KeyCorp Q3 net income hits $537M, diluted EPS up 24%

KeyCorp (NYSE: KEY) reported third quarter 2026 net income from continuing operations of $537 million, equating to $0.51 per diluted common share. The bank posted record revenue of $2.04 billion, an 8% increase year-over-year and a 4% rise sequentially, while diluted earnings per share climbed 24% compared to the same period in the previous year.

Chairman and CEO Chris Gorman attributed the performance to the strength of the relationship-driven franchise and disciplined strategy execution. Gorman noted that the results reflect a return on tangible common equity exceeding 15%, reinforcing confidence in sustaining that level by the end of 2027. The company maintained a Common Equity Tier 1 ratio of 11.1%, which is an estimated figure for September 30, 2026. During the quarter, KeyCorp repurchased $320 million of common shares.

Net interest margin expanded to 2.95%, up 20 basis points year-over-year and 6 basis points sequentially. Taxable-equivalent net interest income reached $1.31 billion, an increase of $115 million from the third quarter of 2025. Management cited declining interest rates and proactive deposit beta management as factors reducing deposit costs. The company also benefited from reinvesting proceeds from maturing low-yielding securities into higher-yielding investments and shifting toward commercial and industrial loans. These gains were partially offset by the impact of lower interest rates on repricing earning assets.

Deposit growth outpaced loan growth in the period. Average deposits increased by $3.6 billion sequentially, while average loans held for investment increased by $1.5 billion. This dynamic supported continued expansion in net interest margin. Noninterest income rose 6% year-over-year. Investment banking and debt placement fees contributed significantly to this segment, rising 27% sequentially.

Credit quality metrics showed broad-based improvement, including lower net charge-offs and nonperforming assets. Gorman stated that client engagement remains strong, supported by a constructive economic environment and continued confidence among businesses and communities served. The bank emphasized its positioning across a broad range of economic scenarios, supported by solid capital levels and a strong liquidity profile.