KeyCorp Affirms Shareholder Returns with Q1 Dividend Declaration

CLEVELAND, OH – January 15, 2026 – KeyCorp (NYSE: KEY) today reinforced its commitment to shareholder returns, announcing that its Board of Directors has declared a series of cash dividends for the first quarter of 2026. The move, which includes payouts for both common and multiple series of preferred stock, signals confidence in the financial services giant's stability and strategic direction.

In a widely anticipated announcement, the Cleveland-based bank confirmed a quarterly cash dividend of $0.205 per common share. This dividend is scheduled to be paid on March 13, 2026, to shareholders of record as of the close of business on March 3, 2026. Alongside the common stock dividend, KeyCorp also declared dividends for five series of its preferred stock—Series D, E, F, G, and H—all payable on March 16, 2026. Furthermore, the company has scheduled its 2026 Annual Meeting of Shareholders for Thursday, May 14, 2026, an event where the company’s leadership will outline its performance and future strategy.

A Steady Hand for Income Investors

For income-focused investors, KeyCorp's consistent dividend for common shares provides a welcome measure of predictability. The $0.205 per share payout has been maintained for several consecutive quarters, continuing a trend of stability and modest growth from the $0.19 per share paid in 2021. This translates to an annualized dividend of $0.82 per share, resulting in a forward dividend yield of approximately 3.9% based on recent trading.

This yield positions KeyCorp competitively within the regional banking sector. While slightly below the yield offered by some peers like Regions Financial Corporation (approximately 4.05%), it remains comfortably above others such as PNC Financial Services Group (around 3.26%) and the broader financial services sector average of 2.74%. This makes KeyCorp an attractive option for investors seeking a balance of yield and stability from a large, established financial institution.

However, a deeper look at the bank's financials reveals a payout ratio that merits attention. Depending on the calculation methodology—whether based on trailing twelve months or forward-looking earnings—analysts place the ratio anywhere from a sustainable 55% to a much higher 95% or more. A higher ratio can suggest that a large portion of earnings is being returned to shareholders, potentially limiting funds available for reinvestment and growth. Conversely, it also demonstrates a strong commitment to shareholder distributions, a key factor for income portfolios. This dividend's sustainability is underpinned by the bank's recent solid performance and robust capital position.

Beyond Common Shares: A Look at Capital Structure

The simultaneous declaration of dividends for five different series of preferred stock highlights KeyCorp's sophisticated approach to capital management. Preferred stocks act as hybrid securities, blending the fixed-income characteristics of bonds with the equity features of stocks. They typically offer a fixed dividend payment, giving them priority over common shares in the event of a dividend distribution or liquidation, though they remain subordinate to traditional debt holders.

Notably, all of KeyCorp's preferred issues mentioned are non-cumulative. This means that if the bank were to miss a dividend payment, it is not obligated to make it up in the future. This feature is common among banks, as non-cumulative preferred shares can qualify as Tier 1 regulatory capital, a critical component of a bank's financial cushion required by regulators. By issuing these securities, KeyCorp can strengthen its capital base without diluting the ownership of its common shareholders.

This multi-tiered approach to shareholder returns allows KeyCorp to appeal to a broader investor base. While common stock offers potential for capital appreciation and a variable dividend, the preferred shares cater to a different risk appetite—typically investors like retirees or institutional funds seeking a more predictable, higher-yield income stream than what might be available from high-grade bonds, albeit with less growth potential than common stock. The strategy demonstrates a deliberate effort to balance regulatory requirements, growth funding, and the diverse needs of its capital providers.

Financial Underpinnings and Future Outlook

KeyCorp's ability to maintain these shareholder returns is directly tied to its recent financial performance. The company's third-quarter 2025 results, reported in October, surpassed analyst expectations. The bank posted earnings of $0.41 per share on revenue of $1.90 billion, beating consensus estimates on both fronts. Key metrics showed positive momentum, including a net interest margin (NIM) that reached its year-end target of 2.75% ahead of schedule and strong growth in non-interest income.

Crucially, the bank's capital position remains robust, with a Common Equity Tier 1 (CET1) ratio of 11.8% at the end of the third quarter. This strong capital buffer provides significant flexibility for capital allocation, including dividends and the previously announced plan to repurchase approximately $100 million of common stock in the fourth quarter of 2025. These actions collectively underscore management's confidence in the bank's earnings power and balance sheet strength.

Investors and analysts are now looking ahead to KeyCorp's fourth-quarter and full-year 2025 earnings, which are expected to be released later this month. Consensus estimates project earnings around $0.38 to $0.39 per share on revenue of approximately $1.95 billion, suggesting continued stability. The upcoming report will provide further clarity on loan growth, expense management, and the overall economic outlook influencing the banking sector.

Setting the Stage for Shareholder Engagement

Beyond the immediate financial implications, KeyCorp's announcement sets the calendar for a key corporate governance event: the 2026 Annual Meeting of Shareholders on May 14. This meeting provides a platform for shareholders to engage with management and the board on the company's long-term strategy, performance, and governance practices.

Standard agenda items will include the election of directors, an advisory vote on executive compensation (known as "say on pay"), and the ratification of the company's independent auditor. However, the meeting will also likely serve as a forum to discuss pressing topics shaping the banking industry. These include the integration of environmental, social, and governance (ESG) criteria into business strategy, particularly around climate risk and responsible lending. Other likely topics are board diversity, cybersecurity risk oversight, and the alignment of executive incentives with long-term value creation, including progress toward strategic goals like achieving a return on tangible common equity of 15% or better by 2027.

The annual meeting will serve as a crucial forum for the board and management to articulate their vision and for shareholders to hold them accountable for the bank's long-term strategic direction.