KEY changes
Pick any two versions below to diff them.
- Next earnings
- Oct 20, 2026 → Jan 20, 2027
- 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 removed: 2.89% added: 2.95% in removed: Q2 added: Q3 2026, against a long-term target of 3.25% or more. Its return on tangible common equity was removed: 12.9%, against added: 15.1% in Q3 2026, and KeyCorp must show that it can keep a removed: target added: return of removed: more than 15% removed: by Q4 added: 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. added: In 2027, $10.7 billion of swaps and $19.9 billion of low-yield fixed-rate assets mature. The market also watches removed: credit: added: credit, but nonperforming removed: loans rose added: assets fell to removed: 0.73% added: 0.55% of loans at removed: June added: September 30, 2026, from removed: 0.62% added: 0.73% three months earlier. For the gap to close, three things must be true. The margin must reach the removed: 3.00% to 3.05% exit rate added: of about 3.00% that KeyCorp guides for Q4 removed: 2026. Commercial loans must added: 2026 and keep removed: growing 8% to 10% added: rising in removed: 2026, added: 2027. Commercial loans and fee income from investment banking, payments and wealth management must keep growing. Net charge-offs must stay removed: within added: low, near the removed: 0.40% added: 0.37% to removed: 0.45% guidance, added: 0.39% guidance for 2026, so that buybacks continue. The removed: Q3 2026 report on October 20, 2026, and the Q4 report on January 20, 2027, removed: show added: with the 2027 outlook, shows whether the margin reaches removed: 3.00%. added: 3.00% and whether the return holds. If it does, the gap can close over the next removed: four added: three to removed: six quarters, as the 2027 return target comes into view. added: 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 removed: 3.00% to 3.05% exit rate added: of about 3.00% for 2026 and the removed: 15% return removed: target for Q4 2027 added: of 15% or more can removed: slip. added: slip in 2027. Nonperforming loans removed: rose added: fell to removed: $809 million, or 0.73% of loans, added: $618 million at removed: June added: September 30, 2026, from removed: $682 added: $809 million three months removed: earlier. added: 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. removed: Accumulated added: KeyCorp estimates its loss in accumulated other comprehensive removed: loss was $2.4 billion at June 30, 2026, mostly added: income from removed: unrealized losses on securities and removed: swaps. added: 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 removed: June added: September 30, 2026, total assets were removed: $191.3 added: $193.1 billion and deposits were removed: $153.1 added: $153.8 billion. Average deposits in Q3 2026 were $151.2 billion, up removed: $4.4 added: $3.6 billion from removed: December 31, 2025. Estimated uninsured deposits were $68.8 billion. added: Q2 2026. Other funding was removed: $3.7 added: $5.2 billion of bank notes and other short-term borrowings and removed: $11.0 added: $11.5 billion of long-term debt. Cash and due from banks was removed: $1.7 added: $1.5 billion and short-term investments were removed: $12.4 added: $13.0 billion. removed: Securities were $38.5 billion available for sale and $9.5 billion held to maturity. Loans were removed: $110.4 added: $113.0 billion, and the allowance for credit losses was removed: 1.56% added: 1.50% of loans. Capital is the real limit. removed: Total added: Key shareholders' equity was removed: $19.8 added: $17.8 billion, including removed: $2.5 added: $2.0 billion of preferred stock, after removed: an accumulated other comprehensive loss added: KeyCorp redeemed $525 million of removed: $2.4 billion. added: Series D preferred stock on September 15, 2026. The estimated CET1 ratio was removed: 11.2%, added: 11.1%. With the $3.2 billion estimated loss on securities and added: pensions, the removed: long-term target for CET1 removed: including unrealized losses is 9.5% to 10%. added: ratio was 9.0%. KeyCorp bought back removed: $727 added: $320 million of common shares in removed: the first half of added: Q3 2026 and removed: redeemed $525 million added: plans $1.3 billion of removed: Series D preferred stock on September 15, added: buybacks for all of 2026. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 20, 2026: Q3 2026 earnings: margin on track to 3.00%. removed: Pending. added: 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. added: 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
- added: Oct 20, 2026: 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. Sep 15, 2026: KeyCorp redeemed all of its Series D preferred stock, with a liquidation preference of $525 million. Sep 14, 2026: 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. Jul 21, 2026: 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. Apr 16, 2026: KeyCorp reported Q1 2026 results. EPS was $0.44, and the net interest margin was 2.87%.