KeyCorp reports strong Q2 earnings with growth outlook for Idaho business banking

How banks fare reflects the health of the overall economy. Looking at quarterly results can help those in the industry forecast what’s to come.

On July 21, KeyCorp, the parent company of KeyBank, reported its second quarter earnings for 2026, giving an overall positive outlook for activity from April through June throughout the 15 states it operates within, including Idaho.

In a phone interview after the earnings call, KeyCorp CEO Chris Gorman broke down what those overall numbers meant for its customers and the economy in Idaho.

Revenue increased 26% year over year in the quarter, along with a 7% year-over-year increase in pre-provision net revenue and a net interest margin of 2.89%, Gorman stated during the earnings call.

KeyCorp’s commercial loans grew by $2.1 billion (3%), and deposit costs declined by two basis points. Additionally, asset quality remained strong with a net charge-off ratio of 42 basis points. The company repurchased $340 million in shares, putting it on track for a $1.3 billion full-year target. Its investment banking pipelines grew 9%. Wealth assets under management hit $74 billion.

The company expects its full-year revenue growth to be 7.8% and net interest income is projected to increase 9% to 11%.

Commercial mortgage servicing fees were down, Chief Financial Officer Clark Khayat pointed out during the earnings call.

“Commercial mortgage servicing fees were $49 million, down $21 million year over year, largely driven by lower deposit placement fees than special servicing fees,” Khayat said. “At quarter end, we were named primary, where special service earned approximately $735 billion in commercial real estate loans, of which about $270 billion is special servicing. … We continue to expect commercial mortgage servicing fees to run about $50 million to $60 million per quarter the remainder of the year.”

KeyCorp raised its full-year commercial loan growth guidance to 8% to 10%. Gorman stated that in Idaho the business community is driven by an entrepreneurial spirit, which helps the bank to grow its business banking presence.

“I think you have a very healthy business community [in Idaho],” he said. “I feel so fortunate that we’ve been in Idaho for so long and play such a significant role. …Obviously, you have a few large businesses, but what I find so interesting about the Boise [and] Idaho economy is how many small business and business banking kind of customers that you have, very entrepreneurial and very growth oriented.”

In terms of helping those businesses in Idaho grow, Gorman stated that the bank has 11.2% CET 1, a bank’s core capital. “We are looking to deploy capital and credit pricing is dependent on the risk, and we’re very much looking to bring new customers [on] that are new to the bank.”

When it comes to mergers and acquisitions, Gorman said he believes the time is right whether a business is buying or selling. However, he added the caveat that, when taking advice from someone, “watch carefully what they do.”

With that, KeyCorp also announced that it is buying a mid-sized business in the United Kingdom, which it expects to close in the next few months.
“I think now is a great time, if you’re either a buyer or a seller, and I say that because it’s important that the economy has a good trajectory,” he said. “My personal view is that the economy is in good shape. … If I was a buyer, I would have the confidence to act.

“As a seller, I think now is a good time. I think people have come to grips with the fact that interest rates for 10 years have been around 4.6%. I think people think it will stay around there, so I think it’s an interesting time to transact. … You can identify the perfect time in retrospect, but when you’re living it, it’s hard to know exactly what the perfect time is.”

One area that is benefitting the Idaho economy, Gorman stated, is the state’s growth as far as in-migration from other states, being one of the top fastest growing in the past few years. That also means there is more wealth coming to the state, and wealth management is one service the company is looking to expand upon, which he called a significant opportunity.

“We have been very, very successful in coming up with great product offerings for what we call ‘mass affluent,’ which is the $250,000 to $2 million of investable assets ― which many of the people migrating to Idaho would fit that bill,” he said. “We have 20 branches in the 12-county area that we serve in Idaho, and in addition to that, we’ve got these advisors that are helping people invest their money. That’s been a real growth business for us.”

When it came to tariffs and an uncertain political climate and how that affects businesses, he pointed out that the bank’s clients were at first “paralyzed by it. However, I think most people have realized that they can manage it.”
Overall, Gorman sees the Idaho and national economies as being in good shape with plenty of opportunity for growth, which the bank’s second quarter earnings reflect.

“Our lens on the economy, which is a pretty broad one, is that the economy continues to expand and the economy is strong,” he said. “The second thing our earnings mean to [clients] is we have plenty of capital. We’re generating plenty of capital, and we want to be out there helping people grow their business, whether it’s helping them with payments, helping them with lending them money or giving them strategic advice.”