What changed in this filing

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Item 1. Business

2025-02-21 compared with 2024-02-22 · 129 added, 145 removed, 392 unchanged (41% of the section changed)

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Consumer Bank and Commercial Bank.

As of December 31, 2023, these services were provided across the country through KeyBank’s 959 full-service retail banking branches and a network of 1,217 ATMs in 15 states, as well as additional offices, online and mobile banking capabilities, including our national digital bank, Laurel Road, and a telephone banking call center.

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.

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management, and capital markets needs of middle market clients within Key’s 15-state branch footprint.

It is also a significant, national, commercial real estate lender and third-party servicer of commercial mortgage loans and special servicer of CMBS.

The Institutional operating segment operates nationally in providing lending, equipment financing, and banking products and services to large corporate and institutional clients.

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Consumer, Energy, Healthcare, Industrial, Public Sector, Real Estate, and Technology.

The operating segment includes the KBCM platform which provides a broad suite of capital markets products and services including syndicated finance, debt and equity capital markets, derivatives, foreign exchange, financial advisory, public finance, commercial payments, equipment finance, and commercial mortgage banking.

Additionally, KBCM provides fixed income and equity sales and trading services to investor clients.

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

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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 our Technology Committee, Audit Committee, Compensation and Organization Committee, Executive Committee, Nominating and Corporate Governance Committee, and Risk Committee;

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;

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or by sending an e-mail to investor_relations@keybank.com.

The market for banking and related financial services is highly competitive.

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, investment banking firms, broker-dealers, and other local, regional, national, and global institutions that offer financial services.

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.

For more information on competition and related risks, see Item 1A.

Risk Factors - “ We operate in a highly competitive industry.” 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.

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 diverse and talented team is a top strategic priority for Key.

Our human capital management strategy is focused on attracting, developing, and retaining the talent our businesses need to deliver strong returns to our shareholders, 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.

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, 2023, 98% of employees earned $18 or more per hour, with 89% of employees earning $20 or more per hour.

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.

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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 incentives paid to our employees to a robust risk adjustment process that begins before grant and extends beyond payment.

We subject all discretionary

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, including our twelve 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 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.

Creating a Fair and Inclusive Culture

Key’s purpose is to help our clients, colleagues, and communities thrive.

We remain committed to attracting a talented and diverse workforce and supplier base that represents the clients and communities we serve.

In 2023 , we continued to focus on increasing minority representation in management and leadership roles, expanding our overall recruiting focus, developing diverse candidate pipelines, increasing supplier diversity, providing mentorship opportunities, offering implicit bias training, and leveraging our KBINGs to strengthen both engagement and inclusion.

In addition, we are committed to pay equity as a foundational element of our culture.

As of February 2023 , at KeyBank women earn on average more than 99% of what their male teammates earn, and people of color earn on average more than 99% of what their white teammates earn, after taking into account an employee’s job.

Our analysis is based on total compensation (base salary and all discretionary incentives) covering all teammates eligible for a discretionary incentive, other than our Executive Leadership Team whose pay is set by our Board of Directors.

Our pay equity and parity measures are evaluated annually, and we engage third-party partners to consult on our pay equity analysis and practices as needed.

More information about our commitment to pay equity and our commitment to increasing diversity is available at www.key.com/about/diversity/pay-equity-commitment.html.

As of December 31, 2023, our overall workforce was 57.8% female.

In addition, as of December 31, 2023, our workforce was also 74.9% White, 9.0% Black/African American, 7.0% Hispanic/Latino, 6.4% Asian and 2.7% other.

Our Board of Directors is 46% diverse (six of our 13 total Directors are diverse, with four women, one of whom is also a minority, and two male minorities) and our Executive Leadership Team is 42% diverse (four women and one minority out of 12 total executives).

For more information about our diversity and inclusion efforts, a more detailed breakdown of employee diversity by EEO-1 categories, and information about how we work every day and in every way to help our clients, colleagues, and communities thrive, please see our website and our annual Environmental, Social, and Governance report at https://www.key.com/about/diversity/diversity-and-inclusion.html.

Key’s Workforce

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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 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 1, 2024, Darrin J.

Benhart became Chief Risk Officer.

Because Darrin Benhart and James Waters have been employed at KeyCorp for less than five years, information is being provided concerning their prior business experience.

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.

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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.

Benhart (58) - Mr.

Benhart became Chief Risk Officer and an executive officer of KeyCorp on January 1,

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.

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.

Brady (58) - Ms.

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Gavrity served as Head of Enterprise Payments from January 2019 to November 2023 and Head of Commercial Payments from 2016 to 2019.

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.

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She became an executive officer of KeyCorp in 2016.

Midkiff (61) - On December 31, 2023, Mr.

Midkiff was Chief Risk Officer and an executive officer of KeyCorp since January 2018.

Paine III (55) - Mr.

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He became an executive officer of KeyCorp in 2016.

Schosser (53) - Mr.

Schosser has been the Chief Accounting Officer and an executive officer of KeyCorp since May 2015.

Jaime Warder (50) - Mr.

Warder has been Head of Digital Banking since January 2019 and became an executive officer of KeyCorp in May 2021.

Prior to this, Mr.

Warder served as Head of Business Banking and Investment Services from 2017 to 2019.

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.

Waters (58) - Mr.

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From 2018 to 2021, he served as General Counsel and Corporate Secretary of Cullen/Frost Bankers, Inc., a financial holding company.

Prior to 2018, he was a partner of the law firm Haynes and Boone, LLP.

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, with additional reforms expected following the bank failures that occurred in early 2023.

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.

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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.

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.

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.

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government will shield shareholders, creditors, and counterparties from losses in the event of failure;

and (iii) respond to emerging threats to the stability of the U.S.

and (iii) respond to emerging threats

to the stability of the U.S.

financial system.

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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.

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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 buffers.

and address pro-cyclicality concerns through the implementation of capital

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.

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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, with an effective date of January 1, 2015.

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.

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Recent regulatory capital-related developments

In December 2017, the Basel Committee released its final revisions to Basel III.

The revisions seek to restore credibility in the calculation of risk-weighted assets and improve the comparability of regulatory capital ratios across banking organizations by:

(1) enhancing the robustness and risk-sensitivity of the standardized approach for credit risk, credit valuation adjustment, and operational risk;

(2) constraining the use of internal models by placing limits on certain inputs used to calculate capital requirements under the internal ratings-based approach for credit risk (used by advanced approaches banking organizations) and removing the ability to use an internal model for purposes of determining the capital charge for CVA risk and operational risk;

(3) introducing a leverage ratio buffer to further limit the leverage of global systemically-important banks;

and (4) replacing the existing Basel II output floor with a more robust, risk-sensitive floor based on the Basel III standardized approach.

A final rule adopted by the federal banking agencies in February 2019 provides banking organizations with the option to phase in, over a three-year period, the adverse day-one regulatory capital effects of the adoption of the CECL accounting standard.

On August 20, 2020, the federal banking agencies issued a final rule that gives banking organizations that adopt CECL before the end of 2020 the option to delay for two years CECL’s adverse effects on regulatory capital.

This is in addition to the three-year transition period already in place, resulting in an optional five-year transition.

Key elected to adopt CECL as planned in the first quarter of 2020 and exercised the option to use a five-year transition to measure CECL’s effects on regulatory capital.

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.

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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.

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 starting on July 1, 2025.

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 starting on July 1, 2025.

All other elements of the calculation of regulatory capital would apply on the effective date of the final rule, which is expected to be on or about July 1, 2025.

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

banking organizations are subject to regulatory liquidity requirements based on international liquidity standards established by the Basel Committee in 2010, and subsequently revised between 2013 and 2014 (as revised, the “Basel III liquidity framework”).

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.

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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 (collectively, “EPSs”), 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 EPSs to BHCs from $50 billion to $250 billion.

EGRRCPA gave the Federal Reserve the authority to continue to apply EPSs 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 EPS 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 EPSs, 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”) became effective on December 31, 2019.

The 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.

Based on Key’s analysis of the Tailoring Rules, 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 reduced LCR.

KeyCorp does not meet the $50 billion threshold and is not subject to the reduced LCR or an LCR public disclosure requirement.

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.

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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, Key, as a Category IV firm with average weighted short-term wholesale funding of less than $50 billion, is not subject to an NSFR requirement.

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

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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 has only had to conduct an annual stress test, KeyCorp has had to conduct both an annual and a mid-cycle stress test.

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.

KeyCorp has been required to report the results of its mid-cycle stress test to the Federal Reserve.

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 2020 and again in 2022, 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.

In 2024, KeyCorp will again be required to participate in the Federal Reserve’s CCAR process and will be subject to a supervisory stress test conducted by the Federal Reserve.

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.

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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).

Under the final rule, the Federal Reserve 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.

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.

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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 revises 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 updates the frequency for calculating the stress capital buffer for these firms.

As a Category IV banking organization subject to a supervisory stress test every other year, KeyCorp was not required to participate in the Federal Reserve’s supervisory stress test in 2023.

On July 27, 2023, the Federal Reserve confirmed that KeyCorp’s required stress capital buffer (based on the results of KeyCorp’s June 2022 stress test) is 2.5%, which is the minimum buffer required for banking organizations the size of KeyCorp.

This stress capital buffer requirement will remain in effect until September 30, 2024 unless KeyCorp receives an updated stress capital buffer requirement from the Federal Reserve before that date.

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

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

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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.

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.

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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 impact of the special assessment to Key was approximately $190 million, which was recognized upon issuance of the final rule in the fourth quarter of 2023.

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).

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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 plans

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.

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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/regulations/reform/resplans/.

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.

In October 2019, the Federal Reserve and FDIC adopted a final rule to modify the resolution planning requirements applicable to large BHCs.

Under this final rule, BHCs with less than $250 billion in total consolidated assets will no longer be required to submit a resolution plan unless they have $75 billion or more in certain risk-based indicators.

Under this final rule, KeyCorp is no longer subject to resolution planning requirements.

On June 25, 2021, the FDIC issued a statement describing the modified approach that it plans to take in implementing certain aspects of its resolution plan rule with respect to IDIs with $100 billion or more in total assets (including KeyBank).

In this statement, the FDIC (i) indicated that these institutions will be required to submit resolution plans on a three-year cycle;

(ii) described the content requirements for these resolution plan submissions;

and (iii) specified that there will be greater emphasis in the future on periodic engagement and capabilities testing by the FDIC with individual institutions.

The FDIC stated that resolution plans will be submitted in two groups, with the first group consisting of IDIs whose parent company is not a U.S.

global systemically important bank (“GSIB”) or a Category II banking organization and the second group consisting of all other IDIs with $100 billion or more in total assets.

KeyBank is in the first group.

On August 29, 2023, the FDIC released for public comment a proposal 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 proposal would (i) require IDIs with more than $100 billion in total assets (including KeyBank) to submit full resolution plans every two years, (ii) require IDIs with total assets between $50 billion and $100 billion to submit informational filings every two years, (iii) require both groups of filers to submit more limited supplements in the off years, (iv) enhance and clarify the requirements for the content of resolution submissions, (v) codify certain aspects of guidance and feedback provided to filers subject to the current rule, (vi) expand expectations regarding engagement and capabilities testing, and (vii) establish an enhanced credibility standard for the evaluation of resolution submissions.

Comments on the proposal were due by November 30, 2023.

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

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

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Enhanced prudential standards and early remediation requirements

As enacted in 2010, the Dodd-Frank Act required the Federal Reserve to impose EPSs upon BHCs, like KeyCorp, with at least $50 billion in total consolidated assets.

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, enacted on May 24, 2018, raised the asset threshold above which the Federal Reserve is required to apply EPSs to BHCs from $50 billion to $250 billion and gave the Federal Reserve the authority to apply EPSs to BHCs with at least $100 billion in assets.

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 EPSs required under the Dodd-Frank Act:

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;

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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.

The Federal Reserve has yet to implement a final rule on the early remediation requirements.

Bank transactions with affiliates

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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).

Provisions added by the Dodd-Frank Act expanded the scope of:

(i) the definition of affiliate to include any investment fund having any bank or BHC-affiliated company as an investment adviser;

(ii) credit exposures subject to the prohibition on the acceptance of low-quality assets or securities issued by an affiliate as collateral, the quantitative limits, and the collateralization requirements to now include credit exposures arising out of derivative, repurchase agreement, and securities lending/borrowing transactions;

and (iii) transactions subject to quantitative limits to now also include credit collateralized by affiliate-issued debt obligations that are not securities.

these provisions require that a credit extension to an affiliate remain secured in accordance with the collateral requirements at all times that it is outstanding, rather than the previous requirement of only at the inception or upon material modification of the transaction.

These provisions also raise significantly the procedural and substantive hurdles required to obtain a regulatory exemption from the affiliate transaction requirements.

While these provisions became effective on July 21, 2012, the Federal Reserve has not yet issued a proposed rule to implement them.

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

On November 2, 2018, the Federal Reserve announced that it is adopting a new supervisory rating system for large financial institutions, including BHCs with total consolidated assets of $100 billion or more (like KeyCorp) (“LFI Rating System”), in order to align the Federal Reserve’s rating system with the post-crisis supervisory programs for these firms.

The LFI Rating System will provide 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 will assess an institution’s capital planning and positions, liquidity risk management and positions, and governance and controls.

Institutions subject to the LFI Rating System will be rated using the following scale:

Broadly Meets Expectations, Conditionally Meets Expectations, Deficient-1, and Deficient-2, with the Conditionally Meets Expectations rating intended to be used as a transitory rating to allow an institution time to remediate a concern identified during the supervisory evaluation.

The Federal Reserve assigned an initial rating under the LFI Rating System to KeyCorp in 2020.

The governance and controls component of the LFI Rating System was the subject of two separate, but related proposals:

(i) proposed guidance regarding supervisory expectations for boards of directors of large financial institutions;

and (ii) proposed guidance regarding core principles for effective senior management, business management, and independent risk management and controls for large financial institutions.

The final guidance regarding supervisory expectations for boards of directors was issued by the Federal Reserve on February 26, 2021.

The Federal Reserve indicated that it intends to use the board effectiveness guidance in informing its assessment of governance and controls at all firms subject to the LFI Rating System (including KeyCorp).

The Federal Reserve has not finalized the proposed guidance referenced above regarding core principles for effective senior management, business management, and independent risk management and controls for large financial institutions.

This guidance would support the supervisory evaluation under the governance and controls component of the LFI Rating System, together with the above-mentioned guidance regarding the effectiveness of a firm’s board of directors.

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

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Various metrics and performance standards will be applied under these tests.

Some provisions of the final rule will be effective on April 1, 2024 while many other provisions will be effective on January 1, 2026, and certain reporting requirements will be effective on January 1, 2027.

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 March 21, 2022, the SEC issued for public comment a proposal to amend its rules under the Securities Act of 1933 and the Securities Exchange Act of 1934 to require public companies (including KeyCorp) to provide detailed climate-related information in their registration statements and periodic reports.

Among other things, the proposal would require public companies to disclose information about (i) climate-related risks that are reasonably likely to have a material impact on the company’s business or financial statements over the short-, medium- or long-term;

(ii) the actual and potential impacts of such risks on the company’s strategy, business model, and outlook;

(iii) the role of the board of directors in overseeing climate-related risks and management’s role in assessing and managing such risks;

(iv) the impact of climate-related events and transitional activities on line items in the company’s consolidated financial statements as well as the financial estimates and assumptions used in the financial statements;

and (v) the company’s direct greenhouse gas emissions, indirect emissions from purchased energy, and, if material, indirect emissions from the company’s value chain (which may include financed emissions in a bank’s loan portfolio).

The financial services industry has not yet adopted a standardized methodology for banks to use to quantitatively measure indirect emissions from a bank’s value chain, such as financed emissions.

Accordingly, this proposal would require many banks to quantify and disclose financed emissions on a comprehensive scale for the first time.

We are awaiting issuance of the final rule.

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.

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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 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 are due by May 12, 2024.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business