Report date: Tuesday, July 21, 2026, before market open | Call: 9:00 AM ET
KeyCorp heads into its second-quarter report on a run of momentum. The stock closed at $23.33 on July 20, near the top of its 52-week range, up from roughly $21 at the start of 2026 and well above the $15.99 level from a year ago.
Sell-side expectations are running hot on a year-over-year basis but have softened modestly in recent weeks:
Q1 was a strong quarter and the baseline against which Q2 will be judged. KeyCorp reported net income of $486 million, or $0.44 per diluted share, up 33% year-over-year, on revenue of $1.95 billion (+10% y/y). Management raised full-year guidance off the back of it:
| Metric | Q1 2026 | vs. Q4 2025 | vs. Q1 2025 |
|---|---|---|---|
| EPS (diluted) | $0.44 | +2.3% | +33.3% |
| Net interest income (TE) | $1.23B | +0.6% | +11.3% |
| Net interest margin | 2.87% | +5 bps | +29 bps |
| Noninterest income | $723M | -7.5% | +8.2% |
| ROTCE | 13.02% | +59 bps | +178 bps |
| Period-end commercial loans | — | +4% (+$3.3B) | — |
| Net charge-offs | 38 bps | -1 bp | -5 bps |
| CET1 ratio | 11.4% | -40 bps | -20 bps |
| Buybacks | $389M | — | — |
Coming out of Q1, management raised full-year NII growth guidance to 9%–10% (from 8%–10%), guided to an exit NIM near 3.05%, and lifted average loan growth guidance to 2%–4% (commercial loans 6%–8%), while reiterating expense growth of 3%–4% and a $1.3 billion full-year buyback plan (up from $1.2 billion). Management's stated base case assumes no rate cuts in 2026.
1. NII/NIM trajectory. KeyCorp is guiding toward a ~3.05% exit NIM, up from 2.87% in Q1, driven by continued remixing of consumer into higher-yielding commercial loans, deposit beta management, and swap repricing. Watch whether margin expansion is tracking that glide path, and whether management reiterates the "no cuts" base case or shifts tone given the current Fed standoff (more below).
2. Investment banking fees — a guided-down sequential number. Q1's $197 million in IB and debt placement fees was a record, but management explicitly guided Q2 IB fees to a $175–180 million range, citing macro/geopolitical uncertainty slowing M&A pull-through despite record pipelines. The key question: does Key hit (or beat) that range, and does it reaffirm the mid-single-digit full-year IB fee growth target ($780M base year, guiding to ~$825M at the midpoint)?
3. Loan growth and pipeline conversion. Commercial loan pipelines were up ~20% from year-end as of the Q1 call, with utilization ticking up for the first time in a long while. Watch for confirmation of continued broad-based C&I growth (utilities/power, healthcare consolidation, CRE transactional activity picking up) and progress against the 6%-8% full-year commercial loan growth guide.
4. Deposits and funding costs. Average deposits were guided to trough around mid-May and build from there through year-end, with cumulative deposit beta running near 56% (cumulative funding beta 68%). Confirmation that deposit costs are stabilizing (or still declining) in a "higher-for-longer" rate backdrop is a key swing factor for NIM.
5. Credit quality and the private credit/NDFI disclosures. Nonperforming assets ticked up in Q1 (63 bps vs. 59 bps in Q4) on two idiosyncratic credits (utilities, multifamily real estate), and management added qualitative reserves for macro uncertainty even as charge-offs stayed benign at 38 bps. Given ongoing market scrutiny of non-depository financial institution (NDFI) and private-credit exposure, expect continued detailed disclosure — Key highlighted ~$10.9 billion of private-credit-related outstandings (about 70% specialty finance lending, ~98% investment grade) as of Q1 and called the book "not a credit problem."
6. Capital return and Basel III Endgame. Key repurchased $389 million of stock in Q1 (ahead of its $300M+/quarter commitment) and reiterated at least $1.3 billion of buybacks for 2026. It also flagged a preliminary 100+ basis point benefit to its marked CET1 ratio from the revised Basel III Endgame standardized approach — any update on rulemaking progress or capital deployment plans would be notable.
7. Expense discipline / operating leverage. Full-year expense growth guidance remains 3%-4%, with continued investment in frontline bankers (payments, wealth, investment banking) and ~$1 billion of technology/AI spend planned for 2026. Watch for confirmation that revenue continues to grow at roughly 2x the rate of expenses (positive operating leverage), a theme management leaned on heavily last quarter.
8. Progress toward the 15%+ ROTCE by year-end 2027 target. Q1 ROTCE of 13.02% was already ahead of plan; the path to 15%+ is the multi-quarter story investors are tracking.
Regional/large-cap bank earnings season is already underway and offers some cross-checks:
Truist Financial (TFC), which reported July 17, posted EPS up 37% y/y, but the composition is instructive: non-interest income climbed 17% from the second quarter of 2025 to $1.64 billion, led by investment banking and trading up 72%, while net interest income growth was sluggish and net interest margin on a tax-equivalent basis was 2.98%, down roughly four basis points. This is broadly consistent with the pattern KeyCorp itself flagged for Q2 — strong fee/capital-markets momentum potentially outpacing NII, at least at some peers.
The rate backdrop is unusually two-sided. The Fed held rates steady at its June meeting, but minutes revealed a split committee: the release of the June meeting minutes showed that policymakers were split 9-to-8 on a 2026 rate hike, with some officials actively making a case for one. The next FOMC decision lands July 28–29 — after KeyCorp's print — so investors will be listening closely to whether management's "no cuts" NIM base case is holding up, and how sensitive guidance is to a hike scenario (management noted on the Q1 call that a hike would create "a little stress" on the margin outlook, while cuts would offer modest upside if accompanied by curve steepening).
KEY trades around $23.3–23.6, near its 52-week high of ~$24.07 (52-week low ~$16.47), giving it a market cap near $25 billion and a trailing P/E in the mid-teens. The average sell-side price target of roughly $25.85 implies modest upside from current levels, and the stock has already outperformed the broader market over the past month.
KeyCorp enters this print with genuine operating momentum — eight consecutive quarters of adjusted PPNR growth, NIM expansion, above-plan capital returns, and record fee-business production — but consensus estimates have ticked down slightly into the quarter and management itself flagged a sequential step-down in investment banking fees. The print will likely be judged less on the raw EPS beat/miss and more on: (1) whether NIM is still tracking toward the ~3.05% year-end target, (2) whether commercial loan and deposit trends confirm the raised full-year guidance, (3) whether credit costs stay contained outside the two known idiosyncratic Q1 credits, and (4) management's tone on capital deployment (buybacks, Basel III Endgame) and the Fed's unusually uncertain rate path heading into the July 28–29 FOMC meeting.