Keycorp: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 20 October 2026: press release. Guidance figures: 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net income and diluted EPS rose: Net income from continuing operations attributable to Key common shareholders was $537 million, or $0.51 per diluted share, compared with $454 million and $0.41 a year earlier. Source
• Total revenue reached $2.04 billion: Total revenue was $2.04 billion, up 4% from the second quarter and 8% from the third quarter of 2025. Source
• Return on tangible common equity above 15%: Return on average tangible common equity from continuing operations was 15.11%, compared with 12.89% in the second quarter of 2026 and 12.51% a year earlier. Source
• Investment banking fees rose 27%: Investment banking and debt placement fees were $214 million, up from $169 million in the second quarter and $184 million a year earlier. Source
• Net interest margin reached 2.95%: Taxable-equivalent net interest income was $1.31 billion, and the net interest margin rose 6 basis points from the second quarter. Net interest income also benefited from one additional day in the quarter. Source
• Net charge-offs fell to 0.32%: Net loan charge-offs were $89 million, or 0.32% of average total loans, compared with $115 million in the second quarter and $114 million a year earlier. Source
• Provision fell to $61 million: The provision for credit losses was $61 million, down from $92 million in the second quarter and $107 million a year earlier. Source
• Repurchased $320 million of stock: Common share repurchases totaled $320 million, and shares outstanding at period end fell 1.3% to 1,058,176 thousand. Source

“Our performance this quarter demonstrates the power of our balanced business model.”

Chris Gorman, Chairman and CEO

Guidance

Results and profit drivers

• Net income and diluted EPS rose: Net income from continuing operations attributable to Key common shareholders was $537 million, or $0.51 per diluted share, compared with $454 million and $0.41 a year earlier. Source
• Total revenue reached $2.04 billion: Total revenue was $2.04 billion, up 4% from the second quarter and 8% from the third quarter of 2025. Source
• Return on tangible common equity above 15%: Return on average tangible common equity from continuing operations was 15.11%, compared with 12.89% in the second quarter of 2026 and 12.51% a year earlier. Source
• Pre-provision net revenue rose: Pre-provision net revenue from continuing operations was $807 million, compared with $747 million in the second quarter and $718 million a year earlier. Source

Business segments

• Commercial Bank net income rose: Commercial Bank net income was $516 million, up 22% from the second quarter, with taxable-equivalent revenue of $1.20 billion and average loans of $78.6 billion. Source
• Consumer Bank net income edged up: Consumer Bank net income was $211 million, up 1.4% from a year earlier, on taxable-equivalent revenue of $1.05 billion. Source
• Other segment loss narrowed year over year: The Other segment, which includes corporate treasury, the principal investing unit and exit portfolios, reported a loss of $148 million, compared with $158 million a year earlier. Source

“Concurrently, we maintained our disciplined approach to risk management, evidenced by broad-based improvement in credit quality metrics, including lower net charge-offs and nonperforming assets.”

Chris Gorman, Chairman and CEO

Fee income and asset management

• Investment banking fees rose 27%: Investment banking and debt placement fees were $214 million, up from $169 million in the second quarter and $184 million a year earlier. Source
• Noninterest income rose sequentially: Noninterest income was $744 million, up $38 million from the second quarter, with trust and investment services income at $165 million. Source
• Assets under management rose to $74.5 billion: Assets under management at period end were $74.5 billion, up 9.7% from a year earlier, within the Consumer Bank segment. Source
• Corporate services fees declined: Corporate services income fell $8 million from the second quarter, while commercial mortgage servicing fees rose 8.2% to $53 million. Source

Net interest margin and deposit costs

• Net interest margin reached 2.95%: Taxable-equivalent net interest income was $1.31 billion, and the net interest margin rose 6 basis points from the second quarter. Net interest income also benefited from one additional day in the quarter. Source
• Securities reinvestment supported yields: Proceeds from maturing low-yielding securities and fixed-rate swaps were reinvested into higher-yielding investments, which management cites as a driver of the margin. Source
• Deposit costs rose 3 basis points: The rate paid on interest-bearing deposits was 2.04%, and the overall cost of total deposits was 1.66%, both up 3 basis points from the second quarter. Source

“Looking ahead, we remain focused on executing with discipline, capturing the significant organic growth opportunities across our franchise, and delivering significant value for all our stakeholders.”

Chris Gorman, Chairman and CEO

Balance sheet mix and headcount

• Average deposits up $3.6 billion: Average deposits were $151.2 billion, with growth in demand and money market deposits and higher noninterest-bearing deposits. Period-end deposits were $153.8 billion. Source
• Average loans rose $1.5 billion: Average loans held for investment were $111.6 billion, with commercial loans up $2.1 billion, driven by commercial and industrial lending. Source
• Consumer loans continue to run off: Average consumer loans were $28.5 billion, down $2.3 billion from a year earlier, with declines in every consumer loan category. Source
• Shift toward commercial and industrial loans: Management cites an expanding balance sheet and a continued strategic shift toward higher-yielding commercial and industrial loans as drivers of net interest income. Source
• Loan-to-deposit ratio rose to 74.3%: The period-end loan-to-deposit ratio was 74.3%, compared with 73.0% at June 30, 2026 and 71.0% a year earlier. Source
• Average headcount rose to 17,700: Average full-time equivalent employees were 17,700, up from 17,517 in the second quarter and 17,414 a year earlier. Source

Costs and expenses

• Noninterest expense rose 2.3%: Noninterest expense was $1.245 billion, up 2.3% from the second quarter and 5.8% from a year earlier. Source
• Personnel expense drove the increase: Personnel expense was $815 million, $29 million above the second quarter, reflecting incentive compensation and continued investments in people. Source
• Cash efficiency ratio at 60.6%: The cash efficiency ratio was 60.6%, compared with 61.9% in the second quarter of 2026 and 61.8% in the third quarter of 2025. Source
• Other expense declined: Other expense was $151 million, down $7 million from the second quarter and $19 million from a year earlier. Source

Credit quality and reserves

• Net charge-offs fell to 0.32%: Net loan charge-offs were $89 million, or 0.32% of average total loans, compared with $115 million in the second quarter and $114 million a year earlier. Source
• Provision fell to $61 million: The provision for credit losses was $61 million, down from $92 million in the second quarter and $107 million a year earlier. Source
• Nonperforming loans declined: Nonperforming loans were $618 million, or 0.55% of period-end portfolio loans, compared with $809 million, or 0.73%, at June 30, 2026. Source
• Commercial Bank provision fell to $8 million: The Commercial Bank provision was $8 million, down $60 million from a year earlier, reflecting a reserve release tied to portfolio changes and lower charge-offs. Source
• Allowance ratio eased to 1.50%: The allowance for credit losses was $1.7 billion, or 1.50% of period-end loans, against 1.56% at June 30, 2026 and 1.64% a year earlier. Source

Capital and shareholder returns

• CET1 ratio estimated at 11.1%: The estimated CET1 ratio was 11.1% at September 30, 2026, down 10 basis points from June 30 and 70 basis points from a year earlier. Tier 1 was 12.3%. Source
• Marked CET1 ratio at 9.0%: The non-GAAP marked CET1 ratio, which includes AFS and pension AOCI, was 9.0%, compared with 9.8% at June 30, 2026 and 10.3% a year earlier. Source
• Repurchased $320 million of stock: Common share repurchases totaled $320 million, and shares outstanding at period end fell 1.3% to 1,058,176 thousand. Source
• Quarterly dividend of $0.205: Key declared a dividend of $.205 per common share in the quarter. Cash dividends declared for the first nine months totaled $0.615 per share. Source
• Book value per share fell: Book value per share was $15.01 at period end, down from $16.19 at June 30, 2026, and tangible book value was $12.35. Source

Figures management reported

Risks management discussed

• Financial: Lower interest rates reduce the repricing yield on earning assets, which partly offset the net interest income gains. Source
• External: The Consumer Bank provision rose $15 million year over year, which management attributes to a reserve build reflecting economic conditions. Source

Earlier plans management reported on

• Not stated: Average consumer loans fell $586 million from the second quarter, which management describes as the intentional run-off of low-yielding loans. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.