Net interest income up 11% year-over-year and 1% quarter-over-quarter despite seasonality impact; net interest margin of 2.87% increased 5 bps sequentially
Period-end loans up $2.6 billion quarter-over-quarter, with commercial loans up $3.3 billion or 4%
Credit quality remains strong - nonperforming assets were 63 bps and net charge-offs were 38 bps
Common Equity Tier 1 ratio of 11.4%(a); repurchased $389 million of common shares during the quarter
CLEVELAND, April 16, 2026 /PRNewswire/ -- KeyCorp (NYSE:KEY) announced net income from continuing operations attributable to Key common shareholders of $486 million, or $0.44 per diluted common share, for the first quarter of 2026. For the fourth quarter of 2025, net income from continuing operations attributable to Key common shareholders was $474 million, or $0.43 per diluted common share, or adjusted net income of $458 million, or $0.41 per diluted common share.(b) The fourth quarter of 2025 included a $16 million after-tax benefit related to the updated FDIC special assessment.(c) For the first quarter of 2025, KeyCorp reported net income from continuing operations attributable to Key common shareholders of $370 million, or $0.33 per diluted common share.
Comments from Chairman and CEO, Chris Gorman
"Our strong first quarter performance demonstrates disciplined execution and significant momentum as we continue to deliver on our commitments. Revenue grew 10% year-over-year, growing at more than double the rate of expenses. We grew net interest income and net interest margin sequentially and year-over-year. Our priority fee-based businesses - investment banking, commercial payments, and wealth management - collectively grew 12% year-over-year. Return on tangible common equity exceeded 13%, reflecting significant progress toward achieving our goal of 15%+ return on tangible common equity by year-end 2027.
In addition to driving a greater return on capital, we remain committed to the return of capital. We repurchased almost $400 million of common shares in the first quarter. We are also encouraged by the recently updated Basel III proposal which, if implemented as currently proposed, would imply more than 100 basis point benefit to our marked CET1 ratio.
We are successfully navigating the dynamic macroeconomic environment and are prepared to manage through a broad range of potential scenarios. We are growing clients, loans, and pipelines. We continue to gain momentum in the marketplace, and are investing across the franchise in frontline bankers and technology that will drive additional organic growth and efficiency. We remain well positioned to drive strong revenue and earnings growth in 2026 through the continued delivery of our differentiated capabilities and exceptional service to our clients."
(a)
March 31, 2026 ratio is estimated.
(b)
The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures. The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
(c)
See table on page 22 of the 1Q26 Earnings Release for more information on Selected Items Impact on Earnings.
Selected Financial Highlights
Dollars in millions, except per share data
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Income (loss) from continuing operations attributable to Key common shareholders
$ 486
$ 474
$ 370
2.5 %
31.4 %
Income (loss) from continuing operations attributable to Key common shareholders per common share, assuming dilution
0.44
0.43
0.33
2.3
33.3
Book value at period end
16.13
16.27
14.89
(0.9)
8.3
Return on average tangible common equity from continuing operations (a)
13.02 %
12.43 %
11.24 %
59 bps
178 bps
Return on average total assets from continuing operations
1.14
1.08
.88
6
26
Common Equity Tier 1 ratio (b)
11.4
11.8
11.6
(40)
(20)
Net interest margin (TE) from continuing operations
2.87
2.82
2.58
5
29
(a)
The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "tangible common equity." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
(b)
March 31, 2026 ratio is estimated.
TE = Taxable Equivalent
INCOME STATEMENT HIGHLIGHTS
Revenue
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Net interest income (TE)
$ 1,230
$ 1,223
$ 1,105
0.6 %
11.3 %
Noninterest income
723
782
668
(7.5)
8.2
Total revenue (TE)
$ 1,953
$ 2,005
$ 1,773
(2.6) %
10.2 %
TE = Taxable Equivalent
Taxable-equivalent net interest income was $1.23 billion for the first quarter of 2026 and the net interest margin was 2.87%. Compared to the first quarter of 2025, net interest income increased by $125 million, and the net interest margin increased by 29 basis points. These increases were driven by a reduction in deposit costs as a result of declining interest rates and proactive deposit beta management, the reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher-yielding investments, and a shift in the balance sheet composition to a more favorable mix of higher-yielding commercial and industrial loans. These benefits were partially offset by the impact of lower interest rates on variable-rate earning assets.
Compared to the fourth quarter of 2025, taxable-equivalent net interest income increased by $7 million, and the net interest margin increased by 5 basis points. These increases reflect lower deposit costs and a shift in the balance sheet composition to a more favorable mix of higher-yielding commercial and industrial loans. These benefits were partially offset by the impact of lower interest rates on variable-rate earning assets, a decline in low-cost deposit balances from seasonal outflows, and two fewer days in the first quarter of 2026 compared to the fourth quarter of 2025.
Noninterest Income
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Trust and investment services income
$ 157
$ 156
$ 139
0.6 %
12.9 %
Investment banking and debt placement fees
197
243
175
(18.9)
12.6
Cards and payments income
86
84
82
2.4
4.9
Service charges on deposit accounts
77
78
69
(1.3)
11.6
Corporate services income
71
81
65
(12.3)
9.2
Commercial mortgage servicing fees
62
68
76
(8.8)
(18.4)
Corporate-owned life insurance income
34
40
33
(15.0)
3.0
Consumer mortgage income
13
16
13
(18.8)
—
Operating lease income and other leasing gains
8
9
9
(11.1)
(11.1)
Other income
18
7
7
157.1
157.1
Total noninterest income
$ 723
$ 782
$ 668
(7.5) %
8.2 %
Compared to the first quarter of 2025, noninterest income increased by $55 million. The increase was primarily driven by a $22 million increase in investment banking and debt placement fees reflecting higher merger and acquisition advisory fees, commercial mortgage debt placement activity, and equity underwriting activity, as well as an $18 million increase in trust and investment services income. These were partially offset by a $14 million decrease in commercial mortgage servicing fees.
Compared to the fourth quarter of 2025, noninterest income decreased by $59 million. The decrease was driven by a $46 million decrease in investment banking and debt placement fees, a $10 million decrease in corporate services income, and a $6 million decrease in commercial mortgage servicing fees.
Noninterest Expense
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Personnel expense
$ 743
$ 790
$ 680
(5.9) %
9.3 %
Net occupancy
68
69
67
(1.4)
1.5
Computer processing
111
106
107
4.7
3.7
Business services and professional fees
36
61
40
(41.0)
(10.0)
Equipment
19
22
20
(13.6)
(5.0)
Operating lease expense
7
8
11
(12.5)
(36.4)
Marketing
18
28
21
(35.7)
(14.3)
Other expense
179
157
185
14.0
(3.2)
Total noninterest expense
$ 1,181
$ 1,241
$ 1,131
(4.8) %
4.4 %
Compared to the first quarter of 2025, noninterest expense increased by $50 million. The increase was predominantly driven by a $63 million increase in personnel expense primarily related to continued investments in people, employee benefits, and incentive compensation associated with noninterest income growth.
Compared to the fourth quarter of 2025, noninterest expense decreased by $60 million. The decrease was predominantly driven by a $47 million decline in personnel expense, primarily related to incentive compensation. Business services and professional fees decreased by $25 million and marketing expense decreased by $10 million largely due to seasonality. These were partially offset by an increase in other expense related to a $21 million benefit associated with the updated FDIC special assessment in the prior quarter.
BALANCE SHEET HIGHLIGHTS
Average Loans
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Commercial and industrial (a)
$ 59,149
$ 57,541
$ 53,746
2.8 %
10.1 %
Other commercial loans
18,918
18,497
18,619
2.3
1.6
Total consumer loans
29,670
30,278
31,989
(2.0)
(7.2)
Total loans
$ 107,737
$ 106,316
$ 104,354
1.3 %
3.2 %
(a)
Commercial and industrial average loan balances include $205 million, $211 million, and $213 million of assets from commercial credit cards at March 31, 2026, December 31, 2025, and March 31, 2025, respectively.
Average loans were $107.7 billion for the first quarter of 2026, an increase of $3.4 billion compared to the first quarter of 2025. Average commercial loans increased by $5.7 billion, primarily driven by a $5.4 billion increase in commercial and industrial loans. Average consumer loans declined by $2.3 billion, reflective of broad-based declines across all consumer loan categories.
Compared to the fourth quarter of 2025, average loans increased by $1.4 billion. Average commercial loans increased $2.0 billion, primarily driven by an increase in commercial and industrial loans. Average consumer loans declined by $608 million, reflective of the intentional run-off of low-yielding loans.
Average Deposits
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Non-time deposits
$ 135,522
$ 136,853
$ 131,917
(1.0) %
2.7 %
Time deposits
11,777
13,857
16,625
(15.0)
(29.2)
Total deposits
$ 147,299
$ 150,710
$ 148,542
(2.3) %
(0.8) %
Cost of total deposits
1.65 %
1.81 %
2.06 %
(16) bps
(41) bps
Average deposits totaled $147.3 billion for the first quarter of 2026, a decrease of $1.2 billion compared to the year-ago quarter, driven by the intentional runoff of brokered CDs.
Compared to the fourth quarter of 2025, average deposits decreased by $3.4 billion. The decline was driven by seasonally lower deposit balances, as well as the intentional runoff of brokered CDs. The rate paid on interest-bearing deposits declined by 22 basis points, and the overall cost of deposits declined by 16 basis points to 1.65%.
ASSET QUALITY
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Net loan charge-offs
$ 101
$ 104
$ 110
(2.9) %
(8.2) %
Net loan charge-offs to average total loans
.38 %
.39 %
.43 %
(1) bps
(5) bps
Nonperforming loans at period end
$ 682
$ 615
$ 686
10.9 %
(0.6) %
Nonperforming loans to period-end portfolio loans
.62 %
.58 %
.65 %
4 bps
(3) bps
Nonperforming assets at period end
$ 692
$ 627
$ 700
10.4 %
(1.1) %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
.63 %
.59 %
.67 %
4 bps
(4) bps
Allowance for loan and lease losses
$ 1,449
$ 1,427
$ 1,429
1.5 %
1.4 %
Allowance for credit losses
1,745
1,740
1,707
0.3 %
2.2 %
Allowance for credit losses to period-end loans
1.60 %
1.63 %
1.63 %
(3) bps
(3) bps
Provision for credit losses
$ 106
$ 108
$ 118
(1.9) %
(10.2) %
Allowance for loan and lease losses to nonperforming loans
212 %
232 %
208 %
N/M
N/M
Allowance for credit losses to nonperforming loans
256
283
249
N/M
N/M
N/M = Not Meaningful
Net loan charge-offs for the first quarter of 2026 totaled $101 million, or 0.38% of average total loans. These results compare to $110 million, or 0.43%, for the first quarter of 2025 and $104 million, or 0.39%, for the fourth quarter of 2025.
Key's allowance for credit losses was $1.7 billion, or 1.60% of total period-end loans at March 31, 2026, compared to 1.63% at March 31, 2025, and 1.63% at December 31, 2025. A reserve build of $5 million during the first quarter of 2026 was driven by increases in qualitative reserves due to elevated economic uncertainty, partially offset by continued improvement in the portfolio mix.
At March 31, 2026, Key's nonperforming loans totaled $682 million, which represented 0.62% of period-end portfolio loans. These results compare to 0.65% at March 31, 2025, and 0.58% at December 31, 2025. Nonperforming assets at March 31, 2026, totaled $692 million, and represented 0.63% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.67% at March 31, 2025, and 0.59% at December 31, 2025.
CAPITAL
Key's estimated risk-based capital ratios, included in the following table, continued to exceed all "well-capitalized" regulatory benchmarks at March 31, 2026.
Capital Ratios
3/31/2026
12/31/2025
3/31/2025
Common Equity Tier 1 (a)
11.4 %
11.8 %
11.6 %
Tier 1 risk-based capital (a)
13.0
13.5
13.3
Total risk-based capital (a)
15.2
15.7
15.7
Tangible common equity to tangible assets (b)
8.0
8.4
7.4
Leverage (a)
10.5
10.5
10.2
(a)
March 31, 2026 ratio is estimated.
(b)
The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "tangible common equity." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
Key's regulatory capital position remained strong in the first quarter of 2026. As shown in the preceding table, at March 31, 2026, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 11.4% and 13.0%, respectively.
Summary of Changes in Common Shares Outstanding
In thousands
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Shares outstanding at beginning of period
1,102,401
1,112,952
1,106,786
(0.9) %
(0.4) %
Share repurchases
(17,969)
(11,109)
—
61.8
N/M
Shares issued under employee compensation plans (net of cancellations and returns)
2,861
558
5,200
N/M
(45.0)
Shares outstanding at end of period
1,087,293
1,102,401
1,111,986
(1.4) %
(2.2) %
N/M = Not Meaningful
During the first quarter of 2026, Key declared a dividend of $.205 per common share. The reduction in share count was driven by $389 million of common shares repurchased.
LINE OF BUSINESS RESULTS
The following table shows the contribution made by each major business segment to Key's taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.
Major Business Segments
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Revenue from continuing operations (TE)
Consumer Bank
$ 978
$ 998
$ 932
(2.0) %
4.9 %
Commercial Bank
1,117
1,194
1,047
(6.4)
6.7
Other (a)
(142)
(187)
(206)
24.1
31.1
Total
$ 1,953
$ 2,005
$ 1,773
(2.6) %
10.2 %
Income (loss) from continuing operations attributable to Key
Consumer Bank
$ 173
$ 176
$ 163
(1.7) %
6.1 %
Commercial Bank
451
472
399
(4.4)
13.0
Other (a)
(102)
(139)
(156)
26.6
34.6
Total
$ 522
$ 509
$ 406
2.6 %
28.6 %
(a)
Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represent the unallocated portion of nonearning assets of corporate support functions. Other also includes the residual net impact of our internal funds transfer pricing methodology, which arise from centrally managed interest rate activities and asset-liability repricing difference. Corporate treasury includes realized gains and losses from transactions associated with Key's investment securities portfolio. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.
TE = Taxable Equivalent
Consumer Bank
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Summary of operations
Net interest income (TE)
$ 738
$ 747
$ 706
(1.2) %
4.5 %
Noninterest income
240
251
226
(4.4)
6.2
Total revenue (TE)
978
998
932
(2.0)
4.9
Provision for credit losses
40
32
43
25.0
(7.0)
Noninterest expense
709
734
675
(3.4)
5.0
Income (loss) before income taxes (TE)
229
232
214
(1.3)
7.0
Allocated income taxes (benefit) and TE adjustments
56
56
51
—
9.8
Net income (loss) attributable to Key
$ 173
$ 176
$ 163
(1.7) %
6.1 %
Average balances
Loans and leases
$ 34,005
$ 34,683
$ 36,819
(2.0) %
(7.6) %
Total assets
37,341
37,731
39,806
(1.0)
(6.2)
Deposits
87,796
87,738
88,306
0.1
(0.6)
Assets under management at period end
$ 69,756
$ 69,964
$ 61,053
(0.3) %
14.3 %
TE = Taxable Equivalent
Additional Consumer Bank Data
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Noninterest income
Trust and investment services income
$ 130
$ 128
$ 113
1.6 %
15.0 %
Service charges on deposit accounts
34
38
33
(10.5)
3.0
Cards and payments income
55
60
57
(8.3)
(3.5)
Consumer mortgage income
13
16
13
(18.8)
—
Other noninterest income
8
9
10
(11.1)
(20.0)
Total noninterest income
$ 240
$ 251
$ 226
(4.4) %
6.2 %
Average deposit balances
Money market deposits
$ 35,920
$ 35,390
$ 33,533
1.5 %
7.1 %
Demand deposits
23,214
22,879
22,772
1.5
1.9
Savings deposits
4,199
4,177
4,392
0.5
(4.4)
Time deposits
10,610
11,059
13,318
(4.1)
(20.3)
Noninterest-bearing deposits
13,853
14,233
14,291
(2.7)
(3.1)
Total deposits
$ 87,796
$ 87,738
$ 88,306
0.1 %
(0.6) %
Other data
Branches
940
940
945
Automated teller machines
1,112
1,120
1,176
Consumer Bank Summary of Operations (1Q26 vs. 1Q25)
Key's Consumer Bank recorded net income attributable to Key of $173 million for the first quarter of 2026, compared to $163 million for the year-ago quarter
Taxable-equivalent net interest income increased by $32 million, or 4.5%, compared to the first quarter of 2025
Average loans and leases decreased $2.8 billion, or 7.6%, from the first quarter of 2025, reflective of broad-based declines across all loan categories
Average deposits decreased $510 million, or 0.6%, from the first quarter of 2025, driven by lower time deposits, partially offset by an increase in money market deposits
Provision for credit losses decreased $3 million compared to the first quarter of 2025 driven by lower charge-offs
Noninterest income increased $14 million from the year-ago quarter, primarily driven by higher trust and investment services income
Noninterest expense increased $34 million from the year-ago quarter, primarily driven by higher support and overhead expense
Commercial Bank
Dollars in millions
Change 1Q26 vs.
1Q26
4Q25
1Q25
4Q25
1Q25
Summary of operations
Net interest income (TE)
$ 672
$ 696
$ 636
(3.4) %
5.7 %
Noninterest income
445
498
411
(10.6)
8.3
Total revenue (TE)
1,117
1,194
1047
(6.4)
6.7
Provision for credit losses
70
73
75
(4.1)
(6.7)
Noninterest expense
474
515
464
(8.0)
2.2
Income (loss) before income taxes (TE)
573
606
508
(5.4)
12.8
Allocated income taxes and TE adjustments
122
134
109
(9.0)
11.9
Net income (loss) attributable to Key
$ 451
$ 472
$ 399
(4.4) %
13.0 %
Average balances
Loans and leases
$ 73,146
$ 71,107
$ 67,058
2.9 %
9.1 %
Loans held for sale
958
1,140
754
(16.0)
27.1
Total assets
82,585
80,689
76,946
2.3
7.3
Deposits
58,929
60,485
57,481
