KeyCorp reported second-quarter 2026 net income of $472 million, down 2.9% from $486 million in the first quarter but up 22.0% from $387 million a year earlier. Diluted earnings per share were $0.44, unchanged from the prior quarter and up from $0.35 in the second quarter of 2025.
Revenue reached $1.964 billion, edging up 0.6% from $1.953 billion in the first quarter and rising 6.7% from $1.840 billion a year ago. Net interest income climbed to $1.258 billion from $1.230 billion in the first quarter and $1.150 billion in the year-ago quarter, a gain of 2.3% sequentially and 9.4% year over year. Net interest margin improved to 2.89%, up 2 basis points from the first quarter and 23 basis points from the second quarter of 2025.
Noninterest income was $706 million, down 2.4% from $723 million in the first quarter but up 2.3% from $690 million a year earlier. The sequential decline was driven mainly by investment banking and debt placement fees, which fell to $169 million from $197 million, and commercial mortgage servicing fees, which dropped to $49 million from $62 million. Those declines were partly offset by cards and payments income, which rose to $94 million from $86 million, and corporate services income, which increased to $80 million from $71 million.
Noninterest expense totaled $1.217 billion, up 3.0% from $1.181 billion in the first quarter and 5.5% from $1.154 billion in the second quarter of 2025. Personnel expense rose to $786 million from $743 million in the first quarter and $705 million a year earlier. Business services and professional fees increased to $46 million from $36 million sequentially.
Average loans were $110.072 billion, up $2.335 billion from the first quarter and $4.357 billion from the year-ago quarter. Commercial and industrial average loans rose to $62.134 billion from $59.149 billion in the first quarter and $55.604 billion a year earlier. Total consumer loans declined to $29.094 billion from $29.670 billion in the first quarter and $31.403 billion a year earlier.
Average deposits were $147.577 billion, up $278 million sequentially and $131 million from a year earlier. The cost of total deposits fell to 1.63% from 1.65% in the first quarter and 1.99% in the second quarter of 2025.
Net charge-offs were $115 million, or 0.42% of average total loans, compared with $101 million, or 0.38%, in the first quarter and $102 million, or 0.39%, a year ago. Nonperforming loans rose to $809 million from $682 million in the first quarter and $696 million a year earlier. The nonperforming loans ratio increased to 0.73% from 0.62% and 0.65%, respectively.
KeyCorp’s allowance for credit losses declined to $1.722 billion from $1.745 billion in the first quarter and $1.743 billion a year earlier. As a percentage of period-end loans, the allowance fell to 1.56% from 1.60% in the first quarter and 1.64% a year ago.
Capital ratios eased quarter over quarter. Common equity tier 1 fell to 11.2% from 11.4% in the first quarter and 11.7% a year earlier. Tier 1 risk-based capital declined to 12.8% from 13.0%, and total risk-based capital slipped to 14.8% from 15.2%.
Book value at period end rose to $16.19 from $16.13 in the first quarter and $15.32 a year ago. Tangible common equity to tangible assets was 7.7%, down from 8.0% in the first quarter and 7.8% a year earlier.
Key repurchased $341 million of common shares during the quarter. Shares outstanding fell to 1.072 billion from 1.087 billion at March 31 and 1.112 billion at June 30, 2025.
By segment, consumer bank revenue increased to $1.010 billion from $977 million in the first quarter and $966 million a year earlier. Commercial bank revenue was $1.108 billion, down from $1.119 billion sequentially but up from $1.074 billion a year earlier. Consumer bank income rose to $203 million from $174 million in the first quarter and $165 million a year earlier, while commercial bank income fell to $423 million from $452 million in the first quarter and was flat with a year ago. Following these announcements, the company's shares moved -0.94%, and are now trading at a price of $23.10. For more information, read the company's full 8-K submission here.
