KeyCorp Q3 2026 Adjusted EPS of $0.51 Beats Estimates as NIM Expands and Investment Banking Fees Surge

KeyCorp posted stronger-than-expected third-quarter 2026 results, with adjusted EPS of $0.51 beating the $0.47 consensus estimate by roughly 9%, a gain of 24% year over year. Adjusted revenue came in at $2.05 billion, up 8% year over year and in line with estimates, though GAAP revenue of $2.04 billion missed by approximately $10 million.

The quarter was driven by broad-based income growth across the bank. Net interest income on a tax-equivalent basis rose 9.6% year over year to $1.31 billion, and net interest margin expanded 20 basis points to 2.95%. Noninterest income grew 6% to $744 million, with investment banking fees particularly strong at $214 million, up 16.3% year over year. Consumer Bank revenue increased 5.9% to $1.05 billion, while Commercial Bank revenue climbed 7.7% to $1.20 billion. Commercial and industrial loans grew 5% sequentially in the quarter.

Credit quality improved, with net charge-offs falling 10 basis points year over year to 0.32%, and lower provisions further supported the earnings beat. Return on tangible common equity rose 260 basis points to 15.11%, and assets under management grew 9.7% to $74.5 billion. The CET1 capital ratio stood at 11.1%, down 70 basis points year over year. KeyCorp repurchased $320 million in shares during the quarter and declared a dividend of $0.205 per share.

Management raised its full-year revenue guidance to the upper end of its prior range and tightened its 2026 net interest income growth outlook to approximately 10%. Looking further out, KeyCorp is targeting a net interest margin of 3.20-3.25% by end of 2027 and 3.25% or above by the fourth quarter of 2027, supported by a fixed-rate asset reinvestment tailwind. Management said the results "reinforce our confidence in achieving and sustaining a return on tangible common equity of 15%+ by the end of 2027." Shares edged higher following the report despite the narrow GAAP revenue miss.