Bank posts stronger quarterly earnings
KeyCorp (NYSE:KEY) reported second-quarter 2026 results on Tuesday that exceeded earnings expectations, although revenue came in just below Wall Street forecasts.
The bank posted adjusted earnings per share of $0.44, ahead of the consensus estimate of $0.42. Revenue totaled $1.96 billion, narrowly missing analysts’ expectation of $1.97 billion.
Shares rose 1.89% in pre-market trading following the earnings release.
Net interest income drives year-over-year growth
Net income from continuing operations increased 22% from a year earlier to $472 million for the quarter ended 30 June 2026.
Total revenue rose 7% year over year from $1.84 billion, supported by a 9% increase in net interest income to $1.26 billion.
The bank also expanded its net interest margin to 2.89%, an improvement of 23 basis points compared with the same quarter last year.
“Our second quarter results reflect the strength of our franchise, disciplined execution, and sustained momentum across our businesses,” said Chairman and CEO Chris Gorman. “We delivered 7% revenue growth and generated approximately 130 basis points of operating leverage on a year-over-year basis.”
Commercial lending supports balance sheet expansion
KeyCorp continued to grow its loan portfolio during the quarter.
Period-end loans increased by $1.2 billion from the previous quarter, led by a $2.1 billion, or 3%, increase in commercial and industrial lending.
The provision for credit losses declined to $92 million from $138 million in the prior-year period, while net charge-offs were 42 basis points.
The allowance coverage ratio eased by 4 basis points sequentially to 1.56%.
Share repurchases continue despite higher expenses
The bank repurchased $341 million of common stock during the quarter while maintaining a Common Equity Tier 1 ratio of 11.2%.
Noninterest expense increased 6% year over year to $1.22 billion, primarily reflecting higher employee-related costs, including benefits and incentive compensation.
KeyCorp stock price
