Cover and table of contents

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Cover and table of contents

Table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-11302

KeyCorp

Exact name of registrant as specified in its charter:


Ohio			34-6542451
State or other jurisdiction of incorporation or organization:			I.R.S. Employer Identification Number:


127 Public Square,			Cleveland,			Ohio			44114-1306
Address of principal executive offices:									Zip Code:

(216) 689-3000

Registrant’s telephone number, including area code:

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, $1 par value	KEY	New York Stock Exchange
Depositary Shares (each representing a 1/40th interest in a share of Fixed-to-Floating Rate	KEY PrI	New York Stock Exchange
Perpetual Non-Cumulative Preferred Stock, Series E)
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-	KEY PrJ	New York Stock Exchange
Cumulative Preferred Stock, Series F)
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-	KEY PrK	New York Stock Exchange
Cumulative Preferred Stock, Series G)
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Reset Perpetual Non-	KEY PrL	New York Stock Exchange
Cumulative Preferred Stock, Series H)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer			☒			Accelerated filer			☐			Non-accelerated filer			☐
Smaller reporting company			☐			Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Common Shares with a par value of $1 each			935,918,922 shares
Title of class			Outstanding at July 31, 2023

Table of contents

KEYCORP

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION


		Page Number
Item 1.	Financial Statements	51

	Consolidated Balance Sheets	51

	Consolidated Statements of Income	51

	Consolidated Statements of Comprehensive Income	52

	Consolidated Statements of Changes in Equity	53

	Consolidated Statements of Cash Flows	54

	Notes to Consolidated Financial Statements (Unaudited)	55

	Note 1. Basis of Presentation and Accounting Policies	55
	Note 2. Earnings Per Common Share	59
	Note 3. Loan Portfolio	59
	Note 4. Asset Quality	60
	Note 5. Fair Value Measurements	72
	Note 6. Securities	78
	Note 7. Derivatives and Hedging Activities	80
	Note 8. Mortgage Servicing Assets	85
	Note 9. Leases	86
	Note 10. Goodwill	87
	Note 11. Variable Interest Entities	87
	Note 12. Income Taxes	89
	Note 13. Acquisitions and Discontinued Operations	89
	Note 14. Securities Financing Activities	90
	Note 15. Employee Benefits	90
	Note 16. Trust Preferred Securities Issued by Unconsolidated Subsidiaries	91
	Note 17. Contingent Liabilities and Guarantees	91
	Note 18. Accumulated Other Comprehensive Income	93
	Note 19. Shareholders’ Equity	94
	Note 20. Business Segment Reporting	94
	Note 21. Revenue from Contracts with Customers	96

	Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)	98

Table of contents


Item 2.	Management’s Discussion & Analysis of Financial Condition & Results of Operations	4
	Introduction	4
	Terminology	4
	Forward-looking statements	5
	Long-term financial targets	7

	Strategic developments	8
	Demographics	8
	Supervision and regulation	9
	Results of Operations	14
	Earnings overview	14
	Net interest income	14
	Provision for credit losses	18
	Noninterest income	18
	Noninterest expense	20
	Income taxes	22
	Business Segment Results	22
	Consumer Bank	22
	Commercial Bank	23
	Financial Condition	24
	Loans and loans held for sale	25
	Securities	30
	Deposits and other sources of funds	32
	Capital	33
	Risk Management	36
	Overview	36
	Market risk management	36
	Liquidity risk management	40
	Credit risk management	42
	Operational and compliance risk management	46
	GAAP to Non-GAAP Reconciliations	48
	Critical Accounting Policies and Estimates	49
	Accounting and Reporting Developments	50
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	99
Item 4.	Controls and Procedures	99


	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	99
Item 1A.	Risk Factors	99
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	99
Item 5.	Other Information	100
Item 6.	Exhibits	101
	Signature	102

Table of contents

PART I. FINANCIAL INFORMATION

Next: Item 2. Management’s Discussion & Analysis of Financial Condition & Results of Operations