Quick Take on 2Q26 Earnings Result: More Balance Sheet Growth, Less NIM

Research evidence excerpt

Quick Take on 2Q26 Earnings Result: More Balance Sheet Growth, Less NIM

Update

July 21, 2026 08:42 PM GMT

Morgan Stanley & Co. LLCMKeyCorp | North America Manan Gosalia

Equity Analyst

Quick Take on 2Q26 Earnings Manan.Gosalia@morganstanley.comAlexander L Ward +1 212 761-4092

Research Associate

Alex.Ward@morganstanley.com +1 212 296-3096

Result: More Balance Sheet Ben Bayanfar

Ben.Bayanfar@morganstanley.com +1 212 761-0649

Growth, Less NIM

KeyCorp (KEY.N, KEY UN)

Midcap Banks | United States of America

AlphaSignals Earnings Reaction

Stock Rating Equal-weight

Unchanged Modest upside Largely unchanged Industry View Attractive

Impact to our thesis Financial results versus consensus Direction of next 12-month Price target $25.00

consensus EPS Shr price, close (Jul 20, 2026) $23.32

Mkt cap, curr (mm) $25,000

Source: Company data, Morgan Stanley Research 52-Week Range $24.06-16.48

KEY raised NII guide marginally on stronger loan and deposit

growth, partially offset by lower NIM as new loans come on at

lower spreads and competition for funding rises. We keep our

forward estimates relatively unchanged.

Loan growth remains a bright spot

• KEY raised the midpoint of its average commercial and total loan growth

guidance by +2.0% and +1.5%, respectively, reflecting continued momentum.

Average loans rose $2.3B (+2.2%) sequentially, led by commercial loans

(+3.7%).

• Period-end C&I loans increased $2.1B (+3%) sequentially. Growth was largely

from new relationships and broad-based across industries and regions. The

largest industry contributors were utilities, power and renewables, real

estate, and technology.

• Management does expect growth to decelerate modestly, but still remain

strong. We model average loan growth of +1.2% q/q in 3Q26/4Q26, bringing