KEY

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. KeyCorp stock has delivered a 148.9% total return over the past three years, yet current checks suggest the shares may still trade below an estimate of intrinsic value. Both the Excess Returns intrinsic value model and market multiples currently point to KeyCorp as undervalued, even after that strong multi year gain. The 148.9% return over three years highlights how strongly the stock has rewarded shareholders. This makes any remaining discount to intrinsic value more important to understand. Recent investments in middle market advisory capabilities and ongoing spending by clients on areas such as AI and M&A can support expectations for KeyCorp's future earnings. Broader economic uncertainty remains a key risk if it slows deal activity or credit demand. KeyCorp screens as undervalued on 4 of 6 checks, which is a mixed overall verdict rather than a clear cut bargain. You can see the breakdown in the 4 score. The stock's next move may depend on whether the current share price already reflects the upside implied by these valuation models or still leaves a meaningful margin to intrinsic value. Find out why KeyCorp's 32.0% return over the last year is lagging behind its peers. The Excess Returns model looks at how efficiently KeyCorp turns its equity base into earnings above the cost of capital. For KeyCorp, the inputs indicate a spread between what shareholders put in and what the bank is estimated to earn on that equity. The model uses a Book Value of $16.14 per share and a Stable EPS estimate of $2.02 per share, alongside a Cost of Equity of $1.24 per share. That leaves an estimated Excess Return of $0.78 per share, supported by an average Return on Equity of 11.96% and a Stable Book Value of $16.89 per share. On these assumptions, the Excess Returns valuation indicates an intrinsic value of about $38.20 per share, which is 40.6% above the current share price, so the stock screens as undervalued. KeyBank's recent Middle Market Sentiment Report, which highlights continued client investment in areas such as AI and M&A, helps clarify why the market may be paying more attention to these earnings and return assumptions. Overall, the Excess Returns analysis indicates that KeyCorp stock appears undervalued relative to the earnings power implied by its equity base. Our Excess Returns analysis suggests KeyCorp is undervalued by 40.6%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for KeyCorp. The P/E multiple is a useful yardstick for a bank such as KeyCorp, since earnings are a central driver of how investors typically price the sector. On this measure, KeyCorp trades on a P/E of about 12.8x, which sits just above the Banks industry average of roughly 12.0x and below a peer group average of about 15.8x. The fair P/E ratio implied by Simply Wall St’s model is about 14.5x. That is higher than where KeyCorp currently trades. This indicates the stock sits at a discount to what the model suggests might be reasonable given its earnings profile and risk factors. The gap between the current P/E and this fair multiple indicates investors are paying a lower price for each dollar of KeyCorp earnings than the model would imply. On the P/E multiple, KeyCorp stock appears undervalued relative to the level suggested by its earnings and risk profile. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for KeyCorp pick up where the valuation checks leave off. They spell out which paths for growth, margins and earnings would need to play out for the stock to be worth materially more or less than today’s price on the Community page. Each narrative ties its number to a concrete view of how KeyCorp's growth, profitability and risk profile might evolve, which you can review again as fresh information arrives. Community views on KeyCorp sit far apart, with one camp leaning into a measured repricing story and the other focused on execution and cycle risk. Bull case: 13% undervalued Read the full Bull Case to see why KeyCorp could be undervalued Bear case: roughly fairly valued Read the full Bear Case to see why KeyCorp could be overvalued Do you think there's more to the story for KeyCorp? Head over to our Community to see what others are saying! KeyCorp screens as undervalued on both the intrinsic value estimate from the Excess Returns model and on earnings based market multiples, although the broader valuation checks are only mixed. That combination points to a stock where the market is still cautious despite supportive model outputs. For you as an investor, the key question is whether concerns around deal activity, credit demand and execution justify that discount or whether sentiment eventually closes the gap to intrinsic value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include KEY. Have feedback on this article? 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TORONTO, July 22, 2026 /CNW/ -- Scotiabank announced today that the expected net income contribution from its ownership interest in KeyCorp will be approximately CAD $82 million in Q3 2026. This contribution represents the Bank's share of KeyCorp's Q2 2026 net income, includes acquisition-related and other accounting impacts, is net of the Bank's associated funding costs and is reported on a one-month lag. Adjusting for the amortization of acquired intangible assets of approximately CAD $8 million, the Bank's adjusted net income contribution from KeyCorp will be approximately CAD $90 million.1 Scotiabank will release its third quarter financial results and host an earnings conference call on August 25, 2026. Conference call and audio webcast details will be announced closer to that date. About Scotiabank Scotiabank's vision is to be our clients' most trusted financial partner and deliver sustainable, profitable growth. Guided by our purpose: "for every future," we help our clients, their families and their communities achieve success through a broad range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With assets of approximately $1.5 trillion (as at April 30, 2026), Scotiabank is one of the largest banks in North America by assets, and trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS). For more information, please visit http://www.scotiabank.com and follow us on X @Scotiabank. Forward-looking Statements From time to time, our public communications include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission (SEC), or in other communications. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management's Discussion and Analysis in the Bank's 2025 Annual Report under the headings "Outlook" and in other statements regarding the Bank's objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank's businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as "believe," "expect," "aim," "achieve," "foresee," "forecast," "anticipate," "intend," "estimate," "outlook," "seek," "schedule," "plan," "goal," "strive," "target," "project," "commit," "objective," and similar expressions of future or conditional verbs, such as "will," "may," "should," "would," "might," "can" and "could" and positive and negative variations thereof. By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward-looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate and globally; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates, including relating to the care and control of information, and other risks arising from the Bank's use of third parties; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; geopolitical risk (including policies and other changes related to, or affecting, economic or trade matters, including tariffs, countermeasures, tariff mitigation policies and tax-related risks); changes to our credit ratings; the possible effects on our business and the global economy of war, conflicts or terrorist actions and unforeseen consequences arising from such actions; technological changes, including open banking and the use of data and artificial intelligence in our business, and technology resiliency; operational and infrastructure risks; reputational risks; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services, and the extent to which products or services previously sold by the Bank require the Bank to incur liabilities or absorb losses not contemplated at their origination; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank's ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; anti-money laundering; disruptions or attacks (including cyberattacks) on the Bank's information technology, internet connectivity, network accessibility, or other voice or data communications systems or services, which may result in data breaches, unauthorized access to sensitive information, denial of service and potential incidents of identity theft; increased competition in the geographic and business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; environmental, social and governance risks, including climate-related risk, our ability to implement various sustainability-related initiatives (both internally and with our clients and other stakeholders) under expected time frames, and our ability to scale our sustainable-finance products and services; the occurrence of natural and unnatural catastrophic events and claims resulting from such events, including disruptions to public infrastructure, such as transportation, communications, power or water supply; inflationary pressures; global supply-chain disruptions; Canadian housing and household indebtedness; the emergence or continuation of widespread health emergencies or pandemics, including their impact on the local, national or global economies, financial market conditions and the Bank's business, results of operations, financial condition and prospects; and the Bank's anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank's actual performance to differ materially from that contemplated by forward-looking statements. The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank's results, for more information, please see the "Risk Management" section of the Bank's 2025 Annual Report, as may be updated by quarterly reports. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2025 Annual Report under the headings "Outlook", as updated by quarterly reports. The "Outlook" and "2026 Priorities" sections are based on the Bank's views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank's shareholders and analysts in understanding the Bank's financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf. Additional information relating to the Bank, including the Bank's Annual Information Form, can be located on the SEDAR+ website at www.sedarplus.ca and on the EDGAR section of the SEC's website at www.sec.gov. View original content to download multimedia: http://www.newswire.ca/en/releases/archive/July2026/22/c7601.html

Interested in KeyCorp? Here are five stocks we like better. KeyCorp posted a strong Q2, with EPS up 26% year over year to $0.44 and revenue up 7%, while net interest margin expanded to 2.89%. Management said it remains on track to reach a 3% margin by year-end. Commercial lending was the main growth driver, as C&I loans rose $2.1 billion sequentially and the bank lifted full-year guidance for revenue, net interest income and average loan growth. KeyCorp now expects average commercial loans to grow 8% to 10% in 2026. Fee businesses and capital returns stayed central, with investment banking pipelines improving, commercial payments up 12%, and wealth assets hitting a record $74 billion. KeyCorp also bought back more than $340 million of stock in the quarter and remains on pace for at least $1.3 billion in repurchases this year. Keysight: The AI and Defense Stock Seeing Big Price Target Boosts KeyCorp (NYSE:KEY) reported higher second-quarter 2026 earnings and raised parts of its full-year outlook, citing stronger commercial loan growth, expanding net interest income and continued momentum in fee-based businesses, while management also addressed investor questions about margin performance, deposit growth and the timing of a recovery in middle-market investment banking. Chairman and Chief Executive Officer Chris Gorman said KeyCorp earned $0.44 per share in the quarter, up 26% from a year earlier. Revenue rose 7% year-over-year, while pre-provision net revenue increased 9%. The bank’s net interest margin expanded sequentially to 2.89%, and Gorman said the company remains on track to meet or exceed a 3% margin by year-end. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks Banks Are Buying Back Stock Hand Over Fist, Including These 3 Names “Our second quarter results reflect strong business momentum and continued progress against our strategic and financial commitments,” Gorman said. KeyCorp’s commercial loan growth was a central focus of the call. Gorman said period-end commercial and industrial loans increased $2.1 billion, or 3%, sequentially, reflecting new client wins and deeper existing relationships. Chief Financial Officer Clark Khayat said average loans rose $2.3 billion sequentially, while period-end loans increased $1.2 billion, as C&I growth was partly offset by the planned runoff of lower-yielding consumer loans. → Cybersecurity Stocks Are Holding Up as the AI Trade Starts to Crack Intel's New Orbit: From Chip Lag to Leading Edge Khayat said growth was broad-based across industries and regions, with the largest contributors including utilities, power and renewables, real estate and technology. He also noted that C&I line utilization declined 50 basis points sequentially to 31%, driven by higher commitments. Management said the bank is intentionally pursuing higher-quality commercial relationships, even where spreads may be somewhat lower. Gorman said about 58% of KeyCorp’s C&I loans are investment grade, and he emphasized that lending is intended to lead to broader relationships in payments, hedging, advisory and other services. → Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit “In order to get the kind of returns that we have to get, we’ve got to do a lot more things for them,” Gorman said. KeyCorp raised several full-year 2026 guidance metrics. Khayat said the bank now expects revenue to grow 7% to 8%, compared with previous guidance of approximately 7%. Full-year net interest income is now expected to increase 9% to 11%, compared with the prior range of 9% to 10%. The company also raised its average loan growth forecast to 4% to 5%, from 2% to 4%, and now expects average commercial loans to increase 8% to 10% this year. Khayat said the updated outlook reflects strong first-half loan growth, success adding and expanding client relationships, and healthy commercial loan pipelines. Gorman said the bank expects revenue to grow about twice as fast as expenses in 2026, producing substantial positive operating leverage. KeyCorp expects to exit the year with a net interest margin of 3% to 3.05%. Khayat said more than $9 billion of low-yielding fixed assets are expected to reprice through year-end, with a pickup of about 1.25%, helping support margin expansion. He also said the bank expects average client deposits to grow by more than 2% through year-end, largely from core operating deposits. Analysts repeatedly questioned management about the bank’s margin trajectory after second-quarter net interest margin rose less than expected. Khayat said the quarter reflected stronger-than-expected loan growth, tighter spreads on higher-quality loans and a temporary need for wholesale funding as deposits reached a seasonal low in May. “We chose to fill that with wholesale funds rather than reprice the client deposit base because the expectation is we’re going to see some good deposit growth here in the second half,” Khayat said. Average deposits were relatively flat sequentially and year-over-year, while total deposit costs declined two basis points to 1.63%. Average non-interest-bearing deposits increased 2.3% sequentially and represented 19% of total deposits, or 24% when adjusted for hybrid accounts. Khayat said end-of-quarter deposit balances of $153 billion were temporarily elevated by about $4 billion because of transaction timing among relationship clients. In response to investor questions, Khayat said KeyCorp has good visibility into expected deposit growth, largely from commercial relationship clients. Gorman added that the bank has been focused for years on primacy in commercial relationships, saying KeyCorp has primacy in 82% of its commercial deposits. KeyCorp’s fee-based businesses remained an area of emphasis. Gorman said investment banking, commercial payments and wealth collectively grew 8% in the first half of 2026 compared with the first half of 2025. Investment banking and debt placement fees totaled $169 million in the second quarter. For the first half, investment banking fees were $366 million, up 4% from the year-ago period. Gorman acknowledged that investment banking results were below the company’s expectations in the quarter but said pipelines remain strong. Khayat said overall investment banking pipelines were up 9% from the prior quarter, while M&A pipelines rose 7% to a record level. KeyCorp expects third-quarter investment banking fees to be up more than 20% sequentially and continues to target mid-single-digit investment banking fee growth for the full year. Gorman said middle-market M&A activity has lagged larger transactions, noting that 40% of KeyCorp’s investment banking fees are driven by private equity. “I think we are in the early innings of the renaissance of middle market M&A,” Gorman said in response to an analyst question. In commercial payments, Gorman said total gross payment fees increased 12% year-over-year, helped by investments in bankers and embedded banking. In wealth management, assets under management reached a record $74 billion. Since launching its Mass Affluent strategy in 2023, KeyCorp has added 59,000 households, more than $4 billion of assets under management and nearly $8 billion of total client assets, Gorman said. Asset quality remained broadly stable, though non-performing assets increased. Khayat said net charge-offs were $115 million, or 42 basis points of average loans, and criticized loans were relatively stable at 4.9%. Non-performing assets rose $126 million sequentially to 74 basis points of loans, largely tied to three credits in real estate, consumer goods and agriculture. Chief Risk Officer Mohit Ramani said the migration was not related to private credit and did not indicate a broader macro trend. He said KeyCorp continues to expect full-year net charge-offs of 40 to 45 basis points. “Overall, we don’t feel like a lot of loss content relative to this move,” Ramani said. KeyCorp reported a CET1 ratio of 11.2% and a marked CET1 ratio of 9.8% at quarter-end. Gorman said the company repurchased more than $340 million of common stock during the quarter and remains on pace to repurchase at least $1.3 billion for the year. Khayat suggested investors assume about $300 million of repurchases per quarter in the second half. The company also announced an agreement during the quarter to acquire Clearwater U.K., which Gorman described as a strategic extension of KeyCorp’s middle-market advisory franchise. He said the transaction, expected to close in the second half of 2026, will expand the bank’s ability to serve M&A clients and prospects internationally. Gorman said that despite macroeconomic uncertainty, KeyCorp enters the second half of the year with strong momentum and remains confident in its ability to generate a return on tangible common equity above 15% by the end of 2027, on the way to its longer-term 16% to 19% target. KeyCorp is a bank holding company headquartered in Cleveland, Ohio, that operates through its primary banking subsidiary, KeyBank. It provides a broad range of banking and financial services to individual consumers, small businesses, middle-market companies and large corporations. KeyBank's offerings span traditional deposit and lending products as well as more specialized financial solutions designed for commercial and institutional clients. The company's product and service mix includes retail banking products such as checking and savings accounts, consumer and residential mortgage lending, and auto financing. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "KeyCorp Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

KeyCorp’s KEY second-quarter 2026 earnings from continuing operations of 44 cents per share outpaced the Zacks Consensus Estimate of 42 cents. The bottom line reflected a 25.7% rise from the prior-year quarter.Results primarily benefited from higher net interest income (NII) and non-interest income. Higher average loan balances, along with lower provisions, were other tailwinds. However, higher expenses hurt the results to some extent.Net income from continuing operations attributable to common shareholders was $472 million, up from $387 million in the prior-year quarter. Total revenues (taxable-equivalent or TE) increased 6.7% year over year to $1.96 billion. However, the top line missed the Zacks Consensus Estimate of $1.98 billion.NII (TE basis) jumped 9.4% from the prior-year quarter to $1.26 billion. The net interest margin (TE basis) from continuing operations expanded 23 basis points (bps) to 2.89%. Both metrics benefited from lower 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, partially offset by the impact of lower interest rates on repricing earning assets.Non-interest income was $706 million, up 2.3% year over year. The rise was mainly driven by higher trust and investment services income, cards and payments income, service charges on deposit accounts, corporate services income, corporate-owned life insurance income, consumer mortgage income, and other income.Non-interest expenses increased 5.5% year over year to $1.22 billion. The rise was due to an increase in personnel expenses, computer processing costs and equipment costs.At the end of the second quarter, average total loans were $110.07 billion, up 2.2% from the previous quarter. Average total deposits were $147.58 billion, up marginally sequentially. The provision for credit losses was $92 million, down 33.3% from the prior-year quarter.However, net loan charge-offs, as a percentage of average total loans, increased 3 bps year over year to 0.42%. Also, non-performing assets, as a percentage of period-end portfolio loans, other real estate-owned property assets and other non-performing assets, were 0.74%, up 8 bps.The allowance for loan and lease losses was $1.45 billion, stable year over year. KEY's tangible common equity to tangible assets ratio was 7.7% as of June 30, 2026, down from 7.8% in the corresponding period of 2025.The Tier 1 risk-based capital ratio was 12.8%, down from 13.4%. The Common Equity Tier 1 ratio was 11.2%, down from 11.7% as of June 30, 2025. In the reported quarter, KeyCorp repurchased shares worth $341 million. In April, KeyCorp entered a definitive agreement to acquire Clearwater Corporate Finance LLP’s UK business, marking its entry into Western Europe. The acquisition is expected to expand KEY’s middle-market investment banking advisory capabilities and strengthen its cross-border merger and acquisition platform.Along with this, robust loan balances, balance sheet repositioning efforts and stabilizing funding costs will likely support the company’s top-line growth in the near term. However, weak asset quality amid a tough macroeconomic backdrop is concerning. KeyCorp price-consensus-eps-surprise-chart | KeyCorp Quote KeyCorp currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Bank of America’s BAC second-quarter 2026 earnings of $1.21 per share handily surpassed the Zacks Consensus Estimate of $1.13. The bottom line grew 34.4% year over year.BAC recorded an improvement in trading numbers for the 17th straight quarter. The company’s investment banking (IB) performance was solid this time as well. These, along with higher NII, drove Bank of America’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.JPMorgan JPM posted second-quarter 2026 adjusted earnings of $6.14 per share, which beat the Zacks Consensus Estimate of $5.59 by 9.8%. The bottom line rose 17.2% from $5.24 reported a year ago.Strong Markets and IB activity powered core growth, while NII got support from decent loan demand. Lower provisions also offered support. However, an increase in operating expenses was the undermining factor for JPMorgan. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KeyCorp (KEY) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

KeyCorp (KEY) came out with quarterly earnings of $0.44 per share, beating the Zacks Consensus Estimate of $0.42 per share. This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.76%. A quarter ago, it was expected that this company would post earnings of $0.41 per share when it actually produced earnings of $0.44, delivering a surprise of +7.32%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. KeyCorp, which belongs to the Zacks Banks - Major Regional industry, posted revenues of $1.96 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.11%. This compares to year-ago revenues of $1.83 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. KeyCorp shares have added about 13% since the beginning of the year versus the S&P 500's gain of 8.7%. While KeyCorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for KeyCorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.46 on $2.02 billion in revenues for the coming quarter and $1.82 on $8.04 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Major Regional is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, BankUnited, Inc. (BKU), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 22. This company is expected to post quarterly earnings of $1.02 per share in its upcoming report, which represents a year-over-year change of +12.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. BankUnited, Inc.'s revenues are expected to be $290.57 million, up 6.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KeyCorp (KEY) : Free Stock Analysis Report BankUnited, Inc. (BKU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by robust commercial loan growth, with C&I loans increasing 3% sequentially through new client acquisition and deeper penetration in utility, power, and technology sectors. Net interest margin expansion to 2.89% was supported by fixed-rate asset repricing and disciplined deposit management, despite a seasonal trough in deposit balances during May. Management attributed the 12% growth in commercial payments fees to sustained investments in frontline bankers and the successful scaling of embedded banking solutions. The wealth management strategy focused on the mass affluent segment has added 59,000 households since 2023, though management notes the bank is still less than 10% penetrated in its existing base. The acquisition of Clearwater UK represents a strategic pivot to expand middle-market M&A advisory capabilities internationally, providing a defensive and offensive buttress to the domestic franchise. Operating leverage remains a core focus, with revenue expected to grow twice as fast as expenses in 2026 due to continuous improvement efforts and technology investments. Management increased full-year revenue guidance to 7-8% growth, underpinned by higher-than-expected commercial loan momentum and a record investment banking pipeline. Net interest margin is projected to reach 3.0% to 3.05% by year-end, driven by the repricing of $9 billion in low-yielding fixed assets at a pickup of approximately 1.25%. The bank expects to increase average client deposits by more than 2% through year-end, primarily through core operating deposits from relationship clients. Investment banking fees are forecasted to rise 20%+ in the third quarter, assuming a seasonal year-end push for middle-market M&A and a stabilizing interest rate environment. Capital allocation priorities remain focused on supporting organic growth and returning at least $1.3 billion to shareholders via repurchases in 2026. A $23 million reserve release was partially offset by a qualitative build to account for heightened geopolitical and macroeconomic uncertainty. Non-performing loans increased due to three idiosyncratic credits in real estate, consumer goods, and agriculture, though management does not expect meaningful incremental losses. Management identified potential long-term risks in software and professional services sectors due to the disruptive impact of large language models on traditional business models. Agricultural portfolio stress in the Pacific Northwest was specifically linked to labor shortages and rising input costs rather than broader systemic credit decay. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expressed a willingness to trade some margin to acquire high-quality relationship clients, viewing initial capital provision as a gateway to higher-returning fee businesses. They emphasized that while new loans may have tighter spreads, the goal is to achieve return hurdles within 12 to 18 months through payments and advisory services. Management noted a bifurcation in the market where large-cap deals have recovered faster than the middle-market and private equity sponsor activity. They remain confident in a 'renaissance' of middle-market M&A as sponsors face pressure to generate exits to raise new funds, despite current transaction volumes being down. The bank relies on its 'primacy' in 82% of commercial relationships, giving them visibility into client funds held elsewhere that can be incentivized to move. The growth forecast assumes stable pricing in a flat rate environment, with the ability to bridge temporary gaps using short-term wholesale funding.

KeyCorp (KEY) reported $1.96 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 6.8%. EPS of $0.44 for the same period compares to $0.35 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $1.98 billion, representing a surprise of -1.11%. The company delivered an EPS surprise of +4.76%, with the consensus EPS estimate being $0.42. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how KeyCorp performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Capital Ratios - Leverage: 10.3% versus 10.4% estimated by two analysts on average. Capital Ratios - Tier 1 risk-based capital: 12.8% versus the two-analyst average estimate of 12.8%. Net loan charge-offs to average loans: 0.4% versus the two-analyst average estimate of 0.4%. Cash efficiency ratio (non-GAAP): 61.9% versus the two-analyst average estimate of 62.1%. Net interest margin (TE) from continuing operations: 2.9% versus the two-analyst average estimate of 2.9%. Book value at period end: $16.19 versus the two-analyst average estimate of $16.29. Average Balance - Total earning assets: $171.82 billion versus $172.2 billion estimated by two analysts on average. Trust and investment services income: $159 million versus the two-analyst average estimate of $160.93 million. Investment banking and debt placement fees: $169 million compared to the $181.24 million average estimate based on two analysts. Total Noninterest Income: $706 million versus $709.43 million estimated by two analysts on average. Net interest income (TE): $1.26 billion versus $1.26 billion estimated by two analysts on average. Corporate services income: $80 million versus $76.68 million estimated by two analysts on average. View all Key Company Metrics for KeyCorp here>>> Shares of KeyCorp have returned +2.2% over the past month versus the Zacks S&P 500 composite's -0.6% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KeyCorp (KEY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Revenue of $1.96 billion, up 7% year-over-year Net interest income up 9% year-over-year and 2% sequentially; net interest margin of 2.89% increased 2 bps sequentially Period-end loans up $1.2 billion sequentially, with commercial and industrial loans up $2.1 billion or 3% Net charge-offs of 42 bps; allowance coverage ratio declined 4 bps sequentially to 1.56% Common Equity Tier 1 ratio of 11.2%(a); repurchased $341 million of common shares during the quarter CLEVELAND, July 21, 2026 /PRNewswire/ -- KeyCorp (NYSE: KEY) announced net income from continuing operations attributable to Key common shareholders of $472 million, or $0.44 per diluted common share,for the second quarter of 2026. For the first quarter of 2026, net income from continuing operations attributable to Key common shareholders was $486 million, or $0.44 per diluted common share. For the second quarter of 2025, KeyCorp reported net income from continuing operations attributable to Key common shareholders of $387 million, or $0.35 per diluted common share. Comments from Chairman and CEO, Chris Gorman "Our second quarter results reflect the strength of our franchise, disciplined execution, and sustained momentum across our businesses. We delivered 7% revenue growth and generated approximately 130 basis points of operating leverage(b) on a year-over-year basis. We expanded net interest margin and grew net interest income both sequentially and year-over-year. We continue to deepen client relationships while attracting new clients across our markets. Our priority growth businesses - investment banking, commercial payments, and wealth management - are performing exceptionally well. Investment banking pipelines grew 9% sequentially. Commercial payments continued to deliver strong, double digit fee growth year-over-year. Assets under management grew to a record $74 billion. These results reinforce the value of our relationship-driven model and the differentiated capabilities we have scaled across multiple businesses. I remain confident in our ability to generate a return on tangible common equity exceeding 15% by year-end 2027. We remain committed to delivering attractive returns to shareholders through both the return on and the return of capital. During the quarter, we repurchased more than $340 million of common shares, reflecting our confidence in the business and our commitment to creating long-term shareholder value. We are operating from a position of strength, supported by a resilient balance sheet, a diversified business model, and strong capital generation. While the operating environment remains dynamic, our performance in the first half of the year demonstrates the power of our strategy, the depth of our client relationships, and the agility of our teammates. Looking ahead, we remain focused on the significant organic growth opportunities in front of us, investing in the capabilities that will further differentiate our franchise, and delivering value for all of our stakeholders." Taxable-equivalent net interest income was $1.26 billion for the second quarter of 2026 and the net interest margin was 2.89%. Compared to the second quarter of 2025, net interest income increased by $108 million, and the net interest margin increased by 23 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 repricing earning assets. Compared to the first quarter of 2026, taxable-equivalent net interest income increased by $28 million, and the net interest margin increased by 2 basis points. These increases reflect growth in commercial and industrial loans and the reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher-yielding investments. Additionally, net interest income benefited from one additional day in the second quarter of 2026 compared to the first quarter of 2026. Compared to the second quarter of 2025, noninterest income increased by $16 million. The increase was driven by a $13 million increase in trust and investment services income, as well as a $14 million increase in other income. These were partially offset by a $21 million decrease in commercial mortgage servicing fees. Compared to the first quarter of 2026, noninterest income decreased by $17 million. The decrease was driven by a $28 million decrease in investment banking and debt placement fees, and a $13 million decrease in commercial mortgage servicing fees. These were partially offset by a $9 million increase in corporate services income and an $8 million increase in cards and payments income. Compared to the second quarter of 2025, noninterest expense increased by $63 million. The increase was predominantly driven by an $81 million increase in personnel expense primarily related to employee benefits, incentive compensation associated with noninterest income growth, and continued investments in people. Compared to the first quarter of 2026, noninterest expense increased by $36 million. The increase was predominantly driven by a $43 million increase in personnel expense, primarily related to incentive compensation, as well as a $10 million increase in business services and professional fees. These were partially offset by a $21 million decrease in other expense primarily related to lower charitable contributions. Average loans were $110.1 billion for the second quarter of 2026, an increase of $4.4 billion compared to the second quarter of 2025. Average commercial loans increased by $6.7 billion, primarily driven by a $6.5 billion increase in commercial and industrial loans. Average consumer loans declined by $2.3 billion, reflective of the intentional run-off of low-yielding loans. Compared to the first quarter of 2026, average loans increased by $2.3 billion. Average commercial loans increased $2.9 billion, primarily driven by an increase in commercial and industrial loans. Average consumer loans declined by $576 million, reflective of broad-based declines across all consumer loan categories. Average deposits totaled $147.6 billion for the second quarter of 2026, an increase of $131 million compared to the year-ago quarter, reflecting growth in demand deposits, partially offset by a decline in time deposits. Compared to the first quarter of 2026, average deposits increased by $278 million. The increase was driven by growth in noninterest bearing deposits, partially offset by lower demand deposits. The rate paid on interest-bearing deposits was flat sequentially, and the overall cost of deposits declined by 2 basis points to 1.63%. Net loan charge-offs for the second quarter of 2026 totaled $115 million, or 0.42% of average total loans. These results compare to $102 million, or 0.39%, for the second quarter of 2025 and $101 million, or 0.38%, for the first quarter of 2026. Key's allowance for credit losses was $1.7 billion, or 1.56% of total period-end loans at June 30, 2026, compared to 1.64% at June 30, 2025, and 1.60% at March 31, 2026. A reserve release of $23 million during the second quarter of 2026 was the result of resilient economic scenario assumptions and the improving mix shift of commercial loans. At June 30, 2026, Key's nonperforming loans totaled $809 million, which represented 0.73% of period-end portfolio loans. These results compare to 0.65% at June 30, 2025, and 0.62% at March 31, 2026. Nonperforming assets at June 30, 2026, totaled $818 million, and represented 0.74% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.66% at June 30, 2025, and 0.63% at March 31, 2026. CAPITAL Key's estimated risk-based capital ratios, included in the following table, continued to exceed all "well-capitalized" regulatory benchmarks at June 30, 2026. Key's regulatory capital position remained strong in the second quarter of 2026. As shown in the preceding table, at June 30, 2026, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 11.2% and 12.8%, respectively. During the second quarter of 2026, Key declared a dividend of $.205 per common share. The reduction in share count was driven by $341 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. Consumer Bank Summary of Operations (2Q26 vs. 2Q25) Key's Consumer Bank recorded net income attributable to Key of $203 million for the second quarter of 2026, compared to $165 million for the year-ago quarter Taxable-equivalent net interest income increased by $26 million, or 3.6%, compared to the second quarter of 2025 Average loans and leases decreased $2.9 billion, or 8.0%, from the second quarter of 2025, reflective of the intentional run-off of low-yielding loans Average deposits decreased $603 million, or 0.7%, from the second quarter of 2025, driven by lower time deposits, partially offset by an increase in money market deposits Provision for credit losses decreased $29 million compared to the second quarter of 2025, primarily driven by favorable economic assumptions and portfolio credit trends Noninterest income increased $18 million from the year-ago quarter, primarily driven by higher trust and investment services income Noninterest expense increased $23 million from the year-ago quarter, primarily driven by higher personnel expense Commercial Bank Summary of Operations (2Q26 vs. 2Q25) Key's Commercial Bank recorded net income attributable to Key of $423 million for the second quarter of 2026, compared to $423 million for the year-ago quarter Taxable-equivalent net interest income increased by $48 million, or 7.4%, compared to the second quarter of 2025 Average loan and lease balances increased $7.1 billion, or 10.3%, compared to the second quarter of 2025, driven by an increase in commercial and industrial loans Average deposit balances increased $3.0 billion compared to the second quarter of 2025, driven by higher client deposits Provision for credit losses decreased $17 million compared to the second quarter of 2025, driven by the impact to reserves due to improved economic assumptions Noninterest income decreased $14 million compared to the second quarter of 2025, primarily driven by a decrease in commercial mortgage servicing fees Noninterest expense increased $52 million compared to the second quarter of 2025, driven by an increase in personnel expense and support and overhead expense KeyCorp's roots trace back more than 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $191 billion at June 30, 2026. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 950 branches and approximately 1,100 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank Member FDIC. A live Internet broadcast of KeyCorp's conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts' questions can be accessed through the Investor Relations section at https://www.key.com/ir at 9:00 a.m. ET, on July 21, 2026. A replay of the call will be available on our website through July 21, 2027. For up-to-date company information, media contacts, and facts and figures about Key's lines of business, visit our Media Newsroom at https://www.key.com/newsroom. ***** KeyCorpSecond Quarter 2026 Financial Supplement Basis of Presentation Use of Non-GAAP Financial MeasuresThis document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Key's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, the financial supplement, or conference call slides related to this document, all of which can be found on Key's website (www.key.com/ir). Forward-Looking Non-GAAP Financial Measures From time to time Key may discuss forward-looking non-GAAP financial measures. Key is unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because Key is unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant for future results. Annualized DataCertain returns, yields, performance ratios, or quarterly growth rates are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. Taxable EquivalentThe interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at the federal statutory rate. This adjustment puts all earning assets, most notably tax-exempt loans, and certain lease assets, on a common basis that facilitates comparison of results to peers. Earnings Per Share Equivalent Certain income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total consolidated earnings per share performance excluding the impact of such items. When the impact of certain income or expense items is disclosed separately, the after-tax amount is computed using the marginal tax rate, unless otherwise specified, with this then being the amount used to calculate the earnings per share equivalent. GAAP to Non-GAAP Reconciliations(Dollars in millions) The table below presents certain non-GAAP financial measures defined and described below. The tangible common equity ratio and the return on average tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key's capital position without regard to the effects of intangible assets and preferred stock. Adjusted return on average tangible common equity excludes significant or unusual items that management does not consider indicative of ongoing financial performance. Management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. The table also shows the computation for pre-provision net revenue and adjusted pre-provision net revenue, which are not formally defined by GAAP. Management believes that eliminating the effects of the provision for credit losses makes it easier to analyze the results by presenting them on a more comparable basis. Further, management believes that adjusting pre-provision net revenue for significant or unusual items that management does not consider indicative of ongoing financial performance provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash efficiency ratio performance measure removes the impact of Key's intangible asset amortization from the calculation. Management believes this ratio provides greater consistency and comparability between Key's results and those of its peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis. The adjusted cash efficiency ratio excludes significant or unusual items that management does not consider indicative of ongoing financial performance Adjusted taxable-equivalent revenue or adjusted revenue is a non-GAAP measure in that it adjusts revenue for certain tax-exempt instruments and selected items. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest income, we use interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable instruments. Additionally, management believes adjusting for the selected items provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of the financial impacts related to those selected items. Adjusted noninterest income and adjusted noninterest expense are non-GAAP measures in that they exclude significant or unusual items that management does not consider indicative of ongoing financial performance. Management believes these measures provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. Adjusted income (loss) available from continuing operations attributable to Key common shareholders (or "adjusted net income") and diluted earnings per share - adjusted (or "adjusted earnings per share") are non-GAAP in that these measures exclude significant or unusual items, net of tax, that management does not consider indicative of ongoing financial performance . Management believes these measures provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods. Adjusted operating leverage and fee-based adjusted operating leverage are non-GAAP performance measures that utilize revenue on a tax-equivalent basis and adjust revenue and expense for significant and unusual items. Management utilizes these measurements in analyzing performance and believes that adjusting for significant and unusual items provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods. Marked CET1 ratio is a non-GAAP measure and is calculated based on Common Equity Tier 1 capital, inclusive of the AOCI impact from securities and pension. The marked CET1 ratio differs from the defined CET1 regulatory capital ratio by including the impact of AFS and pension accumulated other comprehensive income (loss) (AOCI) amounts in the calculation of the capital ratio. These ratios are not defined in GAAP or federal banking regulations. As a result, these non-regulatory capital ratios disclosed may be considered non-GAAP financial measures. Management believes this measure provides useful information in light of the potential for change in the regulatory capital framework. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. View original content to download multimedia:https://www.prnewswire.com/news-releases/keycorp-reports-second-quarter-2026-net-income-of-472-million-or-0-44-per-diluted-common-share-increasing-26-year-over-year-302830181.html

This article first appeared on GuruFocus. Earnings Per Share (EPS): $0.44, up 26% year over year. Revenue Growth: 7% year over year. Pre-Provision Net Revenue Growth: 9% year over year. Net Interest Margin (NIM): Expanded to 2.89%, with a target to exceed 3% by year-end. Commercial Loan Growth: C&I loans increased by $2.1 billion or 3% sequentially. Deposit Costs: Declined 2 basis points during the quarter. Net Charge-Off Ratio: 42 basis points during the quarter. Share Repurchases: Over $340 million repurchased, targeting at least $1.3 billion for the full year. Investment Banking Fees: $169 million for the quarter, with a 4% increase in the first half of 2026 compared to the prior year. Assets Under Management (AUM): Reached a record $74 billion. Non-Interest Income Growth: 2% year over year. Non-Interest Expenses: $1.2 billion, up 5% year over year. Average Loans: Increased by $2.3 billion sequentially. Average Deposit Balances: Relatively flat sequentially and year-over-year. Full-Year Revenue Growth Guidance: Increased to 7% to 8%. Full-Year Net Interest Income Growth Guidance: Increased to 9% to 11%. Average Loan Growth Guidance: Increased to 4% to 5% for the year. Warning! GuruFocus has detected 6 Warning Signs with KEY. Is KEY fairly valued? Test your thesis with our free DCF calculator. Release Date: July 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. KeyCorp (NYSE:KEY) reported a strong year-over-year earnings growth of 26%, with earnings per share reaching $0.44. Revenue increased by 7% year-over-year, and pre-provision net revenue grew by 9%, indicating solid financial performance. Net interest margin expanded to 2.89% with expectations to exceed 3% by year-end, driven by commercial loan growth and portfolio repricing. The company successfully repurchased over $340 million of common stock, on track to meet its full-year share repurchase target of at least $1.3 billion. KeyCorp (NYSE:KEY) announced a strategic acquisition of Clearwater UK, enhancing its middle market advisory franchise and expanding international M&A capabilities. Non-performing loans increased modestly, reflecting idiosyncratic items, although broader portfolio performance remains stable. Investment banking results fell short of expectations, despite strong industry performance, with a need for improvement in the second half. The company faces challenges in maintaining deposit growth, with a reliance on wholesale funds due to seasonal low deposits. Loan growth, while strong, came with tighter spreads due to higher credit quality, potentially impacting net interest margin. The macroeconomic environment remains uncertain, posing potential risks to KeyCorp (NYSE:KEY)'s financial outlook and strategic goals. Q: What drove the net interest margin (NIM) miss, and what are the expectations for reaching the 3.05% target? A: Christopher Gorman, CEO, explained that while NIM is important, the focus is on long-term return targets. Clark Khayat, CFO, noted that stronger-than-expected loan growth and lower loan yields contributed to a tighter spread. The expectation is to reach a 3% NIM by year-end, driven by $9 billion of fixed asset repricing and solid client deposit growth. Deposit costs are expected to remain stable unless there are rate hikes, which would be offset by higher loan yields. Q: Why did investment banking results fall short, and what are the expectations for the future? A: Christopher Gorman, CEO, acknowledged the shortfall but expressed confidence in mid-single-digit growth for the year. He noted that pipelines are strong, with a 9% increase quarter-over-quarter and a 31% increase year-over-year. The expectation is for a 20% increase in investment banking fees in the third quarter, driven by seasonality and strong client engagement. Q: How does KeyCorp plan to balance NIM and client growth to achieve long-term return targets? A: Christopher Gorman, CEO, emphasized that the target of a 15% return on tangible common equity by 2027 is not in conflict with growing the business. The focus is on targeted clients, with 58% of C&I loans being investment grade. The strategy involves providing capital initially and expanding services to achieve desired returns within 12 to 18 months. Q: What is the outlook for deposit growth and its impact on NIM? A: Clark Khayat, CFO, stated that there is good visibility on deposit growth, primarily from commercial clients. The expectation is for a 2% increase in average client deposits by year-end. The deposit growth will be largely commercial in nature, with a mix of interest-bearing and non-interest-bearing accounts. The NIM target of 3.25% by 2027 remains intact. Q: How is KeyCorp addressing credit quality and potential risks in its portfolio? A: Mo Ramani, Chief Risk Officer, highlighted a proactive risk culture and noted that recent increases in non-performing assets were due to specific credits in real estate, consumer goods, and agriculture. The overall portfolio remains healthy, with a focus on resolving non-performing loans and maintaining a strong credit profile. The net charge-off guidance remains at 40 to 45 basis points for the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.