01—Abstract
Summary
Summary of the 8-K filed July 21, 2026. Cited figures are marked; the original filing is the authoritative source.
KeyCorp reported second quarter 2026 net income from continuing operations attributable to Key common shareholders of $472 milliona, or $0.44 per diluted common share, compared with $486 million, or $0.44, in the first quarter of 2026 and $387 million, or $0.35, in the second quarter of 2025.
Total revenue (taxable-equivalent) was $1.96 billionb, up 6.7% year-over-year and 0.6% sequentially. Net interest income (TE) rose to $1.26 billion, with net interest margin of 2.89%, up 2 basis points sequentially and 23 basis points year-over-year. Noninterest expense was $1.22 billion, up 5.5% year-over-year, and the cash efficiency ratio was 61.9%.
Return on average tangible common equity from continuing operations was 12.89%. Asset quality showed net loan charge-offs of $115 millionc, or 0.42% of average total loans, up from 0.38% in the first quarter. Nonperforming loans rose to $809 million, or 0.73% of period-end portfolio loans, from $682 million in the first quarter.
The allowance for credit losses was 1.56% of period-end loans, and the company recorded a $23 milliond reserve release during the quarter. Key's Common Equity Tier 1 ratio was an estimated 11.2% at June 30, 2026, and the company repurchased $341 million of common shares during the quarter. Management reiterated a target of return on tangible common equity exceeding 15% by year-end 2027 and highlighted growth in investment banking, commercial payments, and wealth management, with assets under management at a record $74.2 billion.
The supplemental materials state that the company expects to repurchase at least $1.3 billion of shares in 2026, and the Board authorized $3 billion of common share repurchases. Updated 2026 outlook calls for revenue growth of 7% to 8% on an operating basis and average loan growth of 4% to 5%.
02—Key points
Key Highlights
- Net income from continuing operations to common shareholders of $472 million, or $0.44 per diluted share, flat sequentially and up 26% year-over-year in per-share terms.
- Net interest margin (TE) of 2.89%, up 2 basis points sequentially and 23 basis points year-over-year; net interest income (TE) of $1.26 billion, up 9.4% year-over-year.
- Noninterest income of $706 million, down 2.4% sequentially and up 2.3% year-over-year; investment banking and debt placement fees fell to $169 million from $197 million in the first quarter.
- Net loan charge-offs of 0.42% of average total loans, up from 0.38% in the first quarter; nonperforming loans rose to $809 million from $682 million.
- Allowance for credit losses at 1.56% of period-end loans, down from 1.60% in the first quarter, with a $23 million reserve release.
- Common Equity Tier 1 ratio of an estimated 11.2% at June 30, 2026; marked CET1 ratio (non-GAAP) of 9.8%.
- Repurchased $341 million of common shares in the quarter; the company expects at least $1.3 billion of repurchases in 2026 and the Board authorized $3 billion of repurchases.
03—Questions
Frequently Asked Questions
How did KeyCorp's second quarter 2026 earnings compare with prior periods?
Net income from continuing operations attributable to Key common shareholders was $472 million, or $0.44 per diluted share, compared with $486 million, or $0.44, in the first quarter of 2026 and $387 million, or $0.35, in the second quarter of 2025. Total taxable-equivalent revenue was $1.96 billion, up 0.6% sequentially and 6.7% year-over-year.
What drove the change in net interest income?
Taxable-equivalent net interest income rose to $1.26 billion, up $28 million sequentially and $108 million year-over-year. The filing attributes the increase to lower deposit costs from declining interest rates, reinvestment of maturing low-yielding securities and fixed-rate swaps into higher-yielding investments, and a shift toward higher-yielding commercial and industrial loans.
Is credit quality deteriorating?
Net loan charge-offs rose to $115 million, or 0.42% of average total loans, from 0.38% in the first quarter. Nonperforming loans increased to $809 million, or 0.73% of period-end portfolio loans, from $682 million, and loans placed on nonaccrual status were $365 million for the quarter. The provision for credit losses fell to $92 million from $106 million, and the company recorded a $23 million reserve release.
What are management's capital return plans?
KeyCorp repurchased $341 million of common shares at an average price of $21.95 per share in the second quarter. The company expects to repurchase at least $1.3 billion in 2026, and the Board authorized $3 billion of common share repurchases. The estimated CET1 ratio was 11.2% at June 30, 2026.
What is the company's updated 2026 outlook?
Management projects 2026 revenue growth of 7% to 8% on an operating basis, net interest income growth of 9% to 11%, and average loan growth of 4% to 5%. The outlook also calls for a return on tangible common equity of 16% to 19%, and management reiterated a return on tangible common equity exceeding 15% by year-end 2027.
04—Continue