Cover and table of contents

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Cover and 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 September 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			936,260,261 shares
Title of class			Outstanding at October 30, 2023

KEYCORP

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION


		Page Number
Item 1.	Financial Statements	52

	Consolidated Balance Sheets	52

	Consolidated Statements of Income	53

	Consolidated Statements of Comprehensive Income	54

	Consolidated Statements of Changes in Equity	55

	Consolidated Statements of Cash Flows	56

	Notes to Consolidated Financial Statements (Unaudited)	57

	Note 1. Basis of Presentation and Accounting Policies	57
	Note 2. Earnings Per Common Share	61
	Note 3. Loan Portfolio	61
	Note 4. Asset Quality	62
	Note 5. Fair Value Measurements	74
	Note 6. Securities	80
	Note 7. Derivatives and Hedging Activities	82
	Note 8. Mortgage Servicing Assets	87
	Note 9. Leases	88
	Note 10. Goodwill	89
	Note 11. Variable Interest Entities	89
	Note 12. Income Taxes	91
	Note 13. Acquisitions and Discontinued Operations	91
	Note 14. Securities Financing Activities	92
	Note 15. Employee Benefits	92
	Note 16. Trust Preferred Securities Issued by Unconsolidated Subsidiaries	93
	Note 17. Contingent Liabilities and Guarantees	93
	Note 18. Accumulated Other Comprehensive Income	95
	Note 19. Shareholders’ Equity	96
	Note 20. Business Segment Reporting	97
	Note 21. Revenue from Contracts with Customers	99
	Note 22. Subsequent Events	100

	Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)	101


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	15
	Earnings overview	15
	Net interest income	15
	Provision for credit losses	19
	Noninterest income	19
	Noninterest expense	21
	Income taxes	23
	Business Segment Results	23
	Consumer Bank	23
	Commercial Bank	24
	Financial Condition	25
	Loans and loans held for sale	26
	Securities	31
	Deposits and other sources of funds	33
	Capital	34
	Risk Management	37
	Overview	37
	Market risk management	37
	Liquidity risk management	41
	Credit risk management	43
	Operational and compliance risk management	47
	GAAP to Non-GAAP Reconciliations	49
	Critical Accounting Policies and Estimates	50
	Accounting and Reporting Developments	51
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	102
Item 4.	Controls and Procedures	102


	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	102
Item 1A.	Risk Factors	102
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	102
Item 5.	Other Information	103
Item 6.	Exhibits	104
	Signature	105

PART I. FINANCIAL INFORMATION

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