- Company name
- KeyCorp
- Sector
- Regional bank
- About
- KeyCorp is a US regional bank holding company based in Cleveland, Ohio, and the parent of KeyBank. At June 30, 2026, it had $191 billion in assets, $110 billion in loans and $153 billion in deposits. Its Consumer Bank serves people and small businesses through branches from Maine to Alaska, and it offers wealth management with a record $74 billion of assets under management. Its Commercial Bank lends to middle-market and large companies, and its investment bank, KeyBanc Capital Markets, earns advisory, debt placement and syndication fees. It also has a large commercial payments business and services commercial mortgage loans for other lenders. Net interest income was about 64% of revenue in Q2 2026.
- Thesis
- The market prices KeyCorp for a net interest margin that is still low for a bank of its size and for doubt that its returns can reach its targets. Its margin was 2.95% in Q3 2026, against a long-term target of 3.25% or more. Its return on tangible common equity was 15.1% in Q3 2026, and KeyCorp must show that it can keep a return of 15% or more through 2027. Part of the gap comes from low-yield securities and fixed-rate swaps, so the margin rises only as they mature and KeyCorp reinvests the money at higher rates. In 2027, $10.7 billion of swaps and $19.9 billion of low-yield fixed-rate assets mature. The market also watches credit, but nonperforming assets fell to 0.55% of loans at September 30, 2026, from 0.73% three months earlier. For the gap to close, three things must be true. The margin must reach the exit rate of about 3.00% that KeyCorp guides for Q4 2026 and keep rising in 2027. Commercial loans and fee income from investment banking, payments and wealth management must keep growing. Net charge-offs must stay low, near the 0.37% to 0.39% guidance for 2026, so that buybacks continue. The Q4 report on January 20, 2027, with the 2027 outlook, shows whether the margin reaches 3.00% and whether the return holds. If it does, the gap can close over the next three to five quarters. The main reason it may not close is a margin that stalls below 3.00% because of high deposit costs or lower interest rates on new loans.
- Risks
- KeyCorp's returns depend on a higher net interest margin. If deposit costs rise or rates on new loans and securities fall, the margin can stay below the exit rate of about 3.00% for 2026 and the return of 15% or more can slip in 2027.
Nonperforming loans fell to $618 million at September 30, 2026, from $809 million three months earlier, but they were $682 million at March 31, 2026. Commercial real estate and large commercial loans can bring higher losses in a weaker economy.
KeyCorp estimates its loss in accumulated other comprehensive income from securities and pensions at $3.2 billion at September 30, 2026. With this loss, its CET1 ratio is 9.0%, against 11.1% as reported. Higher long-term interest rates can raise this loss and lower tangible capital.
Investment banking and commercial mortgage servicing fees change with the markets. Investment banking fees fell 14% from Q1 2026 to Q2 2026, and commercial mortgage servicing fees fell 30% from a year earlier.
- Balance sheet
- KeyCorp funds itself mostly with deposits. At September 30, 2026, total assets were $193.1 billion and deposits were $153.8 billion. Average deposits in Q3 2026 were $151.2 billion, up $3.6 billion from Q2 2026. Other funding was $5.2 billion of bank notes and other short-term borrowings and $11.5 billion of long-term debt. Cash and due from banks was $1.5 billion and short-term investments were $13.0 billion. Loans were $113.0 billion, and the allowance for credit losses was 1.50% of loans. Capital is the real limit. Key shareholders' equity was $17.8 billion, including $2.0 billion of preferred stock, after KeyCorp redeemed $525 million of Series D preferred stock on September 15, 2026. The estimated CET1 ratio was 11.1%. With the $3.2 billion estimated loss on securities and pensions, the CET1 ratio was 9.0%. KeyCorp bought back $320 million of common shares in Q3 2026 and plans $1.3 billion of buybacks for all of 2026.
As of 2026-09-30.
- Checkpoints
- Oct 20, 2026: Q3 2026 earnings: margin on track to 3.00%. Passed. Watch: A net interest margin above 2.89% with the 3.00% to 3.05% exit rate kept and net charge-offs within 0.40% to 0.45% pass; a flat margin or a lower exit rate fails. Outcome: The Q3 2026 margin rose to 2.95% and net charge-offs fell to 0.32%, and KeyCorp kept an exit margin of about 3.00%, the low end of its earlier range.
Jan 20, 2027: Q4 2026 results and the 2027 outlook. Pending. Watch: A Q4 2026 margin of 3.00% or more and a 2027 outlook that keeps a return of more than 15% by Q4 2027 pass; a margin below 3.00% or a later return target fails.
- Recent events
- 2026-10-20: KeyCorp reported Q3 2026 results. EPS was $0.51, up from $0.41 a year earlier, and revenue rose 8% to a record $2.04 billion. The net interest margin rose to 2.95%, from 2.89% in Q2 2026. Net charge-offs fell to 0.32% of loans, and nonperforming assets fell to $627 million. The CET1 ratio was 11.1%, and KeyCorp bought back $320 million of shares. It raised its 2026 guidance for net interest income to up about 10% and cut its net charge-off guidance to 0.37% to 0.39%. It now guides a Q4 2026 exit margin of about 3.00%, the low end of its earlier 3.00% to 3.05% range.
2026-09-15: KeyCorp redeemed all of its Series D preferred stock, with a liquidation preference of $525 million.
2026-09-14: At an investor conference, KeyCorp raised its 2026 outlook. It now expects revenue up about 8% from 2025 (previously 7% to 8%) and fee income up 4% to 5% (previously 3% to 4%), with adjusted expenses up about 4%. It kept its guidance for net interest income up 9% to 11%, a net interest margin of 3.00% to 3.05% at the end of 2026, and net charge-offs of 0.40% to 0.45% of loans.
2026-07-21: KeyCorp reported Q2 2026 results. EPS was $0.44, up 26% from a year earlier, and revenue rose 7% to $1.96 billion. Net interest income rose 9% and the net interest margin rose to 2.89%. Period-end loans rose $1.2 billion from the prior quarter, with commercial and industrial loans up $2.1 billion. Net charge-offs were 0.42% of loans. The CET1 ratio was 11.2%, and KeyCorp bought back $341 million of shares.
2026-04-16: KeyCorp reported Q1 2026 results. EPS was $0.44, and the net interest margin was 2.87%.