01—Abstract
Summary
Summary of the 10-Q filed August 4, 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 $472 milliona, or diluted earnings per share of $0.44, for the second quarter of 2026.
Net interest income (TE) was $1.26 billionb with a net interest margin of 2.89%, up 23 basis points from the second quarter of 2025, driven by lower deposit costs, reinvestment of maturing securities and swaps into higher-yielding assets, and a shift toward higher-yielding commercial and industrial loans. Noninterest income rose 2.3% to $706 million, and noninterest expense rose 5.5% to $1.2 billion, led by personnel expense, which increased 11.5%. The provision for credit losses fell to $92 million from $138 million, and net charge-offs were 42 basis points of average loans.
Total loans reached $110.4 billionc at June 30, 2026, up from $106.5 billion at December 31, 2025, led by commercial and industrial growth of 8.7%, while consumer loans declined 3.9% as low-yielding loans ran off. Nonperforming assets rose to $818 million from $627 million at year-end 2025, which the filing attributes to idiosyncratic exposures in select commercial and industrial industries and multifamily real estate. Deposits grew to $153.1 billion, and uninsured deposits were $68.8 billion, or 45% of total deposits.
The company repurchased $341 milliond of common shares in the quarter, and its CET1 ratio was an estimated 11.17% at June 30, 2026. Moody's upgraded KeyCorp's long-term issuer rating to Baa1 from Baa2 on July 15, 2026.
The filing also reports that the company raised its full-year 2026 outlook for revenue, net interest income, average loans, and average commercial loans, and that it authorized a new $3.0 billion share repurchase program in May 2026. The acquisition of Clearwater Corporate Finance LLP (Clearwater UK) closed on August 3, 2026, after being announced in April 2026.
02—Key points
Key Highlights
- Diluted EPS of $0.44 and net income from continuing operations attributable to Key common shareholders of $472 million for Q2 2026, compared with $0.35 and $387 million in Q2 2025.
- Net interest margin of 2.89% for Q2 2026, up 23 basis points year over year, with net interest income (TE) of $1.26 billion.
- Nonperforming assets rose to $818 million at June 30, 2026, from $627 million at December 31, 2025; the filing attributes the increase to idiosyncratic exposures in select C&I industries and multifamily real estate.
- Total loans grew to $110.4 billion from $106.5 billion at year-end 2025, driven by commercial and industrial loans, which rose $5.0 billion, or 8.7%.
- Noninterest expense rose 5.5% to $1.217 billion in Q2 2026, with personnel expense up 11.5%.
- CET1 ratio of 11.17% (estimated) at June 30, 2026, with the company repurchasing $341 million of common shares during the quarter and a new $3.0 billion repurchase authorization approved in May 2026.
- Full-year 2026 outlook raised for revenue (up 7-8%), net interest income (up 9-11%), and average loans (up 4-5%); Moody's upgraded KeyCorp's long-term issuer rating to Baa1 on July 15, 2026.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 4, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.96B$1.84B | +6.7% |
| Operating Income | $1.03B$829.00M | +24.2% |
| Net Income | $509.00M$425.00M | +19.8% |
| EPS (Basic) | $0.44$0.35 | +25.7% |
| EPS (Diluted) | $0.44$0.35 | +25.7% |
| Shares Outstanding (Basic) | 1.07B1.10B | −2.6% |
| Shares Outstanding (Diluted) | 1.08B1.11B | −2.5% |
05—Questions
Frequently Asked Questions
How did KeyCorp's profitability trend in the second quarter of 2026?
Net income from continuing operations attributable to Key common shareholders was $472 million, or $0.44 diluted EPS, compared with $387 million, or $0.35, in the second quarter of 2025. Net interest income rose $108 million year over year on a TE basis, and the provision for credit losses fell to $92 million from $138 million, while noninterest expense increased 5.5%.
What drove the improvement in net interest margin?
The filing attributes the 23 basis point increase in net interest margin to lower deposit costs from declining interest rates and proactive deposit beta management, reinvestment of maturing low-yielding securities and fixed-rate swaps into higher-yielding investments, and a balance sheet shift toward higher-yielding commercial and industrial loans. These benefits were partially offset by lower rates on repricing earning assets.
Is credit quality deteriorating?
Net charge-offs were 42 basis points of average loans in the second quarter, and nonperforming assets rose to $818 million from $627 million at December 31, 2025. The filing attributes the increase to idiosyncratic exposures within select commercial and industrial industries and multifamily real estate, and states that management does not view it as indicative of broader credit deterioration. The allowance for loan and lease losses was $1.445 billion at June 30, 2026.
How is the company deploying capital?
KeyCorp repurchased $341 million of common shares in the second quarter and paid a quarterly dividend of $0.205 per common share. In May 2026 the board authorized a new $3.0 billion repurchase program, replacing the prior $1.0 billion authorization. The filing states the company remained on pace to complete at least $1.3 billion of repurchases in 2026.
What did the filing say about the outlook and the Clearwater acquisition?
KeyCorp raised its full-year 2026 outlook for revenue, net interest income, average loans, and average commercial loans, citing stronger-than-expected commercial loan growth. The Clearwater Corporate Finance LLP acquisition, a UK-based middle-market investment banking advisory firm announced April 22, 2026, closed on August 3, 2026, according to the filing.
06—Continue