KeyCorp posts record revenue of $2.044 billion in third quarter
Key Facts
KeyCorp reported record revenue of $2.044 billion in the third quarter of 2026, according to its disclosure issued on October 20 and filed with the U.S. Securities and Exchange Commission. Revenue rose 8.4% from the third quarter of last year. On a quarterly basis, revenue increased 4.5% from the second quarter, driven by growth in interest income and investment banking and debt placement fees. Total net income attributable to KeyCorp was $579 million, compared with $489 million a year earlier. The increase in earnings also coincided with lower provisions for credit losses, despite higher noninterest expenses.
Income from continuing operations attributable to common shareholders totaled $537 million, according to the bank's official disclosure. That income rose 18.3% year on year and 13.8% from the previous quarter. Diluted earnings per share from continuing operations reached $0.51, compared with $0.41 in the third quarter of 2025. Investment banking and debt placement fees totaled $214 million during the quarter. That compared with fees of $169 million in the second quarter of 2026 and $184 million in the third quarter of last year, marking increases on both a quarterly and annual basis.
In its interest-related business, net interest income rose to $1,300 million, an annual increase of 9.8%, according to the bank. Net interest margin, calculated on a tax-equivalent basis, improved to 2.95%. The margin was 2.89% in the second quarter of 2026 and 2.75% in the third quarter of 2025. The bank attributed the annual improvement in interest income to lower deposit costs, the reinvestment of proceeds from maturities at higher yields, and growth in commercial and industrial loans. It said in the disclosure that factors behind the improvement included "lower deposit costs resulting from declining interest rates and proactive management of the responsiveness of deposit pricing to changes in those rates." The business thus combined higher interest income with a wider margin compared with both comparison periods.
In funding and lending, KeyCorp's average deposits totaled $151,175 million during the third quarter, according to the disclosure. That compared with average deposits of $147,577 million in the second quarter of the same year. Average loans totaled $111,585 million during the third quarter. The cost of total deposits declined year on year to 1.66%, compared with 1.97% a year earlier. However, it rose from 1.63% in the second quarter, coinciding with an increase in average deposits during the period.
On credit quality, provisions for credit losses fell to $61 million, compared with $92 million in the previous quarter and $107 million a year earlier. The ratio of net loan charge-offs to average total loans declined to 0.32%, compared with 0.42% in both the second quarter of 2026 and the third quarter of 2025. Noninterest expenses, meanwhile, rose to $1,245 million, compared with $1,177 million in the corresponding quarter of last year. On capital, the estimated common equity tier 1 ratio was 11.1% at the end of September 2026. That compared with 11.8% at the end of September of the previous year, according to the official disclosure. The bank repurchased $320 million of common shares during the third quarter.
In premarket trading on the day the results were announced, KeyCorp shares rose 3.19% to $20.56, according to Investing's coverage. Regarding future profitability targets, Chief Executive Chris Gorman reaffirmed his confidence in reaching the targeted return on tangible common equity. He said in the disclosure that he had "confidence in achieving and sustaining a return on tangible common equity of 15% or more by the end of 2027." The bank also maintained its target of further increasing its net interest margin, according to Investing's coverage of the earnings presentation. KeyCorp aims for the margin to reach 3.25% or more in the fourth quarter of 2027.