expecting full-year net interest income (TE) growth of 9 to 10%d and noninterest income growth of 3 to 4% versus 2025, with adjusted noninterest expense up 3 to 4%. Medium-term targets are a return on tangible common equity of 15.0% or more and a net interest margin of 3.25% or more by the end of 2027.
02—Key points
Key Highlights
- Net income from continuing operations attributable to Key common shareholders was $486 million, or $0.44 diluted EPS, for Q1 2026, compared with $370 million in Q1 2025.
- Net interest income (TE) was $1.23 billion with a net interest margin of 2.87%, up 29 basis points year-over-year, driven by lower deposit costs and a mix shift toward commercial and industrial loans.
- Noninterest income rose 8.2% to $723 million, with trust and investment services up 12.9% and investment banking and debt placement fees up 12.6%; assets under management reached $69.8 billion.
- Average loans were $107.7 billion, up $3.4 billion year-over-year, while total loans at period end were $109.2 billion, up from $106.5 billion at December 31, 2025.
- Credit quality was stable: the provision for credit losses fell to $106 million from $118 million, though nonperforming assets rose $65 million to $692 million.
- Common Equity Tier 1 ratio was an estimated 11.40% at March 31, 2026, versus 11.78% at December 31, 2025; $389 million of open market share repurchases were completed in the quarter.
- Wholesale funds rose to $17.1 billion from $11.0 billion as deposits declined $898 million to $147.8 billion, and KeyCorp issued $750 million of 5.305% fixed-to-floating senior notes due 2037.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 5, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.95B$1.77B | +10.2% |
| Operating Income | $522.00M$406.00M | +28.6% |
| Net Income | $522.00M$405.00M | +28.9% |
| EPS (Basic) | $0.45$0.34 | +32.4% |
| EPS (Diluted) | $0.44$0.33 | +33.3% |
| Shares Outstanding (Basic) | 1.08B1.10B | −1.1% |
| Shares Outstanding (Diluted) | 1.09B1.11B | −1.1% |
05—Questions
Frequently Asked Questions
How did KeyCorp's profitability change in the first quarter of 2026?
Net income from continuing operations attributable to Key common shareholders was $486 million, or $0.44 diluted EPS, compared with $370 million in the first quarter of 2025. The increase was supported by higher net interest income, which rose $125 million on a taxable-equivalent basis, and higher noninterest income, partly offset by higher noninterest expense.
What is management's outlook for 2026?
Management expects full-year 2026 revenue (TE) to be up about 7% versus 2025, net interest income (TE) up 9 to 10%, and noninterest income up 3 to 4%. Adjusted noninterest expense is expected to rise 3 to 4%, and net charge-offs are expected at 40 to 45 basis points of average loans. The company also set medium-term targets of a return on tangible common equity of 15.0% or more and a net interest margin of 3.25% or more by the end of 2027.
Is credit quality deteriorating?
Net charge-offs were $101 million, down from $110 million a year earlier, and the provision for credit losses decreased to $106 million from $118 million. Nonperforming loans rose to $682 million from $615 million at December 31, 2025, which the filing attributes to two idiosyncratic exposures in the utilities and multifamily real estate sectors rather than broader deterioration. The allowance for loan and lease losses increased to $1.449 billion, reflecting added qualitative reserves for geopolitical and energy price uncertainty.
How strong is KeyCorp's capital position?
All capital ratios exceeded regulatory requirements at March 31, 2026. The Common Equity Tier 1 ratio was an estimated 11.40%, Tier 1 risk-based capital was 13.03%, and total risk-based capital was 15.18%. Book value per common share was $16.13, and tangible book value per common share was $13.60, versus $13.77 at December 31, 2025.
What are the main funding developments this quarter?
Total deposits fell $898 million to $147.8 billion, while bank notes and other short-term borrowings increased to $6.1 billion from $1.1 billion and long-term debt rose to $10.9 billion from $9.9 billion. The filing notes that wholesale funds totaled $17.1 billion, up from $11.0 billion, and that uninsured deposits were $66.5 billion, or 45% of total deposits.
06—Continue