What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-23 compared with 2025-02-21 · 421 added, 361 removed, 1250 unchanged (38% of the section changed)

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Valuation methodologies

Derivatives and hedging

Contingent liabilities, guarantees and income taxes

Accounting and reporting developments

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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.

Our results for 2025 saw us meet or exceed all of our financial targets communicated at the beginning of the year.

We delivered full year record revenue with both net interest income and fee revenue growing greater than projected.

As a result, we generated significant positive operating leverage.

At December 31, 2025, our Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 11.78% and 13.46%, 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.

We are well positioned as we enter 2026.

In addition to the items described above, the following actions and results during 2025 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.

• 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 added nearly 10% to our frontline banker staff across wealth management, commercial payments, middle market, and investment banking.

• We invested an additional $100 million in technology focused on customer-facing capabilities that make it easier for our clients to bank at Key.

• We ended the year with $70.0 billion in assets under management, a record high, reflecting the continued strong sales production in our mass affluent segment.

• We continued to maintain our strong risk discipline.

Full year net charge-offs were 41 basis points.

Additionally, all leading indicators:

non-performing assets, criticized loans, and delinquencies moved in a favorable direction.

• We remained committed to our strategy to engage a high-performing and talented workforce and fostering an inclusive environment for all .

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Category 2025 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)

FY2026 (vs FY 2025) (a)

Revenue (TE) (b)

$7,513 Million up ~7%

Adjusted noninterest expense (c)

Net interest income (TE) (b)

$4,671 Million up 8 to 10%

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)

Net interest margin 2.82% 4Q exit rate:

3.00 - 3.05% (c)

Noninterest income $2,842 Million up 3 - 4%

Noninterest income on an adjusted basis (b)(d)

$2,495 Million up 5 - 6%

Adjusted noninterest expense (b)

$4,729 Million up 3 to 4%

Average loans $105.7 Billion up 1 - 2%

Average Commercial Loans $74.5 Billion up ~5%

Net charge-offs to average loans 40 to 45 basis points

Effective tax rate ~22%

Tax-equivalent Effective Rate (e)

(a) Ranges are shown on an operating basis.

(b) Additional Guidance:

Net interest income (TE):

10%+ 4Q25 vs.

(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.

(b) Key is unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly related GAAP financial measures due to the difficulty in forecasting when future amounts may occur.

Such unavailable information could be significant for future results.

(d) Excluding commercial mortgage servicing fees, operating lease income and other leasing gains, other income, and net securities gains (losses)

(e) Reflects the estimated full year taxable-equivalent adjustment.

We have also established the following medium-term targets reflecting expected run rates by the end of 2027:

Return on tangible common equity (a)

15.0%+ Net Interest Margin 3.25%+

(a) Key is unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly related GAAP financial measures due to the difficulty in forecasting when future amounts may occur.

Such unavailable information could be significant for future results.

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):

The following chart provides a reconciliation of net income (loss) from continuing operations attributable to Key common shareholders for the year ended December 31, 2024, to the year ended December 31, 2025 (dollars in millions):

Net interest income

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• 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).

To make it easier to compare both the results across 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.

Net interest income (TE) for 2025 was $4.7 billion, and the net interest margin was 2.69%.

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.

Compared to 2024, net interest income (TE) increased $861 million, and the net interest margin increased by 53 basis points.

These increases primarily reflect lower interest-bearing deposit costs, the reinvestment of proceeds from maturing low-yielding investment securities, fixed-rate loans, and swaps into higher-yielding investments, and the repositioning of the available-for-sale portfolio during the second half of 2024, which involved the sale and reinvestment of approximately $10.0 billion of lower-yielding mortgaged-backed securities into higher-yielding investments.

Additionally, the balance sheet composition shifted to reflect a more favorable mix of higher-yielding commercial and industrial loans, and an improved funding mix as lower-cost deposits increased while wholesale borrowings declined.

These benefits were partially offset by the impact of lower interest rates on variable-rate earning assets.

Average loans totaled $105.7 billion for 2025, compared to $107.7 billion in 2024.

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.

The $2.1 billion decrease was driven by the intentional run-off of low-yielding consumer loans, which decreased $2.4 billion.

Average commercial loans increased $380 million, primarily driven by a mix shift to commercial and industrial loans.

Average deposits totaled $149.3 billion for 2025, an increase of $3.1 billion compared to 2024, reflecting growth in consumer deposits.

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.

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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.

Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates from Continuing Operations (g)

Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates and Components of Net Interest Income Changes from Continuing Operations (g)

Year ended December 31, 2025 2024 2023

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Bank notes and other short-term borrowings 1,996 84 4.20 2,984 164 5.49 5,890 308 5.24

Long-term debt (g)

Long-term debt (f)

11,298 734 6.50 17,279 1,187 6.87 20,983 1,305 6.22

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(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.

Interest excludes the interest associated with the liabilities referred to in (f) below, calculated using a matched funds transfer pricing methodology.

(b) Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% in effect that calendar year.

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Our provision for credit losses was a net charge of $471 million for 2025, compared to $335 million for 2024.

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.

The increase in our provision for credit losses was driven by reserve increases, partly offset by lower net charge-offs.

The reserve build in 2025 was largely driven by elevated economic uncertainty and loan growth, both primarily impacting the commercial loan portfolio.

This is in contrast to the reserve release in 2024 largely due to balance sheet optimization.

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 for 2025 was $2.8 billion compared to $809 million inclusive of the $1.8 billion loss from the investment portfolio repositioning during 2024.

Noninterest income represented 38% of total revenue for 2025 and 18% of total revenue for 2024.

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Noninterest Income

Year ended December 31, Change 2025 vs.

Change 2024 vs.

Dollars in millions 2025 2024 2023 Amount Percent Amount Percent

Trust and investment services income $ 591 $ 557 $ 516 $ 34 6.1 % $ 41 7.9 %

Investment banking and debt placement fees 780 688 542 92 13.5 146 26.9

Cards and payments income 337 331 340 6 1.8 (9) (2.6)

Service charges on deposit accounts 295 261 270 34 13.0 (9) (3.3)

Corporate services income 294 275 302 19 6.9 (27) (8.9)

Commercial mortgage servicing fees 287 258 190 29 11.2 68 35.8

Corporate-owned life insurance income 140 138 132 2 1.4 6 4.5

Consumer mortgage income 58 58 51 — — 7 13.7

Operating lease income and other leasing gains 43 76 92 (33) (43.4) (16) (17.4)

Other income 23 23 46 — — (23) (50.0)

Net securities gains (losses) (6) (1,856) (11) 1,850 (99.7) (1,845) N/M

Total noninterest income $ 2,842 $ 809 $ 2,470 $ 2,033 251.3 % $ (1,661) (67.2) %

Trust and investment services income

Trust and investment services income consists of brokerage commissions, trust and asset management fees, and insurance income.

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For 2025, trust and investment services income increased $34 million, or 6.1%.

This was primarily due to an increase in investment management income and other fees stemming from increased assets under management.

This was primarily due to an increase in investment management income and other fees associated with higher 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, 2025, our bank, trust, and registered investment advisory subsidiaries had assets under management or administration of $70.0 billion, compared to $61.4 billion at December 31, 2024.

The increase from 2023 to 2024 was attributable to movements in the market and net new business.

The increase from 2024 to 2025 was attributable to market activity and net new business.

Assets Under Management or Administration

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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.

For 2025, investment banking and debt placement fees increased $92 million, or 13.5%, from the prior year reflective of growth in syndication and commercial mortgage activity offset slightly by decreased merger and acquisitions fee activity.

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.

Cards and payments income, which consists of debit card, prepaid card, consumer and commercial credit card, and merchant services income increased $6 million, or 1.8%, in 2025 compared to 2024, driven by an increase in merchant services income and credit card fees, slightly offset by an increase in credit card rewards.

Service charges on deposit accounts

Service charges on deposit accounts increased $34 million, or 13.0%, in 2025 compared to the prior year.

This increase was driven by higher account analysis fees and lower fee waivers, offset slightly by a decrease in deposit maintenance fees.

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.

Other noninterest income increased $1.9 billion in 2025 compared to 2024, 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 increased $34 million, reflecting increases in commercial mortgage servicing fees and corporate services income, offset by declines in operating lease income and other leasing gains.

Noninterest expense

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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.

Year ended December 31, Change 2025 vs.

Change 2024 vs.

Dollars in millions 2025 2024 2023 Amount Percent Amount Percent

Personnel $ 2,917 $ 2,714 $ 2,660 $ 203 7.5 % $ 54 2.0 %

Net occupancy 270 266 267 4 1.5 (1) (0.4)

Computer processing 425 414 368 11 2.7 46 12.5

Business services and professional fees 193 174 168 19 10.9 6 3.6

Equipment 83 80 88 3 3.8 (8) (9.1)

Operating lease expense 38 63 77 (25) (39.7) (14) (18.2)

Marketing 95 94 109 1 1.1 (15) (13.8)

Other expense 682 740 997 (58) (7.8) (257) (25.8)

Total noninterest income $ 4,703 $ 4,545 $ 4,734 $ 158 3.5 % $ (189) (4.0) %

As shown in Figure 6, personnel expense, the largest category of our noninterest expense, increased by $203 million, or 7.5%, in 2025 compared to 2024.

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.

Overall activity for the year was driven by higher incentive compensation associated with noninterest income growth and continued investments in people.

Personnel Expense

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Change 2025 vs.

2024 2023 Amount Percent

Change 2024 vs.

2025 2024 2023 Amount Percent Amount Percent

Salaries and contract labor $ 1,715 $ 1,609 $ 1,649 $ 106 6.6 % $ (40) (2.4) %

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Total personnel expense $ 2,917 $ 2,714 $ 2,660 $ 203 7.5 % $ 54 2.0 %

N/M - Not meaningful

(a) Excludes directors’ stock-based compensation of $5 million in 2025 and $4 million in 2024, reported as “other noninterest expense” in Figure 5.

N/M - Not meaningful

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.

We recorded a tax benefit from continuing operations of $143 million for 2024, compared to tax expense of $196 million for 2023.

In total, other non-personnel expense decreased $45 million, or 2.5%, in 2025 compared to 2024 primarily due to a $26 million decrease in the FDIC Special Assessment accrual within other expense and continued decreases in

operating lease expense, slightly offset by increases in computer processing and business services and professional fees expense.

We recorded a tax expense from continuing operations of $476 million for 2025, compared to tax benefit of $143 million for 2024.

The effective tax rate, which is the provision for income taxes as a percentage of income from continuing operations before income taxes, was 20.7% for 2025 and 46.6% for 2024.

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Our goal is to help our clients move forward on their financial journeys and to be by their sides along the way.

Consumer Bank Summary of Operations

Year ended December 31, Change 2025 vs.

Dollars in millions 2025 2024 2023 2024 2023

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

Net interest income (TE) $ 2,709 $ 2,246 $ 2,221 20.6 % 22.0 %

Noninterest income 957 924 937 3.6 2.1

Total revenue (TE) 3,666 3,170 3,158 15.6 16.1

Provision for credit losses 169 126 111 34.1 52.3

Noninterest expense 2,802 2,714 2,779 3.2 .8

Income (loss) before income taxes (TE) 695 330 268 110.6 159.3

Allocated income taxes (benefit) and TE adjustments 168 79 64 112.7 162.5

Net income (loss) attributable to Key $ 527 $ 251 $ 204 110.0 % 158.3 %

Average loans and leases

Real estate — residential mortgage $ 19,285 $ 20,369 $ 21,348 (5.3) % (9.7) %

Home equity loans 5,973 6,696 7,502 (10.8) (20.4)

Other consumer loans 4,890 5,501 6,223 (11.1) (21.4)

Credit cards 925 934 986 (1.0) (6.2)

Commercial loans 4,671 5,244 5,717 (10.9) (18.3)

Total loans and leases $ 35,744 $ 38,744 $ 41,777 (7.7) % (14.4) %

Average deposits

Money market deposits $ 34,688 $ 30,723 $ 28,356 12.9 % 22.3 %

Demand deposits 22,759 22,315 23,142 2.0 (1.7)

Savings deposits 4,316 4,679 6,051 (7.8) (28.7)

Time deposits 11,840 13,190 7,463 (10.2) 58.6

Noninterest-bearing deposits 14,328 14,945 17,780 (4.1) (19.4)

Total deposits $ 87,932 $ 85,851 $ 82,793 2.4 % 6.2 %

Credit-related statistics

Nonperforming assets at period end $ 201 $ 201 $ 190

Net loan charge-offs 190 207 133

Net loan charge-offs to average total loans 0.53 % 0.53 % 0.32 %

• Net income attributable to Key of $527 million in 2025, compared to $251 million in 2024, an increase of 110.0%, largely driven by favorable rates on deposits

• Taxable-equivalent net interest income increased in 2025 by $463 million, or 20.6%, from the prior year, due to favorable rates on deposits

• Average loans and leases decreased in 2025 by $3.0 billion, or 7.7%, 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

• 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

• Average deposits increased in 2025 by $2.1 billion, or 2.4%, from the prior year, driven by growth in money market deposits

• Provision for credit losses increased $43 million in 2025 compared to the prior year, driven by increased economic uncertainty slightly offset by loan balance run-off.

• Noninterest income increased in 2025 by $33 million, or 3.6%, driven by increases in trust and investment services income

• Noninterest expense increased in 2025 by $88 million, or 3.2%, primarily reflective of increased personnel expenses, slightly offset by lower FDIC special assessment charges

Commercial Bank

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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.

Building relationships and delivering complex solutions for middle market and larger 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.

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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 deep market expertise in multiple industry verticals and relationship-led approach allow us to recognize opportunities and deliver strategic financial solutions that align with our clients’ goals.

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.

Commercial Bank Summary of Operations

Year ended December 31, Change 2025 vs.

Dollars in millions 2025 2024 2023 2024 2023

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

Net interest income (TE) $ 2,294 $ 1,805 $ 1,866 27.1 % 22.9 %

Noninterest income 1,745 1,629 1,429 7.1 22.1

Total revenue (TE) 4,039 3,434 3,295 17.6 22.6

Provision for credit losses 299 227 379 31.7 (21.1)

Noninterest expense 1,905 1,834 1,806 3.9 5.5

Income (loss) before income taxes (TE) 1,835 1,373 1,110 33.6 65.3

Allocated income taxes (benefit) and TE adjustments 388 282 227 37.6 70.9

Net income (loss) attributable to Key $ 1,447 $ 1,091 $ 883 32.6 % 63.9 %

Average loans and leases

Commercial and industrial $ 52,156 $ 49,926 $ 55,057 4.5 % (5.3) %

Real estate — commercial mortgage 12,057 12,575 14,325 (4.1) (15.8)

Real estate — construction 2,735 2,918 2,650 (6.3) 3.2

Commercial lease financing 2,450 3,065 3,678 (20.1) (33.4)

Other loans 8 14 73 (42.9) (89.0)

Total loans and leases $ 69,407 $ 68,498 $ 75,782 1.3 % (8.4) %

Average deposits

Money market deposits $ 7,508 $ 8,696 $ 6,141 (13.7) % 22.3 %

Demand deposits 36,868 35,031 31,864 5.2 15.7

Other deposits 529 739 641 (28.4) (17.5)

Noninterest-bearing deposits 13,165 13,558 16,398 (2.9) (19.7)

Total deposits $ 58,070 $ 58,025 $ 55,045 .1 % 5.5 %

Credit-related statistics

Nonperforming assets at period end $ 426 $ 571 $ 401

Net loan charge-offs 237 252 111

Net loan charge-offs to average total loans 0.34 % 0.37 % 0.15 %

• Net income attributable to Key of $1.4 billion in 2025, compared to $1.1 billion in 2024, an increase of 32.6%, 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 increased in 2025 by $489 million, or 27.1%, from the prior year, due to favorable deposit costs

• Average loan and lease balances increased $909 million in 2025, or 1.3%, driven by an increase in commercial and industrial loans

• Average deposit balances increased $45 million in 2025, or 0.1%, driven by our focus on growing deposits across our commercial businesses

• Provision for credit losses increased $72 million in 2025 compared to the prior year, resulting from reserve builds due to changes in economic conditions and portfolio growth, partially offset by lower net charge-offs

• Noninterest income increased $116 million in 2025, or 7.1%, 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

• Noninterest expense increased by $71 million in 2025, or 3.9%, from the prior year, primarily driven by higher personnel expense related to incentive compensation associated with noninterest income growth and continued investments in people, partially offset by decreases in FDIC special assessment charges and operating lease expenses

Financial Condition

Loans and loans held for sale

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 9 shows the composition of our loan portfolio at December 31 for each of the past two years.

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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”).

Additional information pertaining to this secured borrowing is included in Note 17 (“Borrowings”).

(c) Total loans exclude loans of $205 million at December 31, 2025, and $257 million at December 31, 2024, related to the discontinued operations of the education lending business.

At December 31, 2025, total loans outstanding from continuing operations were $106.5 billion, compared to $104.3 billion at the end of 2024.

At December 31, 2025, 67% of our loans were variable rate as compared to 63% at the end of 2024.

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.

Commercial loans outstanding were $76.5 billion at December 31, 2025, an increase of $4.6 billion, or 6.4%, compared to December 31, 2024, primarily reflecting increases in commercial and industrial loans and commercial mortgage real estate loans.

Figure 10 provides our commercial loan portfolio by industry classification as of December 31, 2025, and December 31, 2024.

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Public exposure 1,654 7 306 1,967 2.6

Technology, media, and telecom 521 10 44 575 .8

Technology 1,009 17 82 1,108 1.5

Transportation 1,022 121 276 1,419 1.9

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Public exposure 2,003 7 387 2,397 3.3

Technology, media, and telecom 807 11 78 896 1.2

Technology 829 25 95 949 1.3

Transportation 841 126 291 1,258 1.7

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This portfolio is approximately 92% 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.

Commercial and industrial loans totaled $57.7 billion at December 31, 2025, an increase of $4.8 billion, or 9.0%, compared to December 31, 2024 .

The increase was partly driven by increases in specialty finance lending within the finance industry classification.

The finance industry classification is comprised primarily of finance companies, insurance companies, and leasing companies.

Commercial real estate loans .

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These three commercial real estate segments make up 70% 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.

Our non-owner-occupied portfolio is focused on operators of commercial real estate who not only utilize our loan products, but also utilize 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, 2025, commercial real estate loans totaled $16.6 billion, which includes $13.7 billion of mortgage loans and $2.8 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.

Compared to December 31, 2024, this portfolio increased $305 million or 1.9%.

Nonowner-occupied properties, generally properties for which at least 50% of the debt service is provided

by rental income from nonaffiliated third parties, represented 81% of total commercial real estate loans outstanding at December 31, 2025

Our construction loans constitute 17% of commercial real estate loans as of December 31, 2025 compared to 18% 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.

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Commercial Real Estate Loans

Geographic Region

Dollars in millions West Southwest Central Midwest Southeast Northeast National Total Percent of Total Construction Commercial

Geographic Region Percent of Total Commercial

Dollars in millions West Southwest Central Midwest Southeast Northeast National Total Construction

December 31, 2025

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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.

Consumer loans outstanding at December 31, 2025, totaled $30.0 billion, a decrease of $2.3 billion, or 7.2%, from one year ag o.

The decrease was driven by declines across all consumer loan categories reflective of the intentional run-off of low-yielding loans, primarily consumer mortgages, 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, 2025, representing approximately 62% of consumer loans.

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Consumer Loans by State

Dollars in millions Real estate — residential mortgage Home equity loans Consumer direct loans Credit cards Total

Dollars in millions Real estate — residential mortgage Home equity loans Other consumer loans Credit cards Total

December 31, 2025

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Total $ 19,886 $ 6,358 $ 5,167 $ 958 $ 32,369

As shown in Figure 12, during 2024, we sold $8.2 billion of our loans .

As shown in Figure 13, during 2025, we sold $10.1 billion of our loa ns.

Sales of loans classified as held for sale generated net gains of $147 million during 2025.

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(c) Predetermined interest rates either are fixed or may change during the term of the loan according to a specific formula or schedule.

Our securities portfolio is constructed to store liquidity and help manage interest rate risk, including holding securities used to accommodate pledging requirements.

We manage our securities portfolio according to the following priorities:

1) store of liquidity, 2) interest rate risk management tool, and 3) source of earnings.

In keeping with the first priority, the portfolio provides securities to meet our pledging requirements.

Our securities portfolio totaled $48.2 billion at December 31, 2025, compared to $45.1 billion at December 31, 2024.

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Held-to-maturity securities were $8.6 billion at December 31, 2025, compared to $7.4 billion at December 31, 2024.

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”).

Mortgage-Backed Securities by Issuer

Dollars in millions

FHLMC & FNMA $ 14,291 $ 24,302

GNMA 21,573 11,665

$ 35,864 $ 35,967

(a) Includes securities held in the available-for-sale and held-to-maturity portfolios.

Securities available for sale

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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.

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.

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Agency Commercial Mortgage-backed Securities (a)

Total Weighted-Average Yield (b)

Total Weighted-Average Yield (c)

December 31, 2025

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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.

At December 31, 2025, our deposits totaled $148.7 billion, a decrease of $1.0 billion, compared to December 31, 2024.

Uninsured deposits totaled $66.2 billion and $64.4 billion at December 31, 2025 and December 31, 2024, respectively.

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(a) Intercompany deposits and accrued interest excluded from uninsured deposits

$ 12.8 $ 12.4

As of December 31, 2025 and December 31, 2024, approximately $12.0 billion and $12.3 billion, respectively, of uninsured deposits were collateralized by government-backed securities.

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Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $11.0 billion at December 31, 2025, compared to $14.2 billion at December 31, 2024.

The decrease reflects our balance sheet optimization efforts, which reduced our need for wholesale borrowings.

The decrease reflects maturities in long-term debt and a reduced need for wholesale borrowings.

Wholesale funding supplements client deposit funding and may rise or fall with seasonal or other funding needs.

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.

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.

Our capital management objective is to maintain capital levels consistent with our risk appetite and of a sufficient amount to operate and support our clients under a wide range of economic conditions.

Our current capital levels position us well to execute against our capital priorities including supporting organic growth, investing in our business, and providing an attractive return to our investors through dividends and share repurchases.

The following sections discuss certain ways we have deployed our capital.

For further information, see the Consolidated Statements of Changes in Equity and Note 21 (“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.

Consistent with our capital plans, the Board declared a quarterly dividend of $.205 per Common Share for each of the four quarters of 2024.

Consistent with our capital plan, the Board declared a quarterly dividend of $.205 per Common Share for each of the four quarters of 2025.

These quarterly dividend payments brought our annual dividend to $.82 per Common Share for 2025.

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Our Common Shares are traded on the NYSE under the symbol KEY with 25,873 holders of record at December 31, 2025.

Our book value per Common Share was $14.21 based on 1.1 billion shares outstanding at

December 31, 2024, compared to $13.02 based on 936.6 million shares outstanding at December 31, 2023.

Our book value per Common Share was $16.27 based on 1.1 billion shares outstanding at December 31, 2025, compared to $14.21 based on 1.1 billion shares outstanding at December 31, 2024.

At December 31, 2025, our tangible book value per Common Share was $13.77, compared to $11.70 at December 31, 2024.

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Shares outstanding at beginning of period 1,106,786 1,112,952 1,112,453 1,111,986 1,106,786 936,564

Open market share repurchases — — — — — (2,550)

Share repurchases (11,109) (11,109) — — — —

Shares issued under employee compensation plans (net of cancellations and returns) 6,724 558 499 467 5,200 7,351

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Shares outstanding at end of period 1,102,401 1,102,401 1,112,952 1,112,453 1,111,986 1,106,786

During 2024, Common Shares outstanding increased by 170.2 million shares, primarily driven by issuances under the Scotiabank investment agreement.

In March 2025, the Board of Directors authorized a share repurchase program pursuant to which we may purchase up to $1.0 billion of Common Shares.

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.

During the fourth quarter of 2025, we began repurchasing shares under the share repurchase program authorized by the Board of Directors in March 2025.

During 2025, Common Shares outstanding decreased by 4.4 million shares, primarily driven by share repurchases in the fourth quarter.

For more information on share activity, see Note 21 (“Shareholders' Equity”).

At December 31, 2025, we had 154.3 million treasury shares, compared to 149.9 million treasury shares at December 31, 2024.

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.

The increase in treasury shares during the year was primarily attributable to the repurchase of 11.1 million shares beginning in the fourth quarter.

Going forward, we expect to reissue treasury shares as needed in connection with stock-based compensation awards and for other corporate purposes.

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Our tangible common equity to tangible assets ratio was 8.4% at December 31, 2025, compared to 7.0% at December 31, 2024.

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.

See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity.” The minimum capital and leverage ratios under the Regulatory Capital Rules together with the estimated ratios of KeyCorp at December 31, 2025, are set forth 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, 2025, and December 31, 2024, under the Regulatory Capital Rules.

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Total risk-based capital $ 22,910 $ 22,336

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

Excess allowance for loan and lease losses — —

Net risk-weighted assets $ 138,296 $ 148,575

RISK-WEIGHTED ASSETS (a)

$ 145,933 $ 138,296

AVERAGE QUARTERLY TOTAL ASSETS $ 187,035 $ 188,855

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(a) Net of capital surplus.

(b) Amount reflects our decision to adopt the CECL transitional provision.

(b) As of January 1, 2025, the CECL optional transition provision had been fully phased-in.

Amounts prior to January 1, 2025, reflect Key's election to adopt the CECL optional transition 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).

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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.”

Information about such arrangements is provided in Note 19 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Other Off-Balance Sheet Risk.”

We are a guarantor in various agreements with third parties.

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Risk Management

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.

Like all financial services companies, we engage in business activities that come with related risks.

The most significant risks we face are credit, compliance, operational, liquidity, market, strategic, model, and technology risks, as depicted in the following chart.

We manage such risks across the entire enterprise to maintain safety and soundness and maximize profitable growth.

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

conform to regulatory expectations.

Our risk appetite is defined as the level of risk we are willing to accept and prudently manage in pursuit of our strategic objectives.

It is consistent with our pursuit of risk-adjusted shareholder returns, our corporate risk-taking capacity and willingness to accept risk.

Our risk appetite statement is an important component of our enterprise risk

governance framework, reinforces our risk culture, and provides focus on our primary risk management tenets of soundness, profitability, and growth.

Our risk appetite framework serves as a guide for establishing corporate and business strategies as well as for developing and evaluating strategic objectives and capital planning activities.

It is articulated through qualitative statements and quantitative metrics, approved by the Board of Directors, and translated into limits, targets, and other measures at appropriate levels in the organization.

Maintaining a strong risk culture plays an integral role in achieving our strategic objectives and delivering for our stakeholders.

Each employee plays a proactive role by complying with applicable laws and regulations, treating our customers fairly and responsibly, and demonstrating the highest levels of professionalism, conduct, and ethics.

Our risk culture is centered on maintaining strong practices for risk awareness, identification, escalation, and mitigation across the enterprise.

We seek to sustain strong enterprise risk management practices consistent with industry standards and regulatory expectations.

The table below depicts our risk management hierarchy and associated responsibilities and activities of each group.

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• Challenges management and promotes accountability

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, strategic, and technology 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 Executive Level (Level II) Risk Governance Committee charters and significant policies relating to risk management, including corporate risk metrics for major risk categories

Board of Directors Compensation & Organization Committee (a)

• Assists the Board in oversight of compensation policies and practices to support Key’s efforts to attract, retain, develop, motivate, and reward a high performing and collaborative workforce to achieve its business objectives

• Oversees compensation for Key’s Board-Reported Executives, talent management and organizational development, including succession planning, leadership development and strategic hiring objectives

Board of Directors Nominating & Corporate Governance Committee (a)

• Assists the Board with oversight of corporate governance matters and Key’s policies and practices on significant issues of corporate responsibility

• Oversees the evaluation of the Board, the directors, and the Lead Director

• Provides guidance on Board-related matters, including director candidates, director compensation, director independence, the Board committee structure, and succession planning matters

• Reviews the Corporate Governance Guidelines

• Provides oversight with respect to community investment strategy

Board of Directors Technology Committee (a)

• Assists the Board with oversight of major technology investments and technology risks

• Supports Key’s strategic objectives in areas such as cybersecurity, fraud, and data, project management, technology strategy, technology innovation, and emerging technology trends

• In consultation with the Risk Committee, oversees technology-related risks including (but not limited to) cybersecurity, business resiliency, and other technology-related risks as necessary and appropriate

Board of Directors Audit Committee (a)

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• 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.

Executive Level (Level II) Risk Governance Committees • Includes ERM Committee, Asset Liability Committee, Capital Committee, Credit Risk Committee, Compliance Risk Committee, and Operational Risk Committee, as well as the Compensation & Benefits Oversight Committee and the Disclosure Committee.

Level II Risk Governance Committees report to the Risk Committee of the Board (except for the Compensation & Benefits Oversight Committee, which reports to the Compensation & Organization Committee of the Board, and the Disclosure Committee, which reports to the Audit Committee of the Board) and are generally responsible for the activities listed herein

• Escalation of risk issues, particularly issues that have the potential to increase aggregated risk beyond Key’s risk appetite, to the appropriate Level I Governance Committee, typically the Risk or Audit Committees of the Board

• Identifying early warning events or trends, top and emerging risks and discussing forward looking assessments

• Approving certain risk metrics

• Monitoring certain metric limits, as well as associated risk levels to the Board approved risk appetite

• Providing governance, direction, oversight and high-level management of their associated risk and the risk assessment process which is used in capital adequacy stress testing;

• Monitoring stress testing results related to their associated risks (if required per committee charter) and escalating emerging risks as appropriate

• Providing assurance, advice and support to the Risk Committee on their associated risk

Management Level (Level III) Risk Governance Committees • Includes attendees from each of the Three Lines of Defense:

First Line (line of business and support areas), Second Line (risk management), and Third Line (internal audit function)

• Supports the ERM Committee, Asset Liability Committee, Capital Committee, Credit Risk Committee, Compliance Risk Committee, and Operational Risk Committee, as well as the Compensation & Benefits Oversight Committee and the Disclosure Committee, by identifying early warning events and trends, escalating emerging risks, and discussing forward-looking assessments

Internal Audit • Provides 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.

(a) Certain Board Committees, including 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.

We utilize a Three Lines of Defense model for risk governance which establishes roles and responsibilities for each of the Three Lines, consisting of Business and Support Areas, Risk Management, and Internal Audit relative to the management and oversight of risk.

As the first line of defense, Lines of Business and Support Areas have the primary responsibility to accept, own, and proactively identify, monitor, and manage risk.

The second line of defense, Risk Management, provides independent, centralized oversight over all risk categories by aggregating, analyzing, and reporting risk information.

The third line of defense, Internal Audit, is responsible for independently evaluating the appropriateness of the risk governance framework for the size, complexity, and risk profile of Key.

Market risk management

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At December 31, 2025, 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.

We maintain modest trading inventories to facilitate customer flow, make markets in securities, and hedge certain risks including but not limited to credit spread risk and interest rate risk.

The risks associated with these activities are mitigated in accordance with the Market Risk policies.

The majority of our positions are traded in active markets.

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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.

The Joint KeyCorp and KeyBank National Association Risk Committee (“Board Risk Committee”) provides oversight of trading market risks.

The ALCO 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.

The Market Risk Committee approves market risk policies and recommends our significant market risk policy to the ALCO and the Board Risk Committee 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.

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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.

MTRM conducts an initial assessment of a position and shares with the Covered Position Working Group, which provides recommendation of the classification of a position, with final determination made by MTRM and legal.

Decisions on the classification of Covered Positions are communicated to the Market Risk Committee as needed.

Our significant portfolios of covered positions are detailed below.

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Stressed VaR is used to assess extreme conditions on market risk within our trading portfolios.

MTRM calculates VaR and stressed VaR at

various confidence levels and the results are closely monitored.

MTRM calculates VaR and stressed VaR at various confidence levels daily, and the results are closely monitored.

VaR and stressed VaR results are also provided to our regulators and utilized in regulatory capital calculations.

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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.

VaR is calculated using daily observations over a one-year lookback period 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.

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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 VaR model undergoes periodic review and validation by Key’s Model Risk team.

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.

MTRM backtests the 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 (the profit/loss resulting from changes in risk factors applied to the previous trading day’s closing positions;

held profit and loss excludes fees, commissions, reserves, net interest income, and intraday trading).

Backtesting exceptions occur when daily held profit and loss exceeds VaR.

There were four backtesting exceptions for KeyCorp during the past 250 trading days ended December 31, 2025, generally caused by large moves in rates.

The total number of VaR backtesting breaches for KeyCorp over the preceding 250 trading days is used to determine the multiplier for the VaR based capital requirement under the Market Risk Rule.

The multiplier increases from a minimum of 3.0 to a maximum of 4.0, depending on the number of backtesting exceptions.

All KeyCorp backtesting exceptions are thoroughly reviewed in the context of VaR model use and performance.

The backtesting multiplier for KeyCorp was 3.0 for both December 31, 2025, and December 31, 2024.

We do not engage in correlation trading or utilize the internal model approach for measuring default and credit migration risk.

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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, 2025, and December 31, 2024.

The increase in stressed VaR is due to a change in the size and composition of our fixed income inventory.

Changes in VaR are dependent on portfolio composition, inventory levels, and other market factors.

Stressed VaR for Significant Portfolios of Covered Positions

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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.

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 & Treasury Risk Officer.

Nontrading market risk

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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.

The primary components of interest rate risk exposure consist of reprice risk, basis risk, yield curve risk, and option 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.

• “Yield curve risk” is the exposure to nonparallel 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.

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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.

In addition, the ALCO and the TROC review 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.

The MTRM, as the second line of defense, provides additional oversight.

Net interest income simulation analysis.

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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 analysis also incorporates assumptions for the current and projected interest rate environments and balance sheet growth projections based on a most likely macroeconomic outlook.

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

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).

The simulation model estimates the amount of net interest income at risk by simulating the change in net interest income that would occur if rates were to gradually diverge from market expectations 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, 2025, and December 31, 2024.

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%.

At December 31, 2025, our simulated exposure to changes in interest rates remained neutral.

The exposure to declining rates has changed from 0.15% as of December 31, 2024 to (0.35)% as of December 31, 2025, while the exposure to rising rates has changed from (0.39)% as of December 31, 2024 to 0.41% as of December 31, 2025.

The modest shift toward asset sensitivity was caused principally by the adoption of a new pricing model for indeterminate maturity interest-bearing deposits in the first quarter of 2025.

The new deposit beta model incorporates more historical data and features that we believe more accurately reflect the behavior of our clients in rising and declining interest rate cycles.

In addition, since the beginning of the second quarter of 2025, Key now measures simulated change in net interest income relative to implied forwards in a baseline scenario.

Previously, metrics were calculated against a flat-rate assumption in the baseline scenario.

We are actively managing the balance sheet to maintain desired IRR positioning in the current environment.

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.

Simulated Change in Net Interest Income

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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.

Regular 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.

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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.

Corporate Treasury’s 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 the 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.

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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

upon assumptions applied to assets and liabilities with non-contractual maturities.

This analysis is highly dependent 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.

Remediation plans are similarly developed if the analysis indicates that the EVE will decrease by 15% or more in response to an instantaneous increase or decrease in interest rates.

The position is within these guidelines as of December 31, 2025.

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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”).

For more information about how interest rate swaps are used to manage the risk profile, see Note 7 (“Derivatives and Hedging Activities”).

Portfolio Swaps and Options by Interest Rate Risk Management Strategy

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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.

Liquidity management involves maintaining sufficient and diverse sources of funding to accommodate planned, as well as unanticipated, changes in cash flows of assets and liabilities under both normal and adverse conditions.

Governance structure

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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.

Oversight and governance is provided by the Board, 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.

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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.

These 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.

To ensure that emerging issues are identified, we monitor an extensive set of systematic and idiosyncratic early warning indicators daily.

To ensure that emerging issues are identified, we monitor an extensive set of systemic and idiosyncratic early warning indicators daily.

Factors affecting liquidity

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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.

Our credit ratings and rating agency outlooks at December 31, 2025, 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.

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Stable A-2 N/A BBB BBB- BB BB

Stable P-2 N/A Baa2 Baa2 Baa3 Ba1

Positive F2 N/A BBB+ N/A BB BB

Positive P-2 N/A Baa2 Baa2 Baa3 Ba1

Fitch Ratings, Inc.

Stable F1 N/A A- N/A BB+ BB+

Stable R-1 (low) N/A A (low) BBB (high) BBB (high) BBB (low)

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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

Positive F2 F2/A- BBB+ BBB N/A N/A

Moody’s Positive P-2 P-1/A2 Baa1 Baa2 N/A N/A

Fitch Ratings, Inc.

Stable F1 F1/A A- BBB+ N/A N/A

Stable R-1 (low) A A A (low) N/A N/A

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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.

Additionally, 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,

2024 and December 31, 2023.

In 2024, our secured term borrowings decreased $8.5 billion from a reduction in FHLB borrowings.

During a stress 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, 2025 and December 31, 2024.

As of December 31, 2025, our secured term borrowings were $810 million, a decrease of $519 million compared to December 31, 2024 due to a reduction in FHLB borrowings.

Available Contingent Liquidity

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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.

We have several liquidity programs 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.

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There are no restrictive financial covenants in any of these programs.

KeyBank had no bank note issuances during 2024.

KeyCorp maintains a Medium-Term Note Program that permits KeyCorp to issue notes with original maturities of nine months or more.

At December 31, 2025, KeyCorp had $13.3 billion available for issuance under the Medium-Term Note Program.

Under its Bank Note Program, KeyBank may issue up to $20 billion of notes.

At December 31, 2025, 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.

The primary sources of liquidity for KeyCorp are dividends from KeyBank and the proceeds from the issuance of debt and capital securities.

KeyCorp has sufficient liquidity when it can service its debt;

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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.

The parent company generally maintains cash and short-term investments in an amount sufficient to meet projected debt maturities and dividends for the next 24 months.

At December 31, 2025, KeyCorp held $4.9 billion in cas h 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 the proceeds from term debt issuances.

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

quarter of 2024.

At December 31, 2024, KeyBank had no regulatory capacity to pay any dividends to KeyCorp without prior regulatory approval.

During 2025, KeyBank paid $1.4 billion in cash dividends to KeyCorp, and during the fourth quarter of 2025, KeyBank paid $525 million in cash dividends to KeyCorp.

At December 31, 2025, KeyBank had $783 million in 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 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.

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, 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 December 29, 2025 all of the KeyBank outstanding 4.700% Fixed Rate Senior Bank Notes due January 26, 2026 were called at a redemption price equal to 100% of the outstanding principal amount of the Senior Bank Notes plus accrued and unpaid interest to, but excluding, the redemption date.

In addition, on January 28, 2026, also under the Medium-Term Note Program, KeyCorp issued $750 million of 5.305% Fixed-to-Floating Rate Senior Notes due January 28, 2037.

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.

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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.

The Credit Risk Committee recommends Significant Level 1 credit policies to the Board Risk Committee for approval.

These policies are communicated throughout the organization to foster a consistent approach to granting credit.

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For more information, see Note 4 (“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.

As shown in Figure 29, our ALLL from continuing operations increased by $18 million, or 1.3%, from December 31, 2024.

The commercial ALLL increased by $41 million, or 4.0%, from December 31, 2024, driven by changes in the economic outlook and loan growth, partly offset by improving credit quality trends.

The consumer ALLL decreased $23 million, or 6.2%, from December 31, 2024, driven by the impact of ongoing loan balance reductions and strong credit performance.

Allocation of the Allowance for Loan and Lease Losses

Dollars in millions

Allowance Percent of

Commercial and industrial $ 745 50.6 % 54.1 % $ 639 45.4 % 50.7 %

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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.

Over the past 12 months, net loan charge-offs decreased $10 million, mainly reflecting a decrease in charge-offs of consumer loans.

Net Loan Charge-offs from Continuing Operations (a)

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Commercial and industrial $ 255 $ 305

Real estate — commercial mortgage 38 37

Real estate — construction — (1)

Commercial real estate:

Commercial mortgage 87 38

Construction — —

Total commercial real estate loans 87 38

Commercial lease financing 6 2

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Commercial and industrial 0.46 % 0.56 %

Real estate — commercial mortgage 0.27 0.23

Real estate — construction — (0.04)

Commercial real estate:

Commercial mortgage 0.65 0.27

Construction 0.01 —

Total commercial real estate loans 0.54 0.22

Commercial lease financing 0.25 0.05

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Commercial and industrial $ 312 $ 363

Real estate — commercial mortgage 40 39

Real estate — construction — —

Commercial real estate:

Commercial mortgage 94 40

Construction — —

Total commercial real estate loans (a)

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Commercial and industrial 57 58

Real estate — commercial mortgage 2 2

Real estate — construction — 1

Commercial real estate:

Commercial mortgage 7 2

Construction — —

Total commercial real estate loans (a)

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Figure 33 shows the composition of our nonperforming assets.

As shown in Figure 33, nonperforming assets increased $181 million during 2024.

As shown in Figure 33, nonperforming assets decreased $145 million during 2025.

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.

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Commercial and industrial $ 256 $ 322

Real estate — commercial mortgage 243 100

Real estate — construction — —

Commercial real estate:

Commercial mortgage 157 243

Construction — —

Total commercial real estate loans (a)

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Accruing loans past due 30 through 89 days 220 206

Restructured loans — accruing and nonaccruing (c)

Restructured loans included in nonperforming loans (c)

Nonperforming assets from discontinued operations — education lending business 2 2

Nonperforming loans to period-end portfolio loans .58 % .73 %

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (c)

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets .59 .74

(a) See Figure 11 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 10 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, 2025, and December 31, 2024.

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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

operational risk and losses.

For example, an operational event database tracks the amounts and sources of 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.

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.

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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.

Our Internal Audit function regularly assesses the overall effectiveness of our Operational Risk Management and Compliance Risk Management Programs and our system of internal controls.

Internal Audit 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

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Key shareholders’ equity (GAAP) $ 20,381 $ 18,176 $ 14,637

Intangible assets (a)

Intangible assets

2,760 2,779 2,806

Preferred Stock (b)

Preferred Stock (a)

2,446 2,446 2,446

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Total assets (GAAP) $ 184,381 $ 187,168 $ 188,281

Intangible assets (a)

2,779 2,806 2,844

Intangible assets 2,760 2,779 2,806

Tangible assets (non-GAAP) $ 181,621 $ 184,389 $ 185,475

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Average Key shareholders’ equity (GAAP) $ 19,493 $ 15,408 $ 13,881

Intangible assets (average) (c)

2,793 2,826 2,839

Intangible assets (average) 2,769 2,793 2,826

Preferred Stock (average) 2,500 2,500 2,500

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Return on average tangible common equity from continuing operations

Income (loss) from continuing operations attributable to Key common shareholders (GAAP)

$ (306) $ 821 $ 1,793

Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 1,685 $ (306) $ 821

Average tangible common equity (non-GAAP) 14,224 10,115 8,555

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Return on average tangible common equity consolidated (non-GAAP) 11.85 % (3.01) % 9.63 %

(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.

Pre-provision net revenue

Net interest income (GAAP) $ 4,636 $ 3,765 $ 3,913

Taxable-equivalent adjustment 35 45 30

Noninterest income 2,842 809 2,470

Noninterest expense 4,703 4,545 4,734

Pre-provision net revenue from continuing operations (non-GAAP) $ 2,810 $ 74 $ 1,679

(a) Net of capital surplus.

Adjusted noninterest expense and adjusted noninterest income are non-GAAP measures in that they are adjusted to exclude the impact of significant or unusual items.

Management believes adjusting for significant or unusual 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,

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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.

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.

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.

We rely heavily on the use of judgment, assumptions, and estimates to make a number of core decisions, including accounting for the ALLL and assets and liabilities that involve valuation methodologies.

In addition, we may employ outside valuation experts to assist us in determining fair values of certain assets and liabilities.

Allowance for loan and lease losses

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Our ALLL models were designed to capture the correlation between economic and portfolio changes.

As such, evaluating

shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance.

As such, evaluating 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.

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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.

The maximum difference in the quarterly macroeconomic variables as of December 31, 2025, between the base and downside scenarios over the two year reasonable and supportable period includes an approximate 6 percentage point decline in GDP annualized growth and an approximate 4 percentage point increase in the U.S.

unemployment rate.

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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.

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.

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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%).

Key’s 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.

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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.

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.

Future cash 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.

The discount rates for the Consumer, Commercial, and Institutional reporting units used in the most recent quantitative assessment, which was performed in the first quarter of 2024, were, 13%, 13.5%, and 13.5%, respectively.

The results of the 2024 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.

This was the most recent quantitative test performed by Key.

We performed an annual qualitative impairment test for all three of our reporting units as of October 1, 2025.

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, 2025, our annual testing date.

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Additional information is provided in Note 11 (“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.

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”).

Accounting and reporting developments

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Other Significant Matters

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

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.

Income Statement—Reporting Comprehensive

ASU 2024-03 and ASU 2025-01 Income Statement— Reporting

Comprehensive

Income—Expense Disaggregation Disclosures (Topic 220-40) January 1, 2027

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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 could be applied on a prospective or retrospective basis.

The guidance is not expected to have a material impact on Key’s disclosures.

Debt—Debt with Conversion and

Other Options (Topic 470-20) January 1, 2026

ASU 2025-06—Intangibles—Goodwill and Other—

Internal-Use Software (Subtopic 350-40) January 1, 2028

Early adoption permitted.

The guidance revises the accounting for internal-use software by replacing prescriptive development stage guidance with a principle-based capitalization threshold.

Entities are required to begin capitalizing costs when management commits funding and it is probable the software will be completed and used as intended.

This guidance may be applied on a prospective, retrospective or modified retrospective basis.

We are currently evaluating the impact of this guidance on its financial condition and results of operations.

ASU 2025-08 Financial Instruments—Credit Losses (Topic 326):

Purchased Loans January 1, 2027

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.

This guidance expands the types of acquired financial assets that must use the gross‑up approach under ASC 326.

Certain non‑PCD loans considered “seasoned” are now accounted for using the gross‑up approach at acquisition.

All non‑PCD loans acquired in a business combination are considered “seasoned” and other acquired loans are considered “seasoned” if they were purchased at least 90 days after origination and the acquirer did not originate the loans.

This guidance must be applied prospectively to loans that are acquired on or after the initial application date.

While we are currently evaluating the impact of this guidance on its financial condition and results of operations, we would also assess for early adoption upon any applicable future activity.

ASU 2025-09 Derivatives and Hedging (Topic 815)

Hedge Accounting Improvements January 1, 2027

Early adoption is permitted.

The accounting update expands cash flow hedge accounting by allowing the grouping of forecasted transactions with similar risk exposures.

It introduces a model that allows entities to hedge forecasted interest payments on certain variable rate debt using simplified assumptions.

The guidance also broadens hedge accounting for nonfinancial forecasted transactions, permitting eligible components of spot and forward purchases or sales to be designated as hedged risks.

The amendments update hedge accounting for net written options to better reflect changes in interest rate markets proceeding the discontinuation of LIBOR.

Further, this new guidance improves accounting for dual hedge strategies involving foreign currency debt by eliminating recognition mismatches and better reflecting the economics of combined interest rate and foreign exchange risk management.

The guidance should be applied on a prospective basis.

We will early adopt this guidance within the first half of 2026 and do not expect it to have a material impact on our financial condition or results of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-K

Item 7. Management’s Discussion and Analysis