The EPS beat and raised guidance are positive, but the BNS secondary overhang (158.7M shares) and deteriorating credit quality (NPAs +18% QoQ) warrant caution. Watch for BNS selling activity and monitor NPA trends in Q3. The raised loan growth guidance (+4-5%) supports the net interest income trajectory, making this a cautiously constructive setup for the next few weeks.
Price Chart
Executive Summary
KeyCorp reported Q2 2026 EPS of $0.44, beating consensus of $0.42 by 4.8%, with revenue of $1.96B slightly below the $1.97B estimate. Net interest income grew 9% YoY and NIM expanded 23 bps, but credit quality weakened with NCOs rising to 42 bps and NPAs jumping 18% QoQ. The company raised its FY2026 revenue and loan growth guidance, signaling continued momentum, though the CET1 ratio declined to 11.2% and the marked CET1 fell to 9.8% due to share repurchases and RWA growth. The recent S-3/A filing for BNS's secondary share sale creates overhang, but the strong operational beat and raised guidance should support the stock near-term.
Key Financial Metrics
Key Facts
- EPS of $0.44 beat consensus of $0.42 by 4.8%
- Revenue of $1.96B was slightly below $1.97B estimate but up 6.7% YoY
- Net interest income (TE) up 9.4% YoY to $1.258B; NIM expanded 23 bps to 2.89%
- Raised FY2026 revenue guidance to +7-8% (from ~7%) and loan growth to +4-5% (from +2-4%)
- NCOs rose to 42 bps from 39 bps YoY; NPAs jumped 18.2% QoQ to $818M
- CET1 ratio fell to 11.2% from 11.7% YoY; marked CET1 at 9.8%
- Repurchased $341M of common shares in Q2; Board authorized $3B buyback program
- S-3/A filed 29 days ago registers 158.7M shares for BNS resale, creating overhang
Financial Impact
EPS beat of $0.02 vs consensus; revenue miss of ~$10M vs consensus
Risk Factors
- BNS secondary share sale overhang (158.7M shares registered on S-3/A)
- NPA ratio rising to 0.74% from 0.63% QoQ, signaling credit deterioration
- CET1 ratio declining to 11.2% limits capital return flexibility
- Noninterest income down 2.4% QoQ due to lower IB fees
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 8 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000091576-26-000017 |
| Document: a2q26erex993.htm | 0000091576-26-000017 |
| Document: key-20260721.htm | 0000091576-26-000017 |
| Document: a2q26earningspresentatio.htm | 0000091576-26-000017 |
| Document: 0000091576-26-000017-index-headers.html | 0000091576-26-000017 |
| Document: 0000091576-26-000017-index.html | 0000091576-26-000017 |
| Document: 0000091576-26-000017.txt | 0000091576-26-000017 |
| 8-K Data (Synthetic) | 0000091576-26-000017 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 14, 2026 18d ago | 8-K | $21.93 $20.87 | ▼ −4.83% | ▼ −4.94% | $20.08 (−8.44%) |
Aug 4, 2026 8w ago | Press Release | $23.10 $22.69 | ▼ −1.77% | ▼ −1.68% | $20.08 (−13.07%) |
Jul 31, 2026 8w ago | Press Release | $22.81 $22.68 | ▲ +0.57% | ▲ +2.60% | $20.08 (+11.97%) |
Jul 21, 2026 10w ago | 8-K | $22.95 $22.51 | ▼ −1.92% | ▼ −0.69% | $20.08 (−12.51%) |
Jun 25, 2026 14w ago | EFFECT | $23.41 $23.25 | ▲ +0.68% | ▲ +2.24% | $20.08 (+14.22%) |
Jun 22, 2026 14w ago | S-3/A | $23.02 $23.15 | ▼ −0.56% | ▲ +0.45% | $20.08 (+12.77%) |
Jun 10, 2026 16w ago | 424B5 | $24.85 $25.00 | ▲ +0.60% | ▼ −0.61% | $20.08 (−19.20%) |
Jun 5, 2026 17w ago | S-3 | $24.92 $24.94 | ▲ +0.08% | ▼ −2.03% | $20.08 (−19.42%) |
Jun 5, 2026 17w ago | S-3ASR | $24.92 $24.94 | ▲ +0.08% | ▼ −2.03% | $20.08 (−19.42%) |
Jun 3, 2026 17w ago | 8-K | $20.23 $20.50 | ▲ +1.33% | ▲ +3.89% | $20.08 (−0.74%) |
US Market Status
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