KEY changes

Pick any two versions below to diff them.

FromTo

View the full Oct 20, 2026 version

Price: $19.99 → $21.03(+5.2%)
Discount: 3% → −2%(−5.0 pts)
Next earnings: 2026-10-20 → 2027-01-20
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 2.8995% in Q2Q3 2026, against a long-term target of 3.25% or more. Its return on tangible common equity was 1215.91% in Q3 2026, againstand KeyCorp must show that it can keep a targetreturn of more than 15% by Q4or 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. In 2027, $10.7 billion of swaps and $19.9 billion of low-yield fixed-rate assets mature. The market also watches credit:, but nonperforming loans roseassets fell to 0.7355% of loans at JuneSeptember 30, 2026, from 0.6273% three months earlier. For the gap to close, three things must be true. The margin must reach the exit rate of about 3.00% to 3.05% exit rate that KeyCorp guides for Q4 2026 and keep rising in 2027. Commercial loans must keep growing 8% to 10% in 2026, and fee income from investment banking, payments and wealth management must keep growing. Net charge-offs must stay withinlow, near the 0.4037% to 0.4539% guidance for 2026, so that buybacks continue. The Q3 2026 report on October 20, 2026, and the Q4 report on January 20, 2027, showwith the 2027 outlook, shows whether the margin reaches 3.00% and whether the return holds. If it does, the gap can close over the next fourthree to sixfive quarters, as the 2027 return target comes into view. 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 exit rate of about 3.00% to 3.05% exit rate for 2026 and the return of 15% return target for Q4 2027or more can slip in 2027. Nonperforming loans rosefell to $809618 million, or 0.73% of loans, at JuneSeptember 30, 2026, from $682809 million three months 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. AccumulatedKeyCorp estimates its loss in accumulated other comprehensive loss wasincome from securities and pensions at $23.42 billion at JuneSeptember 30, 2026. With this loss, mostly from unrealized losses on securities and swapsits 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 JuneSeptember 30, 2026, total assets were $191193.31 billion and deposits were $153.18 billion, up. Average deposits in Q3 2026 were $4151.42 billion from December 31, 2025. Estimated uninsured deposits wereup $683.86 billion from Q2 2026. Other funding was $35.72 billion of bank notes and other short-term borrowings and $11.05 billion of long-term debt. Cash and due from banks was $1.75 billion and short-term investments were $1213.40 billion. Securities were $38.5 billion available for sale and $9.5 billion held to maturity. Loans were $110113.40 billion, and the allowance for credit losses was 1.5650% of loans. Capital is the real limit. TotalKey shareholders' equity was $1917.8 billion, including $2.50 billion of preferred stock, after an accumulated other comprehensive loss ofKeyCorp redeemed $2525 million of Series D preferred stock on September 15, 2026.4 billion. The estimated CET1 ratio was 11.21%,. With the $3.2 billion estimated loss on securities and pensions, the long-term target for CET1 including unrealized losses isratio was 9.50% to 10%. KeyCorp bought back $727320 million of common shares in the first half ofQ3 2026 and redeemedplans $525 million1.3 billion of Series D preferred stock on September 15,buybacks for all of 2026. As of 2026-0609-30.
Checkpoints: Oct 20, 2026: Q3 2026 earnings: margin on track to 3.00%. PendingPassed. 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. 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: 2026-10-20: 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. 2026-09-15: KeyCorp redeemed all of its Series D preferred stock, with a liquidation preference of $525 million. 2026-09-14: 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. 2026-07-21: 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. 2026-04-16: KeyCorp reported Q1 2026 results. EPS was $0.44, and the net interest margin was 2.87%.