GET DAILY SIGNALSKeyCorp (KEY) Delivers +24% EPS Growth and Record Revenue in Q3
Key Takeaways
- KeyCorp reported diluted earnings per share (EPS) of $0.51, up 24% from $0.41 a year earlier and above the consensus estimate of $0.46.
- Total taxable-equivalent revenue reached a record $2.05 billion, up 8.3% year over year and ahead of the roughly $2.03 billion consensus.
- Net interest margin (NIM) expanded to 2.95%, up 20 basis points from the prior-year quarter, driven by deposit growth and fixed-asset repricing.
- Credit quality improved, with net charge-offs falling to 0.32% of average loans and the provision for credit losses dropping 43% year over year.
- Management guided to a roughly 3.00% NIM for the fourth quarter and reaffirmed a 3.25%-plus NIM target by the end of 2027.
Why This Quarter Matters for KeyCorp
KeyCorp (NYSE: KEY), the Cleveland-based bank holding company, has been shifting its balance sheet toward higher-yielding commercial and industrial loans while allowing lower-yielding consumer and securities assets to run off. That repositioning sits at the center of its plan to widen net interest margin and push returns on tangible common equity above 15%. The third-quarter results offer a useful test of whether deposit growth can support loan expansion in the current rate environment and whether fee businesses such as investment banking and payments are gaining traction. From what I see, the quarter also provides a window into how regional banks are handling shifting rates and ongoing economic uncertainty.
Breaking Down the Reported Numbers
For the third quarter ended September 30, 2026, KeyCorp posted diluted EPS of $0.51, a 24% rise from $0.41 in the same quarter last year and $0.05 ahead of the $0.46 consensus. Net income attributable to common shareholders reached $537 million, up from $454 million a year earlier. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Total taxable-equivalent revenue climbed 8.3% to a record $2.05 billion, topping the roughly $2.03 billion consensus. Net interest income increased 9.6% year over year to $1.31 billion, while net interest margin widened 20 basis points to 2.95%. Noninterest income rose 6% to $744 million, helped by investment banking and debt placement fees of $214 million that jumped 27% sequentially on stronger M&A and syndication activity.
Noninterest expenses rose about 6% year over year to $1.25 billion, reflecting ongoing investments in people and technology. Credit metrics improved, with the provision for credit losses falling to $61 million from $107 million a year earlier and net charge-offs declining to 0.32% of average loans. Return on average tangible common equity reached 15.1%. KeyCorp repurchased $320 million of common stock during the quarter.
Market Reaction and Investor Sentiment
Shares of KeyCorp moved higher after the release, climbing more than 4% to around $20.76 in afternoon trading. Investors appeared to respond positively to the EPS beat, record revenue, expanding net interest margin, and better credit quality. Management’s constructive tone—centered on solid deposit gathering, steady loan demand, and healthy capital markets pipelines—helped support the move. The main points of caution remain elevated noninterest expenses and capital ratios that have declined year over year, largely due to the rate environment’s effect on accumulated other comprehensive income rather than any deterioration in credit outlook.
Forward Outlook and Factors to Watch
Management guided to a fourth-quarter 2026 net interest margin of about 3.00%, with average earning assets expected to increase by $1.5 billion to $2.0 billion from the third quarter. The bank also reaffirmed its target of reaching a 3.25%-plus NIM by the fourth quarter of 2027.
Several elements will influence that path. KeyCorp estimates roughly $24 billion in low-yielding securities, swaps, and residential mortgages will roll off the balance sheet by the end of 2027, and management believes that runoff alone could account for about 70% of the margin expansion needed to hit the target. Deposit growth remains a key variable: the bank nearly met its $3 billion second-half client deposit growth goal in the third quarter alone and now expects loan growth to be fully funded by client deposits.
Investors will also want to track the pace of fee-based revenue, especially investment banking pipelines that management called historically elevated, along with commercial mortgage servicing fees that continue to face pressure. Expense discipline stays in focus, with management reiterating full-year expense growth of about 4%. Capital deployment, including the pace of share repurchases and the priority of maintaining the dividend, will be watched as the bank balances growth investments with returns to shareholders.
Using AI Tools in My Research Process
One resource I turn to regularly is Tickeron’s AI Screener. It lets me filter stocks and ETFs by technical patterns, fundamentals, and performance metrics, making it easier to compare peers and spot ideas without spending hours on manual screens. I find it particularly useful when evaluating banks like KeyCorp alongside their industry counterparts.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
KEY's RSI Oscillator recovers from oversold territory
The RSI Oscillator for KEY moved out of oversold territory on October 08, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 28 similar instances when the indicator left oversold territory. In 21 of the 28 cases the stock moved higher. This puts the odds of a move higher at 75%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 20, 2026. You may want to consider a long position or call options on KEY as a result. In 57 of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 65%.
The Moving Average Convergence Divergence (MACD) for KEY just turned positive on October 08, 2026. Looking at past instances where KEY's MACD turned positive, the stock continued to rise in 26 of 47 cases over the following month. The odds of a continued upward trend are 55%.
KEY moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +1.92% 3-day Advance, the price is estimated to grow further. Considering data from situations where KEY advanced for three days, in 177 of 292 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
Bearish Trend Analysis
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
The 50-day moving average for KEY moved below the 200-day moving average on October 16, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KEY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 70%.
KEY broke above its upper Bollinger Band on October 20, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for KEY entered a downward trend on October 21, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 7 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 49 (best 1 - 100 worst), indicating steady price growth. KEY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 57 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.308) is normal, around the industry mean (1.268). P/E Ratio (12.260) is within average values for comparable stocks, (13.372). Projected Growth (PEG Ratio) (1.332) is also within normal values, averaging (1.190). Dividend Yield (0.039) settles around the average of (0.035) among similar stocks. P/S Ratio (2.996) is also within normal values, averaging (3.738).
The Tickeron Profit vs. Risk Rating rating for this company is 77 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. KEY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 55, placing this stock worse than average.
The Tickeron PE Growth Rating for this company is 85 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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a major bank
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