Item 1A. Risk Factors

For a discussion of certain risk factors affecting us, see the section titled “Supervision and Regulation” in Part I, Item 1. Business, on pages 10-25 of our 2020 Form 10-K; Part I, Item 1A. Risk Factors, on pages 26-38 of our 2020 Form 10-K; the sections titled “Supervision and regulation” and “Strategic developments” in this Form 10-Q; and our disclosure regarding forward-looking statements in this Form 10-Q. The additional risk factor set forth below represents a new risk factor that has become applicable since the filing of our 2020 Form 10-K.

Labor shortages and constraints in the supply chain could adversely affect our clients’ operations as well as our operations.

Many sectors in the United States and around the world are experiencing a shortage of workers. The shortage of workers is exacerbating supply chain disruptions around the world, causing certain industries to struggle to regain momentum due to a lack of workers or materials. Our commercial clients may be impacted by the shortage of workers and constraints in the supply chain, which could adversely impact our clients’ operations. Clients may experience disruptions in their operations, which could lead to reduced cash flow and difficulty in making loan repayments. The financial services industry has also been affected by the shortage of workers, and Key has experienced the war for talent that is currently underway in the financial services industry. This may lead to open positions remaining unfilled for longer periods of time or a need to increase wages to attract workers. We have had to recently increase wages in certain positions to attract talent, particularly in entry-level type positions and certain specialty areas. Please also see the risk factor entitled “We may not be able to attract and retain skilled people” in Part I, Item 1A. Risk Factors on page 37 of our 2020 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

From time to time, KeyCorp or its principal subsidiary, KeyBank, may seek to retire, repurchase, or exchange outstanding debt of KeyCorp or KeyBank, and capital securities or preferred stock of KeyCorp, through cash purchase, privately negotiated transactions, or otherwise. Such transactions, if any, depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, and other factors. The amounts involved may be material.

In July 2021, the Board of Directors authorized the repurchase of up to $1.5 billion of our Common Shares, effective for the third quarter of 2021 through the third quarter of 2022.

In the third quarter of 2021, under our authorization pursuant to our 2021 capital plan, we completed $593 million of Common Share repurchases, including less than $1 million of Common Share repurchases related to employee equity compensation programs. Of the total share repurchases, $468 million were repurchased under an ASR program. Refer to Note 19 (“Shareholders' Equity”) for further information on the ASR program.

The following table summarizes our repurchases of our Common Shares for the three months ended September 30, 2021.

(a)Includes Common Shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations.

(b)Calculated using the remaining general repurchase amount divided by the closing price of KeyCorp Common Shares as follows: on July 31, 2021, at $19.66; on August 30, 2021, at $20.32; and on September 30, 2021, at $21.62. Includes shares that may be subject to repurchase under the ASR program pending final settlement in the fourth quarter of 2021. The total number of shares we will repurchase will be based on the volume-weighted average share price of our common stock during the term of the ASR, less a discount, and subject to potential adjustments pursuant to the terms and conditions of the ASR agreement.