What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-23 compared with 2025-02-21 · 541 added, 693 removed, 2683 unchanged (32% of the section changed)

11 unchanged sentences

Earnings Per Common Share

Restrictions on Cash, Dividends and Lending Activities

Loan Portfolio

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Discontinued Operations

Securities Financing Activities

Stock-Based Compensation

Employee Benefits

Short-Term Borrowings

Long-Term Debt

Trust Preferred Securities Issued by Unconsolidated Subsidiaries

Time Deposits

Commitments, Contingent Liabilities, and Guarantees

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Shareholders’ Equity

Regulatory Matters

Business Segment Reporting

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Also, KeyCorp maintains a Disclosure Review Committee.

This committee’s purpose is to design and maintain disclosure controls and procedures to ensure that material information relating to the financial and operating condition of KeyCorp is properly reported to its Chief Executive Officer, Chief Financial Officer, General Auditor, and the Audit Committee of the Board of Directors in connection with the preparation and filing of periodic reports and the certification of those reports by the Chief Executive Officer and the Chief Financial Officer.

This committee’s purpose is to design and maintain disclosure controls and procedures to ensure that material information relating to the financial and operating condition of KeyCorp is properly reported to its Chief Executive Officer, Chief Financial Officer, Chief Auditor, and the Audit Committee of the Board of Directors in connection with the preparation and filing of periodic reports and the certification of those reports by the Chief Executive Officer and the Chief Financial Officer.

Management’s Assessment of Internal Control over Financial Reporting

Management assessed, with participation of the KeyCorp’s Chief Executive Officer and Chief Financial Officer, the effectiveness of our internal control and procedures over financial reporting using criteria described in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Management assessed, with participation of KeyCorp’s Chief Executive Officer and Chief Financial Officer, the effectiveness of our internal control and procedures over financial reporting using criteria described in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on that assessment, we believe we maintained an effective system of internal control over financial reporting as of December 31, 2025.

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We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

Those standards require that we plan

and perform the audit to obtain reasonable assurance about whether effective internal control over financial

reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a

material weakness exists, testing and evaluating the design and operating effectiveness of internal control based

on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of KeyCorp as of December 31, 2024 and 2023 , and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of KeyCorp at December 31, 2024 and 2023 , and results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of KeyCorp as of December 31, 2025 and 2024 , the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of KeyCorp at December 31, 2025 and 2024 , and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Loan and Lease Losses

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Allowance for Loan and Lease Losses (ALLL)

Description of the Matter

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As discussed in Note 1 and 4 of the financial statements, the ALLL represents management’s current estimate of lifetime credit losses inherent in the loan portfolio at the balance sheet date.

Management estimates the ALLL using relevant available information, from internal and external sources, relating to past events, current economic conditions, idiosyncratic risk factors and reasonable and supportable forecasts.

Management estimates the ALLL using relevant available information, from internal and external sources, relating to past events, current portfolio specific and economic conditions, and reasonable and supportable forecasts.

The ALLL is the sum of (i) asset specific / individual loan reserves;

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The ALLL also considers qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors to reflect management’s best estimate of current expected credit losses.

Auditing management’s ALLL was complex due to the loss forecasting models used to compute the quantitative reserve and involves a high degree of subjectivity and judgment in evaluating management’s determination of the economic forecast and qualitative factor adjustments to the ALLL described above.

Auditing management’s ALLL was complex due to the loss forecasting models used to compute the quantitative reserve and involves a high degree of subjectivity and judgment in evaluating management’s determination of the qualitative factor adjustments to the ALLL described above.

How We Addressed the Matter in Our Audit

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Further, we performed an independent search for the existence of new or contrary information relating to risks impacting the qualitative factor adjustments to validate that management’s considerations are appropriate.

Additionally, we evaluated whether the overall ALLL, inclusive of qualitative factor adjustments, reasonably reflects losses expected in the loan and lease portfolio by comparing to peer bank data and KeyCorp’s actual historical loss data.

Goodwill Impairment Test of the Institutional Bank Reporting Unit

Description of the Matter

KeyCorp has a goodwill balance of $2.8 billion as of December 31, 2024, of which $715 million is allocated to the Institutional Bank reporting unit.

As discussed in Notes 1 and 12 of the financial statements, management performs an annual goodwill impairment test at the reporting unit level as of October 1, or more frequently as events occur or circumstances change that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.

Effective in the first quarter of 2024, management realigned KeyCorp’s real estate capital business from the Commercial Bank reporting unit to the Institutional Bank reporting unit.

The realignment was identified as a triggering event for purposes of performing an interim quantitative goodwill impairment test immediately before and immediately after the realignment.

Management estimates the fair value of its reporting units by using a combination of income and market approaches.

The income approach consists of discounted cash flow modeling that uses internal forecasts and various other inputs and assumptions.

The market approach incorporates comparable public company multiples along with data related to recent merger and acquisition activity.

Auditing management's interim quantitative goodwill impairment test, for the Institutional Bank reporting unit, immediately before the realignment, was complex and highly judgmental due to the significant estimation required to determine the fair value of the reporting unit as of the interim measurement date.

In particular, the fair value estimate was sensitive to certain assumptions, which includes the internal forecast and discount rate utilized in the discounted cash flow method of the income approach.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over KeyCorp’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.

To test management’s interim quantitative goodwill impairment test for the Institutional Bank reporting unit, we evaluated certain assumptions of the internal forecast utilized by management in the discounted cash flow method of the income approach with historical performance (e.g., trend analysis), current industry and economic trends, and changes in KeyCorp’s strategies.

We evaluated the consistency of the internal forecast utilized in the income approach by comparing the internal forecast to other analyses used within the organization and inquiries performed of senior management regarding strategic plans for the reporting unit.

We also performed sensitivity analyses related to significant assumptions to evaluate the change in the fair value of the reporting unit resulting from changes in the assumptions.

With the assistance of EY specialists, we evaluated management’s fair value methodology, assessed the reasonableness of significant assumptions used in the discounted cash flow method of the income approach and reconciled management’s estimated fair value of KeyCorp to its market capitalization as of the interim measurement date.

Additionally, we evaluated whether the overall ALLL, inclusive of qualitative factor adjustments, appropriately reflects losses expected in the loan and lease portfolio by comparing to peer bank data and KeyCorp’s actual historical loss data.

We have served as KeyCorp’s auditor since 1994.

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Total assets $ 184,381 $ 187,168

Deposits in domestic offices:

Interest-bearing deposits $ 121,100 $ 120,132

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Net unrealized gains (losses) on derivative financial instruments, net of income taxes of $( 137 ), $( 104 ), and $( 114 )

329 361 ( 1,212 )

Net pension and postretirement benefit costs, net of income taxes of $( 20 ), $ 8 , and $ 0

( 26 ) — ( 5 )

Total other comprehensive income (loss), net of tax 1,510 1,759 1,066

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Dollars in millions, except per share amounts Preferred

(000) Preferred

Shares Capital

Surplus Retained

Earnings Treasury

Cost Accumulated

Comprehensive

Total Shareholder’s Equity

(Loss) Total Shareholder’s Equity

BALANCE AT DECEMBER 31, 2022 1,996 933,325 $ 2,500 $ 1,257 $ 6,286 $ 15,616 $ ( 5,910 ) $ ( 6,295 ) $ 13,454

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( 24 ) ( 24 )

Series G Preferred Stock ($.

1.406252 per depositary share)

Series G Preferred Stock ($ 1.406252 per depositary share)

( 25 ) ( 25 )

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( 37 ) ( 37 )

Open market Common Share repurchases ( 2,550 ) — ( 38 ) ( 38 )

Employee equity compensation program Common Share repurchases ( 1,833 ) — ( 34 ) ( 34 )

Common shares reissued (returned) for stock options and other employee benefit plans 7,622 — 138 138

Issuance of Series H Preferred Stock 600 600 ( 10 ) 590

BALANCE AT DECEMBER 31, 2023 1,996 936,564 $ 2,500 $ 1,257 $ 6,281 $ 15,672 $ ( 5,844 ) $ ( 5,229 ) $ 14,637

Net income (loss)

( 161 ) ( 161 )

Other comprehensive income (loss)

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( 37 ) ( 37 )

Open market Common Share repurchases

( 2,550 ) ( 38 ) ( 38 )

Employee equity compensation program Common Share repurchases ( 1,991 ) — ( 28 ) ( 28 )

( 1,833 ) — ( 34 ) ( 34 )

Common Shares reissued (returned) for stock options and other employee benefit plans 9,342 ( 42 ) 170 128

Common Shares reissued under Scotiabank investment agreement, net of issuance costs 162,871 ( 198 ) 2,969 2,771

BALANCE AT DECEMBER 31, 2024 1,996 1,106,786 $ 2,500 $ 1,257 $ 6,038 $ 14,584 $ ( 2,733 ) $ ( 3,470 ) $ 18,176

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( 37 ) ( 37 )

Open market Common Share repurchases ( 11,109 ) — ( 200 ) ( 200 )

Employee equity compensation program Common Share repurchases ( 1,963 ) — ( 35 ) ( 35 )

Common Shares reissued (returned) for stock options and other employee benefit plans 8,687 ( 4 ) 158 154

Common Shares reissued under Scotiabank investment agreement, net of issuance costs 162,871 ( 198 ) 2,969 2,771

BALANCE AT DECEMBER 31, 2025 1,996 1,102,401 $ 2,500 $ 1,257 $ 6,035 $ 15,359 $ ( 2,810 ) $ ( 1,960 ) $ 20,381

See Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

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INVESTING ACTIVITIES

Purchases of intangible assets via acquisitions — — ( 12 )

Cash received (used) in acquisitions, net of cash acquired — — ( 58 )

Net decrease (increase) in short-term investments, excluding acquisitions 7,341 ( 6,687 ) ( 8,385 )

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Proceeds from prepayments and maturities of securities available for sale 7,338 2,758 3,225

Proceeds from prepayments and maturities of held-to-maturity securities 1,190 1,343 2,291

Purchases of held-to-maturity securities ( 2,273 ) — ( 1,194 )

Proceeds from prepayments and maturities of held-to-maturity securities 1,054 1,190 1,343

Net decrease (increase) in other investments 92 202 58

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Repurchases of long-term debt — — ( 92 )

Issuance of preferred shares — — 590

Open market common share repurchases ( 200 ) — ( 38 )

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Interest paid $ 3,710 $ 4,160 $ 3,109

Income taxes paid 68 156 292

Income taxes paid (a)

Noncash items:

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Loans transferred to other real estate owned 5 6 7

CMBS risk retentions — — 12

ABS risk retentions 5 7 8

(a) Refer to Note 13 Income Taxes for additional details on income taxes paid by jurisdiction.

See Notes to Consolidated Financial Statements.

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and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary).

Variable interests can include equity interests, subordinated debt, derivative contracts, leases, service agreements, guarantees, standby letters of credit, loan commitments, and other contracts, agreements, and financial instruments.

See Note 12 (“Variable Interest Entities”) for information on our involvement with VIEs.

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We assess all loan modifications to determine whether one is granted to a borrower experiencing financial difficulty, regardless of whether the modification loan terms include a concession.

Modifications granted to borrowers

experiencing financial difficulty may be in the form of an interest rate reduction, payment delay, other modifications, or some combination thereof.

Modifications granted to borrowers experiencing financial difficulty may be in the form of an interest rate reduction, payment delay, other modifications, or some combination thereof.

A borrower is considered to be experiencing financial difficulty when there is significant doubt about the borrower’s ability to make required payments on the loan or to get equivalent financing from another creditor at a market rate for a similar loan.

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Nonperforming loans do not include loans held for sale.

Once a loan is designated nonaccrual, the interest accrued but not collected is reversed against interest income, and payments subsequently received are applied to principal until qualifying for return to accrual.

Once a loan is designated nonaccrual, the interest accrued but not collected is

reversed against interest income, and payments subsequently received are applied to principal until qualifying for return to accrual.

We generally classify commercial loans as nonperforming and stop accruing interest (i.e., designate the loan “nonaccrual”) when the borrower’s principal or interest payment is 90 days past due unless the loan is well-secured and in the process of collection.

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Adjustments are included in “other income” on the income statement.

At each reporting period, we assess if these investments continue to qualify for this measurement alternative.

At each reporting period, we assess if these investments

continue to qualify for this measurement alternative.

Derivatives and Hedging

All derivatives are recognized on the balance sheet at fair value in “accrued income and other assets” or “ accrued expense and other liabilities .” The net increase or decrease in derivatives is included in “other operating activities,

net” within the statement of cash flows.

Accounting for changes in fair value (i.e., gains or losses) of derivatives differs depending on whether the derivative has been designated and qualifies as part of a hedge relationship, and on the type of hedge relationship.

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If market prices are not available, fair value is estimated based on the present value of expected future cash flows using assumptions as to discount rates, interest rates, prepayment speeds, and credit losses.

Loans sold or securitized are removed from the balance sheet and a net gain or loss is recorded depending on the fair value of the loans sold and the retained interests at the date of sale.

Loans sold or securitized are removed from the balance sheet and a net gain or loss is recorded depending on the fair value of the

loans sold and the retained interests at the date of sale.

The net gain or loss is recognized in “other income,” “consumer mortgage income,” or “investment banking and debt placement fees” at the time of sale.

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The amount of capital being allocated to our reporting units as a proxy for the carrying value is based on a combination of regulatory and economic equity.

Fair values are estimated using a combination of market and income approaches.

Fair values are estimated using a combination of market and

income approaches.

The market approach incorporates comparable public company multiples along with data related to recent merger and acquisition activity.

The income approach consists of discounted cash flow modeling that utilizes internal forecasts and various other inputs and assumptions.

A multi-year internal forecast is prepared

for each reporting unit and a terminal growth rate is estimated for each one based on market expectations of inflation and economic conditions in the financial services industry.

A multi-year internal forecast is prepared for each reporting unit and a terminal growth rate is estimated for each one based on market expectations of inflation and economic conditions in the financial services industry.

Earnings projections for reporting units are adjusted for after tax cost savings expected to be realized by a market participant.

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fees paid are recorded in interest expense.

Additional information regarding securities financing activities is included in Note 16 (“Securities Financing Activities”).

Contingencies and Guarantees

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Compensation expense related to awards granted to employees is recorded in “personnel expense” on the Consolidated Statements of Income while compensation expense related to awards granted to directors is recorded in “other expense.”

We recognize compensation expense for stock-based, mandatory deferred incentive compensation awards using the accelerated method of amortization over a period of approximately 5 years (the current year performance period and a four-year vesting period, which generally starts in the first quarter following the performance period).

We recognize compensation expense for stock-based, mandatory deferred incentive compensation awards using the accelerated method of amortization over a period of approximately five years (the current year performance period and a four-year vesting period, which generally starts in the first quarter following the performance period).

We estimate the fair value of options granted using the Black-Scholes option-pricing model, as further described in Note 15 (“Stock-Based Compensation”).

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Amounts are amortized through depreciation or as an adjustment to yield over the estimated life of the asset.

Any gain or loss on the transfer of a tax credit is recorded within “Other income”.

Any gain or loss on the transfer of a tax credit is recorded within noninterest income.

Earnings Per Share

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Standard Date of Adoption Description Effect on Financial Statements or Other Significant Matters

ASU 2022-03, Fair Value Measurement - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820) January 1, 2024 The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and is not considered in measuring fair value.

Entities cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The amendments require disclosures for equity securities subject to contractual restrictions including;

the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, the nature and remaining duration of the restriction(s) and the circumstances that could cause a lapse in the restriction(s).

The guidance should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption.

The guidance did not have a material impact on Key’s financial condition or results of operations.

ASU 2023-07 Segment Reporting (Topic 280) January 1, 2024 This guidance requires certain segment disclosures in annual and interim periods.

It also clarifies that companies may report on additional measures if the chief operating decision maker uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The guidance should be applied on a retrospective basis.

This guidance did not have a material impact on Key’s financial condition or results of operations.

Key updated its segment disclosures in Note.

25, Business Segment Reporting, to reflect this new guidance.

Accounting Guidance Adopted in 2025

Standard Date of Adoption Description Effect on Financial Statements or Other Significant Matters

ASU 2023-09 Income Taxes (Topic 740) Annual periods beginning January 1, 2025

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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.

The guidance did not have a material impact on Key’s disclosures.

See Note 13 (“Income Taxes”) for enhanced disclosures.

Earnings Per Common Share

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Restrictions on Cash, Dividends, and Lending Activities

Capital distributions from KeyBank and other subsidiaries are our principal source of cash flows for paying dividends on our common and preferred shares, servicing our debt, and financing corporate operations.

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 previous two calendar years and for the current year, up to the date the dividend is declared.

During 2024, KeyBank paid $ 750 million in dividends to KeyCorp.

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

At December 31, 2024, KeyCorp held $ 5.2 billion in cash and short-term investments, which can be used to pay dividends to shareholders, service debt, and finance corporate operations.

Loan Portfolio

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Dollars in millions 2025 2024

Commercial and industrial (b)

Commercial and industrial (b)(c)

$ 57,688 $ 52,909

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Total commercial loans 76,509 71,891

Residential — prime loans:

Real estate — residential mortgage 18,732 19,886

Home equity loans 5,703 6,358

Total residential — prime loans 26,244 28,097

Other consumer loans 4,644 5,167

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(b) Loan balances include $ 205 million and $ 212 million of commercial credit card balances at December 31, 2025, and December 31, 2024, respectively.

(c) Commercial lease financing includes receivables of $ 3 million and $ 7 million held as collateral for secured borrowings at December 31, 2024, and December 31, 2023, respectively.

(c) Commercial and industrial includes receivables held as collateral for a secured borrowing of $ 211 million at December 31, 2024.

Commercial lease financing includes receivables of $ 1 million and $ 3 million held as collateral for a secured borrowing at December 31, 2025, and December 31, 2024, respectively.

Principal reductions are based on the cash payments received from these related receivables.

Additional information pertaining to this secured borrowing is included in Note 20 (“Long-Term Debt”).

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

(d) 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.

These amounts are included within “Discontinued assets” on the Consolidated Balance Sheet.

We have access to secured borrowings from the Federal Reserve and advances from the FHLB.

As of December 31, 2025 and December 31, 2024, loans and leases totaling $ 71.0 billion and $ 67.5 billion, respectively, were pledged to the FRB and FHLB for access to these contingent funding sources.

Asset Quality

We estimate the appropriate level of the ALLL on at least a quarterly basis.

The methodology is described in Note 1 ("Basis of Presentation and Accounting Policies") under the heading "Allowance for Loan and Lease Losses" of this report.

The methodology is described in Note 1 ("Summary of Significant Accounting Policies") under the heading "Allowance for Loan and Lease Losses" of this report.

The ALLL at December 31, 2025, represents our current estimate of lifetime credit losses inherent in the loan portfolio at that date.

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Total ALLL — including discontinued operations $ 1,422 $ 448 $ ( 520 ) $ 88 $ 1,438

(a) Excludes a credit related to reserves on lending-related commit ments of $ 6 million.

(a) Excludes a provision related to reserves on lending-related commit ments of $ 23 million.

Twelve Months Ended December 31, 2024 :

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Total ALLL — including discontinued operations $ 1,524 $ 341 $ ( 530 ) $ 87 $ 1,422

(a) Excludes a provision related to reserves on lending-related commitments of $ 74 million.

(a) Excludes a credit related to reserves on lending-related commitments of $ 6 million.

Twelve Months Ended December 31, 2023

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(a) Excludes a provision related to reserves on lending-related commitments of $ 74 million .

As described in Note 1 ("Basis of Presentation and Accounting Policies"), we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

As described in Note 1 ("Summary of Significant Accounting Policies"), we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current economic and portfolio conditions, and reasonable and supportable forecasts.

In our estimation of expected credit losses, we use a two year reasonable and supportable period across all products.

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Commercial Commercial and industrial BBB corporate bond rate (spread), fixed investment, business bankruptcies, GDP, industrial production, unemployment rate, and Producer Price Index

Commercial real estate Property & real estate price indices, unemployment rate, business bankruptcies, GDP, SOFR

Commercial real estate Property & real estate price indices, unemployment rate, business bankruptcies, GDP, and SOFR

Commercial lease financing BBB corporate bond rate (spread), GDP, and unemployment rate

Consumer Real estate — residential mortgage GDP, home price index, unemployment rate, and 30 year mortgage rate

Consumer Real estate — residential mortgage GDP, home price index, unemployment rate, 30 year mortgage rate and U.S.

household income

Home equity Home price index, unemployment rate, and 30 year mortgage rate

Other consumer Unemployment rate and U.S.

Other consumer Unemployment rate, prime rate and U.S.

household income

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Economic Outlook

As of December 31, 2024, economic uncertainty remains elevated due to geopolitical tensions and the interest rate environment, as well as the U.S.

presidential administration change.

The unemployment rate remained at a relatively low level, although job growth remains stable.

Inflation has continued to come down and commercial real estate pressures have eased.

As of December 31, 2025, the economy in 2025 has unfolded better than expected and the outlook is for continued, but slowing, expansion in 2026.

As growth weakens and inflationary pressures continue, policy uncertainty adds significant economic strain.

We utilized the Moody’s November 2025 Consensus forecast as the baseline forecast to estimate our expected credit losses as of December 31, 2025.

We determined such forecast to be a reasonable view of the outlook for the economy given all available information at year end.

The baseline scenario reflects continued economic resiliency, but slowing growth into 2025.

GDP is expected to grow at an annual rate of approximately 2.0% for both 2025 and 2026, compared to 2.7% in 2024.

The expected National Unemployment Rate was 4.2% in the fourth quarter of 2024, with the forecast remaining at 4.4% through late-2025.

Consumer Price Index is forecasted at 2.2% for 2025.

The outlook for the National Home Price Index reflects 2% growth in 2025, while the Commercial Real Estate Price Index is forecasted to remain stable.

We did not identify material limitations in the third-party economic forecast that required management qualitative adjustments to the ALLL.

This baseline scenario reflects slowing growth over the next two years, but no recession.

GDP is forecasted to grow at an annual rate of 1.8% for 2026 and 2.0% for 2027.

The labor market is weakening and the National Unemployment Rate is expected to increase modestly over 2026.

Consumer Price Index is forecasted to remain at 3% for 2026.

The Federal Funds Rate decreases to 3.0-3.25% by late 2026.

Tariffs and the geopolitical environment remain uncertain, which poses potential downside-risks to the economic outlook over the next two years.

These economic uncertainty considerations continue to be addressed through a qualitative reserve adjustment, which leverages downside economic assumptions.

As a result of the current economic uncertainty, our future loss estimates may vary considerably from our December 31, 2025 assumptions.

Commercial Loan Portfolio

The commercial ALLL decreased by $ 23 million, or 2.2 %, from December 31, 2023, through December 31, 2024.

The overall decrease is driven by changes in portfolio activity and the economic outlook.

The change in the reserve levels is reflective of the strategic and ongoing balance sheet optimization efforts, in addition to improving credit quality and economic conditions for the commercial real estate portfolio.

Reserve decreases due to these drivers are partly offset by a reserve build due to credit quality migration in the commercial and industrial portfolio and changes in management qualitative adjustments for commercial real estate price volatility.

The commercial ALLL increased by $ 41 million, or 4.0 %, from December 31, 2024, through December 31, 2025.

The change in the reserve levels is reflective of the elevated economic uncertainty and loan growth.

The reserve build due to these drivers was partly offset by a reserve release due to the net impacts of improving credit quality trends, particularly in commercial real estate.

Consumer Loan Portfolio

The consumer ALLL decreased $ 23 million, or 6.2 %, from December 31, 2024, through December 31, 2025.

The overall decrease in the allowance is primarily driven by changes in portfolio activity.

The reserve decrease is concentrated in the real estate portfolio and is largely attributable to the ongoing loan reductions.

The most meaningful change to the economic forecast year-over-year is the improvement in the home price index outlook, which contributed to reserve decreases for both the residential mortgage and home equity portfolios.

The decrease is driven by the impact of ongoing loan reductions and continued strong credit performance, particularly for the residential mortgage loan book which represents the largest segment of the consumer portfolio.

Credit Risk Profile

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Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category and Vintage (a)

Credit Risk Profile by Creditworthiness Category and Vintage (a)(b)

As of December 31, 2025 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis

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Total commercial loan current period gross write-offs $ 32 $ 41 $ 26 $ 46 $ 37 $ 40 $ 190 $ — $ 412

(a) Accrued in terest of $ 322 million, presente d in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

As of December 31, 2024 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis

Amortized Cost Basis by Origination Year and Internal Risk Rating

Dollars in millions 2024 2023 2022 2021 2020 Prior Total

Commercial and Industrial

Pass $ 6,345 $ 3,097 $ 7,119 $ 3,934 $ 1,617 $ 3,969 $ 22,709 $ 115 $ 48,905

Criticized (Accruing) 172 219 597 419 208 476 1,550 41 3,682

Criticized (Nonaccruing) 23 13 68 30 2 31 153 2 322

Total commercial and industrial 6,540 3,329 7,784 4,383 1,827 4,476 24,412 158 52,909

Current year gross write-offs 1 12 65 106 4 31 144 — 363

Real estate — commercial mortgage

Pass 1,052 748 2,818 2,202 594 3,194 1,001 41 11,650

Criticized (Accruing) 31 85 571 281 93 316 30 9 1,416

Criticized (Nonaccruing) — — 123 52 3 66 — — 244

Total real estate — commercial mortgage

1,083 833 3,512 2,535 690 3,576 1,031 50 13,310

Current year gross write-offs — — 1 6 — 32 1 — 40

Real estate — construction

Pass 199 846 1,021 340 87 67 42 2 2,604

Criticized (Accruing) — 17 112 58 68 77 — — 332

Criticized (Nonaccruing) — — — — — — — — —

Total real estate — construction 199 863 1,133 398 155 144 42 2 2,936

Current year gross write-offs — — — — — — — — —

Commercial lease financing

Pass 301 430 626 368 217 679 — — 2,621

Criticized (Accruing) 2 34 33 9 16 21 — — 115

Criticized (Nonaccruing) — — — — — — — — —

Total commercial lease financing 303 464 659 377 233 700 — — 2,736

Current year gross write-offs — — — — — 7 — — 7

Total commercial loans $ 8,125 $ 5,489 $ 13,088 $ 7,693 $ 2,905 $ 8,896 $ 25,485 $ 210 $ 71,891

Total commercial loan current year gross write-offs $ 1 $ 12 $ 66 $ 112 $ 4 $ 70 $ 145 $ — $ 410

(a) Accrued intere st of $ 338 million a nd $ 322 million as of December 31, 2025, and December 31, 2024, respectively, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in these tables.

(b) Gross write-off information is presented on a year-to-date basis for both the twelve months ended December 31, 2025 and December 31, 2024.

Consumer Credit Exposure

Credit Risk Profile by FICO Score and Vintage (a)

Credit Risk Profile by FICO Score and Vintage (a)(b)

As of December 31, 2025 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis

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Total consumer loan current period gross write-offs $ 4 $ 5 $ 7 $ 9 $ 9 $ 9 $ 62 $ — $ 105

(a) Accrued inte rest of $ 134 million, p resented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

As of December 31, 2024 Term Loans Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis

Amortized Cost Basis by Origination Year and FICO Score

Dollars in millions 2024 2023 2022 2021 2020 Prior Total

Real estate — residential mortgage

750 and above $ 281 $ 669 $ 5,720 $ 7,203 $ 2,247 $ 1,510 $ — $ — $ 17,630

660 to 749 67 116 597 655 199 280 — — 1,914

Less than 660 4 13 81 63 24 134 — — 319

No Score 3 2 1 — 1 15 1 — 23

Total real estate — residential mortgage 355 800 6,399 7,921 2,471 1,939 1 — 19,886

Current period gross write-offs 1 — 1 — — 1 — — 3

Home equity loans

750 and above 33 31 139 775 612 731 1,886 251 4,458

660 to 749 17 17 50 181 129 186 772 80 1,432

Less than 660 2 5 15 40 31 82 263 25 463

No Score — — — — — 1 4 — 5

Total home equity loans 52 53 204 996 772 1,000 2,925 356 6,358

Current period gross write-offs — — — — — 1 1 — 2

Other consumer loans

750 and above 107 143 1,149 1,210 527 245 88 — 3,469

660 to 749 70 109 275 268 128 108 184 — 1,142

Less than 660 9 23 59 59 29 24 56 — 259

No Score 35 12 18 17 7 12 196 — 297

Total consumer direct loans 221 287 1,501 1,554 691 389 524 — 5,167

Current period gross write-offs — 7 17 12 7 6 15 — 64

750 and above — — — — — — 476 — 476

660 to 749 — — — — — — 372 — 372

Less than 660 — — — — — — 109 — 109

No Score — — — — — — 1 — 1

Total credit cards — — — — — — 958 — 958

Current period gross write-offs — — — — — — 47 — 47

Total consumer loans $ 628 $ 1,140 $ 8,104 $ 10,471 $ 3,934 $ 3,328 $ 4,408 $ 356 $ 32,369

Total consumer current period gross write-offs $ 1 $ 7 $ 18 $ 12 $ 7 $ 8 $ 63 $ — $ 116

(a) Accrued intere st of $ 121 million and $ 134 million as of December 31, 2025, and December 31, 2024, respectively, presente d in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

(b) Gross write-off information is presented on a year-to-date basis for both the twelve months ended December 31, 2025 and December 31, 2024.

Nonperforming and Past Due Loans

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The following aging analysis of past due and current loans as of December 31, 2025, and December 31, 2024, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio

Aging Analysis of Loan Portfolio (a)

December 31, 2025 Current (b)(c)

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(b) Accrued interest of $ 459 million pre sented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(c) Includes balances of $ 75 million in Commercial mortgage and $ 7 million in Real estate - residential mortgage associated with loans sold to GNMA where Key has the right but not the obligation to repurchase.

(c) Includes balances of $ 66 million in Commercial mortgage and $ 6 million in Real estate - residential mortgage associated with loans sold to GNMA that are 90 days or more past due where Key has the right but not the obligation to repurchase and whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veteran Affairs.

(d) Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.

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(b) Accrued intere st of $ 456 million prese nted in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(c) Includes balances of $ 94 million in Commercial mortgage and $ 3 million in Real estate - residential mortgage associated with loans sold to GNMA where Key has the right but not the obligation to repurchase.

(c) Includes balances of $ 75 million in Commercial mortgage and $ 7 million in Real estate - residential mortgage associated with loans sold to GNMA that are 90 days or more past due where Key has the right but not the obligation to repurchase and whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veteran Affairs.

(d) Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.

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The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $ 386 million at December 31, 2025.

As of December 31, 2024, 43 % of our nonperforming loans were contractually current versus 51 % as of December 31, 2023.

Collateral-dependent Financial Assets

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Generally, Key considers any delay in payment of greater than 90 days in the last 12 months to be significant.

The ALLL for loans modified for borrowers experiencing financial difficulty is determined based on Key’s ALLL policy as described within Note 1 (“Basis of Presentation and Accounting Policies”).

The ALLL for loans modified for borrowers experiencing financial difficulty is determined based on Key’s ALLL policy as described within Note 1 (“Summary of Significant Accounting Policies”).

Modifications for Borrowers Experiencing Financial Difficulty

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Consumer borrowers identified as experiencing financial difficulty are generally unable to refinance their loans through our normal origination channel or through other independent sources.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty within the past 12 months or since the adoption of ASU 2022-02 for the reporting period in 2023.

The table does not include those modifications that only resulted in an insignificant payment delay.

The table does not include consumer loans that are still within a trial modification period.

The following tables show the amortized cost basis at the end of the noted reporting periods of the loans modified to borrowers experiencing financial difficulty within the past 12 months of the noted periods.

The tables do not include those modifications that only resulted in an insignificant payment delay.

The tables do not include consumer loans that are still within a trial modification period.

Trial modifications may be done for consumer borrowers where a trial payment plan period is offered in advance of a permanent loan modification.

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Total commercial real estate loans — 189 5 67 261 1.58

Commercial lease financing — — — — — —

Total commercial loans $ 2 $ 425 $ 27 $ 111 $ 565 0.74 %

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Total commercial real estate loans 28 265 22 21 336 2.07

Commercial lease financing — — — — — —

Total commercial loans $ 28 $ 383 $ 47 $ 41 $ 499 0.69 %

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(a) Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

As of December 31, 2023 Interest Rate Reduction Term Extension Other Combination (a)

Dollars in millions Amortized Cost Basis Amortized Cost Basis Amortized Cost Basis Amortized Cost Basis Amortized Cost Basis % of Total Loan Type

Commercial and Industrial $ — $ 180 $ 49 $ 34 $ 263 0.47 %

Commercial real estate:

Commercial mortgage — 4 2 — 6 0.04

Construction — — — — — —

Total commercial real estate loans — 4 2 — 6 0.03

Total commercial loans $ — $ 184 $ 51 $ 34 $ 269 0.35 %

Real estate — residential mortgage $ — $ — $ 1 $ 9 $ 10 0.05 %

Home equity loans 2 1 1 5 9 0.13

Other consumer loans — 1 — 2 3 0.05

Credit cards — — — 4 4 0.40

Total consumer loans $ 2 $ 2 $ 2 $ 20 $ 26 0.07 %

Total loans $ 2 $ 186 $ 53 $ 54 $ 295 0.26 %

(a) Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

Financial Effects of Modifications to Borrowers Experiencing Financial Difficulty

The following table summarizes the financial impacts of loan modifications made to specific loans during the twelve months ended December 31, 2024.

The following table summarizes the financial impacts of loan modifications made to specific loans for the noted periods.

Twelve months ended December 31, 2025 Weighted-average Interest Rate Change Weighted-average Term Extension (in years)

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Commercial mortgage ( 1.49 ) % 0.66

Construction — % 2.87

Real estate — residential mortgage ( 1.81 ) % 6.15

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Credit cards ( 16.26 ) % 1.00

Twelve months ended December 31, 2023 Weighted-average Interest Rate Change Weighted-average Term Extension (in years)

Commercial and Industrial ( 5.69 ) % 0.59

Commercial mortgage — % 1.37

Real estate — residential mortgage ( 1.97 ) % 7.58

Home equity loans ( 4.02 ) % 6.87

Other consumer loans ( 3.62 ) % 1.01

Credit cards ( 14.90 ) % 1.00

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Twelve months ended December 31, 2024

Dollars in millions Interest Rate Reduction Term Extension Other Combination Total

Key considers modifications to borrowers experiencing financial difficulty that subsequently become 90 days or more past due under modified terms as subsequently defaulted.

The following table presents the amortized cost of modified loans to borrowers experiencing financial difficulty that were within 12 months of their modification and subsequently defaulted within the noted periods.

Twelve months ended December 31, 2025 Interest Rate Reduction

Dollars in millions Term Extension Other Combination Total

Commercial and Industrial $ — $ 2 $ 5 $ — $ 7

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Commercial mortgage — 18 — — 18

Construction — — — — —

Total commercial real estate loans — 18 — — 18

Commercial lease financing — — — — —

Total commercial loans $ — $ 20 $ 5 $ — $ 25

1 unchanged sentence

Home equity loans — — 1 — 1

Other consumer loans — — — — —

Credit cards — — — — —

Total consumer loans $ — $ — $ 1 $ 1 $ 2

Total loans $ — $ 20 $ 6 $ 1 $ 27

Twelve months ended December 31, 2024 Interest Rate Reduction

Dollars in millions Term Extension Other Combination Total

Commercial and Industrial $ — $ 22 $ — $ 1 $ 23

Commercial real estate

Commercial mortgage 11 — — 11

Total commercial real estate loans 11 — — — 11

Total commercial loans $ 11 $ 22 $ — $ 1 $ 34

Real estate — residential mortgage $ — $ — $ — $ 1 $ 1

Home equity loans — — — 2 2

Total consumer loans $ — $ — $ — $ 3 $ 3

Total loans $ 11 $ 22 $ — $ 4 $ 37

Twelve months ended December 31, 2023

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Commercial mortgage — — 1 — 1

Total commercial real estate loans — 7 1 3 11

Commercial lease financing — — — — —

Total commercial loans $ — $ 7 $ 1 $ 3 $ 11

Total consumer loans $ — $ — $ — $ — $ —

Total loans $ — $ 7 $ 1 $ 3 $ 11

Key closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the amortized cost as of December 31, 2025, of loans modified during the 12 months then ended, by aging.

As of December 31, 2025 Current 30-89 Days

Past Due 90 and Greater Days Past Due Total

Dollars in millions

Commercial and Industrial $ 286 $ 7 $ 11 $ 304

Commercial real estate

Commercial mortgage 184 42 5 231

Construction 30 — — 30

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Total loans $ 528 $ 50 $ 17 $ 595

Key closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table depicts the performance of loans that have been modified for borrowers experiencing financial difficulty in the past 12 months as of each respective period.

As of December 31, 2024 Current 30-89

The following table presents the amortized cost as of December 31, 2024, of loans modified during the 12 months then ended, by aging.

As of December 31, 2024 Current 30-89 Days

Past Due 90 and Greater

Days Past Due Total

Dollars in millions

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Total commercial real estate loans 289 19 28 336

Commercial lease financing — — — —

Total commercial loans $ 443 $ 22 $ 34 $ 499

5 unchanged sentences

Total loans $ 474 $ 24 $ 36 $ 534

As of December 31, 2023 Current 30-89

The following table presents the amortized cost as of December 31, 2023, of loans modified during the 12 months then ended, by aging.

As of December 31, 2023 Current 30-89 Days

Past Due 90 and Greater

Days Past Due Total

Dollars in millions

2 unchanged sentences

Commercial mortgage 6 — — 6

Construction — — — —

Total commercial real estate loans $ 244 $ 25 $ — $ 269

Commercial lease financing — — — —

Total commercial loans $ 244 $ 25 $ — $ 269

5 unchanged sentences

Total loans $ 267 $ 27 $ 1 $ 295

Liability for Credit Losses on Off Balance Sheet Exposures

The liability for credit losses on off balance sheet exposure is included in “accrued expense and other liabilities” on the balance sheet.

Liability for Credit Losses on Lending-related Commitments

The liability for credit losses on lending-related commitments is included in “accrued expense and other liabilities” on the balance sheet.

This includes credit risk for recourse associated with loans sold under the Fannie Mae Delegated Underwriting and Servicing program and credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, and certain financial guarantees.

Changes in the liability for credit losses for off balance sheet exposures are summarized as follows:

Changes in the liability for credit losses on lending-related commitments are summarized as follows:

Twelve months ended December 31,

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Provision (credit) for losses on off balance sheet exposures 23 ( 6 )

Other — ( 3 )

Balance at end of period $ 313 $ 290

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In accordance with GAAP, Key measures certain assets and liabilities at fair value.

Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants in our principal market.

Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants in the principal market of the asset or liability.

Additional information regarding our accounting policies for determining fair value is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements.”

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Certain assets and liabilities are measured at fair value on a recurring basis in accordance with GAAP.

For more information on the valuation techniques used to measure classes of assets and liabilities reported at fair value on a recurring basis as well as the classification of each in the valuation hierarchy, refer below.

The following tables present assets and liabilities measured at fair value on a recurring basis at December 31, 2025, and December 31, 2024.

December 31, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Dollars in millions

Dollars in millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

ASSETS MEASURED ON A RECURRING BASIS

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(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

(b) Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

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Valuations reflect prices within the bid-ask spread that are most representative of fair value.

Asset/liability class Valuation technique Valuation hierarchy classification(s)

Principal investments (indirect) Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing.

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Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings.

Under the provisions of the Volcker Rule, we were required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2023.

Key completed conforming and/or divesting certain indirect investments subject to the Volcker Rule as of June 30, 2023.

The following table presents the fair value of our indirect principal investments and related unfunded commitments at December 31, 2024, as well as financial support provided for the years ended December 31, 2024, and December 31, 2023.

Financial support provided

Year ended December 31,

December 31, 2024 2024 2023

Dollars in millions Fair Value Unfunded

INVESTMENT TYPE

Indirect investments (a)

Total $ 14 $ 1 $ — $ — $ — $ —

(a) Our indirect investments consist of buyout funds, venture capital funds, and fund of funds.

These investments are generally not redeemable.

Instead, distributions are received through the liquidation of the underlying investments of the fund.

An investment in any one of these funds typically can be sold only with the approval of the fund’s general partners.

The fair value and related unfunded commitments of our indirect principal investments at December 31, 2025, was $ 9 million and $ 1 million, respectively.

No additional financial support was provided for the years ended December 31, 2025, and December 31, 2024.

At December 31, 2025, no significant liquidation of the underlying investments has been communicated to Key.

The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves.

We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

Asset/liability class Valuation technique Valuation hierarchy classification(s)

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Increases in valuation multiples of comparable companies would positively affect the fair value.

Level 1 investments reflect the quoted market prices of the investments available in an active market.

Level 1 and 3

Other direct and indirect equity investments (NAV) Certain direct and indirect investments do not have readily determinable fair values and qualify for the practical expedient in the accounting guidance that allows us to estimate fair value based upon net asset value per share.

Asset/liability class Valuation technique Valuation hierarchy classification(s)

These are typically comprised of investments in venture capital funds engaged mainly in venture- and growth-oriented investing.

The unfunded commitments of these investments as of December 31, 2025, totaled $ 57 million.

Loans held for sale and held for investment (residential) Residential mortgage loans held for sale are accounted for at fair value.

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• The specific characteristics of certain loans that are priced based on the pricing of similar loans.

(These adjustments represent unobservable inputs to the valuation but are not considered significant given the relative insensitivity of the value to changes in these inputs to the fair value of the loans.)

Residential loans held for investment:

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Level 2 and 3 (primarily level 2)

Derivatives Exchange-traded derivatives are valued using quoted prices in active markets and, therefore, are classified as Level 1 instruments.

Derivatives Certain foreign exchanged derivative instruments are able to be valued using quoted prices in active markets and are therefore classified as Level 1 instruments.

The majority of our derivative positions are Level 2 and are valued using internally developed models based on market convention and observable market inputs.

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Changes in Level 3 Fair Value Measurements

The following table shows the change in the fair values of our Level 3 financial instruments measured at fair value on a recurring basis for the years ended December 31, 2024, and December 31, 2023.

Dollars in millions Beginning

Gains (Losses) included in

comprehensive income Gains

Purchases Sales Settlements Transfers Other Transfers

Year ended December 31, 2024

Other investments

Equity investments

Direct $ 2 $ — $ — (c)

$ — $ — $ — $ — $ — $ — $ 2 $ —

Loans held for investment (residential) 9 — 1 — — — ( 2 ) — 2 10 —

Derivative instruments (a)

Interest rate ( 2 ) — ( 8 ) (d)

4 — — — 2 (e)

Credit — — — — — — — — — — —

2 — — — — — ( 2 ) — — — —

Dollars in millions Beginning

Gains (Losses) included in comprehensive income Gains

Purchases Sales Settlements Transfers Other Transfers

Year ended December 31, 2023

Other investments

Principal investments

Direct $ 1 $ — $ ( 1 ) (c)

$ — $ — $ — $ — $ — $ — $ — $ —

Equity investments

Direct 2 — — — — — 2 —

Loans held for investment (residential) 9 — — — — — — — — 9 —

Derivative instruments (a)

Interest rate 2 ( 23 ) (d)

19 1 — ( 6 ) (e)

Credit ( 2 ) — — — 2 — — — — — —

— — — — — — 2 — — 2 —

(a) Amounts represent Level 3 derivative assets less Level 3 derivative liabilities.

(b) Amounts represent Level 3 interest rate lock commitments.

(c) Realized and unrealized gains and losses on principal investments are reported in “other income” on the income statement.

(d) Realized and unrealized gains and losses on derivative instruments are reported in “corporate services income” and “other income” on the income statement.

(e) Certain derivatives previously classified as Level 2 were transferred to Level 3 because Level 3 unobservable inputs became significant.

Certain derivatives previously classified as Level 3 were transferred to Level 2 because Level 3 unobservable inputs became less significant.

The change in the fair values of our Level 3 financial instruments measured at fair value on a recurring basis for the years ended December 31, 2025, and December 31, 2024 was not material.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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At December 31, 2025, and December 31, 2024, the carrying amount of equity investments recorded under this method was $ 467 million and $ 394 million, respectively.

We recorded $ 5 million of impairment for the year ended December 31, 2024.

We recorded no impairment for the year ended December 31, 2025.

We recorded $ 5 million impairment for the year ended December 31, 2024.

Mortgage Servicing Rights (a)

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Quantitative Information about Level 3 Fair Value Measurements

The range and weighted-average of the significant unobservable inputs used to fair value our material Level 3 recurring and nonrecurring assets at December 31, 2024, and December 31, 2023, along with the valuation techniques used, are shown in the following table:

The range and weighted-average of the significant unobservable inputs used to measure the fair value our material Level 3 recurring and nonrecurring assets at December 31, 2025, and December 31, 2024, along with the valuation techniques used, are shown in the following table:

Level 3 Asset (Liability) Valuation Technique Significant

Unobservable Input Range

(Weighted-Average) (a), (b)

(Weighted-Average) (a)

Dollars in millions

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0 - 1 ( .50 )

Insignificant level 3 assets, net of liabilities (c)

Insignificant level 3 assets, net of liabilities (b)

Collateral dependent loans 56 152 Fair value of underlying collateral Liquidity discount 0 - 100.00 % ( 40.00 %)

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(a) The weighted average of significant unobservable inputs is calculated using a weighting relative to fair value.

(b) For significant unobservable inputs with no range, a single figure is reported to denote the single quantitative factor used.

(c) Represents the aggregate amount of level 3 assets and liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant.

(b) Represents the aggregate amount of Level 3 assets and liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant.

The amount includes certain equity investments and certain financial derivative assets and liabilities.

(d) Excludes $ 8 million pertaining to mortgage servicing assets measured as of December 31, 2023.

Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at December 31, 2024, and December 31, 2023, are shown in the following table.

Assets and liabilities are further arranged by measurement category.

The carrying amounts and estimated fair value for certain financial instruments that are not recorded at fair value in the consolidated balance sheet as of December 31, 2025, and December 31, 2024, are shown in the following table.

December 31, 2025

Dollars in millions Carrying

Level 1 Level 2 Level 3 Measured

ASSETS (by measurement category)

Fair value - net income

Trading account assets (b)

$ 1,283 $ — $ 1,283 $ — $ — $ — $ 1,283

Other investments (b)

1,041 — — 969 72 — 1,041

Loans, net of unearned income (residential) (d)

10 — — 10 — — 10

Loans held for sale (residential) (b)

Amount Fair Value

Dollars in millions Level 1 Level 2 Level 3 Total

FINANCIAL ASSETS

Cash and short-term investments (a)

$ 11,450 $ 11,450 $ — $ — $ 11,450

Derivative assets - trading (b)

255 93 527 ( 4 ) — ( 361 ) (f)

Fair value - OCI

Securities available for sale (b)

Held-to-maturity securities (b)

8,622 — 8,313 — 8,313

Derivative assets - hedging (b) (g)

( 6 ) — ( 4 ) — — ( 2 ) (f)

Amortized cost

Held-to-maturity securities (c)

Other investments (c)

863 — — 863 863

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105,103 — — 101,946 101,946

Loans held for sale (b)

704 — — 704 — — 704

Cash and short-term investments (a)

Loans held for sale (c)

928 — — 928 928

LIABILITIES (by measurement category)

Fair value - net income

Derivative liabilities - trading (b)

$ 1,028 $ 85 $ 1,351 $ — $ — $ ( 408 ) (f)

Fair value - OCI

Derivative liabilities - hedging (b) (g)

— — 3 — — ( 3 ) (f)

Amortized cost

FINANCIAL LIABILITIES

Time deposits (e)

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December 31, 2024

Dollars in millions Carrying

Level 1 Level 2 Level 3 Measured

ASSETS (by measurement category)

Fair value - net income

Trading account assets (b)

$ 1,142 $ — $ 1,142 $ — $ — $ — $ 1,142

Other investments (b)

1,244 — — 1,183 61 — 1,244

Loans, net of unearned income (residential) (d)

9 — — 9 — — 9

Loans held for sale (residential) (b)

Amount Fair Value

Dollars in millions Level 1 Level 2 Level 3 Total

FINANCIAL ASSETS

Cash and short-term investments (a)

$ 19,247 $ 19,247 $ — $ — $ 19,247

Derivative assets - trading (b)

168 74 886 — — ( 792 ) (f)

Fair value - OCI

Securities available for sale (b)

Held-to-maturity securities (b)

7,395 — 6,837 — 6,837

Derivative assets - hedging (b) (g)

13 — 39 — — ( 26 ) (f)

Amortized cost

Held-to-maturity securities (c)

Other investments (c)

967 — — 967 967

1 unchanged sentence

102,841 — — 99,105 99,105

Loans held for sale (b)

432 — — 432 — — 432

Cash and short-term investments (a)

Loans held for sale (c)

704 — — 704 704

LIABILITIES (by measurement category)

Fair value - net income

Derivative liabilities - trading (b)

$ 1,304 $ 58 $ 1,707 $ — $ — $ ( 461 ) (f)

Fair value - OCI

Derivative liabilities - hedging (b) (g)

— — 12 — — ( 12 ) (f)

Amortized cost

FINANCIAL LIABILITIES

Time deposits (e)

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The fair value of deposits with no stated maturity does not take into consideration the value ascribed to core deposit intangibles.

(b) Information pertaining to our methodology for measuring the fair values of these assets and liabilities is included in the sections entitled “Qualitative Disclosures of Valuation Techniques” and “Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis” in this Note.

Investments accounted for under the cost method (or cost less impairment adjusted for observable price changes for certain equity investments) are classified as Level 3 assets.

These investments are not actively traded in an open market as sales for these types of investments are rare.

The carrying amount of the investments carried at cost are adjusted for declines in value if they are considered to be other-than-temporary (or due to observable orderly transactions of the same issuer for equity investments eligible for the cost less impairment measurement alternative).

These adjustments are included in “other income” on the income statement.

(c) Fair values of held-to-maturity securities are determined by using models that are based on security-specific details, as well as relevant industry and economic factors.

(b) Fair values of held-to-maturity securities are determined by using models that are based on security-specific details, as well as relevant industry and economic factors.

The most significant of these inputs are quoted market prices, interest rate spreads on relevant benchmark securities, and certain prepayment assumptions.

We review the valuations derived from the models to ensure that they are reasonable and consistent with the values placed on similar securities traded in the secondary markets.

(c) Information pertaining to our methodology for measuring the fair values of these assets and liabilities is included in the sections entitled “Qualitative Disclosures of Valuation Techniques” and “Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis” in this Note.

(d) The fair value of loans is based on the present value of the expected cash flows.

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The fair value of loans includes lease financing receivables at their aggregate carrying amount, which is equivalent to their fair value.

(e) Fair values of time deposits and long-term debt are based on discounted cash flows utilizing relevant market inputs.

(f) Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral.

Total derivative assets and liabilities include these netting adjustments.

(g) Derivative assets-hedging and derivative liabilities-hedging includes both cash flow and fair value hedges.

Additional information regarding our accounting policies for cash flow and fair value hedges is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging.”

(e) Fair values of time deposits and non-publicly traded long-term debt are based on discounted cash flows utilizing relevant market inputs.

We determine fair value based on assumptions pertaining to the factors that a market participant would consider in valuing the asset.

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If we were to use different assumptions, the fair values shown in the preceding table could change.

Also, because the applicable accounting guidance for financial instruments excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements, the fair value amounts shown in the table above do not, by themselves, represent the underlying value of our company as a whole.

Discontinued assets - education lending business .

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These loans are classified as Level 3 because we rely on unobservable inputs when determining fair value since observable market data is not available.

Short-term financial instruments.

For financial instruments with a remaining average life to maturity of less than six months, carrying amounts were used as an approximation of fair values.

The amortized cost, unrealized gains and losses, and approximate fair value of our securities available for sale and held-to-maturity securities are presented in the following tables.

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The securities being hedged are primarily U.S Treasuries, Agency RMBS, and Agency CMBS.

(c) Includes $ 303 million of securities as of December 31, 2024, and $ 731 million of securities as of December 31, 2023, related to the purchase of senior notes from a securitization collateralized by sold indirect auto loans.

(c) Amortized costs includes $ 74 million of securities as of December 31, 2025, and $ 303 million of securities as of December 31, 2024, related to the purchase of senior notes from a securitization collateralized by sold indirect auto loans.

The following table summarizes securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of December 31, 2025, and December 31, 2024:

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At December 31, 2025, securities available-for-sale and held-to-maturity securities totaling $ 18.7 billion were pledged to secure securities sold under repurchase agreements, to secure public and trust deposits, to facilitate access to secured funding, and for other purposes required or permitted by law.

The following table shows securities by remaining maturity.

The following table shows our securities by remaining maturity at December 31, 2025.

CMOs, other mortgage-backed securities, and asset-backed securities in the available for sale portfolio and held-to-maturity portfolio are presented based on their expected average lives.

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and credit derivatives.

Generally, these instruments help us manage exposure to interest rate risk, mitigate the credit risk inherent in our loan portfolio, hedge against changes in foreign currency exchange rates, and meet client financing and hedging needs.

As further discussed in this note:

• interest rate risk is the risk that the EVE or net interest income will be adversely affected by fluctuations in interest rates;

• credit risk is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms;

• foreign exchange risk is the risk that an exchange rate will adversely affect the fair value of a financial instrument.

At December 31, 2024, after taking into account the effects of bilateral collateral and master netting agreements, we had $( 6 ) million of derivative assets in a negative fair value position and less than $ 1 million of derivative liabilities that relate to contracts designated as hedging instruments.

As a result of bilateral collateral and master netting arrangements, which are applied at the counterparty level, we could have derivative contracts with negative fair values included in derivative assets and contracts with positive fair values in derivative liabilities related to counterparties with which we have both hedging and trading derivatives.

As of the same date, after taking into account the effects of bilateral collateral and master netting agreements and a reserve for potential future losses, we had derivative assets of $ 255 million and derivative liabilities of $ 1.0 billion that were not designated as hedging instruments.

These positions are primarily comprised of derivative contracts entered into for client accommodation purposes.

Additional information regarding our accounting policies for derivatives is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging.”

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Similarly, we designate certain “receive fixed/pay variable” interest rate swaps as cash flow hedges.

These contracts effectively convert certain floating-rate loans into fixed-rate loans to reduce the potential adverse effect of interest rate decreases on future interest income.

These contracts effectively convert certain floating-rate loans into fixed-rate loans to reduce the potential adverse effect of interest

rate decreases on future interest income.

Again, we receive fixed-rate interest payments in exchange for making variable-rate payments over the lives of the contracts without exchanging the notional amounts.

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These swaps convert certain floating-rate debt into fixed-rate debt.

We also use these swaps to manage the interest rate risk associated with anticipated sales of certain commercial real estate loans and certain student loans originated through our Laurel Road digital brand.

We also use these swaps to manage the interest rate risk associated with anticipated sales of certain commercial real estate loans.

The swaps protect against the possible short-term decline in the value of the loans that could result from changes in interest rates between the time they are originated and the time they are sold.

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We actively manage our overall loan portfolio and the associated credit risk in a manner consistent with asset quality objectives and concentration risk tolerances to mitigate portfolio credit risk.

Purchasing credit protection through default swaps enables us to transfer to a third party a portion of the credit risk associated with a particular extension of credit, including situations where there is a forecasted sale of loans.

Purchasing credit protection through default swaps and risk participation agreements enables us to transfer to a third party a portion of the credit risk associated with a particular extension of credit, including situations where there is a forecasted sale of loans.

We purchase credit default swaps to reduce the credit risk associated with the debt securities held in our trading portfolio.

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As a result, we could have derivative contracts with negative fair values included in derivative assets and contracts with positive fair values included in derivative liabilities.

(b) Other derivatives include interest rate lock commitments related to our residential mortgage banking activities, forward sales commitments related to our residential mortgage banking activities, forward purchase and sales contracts consisting of contractual commitments associated with “to be announced” securities and when-issued securities, and other customized derivative contracts.

(b) Other derivatives include interest rate lock commitments related to our residential and commercial banking activities, forward sale commitments related to our residential mortgage banking activities, forward purchase and sales contracts consisting of contractual commitments associated with “to be announced” securities and when-issued securities, and other customized derivative contracts.

(c) Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

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Fair value hedges.

During the year ended December 31, 2024, we did not exclude any portion of these hedging instruments from the assessment of hedge effectiveness.

During the year ended December 31, 2025, we did not exclude any portion of fair value hedging instruments from the assessment of hedge effectiveness.

The following tables summarize the amounts that were recorded on the balance sheet as of December 31, 2025 and December 31, 2024, related to cumulative basis adjustments for fair value hedges.

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Interest rate contracts Securities available for sale (b)

12,843 ( 100 ) 14

December 31, 2024

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Interest rate contracts Securities available for sale (b)

8,655 ( 152 ) —

(a) The carrying amount represents the portion of the asset or liability designated as the hedged item.

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During the year ended December 31, 2025, we did not exclude any portion of these hedging instruments from the assessment of hedge effectiveness.

Considering the interest rates, yield curves, and notional amounts as of December 31, 2024, we expect to reclassify an est imated $ 231 million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months.

In addition, we expect to reclassify approximately $ 4 million of pre-tax net losses related to terminated cash flow hedges from AOCI to income during the next 12 months.

Considering the interest rates, yield curves, and notional amounts as of December 31, 2025, we expect to reclassify an estimated $ 25 million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months.

In addition, we expect to reclassify approximately $ 1 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months.

These reclassified amounts could differ from actual amounts recognized due to changes in interest rates hedge de-designations and the addition of other hedges subsequent to December 31, 2025 .

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Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships

Dollars in millions Interest expense – long-term debt Interest income – loans Interest Income - securities Investment banking and debt placement fees

Year ended December 31, 2025

Dollars in millions

Interest expense – long-term debt Interest income – loans Interest Income - securities Investment banking and debt placement fees

Twelve Months Ended December 31, 2025

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Net income (expense) recognized on cash flow hedges $ ( 2 ) $ ( 358 ) $ — $ —

Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships

Year ended December 31, 2024

Dollars in millions

Interest expense – long-term debt Interest income – loans Interest Income - securities Investment banking and debt placement fees

Twelve Months Ended December 31, 2024

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Net income (expense) recognized on cash flow hedges $ ( 2 ) $ ( 733 ) $ — $ —

Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships

Year ended December 31, 2023

Dollars in millions

Interest expense – long-term debt Interest income – loans Interest Income - securities Investment banking and debt placement fees

Twelve Months Ended December 31, 2023

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Net income (expense) recognized on cash flow hedges $ ( 2 ) $ ( 956 ) $ — $ 5

The following table summarizes the pre-tax net gains (losses) on our cash flow hedges for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, and where they are recorded on the income statement.

The table includes net gains (losses) recognized in OCI during the period and net gains (losses) reclassified from AOCI into income during the current period.

Dollars in millions Net Gains (Losses)

Recognized in OCI Income Statement Location of Net Gains (Losses)

Reclassified From OCI Into Income Net Gains

(Losses) Reclassified

From OCI Into Income

Twelve Months Ended December 31, 2024

Cash Flow Hedges

Interest rate $ ( 450 ) Interest income — Loans $ ( 733 )

Interest rate 2 Interest expense — Long-term debt ( 2 )

Interest rate — Investment banking and debt placement fees —

Total $ ( 448 ) $ ( 735 )

Twelve Months Ended December 31, 2023

Cash Flow Hedges

Interest rate $ ( 294 ) Interest income — Loans $ ( 956 )

Interest rate — Interest expense — Long-term debt ( 2 )

Interest rate 5 Investment banking and debt placement fees 5

Total $ ( 289 ) $ ( 953 )

Twelve Months Ended December 31, 2022

Cash Flow Hedges

Interest rate $ ( 1,660 ) Interest income — Loans $ ( 146 )

Interest rate 7 Interest expense — Long-term debt ( 3 )

Interest rate 11 Investment banking and debt placement fees 9

The following table summarizes the pre-tax effect of cash flow hedges for the years ended December 31, 2025, December 31, 2024, and December 31, 2023.

Year ended December 31,

Dollars in millions

2025 2024 2023

Net Gains (Losses) Recognized in OCI

Interest contracts $ 309 $ ( 448 ) $ ( 289 )

Net Gains (Losses) Reclassified From AOCI Into Income

Interest income — Loans $ ( 358 ) $ ( 733 ) $ ( 956 )

Interest expense — Long-term debt ( 2 ) ( 2 ) ( 2 )

Investment banking and debt placement fees — — 5

Total $ ( 360 ) $ ( 735 ) $ ( 953 )

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Counterparty Credit Risk

We enter into derivative transactions with two primary groups:

broker-dealers and banks, and clients.

We use several means to mitigate and manage exposure to credit risk on derivative contracts.

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Treasury, government-sponsored enterprises, or GNMA.

Cash collateral netted against derivative assets on the balance s heet totale d $ 75 million at December 31, 2024, and $ 408 million at December 31, 2023.

Cash collateral of $ 103 million was netted against derivative assets on the balance sheet at December 31, 2025, compared to $ 75 million of cash collateral netted against derivative assets at December 31, 2024.

The cash collateral netted against derivative liabilities totaled $ 80 million at December 31, 2025, and $ 124 million at December 31, 2024.

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Total derivative assets $ 175 $ 249

We enter into derivative transactions with two primary groups:

broker-dealers and banks, and clients.

Since these groups have different economic characteristics, we have different methods for managing counterparty credit exposure and credit risk.

We enter into transactions with broker-dealers and banks for various risk management purposes.

These types of transactions are primarily high dollar volume.

We enter into bilateral collateral and master netting agreements with these counterparties.

We clear certain types of derivative transactions with these counterparties, whereby central clearing organizations become the counterparties to our derivative contracts.

In addition, we enter into derivative contracts through swap execution facilities.

Swap clearing and swap execution facilities reduce our exposure to counterparty credit risk.

At December 31, 2024, we had gross exposure of $ 247 million to broker-dealers and banks.

We had net exposure of $ 42 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist.

We held no additional collateral in the form of securities against this net exposure.

We enter into transactions using master netting agreements with clients to accommodate their business needs.

In most cases, we mitigate our credit exposure by cross-collateralizing these transactions to the underlying loan collateral.

For transactions that are not clearable, we mitigate our market risk by buying and selling U.S.

Treasuries and SOFR futures or entering into offsetting positions.

Due to the cross-collateralization to the underlying loan, we typically do not exchange cash or marketable securities collateral in connection with these transactions.

To address the risk of default associated with these contracts, we have established a CVA reserve (included in “accrued income and other assets”) in the amoun t of $ 4 million at December 31, 2024.

The CVA is calculated from potential future exposures, expected recovery rates, and market-implied probabilities of default.

At December 31, 2024, we had gross exposure of $ 239 million to client counterparties and other entities that are not broker-dealers or banks for derivatives that have associated master netting agreements.

We had net exposure of $ 207 million on our derivatives with these counterparties after the application of master netting agreements, collateral, and the related reserve.

Credit Derivatives

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We purchase credit derivatives to manage the credit risk associated with specific commercial lending and swap obligations as well as exposures to debt securities.

Our credit derivative portfolio was in a nominal net liability position as of December 31, 2024, and $ 1 million as of December 31, 2023.

Our credit derivative portfolio was in a net liability position of $ 1 million as of December 31, 2025 and a nominal net liability position as of December 31, 2024.

Our credit derivative portfolio consists of traded credit default swap indices and risk participation agreements.

Our credit derivative portfolio may consist of the following:

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A transaction in which the lead participant has a swap agreement with a customer.

The lead participant (purchaser of protection) then enters into a risk participation agreement with a counterparty (seller of protection), under which the counterparty receives a fee to accept a portion of the lead participant’s credit risk.

If the customer defaults on the swap contract, the counterparty to the risk participation agreement must reimburse the lead participant for the counterparty’s percentage of the positive fair value of the customer swap as of the default date.

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Amortization ( 125 ) ( 124 )

Temporary recoveries (impairments) — —

Balance at end of period $ 578 $ 609

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Escrow earn rate 3.94 % 4.09 % 4.08 % 4.62 % 4.70 % 4.69 %

Loan assumption rate — % 2.50 % 2.00 % — % 2.15 % 1.97 %

Prepayment rate 8.00 % 45.00 % 10.05 % 8.00 % 45.00 % 10.29 %

If these economic assumptions change or prove incorrect, the fair value of commercial mortgage servicing assets may also change.

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Unlike residential mortgages, commercial mortgages experience significantly lower prepayments due to certain contractual restrictions impacting the borrower’s ability to prepay the mortgage.

The sensitivity of the fair value of commercial mortgage servicing assets to adverse fluctuations in key assumptions as of December 31, 2025, is presented below:

Dollars in millions

Key assumptions:

Escrow earn rate assumptions 4.08 %

Effect on fair value from 10% adverse change $ ( 29 )

Effect on fair value from 20% adverse change ( 57 )

Discount rate assumptions 10.58 %

Effect on fair value from 10% adverse change $ ( 19 )

Effect on fair value from 20% adverse change ( 36 )

Default rate assumptions 1.01 %

Effect on fair value from 10% adverse change $ ( 2 )

Effect on fair value from 20% adverse change ( 3 )

Prepayment rate assumptions 10.05 %

Effect on fair value from 10% adverse change $ ( 6 )

Effect on fair value from 20% adverse change ( 13 )

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance.

Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear.

effect of an adverse variation in a particular assumption on the fair value is calculated without changing any other assumption, while in reality changes in one factor may result in changes in another, which may either magnify or counteract the effect of the change.

Assumptions and information for originated mortgage servicing right additions for the year ended December 31, 2025 are shown in the following table:

Dollars in millions

Unpaid principal balance of loans sold during the period $ 8,511

Pretax gains related to the sale of mortgage loans 131

Weighted average servicing fee rate 0.16 %

Weighted average assumptions:

Escrow earn rate assumption 4.88 %

Discount rate assumption 9.82 %

Default rate assumption 1.04 %

Prepayment rate assumption 12.71 %

The amortization of commercial mortgage servicing assets is determined in proportion to, and over the period of, the estimated net servicing income.

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Fair value at end of period

The fair value of residential mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans.

The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans.

This calculation uses a number of assumptions that are based on current market conditions.

The range and weighted-average of the significant unobservable inputs used to fair value our residential mortgage servicing assets along with the valuation techniques, are shown in the following table:

The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at December 31, 2025, and December 31, 2024, along with the valuation techniques, are shown in the following table:

December 31, 2025 December 31, 2024

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Actual rates may differ from those estimated due to changes in a variety of economic factors.

increase in the prepayment speed would cause a decrease in the fair value of our residential mortgage servicing assets.

An increase in the prepayment speed would cause a decrease in the fair value of our residential mortgage servicing assets.

An increase in the assigned discount rates and servicing cost assumptions would cause a decrease in the fair value of our residential mortgage servicing assets.

The amortization of residential mortgage servicing assets for December 31, 2024, as shown in the table above, is recorded as a reduction to contractual fee income.

The sensitivity of the fair value of residential mortgage servicing assets to adverse fluctuations in key assumptions as of December 31, 2025, is presented below:

Dollars in millions 2025

Key Assumptions:

Prepayment speed 8.33 %

Effect on Fair Value of a 10% adverse change $ ( 4 )

Effect on Fair Value of a 20% adverse change ( 8 )

Discount rate 6.62 %

Effect on Fair Value of a 10% adverse change $ ( 4 )

Effect on Fair Value of a 20% adverse change ( 7 )

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance.

Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear.

The amortization of residential servicing assets for December 31, 2025, as shown in the table above, is recorded as a reduction to contractual fee income.

The contractual fee income from servicing residential mortgage loans totaled $ 41 million for the year ended December 31, 2025, $ 40 million for the year ended December 31, 2024, and $ 38 million for the year ended December 31, 2023.

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As a lessor, we primarily provide financing through our equipment leasing business.

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years.

For leases with initial terms greater than one year, a lease liability, measured as the present value of unpaid lease payments, and a corresponding right-of-use asset for the right to use the leased properties are reported on the balance sheet.

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years although certain leases have extension or termination options.

Lease payments are discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease.

Leases with an initial term of less than one year are not recorded on the balance sheet.

The related expense is recognized on a straight-line basis over the lease term.

Certain leases contain options to extend the lease term for up to five years .

Some leases give us the option to terminate, for a penalty or at the lessor's discretion.

Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index.

Certain ATM leases include variable payments based on volume of transactions.

Certain lease payments are variable and are based on a contractually defined index or transaction volume.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement.

The components of lease expense are summarized as follows:

Dollars in millions December 31, 2024 December 31, 2023

The components of lease expense and cash flows related to leases are summarized as follows:

Dollars in millions December 31, 2025 December 31, 2024 December 31, 2023

Operating lease cost $ 118 $ 118 $ 122

Finance lease cost:

Amortization of right-of-use assets 1 1

Interest on lease liabilities — —

Variable lease cost 20 21 19

Total lease cost (a)

(a) Short-term lease cost was le ss than $ 1 million for both the twelve months ended December 31, 2024, and December 31, 2023

Cash flows related to leases are summarized as follows:

Dollars in millions December 31, 2024 December 31, 2023

Finance lease cost — 1 1

Total lease cost $ 138 $ 140 $ 142

Cash paid for amounts included in the measurement of lease liabilities $ 129 $ 134 $ 136

Operating cash flows from operating leases $ 133 $ 135

Financing cash flows from finance leases 1 1

Right-of-use assets obtained in exchange for lease obligations 91 70 65

Operating leases $ 70 $ 65

(a) There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2024 or December 31, 2023.

Additional balance sheet information related to leases is summarized as follows:

Dollars in millions Balance sheet classification December 31, 2025 December 31, 2024

Operating lease assets Accrued income and other assets $ 453 $ 479

Right-of-use assets Accrued income and other assets $ 444 $ 453

Operating lease liabilities Accrued expense and other liabilities 484 506

Finance leases:

Property and equipment, gross Premises and equipment $ 18 $ 18

Accumulated depreciation Premises and equipment ( 16 ) ( 15 )

Property and equipment, net $ 2 $ 3

Finance lease liabilities Long-term debt 3 5

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:

December 31, 2024 December 31, 2023

Weighted-average remaining lease term:

Operating leases 5.42 5.69

Finance leases 2.52 3.53

Weighted-average discount rate:

Operating leases 3.40 % 3.09 %

Finance leases 4.54 % 4.54 %

Maturities of lease liabilities are summarized as follows:

Dollars in millions Operating Leases Finance Leases Total

2025 $ 128 $ 1 $ 129

2026 117 — 117

2027 100 — 100

Information pertaining to the lease term and weighted-average discount rate, and m aturities of operating lease liabilities are summarized as follows:

Dollars in millions December 31, 2025

Thereafter 78

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Less imputed interest 54

Total $ 506 $ 3 $ 509

Total operating lease liabilities $ 484

December 31, 2025 December 31, 2024

Weighted-average remaining lease term (years) 5.37 5.42

Weighted-average discount rate 3.72 % 3.40 %

Lessor Equipment Leasing

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Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income.

Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the Consolidated Statements of Income.

Income related to operating leases is recognized in “operating lease income and other leasing gains” on the Consolidated Statements of Income.

The components of equipment leasing income are summarized in the table below:

Dollars in millions December 31, 2024 December 31, 2023

Dollars in millions December 31, 2025 December 31, 2024 December 31, 2023

Sales-type and direct financing leases

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The carrying amount of residual assets covered by residual value guarantees at December 31, 2025, and December 31, 2024, was $ 269 million and $ 238 million, respectively.

At December 31, 2024, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

Dollars in millions Sales-type and direct financing lease payments

Thereafter 376

Total lease payments $ 2,342

At December 31, 2024 , minimum future lease payments to be received for operating leases are as follows:

Dollars in millions Operating lease payments

At December 31, 2025, minimum future lease payments to be received for leases are as follows:

Dollars in millions Sales-type and direct financing lease payments Operating lease payments

2026 $ 583 $ 27

Thereafter 344 14

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The Commercial Bank and Institutional Bank reporting units are aggregated within Key’s overall Commercial Bank reporting segment.

As of December 31, 2024, the Commercial Bank and Institutional Bank reporting units were allocated goodwill of $ 218 million and $ 715 million, respectively.

As of December 31, 2023, the Commercial Bank and Institutional Bank reporting units were allocated goodwill of $ 800 million and $ 133 million, respectively.

The reallocation of goodwill between the Commercial Bank and Institutional Bank reporting units was a result of the realignment of Key’s business described below.

Additional information pertaining to our accounting policy for goodwill and other intangible assets is summarized in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Goodwill and Other Intangible Assets.”

During the first quarter, Key realigned its real estate capital business from its Commercial Bank reporting unit to its Institutional Bank reporting unit.

During the first quarter of 2024, Key realigned its real estate capital business from its Commercial Bank reporting unit to its Institutional Bank reporting unit.

The move was done to align product-based teams to the client-facing businesses they serve with the goal of reducing overhead and complexity and creating a better client experience.

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We utilized a combination of market and income approaches to calculate the estimated fair values of our reporting units.

We determined in our interim quantitative test that the estimated fair value of the Consumer Bank reporting unit was 18 % greater than its carrying amount, the estimated fair value of the Commercial Bank reporting unit was 25 % greater than its carrying amount, and the estimated fair value of the Institutional Bank reporting unit was 34 % greater than its carrying amount.

We determined in that interim quantitative test that 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 carrying amounts of the reporting units represent the average equity based on blended capital for goodwill impairment testing and management reporting purposes.

Based on the results of the 2024 interim quantitative test, there was no goodwill impairment.

For our annual test, we conducted a qualitative test as of October 1, 2024.

This was the most recent quantitative goodwill test performed by Key.

For our latest annual impairment test, we conducted a qualitative test 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 as of February 29, 2024 and considering recent transactions and events that could impact the goodwill at each reporting unit.

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Additionally, we monitored events and circumstances during the period from October 1, 2025 through December 31, 2025, including an evaluation of macroeconomic and market factors, industry and banking sector events, Key specific performance indicators and updated management forecasts.

Based on these considerations, we concluded that it was not more-likely-than-not that the fair value of one or more of the reporting units is below its respective carrying value as of December 31, 2024.

Based on these considerations, we concluded that it was not more-likely-than-not that goodwill was impaired as of December 31, 2025.

Changes in the carrying amount of goodwill by reporting segment are presented in the following table:

Dollars in millions Consumer Bank Commercial Bank Total

Dollars in millions Consumer Bank Commercial Bank Total (a)

BALANCE AT DECEMBER 31, 2023 $ 1,819 $ 933 $ 2,752

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BALANCE AT DECEMBER 31, 2025 $ 1,819 $ 933 $ 2,752

As of December 31, 2024, we expect goodwill in the amount of $ 293 million to be deductible for tax purposes in future periods.

There were no accumulated impairment losses related to any of Key’s reporting units at December 31, 2024, December 31, 2023, and December 31, 2022.

(a) There were no accumulated impairment losses related to any of Key’s reporting units at December 31, 2025, December 31, 2024, and December 31, 2023.

The following table shows the gross carrying amount and the accumulated amortization of intangible assets subject to amortization:

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• The voting rights of some investors are not proportional to their economic interests in the entity, and substantially all of the entity’s activities involve, or are conducted on behalf of, investors with disproportionately few voting rights.

Our significant VIEs are summarized below.

We define a “significant interest” in a VIE as a subordinated interest that exposes us to a significant portion, but not the majority, of the VIE’s expected losses or residual returns, even though we do not have the power to direct the activities that most significantly impact the entity’s economic performance.

In the normal course of business, we engage in a variety of activities that involve VIEs.

We evaluate our interests in VIEs to determine whether Key is the primary beneficiary and should consolidate the entity.

LIHTC investments.

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Additional information on indirect principal investments is provided in Note 5 (“Fair Value Measurements”).

The table below reflects the size of the private equity funds in which KCC was invested as well as our maximum exposure to loss in connection with these investments at December 31, 2024.

The table below reflects the size of the private equity funds in which we were invested as well as our maximum exposure to loss in connection with these investments at December 31, 2025.

Unconsolidated VIEs

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Other unconsolidated VIEs.

We are involved with other various entities in the normal course of business which we have determined to be VIEs.

We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance or hold a variable interest that could potentially be significant.

The table below shows our assets and liabilities associated with these unconsolidated VIEs at December 31, 2024, and December 31, 2023.

These assets are recorded in “accrued income and other assets,” “other investments,” “securities available for sale,” “held-to-maturity securities,” and “loans, net of unearned income” on our Consolidated Balance Sheets.

These liabilities are recorded in “accrued expenses and other liabilities” on our Consolidated Balance Sheets.

We are involved with other various entities in the normal course of business which we have determined to be VIEs, and include investments in Small Business Investment Companies, Historic Tax Credit Investments, certain equity method investments, and other miscellaneous investments.

We have determined that

we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance or hold a variable interest that could potentially be significant.

The table below shows our assets and liabilities associated with these unconsolidated VIEs at December 31, 2025, and December 31, 2024.These assets are recorded in “accrued income and other assets,” “other investments,” “securities available for sale,” “held-to-maturity securities,” and “loans, net of unearned income” on our Consolidated Balance Sheets.

Our maximum exposure to loss is equal to the value of the assets recorded.

Of the total balance as of December 31, 2025, $ 74 million related to the purchase of senior notes from a securitization collateralized by sold indirect auto loans.

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Net unrealized securities losses 566 1,045

Federal net operating losses and credits 303 3

Federal tax credits 226 303

Non-tax accruals 79 109

Operating lease liabilities (a)

Operating lease liabilities 121 127

State net operating losses and credits 5 20

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State taxes 25 76

Operating lease right-of-use assets (a)

Operating lease right-of-use assets 112 114

Goodwill 195 178

Total deferred tax liabilities 705 814

Net deferred tax assets (liabilities) (b)

Net deferred tax assets (liabilities) (a)

$ 1,149 $ 1,623

(a) A separate deferred tax asset and liability is recognized for each operating lease item resulting from the adoption of ASC 842 in 2019.

(b) From continuing operations.

(a) From continuing operations.

We conduct quarterly assessments of all available evidence to determine the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded.

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Currently, generation of sufficient gain income is uncertain.

At December 31, 2024, we had federal net operating loss carryforwards of $ 420 million and federal credit carryforwards of $ 215 million.

Federal net operating loss carryforwards of $ 7 million are from prior acquisitions by First Niagara and are subject to annual limitations under the tax code and if not utilized, will expire in the years beginning 2027.

The remaining $ 413 million of net operating losses generated in 2024 do not expire.

The federal credit carryforward consists of general business credits generated in 2012 of $ 1 million and 2024 of $ 214 million, which expire in 2027 and 2039, respectively, under the Internal Revenue Code.

We currently expect to fully utilize these losses and credits.

We had state net operating loss carryforwards of $ 271 million, resulting in a net state deferred tax asset of $ 11 million and state credit carryforwards of $ 9 million.

We currently expect to fully utilize these losses and credits.

At December 31, 2025, we had no federal net operating loss carryforwards and federal credit carryforwards of $ 226 million.

The federal credit carryforward consists of general business credits generated of $ 226 million, which expire in 2045, under the Internal Revenue Code.

We currently expect to fully utilize these credits.

We had state net operating loss carryforwards of $ 80 million, resulting in a net state deferred tax asset of $ 3 million, for which we have recorded $ 1 million of valuation allowances, and state credit carryforwards of $ 2 million.

If not utilized, the state net operating losses and state tax credits begin to expire in 2027 and 2029, respectively.

We currently do not expect to utilize the state net operating losses for which we have recorded a valuation allowance.

We currently expect to fully utilize these state credits.

The following table shows how our total income tax expense (benefit) and the resulting effective tax rate were derived:

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Income (loss) before income taxes times 21% statutory federal tax rate $ 484 21.0 % $ ( 64 ) 21.0 % $ 244 21.0 %

Amortization of tax-advantaged investments 185 ( 60.6 ) 171 14.8 149 6.4

State and local income taxes, net of federal income tax effect (a)

75 3.3 ( 33 ) 10.8 13 1.1

Low-income housing/New markets ( 252 ) ( 10.9 ) ( 211 ) 69.1 ( 196 ) ( 16.9 )

Change in valuation allowances ( 2 ) ( .1 ) 3 ( 1.0 ) — —

Nontaxable or nondeductible items

Tax-exempt interest income ( 27 ) ( 1.2 ) ( 27 ) 8.8 ( 35 ) ( 3.0 )

Corporate-owned life insurance income ( 29 ) ( 1.3 ) ( 29 ) 9.5 ( 28 ) ( 2.4 )

State income tax, net of federal tax benefit ( 20 ) 6.6 18 1.6 53 2.3

State income tax rate change, net of federal benefit ( 17 ) 5.5 — — — —

Tax credits ( 211 ) 69.1 ( 196 ) ( 16.9 ) ( 204 ) ( 8.8 )

FDIC Insurance 25 ( 8.3 ) 22 1.9 12 .5

Other 15 ( 4.9 ) — — ( 22 ) ( .9 )

Share-based compensation expense ( 2 ) ( .1 ) 5 ( 1.6 ) 1 .1

Federal deposit insurance 20 .9 25 ( 8.2 ) 22 1.9

Amortization of tax-advantaged investments 212 9.2 185 ( 60.5 ) 171 14.7

Other permanent differences ( 3 ) ( .1 ) 7 ( 2.4 ) ( 1 ) ( .1 )

Changes in reserves of tax positions — — ( 4 ) 1.3 5 .4

Total income tax expense (benefit) $ 476 20.7 % $ ( 143 ) 46.6 % $ 196 16.9 %

(a) In 2025, New York, New York City, California, and Illinois comprised the majority of the state and local income taxes, net of federal income tax effect.

In 2024, New York, New York City, California, Illinois, and Oregon comprised the majority of this category.

In 2023, New York, New York City, California, and Illinois comprised the majority of this category.

The following table shows income taxes paid, net of refunds.

Amounts presented for individual jurisdictions represented 5% or more of total income taxes paid, net of refunds, for each respective year.

Year ended December 31,

Dollars in millions

2025 2024 2023

Federal $ 51 $ 30 $ 119

state and local

California 5 — 11

Illinois — 4 —

New Jersey — 6 —

New York City 7 — 9

New York State — — ( 16 )

Other 8 28 33

Total $ 71 $ 68 $ 156

Liability for Unrecognized Tax Benefits

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Dollars in millions

2025 2024 2023

Balance at beginning of year $ 39 $ 45 $ 40

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Any adjustment to unrecognized tax benefits is recorded in income tax expense.

The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was $ 39 million at December 31, 2024, and $ 45 million at December 31, 2023.

It is reasonably possible that the balance of unrecognized tax benefits could decrease in the next twelve months due to examinations by various tax authorities or the expiration of statutes of limitations.

The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was $ 3 million at December 31, 2025, $ 39 million at December 31, 2024 and $ 45 million at December 31, 2023.

As permitted under the applicable accounting guidance, it is our policy to record interest and penalties related to unrecognized tax benefits in income tax expense.

We recorded net interest benefit of less than $ 1 million, $ 4 million, and $ 1.5 million in 2024, 2023, and 2022, respectively.

We recorded net interest benefit of $ 16 million, less than $ 1 million, and $ 4 million in 2025, 2024, and 2023, respectively.

We did no t recover any state tax penalties in 2025, 2024, or 2023.

At December 31, 2024, we had $ 1 million accrued interest payable, compared to $ 0.6 million at December 31, 2023.

There were no unrecognized tax benefits presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, at December 31, 2024 and December 31, 2023, respectively.

The BEPS 2.0/Pillar Two proposals issued by the Organization for Economic Co-operation and Development focus on global profit allocation and a global minimum tax rate.

While we continue to analyze the tax implications of BEPS 2.0/Pillar Two, we do not currently anticipate that the implementation of tax laws aligned with the BEPS 2.0/Pillar Two proposals will have a material impact on KeyCorp’s income tax expense.

At December 31, 2025, we had $ 1 million accrued interest payable, compared to $ 1 million at December 31, 2024 and $ 0.6 million at December 31, 2023.

We file federal income tax returns, as well as returns in various state and foreign jurisdictions.

We are subject to income tax examination by the IRS for the tax years 2016, and 2020 and forward.

We are subject to income tax examination by the IRS for the tax years 2020 and forward.

Currently, we are under IRS audit for tax year 2020.

We are not subject to income tax examinations by other tax authorities for years prior to 2016.

One Big Beautiful Bill Act (“OBBBA”)

On July 4, 2025, new U.S.

tax legislation was signed into law, OBBBA, which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.

In addition, the OBBBA makes changes to certain U.S.

corporate tax provisions, but many are generally not effective until 2026.

Key does not expect any material change to our ongoing tax rate or any material impact on our results of operations.

Pre-1988 Bank Reserves acquired in a business combination

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Net interest income after provision for credit losses for this business is not material and is included in income (loss) from discontinued operations, net of taxes on the consolidated statements of income.

Securities Financing Activities

The following table summarizes our securities financing agreements at December 31, 2024, and December 31, 2023:

December 31, 2024 December 31, 2023

Dollars in millions Gross Amount

Balance Sheet

Adjustments (a)

Collateral (b)

Balance Sheet

Adjustments (a)

Collateral (b)

Offsetting of financial assets:

Reverse repurchase agreements $ 2 $ ( 2 ) $ — $ — $ 7 $ ( 7 ) $ — $ —

Securities borrowed — — — — — — — —

Total $ 2 $ ( 2 ) $ — $ — $ 7 $ ( 7 ) $ — $ —

Offsetting of financial liabilities:

Repurchase agreements (c)

$ 14 $ ( 2 ) $ ( 12 ) $ — $ 38 $ ( 7 ) $ ( 31 ) $ —

Total $ 14 $ ( 2 ) $ ( 12 ) $ — $ 38 $ ( 7 ) $ ( 31 ) $ —

(a) Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net basis.

(b) These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related collateral.

The application of collateral cannot reduce the net position below zero.

Therefore, excess collateral, if any, is not reflected above.

(c) Repurchase agreements are primarily collateralized by mortgaged-backed agency securities and are contracted on an overnight or continuous basis.

As of December 31, 2024, assets pledged as collateral against repurchase agreements totaled $ 14 million.

Assets pledged as collateral are reported in “available for sale” and “held-to-maturity” securities on the Consolidated Balance Sheets.

At December 31, 2024, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $ 12 million.

The collateral pledged under customer sweep repurchase agreements is posted to a third-party custodian and cannot be sold or repledged by the secured party.

The risk related to a decline in the market value of collateral pledged is minimal given the collateral's high credit quality and the overnight duration of the repurchase agreements.

Like other financing transactions, securities financing agreements contain an element of credit risk.

To mitigate and manage credit risk exposure, we generally enter into master netting agreements and other collateral arrangements that give us the right, in the event of default, to liquidate collateral held and to offset receivables and payables with the same counterparty.

Additionally, we establish and monitor limits on our counterparty credit risk exposure by product type.

For the reverse repurchase agreements, we monitor the value of the underlying securities we received from counterparties and either request additional collateral or return a portion of the collateral based on the value of those securities.

We generally hold collateral in the form of highly rated securities issued by the U.S.

Treasury and fixed income securities.

In addition, we may need to provide collateral to counterparties under our repurchase agreements.

With the exception of collateral pledged against customer sweep repurchase agreements, the collateral we pledge and receive can generally be sold or repledged by the secured parties.

Stock-Based Compensation

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The committee has delegated to our Chief Executive Officer the authority to grant equity awards, including stock options, to any employee who is not designated an “officer” for purposes of Section 16 of the Exchange Act.

No more than 3,000,000 Com mon Shares may be issued under this authority.

At December 31, 2024, we h ad 29,269,060 Co mmon Shares available for future grant under our compensation plans.

In accordance with a resolution adopted by the Compensation and Organization Committee of KeyCorp’s

Board of Directors, we may not grant options to purchase Common Shares, restricted stock or other shares under any long-term compensation plan in an aggregate amount that exceeds 6 % of our outstanding Common Shares in any rolling three-year period.

No more than 3,000,000 Common Shares may be issued under this authority.

At December 31, 2025, we had 13,856,968 Common Shares available for future grant under our compensation plans.

In accordance with a resolution adopted by the Compensation and Organization Committee of KeyCorp’s Board of Directors, we may not grant options to purchase Common Shares, restricted stock or other shares under any long-term compensation plan in an aggregate amount that exceeds 6 % of our outstanding Common Shares in any rolling three-year period.

Long-Term Incentive Compensation Program

Our Long-Term Incentive Compensation Program (the “Program”) rewards senior executives and other employees critical to our long-term financial success.

Awards are granted annually in a variety of forms:

• deferred cash payments that generally vest and are payable at the rate of 25 % per year;

• time-lapsed (service condition) restricted stock units payable in stock or cash, which generally vest at the rate of 25 % per year;

• performance units payable in cash, which vest at the end of the three-year performance cycle and will not vest unless Key attains defined performance levels and the service condition is met;

• stock options that generally become exercisable at the rate of 25 % per year.

During 2025, no performance units vested that were payable in stock and 36,078 performance units vested that were payable in cash.

The total fair value of the performance units that vested in stock and cash during 2025 was zero and $ 1 million, respectively.

During 2024, 30,323 performance units vested that were payable in stock and 1,556,149 performance units vested that were payable in cash.

The total fair value of the performance units that vested in stock and cash during 2024 totaled $ 1 million and $ 22 million, respectively.

The following table summarizes activity and pricing information for the nonvested shares in the Program for the year ended December 31, 2025.

Vesting Contingent on

Service Conditions Vesting Contingent on

Performance and Service

Conditions - Payable in Stock Vesting Contingent on

Performance and Service

Conditions - Payable in Cash

Shares Weighted-

Fair Value Number of

Shares Weighted-

Fair Value Number of

Shares Weighted-

Outstanding at December 31, 2024 14,995,501 $ 17.66 1,440,087 $ 15.42 5,420,941 $ 19.70

Granted 7,306,761 17.72 68,991 15.42 1,575,553 20.82

Vested ( 5,552,419 ) 18.82 — — ( 36,078 ) 19.02

Forfeited (a)

( 461,624 ) 17.53 — — ( 3,682,521 ) 18.52

Outstanding at December 31, 2025 16,288,219 $ 17.27 1,509,078 $ 15.42 3,277,895 $ 20.99

(a) Includes awards that did not vest

The compensation cost of time-lapsed and performance-based restricted stock or unit awards granted under the Program is calculated using the closing trading price of our Common Shares on the grant date (or the prior business day if the grant date is not a business day).

Unlike time-lapsed and performance-based restricted stock or units, we do not pay dividends during the vesting period for performance shares or units that may become payable in excess of targeted performance.

The weighted-average grant-date fair value of awards granted under the Program was $ 18.25 during 2025, $ 13.06 during 2024, and $ 17.81 during 2023.

As of December 31, 2025, unrecognized compensation cost related to nonvested shares under the Program totaled $ 113 million.

We expect to recognize this cost over a weighted-average period of 2.2 years.

The total fair value of shares vested was $ 105 million in 2025, $ 130 million in 2024, and $ 133 million in 2023.

Stock Options

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The following table summarizes activity, pricing and other information for our stock options for the year ended December 31, 2025:

Weighted-Average

Options Weighted-Average

Exercise Price Per

Weighted-Average

Option Weighted-Average

Remaining Life (in years) Aggregate

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(a) The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds the exercise price of the option.

The weighted-average gr ant-date fair value of options was $ 3.43 for options granted during 2024, $ 4.23 for options granted during 2023, and $ 5.78 for options granted during 2022.

The weighted-average grant-date fair value of options was $ 4.93 for options granted during 2025, $ 3.43 for options granted during 2024, and $ 4.23 for options granted during 2023.

Stock option exercises numbered 655,461 in 2025, 819,268 in 2024, and 134,484 in 2023.

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The actual tax benefit realized for the tax deductions from options exercised was less than $ 1 million in 2025 and less than $ 1 million in 2024.

Long-Term Incentive Compensation Program

Our Long-Term Incentive Compensation Program (the “Program”) rewards senior executives and other employees critical to our long-term financial success.

Awards are granted annually in a variety of forms:

• deferred cash payments that generally vest and are payable at the rate of 25 % per year;

• time-lapsed (service condition) restricted stock units payable in stock, which generally vest at the rate of 25 % per year;

• performance units payable in stock, which vest at the end of the three-year performance cycle and will not vest unless Key attains defined performance levels and the service condition is met;

• performance units payable in cash, which vest at the end of the three-year performance cycle and will not vest unless Key attains defined performance levels and the service condition is met.

D uring 2024, 30,323 performance units vested that were payable in stock and 1,556,149 performance units vested that were payable in cash.

The total fair value of the performance units that vested in stock and cash during 2024 totaled $ 1 million and $ 22 million, respectively.

During 2023, 28,008 performance units vested that were payable in stock and 1,778,941 performance units vested that were payable in cash.

The total fair value of the performance units that vested in stock and cash during 2023 totaled $ 1 million and $ 32 million, respectively.

The following table summarizes activity and pricing information for the nonvested shares in the Program for the year ended December 31, 2024.

Vesting Contingent on

Service Conditions

Vesting Contingent on

Performance and Service

Conditions - Payable in Stock

Vesting Contingent on

Performance and Service

Conditions - Payable in Cash

Shares Weighted-

Outstanding at December 31, 2023 12,856,041 $ 20.97 30,323 $ 19.07 5,583,290 $ 14.67

Granted 8,098,908 14.07 1,440,087 — 1,636,720 19.52

Vested ( 5,175,689 ) 20.68 ( 30,323 ) 19.07 ( 1,556,149 ) 14.24

Forfeited ( 783,759 ) 18.47 — — ( 242,920 ) 15.78

Outstanding at December 31, 2024 14,995,501 $ 17.66 1,440,087 $ — 5,420,941 $ 19.70

The weighted-average grant-date fair value of awards granted under the Program was $ 13.06 during 2024, $ 17.81 during 2023, and $ 23.39 during 2022.

As of December 31, 2024, unrecognized compensation cost related to nonvested shares under the Program totaled $ 92 million.

We expect to recognize this cost over a weighted-average period of 2.4 years.

The total fair value of shares vested was $ 130 million in 2024, $ 133 million in 2023, and $ 144 million in 2022.

Deferred Compensation and Other Restricted Stock Awards

Our deferred compensation arrangements include voluntary and mandatory deferral programs for Common Shares awarded to certain employees and directors.

Mandatory deferred incentive awards vest at the rate of 25 % pe r year beginning one year after the deferral date.

Mandatory deferred incentive awards vest at the rate of 25 % per year beginning one year after the deferral date.

Deferrals under the voluntary programs are immediately vested.

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The following table summarizes activity and pricing information for the nonvested shares granted under our deferred compensation plans and these other restricted stock or unit award programs for the year ended December 31, 2025.

Weighted-Average

Shares Weighted-Average

Outstanding at December 31, 2024 2,296,263 $ 16.28

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Gain or loss amounts in AOCI are only amortized to the extent that they exceed 10% of the greater of the market-related value or the projected benefit obligation.

During 2024, Key did not recognize a settlement loss.

In 2023, and 2022, we recognized a settlement loss for lump sum payments made under certain pension plans.

During 2025 and 2024, Key did not recognize a settlement loss.

In 2023, we recognized a settlement loss for lump sum payments made under certain pension plans.

In accordance with the applicable accounting guidance for defined benefit plans, we performed a remeasurement of the affected plans in conjunction with the settlement and recognized the settlement loss reflected in the following table.

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The following table summarizes changes in the PBO and changes in the FVA related to our pension plans and post retirement benefit plan.

Actuarial gains in 2024 associated with the pension plans were primarily driven by an increase in discount rates.

Actuarial losses in 2025 associated with the postretirement benefit plan are a result of asset performance.

Actuarial gains in 2024 associated with the pension plans were primarily driven by an increase in discount rates.

Year ended December 31,

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We also do not expect to make any significant discretionary contributions during 2026.

There are no regulations that require contributions to the VEBA trust that funds our retiree healthcare plan, so there is no minimum funding

There are no regulations that require contributions to the VEBA trust that funds our retiree healthcare plan, so there is no minimum funding requirement.

We are permitted to make discretionary contributions to the VEBA trust, subject to certain IRS restrictions and limitations.

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The following table shows the asset target allocations prescribed by the pension fund’s investment policies based on the plan’s funded status at December 31, 2025.

Target Allocation

Asset Class 2025

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A substantial number of our employees are covere d under a savings plan that is qualified under Section 401(k) of the Internal Revenue Code.

The plan permits employees to contribute from 1 % to 100 % of eligible compensation, with up to 7 % being eligible for matching contributions in 2024.

The plan permits employees to contribute from 1 % to 100 % of eligible compensation, with up to 7 % being eligible for matching contributions in 2024 and 2025.

The plan also permits us to provide a discretionary annual profit sharing contribution to eligible employees who have at least one year of service.

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Total expense associated with the above plans was $ 132 million in 2025, $ 145 million in 2024, and $ 99 million in 2023.

Short-Term Borrowings

Selected financial information pertaining to the components of our short-term borrowings is as follows:

The following table presents a summary of our short-term borrowings:

Dollars in millions 2025 2024

Federal funds purchased $ — $ —

Balance at year end $ — $ — $ 4,006

Average during the year 67 1,098 1,490

Maximum month-end balance — 3,020 5,872

Weighted-average rate during the year 5.29 % 4.83 % 2.04 %

Weighted-average rate at December 31 — — 4.18

Securities sold under repurchase agreements 13 14

Balance at year end $ 14 $ 38 $ 71

Average during the year 36 549 617

Maximum month-end balance 44 1,954 1,090

Weighted-average rate during the year 2.61 % 4.77 % 1.66 %

Weighted-average rate at December 31 3.15 1.63 3.74

Other short-term borrowings 1,071 2,130

Balance at year end $ 2,130 $ 3,053 $ 5,386

Average during the year 2,984 5,890 2,963

Maximum month-end balance 6,794 1,061 11,372

Weighted-average rate during the year 5.49 % 5.24 % 1.82 %

Weighted-average rate at December 31 4.95 5.58 .50

As described below and in Note 20 (“Long-Term Debt”), KeyCorp and KeyBank have a number of programs and facilities that support our short-term financing needs.

As described below KeyCorp and KeyBank have a number of programs and facilities that support our short-term financing needs.

Certain subsidiaries maintain credit facilities with third parties, which provide alternative sources of funding.

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As of December 31, 2025, our unused secured borrowing capacity was $ 39.5 billion at the Federal R eserve Bank of Cleveland an d $ 18.9 billion a t the FHLB.

Long-Term Debt

The following table presents the components of our long-term debt, net of unamortized discounts and adjustments related to hedging with derivative financial instruments.

Long-term borrowings

The following table presents the contractual rates and maturity dates of our long-term debt as of December 31, 2025 and the carrying values as of December 31, 2025 and December 31, 2024.

We use interest rate swaps and caps, which modify the repricing characteristics of certain long-term debt, to manage interest rate risk.

For more information about such financial instruments, see Note 7 (“Derivatives and Hedging Activities”).

December 31, Stated Rate Maturity Carrying Value

Dollars in millions 2025 2025 2025 2024

Senior medium-term notes due through 2035 (a)

Parent Company

Senior notes 2.25 % - 6.40 %

$ 4,659 $ 4,251

2.075 % Subordinated notes due 2028 (b)

6.875 % Subordinated notes due 2029 (b)

7.75 % Subordinated notes due 2029 (b)

Other variable rate notes due 2025 599 —

Other subordinated notes (b)(c)

Junior subordinated debentures 4.99 % - 7.75 %

Other variable rate notes — 599

Total parent company $ 5,106 $ 5,294

Senior medium-term notes due through 2039 (d)

4.39 % Senior remarketable notes due 2027 (e)

3.40 % Subordinated notes due 2026 (f)

6.95 % Subordinated notes due 2028 (f)

3.90 % Subordinated notes due 2029 (f)

4.90 % Subordinated notes due 2032 (f)

Secured borrowings due through 2032 (g)

Federal Home Loan Bank advances due through 2041 (h)

Investment Fund Financing due through 2055 (i)

Revolving loans due through 2027 211 —

Senior notes 3.97 % - 5.85 %

$ 2,229 $ 4,540

Subordinated notes 3.40 % - 6.95 %

Federal Home Loan Bank advances 1.39 % - 7.36 %

Other long-term debt (a)

Revolving loans — 211

Total subsidiaries $ 4,811 $ 6,811

Total long-term debt $ 9,917 $ 12,105

(a) Senior medium-term notes had a weighted-average interest rate of 1.57 % a t December 31, 2024, and 2.31 % at December 31, 2023.

These notes had fixed interest rates at December 31, 2024, and December 31, 2023.

Certain of these notes may be redeemed prior to their maturity dates.

(b) See Note 21 (“Trust Preferred Securities Issued by Unconsolidated Subsidiaries”) for a description of these notes.

(c) The First Niagara variable rate trust preferred securities had a weighted-average interest rate o f 6.22 % a t December 31, 2024, and 7.14 % at December 31, 2023.

These notes may be redeemed prior to their maturity dates.

(d) Senior medium-term notes had weighted-average interest rates of 4.64 % at December 31, 2024, and 4.88 % at December 31, 2023.

These notes are a combination of fixed and floating rates.

These notes may not be redeemed prior to their maturity dates.

(e) The remarketable senior medium-term notes had a weighted-average interest rate of 4.39 % at both December 31, 2024 and December 31, 2023.

These notes had fixed interest rates at December 31, 2024 , and December 31, 2023.

These notes may not be redeemed prior to their maturity dates.

(f) These notes are all obligations of KeyBank.

Only medium term notes due 2027 may be redeemed prior to maturity date.

(g) This includes $ 3 million of Capital Lease financing debt with maturity dates ranging from October 1, 2025 to October 1, 2032.

This category of debt consists primarily of non-recourse debt collateralized by leased equipment under operating, direct financing and sales-type leases.

Additional information pertaining to these commercial lease financing receivables is included in Note 4 (“Loan Portfolio”).

This also includes $ 3 million of capital leases acquired in the First Niagara merger with a maturity range from March 2022 through October 2032.

(h) Long-term advances from the Federal Home Loan Bank had a weighted-average interest ra te of 3.12 % at December 31, 2024, and 5.76 % at December 31, 2023.

These advances, which had fixed interest rates, were secured by real estate loans and securities totaling $ 79 million at December 31, 2024, and $ 7.6 billion at December 31, 2023.

(i) Investment Fund Financing with maturity dates of September 1, 2048 and April 29, 2055, respectively.

At December 31, 2024, scheduled principal payments on long-term debt were as follows:

Dollars in millions Parent Subsidiaries Total

2025 $ 1,094 $ 1,928 $ 3,022

2026 — 1,215 1,215

2027 738 1,303 2,041

2028 882 296 1,178

2029 842 340 1,182

All subsequent years 1,738 1,729 3,467

As described below, KeyBank and KeyCorp have a number of programs that support our long-term financing needs.

Global bank note program.

On December 13, 2024, KeyBank updated its Bank Note Program authorizing the issuance of up to $ 20 billion of notes.

Under the program, KeyBank is authorized to issue notes with original maturities of seven days or more for senior notes or five years or more for subordinated notes.

Notes will be denominated in U.S.

Amounts outstanding under the program and any prior bank note programs are classified as “long-term debt” on our Consolidated Balance Sheets.

On January 26, 2023, KeyBank issued the following notes under the bank note program:

$ 1.0 billion of Fixed Rate Senior Bank Notes due January 26, 2033, and $ 500 million of Fixed Rate Senior Bank Notes due January 26, 2026.

There were no bank note issuances during the year ended December 31, 2024 .

As of December 31, 2024, $ 20.0 billion remained available for issuance under the Bank Note Program.

KeyCorp shelf registration, including Medium-Term Note Program .

On June 9, 2023, KeyCorp updated its shelf registration statement on file with the SEC under rules that allow companies to register various types of debt and equity securities without limitations on the aggregate amounts available for issuance.

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

On February 28, 2024, KeyCorp issued notes under the MTN program consisting of $ 1.0 billion of Fixed-to-Floating Senior Notes due March 6, 2035.

At December 31, 2024, KeyCorp had authorized and available for issuance u p to $ 14 billion of additional debt securities under the Medium-Term Note Program.

Issuances of capital securities or preferred stock by KeyCorp must be approved by the Board and cannot be objected to by the Federal Reserve.

Trust Preferred Securities Issued by Unconsolidated Subsidiaries

(a) Includes debt associated with secured borrowings, investment fund financing, and capital lease obligations.

Junior Subordinated Debentures

We own the outstanding common stock of business trusts formed by us that issued corporation-obligated mandatorily redeemable trust preferred securities.

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the interest payments from the debentures finance the distributions paid on the mandatorily redeemable trust preferred securities.

The outstanding common stock of these business trusts is recorded in “Other Investments” on our Consolidated Balance Sheets.

KeyCorp does not consolidate these trusts, The outstanding common stock of these business trusts is recorded in “Other Investments” on our Consolidated Balance Sheets.

We unconditionally guarantee the following payments or distributions on behalf of the trusts:

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The Regulatory Capital Rules require us to treat our mandatorily redeemable trust preferred securities as Tier 2 capital.

The trust preferred securities, common stock, and related debentures are summarized as follows:

Dollars in millions Trust Preferred

Net of Discount (a)

Net of Discount (a)(b)

Interest Rate

of Trust Preferred

Securities and

Debentures (c)

of Trust Preferred

Securities and

December 31, 2024

KeyCorp Capital I $ 156 $ 6 $ 162 5.595 % 2028

KeyCorp Capital II 85 4 89 6.875 2029

KeyCorp Capital III 110 4 114 7.750 2029

HNC Statutory Trust III 21 1 22 6.182 2035

HNC Statutory Trust IV 21 1 22 5.930 2037

Willow Grove Statutory Trust I 18 1 19 6.131 2036

Westbank Capital Trust II 8 — 8 6.806 2034

Westbank Capital Trust III 8 — 8 6.806 2034

Total $ 427 $ 17 $ 444 6.519 % —

December 31, 2023 $ 431 $ 17 $ 448 6.981 % —

(a) The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture.

The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing structure.

Each issue of trust preferred securities carries an interest rate identical to that of the related debenture.

The principal amount of certain debentures include debt issuance costs and basis adjustments related to fair value hedges totaling $ 14 million at December 31, 2024, and $ 15 million at December 31, 2023.

See Note 8 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges.

(b) We have the right to redeem these debentures.

If the debentures purchased by KeyCorp Capital I, HNC Statutory Trust III, Willow Grove Statutory Trust I, HNC Statutory Trust IV, Westbank Capital Trust II, or Westbank Capital Trust III are redeemed before they mature, the redemption price will be the principal amount, plus any accrued but unpaid interest.

If the debentures purchased by KeyCorp Capital II or KeyCorp Capital III are redeemed before they mature, the redemption price will be the greater of:

(i) the principal amount, plus any accrued but unpaid interest, or (ii) the sum of the present values of principal and interest payments discounted at the Treasury Rate (as defined in the applicable indenture), plus 20 basis points for KeyCorp Capital II or 25 basis points for KeyCorp Capital III or 50 basis points in the case of redemption upon either a tax or a capital treatment event for either KeyCorp Capital II or KeyCorp Capital III, plus any accrued but unpaid interest.

(c) The interest rates for the trust preferred securities issued by KeyCorp Capital II and KeyCorp Capital III are fixed.

The trust preferred securities issued by KeyCorp Capital I, HNC Statutory Trust III, HNC Statutory Trust IV, Willow Grove Statutory Trust I, Westbank Capital Trust II, and Westbank Capital Trust III have a floating interest rate, equal to three-month CME term SOFR plus 26.161 basis points, that reprices quarterly.

The total interest rates are weighted-average rates.

At December 31, 2025, scheduled principal payments on long-term debt were as follows:

Dollars in millions Parent Subsidiaries Total

2026 $ — $ 1,111 $ 1,111

2027 771 1,275 2,046

2028 903 307 1,210

2029 881 345 1,226

All subsequent years 2,551 1,758 4,309

Time Deposits

The table below shows the total amount of time deposits at December 31, 2025, by future contractual maturity range:

Dollars in millions Time Deposits

2026 $ 12,229

All subsequent years 10

Total time deposits $ 12,680

Commitments, Contingent Liabilities, and Guarantees

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From time to time, in the ordinary course of business, we and our subsidiaries are subject to various litigation, investigations, and administrative proceedings.

Private, civil litigation may range from individual actions involving a single plaintiff to putative class action lawsuits with potentially thousands of class members, as well as arbitrations and mass arbitrations.

Private, civil litigation may range from individual actions involving a single plaintiff to putative or actual class action lawsuits with potentially thousands of class members, as well as arbitrations and mass arbitrations.

Investigations may involve both formal and informal proceedings, by both government agencies and self-regulatory bodies.

These matters may involve claims for substantial monetary relief.

These matters may involve claims for substantial monetary or non-monetary relief.

At times, these matters may present novel claims or legal theories.

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We continually monitor and reassess the potential materiality of these litigation matters.

We note, however, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established reserves.

We note, however, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established accruals.

As a result, the outcome of a particular matter, or a combination of matters, may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.

On at least a quarterly basis, we assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available.

Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements.

These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis.

Where a loss is not probable or the amount of the loss is not estimable, we have not accrued a liability for said loss, consistent with applicable accounting guidance.

Based on information currently available to us and advice of counsel, we believe that our established accruals are adequate and the liabilities arising from the legal proceedings will not have a material adverse effect on our consolidated financial condition.

We are a guarantor in various agreements with third parties.

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Residential mortgage reserve 3,418 8

Written put options (a)

Written options (a)

Total $ 21,582 $ 161

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We determine the payment/performance risk associated with each type of guarantee described below based on the probability that we could be required to make the maximum potential undiscounted future payments shown in the preceding table.

We use a scale of low ( 0 % to 30 % probability of payment), moderate (greater than 30 % to 70 % probability of payment), or high (greater than 70 % probability of payment) to assess the payment/performance risk, and have determined that the payment/performance risk associated with each type of guarantee outstanding at December 31, 2024, is low.

and have determined that the payment/performance risk associated with each type of guarantee outstanding at December 31, 2025, is low.

Standby letters of credit.

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Our liability for estimated repurchase obligations on loans sold, which is included in “accrued expenses and other liabilities” on our Consolidated Balance Sheets, was $ 8 million at December 31, 2025.

Written put options.

Written options.

In the ordinary course of business, we “write” put options for clients that wish to mitigate their exposure to changes in interest rates and commodity prices.

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Balance at December 31, 2024 $ ( 2,734 ) $ ( 434 ) $ ( 302 ) $ ( 3,470 )

Other comprehensive income before reclassification, net of income taxes

1,018 154 61 1,233

Amounts reclassified from accumulated other comprehensive income, net of income taxes (a)

Net current-period other comprehensive income, net of income taxes 1,018 427 65 1,510

Balance at December 31, 2025 $ ( 1,716 ) $ ( 7 ) $ ( 237 ) $ ( 1,960 )

(a) See table below for details about these reclassifications.

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Unrealized gains (losses) on available for sale securities

Realized losses $ ( 1,863 ) $ ( 4 ) Other income

Realized losses $ — $ ( 1,863 ) $ ( 4 ) Net securities gains (losses)

— ( 1,863 ) ( 4 ) Income (loss) from continuing operations before income taxes

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Comprehensive Capital Plan

During 2024, Key did not complete any open market share repurchases.

We repurchased $ 28 million of shares related to equity compensation programs.

On March 13, 2025, Key announced that its Board of Directors has authorized a share repurchase program pursuant to which we may purchase up to $ 1.0 billion of KeyCorp Common Shares, in the open market or in privately negotiated transactions.

As contemplated by the Investment Agreement, dated as of August 12, 2024, between KeyCorp and Scotiabank, in February 2025, we entered into an agreement with Scotiabank to permit Scotiabank to participate, through a periodic “true-up” right, in any repurchase by KeyCorp of its common stock on a pro rata basis.

During 2025, Key completed $ 200 million in share repurchases, all within the fourth quarter, including $ 17 million from Scotiabank pursuant to the agreement noted above.

We also repurchased $ 35 million of shares related to equity compensation programs in 2025.

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

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In connection with the completion of the initial purchase of the Scotiabank investment, we incurred $ 10 million in issuance costs, which are classified in shareholders’ equity and recorded against the gross proceeds received.

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 the KeyCorp’s Common Shares, contemplated under the Investment Agreement with an investment of approximately $ 2.0 billion.

On December 27, 2024, following the receipt of all necessary bank regulatory approvals, Scotiabank completed the final purchase of 115,042,316 of the KeyCorp’s 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 Shares.

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600 590 600,000 1 1,000 1/40th 25 1.550000

Regulatory Matters

Capital Adequacy

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If, however, those categories applied to BHCs, we believe that KeyCorp would satisfy the criteria for a “well capitalized” institution at December 31, 2025, and since that date, we believe there has been no change in condition or event that has occurred that would cause such capital category to change.

Additionally, KeyCorp

Because the regulatory capital categories under the prompt corrective action regulations serve a limited supervisory function, investors should not use them as a representation of the overall financial condition or prospects of KeyBank or KeyCorp.

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KeyBank (consolidated) 17,560 9.42 4.00 4.00 5.00 %

Restrictions on Cash, Dividends, and Lending Activities

Federal banking law limits the amount of capital distributions that a bank can make to its holding company without prior regulatory approval.

During 2025, KeyBank paid $ 1.4 billion in dividends to KeyCorp.

At December 31, 2025, KeyBank had $ 783 million in regulatory capacity to pay any dividends to KeyCorp without prior regulatory approval.

At December 31, 2025, KeyCorp held $ 4.9 billion in cash and short-term investments, which can be used to pay dividends to shareholders, service debt, and finance corporate operations .

Business Segment Reporting

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Consumer Bank

The Consumer Bank serves individuals and small businesses throughout our 15 -state branch footprint as well as healthcare professionals nationally through our Laurel Road digital brand by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services.

The Consumer Bank serves individuals and small businesses throughout our 15 -state branch footprint as well as healthcare professionals nationally through our digital channel by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services.

In addition, wealth management and investment services are offered to assist institutional, non-profit, and high-net-worth clients with their banking, trust, portfolio management, charitable giving, and related needs.

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The Commercial operating segment is a full-service corporate bank focused principally on serving the borrowing, cash management, and capital markets needs of middle market clients within Key’s 15 -state branch footprint.

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

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

The industry coverage and product teams have established expertise in the following sectors:

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Accordingly, financial results may be revised periodically to reflect enhanced alignment of expense base allocation drivers, changes in the risk profile of a particular business, or changes in our organizational structure.

The table below reflects our adoption of ASU 2023-07 as described in Note 1 (“Summary of Significant Accounting Policies”).

Year ended December 31,

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Short-term investments 28 26

Securities available for sale — —

Other investments 119 96

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Total investment in subsidiaries 19,989 17,658

Goodwill 167 167

Corporate-owned life insurance 188 197

Derivative assets — 1

Accrued income and other assets 756 777

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Total liabilities and shareholders’ equity $ 26,060 $ 24,006

(a) See Note 20 (“Long-Term Debt”) for information regarding contractual rates and maturity dates of debt that is held by the parent company.

(a) See Note 17 (“Borrowings”) for information regarding contractual rates and maturity dates of debt that is held by the parent company.

(b) See Key’s Consolidated Statements of Changes in Equity.

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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Deferred income taxes (benefit) 10 ( 6 ) 6

Stock-based compensation expense 10 9 117

Equity in net (income) loss less dividends from subsidiaries ( 773 ) 588 ( 575 )

Net (increase) decrease in accrued income and other assets ( 91 ) 44 23

Net increase (decrease) in accrued expenses and other liabilities 25 3 ( 24 )

Other operating activities, net 329 ( 752 ) 172

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Net (increase) decrease in securities available for sale and in short-term and other investments ( 26 ) ( 19 ) ( 14 )

Cash used in acquisitions — — —

Advances to subsidiaries — ( 250 ) —

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FINANCING ACTIVITIES

Net proceeds from issuance of long-term debt 1,000 — 1,350

Payments on long-term debt — — —

Net proceeds (payments) from issuance of long-term debt ( 350 ) 1,000 —

Repurchase of Treasury Shares ( 236 ) ( 28 ) ( 73 )

Net cash from the issuance (redemption) of Common Shares and preferred stock — — 590

Net proceeds from Scotiabank investment — 2,771 —

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Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers, by line of business.

The following table represents a disaggregation of revenue from contracts with customers, by business segment.

The development and application of the methodologies that we use to allocate items among our business segments is a dynamic process.

Accordingly, financial results may be revised periodically to reflect enhanced alignment of expense base allocations drivers, changes in the risk profile of a particular business, or changes in our organizational structure.

Additional details of our revenue recognition policies and components of our noninterest income line items is provided within Note 1 (“Summary of Significant Accounting Policies”) under the heading “Revenue Recognition.”

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data