KEYCORP /NEW/ 10-K

key-20241231 Table of contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2024 Commission file number: 1-11302 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) SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previous issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of voting and non-voting common stock held by nonaffiliates of the Registrant was $ 13,402,865,321 (based on the June 28, 2024, closing price of KeyCorp Common Shares of $14.21 as reported on the New York Stock Exchange). As of February 19, 2025, there were 1,105,119,318 Common Shares outstanding. Certain specifically designated portions of KeyCorp’s definitive Proxy Statement for its 2025 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K. Table of contents Forward-looking Statements From time to time, we have made or will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as “goal,” “objective,” “plan,” “expect,” “assume,” “anticipate,” “intend,” “project,” “believe,” “estimate,” “will,” “would,” “should,” “could,” or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results or aspirations. Our disclosures in this report contain forward-looking statements. We may also make forward-looking statements in other documents filed with or furnished to the SEC. In addition, we may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this report can or will be achieved. Factors that could cause our actual results to differ from those described in forward-looking statements include, but are not limited to: • the extensive regulation of the U.S. financial services industry; • complex and evolving laws and regulations regarding privacy and cybersecurity; • operational or risk management failures by us or critical third parties; • breaches of security or failures of our technology systems due to technological or other factors, cybersecurity threats, and increased risks resulting from remote work; • an ineffective risk management framework; • negative outcomes from claims, litigation, arbitration, investigations, or governmental proceedings; • failure or circumvention of our controls and procedures; • our exposure to a wide range of climate-related physical risks across different geographical areas; • evolving capital and liquidity standards under applicable regulatory rules; • disruption of the U.S. financial system, including the impact of inflation and a potential global economic downturn or recession; • unanticipated changes in our liquidity position, including but not limited to, changes in our access to or the cost of funding and our ability to secure alternative funding sources; • our ability to receive dividends from our subsidiaries, including KeyBank; • downgrades in our credit ratings or those of KeyBank; • a worsening of the U.S. economy due to financial, political or other shocks; • our ability to anticipate interest rate changes and manage interest rate risk; • deterioration of economic conditions in the geographic regions where we operate; • the soundness of other financial institutions, including instability in the financial industry; • our concentrated credit exposure in commercial and industrial loans; • deterioration of commercial real estate market fundamentals; • defaults by our loan clients or counterparties; • adverse changes in credit quality trends; • declining asset prices; • deterioration of asset quality and an increase in credit losses; • geopolitical destabilization; • labor shortages and supply chain constraints, as well as the impact of inflation; • our ability to develop and effectively use the quantitative models we rely upon in our business planning; • our ability to manage reputational risk, including risks related to corporate responsibility and sustainability efforts; • our ability to timely and effectively implement our strategic initiatives; • increased competitive pressure; • our ability to adapt our products and services to industry standards and consumer preferences; • our ability to attract and retain talented executives and employees; • unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses; • the potential impact of Scotiabank’s significant equity interest in our business; • inaccurate assumptions or estimates underlying our consolidated financial statements; • changes in accounting policies, standards, and interpretations; and • impairment of goodwill. 2 Table of contents Any forward-looking statements made by us or on our behalf speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances, except as required by applicable securities laws. Before making an investment decision, you should carefully consider all risks and uncertainties disclosed in our SEC filings, including this report on Form 10-K, our subsequent reports on Forms 10-Q and 8-K, and our registration statements filed with the SEC under the Securities Act of 1933, as amended, all of which are or will upon filing be accessible on the SEC’s website at www.sec.gov and on our website at www.key.com/ir. Terminology Throughout this discussion, references to “Key,” “we,” “our,” “us,” and similar terms refer to the consolidated entity consisting of KeyCorp and its subsidiaries. “KeyCorp” refers solely to the parent holding company, and “KeyBank” refers solely to KeyCorp’s subsidiary bank, KeyBank National Association. “KeyBank (consolidated)” refers to the consolidated entity consisting of KeyBank and its subsidiaries. We want to explain some industry-specific terms at the outset so you can better understand the discussion that follows. • We use the phrase continuing operations in this document to mean all of our businesses other than our government-guaranteed and private education lending business, which are accounted for as discontinued operations . • We engage in capital markets activities primarily through business conducted by our Commercial Bank segment . These activities encompass a variety of products and services. Among other things, we trade securities as a dealer, enter into derivative contracts (both to accommodate clients’ financing needs and to mitigate certain risks), and conduct transactions in foreign currencies (to accommodate clients’ needs). • For regulatory purposes, capital is divided into two classes. Federal regulations currently prescribe that at least one-half of a bank or BHC’s total risk-based capital must qualify as Tier 1 capital . Both total and Tier 1 capital serve as bases for several measures of capital adequacy, which is an important indicator of financial stability and condition. Banking regulators evaluate a component of Tier 1 capital, known as Common Equity Tier 1 , under the Regulatory Capital Rules . The “Capital” section of this report under the heading “Capital adequacy” provides more information on total capital, Tier 1 capital, and the Regulatory Capital Rules, including Common Equity Tier 1, and describes how these measures are calculated. 3 Table of contents The acronyms and abbreviations identified below are used throughout this report, including in the Notes to Consolidated Financial Statements and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations. You may find it helpful to refer back to this page as you read this report. ABO: Accumulated benefit obligation. ALCO: Asset/Liability Management Committee. ALLL: Allowance for loan and lease losses. A/LM: Asset/liability management. AML: Anti-money laundering. AOCI: Accumulated other comprehensive income (loss). APBO: Accumulated postretirement benefit obligation. ASC: Accounting Standards Codification. ASU: Accounting Standards Update. ATMs: Automated teller machines. BSA: Bank Secrecy Act. BHCA: Bank Holding Company Act of 1956, as amended. BHCs: Bank holding companies. Board: KeyCorp Board of Directors. CAPM: Capital Asset Pricing Model. CCAR: Comprehensive Capital Analysis and Review. CECL: Current Expected Credit Losses. CFPB: Consumer Financial Protection Bureau, also known as the Bureau of Consumer Financial Protection. CFTC: Commodities Futures Trading Commission. CMBS: Commercial mortgage-backed securities. CMO: Collateralized mortgage obligation. Common Shares: KeyCorp common shares, $1 par value. CVA: Credit valuation adjustment. DCF: Discounted cash flow. DIF: Deposit Insurance Fund of the FDIC. Dodd-Frank Act: Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. EAD: Exposure at default. EBITDA: Earnings before interest, taxes, depreciation, and amortization. EPS: Earnings per share. ERISA: Employee Retirement Income Security Act of 1974. ERM: Enterprise risk management. EVE: Economic value of equity. FASB: Financial Accounting Standards Board. FDIA: Federal Deposit Insurance Act, as amended. FDIC: Federal Deposit Insurance Corporation. Federal Reserve: Board of Governors of the Federal Reserve System. FHLB: Federal Home Loan Bank of Cincinnati. FHLMC: Federal Home Loan Mortgage Corporation. FICO: Fair Isaac Corporation. FINRA: Financial Industry Regulatory Authority. First Niagara: First Niagara Financial Group, Inc. FNMA: Federal National Mortgage Association. FSOC: Financial Stability Oversight Council. FVA: Fair value of employee benefit plan assets. GAAP: U.S. generally accepted accounting principles. GNMA: Government National Mortgage Association. HTC: Historic tax credit. IDI: Insured depository institution. IRS: Internal Revenue Service. ISDA: International Swaps and Derivatives Association. KBCM: KeyBanc Capital Markets, Inc. KCC: Key Capital Corporation. KCDC: Key Community Development Corporation. KCIC: Key Community Investment Capital LLC. LCR: Liquidity coverage ratio. LGD: Loss given default. LIHTC: Low-income housing tax credit. LTV: Loan-to-value. Moody’s: Moody’s Investor Services, Inc. MTRM: Market & Treasury Risk Management. MRC: Market Risk Committee. N/A: Not applicable. NAV: Net asset value. NFA: National Futures Association. N/M: Not meaningful. NMTC: New market tax credit. NPR: Notice of proposed rulemaking. NSF: Non-sufficient funds. NYSE: New York Stock Exchange. OCC: Office of the Comptroller of the Currency. OCI: Other comprehensive income (loss). OREO: Other real estate owned. PBO: Projected benefit obligation. PCCR: Purchased credit card relationship. PCD: Purchased credit deteriorated. PD: Probability of default. RMBS: Residential mortgage-backed securities. S&P: Standard and Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc. SEC: U.S. Securities & Exchange Commission. Scotiabank: The Bank of Nova Scotia SIFIs: Systemically important financial institutions, including large, interconnected BHCs and nonbank financial companies designated by FSOC for supervision by the Federal Reserve. SOFR: Secured Overnight Financing Rate. TE: Taxable-equivalent. TROC: Treasury Risk Oversight Committee. U.S. Treasury: United States Department of the Treasury. VaR: Value at risk. VEBA: Voluntary Employee Beneficiary Association. VIE: Variable interest entity. 4 Table of contents KEYCORP 2024 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS Item Number Page Number PART I 1 Business 6 1A Risk Factors 24 1B Unresolved Staff Comments 43 1C Cybersecurity 43 2 Properties 46 3 Legal Proceedings 46 4 Mine Safety Disclosures 46 PART II 5 Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 6 RESERVED 48 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 7A Quantitative and Qualitative Disclosures About Market Risk 98 8 Financial Statements and Supplementary Data 99 Management’s Annual Report on Internal Control over Financial Reporting 100 Reports of Independent Registered Public Accounting Firm 101 Consolidated Financial Statements and Related Notes 105 Consolidated Balance Sheets 105 Consolidated Statements of Income 106 Consolidated Statements of Comprehensive Income 107 Consolidated Statements of Changes in Equity 108 Consolidated Statements of Cash Flows 109 Notes to Consolidated Financial Statements 110 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 183 9A Controls and Procedures 183 9B Other Information 183 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 183 PART III 10 Directors, Executive Officers and Corporate Governance 183 11 Executive Compensation 184 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 184 13 Certain Relationships and Related Transactions, and Director Independence 184 14 Principal Accountant Fees and Services 184 PART IV 15 Exhibits and Financial Statement Schedules 184 (a) (1) Financial Statements — See listing in Item 8 above 184 (a) (2) Financial Statement Schedules — None required 185 (a) (3) Exhibits 186 16 Form 10-K Summary 189 Signatures 190 5 Table of contents PART I ITEM 1. BUSINESS Overview KeyCorp, organized in 1958 under the laws of the State of Ohio, is headquartered in Cleveland, Ohio. We are a BHC under the BHCA and one of the nation’s largest bank-based financial services companies, with consolidated total assets of approximately $187.2 billion at December 31, 2024. KeyCorp is the parent holding company for KeyBank National Association, its principal subsidiary, through which most of our banking services are provided. Through KeyBank and certain other subsidiaries, we provide a wide range of retail and commercial banking, commercial leasing, investment management, consumer finance, student loan refinancing, commercial mortgage servicing and special servicing, and investment banking products and services to individual, corporate, and institutional clients through two major business segments: Consumer Bank and Commercial Bank. As of December 31, 2024, these services were provided across the country through KeyBank’s 944 full-service retail banking branches and a network of 1,182 ATMs in 15 states, as well as additional offices, online and mobile banking capabilities, including our national digital brand, Laurel Road, and a telephone banking call center. Additional information pertaining to our two business segments is included in the “Business Segment Results” section in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report, and in Note 25 (“Business Segment Reporting”) of the Notes to Consolidated Financial Statements presented in Item 8. Financial Statements and Supplementary Data, which are incorporated herein by reference. In addition to the customary banking services of accepting deposits and making loans, our bank and its trust company subsidiary offer personal and institutional trust custody services, personal financial and planning services, access to mutual funds, treasury services, and international banking services. Through our bank, trust company, and registered investment adviser subsidiaries, we provide investment management services to clients that include large corporate and public retirement plans, foundations and endowments, high-net-worth individuals, and multi-employer trust funds established for providing pension or other benefits to employees. We provide other financial services — both within and outside of our primary banking markets — through various nonbank subsidiaries. These services include community development financing, securities underwriting, investment banking and capital markets products, and brokerage. We also provide merchant services to businesses. KeyCorp is a legal entity separate and distinct from its banks and other subsidiaries. Accordingly, the right of KeyCorp, its security holders, and its creditors to participate in any distribution of the assets or earnings of its banks and other subsidiaries is subject to the prior claims of the creditors of such banks and other subsidiaries, except to the extent that KeyCorp’s claims in its capacity as a creditor may be recognized. We derive the majority of our revenues within the United States from customers domiciled in the United States. Revenue from foreign countries and external customers domiciled in foreign countries was immaterial to our consolidated financial statements. Demographics Our management structure and basis of presentation is divided into two business segments, Consumer Bank and Commercial Bank. Note 25 (“Business Segment Reporting”) describes the products and services offered by each of these business segments and provides more detailed financial information pertaining to the segments, including changes in basis of presentation. The Consumer Bank serves individuals and small businesses throughout our 15-state branch footprint and through our Laurel Road digital brand by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, student loan refinancing, mortgage and home equity, credit card, treasury services, and business advisory services. In addition, wealth management and investment services are offered to assist non-profit and high-net-worth clients with their banking, trust, portfolio management, charitable giving, and related needs. The Commercial Bank consists of the Commercial and Institutional operating segments. The Commercial operating segment is a full-service, commercial banking platform that focuses primarily on serving the borrowing, cash 6 Table of contents management, and capital markets needs of middle market clients within Key’s 15-state branch footprint. The Institutional operating segment operates nationally in providing lending, equipment financing, and banking products and services to large corporate and institutional clients. The industry coverage and product teams have established expertise in the following sectors: Consumer, Energy, Healthcare, Industrial, Public Sector, Real Estate, and Technology. It is also a significant, national, commercial real estate lender and third-party master and special servicer of commercial mortgage loans. The operating segment includes the KBCM platform which provides a broad suite of capital markets products and services including syndicated finance, debt and equity underwriting, fixed income and equity sales and trading, derivatives, foreign exchange, mergers & acquisition and other advisory, and public finance. Additional Information Our executive offices are located at 127 Public Square, Cleveland, Ohio 44114-1306, and our telephone number is (216) 689-3000. Our website is www.key.com, and the investor relations section of our website may be reached through www.key.com/ir. We make available free of charge, on or through the investor relations section of our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Also posted on our website, and available in print upon request from any shareholder to our Investor Relations Department, are the charters for the committees of our Board of Directors, which includes the Audit Committee, Compensation and Organization Committee, Executive Committee, Nominating and Corporate Governance Committee, Risk Committee, and Technology Committee; our Corporate Governance Guidelines; the Code of Business Conduct and Ethics for our directors, officers, and employees; our Standards for Determining Independence of Directors; our policy for Review of Transactions Between KeyCorp and Its Directors, Executive Officers and Other Related Persons; our Statement of Political Activity; and our Corporate Responsibility Report. Within the time period required by the SEC and the NYSE, we will post on our website any amendment to the Code of Ethics and any waiver applicable to any senior executive officer or director. We also make available a summary of filings made with the SEC of statements of beneficial ownership of our equity securities filed by our directors and officers under Section 16 of the Exchange Act. The “Regulatory Disclosures & Filings” section under the “Financials” tab of the investor relations section of our website includes public disclosures concerning our historic annual and mid-year stress-testing activities under the Dodd-Frank Act and our quarterly regulatory capital disclosures under the third pillar of Basel III. Information contained on or accessible through, including any reports available on, our website or any other website referenced in this report is not part of this report. References to websites in this report are intended to be inactive textual references only. Shareholders may obtain a copy of any of the above-referenced corporate governance documents by writing to our Investor Relations Department at Investor Relations, KeyCorp, 127 Public Square, Mailcode OH-01-27-0737, Cleveland, Ohio 44114-1306; by calling (216) 689-4221; or by sending an e-mail to investor_relations@keybank.com. 7 Table of contents Competition The market for banking and related financial services is highly competitive and continuously evolving. Legislative, regulatory, economic, and technology changes, as well as consolidation within the financial services industry, could result in increased competition from new and existing market participants. Key competes with other providers of financial services, such as BHCs, commercial banks, savings associations, credit unions, mortgage banking companies, finance companies, mutual funds, insurance companies, investment management firms, private credit funds, investment banking firms, broker-dealers, financial technology companies, and other local, regional, national, and global institutions that offer financial services. Some of our competitors are larger and may have more financial resources, while some of our competitors enjoy fewer regulatory constraints and may have lower cost structures. The financial services industry has become more competitive as technology advances have lowered barriers to entry, enabling more companies, including nonbank companies, to provide financial services. Mergers and acquisitions have also led to increased concentration in the banking industry, placing added competitive pressure on Key’s core banking products and services as we see competitors enter some of our markets or offer similar products. We compete by offering quality products and innovative services at competitive prices, and by maintaining our product and service offerings to keep pace with customer preferences and industry standards. Successfully competing in our markets also depends on our ability to invest in technology and infrastructure, execute transactions reliably and effectively, maintain and enhance our reputation, and attract, retain, and motivate talented employees, all while prudently managing risks and expenses. For more information on competition and related risks, see Item 1A. Risk Factors - “We operate in a highly competitive industry.” Human Capital Engaging a high performing and collaborative workforce is a top strategic priority for Key. Our human capital management strategy is focused on attracting, retaining, developing, motivating and rewarding the talent our businesses need to drive sound, profitable growth, and ultimately, enhance shareholder value, which we do by offering a competitive total rewards package, providing opportunities for career development and growth, and fostering a culture that is fair and inclusive for all. Competitive Rewards We make investments to hire and retain the people we need to serve our customers and communities and regularly review our pay practices to reflect changing market and economic conditions. We have steadily increased our starting minimum wage since 2015, and as of December 31, 2024, 93% of employees earned $20 or more per hour. We have made other compensation adjustments in response to market trends, competitive pressures, and a dynamic market for talent. These investments include a comprehensive and competitive total rewards program, representing our investment in our teammates’ collective success and reflecting our commitment to helping them thrive. Key’s benefits offerings include employee health and welfare plans, a 401(k) plan with competitive matching contributions (dollar for dollar, up to the first 7% of eligible pay contributed on a per pay period basis for eligible employees), up to ten weeks of paid parental leave, a Discounted Stock Purchase Plan, wellness incentives, and a lifestyle reimbursement account program for covered expenses related to health, mental wellness, family needs, and finances. Teammates can also participate in a variety of company-sponsored volunteer and giving opportunities, including Neighbors Make the Difference Day, our national employee volunteer day, and the Employee Matching Gift Program, which offers eligible employees the opportunity to support qualified nonprofit organizations and multiply their contributions through the KeyBank Foundation. We have a pay-for-performance culture that is guided by the following three principles: • Pay decisions are based on Key’s performance, business unit performance, and individual performance. • We deliver pay in a way that balances short-term and long-term financial performance objectives and aligns to shareholder value creation. • We support sustainable performance with policies that focus on prudent risk-taking and the balance between risk and reward. We design our compensation programs to balance risk and reward and align with the guidance of our regulators, and we regularly monitor these programs to remain within our risk tolerances. We subject all discretionary 8 Table of contents incentives paid to our employees to a robust risk adjustment process that begins before grant and extends beyond payment. Career Development and Growth We invest in our teammates’ growth and professional development through a variety of internal networking groups that are open to all teammates, including our Key Business Impact and Networking Groups (“KBINGs”), formal and informal mentoring programs, including Key’s enterprise-wide formal mentoring program, MentorMe at Key, and a suite of leadership development programs. We also offer employees the opportunities to develop and enhance their skills through formal learning curricula and to obtain tuition reimbursement for eligible collegiate or post-collegiate education and relevant certifications. Key’s Workforce Key had an average of 16,753 full time equivalent employees in 2024 . As of December 31, 2024, a total of 17,406 full-time and part-time employees worked in the following regions, which are generally aligned to the regions Key uses for its retail branch banking network: Region Employee Count East 12,399 West 2,834 All Other 2,173 We invest significant time and resources in creating an attractive work environment and competitive total rewards package that attracts and retains top talent. Key’s annualized rate for voluntary turnover as of December 31, 2024, was 13.2%, lower than our annualized voluntary turnover rate for 2023, which was 14.6%, and lower than our previous five-year historical average of 15.3%. Information About Our Executive Officers KeyCorp’s executive officers are principally responsible for managing the operations of KeyCorp, making policy for KeyCorp, executing on strategic decisions, and managing material risks, subject to the supervision and direction of 9 Table of contents the Board. All executive officers are subject to annual election at the annual organizational meeting of the Board held each May. Set forth below are the names and ages of the executive officers of KeyCorp as of December 31, 2024, the positions held by each at KeyCorp during the past five years, and the year each first became an executive officer of KeyCorp. On January 23, 2025, Mohit (Mo) Ramani became Chief Risk Officer. Because Mo Ramani and James Waters have been employed at KeyCorp for less than five years, information is being provided concerning their prior business experience. There are no family relationships among the directors or the executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. Victor B. Alexander (45) - Mr. Alexander has been KeyCorp’s Head of Consumer Bank and an executive officer of KeyCorp since January 2020. Prior to that time, he served as the Head of Home Lending from October 2018 to January 2020 and Treasurer from July 2017 to October 2018. Darrin L. Benhart (59) - On December 31, 2024, Mr. Benhart was Chief Risk Officer and an executive officer of KeyCorp and had served in such capacity since January 1, 2024. Prior to that time, he served as Deputy Chief Risk Officer and Head of Enterprise Risk Management from August 2023 to December 2023 and Chief Enterprise Risk Officer from July 2022 to August 2023. Prior to July 2022, he served as a National Bank Examiner with the OCC from March 1992 to March 2022. Amy G. Brady (58) - Ms. Brady is KeyCorp’s Chief Information Officer, serving in that role since May 2012. Ms. Brady has been an executive officer of KeyCorp since she joined in 2012. She has been a director of DuPont de Nemours, Inc., a multi-industry specialty solutions company, since 2019. Trina M. Evans (60) - Ms. Evans has been the Director of Corporate Center for KeyCorp since August 2012. Prior to this role, Ms. Evans was the Chief Administrative Officer for Key Community Bank and the Director of Client Experience for KeyBank. She became an executive officer of KeyCorp in March 2013. Kenneth C. Gavrity (48) - Mr. Gavrity has been Head of Commercial Bank since November 2023 and became an executive officer of KeyCorp in May 2021. Prior to this, Mr. Gavrity served as Head of Enterprise Payments from January 2019 to November 2023 and Head of Commercial Payments from 2016 to 2019. Stacy L. Gilbert (53) - Ms. Gilbert has been the Chief Accounting Officer and an executive officer of KeyCorp since March 2024. Prior to her appointment as Chief Accounting Officer, Ms. Gilbert served as Corporate Controller for KeyCorp since August 2023. She previously served as Assistant Corporate Controller and Senior Director of External Reporting and Accounting Policy. She first joined the Company in 2002, holding a variety of accounting roles, before leaving to join FirstMerit Corporation in 2008. She re-joined the Company in 2016. Christopher M. Gorman (64) - Mr. Gorman has been Chairman, Chief Executive Officer, and President of KeyCorp since May 1, 2020. Mr. Gorman previously served as President and Chief Operating Officer from September 2019 to May 2020 and President of Banking and Vice Chairman from 2017 to September 2019. From 2016 to 2017, he served as Merger Integration Executive responsible for leading the integration efforts related to KeyCorp’s merger with First Niagara. Prior to that, Mr. Gorman was the President of Key Corporate Bank from 2010 to 2016. He became an executive officer of KeyCorp in 2010. Clark H.I. Khayat (53) - Mr. Khayat has been Chief Financial Officer since March 2023 and an executive officer since September 2018. Mr. Khayat rejoined KeyCorp as Chief Strategy Officer in January 2018 and served in that role until March 2023. Mr. Khayat had previously served as Head of Key’s Enterprise Commercial Payments group from April 2014 to June 2016. Allyson M. Kidik (45) - Ms. Kidik has been the Chief Risk Review Officer and General Auditor and an executive officer of KeyCorp since July 2022. Ms. Kidik previously served as Senior Deputy General Auditor from 2018 to 2022 and Deputy General Auditor from 2015 to 2018. Angela G. Mago (59) - Ms. Mago has served as the Chief Human Resources Officer since November 2023. She previously served as Head of Commercial Bank from May 2019 to November 2023 and Co-Head of Key Corporate Bank from 2016 to May 2019. She became an executive officer of KeyCorp in 2016. 10 Table of contents Andrew J. Paine III (55) - Mr. Paine has been the Head of Institutional Bank since 2019. He previously served as Co-Head of Key Corporate Bank from 2016 to May 2019. He also serves as President of KeyBanc Capital Markets Inc., a role he has held since 2013. He became an executive officer of KeyCorp in 2016. Mohit Ramani (51) - Mr. Ramani became Chief Risk Officer and an executive officer of KeyCorp on January 23, 2025. Prior to that time, he served in a variety of roles with Truist Financial Corporation, including Deputy Chief Risk Officer and Chief Credit Officer from January 2023 to January 2025 and Chief Business Unit Risk Officer from 2000 to 2023. James L. Waters (58) - Mr. Waters became the General Counsel and Secretary and an executive officer of KeyCorp in July 2021. From 2018 to 2021, he served as General Counsel and Corporate Secretary of Cullen/Frost Bankers, Inc., a financial holding company. Supervision and Regulation The regulatory framework applicable to BHCs and banks is intended primarily to protect consumers, the DIF, taxpayers and the banking system as a whole, rather than to protect the security holders and creditors of financial services companies. Comprehensive reform of the legislative and regulatory environment for financial services companies occurred in 2010 and remains ongoing. We cannot predict changes in applicable laws, regulations or regulatory agency policies, but any such changes may materially affect our business, financial condition, results of operations, or access to liquidity or credit. Overview Federal law establishes a system of regulation under which the Federal Reserve is the umbrella regulator for BHCs, while their subsidiaries are principally regulated by prudential or functional regulators: (i) the OCC for national banks and federal savings associations; (ii) the FDIC for state non-member banks and savings associations; (iii) the Federal Reserve for state member banks; (iv) the CFPB for consumer financial products or services; (v) the SEC and FINRA for securities broker/dealer activities; (vi) the SEC, CFTC, and NFA for swaps and other derivatives; and (vii) state insurance regulators for insurance activities. Certain specific activities, including traditional bank trust and fiduciary activities, may be conducted in a bank without the bank being deemed a “broker” or a “dealer” in securities for purposes of securities functional regulation. Under the BHCA, BHCs generally may not directly or indirectly own or control more than 5% of the voting shares, or substantially all of the assets, of any bank, without prior approval from the Federal Reserve. In addition, BHCs are generally prohibited from engaging in commercial or industrial activities. However, a BHC that satisfies certain requirements regarding management, capital adequacy, and Community Reinvestment Act performance may elect to be treated as a Financial Holding Company (“FHC”) for purposes of federal law, and as a result may engage in a substantially broader scope of activities that are considered to be financial in nature or complementary to those activities. KeyCorp has elected to be treated as a FHC and, as such, is authorized to engage in securities underwriting and dealing, insurance agency and underwriting, and merchant banking activities. In addition, the Federal Reserve has permitted FHCs, like KeyCorp, to engage in the following activities, under the view that such activities are complementary to a financial activity: physical commodities trading activities, energy management services, and energy tolling, among others. Under federal law, a BHC also must serve as a source of financial strength to its subsidiary depository institution(s) by providing financial assistance in the event of financial distress. This support may be required when the BHC does not have the resources to, or would prefer not to, provide it. Certain loans by a BHC to a subsidiary bank are subordinate in right of payment to deposits in, and certain other indebtedness of, the subsidiary bank. In addition, federal law provides that in the bankruptcy of a BHC, any commitment by the BHC to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment. The Dodd-Frank Act created the FSOC to overlay the U.S. supervisory framework for BHCs, insured depository institutions, and other financial service providers, by serving as a systemic risk oversight body. Specifically, the FSOC is authorized to: (i) identify risks to U.S. financial stability that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected SIFIs, or that could arise outside the financial services marketplace; (ii) promote market discipline by eliminating expectations that the U.S. government will shield shareholders, creditors, and counterparties from losses in the event of failure; and (iii) respond to emerging threats 11 Table of contents to the stability of the U.S. financial system. The FSOC is responsible for facilitating regulatory coordination; information collection and sharing; designating nonbank financial companies for consolidated supervision by the Federal Reserve; designating systemic financial market utilities and systemic payment, clearing, and settlement activities requiring prescribed risk management standards and heightened federal regulatory oversight; recommending stricter standards for SIFIs; and, together with the Federal Reserve, determining whether action should be taken to break up firms that pose a grave threat to U.S. financial stability. As an FHC, KeyCorp is subject to regulation, supervision, and examination by the Federal Reserve under the BHCA. Our national bank subsidiaries and their subsidiaries are subject to regulation, supervision, and examination by the OCC. At December 31, 2024, we operated one full-service, FDIC-insured national bank subsidiary, KeyBank, and one national bank subsidiary that is limited to fiduciary activities. The FDIC also has certain, more limited regulatory, supervisory, and examination authority over KeyBank and KeyCorp under the FDIA and the Dodd-Frank Act. We have other financial services subsidiaries that are subject to regulation, supervision, and examination by the Federal Reserve, as well as other state and federal regulatory agencies and self-regulatory organizations. Because KeyBank engages in derivative transactions, in 2013 it provisionally registered as a swap dealer with the CFTC and became a member of the NFA, the self-regulatory organization for participants in the U.S. derivatives industry. Our securities brokerage and asset management subsidiaries are subject to supervision and regulation by the SEC, FINRA, and state securities regulators, and our insurance subsidiaries are subject to regulation by the insurance regulatory authorities of the states in which they operate. Our other nonbank subsidiaries are subject to laws and regulations of both the federal government and the various states in which they are authorized to do business. Regulatory capital requirements Background KeyCorp and KeyBank are subject to regulatory capital requirements that are based largely on the work of an international group of supervisors known as the Basel Committee on Banking Supervision (“Basel Committee”). The Basel Committee is responsible for establishing international bank supervisory standards for implementation in member jurisdictions, to enhance and align bank regulation on a global scale, and to promote financial stability. The regulatory capital framework developed by the Basel Committee and implemented in the United States is a predominately risk-based capital framework that establishes minimum capital requirements based on the amount of regulatory capital a banking organization maintains relative to the amount of its total assets, adjusted to reflect credit risk (“risk-weighted assets”). Each banking organization subject to this regulatory capital framework is required to satisfy certain minimum risk-based capital measures (e.g., a tier 1 risk-based capital ratio requirement of tier 1 capital to total risk-weighted assets), and in the United States, a minimum leverage ratio requirement of tier 1 capital to average total on-balance sheet assets, which serves as a backstop to the risk-based measures. A capital instrument is assigned to one of two tiers based on the relative strength and ability of that instrument to absorb credit losses on a going concern basis. Capital instruments with relatively robust loss-absorption capacity are assigned to tier 1, while other capital instruments with relatively less loss-absorption capacity are assigned to tier 2. A banking organization’s total capital equals the sum of its tier 1 and tier 2 capital. The Basel Committee also developed a market risk capital framework (that also has been implemented in the United States) to address the substantial exposure to market risk faced by banking organizations with significant trading activity and augment the credit risk-based capital requirements described above. For example, the minimum total risk-based capital ratio requirement for a banking organization subject to the market risk capital rule equals the ratio of the banking organization’s total capital to the sum of its credit risk-weighted assets and market risk-weighted assets. Only KeyCorp is subject to the market risk capital rule, as KeyBank does not engage in substantial trading activity. Basel III To address deficiencies in the international regulatory capital standards identified during the 2007-2009 global financial crisis, in 2010 the Basel Committee released comprehensive revisions to the international regulatory capital framework, commonly referred to as “Basel III.” The Basel III revisions are designed to strengthen the quality and quantity of regulatory capital, in part through the introduction of a Common Equity Tier 1 capital requirement; provide more comprehensive and robust risk coverage, particularly for securitization exposures, equities, and off-balance sheet positions; and address pro-cyclicality concerns through the implementation of capital 12 Table of contents buffers. The Basel Committee also released a series of revisions to the market risk capital framework to address deficiencies identified during its initial implementation (e.g., arbitrage opportunities between the credit risk-based and market risk capital rules) and in connection with the global financial crisis. KeyCorp and KeyBank are subject to regulatory capital requirements implemented by the U.S. banking agencies that are based largely on Basel III (“Regulatory Capital Rules”). Consistent with the international framework, the Regulatory Capital Rules further restrict the type of instruments that may be recognized in tier 1 and tier 2 capital; establish a minimum Common Equity Tier 1 capital ratio requirement of 4.5% and capital buffers to absorb losses during periods of financial stress while allowing an institution to provide credit intermediation as it would during a normal economic environment; and refine several of the methodologies used for determining risk-weighted assets. The Regulatory Capital Rules provide additional requirements for large banking organizations with over $250 billion in total consolidated assets or $10 billion in foreign exposure, but those additional requirements do not apply to KeyCorp or KeyBank. However, some of those additional requirements will apply to KeyCorp and KeyBank if proposed revisions to the Regulatory Capital Rules are adopted. The proposed revisions to the Regulatory Capital Rules are discussed below under the heading “Recent regulatory capital-related developments.” For purposes of the Regulatory Capital Rules, KeyCorp and KeyBank are treated as “standardized approach” banking organizations. Under the Regulatory Capital Rules, standardized approach banking organizations, such as KeyCorp and KeyBank, are required to meet the minimum capital and leverage ratios set forth in the following table. At December 31, 2024, KeyCorp’s ratios under the fully phased-in Regulatory Capital Rules are set forth in the following table. Minimum Capital Ratios and KeyCorp Ratios Under Regulatory Capital Rules Ratios (including stress capital buffer) Regulatory Minimum Requirement Stress Capital Buffer (b) Regulatory Minimum With Stress Capital Buffer KeyCorp December 31, 2024 (c) Common Equity Tier 1 4.50 % 3.10 % 7.60 % 11.92 % Tier 1 Capital 6.00 3.10 9.10 13.69 Total Capital 8.00 3.10 11.10 16.15 Leverage (a) 4.00 N/A 4.00 10.03 (a) As a standardized approach banking organization, KeyCorp is not subject to the 3% supplementary leverage ratio requirement, which became effective January 1, 2018. However, KeyCorp will be subject to the supplementary leverage ratio if proposed revisions to the Regulatory Capital Rules discussed below are adopted. (b) Stress capital buffer must consist of Common Equity Tier 1 capital. As a standardized approach banking organization, KeyCorp is not subject to the countercyclical capital buffer of up to 2.5% imposed upon an advanced approaches banking organization under the Regulatory Capital Rules. However, KeyCorp will be subject to the countercyclical capital buffer if proposed revisions to the Regulatory Capital Rules discussed below are adopted. (c) Ratios reflect the five-year transition of CECL impacts on regulatory ratios. Key elected the CECL phase-in option provided by regulatory guidance which delayed for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. Effective for the first quarter 2022, Key entered a three-year transition period, and the full impact of the CECL standard was phased-in to regulatory capital through December 31, 2024. In the first quarter of 2025, CECL will be fully reflected in regulatory capital. On a fully phased-in basis, Key’s Common Equity Tier 1 ratio would be reduced by five basis points. Revised prompt corrective action framework The federal prompt corrective action (“PCA”) framework under the FDIA groups FDIC-insured depository institutions into one of five prompt corrective action capital categories: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” In addition to implementing the Basel III capital framework in the United States, the Regulatory Capital Rules also revised the PCA capital category threshold ratios applicable to FDIC-insured depository institutions such as KeyBank. The Revised PCA framework table below identifies the capital category threshold ratios for a “well capitalized” and an “adequately capitalized” institution under the Prompt Corrective Action Framework. “Well Capitalized” and “Adequately Capitalized” Capital Category Ratios under Revised Prompt Corrective Action Framework Prompt Corrective Action Capital Category Ratio Well Capitalized (a) Adequately Capitalized Common Equity Tier 1 Risk-Based 6.5 % 4.5 % Tier 1 Risk-Based 8.0 6.0 Total Risk-Based 10.0 8.0 Tier 1 Leverage (b) 5.0 4.0 (a) A “well capitalized” institution also must not be subject to any written agreement, order or directive to meet and maintain a specific capital level for any capital measure. (b) As a standardized approach banking organization, KeyBank is not subject to the 3% supplementary leverage ratio requirement, which became effective January 1, 2018. However, KeyCorp will be subject to the supplementary leverage ratio if proposed revisions to the Regulatory Capital Rules discussed below are adopted. 13 Table of contents As of December 31, 2024, KeyBank (consolidated) satisfied the risk-based and leverage capital requirements necessary to be considered “well capitalized” for purposes of the revised prompt corrective action framework. However, investors should not regard this determination as a representation of the overall financial condition or prospects of KeyBank because the PCA framework is intended to serve a limited supervisory function. Moreover, it is important to note that the PCA framework does not apply to BHCs, like KeyCorp. Recent regulatory capital-related developments On July 27, 2023, the federal banking agencies issued a proposal (the “Capital Proposal”) that would make significant changes to the Regulatory Capital Rules applicable to banking organizations with total assets of $100 billion or more and their depository institution subsidiaries (“Large Banking Organizations”) (including KeyCorp and KeyBank) and banking organizations with significant trading activity. This proposal would implement the final elements of the Basel III capital framework and make other changes to the Regulatory Capital Rules in response to the bank failures that occurred in 2023. The Capital Proposal would establish a new framework for calculating risk-weighted assets (the “expanded risk-based approach”) that would apply to Large Banking Organizations. The expanded risk-based approach would include a new more risk-sensitive standardized approach for measuring credit risk and operational risk. It would also include new standardized approaches for measuring market risk and credit valuation adjustment risk but would allow the use of internal models for market risk in certain circumstances with regulatory approval. Under the Capital Proposal, a Large Banking Organization would be required to calculate its risk-based capital ratios under both the expanded risk-based approach and the current standardized approach and would use the lower of the two. All capital buffer requirements, including the stress capital buffer requirement, would apply regardless of whether the expanded risk-based approach or the existing standardized approach produces the lower ratio. The Capital Proposal would also align the calculation of regulatory capital for Category III and IV banking organizations with the calculation of regulatory capital for Category I and II banking organizations. KeyCorp and KeyBank are Category IV banking organizations. Under the proposal, Category III and IV banking organizations would be required to include most components of AOCI, including net unrealized gains and losses on available-for-sale securities, in regulatory capital. Category III and IV banking organizations would also be required to apply the same capital deductions and minority interest treatments that currently apply to Category I and Category II banking organizations. In addition, all Large Banking Organizations would be subject to the supplementary leverage ratio and countercyclical capital buffer requirement and would be required to make certain enhanced public disclosures. The expanded total risk-weighted assets calculation used in the expanded risk-based approach would be phased in over a three-year period. For Category III and IV banking organizations, the requirement to reflect AOCI in regulatory capital would also be phased in over a three-year period. All other elements of the calculation of regulatory capital would apply on the effective date of a final rule if the proposal is adopted. Comments on this proposal were due by January 16, 2024. Liquidity requirements U.S. banking organizations are subject to regulatory liquidity requirements based on international liquidity standards established by the Basel Committee (the “Basel III liquidity framework”). The Basel III liquidity framework establishes quantitative standards designed to ensure that a banking organization is appropriately positioned, from a balance sheet perspective, to satisfy its short- and long-term funding needs. To address short-term liquidity risk, the Basel III liquidity framework established a liquidity coverage ratio (“Basel III LCR”), calculated as the ratio of a banking organization’s high-quality liquid assets to its total net cash outflows over 30 consecutive calendar days. In addition, to address long-term liquidity risk, the Basel III liquidity framework established a net stable funding ratio (“Basel III NSFR”), calculated as the ratio of the amount of stable funding available to a banking organization to its required amount of stable funding. Consistent with the Basel III LCR, the final rules implementing the Basel III LCR for U.S. banking organizations (the “Liquidity Coverage Rules”) established a minimum LCR for certain internationally active bank and nonbank financial companies (excluding KeyCorp), and a modified version of the LCR (“Modified LCR”) for BHCs and other depository institution holding companies with over $50 billion in consolidated assets that are not internationally active (including KeyCorp). Under the Liquidity Coverage Rules, KeyCorp was required to calculate a Modified LCR on a monthly basis and was required to satisfy a minimum Modified LCR requirement of 100%. KeyBank was not subject to the LCR or the Modified LCR under the Liquidity Coverage Rules. 14 Table of contents Large BHCs, like KeyCorp, are also subject to liquidity requirements contained in regulations adopted pursuant to the Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”). As enacted in 2010, the Dodd-Frank Act required the Federal Reserve to impose enhanced prudential standards and early remediation requirements, including enhanced liquidity standards, upon BHCs (like KeyCorp) with at least $50 billion in total consolidated assets. EGRRCPA, enacted on May 24, 2018, raised the asset threshold above which the Federal Reserve is required to apply enhanced prudential standards to BHCs from $50 billion to $250 billion. EGRRCPA gave the Federal Reserve the authority to continue to apply enhanced prudential standards to any BHCs having at least $100 billion but less than $250 billion in total consolidated assets (like KeyCorp) if it determines that the application of the standard is appropriate to prevent or mitigate risks to financial stability or to promote the safety and soundness of the BHC or BHCs, taking into consideration the BHC’s or BHCs’ capital structure, riskiness, complexity, financial activities, size, and other relevant factors. As a result of the Federal Reserve’s implementation of certain of the enhanced prudential standards, KeyCorp is subject to requirements relating to cash flow projections, a contingency funding plan, liquidity risk limits, the monitoring of liquidity risks (with respect to collateral, legal entities, currencies, business lines, and intraday exposures), liquidity stress testing, a liquidity buffer, and liquidity risk management requirements, including requirements that apply to the board of directors, the risk committee, senior management, and the independent review function. Final rules related to the implementation of EGRRCPA (“Tailoring Rules”) established four risk-based categories of banking organizations with $100 billion or more in total consolidated assets and applied tailored regulatory requirements to each respective category. KeyCorp falls within the least restrictive of those categories (“Category IV Firms”). Under one of the Tailoring Rules, Category IV Firms with weighted short-term wholesale funding of less than $50 billion will not be subject to a modified LCR. KeyCorp does not meet the $50 billion threshold and is not subject to the modified LCR or an LCR public disclosure requirement. Under another Tailoring Rule, Category IV Firms (like KeyCorp) are required to conduct internal liquidity stress tests quarterly and are subject to simplified liquidity risk management requirements. Category IV Firms are still required to maintain a liquidity buffer that is sufficient to meet the projected net stressed cash-flow need over a 30-day planning horizon under the firm’s internal liquidity stress test and remain subject to monthly tailored FR 2052a liquidity reporting requirements. Under the final rules adopted by the federal banking agencies to implement the Basel III NSFR for U.S. banking organizations, certain banking organizations with more than $100 billion in total assets must maintain minimum amounts of stable funding to support their assets, commitments, and derivatives exposures over a one-year time horizon. Under the rules, KeyCorp, as a Category IV firm with average weighted short-term wholesale funding of less than $50 billion, is not subject to an NSFR requirement. Capital planning and stress testing The Federal Reserve’s capital plan rule requires each U.S.-domiciled, top-tier BHC with total consolidated assets of at least $100 billion (like KeyCorp) to develop and maintain a written capital plan supported by a robust internal capital adequacy process. The capital plan must be submitted to the Federal Reserve for supervisory review in connection with the BHC’s CCAR (described below). The supervisory review includes an assessment of many factors, including KeyCorp’s ability to maintain capital above each minimum regulatory capital ratio on a pro forma basis under expected and stressful conditions throughout the planning horizon. The Federal Reserve’s CCAR is an intensive assessment of the capital adequacy of large U.S. BHCs and of the practices these BHCs use to assess their capital needs. The Federal Reserve expects BHCs subject to CCAR to have and maintain regulatory capital in an amount that is sufficient to withstand a severely adverse operating environment and, at the same time, be able to continue operations, maintain ready access to funding, meet obligations to creditors and counterparties, and provide credit intermediation. 15 Table of contents The Federal Reserve has conducted a supervisory stress test on KeyCorp, pursuant to which the Federal Reserve projects revenues, expenses, losses, and resulting post-stress capital levels and regulatory capital ratios under conditions that affect the U.S. economy or the financial condition of KeyCorp, including supervisory baseline and severely adverse scenarios, that are determined by the Federal Reserve. KeyCorp and KeyBank have also been required to conduct their own company-run stress tests to assess the impact of stress scenarios (including supervisor-provided baseline, adverse, and severely adverse scenarios and, for KeyCorp, one KeyCorp-defined baseline scenario and at least one KeyCorp-defined stress scenario) on their consolidated earnings, losses, and capital over a nine-quarter planning horizon, taking into account their current condition, risks, exposures, strategies, and activities. While KeyBank currently only has to conduct an annual stress test, KeyCorp has had to conduct both an annual and a mid-cycle stress test in the past. KeyCorp and KeyBank have been required to report the results of their annual stress tests to the Federal Reserve and the OCC. Under one of the Tailoring Rules, KeyCorp is no longer required to conduct and publicly disclose the results of company-run stress tests and is subject to a supervisory stress test conducted by the Federal Reserve every other year rather than every year. In 2024, KeyCorp was required to participate in the Federal Reserve’s CCAR process and was subject to a supervisory stress test conducted by the Federal Reserve. Since the adoption of a final rule by the federal banking agencies in October 2019, KeyBank is no longer required to conduct annual company-run stress tests. Also, this final rule removes the “adverse” scenario as a required scenario for all stress testing requirements applicable to BHCs and federally-regulated banks so that such stress tests will be required to include only “baseline” and “severely adverse” scenarios. On March 4, 2020, the Federal Reserve adopted a final rule integrating certain aspects of the Federal Reserve’s Regulatory Capital Rules with CCAR and the stress test rules in order to simplify the overall capital framework that is currently applicable to BHCs that have $100 billion or more in total consolidated assets (including KeyCorp). The final rule amended the capital conservation buffer requirement under the Regulatory Capital Rules by replacing the static risk-weighted assets component of the buffer with a new measure, the stress capital buffer, which will be based on the results of an individual BHC’s supervisory stress test and cannot be less than 2.5 percent of risk-weighted assets. A firm will be subject to limitations on capital distributions and discretionary bonus payments if it does not satisfy all minimum capital requirements and its stress capital buffer requirement. A firm’s stress capital buffer requirement will become effective on October 1 of each year and will remain in effect until September 30 of the following year unless the firm receives an updated stress capital buffer requirement from the Federal Reserve. On August 26, 2020, the federal banking agencies issued a final rule that revises the definition of eligible retained income as that term is used in the agencies’ Regulatory Capital Rules. The revised definition applies to all buffer requirements applicable to a banking organization, including the stress capital buffer requirement adopted by the Federal Reserve on March 4, 2020. The revised definition of eligible retained income will make any automatic limitations on capital distributions that could apply under the agencies’ capital rules more gradual with the objective of promoting continued lending during a period of stress. On January 19, 2021, the Federal Reserve issued a final rule to make conforming changes to the capital planning, regulatory reporting, and stress capital buffer requirements for firms subject to Category IV standards (including KeyCorp) to make these requirements consistent with the tailored regulatory framework for large banking organizations that the Federal Reserve adopted in an October 2019 rulemaking. The final rule revised the elements of the capital plan that Category IV firms are required to submit to the Federal Reserve and makes related changes to regulatory reporting requirements. Also, the final rule updated the frequency for calculating the stress capital buffer for these firms. On June 26, 2024, the Federal Reserve announced the results of the supervisory stress test that it conducted of 31 BHCs having more than $100 billion in total consolidated assets (including KeyCorp). The Federal Reserve indicated that all BHCs subject to the stress test maintained capital ratios above the minimum required levels under the severely adverse scenario. The stress test results for individual BHCs (including KeyCorp) were used by the Federal Reserve to determine a BHC’s updated stress capital buffer requirement. The Federal Reserve published the updated stress capital buffer requirements on August 28, 2024. KeyCorp’s updated stress capital buffer is 3.1%. This stress capital buffer became effective on October 1, 2024 and will remain in effect until September 30, 2025, unless KeyCorp later receives an updated stress capital buffer requirement from the Federal Reserve. On December 23, 2024, the Federal Reserve announced that it intends to propose changes to its stress testing framework in order to improve the transparency of the stress tests and reduce the volatility of the resulting capital 16 Table of contents requirements. The Federal Reserve said that it plans to, among other things, disclose and seek public comment on the models and scenarios used in the stress tests and to average results over two years to reduce year-over-year changes in capital requirements. Changes to the stress testing framework would apply to KeyCorp. On December 24, 2024, five trade associations filed a lawsuit against the Federal Reserve in the United States District Court for the Southern District of Ohio to challenge the stress testing framework on the basis that the current framework violates the Administrative Procedures Act and the Due Process Clause of the United States Constitution. The parties bringing the lawsuit indicated that they do not object to the use of stress tests to set stress capital buffer requirements but that they want to ensure that the Federal Reserve subjects the stress tests to public notice and comment and complies with other applicable legal requirements. KeyCorp is monitoring developments in this case. Dividend restrictions Federal law and regulation impose limitations on the payment of dividends by our national bank subsidiaries, like KeyBank. Historically, dividends paid by KeyBank have been an important source of cash flow for KeyCorp to pay dividends on its equity securities and interest on its debt. Dividends by our national bank subsidiaries are limited to the lesser of the amounts calculated under an earnings retention test and an undivided profits test. Under the earnings retention test, without the prior approval of the OCC, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current year’s net income combined with the retained net income of the two preceding years. Under the undivided profits test, a dividend may not be paid in excess of a bank’s undivided profits. Moreover, under the FDIA, an insured depository institution may not pay a dividend if the payment would cause it to be less than “adequately capitalized” under the prompt corrective action framework or if the institution is in default in the payment of an assessment due to the FDIC. Similarly, under the Regulatory Capital Rules, a banking organization that fails to satisfy the minimum capital conservation buffer requirement will be subject to certain limitations, which include restrictions on capital distributions. For more information about the payment of dividends by KeyBank to KeyCorp, please see Note 3 (“Restrictions on Cash, Dividends, and Lending Activities”) in this report. FDIA, Resolution Authority and Financial Stability Deposit insurance and assessments The DIF provides insurance coverage for domestic deposits funded through assessments on insured depository institutions like KeyBank. The amount of deposit insurance coverage for each depositor’s deposits is $250,000 per depository. The FDIC must assess the premium based on an insured depository institution’s assessment base, calculated as its average consolidated total assets minus its average tangible equity. KeyBank’s current annualized premium assessments can range from $.025 to $.45 for each $100 of its assessment base. The rate charged depends on KeyBank’s performance on the FDIC’s “large and highly complex institution” risk-assessment scorecard, which includes factors such as KeyBank’s regulatory rating, its ability to withstand asset and funding-related stress, and the relative magnitude of potential losses to the FDIC in the event of KeyBank’s failure. On October 18, 2022, the FDIC adopted a final rule, applicable to all insured depository institutions (including KeyBank), to increase the initial base deposit insurance assessment rate schedules uniformly by two basis points consistent with the Amended Restoration Plan approved by the FDIC on June 21, 2022. The FDIC indicated that it was taking this action in order to restore the DIF reserve ratio to the required statutory minimum of 1.35% by the statutory deadline of September 30, 2028. Under the final rule, the increase in rates began with the first quarterly assessment period of 2023 and will remain in effect unless and until the reserve ratio meets or exceeds 2% in order to support growth in the DIF in progressing toward the FDIC’s long-term goal of a 2% reserve ratio. On March 10, 2023, and March 12, 2023, Silicon Valley Bank (“SVB”) and Signature Bank (“Signature”) were closed by the state banking authorities in California and New York, respectively, and the FDIC was appointed as receiver of SVB and Signature. All deposits of SVB and Signature were transferred to bridge banks established by the FDIC under the systemic risk exception to the least cost test in the FDIA so that the uninsured deposits as well as the insured deposits of both banks were protected by the FDIC. Under the FDIA, the loss to the DIF arising from the use of the systemic risk exception must be recovered through one or more special assessments. 17 Table of contents On November 16, 2023, the FDIC issued a final rule to impose a special assessment on IDIs to recover the loss to the DIF resulting from the use of the systemic risk exception to protect the uninsured depositors of SVB and Signature. Under the final rule, the FDIC would collect a special assessment from IDIs at an annual rate of approximately 13.4 basis points over eight quarterly assessment periods, starting with the first quarterly assessment period of 2024. The assessment base for the proposed special assessment is equal to an IDI’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits held by the IDI. Because the estimated loss to the DIF from the use of the systemic risk exception will be periodically adjusted and because the total assessments collected may change due to corrective amendments filed by covered IDIs regarding the reported amount of uninsured deposits for the December 31, 2022 reporting period, the FDIC may cease collection of the special assessment early, extend the special assessment collection period, or impose a final shortfall special assessment. In the final rule, the FDIC indicated that the special assessment is a tax-deductible operating expense for IDIs, and that it assumed that the effect on income of the entire amount of the special assessment would occur in one quarter for the IDIs subject to the assessment. The initial impact of the special assessment to Key was approximately $190 million in pre-tax expense, which was recognized upon issuance of the final rule in the fourth quarter of 2023. The FDIC has indicated that the loss estimates to be recovered by the special assessment will be periodically adjusted as the FDIC (as receiver of the failed banks) sells assets, satisfies liabilities, and incurs receivership expenses. The FDIC said that it will provide any updates regarding the amount and collection period for the special assessment when it sends the quarterly deposit insurance assessment invoices to the IDIs subject to the special assessment. In the first quarter of 2024, the FDIC announced an increase in its estimate of losses from protecting the uninsured depositors of SVB and Signature and, therefore, increased the amount that it would collect through the special assessment. Because of this updated estimate, Key incurred an incremental pre-tax expense of $29 million in the first quarter of 2024. Based on the quarterly invoices Key received from the FDIC in June 2024, September 2024, and December 2024, Key recorded an incremental pre-tax expense of $5 million in the second quarter of 2024, and a reversal of pre-tax expense of $6 million and $3 million in the third and fourth quarter of 2024 , respectively, to true-up initial estimates to invoiced amounts. The FDIC’s final rule for a special assessment discussed above was not intended to recover the loss to the DIF from the failure of First Republic Bank in May 2023 (initially estimated as a $13 billion loss) or to the DIF from the failures of SVB and Signature that was not related to the protection of uninsured depositors (initially estimated as a $2.7 billion loss). The FDIC indicated that no further adjustments to assessments are contemplated at this time to recover those losses but that it will re-evaluate this issue in the future when it updates projections for the DIF balance and the reserve ratio in connection with its periodic review of the DIF Restoration Plan that was adopted in 2022. The FDIC updates these projections at least semiannually. Conservatorship and receivership of insured depository institutions Upon the insolvency of an insured depository institution, the FDIC will be appointed as receiver or, in rare circumstances, conservator for the insolvent institution under the FDIA. In an insolvency, the FDIC may repudiate or disaffirm any contract to which the institution is a party if the FDIC determines that performance of the contract would be burdensome and that disaffirming or repudiating the contract would promote orderly administration of the institution’s affairs. If the contractual counterparty made a claim against the receivership (or conservatorship) for breach of contract, the amount paid to the counterparty would depend upon, among other factors, the receivership (or conservatorship) assets available to pay the claim and the priority of the claim relative to others. In addition, the FDIC may enforce most contracts entered into by the insolvent institution, notwithstanding any provision that would terminate, cause a default, accelerate or give other rights under the contract solely because of the insolvency, the appointment of the receiver (or conservator), or the exercise of rights or powers by the receiver (or conservator). The FDIC may also transfer any asset or liability of the insolvent institution without obtaining approval or consent from the institution’s shareholders or creditors. These provisions would apply to obligations and liabilities of KeyCorp’s insured depository institution subsidiary, KeyBank, including obligations under senior or subordinated debt issued to public investors. 18 Table of contents Receivership of certain SIFIs The Dodd-Frank Act created a new resolution regime, as an alternative to bankruptcy, known as the “orderly liquidation authority” (“OLA”) for certain SIFIs, including BHCs and their affiliates. Under the OLA, the FDIC would generally be appointed as receiver to liquidate and wind down a failing SIFI. The determination that a SIFI should be placed into OLA receivership is made by the U.S. Treasury Secretary, who must conclude that the SIFI is in default or in danger of default and that the SIFI’s failure poses a risk to the stability of the U.S. financial system. This determination must come after supermajority recommendations by the Federal Reserve and the FDIC, and consultation between the U.S. Treasury Secretary and the President. If the FDIC is appointed as receiver under the OLA, its powers and the rights and obligations of creditors and other relevant parties would be determined exclusively under the OLA. The powers of a receiver under the OLA are generally based on the FDIC’s powers as receiver for insured depository institutions under the FDIA. Certain provisions of the OLA were modified to reduce disparate treatment of creditors’ claims between the U.S. Bankruptcy Code and the OLA. However, substantial differences between the two regimes remain, including the FDIC’s right to disregard claim priority in some circumstances, the use of an administrative claims procedure under OLA to determine creditors’ claims (rather than a judicial procedure in bankruptcy), the FDIC’s right to transfer claims to a bridge entity, and limitations on the ability of creditors to enforce contractual cross-defaults against potentially viable affiliates of the entity in receivership. OLA liquidity would be provided through credit support from the U.S. Treasury and assessments made, first, on claimants against the receivership that received more in the OLA resolution than they would have received in ordinary liquidation (to the full extent of the excess), and second, if necessary, on SIFIs like KeyCorp utilizing a risk-based methodology. Depositor preference The FDIA provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of its depositors (including claims of its depositors that have subrogated to the FDIC) and certain claims for administrative expenses of the FDIC as receiver have priority over other general unsecured claims. If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will be placed ahead of unsecured, nondeposit creditors, including the institution’s parent BHC and subordinated creditors, in order of priority of payment. Resolution and recovery plans BHCs with at least $50 billion in total consolidated assets, like KeyCorp, have been required to periodically submit to the Federal Reserve and FDIC a plan discussing how the company could be rapidly and orderly resolved if the company failed or experienced material financial distress. Insured depository institutions with at least $50 billion in total consolidated assets, like KeyBank, have also been required to submit a resolution plan to the FDIC. These plans have been due annually unless the requirement to submit the plans was deferred by the regulators. The Federal Reserve and FDIC make available on their websites the public sections of resolution plans for the companies, including KeyCorp and KeyBank, that submitted plans. The public sections of the resolution plans of KeyCorp and KeyBank are available at http://www.federalreserve.gov/supervisionreg/resolution-plans.htm and https://www.fdic.gov/resolutions/fdic-and-financial-regulatory-reform-title-i-and-idi-resolution-planning/. KeyCorp’s last resolution plan was submitted in 2017, and KeyBank’s last resolution plan was submitted in 2022. KeyCorp is no longer required to submit a resolution plan because of the rule change discussed below while KeyBank remains subject to resolution plan requirements as discussed below. BHCs with less than $250 billion in total consolidated assets are no longer required to submit a resolution plan unless they have $75 billion or more in certain risk-based indicators. Under this rule, KeyCorp is no longer subject to resolution planning requirements. On June 20, 2024, the FDIC adopted a final rule to amend and restate its current resolution plan rule in order to clarify and strengthen resolution plan submission requirements and reflect lessons learned since the adoption of the FDIC’s current resolution plan rule in 2012. Among other things, the final rule (i) requires IDIs with more than $100 billion in total assets that are affiliated with a U.S. G-SIB to submit full resolution plans every two years, (ii) requires IDIs with more than $100 billion in total assets that are not affiliated with a U.S. G-SIB (including KeyBank) to submit full resolution plans every three years, (iii) requires IDIs with total assets between $50 billion and $100 billion to submit informational filings every three years, (iv) requires triennial filers to submit more limited supplements in the off years, (v) enhances and clarifies the requirements for the content of resolution submissions, (vi) codifies certain 19 Table of contents aspects of guidance and feedback provided to filers subject to the current rule, (vii) expands expectations regarding engagement and capabilities testing, and (viii) establishes an enhanced credibility standard for the evaluation of resolution submissions. The final rule was effective on October 1, 2024. KeyBank is required to file its next resolution plan by July 1, 2025, which will be its initial filing under the final rule. On October 21, 2024, the OCC adopted revisions to its recovery planning guidelines. The OCC’s recovery planning guidelines require large OCC-regulated banks to develop and maintain a recovery plan that identifies triggers and options for responding to a wide range of severe internal and external stress scenarios so that the bank can be restored to financial strength and viability in a timely manner if it were to experience such stress situations. The OCC revised these guidelines to (i) expand the applicability of the guidelines to banks with at least $100 billion in average total consolidated assets, (ii) add a requirement for covered banks to test their recovery plans to ensure that their plans will be effective during periods of severe stress, and (iii) clarify that recovery plans should consider non-financial risks (including operational and strategic risks) as well as financial risks. KeyBank is subject to the OCC’s revised recovery planning guidelines. KeyBank is required to be in compliance with these guidelines by January 1, 2026 except that KeyBank’s compliance with the testing requirement is delayed until January 1, 2027. Other Regulatory Requirements and Developments The Bank Secrecy Act The BSA requires all financial institutions (including banks and securities broker-dealers) to, among other things, maintain a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism. It includes a variety of recordkeeping and reporting requirements (such as cash and suspicious activity reporting) as well as due diligence and know-your-customer documentation requirements. Key has established and maintains an AML program to comply with the BSA’s requirements. Consumer Financial Protection Bureau Title X of the Dodd-Frank Act created the CFPB, a consumer financial services regulator with supervisory authority over banks and their affiliates with assets of more than $10 billion, like Key, to carry out federal consumer protection laws. The CFPB also regulates financial products and services sold to consumers and has rulemaking authority with respect to federal consumer financial laws. Any new regulatory requirements promulgated by the CFPB or modifications in the interpretations of existing regulations could require changes to Key’s consumer-facing businesses. The Dodd-Frank Act also gives the CFPB broad data collecting powers for fair lending for both small business and mortgage loans, as well as extensive authority to prevent unfair, deceptive and abusive practices. Volcker Rule The Volcker Rule implements Section 619 of the Dodd-Frank Act, which prohibits “banking entities,” such as KeyCorp, KeyBank and their affiliates and subsidiaries, from owning, sponsoring, or having certain relationships with hedge funds and private equity funds (referred to as “covered funds”) and engaging in short-term proprietary trading of financial instruments, including securities, derivatives, commodity futures and options on these instruments. The Volcker Rule excepts certain transactions from the general prohibition against proprietary trading, including transactions in government securities (e.g., U.S. Treasuries or any instruments issued by the GNMA, FNMA, FHLMC, a Federal Home Loan Bank, or any state or a political division of any state, among others); transactions in connection with underwriting or market-making activities; and transactions as a fiduciary on behalf of customers. A banking entity may also engage in risk-mitigating hedging activity if it can demonstrate that the hedge reduces or mitigates a specific, identifiable risk or aggregate risk position of the entity. The banking entity is required to conduct an analysis supporting its hedging strategy and the effectiveness of the hedges must be monitored and, if necessary, adjusted on an ongoing basis. Key does not anticipate that the proprietary trading or covered fund restrictions in the Volcker Rule will have a material impact on its business, but it was required to divest certain fund investments. As of June 30, 2023, Key has completed conforming and/or divesting certain indirect investments subject to the Volcker Rule. 20 Table of contents Enhanced prudential standards and early remediation requirements The Dodd-Frank Act required the Federal Reserve to impose enhanced prudential standards upon BHCs, like KeyCorp, with at least $50 billion in total consolidated assets. Prudential standards were required to include enhanced risk-based capital requirements and leverage limits, liquidity requirements, risk-management and risk committee requirements, resolution plan requirements, credit exposure report requirements, single counterparty credit limits (“SCCL”), supervisory and company-run stress test requirements and, for certain financial companies, a debt-to-equity limit. Early remediation requirements were required to include limits on capital distributions, acquisitions, and asset growth in early stages of financial decline and capital restoration plans, capital raising requirements, limits on transactions with affiliates, management changes, and asset sales in later stages of financial decline, which would be triggered by forward-looking indicators including regulatory capital and liquidity measures. EGRRCPA raised the asset threshold above which the Federal Reserve is required to apply enhanced prudential standards to BHCs from $50 billion to $250 billion and gave the Federal Reserve the authority to apply enhanced prudential standards to BHCs with at least $100 billion in assets. Please see the discussion under the headings “Regulatory capital requirements - Liquidity requirements” and “Regulatory capital requirements - Capital planning and stress testing” for more information about EGRRCPA and the related Tailoring Rules. Since 2010, the Federal Rule has implemented the following enhanced prudential standards required under the Dodd-Frank Act: (i) the resolution plan requirements (through a joint final rule adopted with the FDIC), (ii) stress test requirements, (iii) the incorporation of the Regulatory Capital Rules through the Federal Reserve’s previously finalized rules on capital planning and stress tests; (iv) liquidity requirements; (v) the risk management framework, including requirements around the risk committee and the chief risk officer as well as the corporate governance requirements as they relate to liquidity risk management; and (vi) a 15-to-1 debt-to-equity, limit for companies that the FSOC determines pose a “grave threat” to U.S. financial stability. In addition, the Federal Reserve has issued a final rule establishing SCCL requirements, but that rule does not apply to KeyCorp. The Federal Reserve has yet to implement a final rule on the early remediation requirements. Bank transactions with affiliates Federal banking law and regulation imposes qualitative standards and quantitative limitations upon certain transactions by a bank with its affiliates, including the bank’s parent BHC and certain companies the parent BHC may be deemed to control for these purposes. Transactions covered by these provisions must be on arm’s-length terms, and cannot exceed certain amounts that are determined with reference to the bank’s regulatory capital. Moreover, if the transaction is a loan or other extension of credit, it must be secured by collateral in an amount and quality expressly prescribed by statute, and if the affiliate is unable to pledge sufficient collateral, the BHC may be required to provide it. These provisions significantly restrict the ability of KeyBank to fund its affiliates, including KeyCorp, KBCM, and KeyCorp’s nonbanking subsidiaries engaged in making merchant banking investments (and certain companies in which these subsidiaries have invested). The Dodd-Frank Act expanded the coverage and scope of these regulations, including by applying them to the credit exposure arising under derivative transactions, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions. Supervision and governance KeyCorp is subject to the Federal Reserve’s supervisory rating system for large financial institutions, which includes BHCs with total consolidated assets of $100 billion or more (including KeyCorp) (“LFI Rating System”). The LFI Rating System provides a supervisory evaluation of whether an institution possesses sufficient operational strength and resilience to maintain safe and sound operations through a range of conditions and assesses an institution’s capital planning and positions, liquidity risk management and positions, and governance and controls. Ratings issued under the LFI Rating System are confidential. Community Reinvestment Act The Community Reinvestment Act (“CRA”) was enacted in 1977 to encourage depository institutions to help meet the credit needs of the communities that they serve, including low- and moderate-income (“LMI”) neighborhoods, consistent with the institutions’ safe and sound operations. The CRA requires the federal banking agencies to assess the record of each institution that they supervise in meeting the credit needs of its entire community, including LMI neighborhoods. 21 Table of contents On October 24, 2023, the federal banking agencies adopted a final rule to strengthen and modernize their regulations implementing the CRA to better achieve the purposes of the law, adapt to changes in the banking industry, and provide clarity and consistency in the application of their regulations. Among other things, the final rule (1) clarifies what activities constitute eligible community development activities, (2) adopts four new tests under which large banks with more than $2 billion in assets (including KeyBank) will be evaluated, (3) applies a new framework for assigning conclusions and ratings to banks, (4) updates requirements for delineating facility-based assessment areas, (5) provides for the evaluation of certain large banks in retail lending assessment areas as well as facility-based assessment areas, and (6) imposes new data collection and reporting requirements. The four new tests under which large banks will be evaluated are a retail lending test, a retail services and products test, a community development financing test, and a community development services test. Various metrics and performance standards will be applied under these tests. Most provisions of the final rule will be effective on January 1, 2026, while certain reporting requirements will be effective on January 1, 2027. KeyBank is subject to the final rule. Various trade associations filed a lawsuit in the United States District Court for the Northern District of Texas seeking to invalidate the CRA final rule. In their lawsuit, the trade associations argued that the federal banking agencies exceeded their authority in adopting the CRA final rule. On March 29, 2024, the court in that case issued a preliminary injunction barring the federal banking agencies from enforcing the CRA final rule against the plaintiffs pending the resolution of this lawsuit. The court also extended all implementation dates under the CRA final rule, day for day, for each day that the injunction remains in place. The court concluded that the plaintiffs had demonstrated a substantial likelihood of success on the merits and would suffer irreparable harm if they had to incur costs to prepare to comply with a rule that might later be invalidated. The court’s decision granting a preliminary injunction is on appeal to the United States Court of Appeals for the Fifth Circuit. Key is monitoring developments in this case. Developments relating to climate change On October 24, 2023, the federal banking agencies issued a set of principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for financial institutions with over $100 billion in total consolidated assets. These principles are intended to provide large financial institutions with guidance in their efforts to identify, measure, monitor, and mitigate physical and transition risks associated with climate change. These principles discuss how these risks can be addressed in the following areas: governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis. These principles also describe how climate-related financial risks can be addressed in connection with various specific risk categories, including credit risk, liquidity risk, operational risk, and legal/compliance risk. This interagency guidance applies to KeyCorp and KeyBank. Long-term debt requirement On August 29, 2023, the federal banking agencies issued for public comment a proposal that would require certain large BHCs and certain large IDIs to issue and maintain minimum amounts of long-term debt (“LTD”). This proposal would apply to Category II, III, and IV BHCs (including KeyCorp) and IDIs that (i) are not consolidated subsidiaries of U.S. global systemically important banks and (ii) have at least $100 billion in total assets (including KeyBank) or are affiliated with an IDI that has at least $100 billion in total assets. Under the proposal, the required minimum amount of LTD would be the greater of 6 percent of an entity’s total risk-weighted assets, 3.5 percent of an entity’s average total consolidated assets, and 2.5 percent of an entity’s total leverage exposure if it is subject to the supplementary leverage ratio. IDIs that are consolidated subsidiaries of BHCs would be required to issue the LTD to their parent company or another entity that consolidates the IDI. Debt instruments issued to satisfy the minimum LTD requirement would have to meet certain criteria including, among other things, being unsecured, have a remaining maturity of more than one year, and not provide the holder with acceleration rights except in limited circumstances. BHCs subject to the proposal would also have to comply with certain “clean holding-company” requirements such as a cap on liabilities other than eligible LTD and a prohibition on entering into most qualified financial contracts with third parties. The proposal would provide a three-year transition period with the incremental phase-in of the requirements during this period. The federal banking agencies indicated that the proposal would improve the resolvability of the covered entities in case of their failure, reduce costs to the DIF, and mitigate contagion and financial stability risks by reducing the risk of loss to uninsured depositors. Comments on the proposal were due by January 16, 2024. 22 Table of contents Debit card interchange fee cap On October 25, 2023, the Federal Reserve issued for public comment a proposal to lower the maximum interchange fee that a debit card issuer with $10 billion or more in total consolidated assets (including KeyBank) can receive for a debit card transaction. The interchange fee cap is currently set at the sum of 21 cents for each transaction plus an amount equal to 0.05% of the value of the transaction and a one cent fraud prevention adjustment for issuers that satisfy certain criteria. In the new proposal, the Federal Reserve proposed to lower the cap to the sum of 14.4 cents for each transaction plus an amount equal to 0.04% of the value of the transaction and a 1.3 cent fraud prevention adjustment. The Federal Reserve indicated that it was proposing this revision to the fee cap to reflect changes in issuer costs. The Federal Reserve also proposed to update the amount of the fee cap every other year going forward by using data it collects in a biennial survey of large debit card issuers. Comments on the proposal were due by May 12, 2024. Personal financial data rights On October 22, 2024, the CFPB issued a final rule to implement Section 1033 of the Dodd-Frank Act, which gives individuals the right to obtain data regarding consumer financial products and services they have obtained. The final rule requires financial institutions (including KeyBank) and other financial service providers (collectively “data providers”) to make available to consumers and authorized third parties, upon request, data in the data provider’s possession or control concerning covered consumer financial products or services (including credit cards, deposit accounts, and other accounts that facilitate payments) in an electronic form usable by the consumers and authorized third parties. The data that must be provided includes account balance information, at least 24 months of transaction history, pricing information, information on upcoming third-party bill payments, and account verification information. The data providers are required to create and maintain consumer and developer interfaces that will be able to transfer the data. A data provider will not be allowed to charge any fees or other charges for making the covered data available or for maintaining the required interfaces. The CFPB indicated that it adopted this rule in order to foster competition and consumer choice and said that this rule is a step towards bringing about an “open banking” system in the United States. Compliance with the rule will be phased in over several years with KeyBank required to be in compliance by April 1, 2027. Following the issuance of this rule, two trade associations and a national bank headquartered in Kentucky filed a lawsuit challenging the rule in the United States District Court for the Eastern District of Kentucky. In this lawsuit, the plaintiffs alleged that the CFPB exceeded its statutory authority in adopting the rule. Key is monitoring developments in this case. 23 Table of contents ITEM 1A. RISK FACTORS Summary of Risk Factors The following is a summary of some of the material risks and uncertainties that could have an adverse effect on our business. • Credit Risk ◦ We have concentrated credit exposure in commercial and industrial loans, commercial real estate loans, and commercial leases. ◦ Should the fundamentals of the commercial real estate market deteriorate, our financial condition and results of operations could be adversely affected. ◦ We are subject to the risk of defaults by our loan clients and counterparties. ◦ Declining asset prices could adversely affect us. ◦ Various factors may cause our allowance for loan and lease losses to increase or to be inadequate. ◦ Geopolitical destabilization could adversely impact our loan portfolios. • Market Risk ◦ A worsening of the U.S. economy and volatile or recessionary conditions in the U.S. or abroad could negatively affect our business or our access to capital markets. ◦ We are subject to interest rate risk, which could adversely affect net interest income. ◦ Our profitability depends upon economic conditions in the geographic regions where we have significant operations and in certain market segments in which we conduct significant business. ◦ The soundness of other financial institutions could adversely affect us. • Liquidity Risk ◦ We are subject to liquidity risk, which could negatively affect our funding levels. ◦ Capital and liquidity requirements imposed by banking regulations require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets. ◦ Federal agencies’ actions to ensure stability of the U.S. economy and financial system may have costly or disruptive effects on us. ◦ We rely on dividends by our subsidiaries for most of our funds. ◦ Our credit ratings affect our liquidity position. • Operational Risk ◦ We are subject to a variety of operational risks. ◦ We and third parties on which we rely (including their downstream service providers) may experience a cyberattack, technology failure, information system or security breach or interruption. ◦ We rely on third parties to perform significant operational services for us, and their failure to perform to our standards or other issues of concern with them could harm us. ◦ Our framework for managing risks and mitigating losses may not be effective. ◦ We are, and may in the future be, subject to claims, litigation, arbitration, investigations, and governmental proceedings, which could result in significant financial liability and/or reputational harm. ◦ Our controls and procedures may fail or be circumvented, and our methods of reducing risk exposure may not be effective. ◦ Our operations and financial performance could be adversely affected by severe weather and natural disasters exacerbated by climate change. ◦ Societal and governmental responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers. ◦ The increased use of remote work infrastructure has expanded potential attack vectors and resulted in increased operational risks. • Compliance Risk ◦ We are subject to extensive government regulation, supervision, and tax legislation. ◦ We are subject to complex and evolving laws and regulations regarding privacy and cybersecurity, which could limit our ability to pursue business initiatives, increase the cost of doing business and subject us to compliance risks and potential liability. 24 Table of contents • Strategic Risk ◦ We may not realize the expected benefits of our strategic initiatives. ◦ We operate in a highly competitive industry. ◦ Maintaining or increasing our market share depends upon our ability to adapt our products and services to evolving industry standards and consumer preferences, while maintaining competitive products and services. ◦ We may not be able to attract and retain skilled people. ◦ Acquisitions or strategic partnerships may disrupt our business and dilute shareholder value. ◦ Scotiabank holds a significant equity interest in our business and may exercise influence over us, including through its ability to designate up to two directors to our Board of Directors. • Reputation Risk ◦ Damage to our reputation could significantly impact our business and major stakeholders. ◦ Key is subject to corporate responsibility and sustainability efforts risks that could adversely affect our reputation and our business and results of operations. • Model Risk ◦ We rely on quantitative models to manage certain accounting, risk management, capital planning, and treasury functions. • Estimates and Assumptions Risk ◦ The preparation of our consolidated financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations. ◦ Changes in accounting policies, standards, and interpretations could materially affect how we report our financial condition and results of operations. ◦ Impairment of goodwill could require charges to earnings, which could result in a negative impact on our results of operations. As a financial services organization, we are subject to a number of risks inherent in our transactions and present in the business decisions we make. Described below are the material risks and uncertainties that if realized could have a material and adverse effect on our business, financial condition, results of operations or cash flows, and our access to liquidity. Although the risks are organized by headings and each risk is discussed separately, many are interrelated. The risks and uncertainties described below are not the only risks we face. Disclosures of risks should not be interpreted to imply that the risks have not already materialized. Our ERM program incorporates risk management throughout our organization to identify, understand, and manage the risks presented by our business activities. Our ERM program identifies Key’s major risk categories as: compliance risk, operational risk, liquidity risk, market risk, credit risk, model risk, reputation risk, strategic risk, and estimates and assumptions risk. These risk factors, and other risks we may face, are discussed in more detail in other sections of this report. I. Credit Risk We have concentrated credit exposure in commercial and industrial loans, commercial real estate loans, and commercial leases. As of December 31, 2024, approximately 69% of our loan portfolio consisted of commercial and industrial loans, commercial real estate loans, including commercial mortgage and construction loans, and commercial leases. These types of loans are typically larger than single family residential real estate loans and other types of consumer loans and have a different risk profile. The deterioration of a larger loan or a group of loans in this category could cause an increase in criticized, classified, and nonperforming loans, which could result in lower earnings from these loans, additional provision for loan and lease losses, and ultimately an increase in loan losses. 25 Table of contents Should the fundamentals of the commercial real estate market deteriorate, our financial condition and results of operations could be adversely affected. Recent Federal Reserve monetary policy, including shrinkage of its balance sheet and incremental increases in target interest rates early in 2023 followed by a sustained period of relatively higher target interest rates throughout the latter part of 2023 and 2024, continue to impact the commercial and residential real estate markets. Capitalization rates have risen, and property value appreciation has slowed and continues to decline. In many markets within Key’s footprint, property values continue to decrease. Industrial and retail properties continue to remain stable, but multifamily, office, hospitality, and single family detached properties show signs of deterioration. Development and construction continue, but at muted levels, and deliveries of additional units into the market have been supported. Oversupply of multifamily housing is a concern in certain urban and gateway markets. However, our exposures in those markets are limited (for example, approximately 5% of our multifamily portfolio is located in New York City, Chicago, Los Angeles, and San Francisco; we also have no exposure to rent controlled properties in New York City). The most severely impacted commercial real estate segments have been in office. Key’s non-owner occupied office exposures are 5% of our total commercial real estate exposure. Substantial deterioration in property market fundamentals could negatively impact our portfolio, with a large portion of our clients active in real estate but in the comparatively better performing multifamily space over the cycle. A correction in the real estate markets could impact the ability of borrowers to make debt service payments on loans or to refinance the loans at maturity. A relatively small portion of our commercial real estate loans are construction loans. New construction and value-add or rehabilitation construction projects may not be fully leased at loan origination. These properties typically require additional leasing through the life of the loan to provide adequate cash flow to support debt service payments. If property market fundamentals deteriorate sharply, performance under existing leases could deteriorate and the execution of new leases could slow, compromising the borrower’s ability to cover debt service payments. We are subject to the risk of defaults by our loan clients and counterparties. Many of our routine transactions expose us to credit risk, including the risk of default of our counterparties, which include other financial institutions, or clients. Our credit risk may be exacerbated when the collateral held cannot be realized or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure due to us. In deciding whether to extend credit or enter into other transactions, we rely on information furnished by or on behalf of counterparties and clients, including financial statements, credit reports and other information. We also rely on representations of those counterparties, clients, or other third parties as to the accuracy and completeness of that information. The inaccuracy of that information or those representations affects our ability to accurately evaluate the default risk of a counterparty or client. In addition, given the Dodd-Frank legislative mandate to centrally clear eligible derivative contracts, we rely on central clearing counterparties to remain open and operationally viable at all times. A financial institution or other counterparty failure or a cybersecurity breach that causes the failure of or disruption to a counterparty or client, may materially and adversely affect our business, financial condition, or results of operations. Further, market volatility or difficulty accessing liquidity in the capital markets can result in a weaker counterparty profile and eventual failure of the counterparty to meet its contractual obligations. Declining asset prices could adversely affect us. During periods of economic stress, the volatility and disruption that the capital and credit markets experience may reach, and have in the past reached, extreme levels. Market disruption may severely stress or even lead to the failure of financial institutions, which can cause further credit market constriction and further liquidation of assets, driving asset prices down even more. Asset price deterioration has a negative effect on the valuation of collateral and certain assets represented on our balance sheet and reduces our ability to sell assets at prices we deem acceptable. The most recent recession in the U.S., resulting from the impact of the COVID-19 pandemic, did not have significant lasting impact on collateral value. However, there are still risks to economic stability that could reverse recent stable trends in asset prices. These risks include, but are not limited to: 26 Table of contents • A correction in equity or housing markets; • Supply chain issues such as closed factories and disrupted port activity, as well as the impact of the Russia-Ukraine war and the Israel-Hamas war on global transportation and the availability of materials; • Recessionary pressures on other major international economies, such as China, that may impact the broader global and our domestic economy; • Labor-supply constraints, including as a result of potential changes to U.S. immigration policies and laws, leading to slowing job growth and rising wages along with inflation (wage-price spiral); and • Negative real GDP growth, as a result of, in part, the Federal Reserve’s monetary policy to arrest inflationary pressures within the broader economy. Various factors may cause our allowance for loan and lease losses to increase or to be inadequate. We maintain an ALLL (a reserve established through a provision for loan and lease losses charged to expense) that represents our estimate of losses based on our evaluation of risks within our existing portfolio of loans. The level of the allowance at December 31, 2024 represents management’s estimate of expected credit losses over the contractual life of our existing loan portfolio. The determination of the appropriate level of the ALLL inherently involves a degree of subjectivity and requires that we make significant estimates of current credit risks, current trends, and reasonable and supportable forecasts of future economic conditions, all of which may undergo frequent and material changes. Changes in economic conditions affecting borrowers, the softening of certain macroeconomic variables that we are more susceptible to, such as GDP, unemployment, SOFR and other interest rates, the producer price index, and real estate values, along with updated information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require an increase in the ALLL. Further, the multitude and totality of factors impacting our estimates and the subjectivity of components of its calculation may cause the ALLL to be an inadequate representation of the actual losses incurred over the life of our loan portfolio. Both an increase in the ALLL and actual losses exceeding our current estimates will reduce our net income and could impact our capital positions and may materially and adversely affect our business, financial condition or results of operations. Geopolitical destabilization could adversely impact our loan portfolios. While we have minimal direct foreign company exposure in our loan portfolios, there are correlated and contingent risks posed by geopolitical destabilization within our loan portfolio. For example, conflicts across the world, including the Russia-Ukraine war and the Israel-Hamas war, have proven to have a material impact on certain domestic commodity prices, impacting our borrowers' input costs and disrupting supply chains both domestically and abroad. These factors increase potential defaults in our loan portfolio and could ultimately increase loan losses. II. Market Risk A worsening of the U.S. economy and volatile or recessionary conditions in the U.S. or abroad could negatively affect our business or our access to capital markets. A worsening of economic and market conditions or downside shocks could result in adverse effects on Key and others in the financial services industry. Recent and persistent interest rate increases and a slowing economy could present a challenge for the industry, including Key, and negatively affect business and financial performance. In particular, we face the following risks, and other unforeseeable risks, in connection with a downturn in the economic and market environment or in the face of downside shocks or a recession, whether in the United States or internationally: • A loss of confidence in the financial services industry and the debt and equity markets by investors, placing pressure on the price of our common shares or decreasing the credit or liquidity available to Key, while also increasing the cost of such credit or liquidity; • A decrease in consumer and business confidence levels generally, decreasing credit usage and investment or increasing delinquencies and defaults; • A decrease in household or corporate incomes, reducing demand for our products and services; 27 Table of contents • A decrease in the value of collateral securing loans to our borrowers or a decrease in the quality of our loan portfolio, increasing loan charge-offs and reducing Key’s net income; • A decrease in our ability to liquidate financial positions at acceptable market prices; • An increase in competition or consolidation in the financial services industry; • Increased concern over and scrutiny of the capital and liquidity levels of financial institutions generally, and those of our transaction counterparties specifically with a corresponding increase in our cost of capital, liquidity and/or funding; • A decrease in confidence in the creditworthiness of the United States or other issuers whose securities we hold; and • An increase in limitations on or the regulation of financial services companies like Key. In the event of severely adverse business and economic conditions generally or specifically in the principal markets in which we conduct business, there can be no assurance that the federal government and the Federal Reserve would intervene or make adjustments to fiscal or monetary policy that would cause business and economic conditions to improve. A worsening of business and economic conditions or market volatility related thereto could have a material adverse effect on our business, financial condition, and results of operations. In addition, volatility and uncertainty related to inflation and the effects of inflation, which has, in recent years, led to increased costs for businesses and consumers and could cause the Federal Reserve to reinitiate a series of interest rate increases, which may amplify or contribute to some of the risks of our business by adversely affecting the creditworthiness of our borrowers, increasing our costs, or resulting in lower values for our investment securities and other fixed-rate assets. To the extent that the Federal Reserve’s policies around managing inflation fail to mitigate the volatility and uncertainty related to inflation and the effects of inflation, or to the extent conditions otherwise worsen or are exacerbated by policies enacted by the U.S. government, including the imposition of tariffs or other trade policies, we could experience adverse effects on our business, financial condition, and results of operations. In addition, when U.S. economic conditions are weak or recessionary, unemployment may rise and corporate profits may fall significantly, creating adverse credit conditions in our lending businesses. Rising credit costs may materially reduce our profitability as we generate the majority of our income from lending activity; See the section entitled “Credit Risk” in this Item 1A. “Risk Factors.” We are subject to interest rate risk, which could adversely affect net interest income. Our earnings depend heavily upon our net interest income. Net interest income is the difference between interest income earned on interest-earning assets such as loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds. Hence, interest rate risk is inherent to our banking business and takes four primary forms: repricing risk, yield curve risk, basis risk, and option risk. Repricing risk occurs when assets and liabilities respond to interest rate changes at different paces and to a different degree. Yield curve risk arises when short- and long-term interest rates change to a different extent. We incur basis risk to the extent that the relationship between different interest rate indices changes over time. Option risk is present in assets, liabilities or other financial instruments that allow a party to change the timing of interest or principal payments. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, the competitive environment within our markets, consumer preferences for specific loan and deposit products and their payment behavior, and policies of various governmental and regulatory agencies, in particular, the Federal Reserve. Our ability to anticipate changes in these factors or to hedge the related on-and off-balance sheet exposures, and the cost of any such hedging activity, can significantly influence the success of our asset-and-liability management activities and our net interest income and net interest margin. Changes in monetary policy, including changes in interest rate controls being applied by the Federal Reserve, could influence the amount and timing of interest we receive on loans and securities, the amount and timing of interest we pay on deposits and borrowings, our ability to originate loans and obtain deposits, and the fair value of our financial assets and liabilities. When the Federal Reserve raises or reduces interest rates, the behavior of national money market rate indices, the correlation of consumer deposit rates to financial market interest rates, and the setting of benchmark rates may not follow historical relationships, which could influence net interest income and net interest margin through basis and other risks. In addition, our ability to change deposit rates in response to changes in interest rates and other market and related factors is limited by client relationship considerations. 28 Table of contents Moreover, if the interest we pay on deposits and other borrowings increases at a faster rate than the interest we receive on loans and other investments, net interest income, and therefore our earnings, would be adversely affected. Conversely, earnings could also be adversely affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings. These scenarios illustrate repricing risk. The impact of interest rates on our investment portfolio and consolidated financial results, including AOCI, can also affect our ability to maintain our capital ratios within our target ranges as well as the amount and timing of our future share repurchases and dividends. For additional information about the effects on interest rates on our business, refer to the information included under the caption “Risk Management — Market risk management” in Item 7 of this report. Our profitability depends upon economic conditions in the geographic regions where we have significant operations and in certain market segments in which we conduct significant business. We have concentrations of loans and other business activities in geographic regions where our bank branches are located — Washington; Oregon/Alaska; Rocky Mountains; Indiana/Northwest Ohio/Michigan; Central/Southwest Ohio; East Ohio/Western Pennsylvania; Atlantic; Western New York; Eastern New York; and New England — and additional exposure to geographic regions outside of our branch footprint. Economic growth in the various regions where we operate has been uneven, and the health of the overall U.S. economy may differ from the economy of any particular geographic region. Adverse conditions in a geographic region such as inflation, unemployment, recession, natural disasters, impact of public health crises, or other factors beyond our control could impact the ability of borrowers in these regions to repay their loans, decrease the value of collateral securing loans made in these regions, or affect the ability of our customers in these regions to continue conducting business with us. Additionally, a significant portion of our business activities are concentrated within the commercial real estate, healthcare, finance, and utilities market segments. The profitability of some of these market segments depends upon the health of the overall economy, seasonality, the impact of regulation, and other factors that are beyond our control and may be beyond the control of our customers in these market segments. An economic downturn or recession in one or more geographic regions where we conduct our business, or any significant or prolonged impact on the profitability of one or more of the market segments with which we conduct significant business activity, could adversely affect the demand for our products and services, the ability of our customers to repay loans, the value of the collateral securing loans, and the stability of our deposit funding sources. The soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. We have exposure to many different industries and counterparties in the financial services industries, and we routinely execute transactions with such counterparties, including brokers and dealers, banks, mortgage originators, hedge funds, insurance companies, and other institutional clients. Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to, and may further lead to, market-wide liquidity problems and could lead to losses or defaults by us or other financial institutions. Disruption within the financial markets, including negative news regarding the banking industry or perceived risks of a bank’s safety and soundness, can adversely impact the market price and volatility of our common stock or deposit runoff. Online and mobile banking have made it easier for customers to withdraw their deposits. Higher withdrawals can raise funding cost, which may reduce Key’s net interest margin and net interest income. In addition, many of our transactions with other financial institutions expose us to credit risk in the event of default of a counterparty or client. Our credit risk may be affected when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of our loan or derivatives exposure. There can be no assurance that any such losses would not adversely and materially affect our results of operations. 29 Table of contents III. Liquidity Risk We are subject to liquidity risk, which could negatively affect our funding levels. Liquidity risk refers to our ability to fund liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences. Our banking business is subject to four primary liquidity risks: contingency risk, mismatch risk, funding risk, and refinancing risk. Contingency risk arises from unexpected funding or liquidity needs occurring during challenging economic or financial market conditions. Mismatch risk may occur when illiquid assets are funded with less stable funding sources. Funding risk arises if funding sources become too concentrated. Refinancing risk arises when a concentrated liability maturity profile creates near-term funding stress. Despite actions that we take to manage these risks, unanticipated changes in assets, liabilities, and off-balance sheet commitments under various economic conditions (including a reduced level of wholesale funding sources), a substantial, unexpected, or prolonged change in the level or cost of liquidity could have a material adverse effect on us. If the cost effectiveness or the availability of supply in these credit markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means. These alternatives may include generating client deposits, securitizing or selling loans, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships developed with a variety of fixed income investors to access new funds or renegotiate the terms of outstanding debt, and further managing loan growth and investment opportunities. These alternative means of funding may result in an increase in the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs. Capital and liquidity requirements imposed by banking regulations require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets. Evolving capital standards resulting from the Dodd-Frank Act and the Regulatory Capital Rules adopted by our regulators have had and will continue to have a significant impact on banks and BHCs, including Key. For a detailed explanation of the capital and liquidity rules that apply to us, see the section titled “Regulatory capital requirements” under the heading “Supervision and Regulation” in Item 1 of this report. Regulatory capital standards require Key to maintain significant amounts of high-quality capital (e.g., common equity) and could limit our business activities (including lending) and our ability to expand organically or through acquisitions. They could also result in our taking steps to increase our capital that may be dilutive to shareholders or limit our ability to pay dividends or otherwise return capital to shareholders. In addition, regulatory liquidity standards require us to hold high-quality liquid assets, which has caused us to change, and may in the future cause us to change, our mix of investments, and may impact future business relationships with certain customers. Additionally, support of liquidity standards may be satisfied through the use of long-term wholesale borrowings, which tend to have a higher cost than that of traditional core deposits. Further, the Federal Reserve has detailed the processes that BHCs should maintain to ensure they hold adequate capital under severely adverse conditions and have ready access to funding before engaging in any capital activities. The severity and other features of these processes, which take the form of stress tests and other measures, may evolve from year to year and are used by the Federal Reserve to, among other things, evaluate our management of capital and the adequacy of our regulatory capital and to determine the stress capital buffer that we must maintain above our minimum regulatory capital requirements. Despite recent announcements by the Federal Reserve declaring intent to increase transparency into capital stress tests and models, the results of these processes are difficult to predict due to, among other things, the Federal Reserve’s use of proprietary stress models that differ from our internal models. Consequently, the Federal Reserve may impose capital requirements in excess of our expectations which could require us, as applicable, to revise our stress-testing or capital management approaches, resubmit our capital plan or postpone, cancel, or alter our planned capital actions. The results may also lead to limits on Key’s ability to make distributions, including paying out dividends or buying back shares. From time to time, federal banking regulators tailor the extent to which various categories of large banks are subject to certain capital, liquidity and other regulations. For instance, Category IV banks with assets between $100 billion and $250 billion, including Key, are not currently subject to certain capital and liquidity standards required of larger banks. However, the bank regulatory environment evolves continually, and regulatory standards, expectations and 30 Table of contents requirements evolve along with that environment, raising the risk of increased compliance costs in the future. Moreover, often in response to industry or macroeconomic stress events, informal regulatory expectations of capital and liquidity management practices may exceed formal requirements. Consequently, Key may not be able to realize any potential benefits of periodic regulatory tailoring. For more information on regulatory requirements and proposals regarding the management of liquidity risk, see the section titled “Regulatory capital requirements” under the heading “Supervision and Regulation” in Item 1 of this report. Federal agencies’ actions to ensure stability of the U.S. economy and financial system may have costly or disruptive effects on us. The federal government’s actions can impact financial markets. For example, during 2024 the Federal Reserve, after an extended period of raising its monetary policy rate, began lowering interest rates in an effort to prevent a recession. These types of actions can impact financial markets and our business and cause increased financial market and interest rate volatility. Bank failures, such as those that occurred in 2023, have led the U.S. Treasury Secretary, the FDIC, and the Federal Reserve to invoke the systemic risk exception to the least-cost resolution requirement under the FDIA to guarantee uninsured deposits of the failed banks. The systemic bank exception can only be invoked for financial market risks that pose a threat to financial stability. The FDIC may impose a special assessment on IDIs to recover the loss to the failed bank resulting from the use of the systemic risk exception to protect the uninsured depositors. The potential impact of a special assessment to Key could increase noninterest expense for that quarter, as was the case during the first and second quarters of 2024. Regulators can implement measures designed to strengthen capital and liquidity standards and restore confidence in the banking system applicable to Key including those discussed in “Regulatory capital requirements” under the heading “Supervision and Regulation” in Item 1 of this report. These regulatory rules could have a material effect on our business, financial condition, and results of operations. Capital and long-term debt requirements require us to divert resources from otherwise profitable lending and investment opportunities to ensure compliance, which may be dilutive to shareholders or limit Key’s ability to buy back shares or pay dividends. The Federal Home Loan Bank (FHLB) system continues to be a source of funding. Changes in FHLB lending policy could adversely affect our liquidity and profitability. Further, as market conditions evolve and respond to the influence of government agency initiatives, or lack thereof, the slope of the yield curve will shift and influence our loan and deposit rates and value of investments. The actions of federal agencies are not fully predictable which contributes to market volatility and changes to the slope of the yield curve. We rely on dividends by our subsidiaries for most of our funds. We are a legal entity separate and distinct from our subsidiaries. With the exception of cash that we may raise from debt and equity issuances, we receive substantially all of our funding from dividends by our subsidiaries. Dividends by our subsidiaries are the principal source of funds for the dividends we pay on our common and preferred stock and interest and principal payments on our debt. Federal banking law and regulations limit the amount of dividends that KeyBank (KeyCorp’s largest subsidiary) can pay. For further information on the regulatory restrictions on the payment of dividends by KeyBank, see “Supervision and Regulation” in Item 1 of this report. In the event KeyBank is unable to pay dividends to us, we may not be able to service debt, pay obligations, or pay dividends on our common or preferred stock. Such a situation could result in Key losing access to alternative wholesale funding sources. In addition, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors . 31 Table of contents Our credit ratings affect our liquidity position. The rating agencies regularly evaluate the securities issued by KeyCorp and KeyBank. The ratings of our long-term debt and other securities are based on a number of factors, including our financial strength, ability to generate earnings, and other factors. Some of these factors are not entirely within our control, such as conditions affecting the financial services industry and the economy and changes in rating methodologies. Changes in any of these factors could impair our ability to maintain our current credit ratings. We may be unable to maintain our current ratings and our ratings may be downgraded again in the future. The impact of downgrades to KeyCorp's or KeyBank's credit ratings could adversely affect our access to liquidity and could significantly increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us, reducing our ability to generate income. If KeyCorp’s or KeyBank's credit ratings fell below investment grade, it could also create obligations or liabilities under the terms of existing arrangements that could increase our costs and reduce our profitability. IV. Operational Risk We are subject to a variety of operational risks. We are subject to operational risk, which represents the risk of loss resulting from human error, inadequate or failed internal processes, internal controls, systems, and external events. Operational risk includes the risk of fraud by employees or others outside of Key, clerical and recordkeeping errors, nonperformance by vendors, threats from cyber activity, and computer/telecommunications malfunctions. Fraudulent activity has escalated, become more sophisticated, and is ever evolving as there are more options to access financial services. Operational risk also encompasses compliance and legal risk, which is the risk of loss from violations of, or noncompliance with, laws, rules, regulations, prescribed practices, or ethical standards, as well as the risk of our noncompliance with contractual and other obligations. We are also exposed to operational risk through our outsourcing arrangements, and the effect that changes in circumstances or capabilities of our outsourcing vendors can have on our ability to continue to perform operational functions necessary to our business, such as certain loan processing functions. For example, breakdowns or failures of our vendors’ systems or employees could be a source of operational risk to us. Resulting losses from operational risk could take the form of explicit charges, increased operational costs (including remediation costs), harm to our reputation, inability to secure insurance, litigation, regulatory intervention or sanctions, or foregone business opportunities. We rely on our employees to design, manage, and operate our systems and controls to assure that we properly enter into, record and manage processes, transactions and other relationships with customers, vendors, suppliers, and other parties with whom we do business. We also depend on employees and the systems and controls for which they are responsible to assure that we identify and mitigate the risks that are inherent in our relationships and activities. These concerns are increased when we change processes or procedures, introduce new products or services, or implement new technologies, as we may fail to adequately identify or manage operational risks resulting from such changes. These concerns may be further exacerbated by employee turnover or labor shortages. As a result of our necessary reliance on employees to perform these tasks and manage resulting risks, we are thus subject to human vulnerabilities. These range from innocent human error to misconduct or malfeasance, potentially leading to operational breakdowns or other failures. Our controls may not be adequate to prevent problems resulting from human involvement in our business, including risks associated with the design, operation and monitoring of automated systems. We may also fail to adequately develop a culture of risk management among our employees. We and third parties on which we rely (including their downstream service providers) may experience a cyberattack, technology failure, information system or security breach or interruption. We rely heavily on communications, information systems (both internal and provided by third parties), and the internet to conduct our business. Our business is dependent on our ability to process and monitor large numbers of daily transactions in compliance with legal, regulatory, and internal standards and specifications. In addition, a significant portion of our operations relies heavily on the secure processing, storage, and transmission of personal and confidential information, such as the personal information of our employees, customers, and clients. These risks may increase in the future as we continue to increase mobile payments and other internet-based product offerings, expand our internal usage of web/cloud-based products and applications, and maintain and develop new relationships with third-party providers, including their downstream service providers. In addition, our ability to extend protections to customers’ information to individual customer devices is limited, especially if the customers willingly provide third parties access to their devices or information. 32 Table of contents In the event of a failure, interruption, or breach of our information systems, or that of a third party that provides services to us or our customers, we may be unable to avoid impact to our customers. For example, we may experience operational disruptions or interruptions as a result of a cyber incident, including disruption caused by protective containment measures taken by us, such as taking certain first- or third-party systems off-line for a prolonged period. Such a failure, interruption, or breach could result in legal liability, remediation costs, regulatory action, or reputational harm. U.S. financial service institutions and companies have reported breaches in the security of their websites or other systems and several financial institutions, including Key, have had third parties on which they rely experience such breaches. In addition, several financial institutions, including Key, have experienced significant distributed denial-of-service attacks, some of which involved sophisticated and targeted attacks intended to disrupt, disable, or degrade services, or sabotage systems or data. Other attacks have attempted to obtain unauthorized access to confidential, proprietary, or personal information or intellectual property, to extort money through the use of “ransomware” or other extortion tactics, or to alter or destroy data or systems, often through various attack vectors and methods, including the introduction of computer viruses or malicious or destructive code (commonly referred to as “malware”), phishing, cyberattacks, account takeovers, credential stuffing, and other means. To the extent that we use third parties to provide services to our clients, we cannot control all of the risks at these third parties or third parties’ downstream service providers. Hardware, software, or applications developed by Key or received from third parties may contain exploitable vulnerabilities, bugs, or defects in design, maintenance or manufacture or other issues that could unpredictably compromise information and cybersecurity. We depend on third party service providers and their downstream service providers to implement adequate controls and safeguards to protect against and report cyber incidents. While we have a third party risk management program, because we do not control our third party service providers or their downstream service providers and our ability to monitor their cybersecurity is limited, we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we share with them or prevent any disruption arising from a technology failure, cyberattack or other information or security breach. If such parties fail to deter, detect, or report cyber incidents in a timely manner, we may suffer from financial and other harm, including to our information, operations, performance, employees, and reputation. In addition, should an adverse event affecting another company’s systems occur, we may not have indemnification or other protection from the other company sufficient to fully compensate us or otherwise protect us or our clients from the consequences. To date, our losses and costs related to these breaches have not been material, but other similar events in the future could have a material impact on our business strategy, results of operations, or financial condition. In addition, our customers routinely use Key-issued credit and debit cards to pay for transactions conducted with businesses in person and over the internet. If the business’s systems that process or store debit or credit card information experience a security breach, our card holders may experience fraud on their card accounts. We may suffer losses associated with such fraudulent transactions, as well as for other costs, such as replacing impacted cards. Key also provides card transaction processing services to some merchant customers under agreements we have with payment networks. Under these agreements, we may be responsible for certain losses and penalties if one of our merchant customers suffers a data breach. We also face risks related to the increasing interdependence and interconnectivity of financial entities and technology systems. A technology failure, cyberattack or other security breach that significantly compromises the systems of one or more financial parties or service providers in the financial system could have a material impact on counterparties or market participants, including us. Such incidents could also lead to widespread technology outages, interruptions or other failures of operational, communication, or other systems globally and across companies and industries. Any third-party technology failure, cyberattack, or security breach could adversely affect our ability to effect transactions, service clients, or otherwise operate our business and could result in legal liability, remediation costs, regulatory action, or reputational harm. Additionally, the increasing use of third-party financial data aggregators and emerging technologies, including the use of automation, artificial intelligence and robotics, introduces new information security risks and exposure for us and for our third party service providers, and, additionally, such technologies may be used to identify vulnerabilities; such technologies have resulted in a substantial increase in the volume and sophistication of cyberattacks against financial and other institutions, including the use of generative artificial intelligence to conduct more sophisticated social engineering attacks. Such security attacks can originate from a wide variety of sources/malicious actors, including, but not limited to, persons who constitute an insider threat, who are involved with organized crime, or who may be linked to terrorist organizations or hostile foreign governments. Those same parties may also attempt to fraudulently induce employees, customers, or other users of our systems to disclose sensitive information in order to gain access to our data or that of our customers or clients through social engineering, phishing, mobile phone malware and SIM card swapping, and other methods. Our security systems, and those of the third-party service providers on which we rely, 33 Table of contents may not be able to protect our information systems or data from similar attacks due to the rapid evolution and creation of sophisticated cyberattacks. We are also subject to the risk that a malicious actor or our employees may intercept and/or transmit or otherwise misuse unauthorized personal, confidential, or proprietary information or intellectual property. An interception, misuse, or mishandling of personal, confidential, or proprietary information or intellectual property being sent to or received from a customer or third party could result in legal liability, remediation costs, regulatory action, and reputational harm. We have incurred and will continue to incur significant expense in an effort to improve the reliability and resilience of our systems and their security against internal and external threats. Nonetheless, we cannot guarantee our measures will be effective or sufficient to prevent a cyber incident, and there remains the risk that one or more adverse events might occur. If one does occur, it could go undetected and persist for an extended period of time and/or we may be unable to remediate the event or its consequences timely or adequately. While we do maintain cyber information security and business interruption insurance, losses from a major interruption may exceed our coverage and there can be no assurance that liabilities or losses we may incur will be covered under such policies, that such insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. We rely on third parties to perform significant operational services for us, and their failure to perform to our standards or other issues of concern with them could harm us. Third parties perform significant operational services on our business, and many of our third party vendors outsource aspects of their operations and contractual obligations to downstream service providers. These parties – both our vendors and their downstream service providers – are subject to similar risks as Key. While we have a third party risk management program and can exert varying degrees of influence over our service providers, we do not control them, their actions, or their businesses. For example, one or more of these parties may experience a cybersecurity event, financial distress (including, but not limited to, filing for bankruptcy), operational difficulties, or operational disruptions that could negatively impact performance and delivery of our services. In addition, some of our third party arrangements are located overseas and, therefore, are subject to risks unique to the regions in which they operate. Service providers have not always met our requirements and expectations, and no assurance can be provided that in the future they will perform to our standards, adequately represent our brand, comply with applicable law, appropriately manage their own risks, including cybersecurity, remain financially or operationally viable, abide by their contractual obligations, or continue to provide us with the services that we require or that they are contractually obligated to provide. Disruption in services provided by these third parties, including a discontinuation or delay in services, could increase the costs of doing business and adversely affect our ability to deliver products and services to clients, to support teammates, and otherwise to conduct business, which would negatively impact our customer relationships, our reputation, and our business. Further, regulatory guidance adopted by federal banking regulators related to how banks select, contract with, evaluate, engage with, and manage their third parties, including such third parties’ use of subcontractors and downstream service providers, impacts whether and how we work with such parties, as well as the cost of managing such relationships. In some instances, we may be responsible for failures of third parties to comply with government regulations. We may need to incur substantial expenses to address issues with a service provider, and if the issues cannot be acceptably resolved, we may not be able to timely or effectively replace the service provider due to contractual restrictions, the unavailability of acceptable alternative providers, or other reasons. Further, regardless of how much we can influence our service providers, issues of concern with them could result in supervisory actions and private litigation against us and could harm our reputation, business, and financial results. Certain third parties may have limited identification obligations to us or may not have the financial capacity to satisfy their indemnification obligations, and our insurance coverage may be inadequate to protect us from losses related to the actions of our third party vendors and their downstream service providers. Our framework for managing risks and mitigating losses may not be effective. Our risk management framework seeks to maintain safety and soundness and maximize profitability. We have established policies, processes, and procedures intended to identify, measure, monitor, report, and analyze the types of risk to which we are subject, including compliance, operational, liquidity, market, credit, model, reputational, and strategic risk, among others. We cannot provide assurance that our risk management framework will effectively mitigate risk and limit losses in our business and operations. For example, our risk management framework and measures that we take to mitigate risk may not be fully effective in identifying and mitigating our risk exposure in all 34 Table of contents market environments or against all types of risks, including risks that are unidentified or unanticipated, even if the frameworks for assessing risk are properly designed and implemented. In addition, some of our methods of managing risk are based upon our use of observed historical market behavior and management’s judgment. These methods may not accurately predict future exposures, which could be significantly greater than historical measures indicate. If our risk management framework proves ineffective, we could suffer unexpected losses and our business, results of operations, and financial condition could be adversely affected. We are, and may in the future be, subject to claims, litigation, arbitration, investigations, and governmental proceedings, which could result in significant financial liability and/or reputational harm. We are subject to, and may in the future be subject to, claims or legal actions taken against us by customers, vendors, shareholders, or other parties. Further, KeyCorp is currently named, and KeyCorp and certain of its officers and directors have in the past been named, and may in the future be named, as defendants in various class actions, mass arbitrations, and other litigation relating to our business and activities. We maintain reserves for certain claims when deemed appropriate based upon our assessment that a loss is probable, estimable, and consistent with applicable accounting guidance. At any given time, we have a variety of legal actions asserted against us in various stages of litigation. Resolution of a legal action can often take years. Whether any particular claims and legal actions are founded or unfounded, if such claims and legal actions are not resolved in our favor, they may result in significant financial liability and adversely affect how the market perceives us and our products and services as well as impact customer demand for those products and services. We are also involved, from time to time, in other information-gathering requests, reviews, investigations, and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding our business, including, among other things, accounting, compliance, and operational matters, which may result in adverse judgments, settlements, fines, penalties, injunctions, or other relief which, if significant, could adversely affect our business, results of operations and/or financial condition. Enforcement authorities may also seek admissions of wrongdoing and, in some cases, criminal pleas as part of the resolutions of matters and any such resolution of a matter involving Key could lead to increased exposure to private litigation, could adversely affect Key’s reputation, and could result in limitations on our ability to do business in certain jurisdictions. Further, enforcement matters could impact our supervisory and CRA ratings, which may in turn restrict or limit certain of our business activities. In recent years, there has been an increase in the number of investigations and proceedings in the financial services industry. A violation of law or regulation by another financial institution has, in the past, resulted in, and may, in the future, give rise to an inquiry or investigation by regulators or other authorities of the same or similar practices by Key. The outcome of regulatory matters as well as the timing of ultimate resolution are inherently difficult to predict, and the uncertain regulatory enforcement environment makes it difficult to estimate probable losses, which can lead to substantial disparities between legal reserves and actual settlements or penalties. Our controls and procedures may fail or be circumvented, and our methods of reducing risk exposure may not be effective. We regularly review and update our internal controls, disclosure controls and procedures, compliance monitoring activities, and corporate governance policies and procedures. We also maintain an ERM program designed to identify, measure, monitor, report, and analyze our risks. Additionally, our internal audit function provides an independent assessment and testing of Key’s internal controls, policies, and procedures. Any system of controls and any system to reduce risk exposure, however well designed, operated, and tested, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. The systems may not work as intended or be circumvented by employees, third parties, or others outside of Key. Additionally, instruments, systems, and strategies used to hedge or otherwise manage exposure to various types of market compliance, credit, liquidity, operational, and business risks and enterprise-wide risk could be less effective than anticipated. As a result, we may not be able to effectively or fully mitigate our risk exposures in particular market environments or against particular types of risk. Our operations and financial performance could be adversely affected by severe weather and natural disasters exacerbated by climate change. Natural disasters, including wildfires, tornadoes, severe storms, and hurricanes, have seemingly become more frequent and severe due to climate change. The timing and effects of these climate-related physical risks are difficult to accurately predict, and the potential impact of such risks on our operations, employees, communities, and 35 Table of contents customers could have a material adverse effect on our business, financial position, and results of operations. Given our broad regional focus, we are exposed to a wide range of climate-related physical risks across different geographical areas. Severe weather events can directly affect our operations by interrupting systems, damaging facilities, disrupting our supply chain, and hindering our ability to conduct business as usual. Additionally, these events can indirectly impact us by damaging or destroying customer businesses, impairing their ability to repay loans, or causing damage to properties pledged as collateral for loans made by Key. Although preventative measures may help to mitigate damage, such measures could be costly, and any disaster could adversely affect our ability to conduct our business as usual. Furthermore, the insurance we maintain may not be adequate to cover our losses resulting from any business interruption resulting from a natural disaster or other severe weather events. Recurring extreme weather events could also reduce the availability or increase the cost of insurance. Our failure to comply with evolving regulatory requirements related to natural disaster risk management may also result in legal and financial consequences. Societal and governmental responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers. Concerns over the long-term impacts of climate change have led and may continue to lead to governmental efforts around the world to mitigate those impacts, creating potential transition risk. Transition risks could include additional regulatory requirements or legislation, changes in stakeholder behaviors, or the development of new technologies to aid in the transition to a low-carbon economy, New and/or changing regulatory requirements could affect our results by requiring us to take costly measures to comply with any new laws or regulations related to climate change that may be adopted by federal, state, and local governments or regulators. Consumers and businesses also may change their own behavior as a result of these concerns. We and our customers may face cost increases, asset value reductions, operating process changes, and the like. In addition, the multiple and potentially conflicting laws and regulations regarding climate change that have been or may be adopted by various jurisdictions could increase our cost of doing business and make compliance with such laws and regulations more difficult. The impact on our customers will likely vary depending on their specific attributes, including reliance on or role in carbon-intensive activities. The increased use of remote work infrastructure has expanded potential attack vectors and resulted in increased operational risks. The increase in remote work over the past several years has resulted in an expanded potential attack surface and heightened operational risks and may negatively impact our ability, and the ability of our third-party service providers (including their downstream service providers), to perform services efficiently, securely, and without interruptions. In addition to some of our workforce working remotely periodically or on a full-time basis, our third-party service providers (including their downstream service providers) may utilize personnel who work remotely. Increased levels of remote access create additional cybersecurity risk and opportunities for cybercriminals to exploit vulnerabilities. These fraudulent activities have resulted in increased fraud losses to us and the financial services industry generally. In addition to enhanced cybersecurity risk, employees and other personnel performing services for us who work remotely may experience disruptions to their home internet or phone connections, decreased efficiency due to delayed network speeds or other interruptions, and/or delays in the dissemination and exchange of information, any of which could negatively impact our operations. We have experienced, and may continue to experience, disruption related to remote work, which disruptions could adversely impact our business, and could result in legal liability, regulatory penalties, litigation expenses, remediation costs, or reputational harm. V. Compliance Risk We are subject to extensive government regulation, supervision, and tax legislation. As a financial services institution, we are subject to extensive federal and state regulation, supervision, and tax legislation. Banking regulations are primarily intended to protect depositors’ funds, the DIF, consumers, taxpayers, and the banking system as a whole, not our debtholders or shareholders. These regulations increase our costs and affect our lending practices, capital structure, investment practices, dividend policy, ability to repurchase our common shares, and growth, among other things. KeyBank and KeyCorp remain covered institutions under the Dodd-Frank Act’s enhanced prudential standards and regulations, including its provisions designed to protect consumers from financial abuse. Like similarly situated 36 Table of contents institutions, Key undergoes routine scrutiny from bank supervisors in the examination process and is subject to enforcement of regulations at the federal and state levels, particularly with respect to customer practices involving fair and responsible banking, fair lending, unfair, deceptive or abusive practices, and the Community Reinvestment Act, as well as compliance with AML, BSA and Office of Foreign Assets Control efforts. Changes to existing statutes and regulations, and taxes (including industry-specific taxes and surcharges), or their interpretation or implementation, could affect us in substantial and unpredictable ways, particularly with those laws and regulations that serve to protect customers. Such changes may subject us to additional costs, adversely impact our income, and increase our litigation risk should we fail to appropriately comply and may also impact consumer behavior, limit the types of financial services and products we may offer, affect the investments we make, and change the manner in which we operate. In addition, changes to laws and regulations may impact our customers by requiring them to adjust their operations or practices or impair their ability to pay fees or outstanding loans or afford new products, which could negatively impact demand for our products and services. Certain federal regulations have been in existence for decades without modification to account for modern banking practices, such as digital delivery of products and services, which can create challenges in execution and in the examination process. Emerging technologies, such as cryptocurrencies, could limit KeyBank’s ability to track the movement of funds. KeyBank’s ability to comply with BSA/AML and other regulations is dependent on its ability to continuously improve detection and reporting capabilities and reduce variation in control processes and oversight accountability. Additionally, federal banking law grants substantial enforcement powers to federal banking regulators. This enforcement authority includes, among other things, the ability to assess civil money penalties, fines, or restitution, to issue cease and desist or removal orders, and to initiate injunctive actions against banking organizations and affiliated parties. These enforcement actions may be initiated for violations of laws and regulations, for practices determined to be unsafe or unsound, or for practices or acts that are determined to be unfair, deceptive, or abusive. Failure to comply with these and other regulations, and supervisory expectations related thereto, may result in fines, penalties, lawsuits, regulatory sanctions, reputational damage , or restrictions on our business. Moreover, different government administrations may have different regulatory priorities, which may impact the level of regulation of financial institutions and the enforcement environment. For more information, see “Supervision and Regulation” in Item 1 of this report. We are subject to complex and evolving laws and regulations regarding privacy and cybersecurity, which could limit our ability to pursue business initiatives, increase the cost of doing business and subject us to compliance risks and potential liability. We are subject to complex and evolving laws, regulations, and requirements governing the privacy and protection of personal information of our customers, employees, job applicants, and other individuals. Complying with laws, regulations, and requirements applicable to our collection, use, transfer, and storage of personal information, as well as notification requirements related to our obligations with respect to such personal information, can increase operating costs, impact the development and marketing of new products or services, and reduce operational efficiency. Any mishandling or misuse of personal information by Key or our vendors or our failure to comply with notification requirements related to incidents relating to such personal information could expose us to litigation or regulatory fines, penalties, or other sanctions. At the federal level, we are subject to the Gramm-Leach-Bliley Act of 1999, as amended, which requires financial institutions to, among other things, periodically disclose their privacy policies and practices relating to sharing personal information and, in some cases, enables customers to opt out of the sharing of certain non-public personal information with unaffiliated third parties. We are also subject to the rules and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to privacy and cybersecurity. A number of states have also recently enacted consumer privacy laws that impose compliance obligations with respect to personal information or issued guidance regarding the same, such as the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act (known as the “CCPA”), and the New York Department of Financial Services Cybersecurity Regulations. In addition, there has been a significant increase in privacy-related litigation in recent years with respect to how organizations collect information and technical data from their public facing websites, and federal and state courts have been creating new legal frameworks around consumer and website privacy, which also creates new risks on businesses. As new privacy-related laws and regulations, and judicially-created frameworks, are implemented in jurisdictions in which 37 Table of contents KeyBank operates, the time and resources needed for us to comply with such laws and regulations, as well as our potential liability for noncompliance and reporting obligations in the case of data breaches, may significantly increase. Compliance with these laws and regulations has required and may continue to require us to change our policies, procedures, and technology for information security and segregation of data, which could, among other things, make us more vulnerable to operational failures, result in increased costs as a result of continually evaluating our policies and processes and adapting to new requirements that are or become applicable to us, and subject us to monetary penalties for breach of such laws and regulations. As a result, some uncertainty remains as to the aggregate impact upon Key of significant regulations. VI. Strategic Risk We may not realize the expected benefits of our strategic initiatives. Our ability to compete depends on a number of factors, including, among others, our ability to develop and successfully execute our strategic plans and initiatives. Our strategic priorities include growing profitability; acquiring and expanding targeted client relationships; effectively managing risk and rewards; maintaining financial strength; fostering an inclusive work environment for all employees; and engaging, retaining, and inspiring our high-performing and talented workforce. The success of these initiatives can be subject to changes in the macroeconomic environment that are beyond our control. In addition, our inability to execute on or achieve the anticipated outcomes of our strategic priorities, or to do so in the expected timeframe, may affect how the market perceives us and could impede our growth and profitability. We operate in a highly competitive industry. We face substantial competition in all areas of our operations from a variety of competitors, some of which are larger and may have more financial resources than us. Our competitors primarily include national and super-regional banks as well as smaller community banks within the various geographic regions in which we operate. We also face competition from many other types of financial institutions, including, without limitation, savings associations, credit unions, mortgage banking companies, finance companies, mutual funds, insurance companies, investment management firms, private credit funds, investment banking firms, broker-dealers, financial technology companies, and other local, regional, national, and global financial services firms. In addition, technology has lowered barriers to entry and made it possible for nonbanks, including large technology companies, to offer products and services traditionally provided by banks. We expect the competitive landscape of the financial services industry to become even more intense as a result of legislative, regulatory, structural, customer preference, and technological changes. Our ability to compete successfully depends on a number of factors, including: our ability to develop and execute strategic plans and initiatives; our ability to develop, maintain, and build long-term client relationships; our ability to develop and deliver competitive products and technologies expected by our customers, while maintaining safety and soundness, effective risk management practices, and high ethical standards; our ability to attract, retain, and develop an employee workforce with the required skills and expertise; and industry and economic trends. Increased competition in the financial services industry, or our failure to perform in any of these areas, could significantly weaken our competitive position, which could adversely affect our growth and profitability. Strategic risk may also be realized due to events or issues that materialize in other risk factor areas. For example, significant deficiencies in end-to-end operational execution and/or product delivery or failure to comply with applicable laws and regulations may result in unmet client expectations or harm and impact our competitive standing in the industry. Maintaining or increasing our market share depends upon our ability to adapt our products and services to evolving industry standards and consumer preferences, while maintaining competitive products and services. The continuous, widespread adoption of new technologies requires us to continually evaluate our product and service offerings to ensure they remain competitive. Our success depends, in part, on our ability to adapt our products and services, as well as our distribution of them, to evolving industry standards and consumer preferences. New technologies have altered consumer behavior by allowing consumers to complete transactions such as paying bills or transferring funds directly without the assistance of banks. New products allow consumers to maintain funds in brokerage accounts or mutual funds that would have historically been held as bank deposits. The 38 Table of contents process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer loans and deposits and related income generated from those products. The increasing pressure from our competitors, both bank and nonbank, to keep pace and adopt new technologies and products and services requires us to incur substantial expense. We may be unsuccessful in developing or introducing new products and services, modifying our existing products and services, adapting to changing consumer preferences and spending and saving habits, achieving market acceptance or regulatory approval, sufficiently developing or maintaining a loyal customer base, or offering products and services at prices equal to or lower than the prices offered by our competitors. These risks may affect our ability to achieve growth in our market share and could reduce both our revenue streams from certain products and services and our revenues from our net interest income. We may not be able to attract and retain skilled people. Our success depends on our ability to attract, retain, motivate, and develop a high performing, inclusive, and collaborative workforce. Competition for talent in our business is strong and requires us to make investments to provide compensation and benefits at market levels. Rising wages, as well as inflation, may cause us to increase these investments. Such investments cause compensation and benefits to represent our greatest expense. Additionally, we increasingly compete for talent outside of the core financial services industry. Non-financial institutions may be subject to different pay and hiring expectations than us, which may make it more difficult for us to attract qualified teammates. For example, we are required to deliver a substantial portion of the variable compensation of certain teammates in the form of awards tied to our financial performance and/or share price performance. Our failure to achieve our long-term financial goals and/or our share price performance may cause the value of these awards to decline or fall to zero, which would impact our ability to retain and incentivize qualified teammates. Similarly, our pay practices are subject to scrutiny by our regulators who may identify deficiencies in the structure of, or issue additional guidance on our compensation practices, causing us to make changes that may affect our ability to offer competitive pay to these individuals or that place us at a disadvantage to non-financial service industry competitors. Finally, while remote work opportunities allow us to hire outside of our traditional footprint, it also increases competition. These factors individually, or collectively, may constrain our ability to hire or retain a sufficient number of qualified employees, which could impact our ability to serve our customers and clients. Acquisitions or strategic partnerships may disrupt our business and dilute shareholder value. Acquiring other banks, bank branches, or other businesses involves various risks commonly associated with acquisitions or partnerships, including exposure to unknown or contingent liabilities of the acquired company; diversion of our management’s time and attention; significant integration risk with respect to employees, accounting systems, and technology platforms; increased regulatory scrutiny; and the possible loss of key employees and customers of the acquired company. We regularly evaluate merger and acquisition and strategic partnership opportunities and conduct due diligence activities related to possible transactions. As a result, mergers or acquisitions involving cash, debt or equity securities may occur at any time. Acquisitions may involve the payment of a premium over book and market values. Therefore, some dilution of our tangible book value and net income per common share could occur in connection with any future transaction. Scotiabank holds a significant equity interest in our business and may exercise influence over us, including through its ability to designate up to two directors to our Board of Directors. Scotiabank holds approximately 14.9% of our issued and outstanding common shares. Pursuant to the Investment Agreement, dated August 12, 2024, between us and Scotiabank (the “Investment Agreement”), Scotiabank is entitled to designate up to two directors to our Board of Directors, subject to specified minimum ownership requirements. As of the date hereof, our Board of Directors includes two directors who were appointed pursuant to Scotiabank’s director designation rights. As a result of the amount of common shares that are currently held by Scotiabank, together with its director designation rights, Scotiabank may be able to influence our policies and operations and impact matters requiring shareholder approval. In addition, the existence of a large shareholder may have the effect of deterring takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other shareholders to approve transactions that they may deem to be in the best interests 39 Table of contents of our company. The interests of Scotiabank with respect to matters potentially or actually involving or affecting us and our other shareholders, such as future acquisitions, financings, and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other shareholders. VII. Reputation Risk Damage to our reputation could significantly impact our business and major stakeholders. Our ability to attract and retain customers, clients, investors, and highly skilled management and employees is affected by our reputation. Damage to our reputation could also adversely impact our credit ratings and access to capital markets. Significant harm to our reputation can arise from various sources, including inappropriate behavior or misconduct of employees, actual or perceived unethical behavior, litigation or regulatory outcomes, inadequate or ineffective risk management practices, failing to deliver minimum or required standards of service and quality, corporate governance and regulatory compliance failures, disclosure of confidential information, significant or numerous failures, interruptions or breaches of our information systems, complex fraud threats, failure to meet external commitments and goals, including financial corporate responsibility and sustainability related commitments, the activities of our clients, customers and counterparties, including vendors, and actions taken by shareholder activists and community organizations. Additionally, actions by the financial services industry generally or by certain members or individuals in the industry as well as legislative or regulatory actions that target or negatively impact the industry may also have a significant adverse effect on our reputation. Negative coverage about Key published in traditional media or on social media websites, whether or not factually correct, may affect our reputation and our business prospects and impact our ability to attract and retain highly skilled employees. Social media facilitates the rapid dissemination of information or misinformation, thereby increasing the potential for widespread dissemination of inaccurate, false, misleading, or other negative information that could damage our reputation. Negative public opinion can also adversely affect our ability to attract and maintain customer relationships and could subject us to litigation and regulatory action. We are also subject to the risk that disruptions to how our customers access our banking services, such as disruptions to our technology platforms (e.g., online banking websites or mobile applications) or other impacts to our branches, could harm our reputation with customers. In particular, a cybersecurity event impacting Key or our customers’ data or personal information could negatively impact our reputation and customer confidence in Key and our data security procedures. Increased model and generative AI use could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures. We could also suffer significant reputational harm if we fail to properly identify and manage potential conflicts of interest. Management of potential conflicts of interests is complex as we expand our business activities through more numerous transactions, obligations, and interests with and among our clients. The actual or perceived failure to adequately address conflicts of interest could affect the willingness of clients to deal with us, which could adversely affect our businesses, and could give rise to litigation or enforcement actions. Key is subject to corporate responsibility and sustainability efforts risks that could adversely affect our reputation and our business and results of operations. Views about corporate responsibility and sustainability-related issues are diverse, dynamic, and rapidly changing. Financial services companies, including Key, face increasing criticism from social and environmental activists who target companies, including Key, for engaging in business with clients engaged in industries which such activists perceive to be harmful to communities or the environment. Such criticism directed at Key could generate dissatisfaction among our stakeholders. Additionally, however we respond to such criticism, we face the risk that current or potential clients may decline to do business with us or current or potential employees refuse to work with us. This can be true regardless of whether we are perceived by some as not having done enough to address activist concerns or by others as having inappropriately yielded to activist pressures. Conversely, there exists anti-environmental, social and governance (ESG) and anti-diversity, equity, and inclusion (DEI) sentiment among certain stakeholders and government institutions, which has gained momentum across the U.S. For example, President Trump recently issued an executive order opposing DEI initiatives in the private sector, and certain states have 40 Table of contents taken, and may in the future take, actions or proposed measures to limit the state’s ability to do business with financial institutions or other businesses identified as discriminating against certain industries or practices based on environmental or social criteria. We could be exposed to reputational, financial, and legal risk as a result of anti-ESG and anti-DEI sentiment, and our ability to retain and attract customers and employees may be negatively impacted as a result of these contrasting arguments in how a financial institution should address these issues. Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their corporate responsibility and sustainability practices and disclosures. We may face criticism or a loss of confidence, with accompanying reputational risk, from our perceived action or inaction to deliver on our corporate responsibility and sustainability-related commitments. Investors and other stakeholders, including U.S. institutional investors, are increasingly considering how corporations are incorporating corporate responsibility and sustainability matters, including climate-related financial risks, into their business strategy when analyzing the expected risk and return of potential investments. The specific factors considered, as well as the approach to incorporating the factors into a broader investment process, vary by investor and can shift over time. These shifts in investing priorities may result in adverse effects on the trading price of our common stock if investors determine that Key has not made sufficient progress on corporate responsibility and sustainability matters or is not aligned with the investors’ priorities. In addition, collecting, measuring, and reporting corporate responsibility and sustainability information and metrics can be costly, difficult and time consuming, is subject to evolving and potentially conflicting reporting standards, and can present numerous operational, reputational, financial, legal, and other risks. Further, inadequate processes to collect and review this information prior to disclosure could result in potential liability related to such information. VIII. Model Risk We rely on quantitative models to manage certain accounting, risk management, capital planning, and treasury functions. We use quantitative models to help manage certain aspects of our business and to assist with certain business decisions, including, but not limited to, estimating ALLL, measuring the fair value of financial instruments when reliable market prices are unavailable, estimating the effects of changing interest rates and other market measures on our financial condition and results of operations, managing risk, predicting cash flows, and for capital planning purposes (including during the capital stress testing process). Models are simplified representations of real-world relationships. Thus, our modeling methodologies rely on many assumptions, historical analyses, correlations, and available data. These assumptions provide only reasonable, not absolute, estimates, particularly in times of market distress when historical correlations on which we rely may no longer be relevant. Additionally, as businesses and markets evolve, our measurements may not accurately reflect this evolution. Models can also produce inadequate estimates due to errors in computer code, use of unsuitable data during development or input into the model during model use, or the use of a model for a purpose outside the scope of the model’s design. Some models we use employ methodologies based on artificial intelligence (AI) or machine learning (ML). These models bring some unique complexities from those of traditional models, such as the need for large datasets for training, the potential for algorithmic bias, and the difficulty in interpreting model decisions. If our models fail to produce reliable results on an ongoing basis, we may not make appropriate risk management, capital planning, or other business or financial decisions. Furthermore, strategies that we employ to manage and govern the risks associated with our use of models may not be effective or fully reliable, and as a result, we may realize losses or other lapses. We have an enterprise-wide model risk management program designed to accurately identify, measure, report, monitor, and manage model risk. The management of model risk includes independent validation and model governance, establishing and monitoring model control standards and model risk metrics, and completeness and accuracy of the inventory of models. Banking regulators continue to focus on the models used by banks and bank holding companies in their businesses. The failure or inadequacy of a model may result in increased regulatory scrutiny on us or may result in an enforcement action or proceeding against us by one of our regulators. 41 Table of contents IX. Estimates and Assumptions Risk The preparation of our consolidated financial statements requires us to make subjective determinations and use estimates that may vary from actual results and materially impact our financial condition and results of operations. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make significant estimates that affect the financial statements. Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require the use of estimates and assumptions that may affect the value of the Key’s assets or liabilities and financial results. Certain accounting policies are critical because they require management to make difficult, subjective or complex judgments about matters that are inherently uncertain and the likelihood that materially different estimates would result under different conditions or through the utilization of different assumptions. If assumptions or estimates underlying the Key’s consolidated financial statements are incorrect or are adjusted periodically, our financial condition and results of operations could be materially impacted. See the “Critical Accounting Policies” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for additional information. Changes in accounting policies, standards, and interpretations could materially affect how we report our financial condition and results of operations. The FASB periodically changes the financial accounting and reporting standards governing the preparation of Key’s consolidated financial statements. Additionally, those bodies that establish and/or interpret the financial accounting and reporting standards (such as the FASB, SEC, and other regulatory agencies) may change prior interpretations or positions on how these standards should be applied. These changes can be difficult to predict and can materially affect how Key records and reports its consolidated financial condition and results of operations. In some cases, Key could be required to retroactively apply a new or revised standard, resulting in changes to previously reported financial results. Impairment of goodwill could require charges to earnings, which could result in a negative impact on our results of operations. Goodwill is periodically tested for impairment by comparing the fair value of each reporting unit to its carrying amount. If the fair value is greater than the carrying amount, then the reporting unit’s goodwill is deemed not to be impaired. The fair value of a reporting unit is impacted by the reporting unit’s expected financial performance and susceptibility to adverse economic, regulatory, and legislative changes. A significant decline in a reporting unit’s expected future cash flows, a significant adverse change in the business climate, slower economic growth or a significant and sustained decline in the price of our common stock may cause the fair value of a reporting unit to be below its carrying amount, resulting in goodwill impairment. If an impairment loss is recorded, it will have little or no impact on the tangible book value of our common stock, or on our regulatory capital levels, but such an impairment loss could significantly reduce our earnings and thereby restrict KeyBank’s ability to make dividend payments to us without prior regulatory approval, which in turn could impact our ability to pay dividends. At December 31, 2024, the book value of our goodwill was $2.8 billion, substantially all of which was recorded at KeyBank. Any such write down of goodwill will reduce Key’s earnings, as well. See the “Critical Accounting Policies” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for additional information. 42 Table of contents ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 1C. CYBERSECURITY Cybersecurity Risk Management As a financial services institution, Key faces heightened risk of cybersecurity incidents. Risks and exposures related to cybersecurity incidents are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of cybersecurity threats and geopolitical events, as well as due to the expanding use of Internet and mobile banking and other technology-based products and services utilized by us and our clients, including products and services that utilize the cloud and artificial intelligence (AI), among other emerging technologies. To date, Key has not experienced material disruption to our operations, or material harm to our client base, from cyberattacks. However, we have incurred, and may again incur, expenses related to the investigation of cybersecurity incidents involving third-party providers or related to the protection of our clients from identity theft as a result of such incidents. We have also incurred, and may continue to incur, expenses to enhance our systems or processes to protect against cyber or other security incidents. For more information, see “Risk Factors—We and third parties on which we rely (including their downstream service providers) may experience a cyberattack, technology failure, information system or security breach or interruption” in Item 1A. Risk Factors of this report. Key maintains an Information Security Program (the “IS Program”) to support the management of information security risk, including cybersecurity risk, across the organization. The IS Program is designed to protect Key’s clients, employees, third parties, and assets from threats by managing the confidentiality, availability, and integrity of Key’s information assets. Our Chief Information Security Officer (“ CISO ”), who is also the Enterprise Security Executive, oversees the IS Program and its related policy and has overall responsibility for managing the appropriate identification and ownership of cybersecurity risks. Key’s Corporate Information Security Team, under the oversight of the CISO, is responsible for maintaining the IS Program, assessing program-level risks and threats to our information assets, and overseeing the proper level of investment in security resources. The IS Program is designed to provide safeguards for Key’s assets through a series of administrative, technical, and physical controls. Key employs a variety of security practices and controls to protect information and assets, including, but not limited to, access controls, vulnerability scans, network monitoring, internal and external penetration testing, monitoring of vendor vulnerability notices and patch releases, scanning of systems and emails for malware and other vulnerabilities, firewalls and intrusion detection and prevention systems, and dedicated security personnel. As described in more detail in “Risk Management — Overview” in Item 7 of this report and in “Cybersecurity Governance” below, Key employs the “Three Lines of Defense” in its risk governance framework. Assessing, identifying, and managing cybersecurity risk across the organization in support of the IS Program is a cross-functional effort that requires collaboration and direction from all lines of defense – the lines of business and support functions (First Line of Defense), Risk Management (Second Line of Defense), and the Risk Review Group (RRG), Key’s internal audit function (Third Line of Defense): • First Line of Defense – Lines of Business and Support Functions. Primary responsibility for day-to-day management of cybersecurity risk lies with the senior management of each of Key’s lines of business (LOB) and support functions. The LOB and support functions own and manage the individual processes and procedures that are used throughout the IS Program, implement and manage business-specific security controls, and enforce behavioral controls throughout the management structure. • Second Line of Defense – Risk Management. Risk Management oversees risk and monitors the First Line of Defense controls. Operational Risk Management performs review and challenge of controls, monitors the operational risk profile, and ensures Key operates within its operational risk appetite. Compliance Risk Management provides an independent, enterprise-wide function that focuses on compliance with laws, rules, regulations, and guidance applicable to Key. Privacy Compliance, which sits within Compliance Risk Management, provides advisory support, governance, and oversight of privacy-related statutes, regulations, and risks related to Key’s customers, employees, and other individuals from who Key collects personally identifiable information. • Third Line of Defense – Risk Review Group (RRG). The RRG reviews and evaluates the scope and breadth of security activities throughout Key and the effectiveness of the IS Program. RRG conducts independent internal 43 Table of contents audits on Key’s LOBs, operations, information systems, and technologies. These internal audits provide an independent perspective on Key’s processes and risks. Technology risks are evaluated in areas including cybersecurity and information security, data control, acquisition and development, delivery and support, business continuity, and information technology governance. RRG shares the results of its audits with the LOB management, Key’s Operational and Compliance Risk Management Groups, the Board’s Audit Committee, and banking regulators. As part of its cybersecurity risk management strategy, Key regularly reviews its security and privacy controls in the context of industry standard practices, frameworks, evolving laws, and changing client expectations. Key engages external providers periodically to perform a maturity assessment of the IS Program against industry cybersecurity frameworks. Key also engages external advisors periodically to perform security posture assessments of our environment to proactively identify weakness within our security policy and/or configurations. Summary level results from these assessments are shared to internal stakeholders through Key’s Risk Governance committee structure. Key is also subject to cybersecurity and privacy regulatory exams, as required by law for financial institutions. Key has implemented cybersecurity, privacy, and fraud education and awareness programs across the enterprise to educate teammates on how to identify and report cybersecurity and privacy concerns. Employees and contractors with access to assets or data owned or maintained by Key receive mandatory enterprise-wide cybersecurity, privacy, and fraud training on an annual basis. In addition, our management team from time to time participates in cybersecurity tabletop exercises that simulate cybersecurity incidents. These exercises are intended to test our response to potential incidents and assess the procedures outlined in our incident response playbooks. With respect to third party service providers, Key maintains a third party management program that is designed to identify, review, monitor, escalate, and, if necessary, remediate third party information security risks. Key’s third party onboarding process includes risk-based due diligence and security-relevant contract language. Risk-based due diligence can also include an assessment of the strength of certain control areas, including, but not limited to, information security management, physical security, network security, platform security, application security, cloud security, encryption management, business resiliency, and privacy. Once a business relationship is established with a service provider, Key performs risk-based periodic reviews of the third party service provider's security programs. In addition to an established governance approval process for new engagements, Key has established a Third Party Management Committee to oversee compliance with Key’s Third Party Management Policy and Program. Cybersecurity Governance As described in more detail in “Risk Management — Overview” in Item 7 of this report, the Board serves in an oversight capacity to ensure that Key’s risks, including risk from cybersecurity threats, are managed in a manner that is effective and balanced and adds value for our shareholders. The Board’s Risk Committee exercises primary oversight over enterprise-wide risk at Key, including operational risk, which includes cybersecurity risk, and provides oversight of management’s activities related to cybersecurity risk. The Board’s Audit Committee monitors and exercises oversight over cybersecurity risk as part of its joint oversight of operational risk with the Risk Committee. The Board’s Technology Committee provides additional oversight of management’s activities related to Key’s technology strategic investment plan, cybersecurity investments, and major technology vendor relationships and is expected to escalate to the Risk Committee on certain risk management issues. Key’s CISO oversees the IS Program and its related policies and is responsible for determining whether relevant security risk information is properly integrated into strategic and business decisions, overseeing the appropriate identification and ownership of security risks, monitoring critical risks, and maintaining the appropriate oversight and governance of information security through associated programs and/or standards. Our CISO has served in various roles in information technology and information security at Key for over 30 years, including serving as Enterprise Security Executive. The CISO holds a B.S.B.A in Management Information Systems. The CISO is responsible for reporting on information security matters, including cybersecurity risk, to the Board. The CISO provides updates to the Audit Committee on cybersecurity matters at each regularly scheduled Committee meeting (six times in 2024). The CISO’s update to the Committee generally address the cybersecurity threat landscape, information security trends, strategic initiatives related to information security, and cybersecurity program reviews. The CISO also updates the Risk Committee on cybersecurity matters and on Key’s compliance with the Gramm-Leach-Bliley Act on an annual basis and presents the Information Security Policy for approval. The CISO, along with Key’s Deputy CISO, also report annually to the Technology Committee to obtain approval on Key’s Cyber Strategy and Investment Plan. The CISO provides updates to the Board as needs arise and from time to time. 44 Table of contents Key’s Deputy CISO leads the Corporate Information Security function, including the Cyber Defense Center, Identity & Access Management Operations, Information Security Governance and Data Protection, and Security Architecture, Engineering and Platform Operations. The Deputy CISO has over 17 years of cybersecurity and technology risk management experience across financial services and retail, previously served as the Head of Information Security Governance within KeyCorp’s Corporate Information Security group, as well as the Head of Cybersecurity and Technology Risk Oversight within KeyCorp’s Risk Management group. He holds a bachelor’s degree in Finance and Management Information Systems and an MBA. The CISO reports to Key’s Chief Information Officer who oversees all of Key’s shared services for technology, operations, data, servicing, cyber and physical security, and corporate real estate solutions. Our Chief Information Officer, who has served in the role since 2012, has extensive experience overseeing technology and operations delivery for critical enterprise functions and has held various leadership roles during her over 30-year career in the financial services industry. At the management level, our Enterprise Risk Management (ERM) Committee, chaired by the Chief Executive Officer and comprising other senior level executives, including the Chief Information Officer, reports to the Board’s Risk Committee and is responsible for managing risk, including cybersecurity risk. The ERM Committee serves as a senior level forum for review and discussion of material operational risk issues, including cybersecurity risk, and receives regular updates from the CISO regarding cybersecurity risk. The ERM Committee directly oversees the Operational Risk Committee, which provides governance, direction, oversight, and high-level management of operational risk, including cybersecurity risk, and includes senior management representation from the LOB and support areas. The CISO is a voting member of the Operational Risk Committee. The Operational Risk Committee also includes subcommittees which, among other things, address security issues and concerns, pursue security-related program enhancements, address fraud trends, provide input on fraud strategy, weigh the impacts of fraud risk on customers, business clients, and the LOB, and cascades awareness of fraud risks across Key. Key also has a Privacy Team led by a Chief Privacy Officer (CPO) who has over ten years of experience in legal, compliance, and risk roles at financial institutions, focusing primarily on data protection and privacy. Our CPO holds an undergraduate degree in finance, a master’s degree in business administration, and a juris doctorate. He is licensed to practice law in the state of Ohio and has obtained the CIPP/US certification through the International Association of Privacy Professionals. The CPO and Privacy team have the authority to escalate privacy risks to the Board. The Privacy and Information Security teams work together to implement controls around how personally identifiable information is managed and protected and to comply with applicable laws and regulations. Cybersecurity Incidents When a cybersecurity incident is identified, we follow established processes in our enterprise privacy and cyber incident response plans, which are a supplement to our corporate incident response plan. These plans provide a framework to enable the appropriate personnel to recover operations in the event of a cyberattack and manage incidents impacting banking information, including our clients’ and employees’ information. Our Core Incident Response Rapid Emergency Assessment and Coordination Team (Core IR REACT) is responsible for responding to incidents, including cyberattacks, performing a preliminary assessment, and engaging additional support team members as necessary. The Core IR REACT team is a multidisciplinary team that is empowered to escalate issues, as appropriate, to our Crisis Management Team (CMT), which includes the CEO and senior executives from Key’s LOB and major support areas. The CMT provides overall strategic direction for incident responses and recovery. Incidents are also reported internally to key stakeholders through Key’s risk governance committee structure. As discussed above in “Cybersecurity Risk Management,” the RRG shares the results of its independent internal audits of security activities at Key and the effectiveness of the IS Program with the line of business management, Key’s Operational and Compliance Risk Management Groups, the Board’s Audit Committee, and banking regulators. Any identified gaps are risk rated, issued a due date for remediation, and tracked through completion of remediation. Remediation is then verified by the RRG. 45 Table of contents ITEM 2. PROPERTIES The headquarters of KeyCorp and KeyBank are located at 127 Public Square, Cleveland, Ohio 44114-1306 in the Key Center. At December 31, 2024, Key leased approximately 375,414 square feet of the complex, encompassing the first floor branch, the 2nd, 3rd and 5th through 9th office floors, the 12th floor, and the 54th through 56th floors of the 57-story Key Center. In addition, Key owned two buildings in Brooklyn, Ohio, with office space that it operated from and totaling 584,930 square feet at December 31, 2024. Our office space is used by all of our segments. As of the same date, KeyBank owned 410 branches and leased 534 branches. The lease terms for applicable branches are not individually material, with terms ranging from month-to-month to 99 years from inception. ITEM 3. LEGAL PROCEEDINGS The information presented in the Legal Proceedings section of Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) of the Notes to Consolidated Financial Statements is incorporated herein by reference. On at least a quarterly basis, we assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal reserves may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we have not accrued legal reserves, consistent with applicable accounting guidance. Based on information currently available to us, advice of counsel, and available insurance coverage, we believe that our established reserves are adequate and any liabilities that may arise from outstanding legal proceedings will not have a material adverse effect on our consolidated financial condition. We note, however, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established reserves. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 46 Table of contents PART II ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The following disclosures included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations are incorporated herein by reference: Page(s) Discussion of dividends in the section captioned “Capital — Dividends” 73 Discussion of our common shares, shareholder information, and repurchase activities in the section captioned “Capital — Common Shares outstanding” 73 The following graph compares the price performance of our Common Shares (based on an initial investment of $100 on December 31, 2019, and assuming reinvestment of dividends) with that of the S&P 500 Index and a group of other banks that constitute our peer group. The peer group consists of the banks that make up the S&P 500 Regional Bank Index and the banks that make up the Standard & Poor’s 500 Diversified Bank Index. We are included in the S&P 500 Index and the peer group. Share price performance is not necessarily indicative of future price performance. 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. We did not complete any open market share repurchases in 2024, and have no Board-approved repurchase authorizations outstanding. During 2024, Key repurchased $28 million of shares related to equity compensation programs. On August 30, 2024, KeyCorp issued 47,829,359 Common Shares for approximately $821 million in gross proceeds to Scotiabank pursuant to the first closing under the Investment Agreement. On December 27, 2024, Scotiabank completed the second and final purchase of 115,042,316 Common Shares under the Investment Agreement with an investment of approximately $2.0 billion in gross proceeds. These acquisitions were exempt from registration under the Securities Act of 1933, as amended (“Securities Act”), by virtue of the exemption provided by Section 4(a)(s) of the Securities Act. The following table summarizes our repurchases of our Common Shares for the three months ended December 31, 2024. See Note 24 (“Shareholders' Equity”) for more information regarding share repurchases. 47 Table of contents Calendar month Total number of shares repurchased (a) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Dollar value of shares that may yet be purchased as part of publicly announced plans or programs (b) October 1 - 31 236 $ 17.21 — $ — November 1 - 30 103,712 19.49 — — December 1 -30 262 18.84 — — Total 104,210 $ 19.48 — (a) Includes Common Shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations. We did not complete any open market share repurchases in the fourth quarter of 2024. ITEM 6. [RESERVED] 48 Table of contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Number Introduction 50 Corporate strategy 50 Executive overview 51 Results of Operations 53 Earnings overview 53 Net interest income 53 Provision for credit losses 56 Noninterest income 56 Noninterest expense 58 Income taxes 60 Business Segment Results 60 Consumer Bank 60 Commercial Bank 61 Financial Condition 63 Loans and loans held for sale 63 Securities 69 Deposits and other sources of funds 72 Capital 73 Off-Balance Sheet Arrangements and Aggregate Contractual Obligations 75 Off-balance sheet arrangements 75 Guarantees 76 Risk Management 76 Overview 76 Market risk management 78 Liquidity risk management 83 Credit risk management 86 Operational and compliance risk management 90 GAAP to Non-GAAP Reconciliations 91 Critical Accounting Policies and Estimates 92 Allowance for loan and lease losses 93 Valuation methodologies 94 Derivatives and hedging 96 Contingent liabilities, guarantees and income taxes 97 Accounting and reporting developments 98 49 Table of contents Introduction This section reviews the financial condition and results of operations of KeyCorp and its subsidiaries for 2024 and 2023. Some tables may include additional periods to comply with disclosure requirements or to illustrate trends in greater depth. When you read this discussion, you should also refer to the consolidated financial statements and related notes in this report. The page locations of specific sections and notes that we refer to are presented in the Table of Contents. To review our financial condition and results of operations for 2022 and a comparison between the 2022 and 2023 results, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Form 10-K filed with the SEC on February 22, 2024, which discussion is incorporated herein by reference. Corporate strategy We remain committed to enhancing long-term shareholder value by continuing to execute our relationship-based business model, growing our franchise, and being disciplined with respect to capital management. We intend to pursue this commitment by growing profitably; acquiring and expanding targeted client relationships; effectively managing risk and rewards; maintaining financial strength; and engaging, retaining, and inspiring our high-performing and talented workforce and fostering a culture that is fair and inclusive for all. These strategic priorities for enhancing long-term shareholder value are described in more detail below. • Grow profitably — We intend to continue to focus on generating positive operating leverage by growing revenue and creating a more efficient operating environment. We expect our relationship business model to keep generating organic growth as it helps us expand engagement with existing clients and attract new customers. We plan to leverage our continuous improvement culture to maintain an efficient cost structure that is aligned, sustainable, and consistent with the current operating environment and that supports our relationship business model. • Acquire and expand targeted client relationships — We seek to be client-centric in our actions and have taken purposeful steps to enhance our ability to acquire and expand targeted relationships. We seek to provide solutions to serve our clients' needs. We focus on markets and clients where we can be the most relevant. In aligning our businesses and investments against these targeted client segments, we are able to make a meaningful positive impact for our clients. • Effectively manage risk and rewards — Our risk management activities are focused on ensuring we properly identify, measure, and manage risks across the entire company to maintain safety and soundness and maximize profitability. • Maintain financial strength — With the foundation of a strong balance sheet, we intend to remain focused on sustaining strong reserves, liquidity, and capital. We plan to work closely with our Board and regulators to manage capital to support our clients’ needs and drive long-term shareholder value. Our capital position remains strong, and we are well-positioned relative to our capital priorities. • Engage a high-performing and talented workforce — Every day our employees provide our clients with great ideas, extraordinary service, and smart solutions. We intend to continue to engage our high-performing and talented workforce to create an environment where everyone can make a difference, own their careers, be respected, and feel a sense of pride. 50 Table of contents Executive overview Our 2024 financial results were generally positive and reflected the impact of large securities repositioning trades that enhanced our future earnings trajectory. Net interest income was down, reflecting lower loans and changes in interest rates, but remained within our target range versus 2023. Fee growth was stronger than expected reflecting the second highest year of investment banking revenues in our history. At December 31, 2024, our Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 11.92% and 13.69%, respectively. We achieved meaningful positive operating leverage in the second half of the year and look to continue to deliver earnings growth and operating leverage in 2025. Strategic Minority Investment by Scotiabank On August 12, 2024, we entered into an Investment Agreement with Scotiabank pursuant to which Scotiabank agreed to make a strategic minority investment in KeyCorp of approximately $2.8 billion, representing approximately 14.9% pro forma common stock ownership of KeyCorp, for a fixed price of $17.17 per share. On August 30, 2024, Scotiabank completed the initial purchase of our Common Shares with an investment of approximately $821 million in gross proceeds. Following the initial purchase, Scotiabank owned approximately 4.9% of KeyCorp’s common stock. On December 13, 2024, Key announced that all necessary bank regulatory approvals had been received for completion of Scotiabank’s strategic minority investment in KeyCorp. On December 27, 2024, Scotiabank completed the final purchase of our Common Shares contemplated under the Investment Agreement with an investment of approximately $2.0 billion (the “Second Closing”). Following the Second Closing, Scotiabank owns approximately 14.9% of our Common Shares. On December 27, 2024, in connection with the Second Closing, the Board of Directors of KeyCorp increased the size of the Board to fifteen directors and appointed Jacqueline Allard and Somesh Khanna to serve on the Board, effectively immediately upon the Second Closing. Refer to Note 24 (“Shareholders' Equity”) for additional information on this transaction. Securities Repositioning On September 6, 2024, we initiated a strategic repositioning of our available-for-sale investment securities portfolio by selling approximately $7.0 billion in market value of low-yielding mortgage-backed securities. The mortgage-backed securities that were sold had a weighted average book yield of approximately 2.3% and an average duration of approximately six years. Reinvestment of the proceeds from the sale was completed in October 2024, with the new securities having an average book yield of approximately 4.95% and an average duration of approximately four years. During the third quarter of 2024, along with our customary sale of short-dated U.S. Treasuries set to mature within the quarter, we also sold approximately $3 billion in U.S. Treasuries yielding 50 basis points that were set to mature in the fourth quarter of 2024. The total pre-tax loss on the sale of securities available for sale for the third quarter was $935 million of which $918 million was associated with the strategic repositioning. Prior to the Second Closing, KeyCorp completed the strategic repositioning of its available-for-sale investment securities portfolio by selling an additional $3.0 billion in market value of low-yielding investment securities and terminating approximately $3.0 billion of fair value hedges, resulting in a pre-tax loss of $915 million in the fourth quarter of 2024. The investment securities that were sold had a weighted average book yield of approximately 1.5% and an average duration of approximately eight years. The reinvestment of the proceeds from the repositioning was completed in December 2024, with the new securities having an average book yield of 5.5% and an average duration of approximately four years. In addition to the items described above, the following actions and results during 2024 also supported our overall corporate strategy. • We have expanded our commercial banking business in Chicago and Southern California to serve more middle market clients with our differentiated platform, which includes a full range of commercial lending and capital markets capabilities as well as payments solutions designed specifically for the segment. • We completed core technological modernization projects of our commercial loan platform and our derivatives platform. 51 Table of contents • We ended the year with $61.4 billion in assets under management and administration, a record high, reflecting the strong sales production in our mass affluent segment. • Within our Consumer Bank, we grew relationship households in excess of three percent for the second consecutive year, including growth of five to eight percent throughout our western markets. • We remained committed to our strategy to engage a high-performing and talented workforce and fostering an inclusive environment for all . We continue to be recognized by multiple organizations for our dedication to creating an environment where all employees are treated with respect and empowered to bring their authentic selves to work. Business Outlook Consistent with the forward guidance we provided on January 21, 2025, we expect these results for full year 2025 versus full year 2024. Category 2024 Baseline FY2024 vs FY2023 FY2025 (vs FY 2024) (a) Average loans $107.7 Billion (9)% down 2% to 5% Ending loans $104.3 Billion (7)% Flat vs YE 2024 PE Commercial Loans $71.9 Billion (7)% up 2% to 4% Net interest income (TE) $3,810 Million (3)% up ~20% (b) Adjusted noninterest income (c) $2,645 Million +7% up 5%+ Adjusted noninterest expense (c) $4,520 Million +3% up 3% to 5% Net charge-offs to average loans 41 bps + 20 bps 40 to 45 basis points (FY2025) Effective tax rate ~21% to 22% (FY2025) Tax-equivalent Effective Rate (d) ~23% to 24% (FY2025) (a) Ranges are shown on an operating basis. (b) Additional Guidance: Net interest income (TE): 10%+ 4Q25 vs. 4Q24. (c) Refer to the GAAP to Non-GAAP Reconciliation within Management's Discussion and Analysis of this Form 10-K for the reconciliation of these non-GAAP measures. (d) Reflects the estimated full year taxable-equivalent adjustment. 52 Table of contents Results of Operations Earnings Overview The following chart provides a reconciliation of net income from continuing operations attributable to Key common shareholders for the year ended December 31, 2023, to the year ended December 31, 2024 (dollars in millions): Net interest income One of our principal sources of revenue is net interest income. Net interest income is the difference between interest income received on earning assets (such as loans and securities) and loan-related fee income, and interest expense paid on deposits and borrowings. There are several factors that affect net interest income, including: • the volume, pricing, mix, and maturity of earning assets and interest-bearing liabilities; • the volume and value of net free funds, such as noninterest-bearing deposits and equity capital; • the use of derivative instruments to manage interest rate risk; • interest rate fluctuations and competitive conditions within the marketplace; • asset quality; and • fair value accounting of acquired earning assets and interest-bearing liabilities. To make it easier to compare both the results among several periods and the yields on various types of earning assets (some taxable, some not), we present net interest income in this discussion on a “TE basis” (i.e., as if all income were taxable and at the same rate). For example, $100 of tax-exempt income would be presented as $126, an amount that, if taxed at the statutory federal income tax rate of 21%, would yield $100. 53 Table of contents Net interest income (TE) for 2024 was $3.8 billion, and the net interest margin was 2.16%. Compared to 2023, net interest income (TE) decreased $133 million, and the net interest margin was relatively stable, decreasing by one basis point. The decline in net interest income (TE) and the net interest margin reflects higher deposit costs, partly due to a shift in funding mix from noninterest-bearing deposits to higher cost deposits in 2024, and lower loan balances, in part due to the residual effect of Key’s balance sheet optimization efforts during the second half of 2023. Net interest income (TE) and the net interest margin benefited from higher earning asset yields as a result of the higher interest rate environment, including the reinvestment of proceeds from maturing investment securities into higher-yielding investments. Net interest income (TE) and the net interest margin also benefited from the maturity of interest rate swaps with negative carry, and an increase in lower-cost deposits, which contributed to the decline in wholesale borrowings. In addition, during the second half of 2024, Key completed the available-for-sale portfolio repositioning, which involved the sale and reinvestment of approximately $10.0 billion of lower-yielding mortgaged-backed securities into higher-yielding investments. Average loans totaled $107.7 billion for 2024, compared to $118.0 billion in 2023. The $10.3 billion decrease reflected continued tepid client loan demand. Commercial loans decreased $7.6 billion, due to lower commercial and industrial loans and commercial mortgage real estate loans. Additionally, average consumer loans declined by $2.6 billion, reflective of broad-based declines across all consumer loan categories. Average deposits totaled $146.2 billion for 2024, an increase of $2.1 billion compared to 2023, reflecting growth in both consumer and commercial deposits, partially offset by a decline in brokered CDs. Figure 1 shows the various components of our balance sheet that affect interest income and expense and their respective yields or rates over the past three years. This figure also presents a reconciliation of TE net interest income to net interest income reported in accordance with GAAP for each of those years. The net interest margin, which is an indicator of the profitability of our earning assets less the cost of funding, is calculated by dividing taxable-equivalent net interest income by average earning assets. 54 Table of contents Figure 1. Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates from Continuing Operations (g) Year ended December 31, 2024 2023 2022 Dollars in millions Average Balance Interest (a) Yield/ Rate (a) Average Balance Interest (a) Yield/ Rate (a) Average Balance Interest (a) Yield/ Rate (a) ASSETS Loans (b), (c) Commercial and industrial (d) $ 53,951 $ 3,378 6.26 % $ 59,379 $ 3,444 5.80 % $ 54,970 $ 2,148 3.91 % Real estate — commercial mortgage 14,080 873 6.20 15,968 931 5.83 15,572 633 4.07 Real estate — construction 3,042 227 7.48 2,755 185 6.71 2,229 99 4.44 Commercial lease financing 3,087 105 3.41 3,703 116 3.13 3,869 98 2.54 Total commercial loans 74,160 4,583 6.18 81,805 4,676 5.72 76,640 2,978 3.89 Real estate — residential mortgage 20,382 674 3.31 21,428 699 3.26 19,036 559 2.94 Home equity loans 6,729 398 5.92 7,522 433 5.76 8,115 347 4.28 Other consumer loans 5,519 278 5.04 6,263 305 4.86 6,552 277 4.27 Credit cards 934 138 14.78 986 136 13.88 959 107 11.23 Total consumer loans 33,564 1,488 4.43 36,199 1,573 4.35 34,662 1,290 3.72 Total loans 107,724 6,071 5.64 118,004 6,249 5.30 111,302 4,268 3.84 Loans held for sale 979 60 6.11 1,012 61 6.06 1,278 56 4.41 Securities available for sale (b), (e) 37,127 1,142 2.71 37,718 793 1.80 42,325 752 1.62 Held-to-maturity securities (b) 7,980 284 3.56 9,008 312 3.46 7,676 213 2.77 Trading account assets 1,175 61 5.16 1,138 55 4.85 850 31 3.61 Short-term investments 14,846 792 5.33 7,349 414 5.63 4,264 97 2.28 Other investments (e) 1,177 62 5.25 1,392 73 5.28 952 22 2.26 Total earning assets 171,008 8,472 4.81 175,621 7,957 4.37 168,647 5,439 3.15 Allowance for loan and lease losses (1,515) (1,419) (1,101) Accrued income and other assets 17,322 17,425 18,340 Discontinued assets 296 384 492 Total assets $ 187,111 $ 192,011 $ 186,378 LIABILITIES Money market deposits $ 39,525 $ 1,146 2.90 % $ 34,539 $ 666 1.93 % $ 35,966 $ 52 .14 % Demand deposits 56,130 1,402 2.50 54,711 1,102 2.01 49,707 182 .37 Savings deposits 5,010 7 .14 6,343 3 .04 7,798 1 .01 Time deposits 16,497 752 4.56 13,794 551 4.00 4,347 44 Total interest-bearing deposits 117,162 3,307 2.82 109,387 2,322 2.12 97,818 279 .29 Federal funds purchased and securities sold under repurchase agreements 103 4 4.35 1,647 79 4.81 2,107 41 1.93 Bank notes and other short-term borrowings 2,984 164 5.49 5,890 308 5.24 2,963 90 3.02 Long-term debt (g) 17,279 1,187 6.87 20,983 1,305 6.22 14,915 475 3.19 Total interest-bearing liabilities 137,528 4,662 3.39 137,907 4,014 2.91 117,803 885 .75 Noninterest-bearing deposits 28,993 34,672 49,044 Accrued expense and other liabilities 4,886 5,167 4,309 Discontinued liabilities (f) 296 384 492 Total liabilities 171,703 178,130 171,648 EQUITY Total equity 15,408 13,881 14,730 Total liabilities and equity $ 187,111 $ 192,011 $ 186,378 Interest rate spread (TE) 1.42 % 1.46 % 2.40 % Net interest income (TE) and net interest margin (TE) $ 3,810 2.16 % $ 3,943 2.17 % $ 4,554 2.64 % Less: TE adjustment (b) 45 30 27 Net interest income, GAAP basis $ 3,765 $ 3,913 $ 4,527 (a) Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology. (b) Interest income on tax-exempt securities and loans has been adjusted to a taxabale-equivalent basis using the statutory federal income tax rate in effect that calendar year. (c) For purposes of these computations, nonaccrual loans are included in average loan balances. (d) Commercial and industrial average loan balances include $215 million, $196 million, and $157 million of assets from commercial credit cards for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively. (e) Yield presented is calculated on the basis of amortized cost excluding fair value hedge basis adjustments. The average amortized cost for securities available for sale was $42.2 billion and $44.0 billion for the twelve months ended December 31, 2024, and December 31, 2023, respectively. Yield based on the fair value of securities available for sale was 3.08% and 2.10% for the twelve months ended December 31, 2024, and December 31, 2023, respectively. (f) A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations. (g) Average balances presented are based on daily average balances over the respective stated period. 55 Table of contents Figure 2 shows how the changes in yields or rates and average balances from the prior year affected net interest income. The section entitled “Financial Condition” contains additional discussion about changes in earning assets and funding sources. Figure 2. Components of Net Interest Income Changes from Continuing Operations 2024 vs. 2023 Dollars in millions Average Volume Yield/ Rate Net Change (a) INTEREST INCOME Loans $ (568) $ 390 $ (178) Loans held for sale (2) 1 (1) Securities available for sale (13) 362 349 Held-to-maturity securities (36) 8 (28) Trading account assets 2 4 6 Short-term investments 401 (23) 378 Other investments (11) — (11) Total interest income (TE) (227) 742 515 INTEREST EXPENSE Money market deposits 107 373 480 Demand deposits 29 271 300 Savings deposits (1) 5 4 Time deposits 117 84 201 Total interest-bearing deposits 252 733 985 Federal funds purchased and securities sold under repurchase agreements (62) (13) (75) Bank notes and other short-term borrowings (159) 15 (144) Long-term debt (245) 127 (118) Total interest expense (214) 862 648 Net interest income (TE) $ (13) $ (120) $ (133) (a) The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amounts of the change in each. Provision for credit losses Our provision for credit losses was a net charge of $335 million for 2024, compared to $489 million for 2023. The decrease in our provision for credit losses was driven by reserve releases, partly offset by higher net charge-offs. The net reserve release in 2024 was driven by changes in the economic outlook and planned balance sheet optimization efforts, which offset reserve increases attributable to asset quality migration. The higher net charge-offs were largely driven by the commercial and industrial portfolio. 56 Table of contents Noninterest income Noninterest income for 2024 was $809 million, inclusive of the $1.8 billion loss from the investment portfolio repositioning, compared to $2.5 billion during 2023. Noninterest income represented 18% of total revenue for 2024 and 39% of total revenue for 2023. The following discussion explains the composition of certain elements of our noninterest income and the factors that caused those elements to change. Figure 3. Noninterest Income 57 Table of contents Trust and investment services income Trust and investment services income consists of brokerage commissions, trust and asset management fees, and insurance income. The assets under management or administration that primarily generate these revenues are shown in Figure 4. For 2024, trust and investment services income increased $41 million, or 7.9%. This was primarily due to an increase in investment management income and other fees stemming from increased assets under management. A significant portion of our trust and investment services income depends on the value and mix of assets under management. At December 31, 2024, our bank, trust, and registered investment advisory subsidiaries had assets under management or administration of $61.4 billion, compared to $54.9 billion at December 31, 2023. The increase from 2023 to 2024 was attributable to movements in the market and net new business. Figure 4. Assets Under Management or Administration Year ended December 31, Change 2024 vs. 2023 Dollars in millions 2024 2023 Amount Percent Discretionary assets under management by investment type: Equity $ 34,541 $ 30,724 $ 3,817 12.4 % Fixed income 13,942 13,775 167 1.2 Money market 6,785 6,187 598 9.7 Total discretionary assets under management $ 55,268 $ 50,686 $ 4,582 9.0 % Non-discretionary assets under administration 6,093 4,173 1,920 46.0 Total $ 61,361 $ 54,859 $ 6,502 11.9 % Investment banking and debt placement fees Investment banking and debt placement fees consist of syndication fees, debt and equity securities underwriting fees, merger and acquisition and debt placement advisor fees, gains on sales of commercial mortgages, and agency origination fees. For 2024, investment banking and debt placement fees increased $146 million, or 26.9%, from the prior year reflective of growth across all products excluding commercial mortgage activity. Service charges on deposit accounts Service charges on deposit accounts decreased $9 million, or 3.3%, in 2024 compared to the prior year. This decrease was driven by lower overdraft, maintenance, and service fees, offset slightly by higher account analysis fees. Cards and payments income Cards and payments income, which consists of debit card, consumer and commercial credit card, and merchant services income decreased $9 million, or 2.6%, in 2024 compared to 2023, driven by a decrease in debit interchange fees, partially offset by an increase in card reward costs. Other noninterest income Other noninterest income includes operating lease income and other leasing gains, corporate services income, corporate-owned life insurance income, consumer mortgage income, commercial mortgage servicing fees, net securities gains (losses), and other income. Other noninterest income decreased $1.8 billion in 2024 compared to 2023, primarily attributable to approximately $1.8 billion in losses on the sales of securities available for sale as part of portfolio repositioning activity during the third and fourth quarters of 2024. Excluding the impact of the repositioning activity, other noninterest income was relatively flat, increasing $3 million, reflecting an increase in commercial mortgage servicing fees offset by decreases in operating lease income and corporate services income. Noninterest expense Noninterest expense for 2024 was $4.5 billion, compared to $4.7 billion for 2023. Figure 5 gives a breakdown of our major categories of noninterest expense as a percentage of total noninterest expense for the twelve months ended December 31, 2024. 58 Table of contents The following discussion explains the composition of certain elements of our noninterest expense and the factors that caused those elements to change. Figure 5. Noninterest Expense (a) Other noninterest expense includes equipment, operating lease expense, marketing, intangible asset amortization and other miscellaneous expense. See the "Consolidated Statements of Income" in Part II, Item 8. Financial Statements and Supplementary Data of this report. Personnel As shown in Figure 6, personnel expense, the largest category of our noninterest expense, increased by $54 million, or 2.0%, in 2024 compared to 2023. Overall activity for the year was driven by higher incentive compensation from strong capital markets activity during the year, partially offset by a decrease in severance expense. Salaries and contract labor were down reflecting a decrease in FTE’s, offset slightly by increased contract labor costs. Figure 6. Personnel Expense Year ended December 31, Dollars in millions Change 2024 vs. 2023 2024 2023 Amount Percent Salaries and contract labor $ 1,609 $ 1,649 $ (40) (2.4) % Incentive and stock-based compensation (a) 661 525 136 25.9 Employee benefits 442 405 37 9.1 Severance 2 81 (79) N/M Total personnel expense $ 2,714 $ 2,660 $ 54 2.0 % N/M - Not meaningful (a) Excludes directors’ stock-based compensation of $4 million in 2024 and $3 million in 2023, reported as “other noninterest expense” in Figure 5. 59 Table of contents Non-personnel expense In total, other non-personnel expense decreased $243 million, or 11.7%, in 2024 compared to 2023 primarily due to items impacting non-personnel expense in 2023, including a $190 million FDIC special assessment charge, as well as corporate real estate related rationalization costs recorded within other expense. Income taxes We recorded a tax benefit from continuing operations of $143 million for 2024, compared to tax expense of $196 million for 2023. The effective tax rate, which is the provision for income taxes as a percentage of income from continuing operations before income taxes, was 46.6% for 2024 and 16.9% for 2023. The tax benefit recorded and increased effective tax rate for the year resulted primarily from the $1.8 billion loss on the sales of securities incurred as part of a strategic repositioning of our securities portfolio. In 2024, our federal tax expense and effective tax rate differ from the amount that would be calculated using the federal statutory tax rate primarily due to investments in tax-advantaged assets, such as corporate-owned life insurance, and tax credits associated with low-income housing investments, and periodic adjustments to our tax reserves as described in Note 14 (“Income Taxes”). Business Segment Results This section summarizes the financial performance of our two major business segments (operating segments): Consumer Bank and Commercial Bank. Note 25 (“Business Segment Reporting”) describes the products and services offered by each of these business segments and provides more detailed financial information pertaining to the segments. Dollars in the charts are presented in millions. Consumer Bank Segment imperatives • Execute a relationship-oriented growth strategy, which will enable us to grow (i) stable, low-cost deposits and (ii) valuable fee income streams, including wealth management and cards and payments • Simplify our business to improve execution and efficiency while managing risk • Meet the needs of our clients and communities in markets where we operate Market and business overview As the banking industry moves forward, so do our clients. Anticipating our clients’ needs not only today, but also for tomorrow and into the future, has become one of the biggest challenges for the banking industry. We view these challenges as an opportunity to help our current client base meet their own goals, as well as attract new and diverse clients. Key Consumer Bank’s focus on durable, long-term client relationships centered in core checking has been evident through the execution of our strategic priorities through focus areas such as developing a core Consumer relationship product suite and driving long-term deposits and fee income through new and enhanced products and services. Key continues to adapt to an increasingly digital world with an increased focus on client experience across our online banking channels. The advice our bankers provide, in combination with our products, services and digital platforms, place Key in a strong position to develop long-lasting and meaningful relationships with our current and prospective clients. Our goal is to help our clients move forward on their financial journeys and to be by their sides along the way. Summary of operations • Net income attributable to Key of $283 million in 2024, compared to $202 million in 2023, an increase of 40.1%, largely driven by favorable rates on deposits and lower FDIC special assessment charges • Taxable-equivalent net interest income increased in 2024 by $67 million, or 3.0%, from the prior year, due to favorable rates on deposits • Average loans and leases decreased in 2024 by $3.0 billion, or 7.3%, from the prior year, driven by broad-based declines across all loan categories • Average deposits increased in 2024 by $3.1 billion, or 3.7%, from the prior year, driven by growth in retail deposits, particularly in money market deposit accounts and certificates of deposit 60 Table of contents • Provision for credit losses increased $15 million in 2024 compared to the prior year, driven by higher net charge-offs, partly offset by a reserve release due to changes in the portfolio and economic conditions • Noninterest income decreased in 2024 by $12 million, or 1.3%, driven by decreases in cards and payments income and service charges on deposit accounts • Noninterest expense decreased in 2024 by $67 million, or 2.4%, primarily reflective of lower FDIC special assessment charges Commercial Bank Segment imperatives • Solve complex client needs through a differentiated product set of banking and capital markets capabilities • Drive targeted scale through distinct product capabilities delivered to a broad set of clients • Utilize industry expertise and broad capabilities to build relationships with narrowly targeted client sets 61 Table of contents Market and business overview Building relationships and delivering complex solutions for middle market clients requires a distinctive operating model that understands their business and can provide a broad set of product capabilities. As competition for these clients intensifies, we have positioned the business to maintain and grow our competitive advantage by building targeted scale in businesses and client segments. Strong market share in businesses such as real estate loan servicing and equipment finance highlights our ability to successfully meet customer needs through targeted scale in distinct product capabilities. Clients expect us to understand every aspect of their business. Our seven industry verticals are aligned to drive targeted scale in segments where we have a breadth of industry expertise. Our business model is positioned to meet our client needs because our focus is not on being a universal bank, but rather being the right bank for our clients. Summary of operations • Net income attributable to Key of $1.1 billion in 2024, compared to $885 million in 2023, an increase of 23.3%, largely driven by an increase in investment banking and debt placement fees and commercial mortgage servicing income, along with lower FDIC assessment charges • Taxable equivalent net interest income decreased in 2024 by $61 million, or 3.3%, from the prior year, primarily driven by a reduction in loan balances • Average loan and lease balances decreased $7.3 billion in 2024, or 9.6%, driven by a decline in commercial and industrial loans • Average deposit balances increased $3.0 billion in 2024, or 5.4%, driven by our focus on growing deposits across our commercial businesses • Provision for credit losses decreased $152 million in 2024 compared to the prior year, resulting from reserve releases due to changes in the portfolio and economic conditions, partially offset by higher net charge-offs • Noninterest income increased $198 million in 2024, or 13.8%, from the prior year, driven by growth in investment banking and debt placement fees and commercial mortgage servicing income • Noninterest expense increased by $28 million in 2024, or 1.6%, from the prior year, primarily due to increases in incentive compensation and other personnel expenses, partially offset by decreases in FDIC special assessment charges and operating lease expenses 62 Table of contents Financial Condition Loans and loans held for sale Figure 7. Breakdown of Loans as of December 31, 2024 (a) Other consumer loans include Consumer loans and Credit cards. See Note 4 (“Loan Portfolio”) Item 8. Financial Statements of this report. Figure 8 shows the composition of our loan portfolio at December 31 for each of the past two years. Figure 8. Composition of Loans 2024 2023 December 31, Dollars in millions Amount Percent of Total Amount Percent of Total COMMERCIAL Commercial and industrial (a) $ 52,909 50.7 % $ 55,815 49.6 % Commercial real estate: Commercial mortgage 13,310 12.8 15,187 13.5 Construction 2,936 2.8 3,066 2.7 Total commercial real estate loans 16,246 15.6 18,253 16.2 Commercial lease financing (b) 2,736 2.6 3,523 3.1 Total commercial loans 71,891 68.9 77,591 68.9 CONSUMER Real estate — residential mortgage 19,886 19.1 20,958 18.6 Home equity loans 6,358 6.1 7,139 6.4 Other consumer loans 5,167 5.0 5,916 5.2 Credit cards 958 0.9 1,002 0.9 Total consumer loans 32,369 31.1 35,015 31.1 Total loans (c) $ 104,260 100.0 % $ 112,606 100.0 % (a) Loan balances include $212 million and $207 million, of commercial credit card balances at December 31, 2024, and December 31, 2023, respectively. (b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $3 million and $7 million at December 31, 2024, and December 31, 2023, respectively. Principal reductions are based on the cash payments received from these related receivables. Additional information pertaining to this secured borrowing is included in Note 20 (“Long-Term Debt”). (c) Total loans exclude loans of $257 million at December 31, 2024, and $339 million at December 31, 2023, related to the discontinued operations of the education lending business. 63 Table of contents At December 31, 2024, total loans outstanding from continuing operations were $104.3 billion, compared to $112.6 billion at the end of 2023. For more information on balance sheet carrying value, see Note 1 (“Summary of Significant Accounting Policies”) under the headings “Loans” and “Loans Held for Sale.” Commercial loan portfolio Commercial loans outstanding were $71.9 billion at December 31, 2024, a decrease of $5.7 billion, or 7.3%, compared to December 31, 2023, primarily reflecting declines in commercial and industrial loans and commercial mortgage real estate loans. Figure 9 provides our commercial loan portfolio by industry classification as of December 31, 2024, and December 31, 2023. Figure 9. Commercial Loans by Industry December 31, 2024 Commercial and industrial Commercial real estate Commercial lease financing Total commercial loans Percent of total Dollars in millions Industry classification: Agriculture $ 875 $ 99 $ 80 $ 1,054 1.5 % Automotive 2,173 673 2 2,848 4.0 Business services 2,899 262 81 3,242 4.5 Commercial real estate 7,799 11,909 3 19,711 27.4 Construction materials and contractors 1,839 258 203 2,300 3.2 Consumer goods 3,556 533 190 4,279 5.9 Consumer services 4,127 616 328 5,071 7.1 Equipment 1,740 159 137 2,036 2.8 Finance 10,103 99 209 10,411 14.5 Healthcare 2,707 1,204 210 4,121 5.7 Materials and extraction 2,135 196 134 2,465 3.4 Oil and gas 1,950 28 10 1,988 2.8 Public exposure 1,961 7 387 2,355 3.3 Technology, media, and telecom 521 10 44 575 .8 Transportation 849 127 291 1,267 1.8 Utilities 7,279 6 422 7,707 10.7 Other 396 60 5 461 .6 Total $ 52,909 $ 16,246 $ 2,736 $ 71,891 100.0 % December 31, 2023 Commercial and industrial Commercial real estate Commercial lease financing Total commercial loans Percent of total Dollars in millions Industry classification: Agriculture $ 925 $ 114 $ 74 $ 1,113 1.4 % Automotive 2,153 833 4 2,990 3.9 Business services 3,387 243 112 3,742 4.8 Commercial real estate 8,229 13,113 8 21,350 27.5 Construction materials and contractors 2,311 292 265 2,868 3.7 Consumer goods 3,851 622 268 4,741 6.1 Consumer services 4,568 774 327 5,669 7.3 Equipment 2,405 171 168 2,744 3.5 Finance 8,908 104 284 9,296 12.0 Healthcare 3,222 1,456 303 4,981 6.4 Materials and extraction 2,402 304 152 2,858 3.7 Oil and gas 2,212 37 12 2,261 2.9 Public exposure 2,241 8 513 2,762 3.6 Technology, media, and telecom 807 11 78 896 1.2 Transportation 988 97 466 1,551 2.0 Utilities 6,418 6 459 6,883 8.9 Other 788 68 30 886 1.1 Total $ 55,815 $ 18,253 $ 3,523 $ 77,591 100.0 % Commercial and industrial . Commercial and industrial loans are the largest component of our loan portfolio, representing 51% of our total loan portfolio at December 31, 2024, and 50% at December 31, 2023. This portfolio is approximately 89% variable rate and consists of loans primarily to large corporate, middle market, and small business clients. Commercial and industrial loans totaled $52.9 billion at December 31, 2024, a decrease of $2.9 billion, or 5.2%, compared to December 31, 2023 . The decrease was broad-based and spread across most industry categories, reflecting our planned balance sheet optimization efforts. 64 Table of contents Commercial real estate loans . Our commercial real estate portfolio includes project loans primarily focused in market-rate and affordable multi-family housing loans, owner-occupied commercial and industrial operating company buildings, and community center grocer-anchored retail centers. These three commercial real estate segments make up 75% of our commercial real estate portfolio. Our non-owner-occupied portfolio is focused on operators of commercial real estate who not only utilize our loan products, but also our broader industry-focused products and services and provide consistent pipelines into our agency, CMBS, and other long-term market take out products. This focus ensures our relationship clients foster and build portfolios with stable, recurring cash flows, with adequate, balanced cash reserves to support our balance sheet exposures through the economic cycle. At December 31, 2024, commercial real estate loans totaled $16.2 billion, which includes $13.3 billion of mortgage loans and $2.9 billion of construction loans. Compared to December 31, 2023, this portfolio decreased $2.0 billion or 11.0%, driven mainly by decreases in nonowner-occupied. Since the global financial crisis in 2008, we have limited our construction business and reduced our overall construction loans from 42% to 18% of commercial real estate loans as of December 31, 2024. Construction loans provide a stream of funding for properties not fully leased at origination to support debt service payments over the term of the contract or project. As of December 31, 2024, 82% of our construction portfolio are multi-family project loans. Our office exposure only represents 5% of commercial real estate loans at period end. As shown in Figure 10, our commercial real estate loan portfolio includes various property types and geographic locations of the underlying collateral. These loans include commercial mortgage and construction loans in both Consumer Bank and Commercial Bank. 65 Table of contents Figure 10. Commercial Real Estate Loans Geographic Region Dollars in millions West Southwest Central Midwest Southeast Northeast National Total Percent of Total Construction Commercial Mortgage December 31, 2024 Nonowner-occupied: Data Center $ — $ — $ — $ 98 $ 54 $ — $ — $ 152 .9 % $ — $ 152 Diversified 1 — — 3 — 13 118 135 .8 — 135 Industrial 44 1 95 103 214 258 18 733 4.5 54 679 Land & Residential 10 7 3 7 — 21 — 48 .3 28 20 Lodging 48 — 12 14 46 55 59 234 1.4 — 234 Medical Office 35 43 42 — 37 97 17 271 1.7 — 271 Multifamily 1,303 485 1,201 1,204 2,325 1,336 156 8,010 49.3 2,405 5,605 Office 152 1 129 77 134 232 13 738 4.5 — 738 Retail 152 6 81 172 97 293 79 880 5.4 43 837 Self Storage 44 — 44 8 222 18 24 360 2.2 14 346 Senior Housing 172 39 97 85 54 142 4 593 3.7 154 439 Skilled Nursing — — — — 132 170 90 392 2.4 — 392 Student Housing 41 — 13 63 123 — — 240 1.5 50 190 Other 1 10 7 112 40 48 — 218 1.3 — 218 Total nonowner-occupied 2,003 592 1,724 1,946 3,478 2,683 578 13,004 80.0 2,748 10,256 Owner-occupied 1,078 — 330 601 182 1,051 — 3,242 20.0 188 3,054 Total $ 3,081 $ 592 $ 2,054 $ 2,547 $ 3,660 $ 3,734 $ 578 $ 16,246 100.0 % $ 2,936 $ 13,310 Nonowner-occupied: Nonperforming loans $ 5 $ — $ 64 $ 80 $ 81 $ 13 $ — $ 243 N/M $ — $ 243 Accruing loans past due 90 days or more 10 — 2 1 — 7 — 20 N/M 4 16 Accruing loans past due 30 through 89 days 1 — — 3 19 9 — 32 N/M — 32 December 31, 2023 Nonowner-occupied: Data Center $ — $ — $ — $ — $ — $ — $ — $ — — % $ — $ — Diversified 3 — — 3 — 16 164 186 1.0 — 186 Industrial 58 24 80 110 230 280 20 802 4.4 168 634 Land & Residential 5 3 3 5 3 21 — 40 .2 18 22 Lodging 48 — 3 4 46 66 55 222 1.2 5 217 Medical Office 37 — 42 1 21 97 75 273 1.5 27 246 Multifamily 1,237 552 1,271 1,272 2,707 1,370 444 8,853 48.5 2,389 6,464 Office 142 — 153 76 118 285 50 824 4.5 — 824 Retail 213 6 84 183 102 297 213 1,098 6.0 75 1,023 Self Storage 62 — 45 15 72 32 171 397 2.2 4 393 Senior Housing 124 22 143 88 65 120 213 775 4.2 126 649 Skilled Nursing — — — 66 — 202 215 483 2.6 — 483 Student Housing — — — 27 158 — — 185 1.0 59 126 Other 1 12 8 35 37 67 160 320 1.8 — 320 Total nonowner-occupied 1,930 619 1,832 1,885 3,559 2,853 1,780 14,458 79.2 2,871 11,587 Owner-occupied 1,141 1 414 720 167 1,352 — 3,795 20.8 195 3,600 Total $ 3,071 $ 620 $ 2,246 $ 2,605 $ 3,726 $ 4,205 $ 1,780 $ 18,253 100.0 % $ 3,066 $ 15,187 Nonperforming loans $ 1 $ — $ 46 $ 1 $ 9 $ 5 $ 38 $ 100 N/M $ — $ 100 Accruing loans past due 90 days or more 1 — — 6 — 3 — 10 N/M — 10 Accruing loans past due 30 through 89 days 3 — 12 — 7 7 — 29 N/M — 29 West – Alaska, California, Hawaii, Idaho, Montana, Oregon, Washington, and Wyoming Southwest – Arizona, Nevada, and New Mexico Central – Arkansas, Colorado, Oklahoma, Texas, and Utah Midwest – Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin Southeast – Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Washington, D.C., and West Virginia Northeast – Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont National – Accounts in three or more regions Consumer loan portfolio Consumer loans outstanding at December 31, 2024, totaled $32.4 billion, a decrease of $2.6 billion, or 7.6%, from one year ago . The decrease was driven by declines across all consumer loan categories and reflect the higher interest rate environment and our focus on originating salable loans. The residential mortgage portfolio is comprised of loans originated by our Consumer Bank and is the largest segment of our consumer loan portfolio as of December 31, 2024, representing approximately 61% of consumer loans. This is followed by our home equity portfolio comprising approximately 20% of consumer loans outstanding at year end. 66 Table of contents We held the first lien position for approximately 65% of the home equity portfolio at December 31, 2024, and 64% at December 31, 2023. For loans with real estate collateral, we track borrower performance monthly. Regardless of the lien position, credit metrics are refreshed quarterly, including recent FICO scores as well as updated loan-to-value ratios. This information is used in establishing the ALLL. Our methodology is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses”. Figure 11 presents our consumer loans by geography. Figure 11. Consumer Loans by State Dollars in millions Real estate — residential mortgage Home equity loans Consumer direct loans Credit cards Total December 31, 2024 Washington $ 4,312 $ 929 $ 214 $ 85 $ 5,540 Ohio 2,662 895 111 197 3,865 New York 723 1,756 737 330 3,546 Colorado 2,891 258 131 30 3,310 California 2,191 12 442 3 2,648 Oregon 1,195 532 92 40 1,859 Pennsylvania 403 449 333 60 1,245 Florida 733 41 384 13 1,171 Utah 805 232 56 18 1,111 Connecticut 684 223 105 28 1,040 Other 3,287 1,031 2,562 154 7,034 Total $ 19,886 $ 6,358 $ 5,167 $ 958 $ 32,369 December 31, 2023 Washington $ 4,520 $ 1,020 $ 227 $ 88 $ 5,855 Ohio 2,704 1,029 251 203 4,187 New York 805 1,993 775 347 3,920 Colorado 3,001 277 149 32 3,459 California 2,294 14 500 3 2,811 Oregon 1,269 585 108 43 2,005 Pennsylvania 445 517 379 63 1,404 Florida 782 42 416 14 1,254 Utah 851 252 64 18 1,185 Connecticut 765 255 113 29 1,162 Other 3,522 1,155 2,934 162 7,773 Total $ 20,958 $ 7,139 $ 5,916 $ 1,002 $ 35,015 67 Table of contents Loan sales As shown in Figure 12, during 2024, we sold $8.2 billion of our loans . Sales of loans classified as held for sale generated net gains of $120 million during 2024. Figure 12 summarizes our loan sales during 2024 and 2023. Figure 12. Loans Sold (Including Loans Held for Sale) Dollars in millions Commercial Commercial Real Estate Commercial Lease Financing Residential Real Estate Total 2024 Fourth quarter $ 150 $ 2,584 $ — $ 342 $ 3,076 Third quarter 60 1,406 90 393 1,949 Second quarter 56 860 61 312 1,289 First quarter 86 1,554 85 209 1,934 Total $ 352 $ 6,404 $ 236 $ 1,256 $ 8,248 2023 Fourth quarter $ 34 $ 1,735 $ 21 $ 340 $ 2,130 Third quarter 85 2,861 49 345 3,340 Second quarter 118 1,431 28 283 1,860 First quarter 125 1,121 164 135 1,545 Total $ 362 $ 7,148 $ 262 $ 1,103 $ 8,875 Figure 13 shows loans that are either administered or serviced by us but not recorded on the balance sheet; this includes loans that were sold. Figure 13. Loans Administered or Serviced December 31, Dollars in millions 2024 2023 2022 Commercial real estate loans $ 557,633 $ 499,449 $ 488,478 Residential mortgage 11,344 11,193 11,026 Education loans 189 248 312 Commercial lease financing 1,735 1,946 1,646 Commercial loans 603 667 723 Consumer direct 328 408 509 Consumer indirect 319 792 1,536 Total $ 572,151 $ 514,703 $ 504,230 In the event of default by a borrower, we are subject to recourse with respect to approximately $7.8 billion of the $572.2 billion of loans administered or serviced at December 31, 2024. These are primarily associated with commercial real estate loans administered or serviced. Additional information about this recourse arrangement is included in Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Recourse agreement with FNMA.” We derive income from several sources when retaining the right to administer or service loans that are sold. We earn noninterest income (recorded as “Consumer mortgage income” and “Commercial mortgage servicing fees”) from fees for servicing or administering loans. This fee income is reduced by the amortization of related servicing assets. In addition, we earn interest income from investing funds generated by escrow deposits collected in connection with the servicing loans. Additional information about our mortgage servicing assets is included in Note 9 (“Mortgage Servicing Assets”). 68 Table of contents Maturities and sensitivity of certain loans to changes in interest rates Figure 14 shows the remaining maturities of our loan portfolio and the sensitivity of certain loans to changes in interest rates as of December 31, 2024. Figure 14. Remaining Maturities and Sensitivity of Certain Loans to Changes in Interest Rates (a) December 31, 2024 Dollars in millions Within One Year One - Five Years Five - Fifteen Years Over Fifteen Years Total Commercial Commercial and industrial $ 13,360 $ 35,689 $ 3,733 $ 127 $ 52,909 Commercial Mortgage 6,483 4,322 2,176 329 13,310 Real estate — construction 1,829 750 165 192 2,936 Commercial lease financing 181 1,586 969 — 2,736 Total commercial loans $ 21,853 $ 42,347 $ 7,043 $ 648 $ 71,891 Consumer Real estate - residential mortgage $ 183 $ 36 $ 678 $ 18,989 $ 19,886 Home equity loans 99 205 1,798 4,256 6,358 Other consumer loans 505 807 2,040 1,815 5,167 Credit Cards 958 — — — 958 Total consumer loans 1,745 1,048 4,516 25,060 32,369 Total loans $ 23,598 $ 43,395 $ 11,559 $ 25,708 $ 104,260 Loans with floating or adjustable interest rates (b) $ 37,592 $ 2,991 $ 12,385 $ 52,968 Loans with predetermined interest rates (c) 5,803 8,568 13,323 27,694 Total $ 43,395 $ 11,559 $ 25,708 $ 80,662 (a) Accrued interest of $456 million at December 31, 2024, is presented in "Accrued income and other assets" on the Consolidated Balance Sheets and is excluded from the amortized cost basis disclosed in this table. (b) Floating and adjustable rates vary in relation to other interest rates (such as the base lending rate) or a variable index that may change during the term of the loan. (c) Predetermined interest rates either are fixed or may change during the term of the loan according to a specific formula or schedule. Securities Our securities portfolio is constructed to store liquidity and help manage interest rate risk, including holding securities used to accommodate pledging requirements. Our securities portfolio totaled $45.1 billion at December 31, 2024, compared to $45.8 billion at December 31, 2023. Available-for-sale securities were $37.7 billion at December 31, 2024, compared to $37.2 billion at December 31, 2023. Held-to-maturity securities were $7.4 billion at December 31, 2024, compared to $8.6 billion at December 31, 2023. As shown in Figure 15, all of our mortgage-backed securities, which include both securities available-for-sale and held-to-maturity securities, are issued by government-sponsored enterprises or GNMA, and are traded in liquid secondary markets. These securities are recorded on the balance sheet at fair value for the available-for-sale portfolio and at cost for the held-to-maturity portfolio. For more information about these securities, see Note 6 (“Fair Value Measurements”) under the heading “Qualitative Disclosures of Valuation Techniques,” and Note 7 (“Securities”). Figure 15. Mortgage-Backed Securities by Issuer December 31, Dollars in millions 2024 2023 FHLMC & FNMA $ 14,291 $ 24,302 GNMA 21,573 11,665 Total (a) $ 35,864 $ 35,967 (a) Includes securities held in the available-for-sale and held-to-maturity portfolios. 69 Table of contents Securities available for sale The majority of our securities available-for-sale portfolio consists of federal agency mortgage-backed securities and CMOs. CMOs are debt securities secured by a pool of mortgages or mortgage-backed securities. In September 2024, we initiated a strategic repositioning of our securities available for sale portfolio by selling approximately $7.0 billion in market value of low-yielding mortgage-backed securities. The investment securities that were sold had a weighted average book yield of approximately 2.3% and an average duration of approximately six years. Reinvestment of the proceeds from the sale was completed in October 2024, with the new securities having an average book yield of approximately 4.95% and an average duration of approximately four years. During the third quarter of 2024, along with our customary sale of short-dated U.S. Treasuries set to mature within the quarter, we also sold approximately $3 billion in U.S. Treasuries yielding 50 basis points that were set to mature in the fourth quarter of 2024. In December 2024, we completed the strategic repositioning of our securities available-for-sale portfolio by selling an additional $3.0 billion of low-yielding investment securities and terminating approximately $3.0 billion of fair value hedges. The investment securities sold had a weighted average book yield of approximately 1.5% and an average duration of approximately eight years. Reinvestment of the proceeds from the sale was completed in December 2024, with the new securities having an average book yield of 5.5% and an average duration of approximately four years. Figure 16 shows the composition, TE yields, and remaining maturities of our securities available for sale. For more information about these securities, including gross unrealized gains and losses by type of security and securities pledged, see Note 7 (“Securities”). 70 Table of contents Figure 16. Securities Available for Sale Dollars in millions U.S. Treasury, Agencies, and Corporations Agency Residential Collateralized Mortgage Obligations (a) Agency Residential Mortgage-backed Securities (a) Agency Commercial Mortgage-backed Securities (a) Total Weighted-Average Yield (b) December 31, 2024 Remaining maturity: One year or less $ 2,585 $ 4 $ 6 $ 580 $ 3,175 3.93 % After one through five years 6,212 1,140 2,931 612 10,895 3.66 After five through ten years 40 6,073 6,934 2,358 15,405 3.29 After ten years 67 2,007 5,298 860 8,232 3.49 Fair value $ 8,904 $ 9,224 $ 15,169 $ 4,410 $ 37,707 Amortized cost (b) 8,928 11,409 16,038 4,927 41,302 3.48 % Weighted-average yield (c) 4.21 % 1.98 % 4.32 % 2.91 % 3.48 % — Weighted-average maturity 1.7 years 8.3 years 9.9 years 6.7 years 7.3 years — December 31, 2023 Fair value $ 9,026 $ 15,478 $ 3,589 $ 9,092 $ 37,185 — % Amortized cost 9,300 18,911 4,189 10,295 42,695 1.79 (a) Maturity is based upon expected average lives rather than contractual terms. (b) Excluded from the amortized cost of securities available for sale are basis adjustments for securities designated in active fair value hedges. Basis adjustments totaled $(6) million and $140 million as of December 31, 2024 and December 31, 2023, respectively. The securities being hedged are primarily U.S Treasuries, Agency RMBS, and Agency CMBS. (c) Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year. Held-to-maturity securities The majority of our held-to-maturity portfolio consists of federal agency CMOs and mortgage-backed securities. The portfolio is also comprised of asset-backed securities and foreign bonds. Figure 17 shows the composition, yields, and remaining maturities of these securities. Figure 17. Held-to-Maturity Securities Dollars in millions Agency Residential Collateralized Mortgage Obligations (a) Agency Residential Mortgage-backed Securities (a) Agency Commercial Mortgage-backed Securities (a) Asset-backed securities (a) Other Securities Total Weighted-Average Yield (b) December 31, 2024 Remaining maturity: One year or less $ 35 $ — $ 41 $ 2 $ 7 $ 85 2.54 % After one through five years 1,160 101 1,221 304 19 2,805 3.05 After five through ten years 2,429 7 236 2 — 2,674 3.59 After ten years 953 43 835 — — 1,831 3.79 Amortized cost $ 4,577 $ 151 $ 2,333 $ 308 $ 26 $ 7,395 3.43 % Fair value 4,248 134 2,130 300 25 6,837 — Weighted-average yield (b) 3.78 % 2.82 % 2.94 % 2.09 % 4.17 % 3.43 % — Weighted-average maturity 7.2 years 7.1 years 8.3 years 1.4 years 1.9 years 7.3 years — December 31, 2023 Amortized cost $ 5,170 $ 165 $ 2,473 $ 738 $ 29 $ 8,575 3.49 % Fair value 4,896 152 2,270 709 29 8,056 — (a) Maturity is based upon expected average lives rather than contractual terms. (b) Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year. 71 Table of contents Deposits and other sources of funds Figure 18. Breakdown of Deposits at December 31, 2024 The following presents the breakdown of our deposits by product for the noted periods. December 31, Dollars in billions 2024 2023 Money market deposits $ 41.0 $ 37.0 Demand deposits 57.6 57.7 Savings deposits 4.6 5.4 Time deposits 17.0 14.8 Noninterest bearing deposits 29.6 30.7 Total $ 149.8 $ 145.6 Our highly diversified deposit base is our primary source of funding. At December 31, 2024, our deposits totaled $149.8 billion, an increase of $4.2 billion, compared to December 31, 2023. The increase reflects our durable relationship-based business model, in addition to changing client behavior as a result of higher interest rates. Uninsured deposits totaled $64.4 billion and $61.5 billion at December 31, 2024 and December 31, 2023, respectively. Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit or similar state deposit insurance regimes and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regimes. Figure 19 presents estimated uninsured deposits for the noted periods which reflect amounts disclosed in KeyBank’s Call Report adjusted for intercompany deposits, which are not customer facing and are eliminated in consolidation, and accrued interest. 72 Table of contents Figure 19. Estimated Uninsured Deposits December 31, Dollars in billions 2024 2023 Uninsured deposits (a) $ 64.4 $ 61.5 Total deposits 149.8 145.6 Uninsured % of Deposits 43 % 42 % (a) Intercompany deposits and accrued interest excluded from uninsured deposits $ 12.4 $ 9.5 As of December 31, 2024 and December 31, 2023, approximately $12.3 billion and $13.1 billion, respectively, of uninsured deposits were collateralized by government-backed securities. Figure 20 presents the maturity distribution of estimated uninsured time deposits. Figure 20. Maturity Distribution of Uninsured Time Deposit Amounts December 31, Dollars in millions 2024 2023 Remaining maturity: Three months or less $ 575 $ 480 After three through six months 582 324 After six through twelve months 220 353 After twelve months 77 52 Total $ 1,454 $ 1,209 Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $14.2 billion at December 31, 2024, compared to $22.6 billion at December 31, 2023. The decrease reflects our balance sheet optimization efforts, which reduced our need for wholesale borrowings. For more information regarding our wholesale funds, see Item 7. Management’s Discussion & Analysis of Financial Condition & Results of Operations under the heading “Risk Management - Liquidity risk management” of this report. Capital Our capital management objective is to maintain capital levels consistent with our risk appetite and of a sufficient amount to operate under a wide range of economic conditions. Our current capital levels position us well to execute against our capital priorities including supporting organic growth and paying dividends. The following sections discuss certain ways we have deployed our capital. For further information, see the Consolidated Statements of Changes in Equity and Note 24 (“Shareholders' Equity”). (a) Common Share repurchases were suspended during the second quarter of 2020 in response to the COVID-19 pandemic and resumed in the first quarter of 2021. Dividends Consistent with our capital plans, the Board declared a quarterly dividend of $.205 per Common Share for each of the four quarters of 2024. These quarterly dividend payments brought our annual dividend to $.82 per Common Share for 2024. Common Shares outstanding Our Common Shares are traded on the NYSE under the symbol KEY with 27,154 holders of record at December 31, 2024. Our book value per Common Share was $14.21 based on 1.1 billion shares outstanding at 73 Table of contents December 31, 2024, compared to $13.02 based on 936.6 million shares outstanding at December 31, 2023. At December 31, 2024, our tangible book value per Common Share was $11.70, compared to $10.02 at December 31, 2023. Figure 21 shows activities that caused the change in our outstanding Common Shares over the past two years. Figure 21. Changes in Common Shares Outstanding 2024 Quarters In thousands 2024 Fourth Third Second First 2023 Shares outstanding at beginning of period 936,564 991,251 943,200 942,776 936,564 933,325 Open market share repurchases — — — — — (2,550) Shares issued under employee compensation plans (net of cancellations and returns) 7,351 493 222 424 6,212 5,789 Shares issued under Scotiabank investment agreement 162,871 115,042 47,829 — — — Shares outstanding at end of period 1,106,786 1,106,786 991,251 943,200 942,776 936,564 During 2024, Common Shares outstanding increased by 170.2 million shares, primarily driven by issuances under the Scotiabank investment agreement. For more information on share activity, see Note 24 (“Shareholders' Equity”). At December 31, 2024, we had 149.9 million treasury shares, compared to 320.1 million treasury shares at December 31, 2023. The decrease in treasury shares during the year was primarily attributable to the issuance of 162.9 million shares to Scotiabank in connection with the strategic minority investment. Going forward, we expect to reissue treasury shares as needed in connection with stock-based compensation awards and for other corporate purposes. Capital adequacy Capital adequacy is an important indicator of financial stability and performance. All of our capital ratios remained in excess of regulatory requirements at December 31, 2024. Our capital and liquidity levels are intended to position us to weather an adverse operating environment while continuing to serve our clients’ needs, as well as to meet the Regulatory Capital Rules described in the “Supervision and regulation” section of Item 1 of this report. Our shareholders’ equity to assets ratio was 9.7% at December 31, 2024, compared to 7.8% at December 31, 2023. Our tangible common equity to tangible assets ratio was 7.0% at December 31, 2024, compared to 5.1% at December 31, 2023. The minimum capital and leverage ratios under the Regulatory Capital Rules together with the estimated ratios of KeyCorp at December 31, 2024, calculated on a fully phased-in basis, are set forth under the heading “Basel III” in the “Supervision and Regulation” section in Item 1 of this report. Figure 22 represents the details of our regulatory capital positions at December 31, 2024, and December 31, 2023, under the Regulatory Capital Rules. Information regarding the regulatory capital ratios of KeyCorp’s banking subsidiaries is presented in Note 24 (“Shareholders' Equity”). 74 Table of contents Figure 22. Capital Components and Risk-Weighted Assets December 31, Dollars in millions 2024 2023 COMMON EQUITY TIER 1 Key shareholders’ equity (GAAP) $ 18,176 $ 14,637 Less: Preferred Stock (a) 2,446 2,446 Add: CECL phase-in (b) 59 118 Common Equity Tier 1 capital before adjustments and deductions 15,789 12,309 Less: Goodwill, net of deferred taxes 2,574 2,594 Intangible assets, net of deferred taxes 24 49 Deferred tax assets 172 1 Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes (2,729) (4,296) Accumulated gains (losses) on cash flow hedges, net of deferred taxes (438) (656) Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes (303) (277) Total Common Equity Tier 1 capital 16,489 14,894 TIER 1 CAPITAL Common Equity Tier 1 16,489 14,894 Additional Tier 1 capital instruments and related surplus 2,445 2,446 Less: Deductions — — Total Tier 1 capital 18,934 17,340 TIER 2 CAPITAL Tier 2 capital instruments and related surplus 1,767 2,020 Allowance for losses on loans and liability for losses on lending-related commitments (c) 1,635 1,668 Less: Deductions — — Total Tier 2 capital 3,402 3,688 Total risk-based capital $ 22,336 $ 21,028 RISK-WEIGHTED ASSETS Risk-weighted assets on balance sheet $ 105,047 $ 115,861 Risk-weighted off-balance sheet exposure 31,883 31,555 Market risk-equivalent assets 1,366 1,159 Gross risk-weighted assets 138,296 148,575 Less: Excess allowance for loan and lease losses — — Net risk-weighted assets $ 138,296 $ 148,575 AVERAGE QUARTERLY TOTAL ASSETS $ 188,855 $ 191,948 CAPITAL RATIOS Tier 1 risk-based capital 13.69 % 11.67 % Total risk-based capital 16.15 14.15 Leverage (d) 10.03 9.03 Common Equity Tier 1 11.92 10.02 (a) Net of capital surplus. (b) Amount reflects our decision to adopt the CECL transitional provision. (c) The ALLL included in Tier 2 capital is limited by regulation to 1.25% of the institution’s standardized total risk-weighted assets (excluding its standardized market risk-weighted assets). The ALLL includes $13 million and $16 million of allowance classified as “discontinued assets” on the balance sheet at December 31, 2024, and December 31, 2023, respectively. (d) This ratio is Tier 1 capital divided by average quarterly total assets as defined by the Federal Reserve less: (i) goodwill, (ii) the disallowed intangible and deferred tax assets, and (iii) other deductions from assets for leverage capital purposes. Off-Balance Sheet Arrangements Off-balance sheet arrangements We are party to various types of off-balance sheet arrangements, which could lead to contingent liabilities or risks of loss that are not reflected on the balance sheet. Variable interest entities In accordance with the applicable accounting guidance for consolidations, we consolidate a VIE if we have: (i) a variable interest in the entity; (ii) the power to direct activities of the VIE that most significantly impact the entity’s economic performance; and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary). Additional information regarding the nature of VIEs and our involvement with them is included in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Principles of Consolidation and Basis of Presentation” and in Note 13 (“Variable Interest Entities”). 75 Table of contents Commitments to extend credit or funding Loan commitments provide for financing on predetermined terms as long as the client continues to meet specified criteria. These commitments generally carry variable rates of interest and have fixed expiration dates or other termination clauses. We typically charge a fee for our loan commitments. Since a commitment may expire without resulting in a loan or being fully utilized, the total amount of an outstanding commitment may significantly exceed any related cash outlay. Further information about our loan commitments at December 31, 2024, is presented in Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Commitments to Extend Credit or Funding.” Other off-balance sheet arrangements Other off-balance sheet arrangements include financial instruments that do not meet the definition of a guarantee in accordance with the applicable accounting guidance, and other relationships, such as liquidity support provided to asset-backed commercial paper conduits, indemnification agreements and intercompany guarantees. Information about such arrangements is provided in Note 22 under the heading “Other Off-Balance Sheet Risk.” Guarantees We are a guarantor in various agreements with third parties. As guarantor, we may be contingently liable to make payments to the guaranteed party based on changes in a specified interest rate, foreign exchange rate or other variable (including the occurrence or nonoccurrence of a specified event). These variables, known as underlyings, may be related to an asset or liability, or another entity’s failure to perform under a contract. Additional information regarding these types of arrangements is presented in Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Guarantees.” Risk Management Overview Like all financial services companies, we engage in business activities and assume the related risks. The most significant risks we face are credit, compliance, operational, liquidity, market, reputation, strategic, and model risks. Our risk management activities are shown in the following chart, and we manage such risks across the entire enterprise to maintain safety and soundness and maximize profitability. Certain of these risks are defined and discussed in greater detail in the remainder of this section. Federal banking regulators continue to emphasize with financial institutions the importance of relating capital management strategy to the level of risk at each institution. We believe our internal risk management processes help us achieve and maintain capital levels that are commensurate with our business activities and risks, and 76 Table of contents conform to regulatory expectations. The table below depicts our risk management hierarchy and associated responsibilities and activities of each group. 77 Table of contents Group Overview and Responsibilities Activities Board of Directors – Oversight capacity – Oversees that Key’s risks are managed in a manner that is effective and balanced – Fiduciary duty to Key’s shareholders – Understands Key's risk philosophy – Approves the risk appetite – Inquires about risk practices – Reviews the portfolio of risks – Compares the actual risks to the risk appetite – Is apprised of significant risks, both actual and emerging, and determines whether management is responding appropriately – Challenges management and promotes accountability Board of Directors Audit Committee (a) – Assists the Board in oversight of financial statement integrity, regulatory and legal requirements, independent auditors’ qualifications and independence, and the performance of the internal audit function and independent auditors – Assists the Board in oversight of financial reporting, legal matters, and fraud risk – Meets with management and approves significant policies relating to the risk areas overseen by the Audit Committee – Receives reports on enterprise risk – Meets bi-monthly – Convenes to discuss the content of our financial disclosures and quarterly earnings releases Board of Directors Risk Committee (a) – Assists the Board in oversight of strategies, policies, procedures, and practices relating to the assessment and management of enterprise-wide risk, including credit, market, liquidity, model, operational, compliance, reputation, and strategic risks – Assists the Board in overseeing risks related to capital adequacy, capital planning, and capital actions – Reviews and provides oversight of management’s activities related to the enterprise-wide risk management framework, which includes an annual review of the ERM Policy, including the Risk Appetite Statement, and management and ERM reports – Approves any material changes to the charter of the ERM Committee and significant policies relating to risk management, including corporate risk tolerances for major risk categories ERM Committee – Chaired by the Chief Executive Officer and comprising the Chief Risk Officer and other senior level executives – Manage risk and ensure that the corporate risk profile is managed in a manner consistent with our risk appetite – Oversees the ERM Program, which encompasses our risk philosophy, policy, framework, and governance structure for the management of risks across the entire company – Approves and manages the risk-adjusted capital framework we use to manage risks Disclosure Committee – Includes representatives from each of the Three Lines of Defense – Meets quarterly to review recent internal and external events to determine whether all appropriate disclosures have been made in reports filed with the SEC – Convenes quarterly to discuss the content of our 10-Q and 10-K Tier 2 Risk Governance Committees – Includes attendees from each of the Three Lines of Defense – The First Line of Defense is the line of business primarily responsible to accept, own, proactively identify, monitor, and manage risk – The Second Line of Defense comprises Risk Management representatives who provide independent, centralized oversight over all risk categories by aggregating, analyzing, and reporting risk information – Risk Review, our internal audit function, provides the Third Line of Defense. Its role is to provide independent assessment and testing of the effectiveness of, appropriateness of, and adherence to KeyCorp’s risk management policies, practices, and controls – Supports the ERM Committee by identifying early warning events and trends, escalating emerging risks, and discussing forward-looking assessments Internal Audit – Provide the KeyCorp Board and management with independent, risk-based, and objective assurance, advice, insight, and foresight. – Conducts objective examinations of evidence for the purpose of providing independent assessments to the Audit Committee, management, and outside parties on the adequacy and effectiveness of business processes, risk management activities, internal controls, and governance processes for KeyCorp. (a) The Audit and Risk Committees meet jointly, as appropriate, to discuss matters that relate to each committee’s responsibilities. Committee chairpersons routinely meet with management during interim months to plan agendas for upcoming meetings and to discuss emerging trends and events that have transpired since the preceding meeting. All members of the Board receive formal reports designed to keep them abreast of significant developments during the interim months. Market risk management Market risk is the risk that movements in market risk factors, including interest rates, foreign exchange rates, equity prices, commodity prices, credit spreads, and volatilities will reduce Key’s income and the value of its portfolios. These factors influence prospective yields, values, or prices associated with the instrument. We are exposed to market risk both in our trading and nontrading activities, which include asset and liability management activities. Our risk management activities are focused on ensuring that we properly identify, measure, and manage such risks across the entire enterprise to maintain safety and soundness, and to maximize profitability. Information regarding our fair value policies, procedures, and methodologies is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements” and Note 6 (“Fair Value Measurements”) in this report. 78 Table of contents Trading market risk Key incurs market risk as a result of trading activities that are used in support of client facilitation and hedging activities, principally within our investment banking and capital markets businesses. Key has exposures to a wide range of risk factors including interest rates, equity prices, foreign exchange rates, credit spreads, and commodity prices, as well as the associated implied volatilities and spreads. Our primary market risk exposures are a result of trading and hedging activities in the derivative and fixed income markets, including securitization exposures. At December 31, 2024, we did not have any re-securitization positions. We maintain modest trading inventories to facilitate customer flow, make markets in securities, and hedge certain risks including but not limited to credit risk and interest rate risk. The risks associated with these activities are mitigated in accordance with the Market Risk hedging policy. The majority of our positions are traded in active markets. Governance structure - Trading market risk Market risk management is an integral part of Key’s risk culture. The Risk Committee of our Board provides oversight of trading market risks. The ERM Committee and the Market Risk Committee regularly review and discuss market risk exposures and results of monitoring activities. Market risk policies and procedures have been defined and take into account our tolerance for risk and consideration for the business environment. The Market Risk Committee approves market risk policies and recommends our significant market risk policy to the ERM Committee, the KeyBank Board, and the Risk Committee of the Board for approval. MTRM, as the second line of defense, is an independent risk management function that partners with the lines of business to identify, measure, and monitor market risks throughout our company. MTRM is responsible for ensuring transparency of significant market risks, monitoring compliance with established limits, and escalating limit exceptions to appropriate senior management. The various business units and trading desks are responsible for ensuring that market risk exposures are well-managed and prudent. Market risk is monitored through various measures, such as VaR, and through routine stress testing, sensitivity, and scenario analyses. MTRM conducts stress tests for each position using historical worst case and standard shock scenarios. VaR, stressed VaR, and other analyses are prepared daily and distributed to appropriate management. Covered positions. We monitor the market risk of our covered positions as defined in the Market Risk Rule, which includes all of our trading positions as well as all foreign exchange and commodity positions, regardless of whether the position is in a trading account. Key’s covered positions may also include mortgage-backed and asset-backed securities that may be identified as securitization positions or re-securitization positions under the Market Risk Rule. MTRM as well as the LOB that trades securitization positions monitor the positions, the portfolio composition and the risks identified in this section on a daily basis consistent with the Market Risk policies and procedures. At December 31, 2024, covered positions did not include any re-securitization positions. Instruments that are used to hedge nontrading activities, such as bank-issued debt and loan portfolios, equity positions that are not actively traded, and securities financing activities, do not meet the definition of a covered position. MTRM is responsible for identifying our portfolios as either covered or non-covered. The Covered Position Working Group develops the final list of covered positions, and a summary is provided to the Market Risk Committee. Our significant portfolios of covered positions are detailed below. We analyze market risk by portfolios of covered positions and do not separately measure and monitor our portfolios by risk type. The descriptions below incorporate the respective risk types associated with each of these portfolios. • Fixed income includes those instruments associated with our capital markets business and the trading of securities as a dealer. These instruments may include positions in municipal bonds, bonds backed by the U.S. government, agency and corporate bonds, certain mortgage-backed and asset-backed securities, securities issued by the U.S. Treasury, money markets, and certain CMOs. The activities and instruments within the fixed income portfolio create exposures to interest rate and credit spread risks. • Interest rate derivatives include interest rate swaps, caps, and floors, which are transacted primarily to accommodate the needs of commercial loan clients. In addition, we enter into interest rate derivatives to offset or mitigate the interest rate risk related to the client positions. The activities within this portfolio create exposures to interest rate risk. VaR and stressed VaR. VaR is the estimate of the maximum amount of loss on an instrument or portfolio due to adverse market conditions during a given time interval within a stated confidence level. Stressed VaR is used to assess extreme conditions on market risk within our trading portfolios. MTRM calculates VaR and stressed VaR at 79 Table of contents various confidence levels and the results are closely monitored. VaR and stressed VaR results are also provided to our regulators and utilized in regulatory capital calculations. We use a historical simulation VaR model to measure the potential adverse effect of changes in interest rates, foreign exchange rates, equity prices, and credit spreads on the fair value of our covered positions and other non-covered positions. Historical moves in risk factors across various asset classes are incorporated in VaR metrics. Additional consideration is given to the risk factors to estimate the exposures that contain optionality features, such as options and cancellable provisions. VaR is calculated using daily observations over a one-year time horizon, and approximates a 95% confidence level. Statistically, this means that we would expect to incur losses greater than VaR, on average, five out of 100 trading days, or three to four times each quarter. We also calculate VaR and stressed VaR at a 99% confidence level. The VaR model is an effective tool in estimating ranges of possible gains and losses on our positions. However, there are limitations inherent in the VaR model since it uses historical results over a given time interval to estimate future performance. Historical results may not be indicative of future results, and changes in the market or composition of our portfolios could have a significant impact on the accuracy of the VaR model. We regularly review and enhance the modeling techniques, inputs, and assumptions used. Our market risk policy includes the independent validation of our VaR model by Key’s internal model validation group on an annual basis. The Model Risk Committee oversees the Model Validation Program, and results of validations are discussed with the ERM Committee. Actual losses for the total covered positions did not exceed aggregate daily VaR for any day during the quarters ended December 31, 2024, and December 31, 2023. MTRM backtests our VaR model on a daily basis to evaluate its predictive power. The test compares VaR model results at the 99% confidence level to daily held profit and loss. Results of back testing are provided to the Market Risk Committee. Backtesting exceptions occur when daily held profit and loss exceed VaR. We do not engage in correlation trading or utilize the internal model approach for measuring default and credit migration risk. Our net VaR approach incorporates diversification, but our VaR calculation does not include the impact of counterparty risk and our own credit spreads on derivatives. The aggregate VaR at the 99% confidence level with a one day holding period for all covered positions was $1.4 million at December 31, 2024, and $1.6 million at December 31, 2023. Figure 23 summarizes our VaR at the 99% confidence level with a one day holding period for significant portfolios of covered positions for the three months ended December 31, 2024, and December 31, 2023. Figure 23. VaR for Significant Portfolios of Covered Positions 2024 2023 Three months ended December 31, Three months ended December 31, Dollars in millions High Low Mean December 31, High Low Mean December 31, Trading account assets: Fixed income $ 1.3 $ .4 $ .9 $ .8 $ 1.3 $ .7 $ 1.1 $ 1.1 Derivatives: Interest rate $ .6 $ .4 $ .5 $ .5 $ .5 $ .3 $ .4 $ .4 Stressed VaR is calculated by running the portfolios through a predetermined stress period which is approved by the Market Risk Committee and is calculated at the 99% confidence level using the same model and assumptions used for general VaR. The aggregate stressed VaR for all covered positions was $5.2 million at December 31, 2024, and $4.0 million at December 31, 2023. Figure 24 summarizes our stressed VaR at the 99% confidence level with a one day holding period for significant portfolios of covered positions for the three months ended December 31, 2024, and December 31, 2023. The increase in stressed VaR is due to a change in the size and composition of our fixed income inventory. Figure 24. Stressed VaR for Significant Portfolios of Covered Positions 2024 2023 Three months ended December 31, Three months ended December 31, Dollars in millions High Low Mean December 31, High Low Mean December 31, Trading account assets: Fixed income $ 5.2 $ 1.3 $ 3.3 $ 4.8 $ 4.7 $ 1.9 $ 3.1 $ 3.6 Derivatives: Interest rate $ .4 $ .2 $ .3 $ .3 $ .4 $ .2 $ .3 $ .3 80 Table of contents Market risk is a component of our internal capital adequacy assessment. Our risk-weighted assets include a market risk-equivalent asset amount, which consists of a VaR component, stressed VaR component, a de minimis exposure amount, and a specific risk add-on including the securitization positions. The aggregate market value of the securitization positions as defined by the Market Risk Rule was $24 million at December 31, 2024, all of which were mortgage-backed security positions. Specific risk is the price risk of individual financial instruments, which is not accounted for by changes in broad market risk factors and is measured through a standardized approach. Market risk weighted assets, including the specific risk calculations, are run quarterly by MTRM in accordance with the Market Risk Rule, and approved by the Chief Market Risk Officer. Nontrading market risk Most of our nontrading market risk is derived from interest rate fluctuations and its impacts on our traditional loan and deposit products, as well as investments, hedging relationships, long-term debt, and certain short-term borrowings. Interest rate risk, which is inherent in the banking industry, is measured by the potential for fluctuations in net interest income and the EVE. Such fluctuations may result from changes in interest rates and differences in the repricing and maturity characteristics of interest-earning assets and interest-bearing liabilities. We manage the exposure to changes in net interest income and the EVE in accordance with our risk appetite and in accordance with the Board-approved ERM policy. Interest rate risk positions are influenced by a number of factors, including the balance sheet positioning that arises out of customer preferences for loan and deposit products, economic conditions, the competitive environment within our markets, changes in market interest rates that affect client activity, and our hedging, investing, funding, and capital positions. The primary components of interest rate risk exposure consist of reprice risk, yield curve risk, option risk, and basis risk. • “Reprice risk ” is the exposure to changes in the level of interest rates and occurs when the volume of interest-bearing liabilities and the volume of interest-earning assets they fund (e.g., deposits used to fund loans) do not mature or reprice at the same time. • “Yield curve risk” is the exposure to non-parallel changes in the slope of the yield curve (where the yield curve depicts the relationship between the yield on a particular type of security and its term to maturity) and occurs when interest-bearing liabilities and the interest-earning assets that they fund do not price or reprice to the same term point on the yield curve. • “Option risk” is the exposure to a customer or counterparty’s ability to take advantage of the interest rate environment and terminate or reprice one of our assets, liabilities, or off-balance sheet instruments prior to contractual maturity. Option risk occurs when exposures to customer and counterparty early withdrawals or prepayments are not mitigated with an offsetting position or appropriate compensation. • “Basis risk” is the exposure to asymmetrical changes in interest rate indexes and occurs when floating-rate assets and floating-rate liabilities reprice at the same time, but in response to different market factors or indexes. Governance structure - Nontrading market risk The management of nontrading market risk is centralized within Corporate Treasury. The Risk Committee of our Board provides oversight of nontrading market risk. The ERM Committee, the ALCO, and the Treasury Risk Oversight Committee (“TROC”) review reports on the interest rate risk exposures described above. In addition, the ALCO reviews reports on stress tests and sensitivity analyses related to interest rate risk. These committees have various responsibilities related to managing nontrading market risk, including recommending, approving, and monitoring strategies that maintain risk positions within approved tolerance ranges. The A/LM Policy provides the framework for the oversight and management of interest rate risk and is administered by the ALCO. MTRM, as the second line of defense, provides additional oversight. Net interest income simulation analysis. The primary tool we use to measure our interest rate risk is simulation analysis. For purposes of this analysis, we estimate our net interest income based on the current and projected composition of our on- and off-balance sheet positions, accounting for recent and anticipated trends in customer activity. The analysis also incorporates assumptions for the current and projected interest rate environments and balance sheet growth projections based on a most likely macroeconomic view. The modeling incorporates investment portfolio and swap portfolio balances consistent with management's desired interest rate risk positioning. The simulation model estimates the amount of net interest income at risk by simulating the change in net interest 81 Table of contents income that would occur if rates were to gradually increase or decrease from current levels over the next 12 months (subject to a floor on market interest rates at zero). Figure 25 presents the results of the simulation analysis at December 31, 2024, and December 31, 2023. At December 31, 2024, our simulated impact to changes in interest rates was relatively neutral. The exposure to declining rates has changed from (0.01)% as of December 31, 2023 to 0.15% as of December 31, 2024, as a result of the change in balance sheet mix and positioning. Tolerance levels for risk management require the development of remediation plans to maintain residual risk within tolerance if simulation modeling demonstrates that a gradual, parallel 200 basis point increase or 200 basis point decrease in interest rates over the next 12 months would adversely affect net interest income over the same period by more than 5.5%. Current modeled exposure is within Board-approved tolerances. If a tolerance level is breached and determined inconsistent with risk appetite, the development of a remediation plan is required to reduce exposure back to within tolerance. Figure 25. Simulated Change in Net Interest Income December 31, 2024 December 31, 2023 Basis point change assumption -200 200 -200 200 Tolerance level (5.50) % (5.50) % (5.50) % (5.50) % Interest rate risk assessment 0.15 % (0.39) % (0.01) % (2.08) % Simulation analyses produce an estimate of interest rate exposure based on assumption inputs within the model. Assumptions are tailored to the specific interest rate environment and validated on a regular basis. However, actual results may differ from those derived in simulation analyses due to unanticipated changes to the balance sheet composition, customer behavior, product pricing, market interest rates, changes in management’s desired interest rate risk positioning, investment, funding and hedging activities or repercussions from exogenous events . Regular stress tests and sensitivity analyses are performed on the model inputs that could materially change the resulting risk assessments. Assessments are performed using different yield curve shapes, including steepenings or flattenings of the curve, immediate changes in market interest rates, and changes in the relationship of money market interest rates. Assessments are also performed on changes to the following assumptions: loan and deposit balances, the pricing of deposits without contractual maturities, changes in lending spreads, prepayments on loans and securities, investment, funding and hedging activities, and liquidity and capital management strategies. The results of additional assessments indicate that net interest income could increase or decrease from the base simulation results presented in Figure 25. Net interest income is highly dependent on the timing, magnitude, frequency, and path of interest rate changes and the associated assumptions for deposit repricing relationships, lending spreads, and the balance behavior of transaction accounts. If fixed-rate assets increase by $1 billion, or fixed-rate liabilities decrease by $1 billion, then the potential benefit to declining rates would increase by approximately 23 basis points. A five percentage point increase or decrease in the interest-bearing deposit beta assumption changes the current simulation results by approximately 120 basis points. The current interest rate risk position could fluctuate to higher or lower levels of risk depending on the competitive environment and client behavior that may affect the actual volume, mix, maturity, and repricing characteristics of loan and deposit flows. Corporate Treasury discretionary activities related to funding, investing, and hedging may also change as a result of changes in customer business flows or changes in management’s desired interest rate risk positioning. As changes occur to both the configuration of the balance sheet and the outlook for the economy, management proactively evaluates hedging opportunities that may change our interest rate risk profile. Simulations are also conducted that measure the effect of changes in market interest rates in the second and third years of a three-year horizon. These simulations are conducted in a similar manner to those based on a 12-month horizon. To capture longer-term exposures, changes in the EVE are calculated as discussed in the following section. Economic value of equity modeling. EVE complements net interest income simulation analysis as it estimates risk exposure beyond 12-, 24-, and 36-month horizons. EVE modeling measures the extent to which the economic values of assets, liabilities, and off-balance sheet instruments may change in response to fluctuations in interest rates. EVE is calculated by subjecting the balance sheet to an immediate increase or decrease in interest rates, measuring the resulting change in the values of assets, liabilities, and off-balance sheet instruments, and comparing those amounts with the base case of the current interest rate environment. EVE policy limits are measured against a +/-200 basis point scenario subject to a floor on market interest rates at zero. This analysis is highly dependent 82 Table of contents upon assumptions applied to assets and liabilities with non-contractual maturities. Those assumptions are based on historical behaviors, as well as forward expectations. Remediation plans are similarly developed if this analysis indicates that our EVE will decrease by more than 15% in response to an immediate increase or decrease in interest rates. The position is within these guidelines as of December 31, 2024. Management of interest rate exposure. The results of the various interest rate risk analyses are used to formulate A/LM strategies to achieve the desired risk profile while managing to objectives for capital adequacy and liquidity risk exposures. Specifically, risk positions are managed by purchasing or selling securities, issuing term debt with floating or fixed interest rates, and using derivatives. Interest rate swaps and options are predominantly used, which modify the interest rate characteristics of certain assets and liabilities. Figure 26 shows all swap positions held for A/LM purposes. These positions are used to convert the contractual interest rate index of agreed-upon amounts of assets and liabilities (i.e., notional amounts) to another interest rate index. For example, fixed-rate debt is converted to a floating rate through a “receive fixed/pay variable” interest rate swap. The volume, maturity, and mix of portfolio swaps change frequently to reflect broader A/LM objectives and the balance sheet positions to be hedged. For more information about how interest rate swaps are used to manage our risk profile, see Note 8 (“Derivatives and Hedging Activities”). Figure 26. Portfolio Swaps and Options by Interest Rate Risk Management Strategy December 31, 2024 Weighted-Average December 31, 2023 Dollars in millions Notional Amount Fair Value Maturity (Years) Receive Rate Pay Rate Notional Amount Fair Value Receive fixed/pay variable — conventional loans $ 18,750 $ (442) 1.4 2.3 % 4.5 % $ 15,000 $ (641) Receive fixed/pay variable — conventional debt 9,818 (470) 3.5 2.6 4.5 8,976 (395) Receive fixed/pay variable — forward loans 19,200 (114) 3.1 3.8 4.5 4,000 (27) Receive fixed/pay variable — forward debt 950 (22) 9.2 3.8 4.5 1,411 (40) Pay fixed/receive variable — conventional debt 50 1 3.5 4.7 3.6 50 1 Pay fixed/receive variable — securities 9,405 5 2.8 4.5 4.1 8,655 (152) Total portfolio swaps $ 58,173 $ (1,042) (a) 2.7 3.2 % 4.4 % $ 38,092 $ (1,254) (a) Floors — forward purchased $ 3,250 $ 2 1.1 — % — % $ 3,250 $ 26 Floors — forward sold 3,250 (1) 1.1 — — 3,250 (11) Total floors $ 6,500 $ 1 — — % — % $ 6,500 $ 15 (a) Excludes accrued interest of $51 million and $58 million at December 31, 2024, and December 31, 2023, respectively. Liquidity risk management Liquidity risk, which is inherent in the banking industry, is measured by our ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, and fund new business opportunities at a reasonable cost, in a timely manner, and without adverse consequences. Liquidity management involves maintaining sufficient and diverse sources of funding to accommodate planned, as well as unanticipated, changes in assets and liabilities under both normal and adverse conditions. Governance structure We manage liquidity for all of our affiliates on a consolidated basis. This approach considers the funding sources available to each entity, as well as each entity’s capacity to manage through adverse conditions. The management of consolidated liquidity risk is centralized within Corporate Treasury. Oversight and governance is provided by the Board, the ERM Committee, the ALCO, the TROC, and the Chief Risk Officer. The Asset Liability Management Policy provides the framework for the oversight and management of liquidity risk and is administered by the ALCO. The Corporate Treasury Oversight group within MTRM, as the second line of defense, provides additional oversight. Our current liquidity risk management practices are in compliance with the Federal Reserve Board’s Enhanced Prudential Standards. The committees mentioned above regularly review liquidity and funding summaries, liquidity trends, peer comparisons, variance analyses, liquidity projections, internal liquidity stress tests, and goal tracking reports. The reviews generate a discussion of positions, trends, and directives on liquidity risk and shape a number of our decisions. When liquidity pressure is elevated, positions are monitored more closely and reporting is more intensive. 83 Table of contents To ensure that emerging issues are identified, we monitor an extensive set of systematic and idiosyncratic early warning indicators daily. Factors affecting liquidity Our liquidity could be adversely affected by both direct and indirect events. An example of a direct event would be a downgrade in our credit ratings by a rating agency. Examples of indirect events (events unrelated to us) that could impair our access to liquidity would be an act of terrorism or war, natural disasters, global pandemics, political events, or the default or bankruptcy of a major corporation, mutual fund, or hedge fund. Similarly, market speculation, or rumors about us or the banking industry in general, may adversely affect the cost and availability of normal funding sources. Our credit ratings at December 31, 2024, are shown in Figure 27. While we believe these credit ratings, under normal conditions in the capital markets, will enable KeyCorp or KeyBank to issue fixed income securities to investors, downgrades in our credit ratings could increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us. Figure 27. Credit Ratings December 31, 2024 Outlook Short-Term Borrowings Long-Term Deposits (a) Senior Long-Term Debt Subordinated Long-Term Debt Capital Securities Preferred Stock KEYCORP Standard & Poor’s Stable A-2 N/A BBB BBB- BB BB Moody’s Stable P-2 N/A Baa2 Baa2 Baa3 Ba1 Fitch Positive F2 N/A BBB+ N/A BB BB DBRS Stable R-1 (low) N/A A (low) BBB (high) BBB (high) BBB (low) KEYBANK Standard & Poor’s Stable A-2 N/A BBB+ BBB N/A N/A Moody’s Stable P-2 P-1/A2 Baa1 Baa2 N/A N/A Fitch Positive F2 F2/A- BBB+ BBB N/A N/A DBRS Stable R-1 (low) A A A (low) N/A N/A (a) P-1 rating assigned by Moody’s is specific to KeyBank’s short-term bank deposit ratings. F2 assigned by Fitch Ratings, Inc. is specific to KeyBank’s short-term deposit ratings. Managing liquidity risk Most of our liquidity risk is derived from our business model, which involves taking in deposits, many of which can be withdrawn at any time, and lending them out in the form of illiquid loan assets. The assessments of liquidity risk are measured under the assumption of normal operating conditions as well as under stressed environments. We manage these exposures in accordance with our risk appetite, and within Board-approved policy limits. We regularly monitor our liquidity position and funding sources and measure our capacity to obtain funds in a variety of hypothetical scenarios in an effort to maintain an appropriate mix of available and affordable funding. In the normal course of business, we perform a monthly internal liquidity stress test at the consolidated KeyCorp level. From time to time, we may conduct internal liquidity stress tests more frequently, and use assumptions to reflect the changed market environment. Our testing incorporates estimates for loan and deposit lives based on our historical studies. Internal liquidity stress tests analyze potential liquidity scenarios under various funding constraints and time periods. Ultimately, they determine the periodic effects that major direct and indirect events would have on our access to funding markets and our ability to fund our normal operations. To compensate for the effect of these assumed liquidity pressures, we consider alternative sources of liquidity and maturities over different time periods to project how funding needs would be managed. Our primary source of funding for KeyBank is customer deposits resulting in a consolidated loan-to-deposit ratio of 70% as of December 31, 2024 . If the cash flows needed to support operating and investing activities are not satisfied by deposit balances, we rely on wholesale funding or on-balance sheet liquid reserves. Conversely, excess cash generated by operating, investing, and deposit-gathering activities may be used to repay outstanding debt or invest in liquid assets. We maintain a Contingency Funding Plan that outlines the process for addressing a liquidity crisis. As part of the plan, we maintain on-balance sheet liquid reserves referred to as our liquid asset portfolio, which consists of high-quality liquid assets. During a problem period, that reserve could be used as a source of funding to provide time to develop and execute a longer-term strategy. Figure 28 shows our available contingent liquidity at December 31, 84 Table of contents 2024 and December 31, 2023. In 2024, our secured term borrowings decreased $8.5 billion from a reduction in FHLB borrowings. Figure 28. Available Contingent Liquidity December 31, Dollars in billions 2024 2023 Available contingent liquidity: Unpledged securities $ 25.5 $ 7.5 Net balances of federal funds sold and balances in our Federal Reserve account 17.4 10.7 Unused secured borrowing capacity at the Federal Reserve Bank of Cleveland 36.7 54.7 Unused secured borrowing capacity at the FHLB 18.9 13.6 Total $ 98.5 $ 86.5 Long-term liquidity strategy Our long-term liquidity strategy is to be predominantly funded by core deposits. However, we may use wholesale funds to sustain an adequate liquid asset portfolio, meet daily cash demands, and allow management flexibility to execute business initiatives. Key’s client-based relationship strategy provides for a strong core deposit base that, in conjunction with intermediate and long-term wholesale funds managed to a diversified maturity structure and investor base, supports our liquidity risk management strategy. We use the loan-to-deposit ratio as a metric to monitor these strategies. Our target loan-to-deposit ratio is around 80% (at December 31, 2024, our loan-to-deposit ratio was 70.3%), which we calculate as the sum of total loans, loans held for sale, and nonsecuritized discontinued loans divided by deposits. Liquidity programs We have several liquidity programs, which are described in Note 20 (“Long-Term Debt”), that are designed to enable KeyCorp and KeyBank to raise funds in the public and private debt markets. The proceeds from most of these programs can be used for general corporate purposes, including acquisitions. These liquidity programs are reviewed from time to time by the Board and are renewed and replaced as necessary. There are no restrictive financial covenants in any of these programs. KeyBank had no bank note issuances during 2024. At December 31, 2024, there was $20.0 billion available for issuance under the KeyBank Bank Note Program. Liquidity for KeyCorp The primary source of liquidity for KeyCorp is from subsidiary dividends, primarily from KeyBank. KeyCorp has sufficient liquidity when it can service its debt; support customary corporate operations and activities (including acquisitions); support occasional guarantees of subsidiaries’ obligations in transactions with third parties at a reasonable cost, in a timely manner, and without adverse consequences; and fund capital distributions in the form of dividends and share buybacks. We use a parent cash coverage months metric as the primary measure to assess parent company liquidity. The parent cash coverage months metric measures the number of months into the future where projected obligations can be met with the current quantity of liquidity. We generally issue term debt to supplement dividends from KeyBank to manage our liquidity position at or above our targeted levels. The parent company generally maintains cash and short-term investments in an amount sufficient to meet projected debt maturities over at least the next 24 months. At December 31, 2024, KeyCorp held $5.2 billion in cash and short-term investments, which we projected to be sufficient to meet our projected obligations, including the repayment of our maturing debt obligations for the periods prescribed by our risk tolerance. Typically, KeyCorp meets its liquidity requirements through regular dividends from KeyBank, supplemented with term debt. Federal banking law limits the amount of capital distributions that a bank can make to its holding company without prior regulatory approval. A national bank’s dividend-paying capacity is affected by several factors, including net profits (as defined by statute) for the two previous calendar years and for the current year, up to the date of dividend declaration. During 2024, KeyBank paid $750 million in cash dividends to KeyCorp, and during the fourth quarter of 2024, KeyBank paid no cash dividends to KeyCorp. KeyCorp issued debt of $1.0 billion in the first 85 Table of contents quarter of 2024. At December 31, 2024, KeyBank had no regulatory capacity to pay any dividends to KeyCorp without prior regulatory approval. Our liquidity position and recent activity Over the past 12 months, our liquid asset portfolio, which includes overnight and short-term investments, as well as unencumbered, high quality liquid securities held as protection against a range of potential liquidity stress scenarios, has increased primarily due to an increase in Key's cash position. The liquid asset portfolio continues to exceed the amount that we estimate would be necessary to manage through an adverse liquidity event by providing sufficient time to develop and execute a longer-term solution. On August 12, 2024, we entered into an Investment Agreement with Scotiabank pursuant to which Scotiabank agreed to make a strategic minority investment in KeyCorp of approximately $2.8 billion, representing approximately 14.9% pro forma common stock ownership of KeyCorp, for a fixed price of $17.17 per share. On August 30, 2024, Scotiabank completed the initial purchase of 47,829,359 of our Common Shares with an investment of approximately $821 million in gross proceeds. On December 13, 2024, we announced that all necessary bank regulatory approvals had been received for completion of Scotiabank’s strategic minority investment in KeyCorp. On December 27, 2024, Scotiabank completed the final purchase of 115,042,316 of our Common Shares, contemplated under the Investment Agreement with an investment of approximately $2.0 billion. Following the Second Closing, Scotiabank owns approximately 14.9% of our common stock. In conjunction with the investment from Scotiabank, we executed a strategic repositioning of our securities available-for-sale portfolio, selling $7.0 billion and $3.0 billion in market value of low-yielding investment securities in the third and fourth quarters of 2024, respectively. The sales resulted in a total pre-tax loss of $1.8 billion. Proceeds from the sales were invested in shorter-duration, higher-yielding investment securities. From time to time, KeyCorp or KeyBank may seek to retire, repurchase, or exchange outstanding debt, capital securities, preferred shares, or common shares through cash purchase, privately negotiated transactions or other means. Additional information on repurchases of Common Shares by KeyCorp is included in Part II, Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of this report. Such transactions depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, regulatory requirements, and other factors. The amounts involved may be material, individually or collectively. The Consolidated Statements of Cash Flows summarize our sources and uses of cash by type of activity for the years ended December 31, 2024, and December 31, 2023. Credit risk management Credit risk is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Like other financial services institutions, we make loans, extend credit, distribute credit risk, purchase securities, provide financial and payments products, and enter into financial derivative contracts, all of which have related credit risk. Credit policy, approval, and evaluation We manage credit risk exposure through a multifaceted program. The Credit Risk Committee approves management credit policies and recommends significant credit policies to the Enterprise Risk Management Committee, the KeyBank Board, and the Risk Committee of the Board for approval. These policies are communicated throughout the organization to foster a consistent approach to granting credit. Our credit risk management team and certain individuals within our lines of business, to whom credit risk management has delegated limited credit authority, are responsible for credit approval. Individuals with assigned credit authority are authorized to grant exceptions to credit policies. It is not unusual to make exceptions to established policies when mitigating circumstances dictate, however, a corporate level tolerance has been established to keep exceptions at an acceptable level based upon portfolio and economic considerations. 86 Table of contents Our credit risk management team uses risk models to evaluate consumer loans. These models, known as scorecards, forecast the probability of serious delinquency and default for an applicant. The scorecards are embedded in the application processing system, which allows for real-time scoring and automated decisions for many of our products. We periodically validate the loan scoring processes. We maintain an active concentration management program to mitigate concentration risk in our credit portfolios. For individual obligors, we employ a sliding scale of exposure, known as hold limits, which is dictated by the type of loan and strength of the borrower. Allowance for loan and lease losses We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology used is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses.” Briefly, the ALLL estimate uses various models and estimation techniques based on our historical loss experience, current borrower characteristics, current conditions, reasonable and supportable forecasts and other relevant factors. The ALLL at December 31, 2024, represents our best estimate of the lifetime expected credit losses inherent in the loan portfolio at that date. For more information, see Note 5 (“Asset Quality”). As shown in Figure 29, our ALLL from continuing operations decreased by $99 million, or 6.6%, from December 31, 2023. The commercial ALLL decreased by $23 million, or 2.2%, from December 31, 2023, driven by strategic balance sheet reductions and changes in the economic outlook, partly offset by portfolio credit migration. The consumer ALLL decreased $76 million, or 17.0%, from December 31, 2023, also largely driven by balance sheet reductions and economic forecasts, including improved home price values. Figure 29. Allocation of the Allowance for Loan and Lease Losses 2024 2023 December 31, Dollars in millions Total Allowance Percent of Allowance to Total Allowance Percent of Loan Type to Total Loans Total Allowance Percent of Allowance to Total Allowance Percent of Loan Type to Total Loans Commercial and industrial $ 639 45.4 % 50.7 % $ 556 36.9 % 49.6 % Commercial real estate: Commercial mortgage 320 22.7 12.8 419 27.8 13.5 Construction 51 3.6 2.8 52 3.4 2.7 Total commercial real estate loans 371 26.3 15.6 471 31.2 16.2 Commercial lease financing 27 1.9 2.6 33 2.2 3.1 Total commercial loans 1,037 73.6 68.9 1,060 70.3 68.9 Real estate — residential mortgage 90 6.4 19.1 162 10.7 18.6 Home equity loans 70 5.0 6.1 86 5.7 6.4 Other consumer loans 136 9.6 5.0 122 8.1 5.2 Credit cards 76 5.4 .9 78 5.2 .9 Total consumer loans 372 26.4 31.1 448 29.7 31.1 Total loans (a) $ 1,409 100.0 % 100.0 % $ 1,508 100.0 % 100.0 % (a) Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of $13 million at December 31, 2024, and $16 million at December 31, 2023. 87 Table of contents Net loan charge-offs Figure 30 shows the trend in our net loan charge-offs by loan type, while the composition of loan charge-offs and recoveries by type of loan is presented in Figure 32. Figure 31 shows the ratio of net charge-offs by loan category as a percentage of the respective average loan balance. Over the past 12 months, net loan charge-offs increased $196 million, with the most significant amounts coming from charge-offs of commercial and industrial loans from consumer goods related exposures. Figure 30. Net Loan Charge-offs from Continuing Operations (a) Year ended December 31, Dollars in millions 2024 2023 Commercial and industrial $ 305 $ 144 Real estate — commercial mortgage 38 37 Real estate — construction — (1) Commercial lease financing 2 (5) Total commercial loans 345 175 Real estate — residential mortgage (2) (3) Home equity loans — (1) Other consumer loans 56 43 Credit cards 41 30 Total consumer loans 95 69 Total net loan charge-offs $ 440 $ 244 Net loan charge-offs to average loans .41 % .21 % Net loan charge-offs from discontinued operations — education lending business $ 3 $ 3 (a) Credit amounts indicate that recoveries exceeded charge-offs. Figure 31. Net Loan Charge-offs to Average Loans from Continuing Operations (a) Year ended December 31, 2024 2023 Commercial and industrial 0.56 % 0.24 % Real estate — commercial mortgage 0.27 0.23 Real estate — construction — (0.04) Commercial lease financing 0.05 (0.14) Total commercial loans 0.46 0.21 Real estate — residential mortgage (0.01) (0.01) Home equity loans — (0.01) Other consumer loans 1.01 0.69 Credit cards 4.44 3.04 Total consumer loans 0.29 0.19 Total net loan charge-offs 0.41 % 0.21 % (a) Credit amounts indicate that recoveries exceeded charge-offs. 88 Table of contents Figure 32. Summary of Loan and Lease Loss Experience from Continuing Operations Year ended December 31, Dollars in millions 2024 2023 Average loans outstanding $ 107,724 $ 118,004 Allowance for loan and lease losses at beginning of period $ 1,508 $ 1,337 Loans charged off: Commercial and industrial $ 363 $ 188 Real estate — commercial mortgage 40 39 Real estate — construction — — Total commercial real estate loans (a) 40 39 Commercial lease financing 7 — Total commercial loans (b) 410 227 Real estate — residential mortgage 3 1 Home equity loans 2 2 Other consumer loans 64 51 Credit cards 47 37 Total consumer loans 116 91 Total loans charged off 526 318 Recoveries: Commercial and industrial 58 44 Real estate — commercial mortgage 2 2 Real estate — construction — 1 Total commercial real estate loans (a) 2 3 Commercial lease financing 5 5 Total commercial loans (b) 65 52 Real estate — residential mortgage 5 4 Home equity loans 2 3 Other consumer loans 8 8 Credit cards 6 7 Total consumer loans 21 22 Total recoveries 86 74 Net loan charge-offs (440) (244) Provision (credit) for loan and lease losses 341 415 Allowance for loan and lease losses at end of year $ 1,409 $ 1,508 Liability for credit losses on lending-related commitments at beginning of the year 296 225 Provision (credit) for losses on lending-related commitments (6) 74 Liability for credit losses on lending-related commitments at end of the year (c) $ 290 $ 296 Total allowance for credit losses at end of the year $ 1,699 $ 1,804 Net loan charge-offs to average total loans .41 % .21 % Allowance for loan and lease losses to period-end loans 1.35 1.34 Allowance for credit losses to period-end loans 1.63 1.60 Allowance for loan and lease losses to nonperforming loans 185.9 262.7 Allowance for credit losses to nonperforming loans 224.1 % 314.3 % Discontinued operations — education lending business: Loans charged off $ 4 $ 4 Recoveries 1 1 Net loan charge-offs $ (3) $ (3) (a) See Figure 10 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio. (b) See Figure 9 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio. (c) Included in “accrued expense and other liabilities” on the balance sheet. Nonperforming assets Figure 33 shows the composition of our nonperforming assets. As shown in Figure 33, nonperforming assets increased $181 million during 2024. See Note 1 (“Summary of Significant Accounting Policies”) under the headings “Nonperforming Loans,” “Impaired Loans,” and “Allowance for Loan and Lease Losses” for a summary of our nonaccrual and charge-off policies. 89 Table of contents Figure 33. Summary of Nonperforming Assets and Past Due Loans from Continuing Operations December 31, Dollars in millions 2024 2023 Commercial and industrial $ 322 $ 297 Real estate — commercial mortgage 243 100 Real estate — construction — — Total commercial real estate loans (a) 243 100 Commercial lease financing — — Total commercial loans (b) 565 397 Real estate — residential mortgage 92 71 Home equity loans 89 97 Other consumer loans 5 4 Credit cards 7 5 Total consumer loans 193 177 Total nonperforming loans 758 574 Nonperforming loans held for sale — — OREO 14 17 Other nonperforming assets — — Total nonperforming assets $ 772 $ 591 Accruing loans past due 90 days or more $ 90 $ 107 Accruing loans past due 30 through 89 days 206 222 Restructured loans — accruing and nonaccruing (c) N/A N/A Restructured loans included in nonperforming loans (c) N/A N/A Nonperforming assets from discontinued operations — education lending business 2 3 Nonperforming loans to period-end portfolio loans .73 % .51 % Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (c) .74 .52 (a) See Figure 10 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio. (b) See Figure 9 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio. (c) Restructured loans are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. See Note 5 (“Asset Quality“) for more information. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance. Figure 34 shows the types of activity that caused the change in our nonperforming loans during each of the last four quarters and the years ended December 31, 2024, and December 31, 2023. Figure 34. Summary of Changes in Nonperforming Loans from Continuing Operations 2024 Quarters Dollars in millions 2024 Fourth Third Second First 2023 Balance at beginning of period $ 574 $ 728 $ 710 $ 658 $ 574 $ 387 Loans placed on nonaccrual status 1,140 309 271 317 243 768 Charge-offs (526) (131) (167) (131) (97) (318) Loans sold (72) (13) (32) (22) (5) (38) Payments (259) (111) (37) (76) (35) (132) Transfers to OREO (6) (2) (1) (1) (2) (9) Loans returned to accrual status (93) (22) (16) (35) (20) (84) Balance at end of period $ 758 $ 758 $ 728 $ 710 $ 658 $ 574 Operational and compliance risk management Like all businesses, we are subject to operational risk, which is the risk of loss resulting from human error or malfeasance, inadequate or failed internal processes and systems, and external events. These events include, among other things, threats to our cybersecurity, as we are reliant upon information systems and the internet to conduct our business activities. Operational risk intersects with compliance risk, which is the risk of loss from violations of, or noncompliance with, laws, rules and regulations, prescribed practices, and ethical standards. Under the Dodd-Frank Act, large financial companies like Key are subject to heightened prudential standards and regulation. This heightened level of regulation has increased our operational risk. While operational and compliance risk are separate risk disciplines in KeyCorp’s ERM framework, losses and/or additional regulatory compliance costs are included in operational loss reporting and could take the form of explicit charges, increased operational costs, or harm to our reputation. We seek to mitigate operational risk through identification and measurement of risk, alignment of business strategies with risk appetite and tolerance, and a system of internal controls and reporting. We continuously strive to strengthen our system of internal controls to improve the oversight of our operational risk and to ensure compliance with laws, rules, and regulations. For example, an operational event database tracks the amounts and sources of 90 Table of contents operational risk and losses. This tracking mechanism helps to identify weaknesses and to highlight the need to take corrective action. We also rely upon software programs designed to assist in assessing operational risk and monitoring our control processes. This technology has enhanced the reporting of the effectiveness of our controls to senior management and the Board. The Operational Risk Management Program provides the framework for the structure, governance, roles, and responsibilities, as well as the content, to manage operational risk for Key. The Compliance Risk Management Program serves the same function in managing compliance risk for Key. The Operational Risk Committee and the Compliance Risk Committee support the ERM Committee by identifying early warning events and trends, escalating emerging risks, and discussing forward-looking assessments. Both the Operational Risk Committee and the Compliance Risk Committee include attendees from each of the Three Lines of Defense. Primary responsibility for managing and monitoring internal control mechanisms lies with the managers of our various lines of business. The Operational Risk Committee and Compliance Risk Committee are senior management committees that oversee our level of operational and compliance risk and direct and support our operational and compliance infrastructure and related activities. These committees and the Operational Risk Management and Compliance Risk Management functions are an integral part of our ERM Program. Our Risk Review function regularly assesses the overall effectiveness of our Operational Risk Management and Compliance Risk Management Programs and our system of internal controls. Risk Review reports the results of reviews on internal controls and systems to senior management and the Audit Committee and updates the Risk Committee, as appropriate, on matters related to the oversight of these controls. Cybersecurity For information on our cybersecurity risk management and governance practices, please see Item 1C. Cybersecurity of this report. GAAP to Non-GAAP Reconciliations Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, nor as a substitute for analyses of results as reported under GAAP. The tangible common equity ratio and the return on tangible common equity ratio have been a focus for some investors, and management believes that these ratios may assist investors in analyzing Key’s capital position without regard to the effects of intangible assets and preferred stock. Since analysts and banking regulators may assess our capital adequacy using tangible common equity, we believe it is useful to enable investors to assess our capital adequacy on these same bases. 91 Table of contents Year ended December 31, Dollars in millions 2024 2023 2022 Tangible common equity to tangible assets at period end Key shareholders’ equity (GAAP) $ 18,176 $ 14,637 $ 13,454 Less: Intangible assets (a) 2,779 2,806 2,844 Preferred Stock (b) 2,446 2,446 2,446 Tangible common equity (non-GAAP) $ 12,951 $ 9,385 $ 8,164 Total assets (GAAP) $ 187,168 $ 188,281 $ 189,813 Less: Intangible assets (a) 2,779 2,806 2,844 Tangible assets (non-GAAP) $ 184,389 $ 185,475 $ 186,969 Tangible common equity to tangible assets ratio (non-GAAP) 7.02 % 5.06 % 4.37 % Average tangible common equity Average Key shareholders’ equity (GAAP) $ 15,408 $ 13,881 $ 14,730 Less: Intangible assets (average) (c) 2,793 2,826 2,839 Preferred Stock (average) 2,500 2,500 2,114 Average tangible common equity (non-GAAP) $ 10,115 $ 8,555 $ 9,777 Return on average tangible common equity from continuing operations Income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ (306) $ 821 $ 1,793 Average tangible common equity (non-GAAP) $ 10,115 $ 8,555 $ 9,777 Return on average tangible common equity from continuing operations (non-GAAP) (3.03) % 9.60 % 18.34 % Return on average tangible common equity consolidated Net income (loss) attributable to Key common shareholders (GAAP) $ (304) $ 824 $ 1,799 Average tangible common equity (non-GAAP) 10,115 8,555 9,777 Return on average tangible common equity consolidated (non-GAAP) (3.01) % 9.63 % 18.40 % (a) For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, intangible assets exclude less than $1 million, $1 million, and $2 million, respectively, of period-end purchased credit card relationships. (b) Net of capital surplus. (c) For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, average intangible assets exclude less than $1 million, $1 million, and $2 million, respectively, of average purchased credit card relationships. Adjusted noninterest expense and adjusted noninterest income are non-GAAP measures in that they are adjusted to exclude the impact of certain items. Management believes adjusting for the selected items provide investors with useful information to gain a better understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of the financial impacts related to those selected items. Year ended December 31, Dollars in millions 2024 2023 2022 Adjusted noninterest expense Noninterest expense (GAAP) $ 4,545 $ 4,734 $ 4,410 Adjustments: Efficiency related expenses — (131) — Pension settlement (other expense) — (18) — FDIC special assessment (other expense) (25) (190) — Adjusted noninterest expense (non-GAAP) $ 4,520 $ 4,395 $ 4,410 Adjusted noninterest income Noninterest income (GAAP) $ 809 $ 2,470 $ 2,718 Adjustments: Loss on sale of securities for securities repositioning 1,833 — — Scotiabank investment agreement valuation (other income) 3 — — Adjusted noninterest income (non-GAAP) $ 2,645 $ 2,470 $ 2,718 Critical Accounting Policies and Estimates Our business is dynamic and complex. Consequently, we must exercise judgment in choosing and applying accounting policies and methodologies. These choices are critical; not only are they necessary to comply with GAAP, they also reflect our view of the appropriate way to record and report our overall financial performance. All accounting policies are important, and all policies described in Note 1 (“Summary of Significant Accounting Policies”) should be reviewed for a greater understanding of how we record and report our financial performance. In our opinion, some accounting policies are more likely than others to have a critical effect on our financial results and to expose those results to potentially greater volatility. These policies apply to areas of relatively greater business importance, or require us to exercise judgment and to make assumptions and estimates that affect amounts reported in the financial statements. Because these assumptions and estimates are based on current circumstances, they may prove to be inaccurate, or we may find it necessary to change them. The following is a description of our current critical accounting policies. 92 Table of contents Allowance for loan and lease losses The allowance for loan and lease losses represents management’s estimate of all expected credit losses over the expected contractual life of our existing loan portfolio. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. These critical estimates include significant use of our own historical data and complex methods to interpret them. We have an ongoing process to evaluate and enhance the quality, quantity, and timeliness of our data and interpretation methods used in the determination of these allowances. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change, and include, among others: • PD, • LGD, • Outstanding balance of the loan, • Movement through delinquency stages, • Amounts and timing of expected future cash flows, • Value of collateral, which may be obtained from third parties, • Economic forecasts which are obtained from a third party provider, and • Qualitative factors, such as changes in current economic conditions, that may not be reflected in modeled results. As described in our accounting policy related to the ALLL in Note 1 (“Summary of Significant Accounting Policies”) of this report under the heading “Allowance for Loan and Lease Losses," we employ a disciplined process and methodology to establish our ALLL, which has three main components: (i) asset specific / individual loan reserves; (ii) quantitative (formulaic or pooled) reserves; and (iii) qualitative (judgmental) reserves. We use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller loan portfolios. Probability of default models estimate the likelihood a borrower will cease making payments as agreed. These models use observed loan-level information and projected paths of macroeconomic variables. Borrower credit attributes including FICO scores of consumers and internally assigned risk ratings for commercial borrowers are significant inputs to the models. Consumer FICO scores are refreshed quarterly and commercial risk ratings are updated annually with select borrowers updated more frequently. The macroeconomic trends that have a significant impact on the probability of default vary by portfolio segment. Exposure at default models estimate the loan balance at the time of default. We use an amortization based formulaic approach to estimate account level EAD for all term loans. We use portfolio specific methods in each of our revolving product portfolios. LGD models estimate the loss we will suffer once a loan is in default. Account level inputs to LGD models include collateral attributes, such as loan to value. If we observe limitations in the data or models, we use model overlays to make adjustments to model outputs to capture a particular risk or compensate for a known limitation. These variables and others may result in actual loan losses that differ from the originally estimated amounts. This estimate produced by our models is forward-looking and requires management to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. Moody’s Consensus forecast is our source of macroeconomic projections, including the interest rate forecasts used in the credit models. We use a two year reasonable and supportable period across all products to forecast economic conditions. As the length of the life of a financial asset increases, these inputs may become impractical to estimate as reasonable and supportable. We believe the two year time horizon appropriately aligns with our business planning, available industry guidance, and reliability of various forecasting services. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period. We use a 20 year lookback period for determining long run historical average of the macroeconomic variables. We determined the 20 year lookback period is appropriate as it captures the previous two economic cycles as well as the impact from the pandemic. The ALLL is sensitive to various macroeconomic drivers such as GDP and unemployment as well as portfolio attributes such as remaining term, outstanding balance, risk ratings, FICO, LTV, and delinquency status. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating 93 Table of contents shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance. It is difficult to estimate how potential changes in any one factor or input might affect the overall ALLL because we consider a wide variety of factors and inputs in estimating the ALLL. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and input may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. However, to consider the impact of a hypothetical alternate economic forecast, we compare the modeled quantitative allowance results using a downside economic scenario. The maximum difference in the quarterly macroeconomic variables between the base and downside scenarios over the two year reasonable and supportable period includes an approximate 5 percentage point decline in GDP annualized growth and an approximate 4 percentage point increase in the U.S. unemployment rate. The difference between these two scenarios would have driven an increase of approximately 1.6x for commercial and 1.7x for the consumer modeled allowance results. Similarly, deteriorating conditions for portfolio factors were also considered by moderately stressing key portfolio drivers, relative to the baseline portfolio conditions. Stressing risk ratings by two ratings for commercial loans generates a 1.5x increase in the commercial modeled allowance results. Stressing FICO by ten points, and LTV and utilization by 10% for consumer loans generates a 1.2x increase in the consumer modeled allowance results. Note that these analyses demonstrate the sensitivity of the ALLL to key quantitative assumptions, but exclude potential impacts to non-modeled allowance components and reserves for individually assessed loans. Furthermore, these analyses are not intended to estimate changes in the overall ALLL as they do not reflect qualitative factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors that must be considered to ensure the ALLL reflects our best estimate of current expected credit losses. Valuation methodologies Fair value measurements We measure or monitor many of our assets and liabilities on a fair value basis. Fair value is generally defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) as opposed to the price that would be paid to acquire the asset or received to assume the liability (an entry price), in an orderly transaction between market participants at the measurement date under current market conditions. While management uses judgment when determining the price at which willing market participants would transact when there has been a significant decrease in the volume or level of activity for the asset or liability in relation to “normal” market activity, management’s objective is to determine the point within the range of fair value estimates that is most representative of a sale to a third-party investor under current market conditions. A fair value measure should reflect the assumptions that market participants would use in pricing the asset or liability, including the assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance. Fair value is measured based on a variety of inputs. Fair value may be based on quoted market prices for identical assets or liabilities traded in active markets (Level 1 valuations). If market prices are not available, quoted market prices for similar instruments traded in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable in the market are used (Level 2 valuations). Where observable market data is not available, the valuation is generated from model based techniques that use significant assumptions not observable in the market, but observable based on our specific data (Level 3 valuations). Unobservable assumptions reflect our estimates for assumptions that market participants would use in pricing the asset or liability. Valuation techniques typically include option pricing models, discounted cash flow models and similar techniques, but may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability. The selection and weighting of the various fair value techniques may result in a fair value higher or lower than carrying value. Considerable judgment may be involved in determining the amount that is most representative of fair value. For assets and liabilities recorded at fair value, our policy is to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements for those items where there 94 Table of contents is an active market. In certain cases, when market observable inputs for model-based valuation techniques may not be readily available, we are required to make judgments about assumptions market participants would use in estimating the fair value of the financial instrument. The models used to determine fair value adjustments are regularly evaluated by management for relevance under current facts and circumstances. Changes in market conditions may reduce the availability of quoted prices or observable data. For example, reduced liquidity in the capital markets or changes in secondary market activities could result in observable market inputs becoming unavailable. When market data is not available, we use valuation techniques requiring more management judgment to estimate the appropriate fair value. Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary measure of accounting. Fair value is used on a nonrecurring basis to measure certain assets or liabilities (including held-to-maturity securities, commercial loans held for sale, and OREO) for impairment or for disclosure purposes in accordance with current accounting guidance. Impairment analysis also relates to long-lived assets and core deposit and other intangible assets. An impairment loss is recognized if the carrying amount of the asset is not likely to be recoverable and exceeds its fair value. In determining the fair value, management uses models and applies the techniques and assumptions previously discussed. See Note 1 under the heading “Fair Value Measurements” and Note 6 (“Fair Value Measurements”) for a detailed discussion of determining fair value, including pricing validation processes. Goodwill The valuation and testing methodologies used in our analysis of goodwill impairment are summarized in Note 1 under the heading “Goodwill and Other Intangible Assets.” Goodwill is initially recorded as the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is tested for impairment for all three of our reporting units: Consumer Bank, Commercial Bank and Institutional Bank. We perform our annual impairment test as of October 1st and on an interim basis if events or changes in circumstances between annual tests suggest additional testing is needed. Testing may be either quantitative or qualitative. Fair value is measured during quantitative tests using a combination of income and market approaches. If the fair value of a reporting unit declines below its carrying value, an impairment charge will be recognized for any amount by which the carrying value exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of the goodwill allocated to that reporting unit. When utilizing the qualitative testing approach, Key examines numerous qualitative factors such as financial performance, market capitalization and other industry and economic trends to conclude whether it is more likely than not that goodwill is impaired. Effective in the first quarter of 2024, we realigned our real estate capital business from our Commercial Bank reporting unit to our Institutional Bank reporting unit. The move was done to align product-based teams to the client-facing businesses they serve with the goal of reducing overhead and complexity and creating a better client experience. Additionally, due to the realignment, a portion of goodwill was reallocated from our Commercial Bank reporting unit to our Institutional Bank reporting unit immediately after the realignment based on the relative fair value of the transferred business. This realignment was identified as a triggering event for purposes of goodwill impairment testing. As a result, interim goodwill impairment tests were performed during the first quarter of 2024 reflecting the reporting units both immediately before and immediately after the realignment, neither of which resulted in impairment. The quantitative test estimates the fair value of the reporting units using the income approach (weighted 50%) and two market based approaches: the publicly traded company approach (weighted 25%) and the recent transactions approach (weighted 25%). For the market based approaches, valuations of reporting units considered a combination of earnings and equity multiples based on either public companies with characteristics similar to the reporting unit or actual prices paid from recent transactions. Since the fair values determined under the market approaches are representative of noncontrolling interests, the valuations incorporated a control premium. For the income approach, estimated future cash flows were derived from internal forecasts and economic expectations for each reporting unit. The inputs and assumptions utilized for the valuation of each reporting unit include projections of future cash flows, discount rates, valuation multiples of comparable public companies, and recent transaction information. Future cash 95 Table of contents flows are based on multi-year forecasts for each reporting unit and include inputs and assumptions such as net interest margin, expected credit losses, noninterest income, noninterest expense, and required capital. A terminal growth rate is estimated for each reporting unit based on market expectations of inflation and economic conditions in the financial services industry. Discount rates are developed using the Capital Asset Pricing Model (“CAPM”) which considers a risk free rate, 5-year adjusted beta based on peer companies, a market equity risk premium, a size premium, and a company specific risk premium. The discount rates used for the Consumer, Commercial, and Institutional reporting units were, 13%, 13.5%, and 13.5%, respectively. The results of the interim quantitative goodwill impairment tests indicated that the fair values of the Consumer, Commercial and Institutional Bank reporting units were in excess of their respective carrying values both immediately prior to and immediately after the realignment, therefore, there was no goodwill impairment. The fair values of the Consumer Bank and Commercial Bank reporting units were in excess of their respective carrying values by greater than 10% immediately prior to the realignment. However, for the Institutional Bank reporting unit, the fair value of the reporting unit exceeded its carrying value by less than 4% prior to the reporting unit realignment. The fair values of all reporting units were in excess of their carrying values by greater than 10% immediately after the realignment. The combined fair value of all reporting units immediately before and immediately after the realignment was considered reasonable by comparison to Key's market capitalization. The estimated fair values of each reporting unit are sensitive to changes in management’s estimates and assumptions. Changes in the estimates and assumptions could result in instances in which the fair value of a reporting unit is less than its carrying value. We performed sensitivity analyses around certain assumptions to assess their reasonableness and impact on the reporting units’ fair values. The analysis of the Institutional Bank reporting unit immediately before the realignment indicated that if the discount rate utilized in the income approach was increased or decreased by 50 basis points, the estimated fair value of the reporting unit would have decreased or increased approximately 4%, respectively. If the net interest margin utilized in the income approach was increased or decreased by 25 basis points, the estimated fair value of the reporting unit would have increased or decreased by approximately 19%, respectively, with a decrease resulting in impairment of goodwill recorded at the Institutional Bank reporting unit. Determining the fair value of a reporting unit is subject to uncertainty as it is reliant on estimates of cash flows that extend far into the future, and, by their nature, are difficult to estimate over such an extended time frame. In the future, changes in the assumptions or the discount rate could produce a material non-cash goodwill impairment. The results of the impairment test after the realignment, however, indicated the fair value of each of the three reporting units, Consumer, Commercial, and Institutional, exceeded their respective carrying values by more than 10%. The estimated fair value of the Consumer Bank reporting unit was 18% greater than its carrying amount, the estimated fair value of the Commercial Bank reporting unit was 25% greater than its carrying amount, and the estimated fair value of the Institutional Bank reporting unit was 34% greater than its carrying amount. We performed an annual qualitative impairment test for all three of our reporting units as of October 1, 2024. This test involved reviewing updated internal forecasts, evaluating market data, assessing reasonableness of critical assumptions used in the last quantitative goodwill impairment test and considering recent transactions and events that could impact the goodwill at each reporting unit. Key concluded it was not more likely than not that goodwill was impaired as of October 1, 2024, our annual testing date. Additionally, we monitored events and circumstances during the period from October 1, 2024 through December 31, 2024, including macroeconomic and market factors, industry and banking sector events, Key specific performance indicators, and updated management forecasts. Based on these considerations, we concluded that it was not more-likely-than-not that the fair value of one or more of the reporting units was below its respective carrying value as of December 31, 2024. Additional information is provided in Note 12 (“Goodwill and Other Intangible Assets”). Derivatives and hedging We primarily use interest rate swaps to hedge interest rate risk for asset and liability management purposes. These derivative instruments modify the interest rate characteristics of specified on-balance sheet assets and liabilities. Our accounting policies related to derivatives reflect the current accounting guidance, which provides that all derivatives should be recognized as either assets or liabilities on the balance sheet at fair value, after taking into account the effects of master netting agreements. Accounting for changes in the fair value (i.e., gains or losses) of a particular derivative depends on whether the derivative has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship. 96 Table of contents The application of hedge accounting requires significant judgment to interpret the relevant accounting guidance, as well as to assess hedge effectiveness, identify similar hedged item groupings, and measure changes in the fair value of the hedged items. We believe our methods of addressing these judgments and applying the accounting guidance are consistent with both the guidance and industry practices. Additional information relating to our use of derivatives is included in Note 1 under the heading “Derivatives and Hedging,” and Note 8 (“Derivatives and Hedging Activities”). Contingent liabilities, guarantees and income taxes Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) summarizes contingent liabilities arising from litigation and contingent liabilities arising from guarantees in various agreements with third parties under which we are a guarantor, and the potential effects of these items on the results of our operations. We record a liability for the fair value of the obligation to stand ready to perform over the term of a guarantee. Contingent aspects of guarantees within the scope of ASC 326 are assessed a reserve under CECL. There is a risk that our actual future payments in the event of a default by the guaranteed party could exceed the recorded amount. See Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) for a comparison of the liability recorded and the maximum potential undiscounted future payments for the various types of guarantees that we had outstanding at December 31, 2024. It is not always clear how the Internal Revenue Code and various state tax laws apply to transactions that we undertake. In the normal course of business, we may record tax benefits and then have those benefits contested by the IRS or state tax authorities. We have provided tax reserves that we believe are adequate to absorb potential adjustments that such challenges may necessitate. However, if our judgment later proves to be inaccurate, the tax reserves may need to be adjusted, which could have an adverse effect on our results of operations and capital. Additionally, we conduct quarterly assessments that determine the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded. The available evidence used in connection with these assessments includes a history of pretax income, projected future taxable income, potential tax-planning strategies, and projected future reversals of deferred tax liabilities. These assessments are subjective and may change. Based on these criteria, and all available positive and negative evidence, we establish a valuation allowance for deferred tax assets when we are unable to conclude it is more likely than not that they will be realized. However, if our assessments prove incorrect, they could have a material adverse effect on our results of operations in the period in which they occur. For further information on our accounting for income taxes, see Note 1 (“Summary of Significant Accounting Policies”) and Note 14 (“Income Taxes”). 97 Table of contents Accounting and reporting developments The following table presents accounting guidance pending adoption. Standard Required Adoption Description Effect on Financial Statements or Other Significant Matters ASU 2023-06 Disclosure Improvements The date on which the SEC’s removal of related disclosures from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. This guidance clarifies and improves disclosure requirements for a variety of topics to align with the SEC's regulations. The amendments should be applied prospectively. The guidance is not expected to have a material impact on Key’s disclosures. ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220-40) January 1, 2027 Early adoption is permitted. The guidance requires public companies disclose additional information about certain types of costs and expenses. The guidance should be applied on a prospective or retrospective basis. The guidance is not expected to have a material impact on Key’s disclosures. ASU 2024-04 Debt—Debt with Conversion and Other Options (Topic 470-20) January 1, 2026 Early adoption is permitted. The guidance clarifies criteria to determine whether a settlement of a convertible debt instrument should be accounted for as an induced conversion. The guidance should be applied on a prospective or retrospective basis. The guidance is not expected to have a material impact on Key’s disclosures. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information included under the caption “Risk Management — Market risk management” in the MD&A beginning on page 78 is incorporated herein by reference. 98 Table of contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Number Management’s Annual Report on Internal Control over Financial Reporting 100 Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting 101 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 102 Consolidated Balance Sheets 105 Consolidated Statements of Income 106 Consolidated Statements of Comprehensive Income 107 Consolidated Statements of Changes in Equity 108 Consolidated Statements of Cash Flows 109 Notes to Consolidated Financial Statements 110 Note 1. Summary of Significant Accounting Policies 110 Note 2. Earnings Per Common Share 122 Note 3. Restrictions on Cash, Dividends and Lending Activities 122 Note 4. Loan Portfolio 123 Note 5. Asset Quality 124 Note 6. Fair Value Measurements 133 Note 7. Securities 142 Note 8. Derivatives and Hedging Activities 144 Note 9. Mortgage Servicing Assets 150 Note 10. Leases 152 Note 11. Premises and Equipment 154 Note 12. Goodwill and Other Intangible Assets 155 Note 13. Variable Interest Entities 156 Note 14. Income Taxes 158 Note 15. Discontinued Operations 160 Note 16. Securities Financing Activities 161 Note 17. Stock-Based Compensation 161 Note 18. Employee Benefits 164 Note 19. Short-Term Borrowings 169 Note 20. Long-Term Debt 170 Note 21. Trust Preferred Securities Issued by Unconsolidated Subsidiaries 171 Note 22. Commitments, Contingent Liabilities, and Guarantees 172 Note 23. Accumulated Other Comprehensive Income 174 Note 24. Shareholders’ Equity 175 Note 25. Business Segment Reporting 178 Note 26. Condensed Financial Information of the Parent Company 180 Note 27. Revenue from Contracts with Customers 182 99 Table of contents Management’s Annual Report on Internal Control over Financial Reporting We are responsible for the preparation, content and integrity of the financial statements and other statistical data and analyses compiled for this annual report. The financial statements and related notes have been prepared in conformity with U.S. generally accepted accounting principles and include amounts which of necessity are based on management’s best estimates and judgments and give due consideration to materiality. We believe the financial statements and notes present fairly our financial position, results of operations and cash flows in all material respects. We are responsible for establishing and maintaining a system of internal control that is designed to protect our assets and the integrity of our financial reporting as defined in the Securities Exchange Act of 1934, as amended. This corporate-wide system of controls includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of KeyCorp; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles, and that receipts and expenditures of KeyCorp are made only in accordance with authorizations of management and directors of KeyCorp; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of KeyCorp’s assets that could have a material effect on the consolidated financial statements. All employees are required to comply with our code of ethics. We conduct an annual certification process to ensure that our employees meet this obligation. Although any system of internal control can be compromised by human error or intentional circumvention of required procedures, we believe our system provides reasonable assurance that financial transactions are recorded and reported properly, providing an adequate basis for reliable financial statements. During 2024, the Audit Committee of the Board of Directors met regularly with Management, internal audit, and the independent registered public accounting firm, Ernst & Young LLP , to review the scope of their audits and to discuss the evaluation of internal accounting controls and financial reporting matters. The independent registered public accounting firm and the internal auditors have free access to, and meet confidentially with, the audit committee to discuss appropriate matters. Also, KeyCorp maintains a Disclosure Review Committee. This committee’s purpose is to design and maintain disclosure controls and procedures to ensure that material information relating to the financial and operating condition of KeyCorp is properly reported to its Chief Executive Officer, Chief Financial Officer, General Auditor, and the Audit Committee of the Board of Directors in connection with the preparation and filing of periodic reports and the certification of those reports by the Chief Executive Officer and the Chief Financial Officer. Management’s Assessment of Internal Control over Financial Reporting Management assessed, with participation of the KeyCorp’s Chief Executive Officer and Chief Financial Officer, the effectiveness of our internal control and procedures over financial reporting using criteria described in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that assessment, we believe we maintained an effective system of internal control over financial reporting as of December 31, 2024. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. KeyCorp's internal control over financial reporting as of December 31, 2024, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their accompanying report dated February 21, 2025. Christopher M. Gorman Clark H. Khayat Chairman and Chief Executive Officer Chief Financial Officer 100 Table of contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of KeyCorp Opinion on Internal Control over Financial Reporting We have audited KeyCorp’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, KeyCorp maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of KeyCorp as of December 31, 2024 and 2023 , and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion KeyCorp’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on KeyCorp’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to KeyCorp in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Cleveland, Ohio February 21, 2025 101 Table of contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of KeyCorp Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of KeyCorp as of December 31, 2024 and 2023 , and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of KeyCorp at December 31, 2024 and 2023 , and results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), KeyCorp’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of KeyCorp’s management. Our responsibility is to express an opinion on KeyCorp’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to KeyCorp in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 102 Table of contents Allowance for Loan and Lease Losses Description of the Matter KeyCorp’s loan and lease portfolio totaled $104.3 billion as of December 31, 2024 and the associated ALLL was $1.4 billion. As discussed in Note 1 and 5 of the financial statements, the ALLL represents management’s current estimate of lifetime credit losses inherent in the loan portfolio at the balance sheet date. Management estimates the ALLL using relevant available information, from internal and external sources, relating to past events, current economic conditions, idiosyncratic risk factors and reasonable and supportable forecasts. The ALLL is the sum of (i) asset specific / individual loan reserves; (ii) quantitative (formulaic or pooled) reserves; and (iii) qualitative (judgmental) reserves. Management estimates the quantitative reserves using probability of default / loss given default / exposure at default models (“loss forecasting models”), as well as other estimation methods for smaller loan portfolios. The ALLL also considers qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors to reflect management’s best estimate of current expected credit losses. Auditing management’s ALLL was complex due to the loss forecasting models used to compute the quantitative reserve and involves a high degree of subjectivity and judgment in evaluating management’s determination of the economic forecast and qualitative factor adjustments to the ALLL described above. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over KeyCorp’s ALLL process, including controls over the appropriateness of the ALLL methodology, operation and monitoring of loss forecasting models, the reliability and accuracy of data used in developing the ALLL estimate, and management’s review and approval process over the economic forecast, qualitative adjustments and overall ALLL results. With the assistance of EY specialists, we tested management’s loss forecasting models including evaluating the conceptual soundness of model methodology, assessing model performance and governance, testing key modeling assumptions and independently recalculating model output. We also verified the underlying economic forecast data used to estimate the quantitative reserve was complete and accurate. To test the qualitative factor adjustments, among other procedures, we assessed management’s methodology and considered whether relevant risks were reflected in the models and whether adjustments to the model output were appropriate. We tested the completeness, accuracy and relevance of the underlying data used to estimate the qualitative adjustments. We evaluated whether qualitative adjustments were reasonable based on changes in economic conditions, the loan portfolio, and management’s policies and procedures. For example, we evaluated the reasonableness of qualitative adjustments (or lack thereof) for concentrations of credit by independently comparing to loan portfolio information. We also assessed whether qualitative adjustments were consistent