|
|
|
|
Ohio
|
34-6542451
|
State or other jurisdiction of incorporation or organization:
|
I.R.S. Employer Identification Number:
|
127 Public Square,
|
Cleveland,
|
Ohio
|
44114-1306
|
Address of principal executive offices:
|
Zip Code:
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Shares, $1 par value
|
KEY
|
New York Stock Exchange
|
Depositary Shares (each representing a 1/40th interest in a share of Fixed-to-Floating Rate
|
KEY PrI
|
New York Stock Exchange
|
Perpetual Non-Cumulative Preferred Stock, Series E)
|
|
|
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-
|
KEY PrJ
|
New York Stock Exchange
|
Cumulative Preferred Stock, Series F)
|
|
|
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-
|
KEY PrK
|
New York Stock Exchange
|
Cumulative Preferred Stock, Series G)
|
|
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
Common Shares with a par value of $1 each
|
975,405,589 shares
|
Title of class
|
Outstanding at April 27, 2020
|
|
|
Page Number
|
Item 1.
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Item 2.
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Item 3.
|
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Item 4.
|
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PART II. OTHER INFORMATION
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
•
|
We use the phrase continuing operations in this document to mean all of our businesses other than our government-guaranteed and private education lending business and Austin. The government-guaranteed and private education lending business and Austin have been accounted for as discontinued operations since 2009.
|
•
|
We engage in capital markets activities primarily through business conducted by our Commercial Bank segment. These activities encompass a variety of products and services. Among other things, we trade securities as a dealer, enter into derivative contracts (both to accommodate clients’ financing needs and to mitigate certain risks), and conduct transactions in foreign currencies (both to accommodate clients’ needs and to benefit from fluctuations in exchange rates).
|
•
|
For regulatory purposes, capital is divided into two classes. Federal regulations currently prescribe that at least one-half of a bank or BHC’s total risk-based capital must qualify as Tier 1 capital. Both total and Tier 1 capital serve as bases for several measures of capital adequacy, which is an important indicator of financial stability and condition. Banking regulators evaluate a component of Tier 1 capital, known as Common Equity Tier 1, under the Regulatory Capital Rules. The “Capital” section of this report under the heading “Capital adequacy” provides more information on total capital, Tier 1 capital, and the Regulatory Capital Rules, including Common Equity Tier 1, and describes how these measures are calculated.
|
•
|
our concentrated credit exposure in commercial and industrial loans;
|
•
|
deterioration of commercial real estate market fundamentals;
|
•
|
defaults by our loan counterparties or clients;
|
•
|
adverse changes in credit quality trends;
|
•
|
declining asset prices;
|
•
|
the extensive regulation of the U.S. financial services industry;
|
•
|
changes in accounting policies, standards, and interpretations;
|
•
|
operational or risk management failures by us or critical third parties;
|
•
|
breaches of security or failures of our technology systems due to technological or other factors and
|
•
|
negative outcomes from claims or litigation;
|
•
|
failure or circumvention of our controls and procedures;
|
•
|
the occurrence of natural or man-made disasters, global pandemics, conflicts, terrorist attacks, or other adverse external events;
|
•
|
evolving capital and liquidity standards under applicable regulatory rules;
|
•
|
disruption of the U.S. financial system;
|
•
|
our ability to receive dividends from our subsidiaries, including KeyBank;
|
•
|
unanticipated changes in our liquidity position, including but not limited to, changes in our access to or the cost
|
•
|
downgrades in our credit ratings or those of KeyBank;
|
•
|
a reversal of the U.S. economic recovery due to financial, political or other shocks;
|
•
|
our ability to anticipate interest rate changes and manage interest rate risk;
|
•
|
uncertainty surrounding the transition from LIBOR to an alternative reference rate;
|
•
|
deterioration of economic conditions in the geographic regions where we operate;
|
•
|
the soundness of other financial institutions;
|
•
|
our ability to attract and retain talented executives and employees and to manage our reputational risks;
|
•
|
our ability to timely and effectively implement our strategic initiatives;
|
•
|
increased competitive pressure;
|
•
|
our ability to adapt our products and services to industry standards and consumer preferences;
|
•
|
unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses;
|
•
|
our ability to develop and effectively use the quantitative models we rely upon in our business planning; and
|
•
|
the impact of the COVID-19 global pandemic.
|
(a)
|
See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “cash efficiency.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
(a)
|
See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
|
2020
|
|
2019
|
|||||||||||||
dollars in millions, except per share amounts
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
|||||
FOR THE PERIOD
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
1,251
|
|
|
$
|
1,285
|
|
$
|
1,317
|
|
$
|
1,329
|
|
$
|
1,304
|
|
Interest expense
|
270
|
|
|
306
|
|
345
|
|
348
|
|
327
|
|
|||||
Net interest income
|
981
|
|
|
979
|
|
972
|
|
981
|
|
977
|
|
|||||
Provision for credit losses
|
359
|
|
|
109
|
|
200
|
|
74
|
|
62
|
|
|||||
Noninterest income
|
477
|
|
|
651
|
|
650
|
|
622
|
|
536
|
|
|||||
Noninterest expense
|
931
|
|
|
980
|
|
939
|
|
1,019
|
|
963
|
|
|||||
Income (loss) from continuing operations before income taxes
|
168
|
|
|
541
|
|
483
|
|
510
|
|
488
|
|
|||||
Income (loss) from continuing operations attributable to Key
|
145
|
|
|
466
|
|
413
|
|
423
|
|
406
|
|
|||||
Income (loss) from discontinued operations, net of taxes
|
1
|
|
|
3
|
|
3
|
|
2
|
|
1
|
|
|||||
Net income (loss) attributable to Key
|
146
|
|
|
469
|
|
416
|
|
425
|
|
407
|
|
|||||
Income (loss) from continuing operations attributable to Key common shareholders
|
118
|
|
|
439
|
|
383
|
|
403
|
|
386
|
|
|||||
Income (loss) from discontinued operations, net of taxes
|
1
|
|
|
3
|
|
3
|
|
2
|
|
1
|
|
|||||
Net income (loss) attributable to Key common shareholders
|
119
|
|
|
442
|
|
386
|
|
405
|
|
387
|
|
|||||
PER COMMON SHARE
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.12
|
|
|
$
|
.45
|
|
$
|
.39
|
|
$
|
.40
|
|
$
|
.38
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Net income (loss) attributable to Key common shareholders (a)
|
.12
|
|
|
.45
|
|
.39
|
|
.40
|
|
.38
|
|
|||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
.12
|
|
|
.45
|
|
.38
|
|
.40
|
|
.38
|
|
|||||
Income (loss) from discontinued operations, net of taxes — assuming dilution
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Net income (loss) attributable to Key common shareholders — assuming dilution (a)
|
.12
|
|
|
.45
|
|
.39
|
|
.40
|
|
.38
|
|
|||||
Cash dividends paid
|
.185
|
|
|
.185
|
|
.185
|
|
.17
|
|
.17
|
|
|||||
Book value at period end
|
15.95
|
|
|
15.54
|
|
15.44
|
|
15.07
|
|
14.31
|
|
|||||
Tangible book value at period end
|
12.98
|
|
|
12.56
|
|
12.48
|
|
12.12
|
|
11.55
|
|
|||||
Weighted-average common shares outstanding (000)
|
967,446
|
|
|
973,450
|
|
988,319
|
|
999,163
|
|
1,006,717
|
|
|||||
Weighted-average common shares and potential common shares outstanding (000) (b)
|
976,110
|
|
|
984,361
|
|
998,328
|
|
1,007,964
|
|
1,016,504
|
|
|||||
AT PERIOD END
|
|
|
|
|
|
|
||||||||||
Loans
|
$
|
103,198
|
|
|
$
|
94,646
|
|
$
|
92,760
|
|
$
|
91,937
|
|
$
|
90,178
|
|
Earning assets
|
141,333
|
|
|
130,807
|
|
132,160
|
|
130,213
|
|
127,296
|
|
|||||
Total assets
|
156,197
|
|
|
144,988
|
|
146,691
|
|
144,545
|
|
141,515
|
|
|||||
Deposits
|
115,304
|
|
|
111,870
|
|
111,649
|
|
109,946
|
|
108,175
|
|
|||||
Long-term debt
|
13,732
|
|
|
12,448
|
|
14,470
|
|
14,312
|
|
14,168
|
|
|||||
Key common shareholders’ equity
|
15,511
|
|
|
15,138
|
|
15,216
|
|
15,069
|
|
14,474
|
|
|||||
Key shareholders’ equity
|
17,411
|
|
|
17,038
|
|
17,116
|
|
16,969
|
|
15,924
|
|
|||||
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
||||||||||
Return on average total assets
|
.40
|
%
|
|
1.27
|
%
|
1.14
|
%
|
1.19
|
%
|
1.18
|
%
|
|||||
Return on average common equity
|
3.10
|
|
|
11.40
|
|
9.99
|
|
10.94
|
|
10.98
|
|
|||||
Return on average tangible common equity (c)
|
3.82
|
|
|
14.09
|
|
12.38
|
|
13.69
|
|
13.69
|
|
|||||
Net interest margin (TE)
|
3.01
|
|
|
2.98
|
|
3.00
|
|
3.06
|
|
3.13
|
|
|||||
Cash efficiency ratio (c)
|
62.3
|
|
|
58.7
|
|
56.0
|
|
61.9
|
|
61.9
|
|
|||||
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
|
|
|
|
|
|
|
||||||||||
Return on average total assets
|
.40
|
%
|
|
1.27
|
%
|
1.14
|
%
|
1.19
|
%
|
1.17
|
%
|
|||||
Return on average common equity
|
3.12
|
|
|
11.48
|
|
10.07
|
|
11.00
|
|
11.01
|
|
|||||
Return on average tangible common equity (c)
|
3.86
|
|
|
14.19
|
|
12.48
|
|
13.75
|
|
13.72
|
|
|||||
Net interest margin (TE)
|
3.00
|
|
|
2.97
|
|
2.98
|
|
3.05
|
|
3.12
|
|
|||||
Loan-to-deposit (d)
|
92.1
|
|
|
86.6
|
|
85.3
|
|
86.1
|
|
85.1
|
|
|||||
CAPITAL RATIOS AT PERIOD END
|
|
|
|
|
|
|
||||||||||
Key shareholders’ equity to assets
|
11.1
|
%
|
|
11.8
|
%
|
11.7
|
%
|
11.7
|
%
|
11.3
|
%
|
|||||
Key common shareholders’ equity to assets
|
10.0
|
|
|
10.5
|
|
10.4
|
|
10.5
|
|
10.2
|
|
|||||
Tangible common equity to tangible assets (c)
|
8.3
|
|
|
8.6
|
|
8.6
|
|
8.6
|
|
8.4
|
|
|||||
Common Equity Tier 1
|
8.9
|
|
|
9.4
|
|
9.5
|
|
9.6
|
|
9.8
|
|
|||||
Tier 1 risk-based capital
|
10.2
|
|
|
10.9
|
|
10.9
|
|
11.0
|
|
10.9
|
|
|||||
Total risk-based capital
|
12.2
|
|
|
12.8
|
|
12.9
|
|
13.0
|
|
13.0
|
|
|||||
Leverage
|
9.8
|
|
|
9.9
|
|
9.9
|
|
10.0
|
|
9.9
|
|
|||||
TRUST ASSETS
|
|
|
|
|
|
|
||||||||||
Assets under management
|
$
|
36,189
|
|
|
$
|
40,833
|
|
$
|
39,416
|
|
$
|
38,942
|
|
$
|
38,742
|
|
OTHER DATA
|
|
|
|
|
|
|
||||||||||
Average full-time-equivalent employees
|
16,529
|
|
|
16,537
|
|
16,898
|
|
17,206
|
|
17,554
|
|
|||||
Branches
|
1,082
|
|
|
1,098
|
|
1,101
|
|
1,102
|
|
1,158
|
|
(a)
|
EPS may not foot due to rounding.
|
(b)
|
Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.
|
(c)
|
See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
(d)
|
Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.
|
•
|
Our business resiliency plans are in effect and we have maintained our operational effectiveness across the entire organization. The health and safety of our clients, employees, and communities in which we operate have remained our top priority. In an effort to address this, our bank branches moved to serving clients by drive-thru service and by appointment only to help keep our employees and clients safe. We also instituted work from home plans to abide by stay-at-home orders.
|
•
|
We are committed to playing a critical role in providing capital and assistance to our clients and supporting broader initiatives to strengthen our economy. We have actively assisted clients with their applications for the newly introduced Paycheck Protection Program, which has entailed thousands of our employees collaborating to deliver this much-needed funding to our clients. We are also actively supporting clients through needed payment deferrals and other pandemic related hardship requests.
|
•
|
Our financial outlook has been impacted by the economic fallout from the COVID-19 pandemic. Importantly, we are operating from a position of strength. Our business model and clear strategy position us well during this period of economic and financial stress and we believe it will provide us with significant opportunities through the recovery phase. We want to affirm that our long-term financial targets have not changed and on the other side of this crisis, we expect to continue to deliver positive operating leverage and strong financial returns. However, given our inability to estimate the impact of the pandemic on our business and operations in 2020, we are withdrawing our financial outlook for the full year 2020 that was issued on January 23, 2020.
|
•
|
Credit quality is also playing a critical role in this environment. Our risk profile and strategy is different than the one we had during the 2007-2009 financial crisis. We have significantly reduced our exposure to high-risk sectors and industries and have positioned Key to perform well through all phases of the business cycle, including highly stressed environments, like the one in which we operated during the first quarter of 2020. Our moderate risk profile will continue to inform our credit decisions and the way we underwrite loans.
|
•
|
Capital and liquidity were clear strengths for us during the first quarter of 2020. We have participated in several rounds of government-mandated stress tests since the 2007-2009 financial crisis. These tests have shown that we would remain well capitalized through periods of severe economic and financial stress while continuing to support our clients and the communities in which we operate. Our liquidity position at March 31, 2020, remained strong with a combined $50 billion in liquid assets and unused borrowing capacity.
|
Ratios (including capital conservation buffer)
|
Regulatory Minimum Requirement
|
Capital Conservation Buffer (c)
|
Regulatory Minimum With Capital Conservation Buffer
|
Key March 31, 2020 Pro forma (d)
|
||||
Common Equity Tier 1 (a)
|
4.5
|
%
|
2.5
|
%
|
7.0
|
%
|
8.8
|
%
|
Tier 1 Capital
|
6.0
|
|
2.5
|
|
8.5
|
|
10.1
|
|
Total Capital
|
8.0
|
|
2.5
|
|
10.5
|
|
12.2
|
|
Leverage (b)
|
4.0
|
|
N/A
|
|
4.0
|
|
9.8
|
|
(a)
|
See section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computation of Common Equity Tier 1 capital under the fully phased-in regulatory capital rules.
|
(b)
|
As a standardized approach banking organization, KeyCorp is not subject to the 3% supplemental leverage ratio requirement, which became effective January 1, 2018.
|
(c)
|
Capital conservation buffer must consist of Common Equity Tier 1 capital. As a standardized approach banking organization, KeyCorp is not subject to the countercyclical capital buffer of up to 2.5% imposed upon an advanced approaches banking organization under the Regulatory Capital Rules.
|
(d)
|
Pro forma ratios reflect the five-year transition of CECL impacts on regulatory ratios.
|
Prompt Corrective Action
|
|
Capital Category
|
|||
Ratio
|
|
Well Capitalized (a)
|
Adequately Capitalized
|
||
Common Equity Tier 1 Risk-Based
|
|
6.5
|
%
|
4.5
|
%
|
Tier 1 Risk-Based
|
|
8.0
|
|
6.0
|
|
Total Risk-Based
|
|
10.0
|
|
8.0
|
|
Tier 1 Leverage (b)
|
|
5.0
|
|
4.0
|
|
(a)
|
A “well capitalized” institution also must not be subject to any written agreement, order, or directive to meet and maintain a specific capital level for any capital measure.
|
(b)
|
As a “standardized approach” banking organization, KeyBank is not subject to the 3% supplemental leverage ratio requirement, which became effective January 1, 2018.
|
•
|
the volume, pricing, mix, and maturity of earning assets and interest-bearing liabilities;
|
•
|
the volume and value of net free funds, such as noninterest-bearing deposits and equity capital;
|
•
|
the use of derivative instruments to manage interest rate risk;
|
•
|
interest rate fluctuations and competitive conditions within the marketplace;
|
•
|
asset quality; and
|
•
|
fair value accounting of acquired earning assets and interest-bearing liabilities.
|
|
Three months ended March 31, 2020
|
|
Three months ended March 31, 2019
|
|
Change in Net interest income due to
|
||||||||||||||||||||||
dollars in millions
|
Average
Balance
|
Interest (a)
|
Yield/
Rate (a)
|
|
Average
Balance |
Interest (a)
|
Yield/
Rate (a) |
|
Volume
|
Yield/Rate
|
Total
|
||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans (b), (c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial (d)
|
$
|
49,466
|
|
$
|
508
|
|
4.13
|
%
|
|
$
|
45,998
|
|
$
|
532
|
|
4.68
|
%
|
|
$
|
38
|
|
$
|
(62
|
)
|
$
|
(24
|
)
|
Real estate — commercial mortgage
|
13,548
|
|
155
|
|
4.60
|
|
|
14,325
|
|
179
|
|
5.07
|
|
|
(9
|
)
|
(15
|
)
|
(24
|
)
|
|||||||
Real estate — construction
|
1,666
|
|
20
|
|
4.75
|
|
|
1,561
|
|
21
|
|
5.48
|
|
|
1
|
|
(2
|
)
|
(1
|
)
|
|||||||
Commercial lease financing
|
4,565
|
|
39
|
|
3.39
|
|
|
4,497
|
|
41
|
|
3.66
|
|
|
1
|
|
(3
|
)
|
(2
|
)
|
|||||||
Total commercial loans
|
69,245
|
|
722
|
|
4.19
|
|
|
66,381
|
|
773
|
|
4.71
|
|
|
31
|
|
(82
|
)
|
(51
|
)
|
|||||||
Real estate — residential mortgage
|
7,215
|
|
68
|
|
3.75
|
|
|
5,543
|
|
56
|
|
4.02
|
|
|
16
|
|
(4
|
)
|
12
|
|
|||||||
Home equity loans
|
10,155
|
|
113
|
|
4.49
|
|
|
10,995
|
|
137
|
|
5.07
|
|
|
(10
|
)
|
(14
|
)
|
(24
|
)
|
|||||||
Consumer direct loans
|
3,709
|
|
54
|
|
5.91
|
|
|
1,862
|
|
37
|
|
8.06
|
|
|
29
|
|
(12
|
)
|
17
|
|
|||||||
Credit cards
|
1,082
|
|
31
|
|
11.50
|
|
|
1,105
|
|
32
|
|
11.80
|
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|||||||
Consumer indirect loans
|
4,768
|
|
46
|
|
3.86
|
|
|
3,763
|
|
39
|
|
4.13
|
|
|
10
|
|
(3
|
)
|
7
|
|
|||||||
Total consumer loans
|
26,929
|
|
312
|
|
4.66
|
|
|
23,268
|
|
301
|
|
5.23
|
|
|
44
|
|
(33
|
)
|
11
|
|
|||||||
Total loans
|
96,174
|
|
1,034
|
|
4.32
|
|
|
89,649
|
|
1,074
|
|
4.85
|
|
|
75
|
|
(115
|
)
|
(40
|
)
|
|||||||
Loans held for sale
|
1,885
|
|
19
|
|
3.99
|
|
|
1,121
|
|
13
|
|
4.74
|
|
|
8
|
|
(2
|
)
|
6
|
|
|||||||
Securities available for sale (b), (e)
|
21,172
|
|
129
|
|
2.49
|
|
|
20,206
|
|
129
|
|
2.51
|
|
|
6
|
|
(6
|
)
|
—
|
|
|||||||
Held-to-maturity securities (b)
|
9,820
|
|
62
|
|
2.51
|
|
|
11,369
|
|
68
|
|
2.41
|
|
|
(10
|
)
|
4
|
|
(6
|
)
|
|||||||
Trading account assets
|
1,065
|
|
8
|
|
2.95
|
|
|
957
|
|
8
|
|
3.36
|
|
|
1
|
|
(1
|
)
|
—
|
|
|||||||
Short-term investments
|
1,764
|
|
6
|
|
1.42
|
|
|
2,728
|
|
16
|
|
2.28
|
|
|
(5
|
)
|
(5
|
)
|
(10
|
)
|
|||||||
Other investments (e)
|
614
|
|
1
|
|
.40
|
|
|
654
|
|
4
|
|
2.69
|
|
|
—
|
|
(3
|
)
|
(3
|
)
|
|||||||
Total earning assets
|
132,494
|
|
1,259
|
|
3.82
|
|
|
126,684
|
|
1,312
|
|
4.17
|
|
|
75
|
|
(128
|
)
|
(53
|
)
|
|||||||
Allowance for loan and lease losses
|
(1,097
|
)
|
|
|
|
(878
|
)
|
|
|
|
|
|
|
||||||||||||||
Accrued income and other assets
|
14,831
|
|
|
|
|
14,314
|
|
|
|
|
|
|
|
||||||||||||||
Discontinued assets
|
838
|
|
|
|
|
1,066
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
$
|
147,066
|
|
|
|
|
$
|
141,186
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
NOW and money market deposit accounts
|
$
|
66,721
|
|
112
|
|
.67
|
|
|
$
|
60,773
|
|
130
|
|
.87
|
|
|
12
|
|
(30
|
)
|
(18
|
)
|
|||||
Savings deposits
|
4,655
|
|
1
|
|
.05
|
|
|
4,811
|
|
1
|
|
.08
|
|
|
—
|
|
—
|
|
—
|
|
|||||||
Certificates of deposit ($100,000 or more)
|
6,310
|
|
34
|
|
2.20
|
|
|
8,376
|
|
47
|
|
2.25
|
|
|
(11
|
)
|
(2
|
)
|
(13
|
)
|
|||||||
Other time deposits
|
4,901
|
|
22
|
|
1.81
|
|
|
5,501
|
|
24
|
|
1.79
|
|
|
(3
|
)
|
1
|
|
(2
|
)
|
|||||||
Total interest-bearing deposits
|
82,587
|
|
169
|
|
.82
|
|
|
79,461
|
|
202
|
|
1.03
|
|
|
(2
|
)
|
(31
|
)
|
(33
|
)
|
|||||||
Federal funds purchased and securities sold under repurchase agreements
|
2,002
|
|
6
|
|
1.17
|
|
|
409
|
|
1
|
|
.89
|
|
|
5
|
|
—
|
|
5
|
|
|||||||
Bank notes and other short-term borrowings
|
1,401
|
|
5
|
|
1.58
|
|
|
649
|
|
4
|
|
2.75
|
|
|
3
|
|
(2
|
)
|
1
|
|
|||||||
Long-term debt (f), (g)
|
12,443
|
|
90
|
|
2.96
|
|
|
13,160
|
|
120
|
|
3.67
|
|
|
(6
|
)
|
(24
|
)
|
(30
|
)
|
|||||||
Total interest-bearing liabilities
|
98,433
|
|
270
|
|
1.10
|
|
|
93,679
|
|
327
|
|
1.42
|
|
|
—
|
|
(57
|
)
|
(57
|
)
|
|||||||
Noninterest-bearing deposits
|
27,741
|
|
|
|
|
28,115
|
|
|
|
|
|
|
|
||||||||||||||
Accrued expense and other liabilities
|
2,838
|
|
|
|
|
2,622
|
|
|
|
|
|
|
|
||||||||||||||
Discontinued liabilities (g)
|
838
|
|
|
|
|
1,066
|
|
|
|
|
|
|
|
||||||||||||||
Total liabilities
|
129,850
|
|
|
|
|
125,482
|
|
|
|
|
|
|
|
||||||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Key shareholders’ equity
|
17,216
|
|
|
|
|
15,702
|
|
|
|
|
|
|
|
||||||||||||||
Noncontrolling interests
|
—
|
|
|
|
|
2
|
|
|
|
|
|
|
|
||||||||||||||
Total equity
|
17,216
|
|
|
|
|
15,704
|
|
|
|
|
|
|
|
||||||||||||||
Total liabilities and equity
|
$
|
147,066
|
|
|
|
|
$
|
141,186
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate spread (TE)
|
|
|
2.72
|
%
|
|
|
|
2.75
|
%
|
|
|
|
|
||||||||||||||
Net interest income (TE) and net interest margin (TE)
|
|
989
|
|
3.01
|
%
|
|
|
985
|
|
3.13
|
%
|
|
$
|
75
|
|
$
|
(71
|
)
|
4
|
|
|||||||
TE adjustment (b)
|
|
8
|
|
|
|
|
8
|
|
|
|
|
|
|
||||||||||||||
Net interest income, GAAP basis
|
|
$
|
981
|
|
|
|
|
$
|
977
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g), calculated using a matched funds transfer pricing methodology.
|
(b)
|
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended March 31, 2020, and March 31, 2019.
|
(c)
|
For purposes of these computations, nonaccrual loans are included in average loan balances.
|
(d)
|
Commercial and industrial average balances include $145 million and $133 million of assets from commercial credit cards for the three months ended March 31, 2020, and March 31, 2019, respectively.
|
(e)
|
Yield is calculated on the basis of amortized cost.
|
(f)
|
Rate calculation excludes basis adjustments related to fair value hedges.
|
(g)
|
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations.
|
(a)
|
Other noninterest income includes operating lease income and other leasing gains, corporate services income, corporate-owned life insurance income, consumer mortgage income, commercial mortgage servicing fees, and other income. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.
|
in millions
|
March 31, 2020
|
December 31, 2019
|
September 30, 2019
|
June 30, 2019
|
March 31, 2019
|
||||||||||
Assets under management by investment type:
|
|
|
|
|
|
||||||||||
Equity
|
$
|
20,421
|
|
$
|
25,271
|
|
$
|
23,967
|
|
$
|
23,805
|
|
$
|
23,299
|
|
Securities lending
|
188
|
|
309
|
|
455
|
|
520
|
|
761
|
|
|||||
Fixed income
|
10,911
|
|
11,000
|
|
10,954
|
|
10,800
|
|
10,817
|
|
|||||
Money market
|
4,669
|
|
4,253
|
|
4,040
|
|
3,817
|
|
3,865
|
|
|||||
Total assets under management
|
$
|
36,189
|
|
$
|
40,833
|
|
$
|
39,416
|
|
$
|
38,942
|
|
$
|
38,742
|
|
|
|
|
|
|
|
(a)
|
Other noninterest expense includes equipment, operating lease expense, marketing, FDIC assessment, intangible asset amortization, OREO expense, net, and other expense. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.
|
•
|
Net income attributable to Key of $105 million for the first quarter of 2020, compared to $168 million for the year-ago quarter
|
•
|
Taxable equivalent net interest income decreased by $1 million from the first quarter of 2019, with balance sheet growth offset by lower loan fees and a lower interest rate environment
|
•
|
Average loans and leases increased $3.9 billion, or 12.4%. This was driven by strong loan growth in Laurel Road, residential mortgage, and indirect auto lending
|
•
|
Average deposits increased $2 billion, or 2.9%, from the first quarter of 2019. This was driven by growth in money market deposits, partially offset by a decrease in time deposits
|
•
|
Provision for credit losses increased $95 million compared to the first quarter of 2019. The increase in provision for credit losses is mainly attributable to the significant change in the economic scenario from the COVID-19 pandemic, as well as balance sheet growth
|
•
|
Noninterest income increased $16 million, or 7.5%, from the year ago quarter, driven by growth in trust and investment services income and consumer mortgage income
|
•
|
Noninterest expense increased $3 million, or 0.6%, from the year ago quarter. The increase reflects the addition of Laurel Road, partially offset by strong expense management
|
•
|
Net income attributable to Key of $70 million for the first quarter of 2020, compared to $250 million for the year-ago quarter
|
•
|
Taxable-equivalent net interest income increased by $8 million, compared to the first quarter of 2019, with balance sheet growth partially offset by a lower interest rate environment
|
•
|
Average loan and lease balances increased $2.8 billion, or 4.9%, compared to the first quarter of 2019, driven by broad-based growth in commercial and industrial loans and partially offset by a decline in commercial mortgage balances due to disciplined risk management
|
•
|
Average deposit balances increased $1.6 billion, or 4.8%, compared to the first quarter of 2019, driven by growth in core deposits
|
•
|
Provision for credit losses increased $198 million compared to the first quarter of 2019. The increase in provision for credit losses is mainly attributable to the significant change in the economic scenario from the COVID-19 pandemic, as well as balance sheet growth
|
•
|
Noninterest income decreased $81 million from the prior year, driven by market-related valuation adjustments of customer derivatives, as well as fixed income trading losses
|
•
|
Noninterest expense decreased $20 million, or 5.4%, from the first quarter of 2019. The decline reflects the continued benefit of efficiency initiatives undertaken throughout 2019, as well as strong expense discipline
|
(a)
|
Other consumer loans include Consumer direct loans, Credit cards, and Consumer indirect loans. See Note 3 (“Loan Portfolio”) Item 1. Financial Statements of this report.
|
dollars in millions
|
Outstanding as of March 31, 2020
|
Percent of
Loan Type to Total Loans |
|||
Consumer behavior (a)
|
$
|
5,276
|
|
5.1
|
%
|
Education
|
1,574
|
|
1.5
|
|
|
Sports
|
749
|
|
.7
|
|
|
Restaurants
|
482
|
|
.5
|
|
|
|
|
|
|||
Retail commercial real estate (b)
|
760
|
|
.7
|
|
|
|
|
|
|||
Nondurable retail (c)
|
866
|
|
.8
|
|
|
|
|
|
|||
Travel/Tourism (d)
|
3,102
|
|
3.0
|
|
|
Hotels
|
1,036
|
|
1.0
|
|
|
|
|
|
|||
Leveraged lending (e)
|
2,373
|
|
2.3
|
|
|
|
|
|
|||
Oil and gas
|
2,541
|
|
2.5
|
|
|
Upstream (reserve based)
|
1,630
|
|
1.6
|
|
|
Midstream
|
516
|
|
.5
|
|
|
Downstream
|
171
|
|
.2
|
|
|
|
|
|
(a)
|
Consumer behavior includes restaurants, sports, entertainment and leisure, services, education, etc.
|
(b)
|
Retail commercial real estate is mainly composed of regional malls, strip centers (unanchored) and lifestyle centers.
|
(c)
|
Nondurable retail includes direct lending to retailers including apparel, hobby shops, nursery garden centers, cosmetics, and gas stations with convenience stores.
|
(d)
|
Travel/Tourism includes hotels, tours, and air/water/rail leasing.
|
(e)
|
Leveraged lending exposures have total debt to EBITDA greater than four times or senior debt to EBITDA greater than three time and meets the purpose test (the new debt finances a buyout, acquisitions, or capital distribution).
|
March 31, 2020
|
Commercial and industrial
|
|
Commercial
real estate
|
|
Commercial
lease financing
|
|
Total commercial
loans
|
|
Percent of
total
|
|||||||||
dollars in millions
|
|
|
|
|
||||||||||||||
Industry classification:
|
|
|
|
|
|
|
|
|
|
|||||||||
Agriculture
|
$
|
1,007
|
|
|
$
|
187
|
|
|
$
|
111
|
|
|
$
|
1,305
|
|
|
1.7
|
%
|
Automotive
|
2,321
|
|
|
495
|
|
|
16
|
|
|
2,832
|
|
|
3.7
|
|
||||
Business products
|
1,752
|
|
|
118
|
|
|
51
|
|
|
1,921
|
|
|
2.5
|
|
||||
Business services
|
3,678
|
|
|
201
|
|
|
220
|
|
|
4,099
|
|
|
5.4
|
|
||||
Chemicals
|
867
|
|
|
43
|
|
|
43
|
|
|
953
|
|
|
1.3
|
|
||||
Commercial real estate
|
6,179
|
|
|
10,653
|
|
|
12
|
|
|
16,844
|
|
|
22.2
|
|
||||
Construction materials and contractors
|
2,057
|
|
|
239
|
|
|
241
|
|
|
2,537
|
|
|
3.3
|
|
||||
Consumer discretionary
|
4,226
|
|
|
422
|
|
|
463
|
|
|
5,111
|
|
|
6.7
|
|
||||
Consumer services
|
5,617
|
|
|
901
|
|
|
528
|
|
|
7,046
|
|
|
9.3
|
|
||||
Equipment
|
1,785
|
|
|
80
|
|
|
109
|
|
|
1,974
|
|
|
2.6
|
|
||||
Finance
|
7,100
|
|
|
78
|
|
|
392
|
|
|
7,570
|
|
|
10.0
|
|
||||
Healthcare
|
3,408
|
|
|
1,486
|
|
|
315
|
|
|
5,209
|
|
|
6.9
|
|
||||
Materials manufacturing and mining
|
1,232
|
|
|
49
|
|
|
41
|
|
|
1,322
|
|
|
1.7
|
|
||||
Oil and gas
|
2,401
|
|
|
51
|
|
|
89
|
|
|
2,541
|
|
|
3.4
|
|
||||
Public exposure
|
2,355
|
|
|
24
|
|
|
723
|
|
|
3,102
|
|
|
4.1
|
|
||||
Technology
|
850
|
|
|
26
|
|
|
176
|
|
|
1,052
|
|
|
1.4
|
|
||||
Transportation
|
1,426
|
|
|
194
|
|
|
712
|
|
|
2,332
|
|
|
3.1
|
|
||||
Utilities
|
7,111
|
|
|
1
|
|
|
421
|
|
|
7,533
|
|
|
9.9
|
|
||||
Other
|
611
|
|
|
10
|
|
|
14
|
|
|
635
|
|
|
.8
|
|
||||
Total
|
$
|
55,983
|
|
|
$
|
15,258
|
|
|
$
|
4,677
|
|
|
$
|
75,918
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2019
|
Commercial and industrial
|
|
Commercial
real estate
|
|
Commercial
lease financing
|
|
Total commercial
loans
|
|
Percent of
total
|
|||||||||
dollars in millions
|
|
|
|
|
||||||||||||||
Industry classification:
|
|
|
|
|
|
|
|
|
|
|||||||||
Agriculture
|
$
|
1,036
|
|
|
$
|
178
|
|
|
$
|
112
|
|
|
$
|
1,326
|
|
|
1.9
|
%
|
Automotive
|
2,048
|
|
|
467
|
|
|
18
|
|
|
2,533
|
|
|
3.7
|
|
||||
Business products
|
1,513
|
|
|
111
|
|
|
57
|
|
|
1,681
|
|
|
2.5
|
|
||||
Business services
|
3,083
|
|
|
203
|
|
|
210
|
|
|
3,496
|
|
|
5.2
|
|
||||
Chemicals
|
776
|
|
|
40
|
|
|
46
|
|
|
862
|
|
|
1.3
|
|
||||
Commercial real estate
|
5,126
|
|
|
10,469
|
|
|
12
|
|
|
15,607
|
|
|
22.9
|
|
||||
Construction materials and contractors
|
1,876
|
|
|
238
|
|
|
244
|
|
|
2,358
|
|
|
3.5
|
|
||||
Consumer discretionary
|
3,646
|
|
|
400
|
|
|
467
|
|
|
4,513
|
|
|
6.6
|
|
||||
Consumer services
|
4,567
|
|
|
863
|
|
|
535
|
|
|
5,965
|
|
|
8.8
|
|
||||
Equipment
|
1,428
|
|
|
76
|
|
|
98
|
|
|
1,602
|
|
|
2.4
|
|
||||
Finance
|
6,186
|
|
|
64
|
|
|
386
|
|
|
6,636
|
|
|
9.7
|
|
||||
Healthcare
|
3,000
|
|
|
1,564
|
|
|
331
|
|
|
4,895
|
|
|
7.2
|
|
||||
Materials manufacturing and mining
|
1,117
|
|
|
44
|
|
|
41
|
|
|
1,202
|
|
|
1.8
|
|
||||
Oil and gas
|
2,219
|
|
|
54
|
|
|
90
|
|
|
2,363
|
|
|
3.5
|
|
||||
Public exposure
|
2,422
|
|
|
24
|
|
|
706
|
|
|
3,152
|
|
|
4.6
|
|
||||
Technology
|
916
|
|
|
27
|
|
|
182
|
|
|
1,125
|
|
|
1.6
|
|
||||
Transportation
|
1,298
|
|
|
218
|
|
|
737
|
|
|
2,253
|
|
|
3.3
|
|
||||
Utilities
|
5,560
|
|
|
2
|
|
|
397
|
|
|
5,959
|
|
|
8.8
|
|
||||
Other
|
478
|
|
|
7
|
|
|
19
|
|
|
504
|
|
|
.7
|
|
||||
Total
|
$
|
48,295
|
|
|
$
|
15,049
|
|
|
$
|
4,688
|
|
|
$
|
68,032
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Region
|
|
Total
|
Percent of
Total
|
Construction
|
Commercial
Mortgage
|
||||||||||||||||||||||||||
dollars in millions
|
West
|
Southwest
|
Central
|
Midwest
|
Southeast
|
Northeast
|
National
|
|||||||||||||||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonowner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Retail properties
|
$
|
133
|
|
$
|
41
|
|
$
|
139
|
|
$
|
145
|
|
$
|
151
|
|
$
|
567
|
|
$
|
138
|
|
$
|
1,314
|
|
8.6
|
%
|
$
|
89
|
|
$
|
1,225
|
|
Multifamily properties
|
697
|
|
287
|
|
701
|
|
846
|
|
1,458
|
|
1,332
|
|
248
|
|
5,569
|
|
36.5
|
|
1,312
|
|
4,257
|
|
||||||||||
Health facilities
|
85
|
|
77
|
|
85
|
|
92
|
|
166
|
|
482
|
|
408
|
|
1,395
|
|
9.2
|
|
46
|
|
1,349
|
|
||||||||||
Office buildings
|
265
|
|
—
|
|
298
|
|
155
|
|
214
|
|
667
|
|
174
|
|
1,773
|
|
11.6
|
|
56
|
|
1,717
|
|
||||||||||
Warehouses
|
60
|
|
34
|
|
56
|
|
69
|
|
63
|
|
237
|
|
126
|
|
645
|
|
4.2
|
|
22
|
|
623
|
|
||||||||||
Manufacturing facilities
|
39
|
|
—
|
|
38
|
|
3
|
|
40
|
|
39
|
|
82
|
|
241
|
|
1.6
|
|
5
|
|
236
|
|
||||||||||
Hotels/Motels
|
75
|
|
—
|
|
19
|
|
—
|
|
9
|
|
118
|
|
60
|
|
281
|
|
1.8
|
|
9
|
|
272
|
|
||||||||||
Residential properties
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
|
69
|
|
—
|
|
72
|
|
.5
|
|
4
|
|
68
|
|
||||||||||
Land and development
|
20
|
|
5
|
|
—
|
|
3
|
|
2
|
|
29
|
|
—
|
|
59
|
|
.4
|
|
34
|
|
25
|
|
||||||||||
Other
|
94
|
|
9
|
|
36
|
|
94
|
|
26
|
|
183
|
|
349
|
|
791
|
|
5.2
|
|
24
|
|
767
|
|
||||||||||
Total nonowner-occupied
|
1,468
|
|
453
|
|
1,372
|
|
1,410
|
|
2,129
|
|
3,723
|
|
1,585
|
|
12,140
|
|
79.6
|
|
1,601
|
|
10,539
|
|
||||||||||
Owner-occupied
|
850
|
|
4
|
|
299
|
|
560
|
|
70
|
|
1,335
|
|
—
|
|
3,118
|
|
20.4
|
|
109
|
|
3,009
|
|
||||||||||
Total
|
$
|
2,318
|
|
$
|
457
|
|
$
|
1,671
|
|
$
|
1,970
|
|
$
|
2,199
|
|
$
|
5,058
|
|
$
|
1,585
|
|
15,258
|
|
100.0
|
%
|
$
|
1,710
|
|
$
|
13,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonperforming loans
|
$
|
1
|
|
—
|
|
—
|
|
$
|
8
|
|
$
|
7
|
|
$
|
22
|
|
$
|
51
|
|
$
|
89
|
|
N/M
|
|
2
|
|
$
|
87
|
|
|||
Accruing loans past due 90 days or more
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12
|
|
7
|
|
19
|
|
N/M
|
|
$
|
2
|
|
17
|
|
|||||||||
Accruing loans past due 30 through 89 days
|
2
|
|
—
|
|
11
|
|
2
|
|
—
|
|
29
|
|
21
|
|
65
|
|
N/M
|
|
4
|
|
61
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonowner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Retail properties
|
$
|
133
|
|
$
|
41
|
|
$
|
143
|
|
$
|
155
|
|
$
|
161
|
|
$
|
580
|
|
$
|
124
|
|
$
|
1,337
|
|
8.9
|
%
|
$
|
85
|
|
$
|
1,252
|
|
Multifamily properties
|
698
|
|
354
|
|
767
|
|
795
|
|
1,205
|
|
1,350
|
|
225
|
|
5,394
|
|
35.8
|
|
1,189
|
|
4,205
|
|
||||||||||
Health facilities
|
76
|
|
44
|
|
104
|
|
93
|
|
163
|
|
497
|
|
405
|
|
1,382
|
|
9.2
|
|
40
|
|
1,342
|
|
||||||||||
Office buildings
|
214
|
|
7
|
|
293
|
|
132
|
|
244
|
|
725
|
|
134
|
|
1,749
|
|
11.6
|
|
69
|
|
1,680
|
|
||||||||||
Warehouses
|
51
|
|
34
|
|
51
|
|
51
|
|
46
|
|
238
|
|
134
|
|
605
|
|
4.0
|
|
7
|
|
598
|
|
||||||||||
Manufacturing facilities
|
36
|
|
—
|
|
38
|
|
4
|
|
40
|
|
43
|
|
54
|
|
215
|
|
1.4
|
|
5
|
|
210
|
|
||||||||||
Hotels/Motels
|
76
|
|
—
|
|
19
|
|
—
|
|
12
|
|
129
|
|
57
|
|
293
|
|
1.9
|
|
6
|
|
287
|
|
||||||||||
Residential properties
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
98
|
|
—
|
|
100
|
|
.7
|
|
5
|
|
95
|
|
||||||||||
Land and development
|
20
|
|
5
|
|
—
|
|
3
|
|
2
|
|
9
|
|
—
|
|
39
|
|
.3
|
|
34
|
|
5
|
|
||||||||||
Other
|
80
|
|
9
|
|
71
|
|
86
|
|
22
|
|
259
|
|
358
|
|
885
|
|
5.9
|
|
23
|
|
862
|
|
||||||||||
Total nonowner-occupied
|
1,384
|
|
494
|
|
1,486
|
|
1,321
|
|
1,895
|
|
3,928
|
|
1,491
|
|
11,999
|
|
79.7
|
|
1,463
|
|
10,536
|
|
||||||||||
Owner-occupied
|
833
|
|
4
|
|
285
|
|
536
|
|
71
|
|
1,321
|
|
—
|
|
3,050
|
|
20.3
|
|
95
|
|
2,955
|
|
||||||||||
Total
|
$
|
2,217
|
|
$
|
498
|
|
$
|
1,771
|
|
$
|
1,857
|
|
$
|
1,966
|
|
$
|
5,249
|
|
$
|
1,491
|
|
$
|
15,049
|
|
100.0
|
%
|
$
|
1,558
|
|
$
|
13,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonperforming loans
|
$
|
1
|
|
—
|
|
—
|
|
$
|
7
|
|
7
|
|
$
|
20
|
|
$
|
52
|
|
$
|
87
|
|
N/M
|
|
2
|
|
$
|
85
|
|
||||
Accruing loans past due 90 days or more
|
—
|
|
—
|
|
—
|
|
2
|
|
$
|
—
|
|
11
|
|
—
|
|
13
|
|
N/M
|
|
$
|
1
|
|
12
|
|
||||||||
Accruing loans past due 30 through 89 days
|
1
|
|
—
|
|
—
|
|
7
|
|
—
|
|
8
|
|
—
|
|
16
|
|
N/M
|
|
2
|
|
14
|
|
|
Real estate — residential mortgage
|
Home equity loans
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
||||||||||||
March 31, 2020
|
|
|
|
|
|
|
||||||||||||
New York
|
$
|
1,156
|
|
$
|
2,615
|
|
$
|
569
|
|
$
|
370
|
|
$
|
789
|
|
$
|
5,499
|
|
Ohio
|
627
|
|
1,426
|
|
466
|
|
225
|
|
879
|
|
3,623
|
|
||||||
Washington
|
1,276
|
|
1,518
|
|
251
|
|
95
|
|
7
|
|
3,147
|
|
||||||
Pennsylvania
|
280
|
|
670
|
|
208
|
|
52
|
|
505
|
|
1,715
|
|
||||||
Connecticut
|
1,014
|
|
373
|
|
75
|
|
24
|
|
153
|
|
1,639
|
|
||||||
Oregon
|
571
|
|
840
|
|
95
|
|
45
|
|
2
|
|
1,553
|
|
||||||
Colorado
|
614
|
|
418
|
|
115
|
|
32
|
|
2
|
|
1,181
|
|
||||||
Maine
|
126
|
|
425
|
|
71
|
|
35
|
|
365
|
|
1,022
|
|
||||||
Massachusetts
|
257
|
|
49
|
|
76
|
|
5
|
|
449
|
|
836
|
|
||||||
Indiana
|
119
|
|
403
|
|
133
|
|
43
|
|
125
|
|
823
|
|
||||||
Other
|
1,458
|
|
1,366
|
|
1,774
|
|
115
|
|
1,529
|
|
6,242
|
|
||||||
Total
|
$
|
7,498
|
|
$
|
10,103
|
|
$
|
3,833
|
|
$
|
1,041
|
|
$
|
4,805
|
|
$
|
27,280
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
Real estate — residential mortgage
|
Home equity loans
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
||||||||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||||||
New York
|
$
|
1,146
|
|
$
|
2,655
|
|
$
|
548
|
|
$
|
404
|
|
$
|
797
|
|
$
|
5,550
|
|
Ohio
|
601
|
|
1,458
|
|
461
|
|
247
|
|
827
|
|
3,594
|
|
||||||
Washington
|
1,126
|
|
1,546
|
|
252
|
|
102
|
|
8
|
|
3,034
|
|
||||||
Pennsylvania
|
282
|
|
677
|
|
189
|
|
55
|
|
477
|
|
1,680
|
|
||||||
Connecticut
|
1,029
|
|
375
|
|
68
|
|
26
|
|
154
|
|
1,652
|
|
||||||
Oregon
|
517
|
|
852
|
|
94
|
|
48
|
|
2
|
|
1,513
|
|
||||||
Colorado
|
544
|
|
428
|
|
109
|
|
34
|
|
2
|
|
1,117
|
|
||||||
Maine
|
123
|
|
434
|
|
71
|
|
38
|
|
359
|
|
1,025
|
|
||||||
Indiana
|
117
|
|
412
|
|
131
|
|
47
|
|
118
|
|
825
|
|
||||||
Massachusetts
|
257
|
|
48
|
|
62
|
|
6
|
|
437
|
|
810
|
|
||||||
Other
|
1,281
|
|
1,389
|
|
1,528
|
|
123
|
|
1,493
|
|
5,814
|
|
||||||
Total
|
$
|
7,023
|
|
$
|
10,274
|
|
$
|
3,513
|
|
$
|
1,130
|
|
$
|
4,674
|
|
$
|
26,614
|
|
|
|
|
|
|
|
|
in millions
|
Commercial
|
Commercial
Real Estate
|
Commercial Lease Financing
|
Residential
Real Estate
|
Consumer Direct
|
Total
|
||||||||||||
2020
|
|
|
|
|
|
|
||||||||||||
First quarter
|
$
|
55
|
|
$
|
2,022
|
|
$
|
81
|
|
$
|
546
|
|
—
|
|
2,704
|
|
||
Total
|
$
|
55
|
|
$
|
2,022
|
|
$
|
81
|
|
$
|
546
|
|
—
|
|
$
|
2,704
|
|
|
2019
|
|
|
|
|
|
|
||||||||||||
Fourth quarter
|
$
|
50
|
|
$
|
3,138
|
|
$
|
222
|
|
$
|
559
|
|
—
|
|
$
|
3,969
|
|
|
Third quarter
|
220
|
|
2,600
|
|
68
|
|
569
|
|
$
|
247
|
|
3,704
|
|
|||||
Second quarter
|
154
|
|
1,864
|
|
96
|
|
329
|
|
—
|
|
2,443
|
|
||||||
First quarter
|
301
|
|
1,536
|
|
34
|
|
225
|
|
—
|
|
2,096
|
|
||||||
Total
|
$
|
725
|
|
$
|
9,138
|
|
$
|
420
|
|
$
|
1,682
|
|
$
|
247
|
|
$
|
12,212
|
|
|
|
|
|
|
|
|
in millions
|
March 31, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
|
June 30, 2019
|
|
March 31, 2019
|
|
|||||
Commercial real estate loans
|
$
|
354,919
|
|
$
|
347,186
|
|
$
|
317,152
|
|
$
|
310,792
|
|
$
|
300,989
|
|
Residential mortgage
|
6,405
|
|
6,146
|
|
5,749
|
|
5,428
|
|
5,304
|
|
|||||
Education loans
|
594
|
|
625
|
|
658
|
|
693
|
|
727
|
|
|||||
Commercial lease financing
|
1,029
|
|
1,047
|
|
969
|
|
934
|
|
924
|
|
|||||
Commercial loans
|
614
|
|
591
|
|
590
|
|
588
|
|
562
|
|
|||||
Consumer direct
|
1,999
|
|
2,243
|
|
2,272
|
|
—
|
|
—
|
|
|||||
Total
|
$
|
365,560
|
|
$
|
357,838
|
|
$
|
327,390
|
|
$
|
318,435
|
|
$
|
308,506
|
|
|
|
|
|
|
|
in millions
|
March 31, 2020
|
December 31, 2019
|
||||
FHLMC
|
$
|
5,797
|
|
$
|
5,115
|
|
FNMA
|
10,573
|
|
12,308
|
|
||
GNMA
|
13,695
|
|
14,112
|
|
||
Total (a)
|
$
|
30,065
|
|
$
|
31,535
|
|
|
|
|
(a)
|
Includes securities held in the available-for-sale and held-to-maturity portfolios.
|
dollars in millions
|
U.S. Treasury, Agencies, and Corporations
|
States and
Political
Subdivisions
|
Agency Residential Collateralized Mortgage Obligations (a)
|
Agency Residential Mortgage-backed Securities (a)
|
Agency Commercial Mortgage-backed Securities (a)
|
Other Securities
|
Total
|
Weighted-Average Yield (b)
|
|||||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|||||||||||||||
Remaining maturity:
|
|
|
|
|
|
|
|
|
|||||||||||||||
One year or less
|
$
|
341
|
|
$
|
4
|
|
$
|
222
|
|
$
|
2
|
|
—
|
|
$
|
8
|
|
$
|
577
|
|
1.88
|
%
|
|
After one through five years
|
—
|
|
—
|
|
9,792
|
|
1,516
|
|
$
|
3,793
|
|
—
|
|
15,101
|
|
2.47
|
|
||||||
After five through ten years
|
—
|
|
—
|
|
2,031
|
|
19
|
|
3,076
|
|
1
|
|
5,127
|
|
2.52
|
|
|||||||
After ten years
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
2
|
|
3.34
|
|
|||||||
Fair value
|
$
|
341
|
|
$
|
4
|
|
$
|
12,045
|
|
$
|
1,539
|
|
$
|
6,869
|
|
$
|
9
|
|
$
|
20,807
|
|
—
|
|
Amortized cost
|
340
|
|
4
|
|
11,705
|
|
1,472
|
|
6,597
|
|
8
|
|
20,126
|
|
2.47
|
%
|
|||||||
Weighted-average yield (b)
|
1.53
|
%
|
4.37
|
%
|
2.26
|
%
|
2.79
|
%
|
2.83
|
%
|
.18
|
%
|
2.47
|
%
|
—
|
|
|||||||
Weighted-average maturity
|
.2 years
|
|
.6 years
|
|
3.7 years
|
|
3.5 years
|
|
5.1 years
|
|
.8 years
|
|
4.1 years
|
|
—
|
|
|||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fair value
|
$
|
334
|
|
$
|
4
|
|
$
|
12,783
|
|
$
|
1,714
|
|
$
|
6,997
|
|
$
|
11
|
|
$
|
21,843
|
|
—
|
|
Amortized cost
|
334
|
|
4
|
|
12,772
|
|
1,677
|
|
6,898
|
|
7
|
|
21,692
|
|
2.52
|
%
|
(a)
|
Maturity is based upon expected average lives rather than contractual terms.
|
(b)
|
Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate of 21%.
|
dollars in millions
|
Agency Residential Collateralized Mortgage Obligations (a)
|
Agency Residential Mortgage-backed Securities (a)
|
Agency Commercial Mortgage-backed Securities (a)
|
Asset-backed securities
|
Other
Securities
|
Total
|
Weighted-Average Yield (b)
|
|||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|||||||||||||
Remaining maturity:
|
|
|
|
|
|
|
|
|||||||||||||
One year or less
|
$
|
55
|
|
—
|
|
—
|
|
$
|
2
|
|
$
|
3
|
|
$
|
60
|
|
1.85
|
%
|
||
After one through five years
|
4,230
|
|
$
|
321
|
|
$
|
2,118
|
|
9
|
|
12
|
|
6,690
|
|
2.36
|
|
||||
After five through ten years
|
1,069
|
|
69
|
|
1,750
|
|
—
|
|
—
|
|
2,888
|
|
2.59
|
|
||||||
After ten years
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortized cost
|
$
|
5,354
|
|
$
|
390
|
|
$
|
3,868
|
|
$
|
11
|
|
$
|
15
|
|
$
|
9,638
|
|
2.43
|
%
|
Fair value
|
5,511
|
|
409
|
|
4,066
|
|
11
|
|
15
|
|
10,012
|
|
—
|
|
||||||
Weighted-average yield (b)
|
2.12
|
%
|
2.50
|
%
|
2.85
|
%
|
1.75
|
%
|
3.05
|
%
|
2.43
|
%
|
—
|
|
||||||
Weighted-average maturity
|
3.6 years
|
|
4.4 years
|
|
5.3 years
|
|
3.7 years
|
|
2.8 years
|
|
4.3 years
|
|
—
|
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|
|||||||||||||
Amortized cost
|
$
|
5,692
|
|
$
|
409
|
|
$
|
3,940
|
|
11
|
|
$
|
15
|
|
$
|
10,067
|
|
2.43
|
%
|
|
Fair value
|
5,666
|
|
415
|
|
4,009
|
|
11
|
|
15
|
|
10,116
|
|
—
|
|
(a)
|
Maturity is based upon expected average lives rather than contractual terms.
|
(b)
|
Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate of 21%.
|
(a)
|
Common Share repurchases were suspended during the first quarter of 2020 in response to the COVID-19 pandemic.
|
(b)
|
The dividend payout ratio for the first quarter of 2020 was impacted by lower EPS which was impacted by the economic fallout from the COVID-19 pandemic.
|
|
2020
|
|
2019
|
||||||||
in thousands
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Shares outstanding at beginning of period
|
977,189
|
|
|
988,538
|
|
1,003,114
|
|
1,013,186
|
|
1,019,503
|
|
Open market repurchases and return of shares under employee compensation plans
|
(7,862
|
)
|
|
(12,968
|
)
|
(15,076
|
)
|
(10,412
|
)
|
(11,791
|
)
|
Shares issued under employee compensation plans (net of cancellations)
|
5,992
|
|
|
1,619
|
|
500
|
|
340
|
|
5,474
|
|
Shares outstanding at end of period
|
975,319
|
|
|
977,189
|
|
988,538
|
|
1,003,114
|
|
1,013,186
|
|
|
|
|
|
|
|
|
(a)
|
Net of capital surplus.
|
(b)
|
Amount reflects our decision to adopt the CECL transitional provision.
|
(c)
|
The ALLL included in Tier 2 capital is limited by regulation to 1.25% of the institution’s standardized total risk-weighted assets (excluding its standardized market risk-weighted assets). The ALLL includes $43 million and $10 million of allowance classified as “discontinued assets” on the balance sheet at March 31, 2020, and December 31, 2019, respectively.
|
(d)
|
This ratio is Tier 1 capital divided by average quarterly total assets as defined by the Federal Reserve less: (i) goodwill, (ii) the disallowed intangible and deferred tax assets, and (iii) other deductions from assets for leverage capital purposes.
|
|
2020
|
|
2019
|
||||||||||||||||||||||
|
Three months ended March 31,
|
|
|
Three months ended March 31,
|
|
||||||||||||||||||||
in millions
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
3.3
|
|
$
|
.5
|
|
$
|
1.2
|
|
$
|
2.6
|
|
|
$
|
.8
|
|
$
|
.4
|
|
$
|
.6
|
|
$
|
.6
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
.3
|
|
.1
|
|
$
|
.1
|
|
$
|
.3
|
|
|
$
|
.1
|
|
$
|
—
|
|
$
|
.1
|
|
$
|
.1
|
|
|
2020
|
|
2019
|
||||||||||||||||||||||
|
Three months ended March 31,
|
|
|
Three months ended March 31,
|
|
||||||||||||||||||||
in millions
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|
|
High
|
|
Low
|
|
Mean
|
|
March 31,
|
|
||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
5.1
|
|
$
|
2.2
|
|
$
|
3.8
|
|
$
|
3.7
|
|
|
$
|
6.8
|
|
$
|
3.6
|
|
$
|
4.8
|
|
$
|
4.6
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
1.0
|
|
$
|
.1
|
|
$
|
.3
|
|
$
|
.2
|
|
|
$
|
.7
|
|
$
|
.3
|
|
$
|
.4
|
|
$
|
.5
|
|
•
|
“Reprice risk” is the exposure to changes in the level of interest rates and occurs when the volume of interest-bearing liabilities and the volume of interest-earning assets they fund (e.g., deposits used to fund loans) do not mature or reprice at the same time.
|
•
|
“Basis risk” is the exposure to asymmetrical changes in interest rate indices and occurs when floating-rate assets and floating-rate liabilities reprice at the same time, but in response to different market factors or indexes.
|
•
|
“Yield curve risk” is the exposure to nonparallel changes in the slope of the yield curve (where the yield curve depicts the relationship between the yield on a particular type of security and its term to maturity) and occurs when interest-bearing liabilities and the interest-earning assets that they fund do not price or reprice to the same term point on the yield curve.
|
•
|
“Option risk” is the exposure to a customer or counterparty’s ability to take advantage of the interest rate environment and terminate or reprice one of our assets, liabilities, or off-balance sheet instruments prior to contractual maturity without a penalty. Option risk occurs when exposures to customer and counterparty early withdrawals or prepayments are not mitigated with an offsetting position or appropriate compensation.
|
|
March 31, 2020
|
March 31, 2019
|
||||||||
Basis point change assumption (short-term rates)
|
-200
|
|
|
200
|
|
-200
|
|
|
+200
|
|
Tolerance level
|
-5.50
|
|
%
|
-5.50
|
%
|
-5.50
|
|
%
|
-5.50
|
%
|
Interest rate risk assessment
|
-4.97
|
|
%
|
5.95
|
%
|
-2.92
|
|
%
|
-.02
|
%
|
|
March 31, 2020
|
|
|
|
|
|||||||||||||||
|
|
|
|
Weighted-Average
|
|
December 31, 2019
|
|
|||||||||||||
dollars in millions
|
Notional
Amount |
Fair
Value |
|
Maturity
(Years) |
Receive
Rate |
Pay
Rate |
|
Notional
Amount |
Fair
Value |
|
||||||||||
Interest rate swaps
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Receive fixed — asset
|
$
|
17,565
|
|
$
|
851
|
|
|
2.5
|
2.3
|
%
|
1.2
|
%
|
|
$
|
19,270
|
|
$
|
312
|
|
|
Receive fixed forward starting — asset
|
—
|
|
—
|
|
|
.0
|
—
|
|
—
|
|
|
3,400
|
|
32
|
|
|
||||
Pay fixed swap — debt
|
50
|
|
(12
|
)
|
|
8.3
|
1.9
|
%
|
3.6
|
%
|
|
50
|
|
(7
|
)
|
|
||||
Total cash flow swaps
|
17,615
|
|
839
|
|
|
2.5
|
2.3
|
%
|
1.2
|
%
|
|
22,720
|
|
337
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Received fixed — debt
|
7,259
|
|
535
|
|
|
3.3
|
2.3
|
%
|
.8
|
%
|
|
8,189
|
|
240
|
|
|
||||
Total interest rate swaps
|
$
|
24,874
|
|
$
|
1,374
|
|
|
2.7
|
2.3
|
%
|
1.1
|
%
|
|
$
|
30,909
|
|
$
|
577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate options
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Floors — purchased
|
$
|
300
|
|
$
|
6
|
|
|
1.0
|
—
|
|
—
|
|
|
$
|
4,200
|
|
$
|
149
|
|
|
Floors — sold
|
—
|
|
—
|
|
|
.0
|
—
|
|
—
|
|
|
3,900
|
|
(15
|
)
|
|
||||
Total interest rate options
|
$
|
300
|
|
$
|
6
|
|
|
1.0
|
—
|
|
—
|
|
|
$
|
8,100
|
|
$
|
134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Portfolio swaps designated as A/LM are used to manage interest rate risk tied to both assets and liabilities.
|
(b)
|
Conventional A/LM and forward A/LM floors do not have a stated receive rate or pay rate and are given a strike price on the option.
|
(c)
|
Excludes accrued interest of $102 million and $107 million at March 31, 2020, and December 31, 2019, respectively.
|
March 31, 2020
|
Short-Term
Borrowings |
Long-Term
Deposits |
Senior
Long-Term Debt |
Subordinated
Long-Term Debt |
Capital
Securities |
Preferred
Stock |
KEYCORP (THE PARENT COMPANY)
|
|
|
|
|
|
|
Standard & Poor’s
|
A-2
|
N/A
|
BBB+
|
BBB
|
BB+
|
BB+
|
Moody’s
|
P-2
|
N/A
|
Baa1
|
Baa1
|
Baa2
|
Baa3
|
Fitch Ratings, Inc.
|
F1
|
N/A
|
A-
|
BBB+
|
BB+
|
BB
|
DBRS, Inc.
|
R-1 (low)
|
N/A
|
A
|
A (low)
|
A (low)
|
BBB
|
|
|
|
|
|
|
|
KEYBANK
|
|
|
|
|
|
|
Standard & Poor’s
|
A-2
|
N/A
|
A-
|
BBB+
|
N/A
|
N/A
|
Moody’s
|
P-2
|
Aa3
|
A3
|
Baa1
|
N/A
|
N/A
|
Fitch Ratings, Inc.
|
F1
|
A
|
A-
|
BBB+
|
N/A
|
N/A
|
DBRS, Inc.
|
R-1 (middle)
|
A (high)
|
A (high)
|
A
|
N/A
|
N/A
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
dollars in millions
|
Amount
|
Percent of
Allowance to
Total Allowance
|
Percent of
Loan Type to
Total Loans
|
|
Amount
|
Percent of
Allowance to
Total Allowance
|
Percent of
Loan Type to
Total Loans
|
||||||||
Commercial and industrial
|
$
|
542
|
|
39.9
|
%
|
54.2
|
%
|
|
$
|
551
|
|
61.2
|
%
|
51.0
|
%
|
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage
|
207
|
|
15.2
|
|
13.1
|
|
|
143
|
|
15.9
|
|
14.3
|
|
||
Construction
|
25
|
|
1.9
|
|
1.7
|
|
|
22
|
|
2.4
|
|
1.6
|
|
||
Total commercial real estate loans
|
232
|
|
17.1
|
|
14.8
|
|
|
165
|
|
18.3
|
|
15.9
|
|
||
Commercial lease financing
|
44
|
|
3.2
|
|
4.5
|
|
|
35
|
|
3.9
|
|
5.0
|
|
||
Total commercial loans
|
818
|
|
60.2
|
|
73.5
|
|
|
751
|
|
83.4
|
|
71.9
|
|
||
Real estate — residential mortgage
|
89
|
|
6.6
|
|
7.3
|
|
|
7
|
|
.8
|
|
7.4
|
|
||
Home equity loans
|
184
|
|
13.5
|
|
9.8
|
|
|
31
|
|
3.5
|
|
10.9
|
|
||
Consumer direct loans
|
116
|
|
8.5
|
|
3.7
|
|
|
34
|
|
3.8
|
|
3.7
|
|
||
Credit cards
|
104
|
|
7.7
|
|
1.0
|
|
|
47
|
|
5.2
|
|
1.2
|
|
||
Consumer indirect loans
|
48
|
|
3.5
|
|
4.7
|
|
|
30
|
|
3.3
|
|
4.9
|
|
||
Total consumer loans
|
541
|
|
39.8
|
|
26.5
|
|
|
149
|
|
16.6
|
|
28.1
|
|
||
Total ALLL — continuing operations (b)
|
$
|
1,359
|
|
100.0
|
%
|
100.0
|
%
|
|
$
|
900
|
|
100.0
|
%
|
100.0
|
%
|
|
|
|
|
|
|
|
|
(a)
|
The ALLL at December 31, 2019, was calculated under the incurred-loss methodology which was replaced by the CECL methodology beginning on January 1, 2020. See Note 1 (“Summary of Significant Accounting Policies”) and Note 5 (“Asset Quality”) for more information.
|
(b)
|
Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of $43 million at March 31, 2020, and $10 million at December 31, 2019.
|
|
2020
|
|
2019
|
|||||||||||||
dollars in millions
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
|||||
Commercial and industrial
|
$
|
55
|
|
|
$
|
72
|
|
$
|
170
|
|
$
|
24
|
|
$
|
26
|
|
Real estate — Commercial mortgage
|
2
|
|
|
2
|
|
—
|
|
—
|
|
4
|
|
|||||
Real estate — Construction
|
—
|
|
|
1
|
|
—
|
|
—
|
|
4
|
|
|||||
Commercial lease financing
|
2
|
|
|
—
|
|
—
|
|
14
|
|
7
|
|
|||||
Total commercial loans
|
59
|
|
|
75
|
|
170
|
|
38
|
|
41
|
|
|||||
Real estate — Residential mortgage
|
—
|
|
|
(1
|
)
|
1
|
|
1
|
|
—
|
|
|||||
Home equity loans
|
2
|
|
|
1
|
|
4
|
|
4
|
|
2
|
|
|||||
Consumer direct loans
|
10
|
|
|
9
|
|
8
|
|
8
|
|
9
|
|
|||||
Credit cards
|
9
|
|
|
9
|
|
9
|
|
10
|
|
9
|
|
|||||
Consumer indirect loans
|
4
|
|
|
6
|
|
4
|
|
4
|
|
3
|
|
|||||
Total consumer loans
|
25
|
|
|
24
|
|
26
|
|
27
|
|
23
|
|
|||||
Total net loan charge-offs
|
$
|
84
|
|
|
$
|
99
|
|
$
|
196
|
|
$
|
65
|
|
$
|
64
|
|
Net loan charge-offs to average loans
|
.35
|
%
|
|
.42
|
%
|
.85
|
%
|
.29
|
%
|
.29
|
%
|
|||||
Net loan charge-offs from discontinued operations — education lending business
|
$
|
1
|
|
|
$
|
1
|
|
—
|
|
$
|
3
|
|
$
|
3
|
|
(a)
|
Credit amounts indicate that recoveries exceeded charge-offs.
|
|
Three months ended March 31,
|
|||||
dollars in millions
|
2020
|
|
2019
|
|
||
Average loans outstanding
|
$
|
96,174
|
|
$
|
89,649
|
|
Allowance for loan and lease losses at the end of the prior period
|
$
|
900
|
|
$
|
883
|
|
Cumulative effect from change in accounting principle (a)
|
204
|
|
—
|
|
||
Allowance for loan and lease losses at beginning of period
|
1,104
|
|
883
|
|
||
Loans charged off:
|
|
|
||||
Commercial and industrial
|
60
|
|
36
|
|
||
Real estate — commercial mortgage
|
3
|
|
5
|
|
||
Real estate — construction
|
—
|
|
4
|
|
||
Commercial lease financing
|
2
|
|
8
|
|
||
Total commercial loans
|
65
|
|
53
|
|
||
Real estate — residential mortgage
|
—
|
|
1
|
|
||
Home equity loans
|
4
|
|
4
|
|
||
Consumer direct loans
|
12
|
|
10
|
|
||
Credit cards
|
11
|
|
11
|
|
||
Consumer indirect loans
|
9
|
|
8
|
|
||
Total consumer loans
|
36
|
|
34
|
|
||
Total loans charged off
|
101
|
|
87
|
|
||
Recoveries:
|
|
|
||||
Commercial and industrial
|
5
|
|
10
|
|
||
Real estate — commercial mortgage
|
1
|
|
1
|
|
||
Real estate — construction
|
—
|
|
—
|
|
||
Commercial lease financing
|
—
|
|
1
|
|
||
Total commercial loans
|
6
|
|
12
|
|
||
Real estate — residential mortgage
|
—
|
|
1
|
|
||
Home equity loans
|
2
|
|
2
|
|
||
Consumer direct loans
|
2
|
|
1
|
|
||
Credit cards
|
2
|
|
2
|
|
||
Consumer indirect loans
|
5
|
|
5
|
|
||
Total consumer loans
|
11
|
|
11
|
|
||
Total recoveries
|
17
|
|
23
|
|
||
Net loan charge-offs
|
(84
|
)
|
(64
|
)
|
||
Provision (credit) for loan and lease losses
|
339
|
|
64
|
|
||
Allowance for loan and lease losses at end of period (c)
|
$
|
1,359
|
|
$
|
883
|
|
Liability for credit losses on lending-related commitments at the end of the prior period
|
$
|
68
|
|
$
|
64
|
|
Liability for credit losses on contingent guarantees at the end of the prior period
|
7
|
|
—
|
|
||
Cumulative effect from change in accounting principle (a), (b)
|
66
|
|
—
|
|
||
Liability for credit losses on off-balance sheet exposures at beginning of period
|
141
|
|
64
|
|
||
Provision (credit) for losses on off-balance sheet exposures
|
20
|
|
(2
|
)
|
||
Liability for credit losses on off-balance sheet exposures at end of period (d)
|
$
|
161
|
|
$
|
62
|
|
Total allowance for credit losses at end of period
|
$
|
1,520
|
|
$
|
945
|
|
Net loan charge-offs to average total loans
|
.35
|
%
|
.29
|
%
|
||
Allowance for loan and lease losses to period-end loans
|
1.32
|
|
.98
|
|
||
Allowance for credit losses to period-end loans
|
1.47
|
|
1.05
|
|
||
Allowance for loan and lease losses to nonperforming loans
|
215.0
|
|
161.1
|
|
||
Allowance for credit losses to nonperforming loans
|
240.5
|
|
172.4
|
|
||
|
|
|
||||
Discontinued operations — education lending business:
|
|
|
||||
Loans charged off
|
$
|
2
|
|
$
|
4
|
|
Recoveries
|
1
|
|
1
|
|
||
Net loan charge-offs
|
$
|
(1
|
)
|
$
|
(3
|
)
|
|
|
|
(a)
|
The cumulative effect from change in accounting principle relates to the January 1, 2020, adoption of ASU 2016-13.
|
(b)
|
Excludes $4 million related to the provision for other financial assets.
|
(c)
|
The ALLL at December 31, 2019, was calculated under the incurred-loss methodology which was replaced by the CECL methodology beginning on January 1, 2020. See Note 1 (“Summary of Significant Accounting Policies”) and Note 5 (“Asset Quality”) for more information.
|
(d)
|
Included in "Accrued expense and other liabilities" on the balance sheet.
|
dollars in millions
|
March 31, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
|
June 30, 2019
|
|
March 31, 2019
|
|
|||||
Commercial and industrial
|
$
|
277
|
|
$
|
264
|
|
$
|
238
|
|
$
|
189
|
|
$
|
170
|
|
Real estate — commercial mortgage
|
87
|
|
83
|
|
92
|
|
85
|
|
82
|
|
|||||
Real estate — construction
|
2
|
|
2
|
|
2
|
|
2
|
|
2
|
|
|||||
Total commercial real estate loans (a)
|
89
|
|
85
|
|
94
|
|
87
|
|
84
|
|
|||||
Commercial lease financing
|
5
|
|
6
|
|
7
|
|
7
|
|
9
|
|
|||||
Total commercial loans (b)
|
371
|
|
355
|
|
339
|
|
283
|
|
263
|
|
|||||
Real estate — residential mortgage
|
89
|
|
48
|
|
42
|
|
62
|
|
64
|
|
|||||
Home equity loans
|
143
|
|
145
|
|
179
|
|
191
|
|
195
|
|
|||||
Consumer direct loans
|
4
|
|
4
|
|
3
|
|
3
|
|
3
|
|
|||||
Credit cards
|
3
|
|
3
|
|
2
|
|
2
|
|
3
|
|
|||||
Consumer indirect loans
|
22
|
|
22
|
|
20
|
|
20
|
|
20
|
|
|||||
Total consumer loans
|
261
|
|
222
|
|
246
|
|
278
|
|
285
|
|
|||||
Total nonperforming loans
|
632
|
|
577
|
|
585
|
|
561
|
|
548
|
|
|||||
OREO
|
119
|
|
35
|
|
39
|
|
38
|
|
40
|
|
|||||
Nonperforming loans held for sale
|
89
|
|
94
|
|
78
|
|
—
|
|
—
|
|
|||||
Other nonperforming assets
|
4
|
|
9
|
|
9
|
|
9
|
|
9
|
|
|||||
Total nonperforming assets
|
$
|
844
|
|
$
|
715
|
|
$
|
711
|
|
$
|
608
|
|
$
|
597
|
|
Accruing loans past due 90 days or more
|
$
|
128
|
|
$
|
97
|
|
$
|
54
|
|
$
|
74
|
|
$
|
118
|
|
Accruing loans past due 30 through 89 days
|
393
|
|
329
|
|
366
|
|
299
|
|
290
|
|
|||||
Restructured loans — accruing and nonaccruing (c)
|
340
|
|
347
|
|
347
|
|
395
|
|
365
|
|
|||||
Restructured loans included in nonperforming loans (c)
|
172
|
|
183
|
|
176
|
|
228
|
|
198
|
|
|||||
Nonperforming assets from discontinued operations — education lending business
|
7
|
|
7
|
|
7
|
|
7
|
|
7
|
|
|||||
Nonperforming loans to period-end portfolio loans
|
.61
|
%
|
.61
|
%
|
.63
|
%
|
.61
|
%
|
.61
|
%
|
|||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
|
.82
|
|
.75
|
%
|
.77
|
%
|
.66
|
%
|
.66
|
%
|
(a)
|
See Figure 11 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio.
|
(b)
|
See Figure 10 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio.
|
(c)
|
Restructured loans (i.e., TDRs) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.
|
|
2020
|
|
2019
|
|||||||||||||
in millions
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
|||||
Balance at beginning of period
|
$
|
577
|
|
|
$
|
585
|
|
$
|
561
|
|
$
|
548
|
|
$
|
542
|
|
Loans placed on nonaccrual status (a)
|
219
|
|
|
268
|
|
271
|
|
189
|
|
196
|
|
|||||
Charge-offs
|
(100
|
)
|
|
(114
|
)
|
(91
|
)
|
(84
|
)
|
(91
|
)
|
|||||
Loans sold
|
(4
|
)
|
|
(1
|
)
|
—
|
|
(38
|
)
|
(18
|
)
|
|||||
Payments
|
(31
|
)
|
|
(59
|
)
|
(37
|
)
|
(23
|
)
|
(22
|
)
|
|||||
Transfers to OREO
|
(3
|
)
|
|
(3
|
)
|
(4
|
)
|
(4
|
)
|
(8
|
)
|
|||||
Transfers to nonperforming loans held for sale
|
—
|
|
|
(47
|
)
|
(78
|
)
|
—
|
|
—
|
|
|||||
Transfers to other nonperforming assets
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(13
|
)
|
|||||
Loans returned to accrual status
|
(26
|
)
|
|
(52
|
)
|
(37
|
)
|
(27
|
)
|
(38
|
)
|
|||||
Balance at end of period
|
$
|
632
|
|
|
$
|
577
|
|
$
|
585
|
|
$
|
561
|
|
$
|
548
|
|
|
|
|
|
|
|
|
(a)
|
PCI loans meeting nonperforming criteria were historically excluded from Key's nonperforming disclosures. As a result of CECL implementation on January 1, 2020, PCI loans became PCD loans. PCD loans that met the definition of nonperforming are now included in nonperforming disclosures, resulting in a $45 million increase in nonperforming loans in the first quarter of 2020.
|
|
|
Three months ended
|
||||||||||||||
dollars in millions
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
6/30/2019
|
3/31/2019
|
|||||||||||
Tangible common equity to tangible assets at period-end
|
|
|
|
|
|
|||||||||||
Key shareholders’ equity (GAAP)
|
$
|
17,411
|
|
$
|
17,038
|
|
$
|
17,116
|
|
$
|
16,969
|
|
$
|
15,924
|
|
|
Less:
|
Intangible assets (a)
|
2,894
|
|
2,910
|
|
2,928
|
|
2,952
|
|
2,804
|
|
|||||
|
Preferred Stock (b)
|
1,856
|
|
1,856
|
|
1,856
|
|
1,856
|
|
1,421
|
|
|||||
|
Tangible common equity (non-GAAP)
|
$
|
12,661
|
|
$
|
12,272
|
|
$
|
12,332
|
|
$
|
12,161
|
|
$
|
11,699
|
|
Total assets (GAAP)
|
$
|
156,197
|
|
$
|
144,988
|
|
$
|
146,691
|
|
$
|
144,545
|
|
$
|
141,515
|
|
|
Less:
|
Intangible assets (a)
|
2,894
|
|
2,910
|
|
2,928
|
|
2,952
|
|
2,804
|
|
|||||
|
Tangible assets (non-GAAP)
|
$
|
153,303
|
|
$
|
142,078
|
|
$
|
143,763
|
|
$
|
141,593
|
|
$
|
138,711
|
|
|
Tangible common equity to tangible assets ratio (non-GAAP)
|
8.3
|
%
|
8.6
|
%
|
8.6
|
%
|
8.6
|
%
|
8.4
|
%
|
|||||
Average tangible common equity
|
|
|
|
|
|
|||||||||||
Average Key shareholders’ equity (GAAP)
|
$
|
17,216
|
|
$
|
17,178
|
|
$
|
17,113
|
|
$
|
16,531
|
|
$
|
15,702
|
|
|
Less:
|
Intangible assets (average) (c)
|
2,902
|
|
2,919
|
|
2,942
|
|
2,959
|
|
2,813
|
|
|||||
|
Preferred Stock (average)
|
1,900
|
|
1,900
|
|
1,900
|
|
1,762
|
|
1,450
|
|
|||||
|
Average tangible common equity (non-GAAP)
|
$
|
12,414
|
|
$
|
12,359
|
|
$
|
12,271
|
|
$
|
11,810
|
|
$
|
11,439
|
|
Return on average tangible common equity from continuing operations
|
|
|
|
|
|
|||||||||||
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)
|
$
|
118
|
|
$
|
439
|
|
$
|
383
|
|
$
|
403
|
|
$
|
386
|
|
|
Average tangible common equity (non-GAAP)
|
12,414
|
|
12,359
|
|
12,271
|
|
11,810
|
|
11,439
|
|
||||||
Return on average tangible common equity from continuing operations (non-GAAP)
|
3.82
|
%
|
14.09
|
%
|
12.38
|
%
|
13.69
|
%
|
13.69
|
%
|
||||||
Return on average tangible common equity consolidated
|
|
|
|
|
|
|||||||||||
Net income (loss) attributable to Key common shareholders (GAAP)
|
$
|
119
|
|
$
|
442
|
|
$
|
386
|
|
$
|
405
|
|
$
|
387
|
|
|
Average tangible common equity (non-GAAP)
|
12,414
|
|
12,359
|
|
12,271
|
|
11,810
|
|
11,439
|
|
||||||
Return on average tangible common equity consolidated (non-GAAP)
|
3.86
|
%
|
14.19
|
%
|
12.48
|
%
|
13.75
|
%
|
13.72
|
%
|
(a)
|
For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, intangible assets exclude $6 million, $7 million, $9 million, $10 million, and $12 million, respectively, of period-end purchased credit card receivables.
|
(b)
|
Net of capital surplus.
|
(c)
|
For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, average intangible assets exclude $7 million, $8 million, $9 million, $11 million, and $13 million, respectively, of average purchased credit card receivables.
|
|
|
Three months ended
|
||||||||||||||
dollars in millions
|
3/31/2020
|
12/31/2019
|
9/30/2019
|
6/30/2019
|
3/31/2019
|
|||||||||||
Cash efficiency ratio
|
|
|
|
|
|
|||||||||||
Noninterest expense (GAAP)
|
$
|
931
|
|
$
|
980
|
|
$
|
939
|
|
$
|
1,019
|
|
$
|
963
|
|
|
Less:
|
Intangible asset amortization
|
17
|
|
19
|
|
26
|
|
22
|
|
22
|
|
|||||
Adjusted noninterest expense (non-GAAP)
|
$
|
914
|
|
$
|
961
|
|
$
|
913
|
|
$
|
997
|
|
$
|
941
|
|
|
Net interest income (GAAP)
|
$
|
981
|
|
$
|
979
|
|
$
|
972
|
|
$
|
981
|
|
$
|
977
|
|
|
Plus:
|
Taxable-equivalent adjustment
|
8
|
|
8
|
|
8
|
|
8
|
|
8
|
|
|||||
|
Noninterest income (GAAP)
|
477
|
|
651
|
|
650
|
|
622
|
|
536
|
|
|||||
Total taxable-equivalent revenue (non-GAAP)
|
$
|
1,466
|
|
$
|
1,638
|
|
$
|
1,630
|
|
$
|
1,611
|
|
$
|
1,521
|
|
|
Cash efficiency ratio (non-GAAP)
|
62.3
|
%
|
58.7
|
%
|
56.0
|
%
|
61.9
|
%
|
61.9
|
%
|
|
|
|
Three months ended
|
||
|
|
|
3/31/2020
|
||
Common Equity Tier 1 under the RCR (estimates)
|
|
||||
|
Common Equity Tier 1 under current RCR
|
$
|
12,268
|
|
|
|
Adjustments from current RCR to the fully phased-in RCR:
|
|
|||
|
|
Deferred tax assets and other intangible assets (a)
|
—
|
|
|
|
|
Common Equity Tier 1 anticipated under the fully phased-in RCR (b)
|
$
|
12,268
|
|
|
|
|
|
||
|
Net risk-weighted assets under current RCR
|
$
|
138,310
|
|
|
|
Adjustments from current RCR to the fully phased-in RCR:
|
|
|||
|
|
Mortgage servicing assets (c)
|
875
|
|
|
|
|
Deferred tax assets
|
58
|
|
|
|
|
All other assets
|
—
|
|
|
|
|
Total risk-weighted assets anticipated under the fully phased-in RCR (b)
|
$
|
139,243
|
|
|
|
|
|
||
|
Common Equity Tier 1 ratio under the fully phased-in RCR (b)
|
8.8
|
%
|
(a)
|
Includes the deferred tax assets subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule.
|
(b)
|
The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ RCR (fully phased-in); Key is subject to the RCR under the “standardized approach.”
|
(c)
|
Item is included in the 25% exceptions bucket calculation and is risk-weighted at 250%.
|
•
|
PD,
|
•
|
LGD,
|
•
|
Outstanding balance of the loan,
|
•
|
Movement through delinquency stages,
|
•
|
Amounts and timing of expected future cash flows,
|
•
|
Value of collateral, which may be obtained from third parties,
|
•
|
Economic forecasts which are obtained from a third party provider,
|
•
|
Qualitative factors, such as changes in current economic conditions, that may not be reflected in modeled results.
|
ALLL Input / Stress Level
|
Low
|
Moderate
|
High
|
Portfolio Factors
|
1.3x
|
1.7x
|
2.0x
|
ALLL Input / Stress Level
|
Low/Moderate
|
Moderate/High
|
Economic Scenario
|
1.3x
|
1.7x
|
ALLL Input / Stress Level
|
Low
|
Moderate
|
High
|
Portfolio Factors
|
1.1x
|
1.2x
|
1.3x
|
ALLL Input / Stress Level
|
Low/Moderate
|
Moderate/High
|
Economic Scenario
|
1.1x
|
1.3x
|
Standard
|
Required Adoption
|
Description
|
Effect on Financial Statements or
Other Significant Matters
|
ASU 2019-12,
Simplifying the
Accounting for
Income Taxes
|
January 1, 2021
Early adoption is
permitted
|
This ASU simplifies the accounting for income
taxes by removing certain exceptions to the
existing guidance, such as exceptions related
to the incremental approach for intraperiod tax
allocation, the methodology for calculating
income taxes in an interim period when a
year-to-date loss exceeds the anticipated loss,
and the recognition of deferred tax liabilities
when a foreign subsidiary becomes an equity
method investment and when a foreign equity
method investment becomes a subsidiary.
Along with general improvements, it adds
simplifications related to franchise taxes, the
tax basis of goodwill, and the method for
recognizing an enacted change in tax laws.
The guidance also specifies that an entity is
not required to allocate the consolidated
amount of certain tax expense to a legal entity
not subject to tax in its own separate financial
statements.
The guidance should be applied on either a
retrospective, modified retrospective, or
prospective basis depending on the
amendment.
|
The adoption of this accounting guidance is not expected to have a
material effect on our financial condition or results of operations.
|
ASU 2020-01,
Clarifying the
Interactions
between Topic
321,Investments
—Equity
Securities;
Topic 323,
Investments—
Equity Method
and Joint
Ventures; and
Topic 815,
Derivatives and
Hedging
|
January 1, 2021
Early adoption is
permitted
|
This guidance clarifies that when applying the
measurement alternative in Topic 321,
companies should consider certain observable
transactions that require the application or
discontinuance of the equity method under
Topic 323.
It also clarifies that companies should not
consider whether the underlying securities in
certain forward contracts and purchased
options would be accounted for under the
equity method or fair value option when
determining the method of accounting for
those contracts.
This guidance should be applied on a
prospective basis.
|
The adoption of this accounting guidance is not expected to have a
material effect on our financial condition or results of operations.
|
March 31, 2020
|
Short- and Long-
Term Commercial
Total (a)
|
Foreign Exchange
and Derivatives
with Collateral (b) |
Net
Exposure
|
||||||
in millions
|
|||||||||
France:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
$
|
1
|
|
$
|
1
|
|
|
Nonsovereign non-financial institutions
|
$
|
1
|
|
—
|
|
1
|
|
||
Total
|
1
|
|
1
|
|
2
|
|
|||
Germany:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
38
|
|
—
|
|
38
|
|
|||
Total
|
38
|
|
—
|
|
38
|
|
|||
Italy:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
1
|
|
—
|
|
1
|
|
|||
Total
|
1
|
|
—
|
|
1
|
|
|||
Luxembourg:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
8
|
|
—
|
|
8
|
|
|||
Total
|
8
|
|
—
|
|
8
|
|
|||
Switzerland:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
1
|
|
1
|
|
|||
Nonsovereign non-financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Total
|
—
|
|
1
|
|
1
|
|
|||
United Kingdom:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
423
|
|
423
|
|
|||
Nonsovereign non-financial institutions
|
1
|
|
—
|
|
1
|
|
|||
Total
|
1
|
|
423
|
|
424
|
|
|||
Total Europe:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
425
|
|
425
|
|
|||
Nonsovereign non-financial institutions
|
49
|
|
—
|
|
49
|
|
|||
Total
|
$
|
49
|
|
$
|
425
|
|
$
|
474
|
|
|
|
|
|
(a)
|
Represents our outstanding leases.
|
(b)
|
Represents contracts to hedge our balance sheet asset and liability needs and to accommodate our clients’ trading and/or hedging needs. Our derivative mark-to-market exposures are calculated and reported on a daily basis. These exposures are largely covered by cash or highly marketable securities collateral with daily collateral calls.
|
in millions, except per share data
|
March 31,
2020 |
|
December 31,
2019 |
|
||
|
(Unaudited)
|
|
|
|||
ASSETS
|
|
|
||||
Cash and due from banks
|
$
|
865
|
|
$
|
732
|
|
Short-term investments
|
4,073
|
|
1,272
|
|
||
Trading account assets
|
795
|
|
1,040
|
|
||
Securities available for sale
|
20,807
|
|
21,843
|
|
||
Held-to-maturity securities (fair value: $10,012 and $10,116)
|
9,638
|
|
10,067
|
|
||
Other investments
|
679
|
|
605
|
|
||
Loans, net of unearned income of $575 and $603
|
103,198
|
|
94,646
|
|
||
Less: Allowance for loan and lease losses
|
(1,359
|
)
|
(900
|
)
|
||
Net loans
|
101,839
|
|
93,746
|
|
||
Loans held for sale (a)
|
2,143
|
|
1,334
|
|
||
Premises and equipment
|
791
|
|
814
|
|
||
Goodwill
|
2,664
|
|
2,664
|
|
||
Other intangible assets
|
236
|
|
253
|
|
||
Corporate-owned life insurance
|
4,243
|
|
4,233
|
|
||
Accrued income and other assets
|
6,604
|
|
5,494
|
|
||
Discontinued assets
|
820
|
|
891
|
|
||
Total assets
|
$
|
156,197
|
|
$
|
144,988
|
|
LIABILITIES
|
|
|
||||
Deposits in domestic offices:
|
|
|
||||
NOW and money market deposit accounts
|
$
|
71,005
|
|
$
|
66,714
|
|
Savings deposits
|
4,753
|
|
4,651
|
|
||
Certificates of deposit ($100,000 or more)
|
5,630
|
|
6,598
|
|
||
Other time deposits
|
4,623
|
|
5,054
|
|
||
Total interest-bearing deposits
|
86,011
|
|
83,017
|
|
||
Noninterest-bearing deposits
|
29,293
|
|
28,853
|
|
||
Total deposits
|
115,304
|
|
111,870
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
2,444
|
|
387
|
|
||
Bank notes and other short-term borrowings
|
4,606
|
|
705
|
|
||
Accrued expense and other liabilities
|
2,700
|
|
2,540
|
|
||
Long-term debt
|
13,732
|
|
12,448
|
|
||
Total liabilities
|
138,786
|
|
127,950
|
|
||
EQUITY
|
|
|
||||
Preferred stock
|
1,900
|
|
1,900
|
|
||
Common Shares, $1 par value; authorized 2,100,000,000 and 2,100,000,000 shares; issued 1,256,702,081 and 1,256,702,081 shares
|
1,257
|
|
1,257
|
|
||
Capital surplus
|
6,222
|
|
6,295
|
|
||
Retained earnings
|
12,174
|
|
12,469
|
|
||
Treasury stock, at cost (281,383,095 and 279,513,530 shares)
|
(4,956
|
)
|
(4,909
|
)
|
||
Accumulated other comprehensive income (loss)
|
814
|
|
26
|
|
||
Key shareholders’ equity
|
17,411
|
|
17,038
|
|
||
Noncontrolling interests
|
—
|
|
—
|
|
||
Total equity
|
17,411
|
|
17,038
|
|
||
Total liabilities and equity
|
$
|
156,197
|
|
$
|
144,988
|
|
|
|
|
(a)
|
Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $152 million at March 31, 2020, and $140 million at December 31, 2019.
|
dollars in millions, except per share amounts
|
Three months ended March 31,
|
|||||
(Unaudited)
|
2020
|
|
2019
|
|
||
INTEREST INCOME
|
|
|
||||
Loans
|
$
|
1,026
|
|
$
|
1,066
|
|
Loans held for sale
|
19
|
|
13
|
|
||
Securities available for sale
|
129
|
|
129
|
|
||
Held-to-maturity securities
|
62
|
|
68
|
|
||
Trading account assets
|
8
|
|
8
|
|
||
Short-term investments
|
6
|
|
16
|
|
||
Other investments
|
1
|
|
4
|
|
||
Total interest income
|
1,251
|
|
1,304
|
|
||
INTEREST EXPENSE
|
|
|
||||
Deposits
|
169
|
|
202
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
6
|
|
1
|
|
||
Bank notes and other short-term borrowings
|
5
|
|
4
|
|
||
Long-term debt
|
90
|
|
120
|
|
||
Total interest expense
|
270
|
|
327
|
|
||
NET INTEREST INCOME
|
981
|
|
977
|
|
||
Provision for credit losses
|
359
|
|
62
|
|
||
Net interest income after provision for credit losses
|
622
|
|
915
|
|
||
NONINTEREST INCOME
|
|
|
||||
Trust and investment services income
|
133
|
|
115
|
|
||
Investment banking and debt placement fees
|
116
|
|
110
|
|
||
Service charges on deposit accounts
|
84
|
|
82
|
|
||
Operating lease income and other leasing gains
|
30
|
|
37
|
|
||
Corporate services income
|
62
|
|
55
|
|
||
Cards and payments income
|
66
|
|
66
|
|
||
Corporate-owned life insurance income
|
36
|
|
32
|
|
||
Consumer mortgage income
|
20
|
|
11
|
|
||
Commercial mortgage servicing fees
|
18
|
|
18
|
|
||
Other income (a)
|
(88
|
)
|
10
|
|
||
Total noninterest income
|
477
|
|
536
|
|
||
NONINTEREST EXPENSE
|
|
|
||||
Personnel
|
515
|
|
563
|
|
||
Net occupancy
|
76
|
|
72
|
|
||
Computer processing
|
55
|
|
54
|
|
||
Business services and professional fees
|
44
|
|
44
|
|
||
Equipment
|
24
|
|
24
|
|
||
Operating lease expense
|
36
|
|
26
|
|
||
Marketing
|
21
|
|
19
|
|
||
FDIC assessment
|
9
|
|
7
|
|
||
Intangible asset amortization
|
17
|
|
22
|
|
||
OREO expense, net
|
3
|
|
3
|
|
||
Other expense
|
131
|
|
129
|
|
||
Total noninterest expense
|
931
|
|
963
|
|
||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
168
|
|
488
|
|
||
Income taxes
|
23
|
|
82
|
|
||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
145
|
|
406
|
|
||
Income (loss) from discontinued operations
|
1
|
|
1
|
|
||
NET INCOME (LOSS)
|
146
|
|
407
|
|
||
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO KEY
|
$
|
146
|
|
$
|
407
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
118
|
|
$
|
386
|
|
Net income (loss) attributable to Key common shareholders
|
119
|
|
387
|
|
||
Per Common Share:
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.12
|
|
$
|
.38
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders (b)
|
.12
|
|
.38
|
|
||
Per Common Share — assuming dilution:
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.12
|
|
$
|
.38
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders (b)
|
.12
|
|
.38
|
|
||
Cash dividends declared per Common Share
|
$
|
.185
|
|
$
|
.17
|
|
Weighted-average Common Shares outstanding (000)
|
967,446
|
|
1,006,717
|
|
||
Effect of Common Share options and other stock awards
|
8,664
|
|
9,787
|
|
||
Weighted-average Common Shares and potential Common Shares outstanding (000) (c)
|
976,110
|
|
1,016,504
|
|
||
|
|
|
(a)
|
For the three months ended March 31, 2020, net securities gains (losses) totaled $4 million. For the three months ended March 31, 2019, net securities gains (losses) totaled less than $1 million. For the three months ended March 31, 2020, and March 31, 2019, Key did not have any impairment losses related to securities.
|
(b)
|
EPS may not foot due to rounding.
|
(c)
|
Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.
|
in millions
|
Three months ended March 31,
|
|||||
(Unaudited)
|
2020
|
|
2019
|
|
||
Net income (loss)
|
$
|
146
|
|
$
|
407
|
|
Other comprehensive income (loss), net of tax:
|
|
|
||||
Net unrealized gains (losses) on securities available for sale, net of income taxes of $126 and $56
|
405
|
|
184
|
|
||
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of $117 and $31
|
377
|
|
99
|
|
||
Foreign currency translation adjustments, net of income taxes of $0 and $0
|
—
|
|
3
|
|
||
Net pension and postretirement benefit costs, net of income taxes of $2 and $1
|
6
|
|
2
|
|
||
Total other comprehensive income (loss), net of tax
|
788
|
|
288
|
|
||
Comprehensive income (loss)
|
934
|
|
695
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
||
Comprehensive income (loss) attributable to Key
|
$
|
934
|
|
$
|
695
|
|
|
|
|
|
Key Shareholders’ Equity
|
|
|||||||||||||||||||||||
dollars in millions, except per share amounts
(Unaudited)
|
Preferred
Shares
Outstanding
(000)
|
Common
Shares
Outstanding
(000)
|
Preferred
Stock
|
Common
Shares
|
Capital
Surplus
|
Retained
Earnings
|
Treasury
Stock,
at Cost
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Noncontrolling
Interests
|
||||||||||||||||
BALANCE AT DECEMBER 31, 2018
|
946
|
|
1,019,503
|
|
$
|
1,450
|
|
$
|
1,257
|
|
$
|
6,331
|
|
$
|
11,556
|
|
$
|
(4,181
|
)
|
$
|
(818
|
)
|
$
|
1
|
|
Net income (loss)
|
|
|
|
|
|
407
|
|
|
|
—
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
288
|
|
|
|||||||||||||||
Deferred compensation
|
|
|
|
|
(3
|
)
|
|
|
|
|
|||||||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common Shares ($.17 per share)
|
|
|
|
|
|
(172
|
)
|
|
|
|
|||||||||||||||
Series D Preferred Stock ($12.50 per depositary share)
|
|
|
|
|
|
(6
|
)
|
|
|
|
|||||||||||||||
Series E Preferred Stock ($.382813 per depositary share)
|
|
|
|
|
|
(8
|
)
|
|
|
|
|||||||||||||||
Series F Preferred Stock ($.353125 per depositary share)
|
|
|
|
|
|
(6
|
)
|
|
|
|
|||||||||||||||
Open market Common Share repurchases
|
|
(9,968
|
)
|
|
|
|
|
(167
|
)
|
|
|
||||||||||||||
Employee equity compensation program Common Share repurchases
|
|
(1,823
|
)
|
|
|
(2
|
)
|
|
(32
|
)
|
|
|
|||||||||||||
Common Shares reissued (returned) for stock options and other employee benefit plans
|
|
5,474
|
|
|
|
(67
|
)
|
|
97
|
|
|
|
|||||||||||||
Net contribution from (distribution to) noncontrolling interests
|
|
|
|
|
|
|
|
|
1
|
|
|||||||||||||||
BALANCE AT MARCH 31, 2019
|
946
|
|
1,013,186
|
|
$
|
1,450
|
|
$
|
1,257
|
|
$
|
6,259
|
|
$
|
11,771
|
|
$
|
(4,283
|
)
|
$
|
(530
|
)
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE AT DECEMBER 31, 2019
|
1,396
|
|
977,189
|
|
1,900
|
|
1,257
|
|
6,295
|
|
12,469
|
|
(4,909
|
)
|
26
|
|
—
|
|
|||||||
Cumulative effect from changes in accounting principle (a)
|
|
|
|
|
|
(230
|
)
|
|
|
|
|||||||||||||||
Net income (loss)
|
|
|
|
|
|
146
|
|
|
|
—
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
788
|
|
|
|||||||||||||||
Deferred compensation
|
|
|
|
|
(1
|
)
|
|
|
|
|
|||||||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common Shares ($.185 per share)
|
|
|
|
|
|
(181
|
)
|
|
|
|
|||||||||||||||
Series D Preferred Stock ($12.50 per depositary share)
|
|
|
|
|
|
(7
|
)
|
|
|
|
|||||||||||||||
Series E Preferred Stock ($.382813 per depositary share)
|
|
|
|
|
|
(8
|
)
|
|
|
|
|||||||||||||||
Series F Preferred Stock ($.353125 per depositary share)
|
|
|
|
|
|
(6
|
)
|
|
|
|
|||||||||||||||
Series G Preferred Stock ($.351563 per depositary share)
|
|
|
|
|
|
(6
|
)
|
|
|
|
|||||||||||||||
Open market Common Share repurchases
|
|
(6,067
|
)
|
|
|
|
|
(117
|
)
|
|
|
||||||||||||||
Employee equity compensation program Common Share repurchases
|
|
(1,795
|
)
|
|
|
(72
|
)
|
|
(35
|
)
|
|
|
|||||||||||||
Common Shares reissued (returned) for stock options and other employee benefit plans
|
|
5,992
|
|
|
|
—
|
|
|
105
|
|
|
|
|||||||||||||
Net contribution from (distribution to) noncontrolling interests
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||
Other
|
|
|
|
|
|
(3
|
)
|
|
|
|
|||||||||||||||
BALANCE AT MARCH 31, 2020
|
1,396
|
|
975,319
|
|
$
|
1,900
|
|
$
|
1,257
|
|
$
|
6,222
|
|
$
|
12,174
|
|
$
|
(4,956
|
)
|
$
|
814
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes the impact of implementing ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. See Note 1 (“Basis of Presentation and Accounting Policies”) for more information on our adoption of this guidance and the impact to our results of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
Three months ended March 31,
|
||||||
(Unaudited)
|
2020
|
|
|
2019
|
|
||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (loss)
|
$
|
146
|
|
|
$
|
407
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Provision for credit losses
|
359
|
|
|
62
|
|
||
Depreciation and amortization expense, net
|
54
|
|
|
58
|
|
||
Accretion of acquired loans
|
10
|
|
|
17
|
|
||
Increase in cash surrender value of corporate-owned life insurance
|
(29
|
)
|
|
(28
|
)
|
||
Stock-based compensation expense
|
25
|
|
|
25
|
|
||
Deferred income taxes (benefit)
|
(18
|
)
|
|
99
|
|
||
Proceeds from sales of loans held for sale
|
2,687
|
|
|
2,045
|
|
||
Originations of loans held for sale, net of repayments
|
(3,256
|
)
|
|
(1,679
|
)
|
||
Net losses (gains) on sales of loans held for sale
|
(38
|
)
|
|
(28
|
)
|
||
Net losses (gains) on leased equipment
|
6
|
|
|
2
|
|
||
Net securities losses (gains)
|
(4
|
)
|
|
—
|
|
||
Net losses (gains) on sales of fixed assets
|
2
|
|
|
(1
|
)
|
||
Net decrease (increase) in trading account assets
|
245
|
|
|
(130
|
)
|
||
Other operating activities, net
|
(362
|
)
|
|
(289
|
)
|
||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
(173
|
)
|
|
560
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Net decrease (increase) in short-term investments, excluding acquisitions
|
(2,801
|
)
|
|
50
|
|
||
Purchases of securities available for sale
|
(190
|
)
|
|
(1,842
|
)
|
||
Proceeds from sales of securities available for sale
|
583
|
|
|
—
|
|
||
Proceeds from prepayments and maturities of securities available for sale
|
1,176
|
|
|
655
|
|
||
Proceeds from prepayments and maturities of held-to-maturity securities
|
434
|
|
|
295
|
|
||
Purchases of held-to-maturity securities
|
(4
|
)
|
|
(9
|
)
|
||
Purchases of other investments
|
(91
|
)
|
|
(16
|
)
|
||
Proceeds from sales of other investments
|
2
|
|
|
7
|
|
||
Proceeds from prepayments and maturities of other investments
|
10
|
|
|
32
|
|
||
Net decrease (increase) in loans, excluding acquisitions, sales and transfers
|
(8,902
|
)
|
|
(780
|
)
|
||
Proceeds from sales of portfolio loans
|
54
|
|
|
61
|
|
||
Proceeds from corporate-owned life insurance
|
19
|
|
|
16
|
|
||
Purchases of premises, equipment, and software
|
(12
|
)
|
|
(9
|
)
|
||
Proceeds from sales of premises and equipment
|
—
|
|
|
1
|
|
||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
(9,722
|
)
|
|
(1,539
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Net increase (decrease) in deposits, excluding acquisitions
|
3,434
|
|
|
866
|
|
||
Net increase (decrease) in short-term borrowings
|
5,958
|
|
|
83
|
|
||
Net proceeds from issuance of long-term debt
|
2,497
|
|
|
1,351
|
|
||
Payments on long-term debt
|
(1,506
|
)
|
|
(1,000
|
)
|
||
Open market Common Share repurchases
|
(117
|
)
|
|
(167
|
)
|
||
Employee equity compensation program Common Share repurchases
|
(35
|
)
|
|
(32
|
)
|
||
Net proceeds from reissuance of Common Shares
|
5
|
|
|
3
|
|
||
Cash dividends paid
|
(208
|
)
|
|
(192
|
)
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
10,028
|
|
|
912
|
|
||
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
|
133
|
|
|
(67
|
)
|
||
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD
|
732
|
|
|
678
|
|
||
CASH AND DUE FROM BANKS AT END OF PERIOD
|
$
|
865
|
|
|
$
|
611
|
|
Additional disclosures relative to cash flows:
|
|
|
|
||||
Interest paid
|
$
|
267
|
|
|
$
|
306
|
|
Income taxes paid (refunded)
|
35
|
|
|
34
|
|
||
Noncash items:
|
|
|
|
||||
Reduction of secured borrowing and related collateral
|
$
|
1
|
|
|
1
|
|
|
Loans transferred to portfolio from held for sale
|
10
|
|
|
5
|
|
||
Loans transferred to held for sale from portfolio
|
210
|
|
|
(10
|
)
|
||
Loans transferred to OREO
|
92
|
|
|
—
|
|
||
CMBS risk retentions
|
12
|
|
|
9
|
|
||
ABS risk retentions
|
11
|
|
|
—
|
|
||
|
|
|
|
|
Pre-ASC 326 Adoption
|
Impact of ASC 326 Adoption
|
As Reported Under ASC 326
|
||||||
in millions
|
December 31, 2019
|
January 1, 2020
|
|||||||
Allowance for credit losses
|
|
|
|
||||||
Commercial
|
|
|
|
||||||
Commercial and industrial
|
$
|
551
|
|
$
|
(141
|
)
|
$
|
410
|
|
Real estate — commercial mortgage
|
143
|
|
16
|
|
159
|
|
|||
Real estate — construction
|
22
|
|
(7
|
)
|
15
|
|
|||
Commercial lease financing
|
35
|
|
8
|
|
43
|
|
|||
Total commercial loans
|
751
|
|
(124
|
)
|
627
|
|
|||
Consumer
|
|
|
|
||||||
Real estate — residential mortgage
|
7
|
|
77
|
|
84
|
|
|||
Home equity loans
|
31
|
|
147
|
|
178
|
|
|||
Consumer direct loans
|
34
|
|
63
|
|
97
|
|
|||
Credit cards
|
47
|
|
35
|
|
82
|
|
|||
Consumer indirect loans
|
30
|
|
6
|
|
36
|
|
|||
Total consumer loans
|
149
|
|
328
|
|
477
|
|
|||
Total ALLL — continuing operations
|
900
|
|
204
|
|
1,104
|
|
|||
Discontinued operations
|
10
|
|
31
|
|
41
|
|
|||
Total ALLL
|
910
|
|
235
|
|
1,145
|
|
|||
Accrued expense and other liabilities
|
75
|
|
70
|
|
145
|
|
|||
Total allowance for credit losses
|
$
|
985
|
|
$
|
305
|
|
$
|
1,290
|
|
|
|
|
|
•
|
For commercial non-accruing loans greater than or equal to a defined dollar threshold, individual reserves are determined based on an analysis of the present value of the loan's expected future cash flows, the loan's observable market value, or the fair value of the collateral less costs to sell.
|
•
|
For commercial non-accruing loans below the defined dollar threshold, an established LGD percentage is multiplied by the loan balance and the results are aggregated for purposes of measuring specific reserve impairment.
|
•
|
The population of individually assessed consumer loans includes loans deemed collateral dependent, in addition to all TDRs. The expected loss for these loans is estimated based on the present value of the loan's expected future cash flows, except in instances where the loan is collateral dependent, in which case the loan is written down based on the collateral's fair market value less costs to sell.
|
•
|
PD: This component model is used to estimate the likelihood that a borrower will cease making payments as agreed. The major contributors to this are the borrower credit attributes and macro-economic trends. The objective of the PD model is to produce default likelihood forecasts based on the observed loan-level information and projected paths of macroeconomic variables.
|
•
|
LGD: This component model is used to estimate the loss on a loan once a loan is in default.
|
•
|
EAD: Estimates the loan balance at the time the borrower stops making payments. For all term loans, an amortization based formulaic approach is used for account level EAD estimates. We calculate EAD using a portfolio specific method in each of our revolving product portfolios. For line products that are unconditionally cancellable, the balances will either use a paydown curve or be held flat through the life of the loan.
|
•
|
The nature and volume of the institution’s financial assets;
|
•
|
The existence, growth, and effect of any concentrations of credit;
|
•
|
The volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets;
|
•
|
The value of the underlying collateral for loans that are not collateral dependent;
|
•
|
The institution’s lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries;
|
•
|
The quality of the institution’s credit review function;
|
•
|
The experience, ability, and depth of the institution’s lending, investment, collection, and other relevant management and staff;
|
•
|
The effect of other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters; and
|
•
|
Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the institution operates that affect the collectability of financial assets.
|
|
Three months ended March 31,
|
|||||
dollars in millions, except per share amounts
|
2020
|
2019
|
||||
EARNINGS
|
|
|
||||
Income (loss) from continuing operations
|
$
|
145
|
|
$
|
406
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
||
Income (loss) from continuing operations attributable to Key
|
145
|
|
406
|
|
||
Less: Dividends on Preferred Stock
|
27
|
|
20
|
|
||
Income (loss) from continuing operations attributable to Key common shareholders
|
118
|
|
386
|
|
||
Income (loss) from discontinued operations, net of taxes
|
1
|
|
1
|
|
||
Net income (loss) attributable to Key common shareholders
|
$
|
119
|
|
$
|
387
|
|
WEIGHTED-AVERAGE COMMON SHARES
|
|
|
||||
Weighted-average Common Shares outstanding (000)
|
967,446
|
|
1,006,717
|
|
||
Effect of Common Share options and other stock awards
|
8,664
|
|
9,787
|
|
||
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)
|
976,110
|
|
1,016,504
|
|
||
EARNINGS PER COMMON SHARE
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.12
|
|
$
|
.38
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders (b)
|
.12
|
|
.38
|
|
||
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
$
|
.12
|
|
$
|
.38
|
|
Income (loss) from discontinued operations, net of taxes — assuming dilution
|
—
|
|
—
|
|
||
Net income (loss) attributable to Key common shareholders — assuming dilution (b)
|
.12
|
|
.38
|
|
(a)
|
Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.
|
(b)
|
EPS may not foot due to rounding.
|
in millions
|
March 31, 2020
|
December 31, 2019
|
||||
Commercial and industrial (b)
|
$
|
55,983
|
|
$
|
48,295
|
|
Commercial real estate:
|
|
|
||||
Commercial mortgage
|
13,548
|
|
13,491
|
|
||
Construction
|
1,710
|
|
1,558
|
|
||
Total commercial real estate loans
|
15,258
|
|
15,049
|
|
||
Commercial lease financing (c)
|
4,677
|
|
4,688
|
|
||
Total commercial loans
|
75,918
|
|
68,032
|
|
||
Residential — prime loans:
|
|
|
||||
Real estate — residential mortgage
|
7,498
|
|
7,023
|
|
||
Home equity loans
|
10,103
|
|
10,274
|
|
||
Total residential — prime loans
|
17,601
|
|
17,297
|
|
||
Consumer direct loans
|
3,833
|
|
3,513
|
|
||
Credit cards
|
1,041
|
|
1,130
|
|
||
Consumer indirect loans
|
4,805
|
|
4,674
|
|
||
Total consumer loans
|
27,280
|
|
26,614
|
|
||
Total loans (d)
|
$
|
103,198
|
|
$
|
94,646
|
|
|
|
|
(a)
|
Accrued interest of $241 million and $244 million at March 31, 2020, and December 31, 2019, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
|
(b)
|
Loan balances include $143 million and $144 million of commercial credit card balances at March 31, 2020, and December 31, 2019, respectively.
|
(c)
|
Commercial lease financing includes receivables held as collateral for a secured borrowing of $14 million and $15 million at March 31, 2020, and December 31, 2019, 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”) beginning on page 163 of our 2019 Form 10-K.
|
(d)
|
Total loans exclude loans of $821 million at March 31, 2020, and $865 million at December 31, 2019, related to the discontinued operations of the education lending business.
|
in millions
|
January 1, 2020
|
Provision
|
|
Charge-offs
|
Recoveries
|
March 31, 2020
|
||||||||||
Commercial and Industrial
|
$
|
410
|
|
$
|
187
|
|
|
$
|
(60
|
)
|
$
|
5
|
|
$
|
542
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
159
|
|
50
|
|
|
(3
|
)
|
1
|
|
207
|
|
|||||
Real estate — construction
|
15
|
|
10
|
|
|
—
|
|
—
|
|
25
|
|
|||||
Total commercial real estate loans
|
174
|
|
60
|
|
|
(3
|
)
|
1
|
|
232
|
|
|||||
Commercial lease financing
|
43
|
|
3
|
|
|
(2
|
)
|
—
|
|
44
|
|
|||||
Total commercial loans
|
627
|
|
250
|
|
|
(65
|
)
|
6
|
|
818
|
|
|||||
Real estate — residential mortgage
|
84
|
|
5
|
|
|
—
|
|
—
|
|
89
|
|
|||||
Home equity loans
|
178
|
|
8
|
|
|
(4
|
)
|
2
|
|
184
|
|
|||||
Consumer direct loans
|
97
|
|
29
|
|
|
(12
|
)
|
2
|
|
116
|
|
|||||
Credit cards
|
82
|
|
31
|
|
|
(11
|
)
|
2
|
|
104
|
|
|||||
Consumer indirect loans
|
36
|
|
16
|
|
|
(9
|
)
|
5
|
|
48
|
|
|||||
Total consumer loans
|
477
|
|
89
|
|
|
(36
|
)
|
11
|
|
541
|
|
|||||
Total ALLL — continuing operations
|
1,104
|
|
339
|
|
(a)
|
(101
|
)
|
17
|
|
1,359
|
|
|||||
Discontinued operations
|
41
|
|
3
|
|
|
(2
|
)
|
1
|
|
43
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
1,145
|
|
$
|
342
|
|
|
$
|
(103
|
)
|
$
|
18
|
|
$
|
1,402
|
|
|
|
|
|
|
|
|
(a)
|
Excludes a provision for losses on lending-related commitments of $20 million.
|
Segment
|
Portfolio
|
Significant Macroeconomic Variables (a)
|
Commercial
|
Commercial and industrial
|
BBB corporate bond rate (spread), GDP, industrial production, and unemployment rate
|
Commercial real estate
|
BBB corporate bond rate (spread), property and real estate price indices, and unemployment rate
|
|
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
|
Home equity
|
Home price index, unemployment rate, and 30 year mortgage rate
|
|
Consumer direct
|
Unemployment rate and U.S. household income
|
|
Consumer indirect
|
New vehicle sales and unemployment rate
|
|
Credit cards
|
Unemployment rate and U.S. household income
|
|
Discontinued operations
|
Unemployment rate
|
(a)
|
Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.
|
in millions
|
December 31, 2018
|
Provision
|
|
Charge-offs
|
Recoveries
|
March 31, 2019
|
||||||||||
Commercial and Industrial
|
$
|
532
|
|
$
|
24
|
|
|
$
|
(36
|
)
|
$
|
10
|
|
$
|
530
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
142
|
|
6
|
|
|
(5
|
)
|
1
|
|
144
|
|
|||||
Real estate — construction
|
33
|
|
(1
|
)
|
|
(4
|
)
|
—
|
|
28
|
|
|||||
Total commercial real estate loans
|
175
|
|
5
|
|
|
(9
|
)
|
1
|
|
172
|
|
|||||
Commercial lease financing
|
36
|
|
6
|
|
|
(8
|
)
|
1
|
|
35
|
|
|||||
Total commercial loans
|
743
|
|
35
|
|
|
(53
|
)
|
12
|
|
737
|
|
|||||
Real estate — residential mortgage
|
7
|
|
1
|
|
|
(1
|
)
|
1
|
|
8
|
|
|||||
Home equity loans
|
35
|
|
3
|
|
|
(4
|
)
|
2
|
|
36
|
|
|||||
Consumer direct loans
|
30
|
|
12
|
|
|
(10
|
)
|
1
|
|
33
|
|
|||||
Credit cards
|
48
|
|
8
|
|
|
(11
|
)
|
2
|
|
47
|
|
|||||
Consumer indirect loans
|
20
|
|
5
|
|
|
(8
|
)
|
5
|
|
22
|
|
|||||
Total consumer loans
|
140
|
|
29
|
|
|
(34
|
)
|
11
|
|
146
|
|
|||||
Total ALLL — continuing operations
|
883
|
|
64
|
|
(a)
|
(87
|
)
|
23
|
|
883
|
|
|||||
Discontinued operations
|
14
|
|
2
|
|
|
(4
|
)
|
1
|
|
13
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
897
|
|
$
|
66
|
|
|
$
|
(91
|
)
|
$
|
24
|
|
$
|
896
|
|
|
|
|
|
|
|
|
(a)
|
Excludes a credit for losses on lending-related commitments of $2 million.
|
As of March 31, 2020
|
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
|
|
|||||||||||||||||||||||||
in millions
|
2019
|
2018
|
2017
|
2016
|
2015
|
Prior
|
Total
|
||||||||||||||||||||
Commercial and Industrial
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk Rating:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
$
|
3,137
|
|
$
|
7,197
|
|
$
|
5,497
|
|
$
|
3,517
|
|
$
|
2,541
|
|
$
|
3,947
|
|
$
|
28,058
|
|
$
|
145
|
|
$
|
54,039
|
|
Criticized (Accruing)
|
6
|
|
56
|
|
129
|
|
177
|
|
110
|
|
169
|
|
1,004
|
|
16
|
|
1,667
|
|
|||||||||
Criticized (Nonaccruing)
|
—
|
|
25
|
|
16
|
|
36
|
|
8
|
|
62
|
|
126
|
|
4
|
|
277
|
|
|||||||||
Total commercial and industrial
|
3,143
|
|
7,278
|
|
5,642
|
|
3,730
|
|
2,659
|
|
4,178
|
|
29,188
|
|
165
|
|
55,983
|
|
|||||||||
Real estate — commercial mortgage
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk Rating:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
726
|
|
3,346
|
|
2,074
|
|
1,067
|
|
1,011
|
|
3,774
|
|
1,089
|
|
42
|
|
13,129
|
|
|||||||||
Criticized (Accruing)
|
—
|
|
6
|
|
21
|
|
51
|
|
40
|
|
205
|
|
7
|
|
2
|
|
332
|
|
|||||||||
Criticized (Nonaccruing)
|
—
|
|
—
|
|
1
|
|
3
|
|
1
|
|
77
|
|
4
|
|
1
|
|
87
|
|
|||||||||
Total real estate — commercial mortgage
|
726
|
|
3,352
|
|
2,096
|
|
1,121
|
|
1,052
|
|
4,056
|
|
1,100
|
|
45
|
|
13,548
|
|
|||||||||
Real estate — construction
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk Rating:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
36
|
|
509
|
|
703
|
|
326
|
|
69
|
|
21
|
|
14
|
|
3
|
|
1,681
|
|
|||||||||
Criticized (Accruing)
|
—
|
|
—
|
|
—
|
|
—
|
|
23
|
|
3
|
|
1
|
|
—
|
|
27
|
|
|||||||||
Criticized (Nonaccruing)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2
|
|
—
|
|
—
|
|
2
|
|
||||||||||
Total real estate — construction
|
36
|
|
509
|
|
703
|
|
326
|
|
92
|
|
26
|
|
15
|
|
3
|
|
1,710
|
|
|||||||||
Commercial lease financing
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk Rating:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
313
|
|
1,348
|
|
763
|
|
697
|
|
345
|
|
1,162
|
|
—
|
|
—
|
|
4,628
|
|
|||||||||
Criticized (Accruing)
|
—
|
|
2
|
|
6
|
|
12
|
|
12
|
|
12
|
|
—
|
|
—
|
|
44
|
|
|||||||||
Criticized (Nonaccruing)
|
—
|
|
—
|
|
1
|
|
1
|
|
3
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||||||
Total commercial lease financing
|
313
|
|
1,350
|
|
770
|
|
710
|
|
360
|
|
1,174
|
|
|
—
|
|
4,677
|
|
||||||||||
Total commercial loans
|
$
|
4,218
|
|
$
|
12,489
|
|
$
|
9,211
|
|
$
|
5,887
|
|
$
|
4,163
|
|
$
|
9,434
|
|
$
|
30,303
|
|
$
|
213
|
|
$
|
75,918
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Accrued interest of $142 million, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.
|
As of March 31, 2020
|
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
|
|
|||||||||||||||||||||||||
in millions
|
2019
|
2018
|
2017
|
2016
|
2015
|
Prior
|
Total
|
||||||||||||||||||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO Score:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
750 and above
|
$
|
648
|
|
$
|
1,923
|
|
$
|
344
|
|
$
|
368
|
|
$
|
686
|
|
$
|
1,662
|
|
—
|
|
—
|
|
$
|
5,631
|
|
||
660 to 749
|
166
|
|
525
|
|
123
|
|
76
|
|
127
|
|
431
|
|
—
|
|
—
|
|
1,448
|
|
|||||||||
Less than 660
|
5
|
|
36
|
|
28
|
|
12
|
|
33
|
|
223
|
|
—
|
|
—
|
|
337
|
|
|||||||||
No Score
|
—
|
|
4
|
|
3
|
|
7
|
|
5
|
|
63
|
|
—
|
|
—
|
|
82
|
|
|||||||||
Total real estate — residential mortgage
|
819
|
|
2,488
|
|
498
|
|
463
|
|
851
|
|
2,379
|
|
—
|
|
—
|
|
7,498
|
|
|||||||||
Home equity loans
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO Score:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
750 and above
|
168
|
|
475
|
|
208
|
|
231
|
|
219
|
|
972
|
|
$
|
2,898
|
|
$
|
444
|
|
5,615
|
|
|||||||
660 to 749
|
58
|
|
296
|
|
142
|
|
154
|
|
128
|
|
476
|
|
1,902
|
|
228
|
|
3,384
|
|
|||||||||
Less than 660
|
5
|
|
57
|
|
41
|
|
34
|
|
38
|
|
186
|
|
648
|
|
71
|
|
1,080
|
|
|||||||||
No Score
|
5
|
|
3
|
|
1
|
|
1
|
|
—
|
|
3
|
|
8
|
|
3
|
|
24
|
|
|||||||||
Total home equity loans
|
236
|
|
831
|
|
392
|
|
420
|
|
385
|
|
1,637
|
|
5,456
|
|
746
|
|
10,103
|
|
|||||||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO Score:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
750 and above
|
359
|
|
1,283
|
|
157
|
|
48
|
|
26
|
|
74
|
|
137
|
|
—
|
|
2,084
|
|
|||||||||
660 to 749
|
111
|
|
429
|
|
117
|
|
38
|
|
23
|
|
44
|
|
304
|
|
—
|
|
1,066
|
|
|||||||||
Less than 660
|
3
|
|
47
|
|
31
|
|
13
|
|
7
|
|
14
|
|
113
|
|
—
|
|
228
|
|
|||||||||
No Score
|
170
|
|
67
|
|
30
|
|
23
|
|
17
|
|
15
|
|
133
|
|
—
|
|
455
|
|
|||||||||
Total consumer direct loans
|
643
|
|
1,826
|
|
335
|
|
122
|
|
73
|
|
147
|
|
687
|
|
—
|
|
3,833
|
|
|||||||||
Credit cards
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO Score:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
750 and above
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
459
|
|
—
|
|
459
|
|
|||||||||
660 to 749
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
459
|
|
—
|
|
459
|
|
|||||||||
Less than 660
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
122
|
|
—
|
|
122
|
|
|||||||||
No Score
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
|
|||||||||
Total credit cards
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,041
|
|
—
|
|
1,041
|
|
|||||||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO Score:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
750 and above
|
383
|
|
1,066
|
|
476
|
|
278
|
|
124
|
|
114
|
|
—
|
|
—
|
|
2,441
|
|
|||||||||
660 to 749
|
206
|
|
816
|
|
351
|
|
165
|
|
70
|
|
91
|
|
—
|
|
—
|
|
1,699
|
|
|||||||||
Less than 660
|
38
|
|
259
|
|
154
|
|
89
|
|
47
|
|
48
|
|
—
|
|
—
|
|
635
|
|
|||||||||
No Score
|
28
|
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
30
|
|
|||||||||
Total consumer indirect loans
|
655
|
|
2,142
|
|
981
|
|
532
|
|
241
|
|
254
|
|
—
|
|
—
|
|
4,805
|
|
|||||||||
Total consumer loans
|
$
|
2,353
|
|
$
|
7,287
|
|
$
|
2,206
|
|
$
|
1,537
|
|
$
|
1,550
|
|
$
|
4,417
|
|
$
|
7,184
|
|
$
|
746
|
|
$
|
27,280
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Accrued interest of $99 million, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.
|
March 31, 2020
|
Current
|
30-59
Days Past
Due (b)
|
60-89
Days Past
Due (b)
|
90 and
Greater
Days Past
Due (b)
|
Non-performing
Loans (c)
|
Total Past
Due and
Non-performing
Loans (c)
|
Total
Loans (d)
|
||||||||||||||
in millions
|
|||||||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
55,455
|
|
$
|
100
|
|
$
|
78
|
|
$
|
73
|
|
$
|
277
|
|
$
|
528
|
|
$
|
55,983
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||||||||
Commercial mortgage
|
13,381
|
|
28
|
|
34
|
|
18
|
|
87
|
|
167
|
|
13,548
|
|
|||||||
Construction
|
1,702
|
|
4
|
|
—
|
|
2
|
|
2
|
|
8
|
|
1,710
|
|
|||||||
Total commercial real estate loans
|
15,083
|
|
32
|
|
34
|
|
20
|
|
89
|
|
175
|
|
15,258
|
|
|||||||
Commercial lease financing
|
4,644
|
|
14
|
|
5
|
|
9
|
|
5
|
|
33
|
|
4,677
|
|
|||||||
Total commercial loans
|
$
|
75,182
|
|
$
|
146
|
|
$
|
117
|
|
$
|
102
|
|
$
|
371
|
|
$
|
736
|
|
$
|
75,918
|
|
Real estate — residential mortgage
|
$
|
7,397
|
|
$
|
10
|
|
$
|
2
|
|
$
|
—
|
|
$
|
89
|
|
$
|
101
|
|
$
|
7,498
|
|
Home equity loans
|
9,910
|
|
34
|
|
11
|
|
5
|
|
143
|
|
193
|
|
10,103
|
|
|||||||
Consumer direct loans
|
3,801
|
|
17
|
|
4
|
|
7
|
|
4
|
|
32
|
|
3,833
|
|
|||||||
Credit cards
|
1,015
|
|
7
|
|
5
|
|
11
|
|
3
|
|
26
|
|
1,041
|
|
|||||||
Consumer indirect loans
|
4,740
|
|
32
|
|
8
|
|
3
|
|
22
|
|
65
|
|
4,805
|
|
|||||||
Total consumer loans
|
$
|
26,863
|
|
$
|
100
|
|
$
|
30
|
|
$
|
26
|
|
$
|
261
|
|
$
|
417
|
|
$
|
27,280
|
|
Total loans
|
$
|
102,045
|
|
$
|
246
|
|
$
|
147
|
|
$
|
128
|
|
$
|
632
|
|
$
|
1,153
|
|
$
|
103,198
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts in table represent amortized cost and exclude loans held for sale.
|
(b)
|
Accrued interest of $241 million presented in “other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
|
(c)
|
PCI loans meeting nonperforming criteria were historically excluded from Key's nonperforming disclosures. As a result of CECL implementation on January 1, 2020, PCI loans became PCD loans. PCD loans that met the definition of nonperforming are now included in nonperforming disclosures.
|
(d)
|
Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.
|
December 31, 2019
|
Current
|
30-59
Days Past
Due (b)
|
60-89
Days Past
Due (b)
|
90 and
Greater
Days Past
Due (b)
|
Non-performing
Loans
|
Total Past
Due and
Non-performing
Loans
|
Purchased
Credit
Impaired
|
Total
Loans
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
47,768
|
|
$
|
110
|
|
$
|
52
|
|
$
|
53
|
|
$
|
264
|
|
$
|
479
|
|
48
|
|
$
|
48,295
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage
|
13,258
|
|
8
|
|
5
|
|
13
|
|
83
|
|
109
|
|
124
|
|
13,491
|
|
||||||||
Construction
|
1,551
|
|
3
|
|
—
|
|
1
|
|
2
|
|
6
|
|
1
|
|
1,558
|
|
||||||||
Total commercial real estate loans
|
14,809
|
|
11
|
|
5
|
|
14
|
|
85
|
|
115
|
|
125
|
|
15,049
|
|
||||||||
Commercial lease financing
|
4,647
|
|
22
|
|
11
|
|
2
|
|
6
|
|
41
|
|
—
|
|
4,688
|
|
||||||||
Total commercial loans
|
$
|
67,224
|
|
$
|
143
|
|
$
|
68
|
|
$
|
69
|
|
$
|
355
|
|
$
|
635
|
|
173
|
|
$
|
68,032
|
|
|
Real estate — residential mortgage
|
$
|
6,705
|
|
$
|
7
|
|
$
|
5
|
|
$
|
1
|
|
$
|
48
|
|
$
|
61
|
|
$
|
257
|
|
$
|
7,023
|
|
Home equity loans
|
10,071
|
|
30
|
|
10
|
|
5
|
|
145
|
|
190
|
|
13
|
|
10,274
|
|
||||||||
Consumer direct loans
|
3,484
|
|
10
|
|
5
|
|
7
|
|
4
|
|
26
|
|
3
|
|
3,513
|
|
||||||||
Credit cards
|
1,104
|
|
6
|
|
5
|
|
12
|
|
3
|
|
26
|
|
—
|
|
1,130
|
|
||||||||
Consumer indirect loans
|
4,609
|
|
32
|
|
8
|
|
3
|
|
22
|
|
65
|
|
—
|
|
4,674
|
|
||||||||
Total consumer loans
|
$
|
25,973
|
|
$
|
85
|
|
$
|
33
|
|
$
|
28
|
|
$
|
222
|
|
$
|
368
|
|
$
|
273
|
|
$
|
26,614
|
|
Total loans
|
$
|
93,197
|
|
$
|
228
|
|
$
|
101
|
|
$
|
97
|
|
$
|
577
|
|
$
|
1,003
|
|
$
|
446
|
|
$
|
94,646
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.
|
(b)
|
Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.
|
|
Three Months Ended March 31,
|
|||||
in millions
|
2020
|
2019
|
||||
Consumer loans:
|
|
|
||||
Interest rate reduction
|
$
|
9
|
|
$
|
4
|
|
Other
|
9
|
|
9
|
|
||
Total
|
$
|
18
|
|
$
|
13
|
|
Total TDRs
|
$
|
18
|
|
$
|
13
|
|
|
Three Months Ended March 31,
|
|||||
in millions
|
2020
|
2019
|
||||
Balance at beginning of the period
|
$
|
347
|
|
$
|
399
|
|
Additions
|
17
|
|
14
|
|
||
Payments
|
(18
|
)
|
(39
|
)
|
||
Charge-offs
|
(6
|
)
|
(9
|
)
|
||
Balance at end of period
|
$
|
340
|
|
$
|
365
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||
|
Number of
Loans
|
Pre-modification
Outstanding
Recorded
Investment
|
Post-modification
Outstanding
Recorded
Investment
|
|
Number of
Loans
|
Pre-modification
Outstanding
Recorded
Investment
|
Post-modification
Outstanding
Recorded
Investment
|
||||||||||
dollars in millions
|
|||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
||||||||||
Nonperforming:
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
35
|
|
$
|
65
|
|
$
|
43
|
|
|
51
|
|
$
|
72
|
|
$
|
53
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage
|
7
|
|
64
|
|
58
|
|
|
6
|
|
64
|
|
58
|
|
||||
Total commercial real estate loans
|
7
|
|
64
|
|
58
|
|
|
6
|
|
64
|
|
58
|
|
||||
Total commercial loans
|
42
|
|
129
|
|
101
|
|
|
57
|
|
136
|
|
111
|
|
||||
Real estate — residential mortgage
|
194
|
|
16
|
|
14
|
|
|
181
|
|
13
|
|
11
|
|
||||
Home equity loans
|
625
|
|
38
|
|
37
|
|
|
713
|
|
42
|
|
41
|
|
||||
Consumer direct loans
|
168
|
|
2
|
|
2
|
|
|
172
|
|
2
|
|
2
|
|
||||
Credit cards
|
324
|
|
2
|
|
2
|
|
|
368
|
|
2
|
|
2
|
|
||||
Consumer indirect loans
|
1,097
|
|
19
|
|
15
|
|
|
1,131
|
|
19
|
|
16
|
|
||||
Total consumer loans
|
2,408
|
|
77
|
|
70
|
|
|
2,565
|
|
78
|
|
72
|
|
||||
Total nonperforming TDRs
|
2,450
|
|
206
|
|
171
|
|
|
2,622
|
|
214
|
|
183
|
|
||||
Prior-year accruing:(a)
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
5
|
|
30
|
|
25
|
|
|
6
|
|
30
|
|
25
|
|
||||
Commercial real estate
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage
|
1
|
|
1
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
||||
Total commercial real estate loans
|
1
|
|
1
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
||||
Total commercial loans
|
6
|
|
31
|
|
25
|
|
|
7
|
|
30
|
|
25
|
|
||||
Real estate — residential mortgage
|
489
|
|
36
|
|
31
|
|
|
493
|
|
37
|
|
31
|
|
||||
Home equity loans
|
1,839
|
|
110
|
|
90
|
|
|
1,751
|
|
104
|
|
84
|
|
||||
Consumer direct loans
|
165
|
|
4
|
|
3
|
|
|
139
|
|
4
|
|
3
|
|
||||
Credit cards
|
577
|
|
3
|
|
1
|
|
|
486
|
|
3
|
|
1
|
|
||||
Consumer indirect loans
|
784
|
|
33
|
|
19
|
|
|
714
|
|
33
|
|
20
|
|
||||
Total consumer loans
|
3,854
|
|
186
|
|
144
|
|
|
3,583
|
|
181
|
|
139
|
|
||||
Total prior-year accruing TDRs
|
3,860
|
|
217
|
|
169
|
|
|
3,590
|
|
211
|
|
164
|
|
||||
Total TDRs
|
6,310
|
|
$
|
423
|
|
$
|
340
|
|
|
6,212
|
|
$
|
425
|
|
$
|
347
|
|
|
|
|
|
|
|
|
|
(a)
|
All TDRs that were restructured prior to January 1, 2020, and January 1, 2019, and are fully accruing.
|
|
Three months ended March 31,
|
|||||
in millions
|
2020
|
2019
|
||||
Balance at the end of the prior period
|
$
|
68
|
|
$
|
64
|
|
Liability for credit losses on contingent guarantees at the end of the prior period
|
7
|
|
—
|
|
||
Cumulative effect from change in accounting principle (a), (b)
|
66
|
|
—
|
|
||
Balance at beginning of period
|
141
|
|
64
|
|
||
Provision (credit) for losses on off balance sheet exposures
|
20
|
|
(2
|
)
|
||
Balance at end of period
|
$
|
161
|
|
$
|
62
|
|
|
|
|
(a)
|
The cumulative effect from change in accounting principle relates to the January 1, 2020, adoption of ASU 2016-13.
|
(b)
|
Excludes $4 million related to the provision for other financial assets.
|
|
March 31, 2020
|
December 31, 2019
|
||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
ASSETS MEASURED ON A RECURRING BASIS
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury, agencies and corporations
|
—
|
|
$
|
556
|
|
—
|
|
$
|
556
|
|
—
|
|
$
|
843
|
|
—
|
|
$
|
843
|
|
||||
States and political subdivisions
|
—
|
|
19
|
|
—
|
|
19
|
|
—
|
|
30
|
|
—
|
|
30
|
|
||||||||
Other mortgage-backed securities
|
—
|
|
176
|
|
—
|
|
176
|
|
—
|
|
78
|
|
—
|
|
78
|
|
||||||||
Other securities
|
—
|
|
38
|
|
—
|
|
38
|
|
—
|
|
44
|
|
—
|
|
44
|
|
||||||||
Total trading account securities
|
—
|
|
789
|
|
—
|
|
789
|
|
—
|
|
995
|
|
—
|
|
995
|
|
||||||||
Commercial loans
|
—
|
|
6
|
|
—
|
|
6
|
|
—
|
|
45
|
|
—
|
|
45
|
|
||||||||
Total trading account assets
|
—
|
|
795
|
|
—
|
|
795
|
|
—
|
|
1,040
|
|
—
|
|
1,040
|
|
||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury, agencies and corporations
|
—
|
|
341
|
|
—
|
|
341
|
|
—
|
|
334
|
|
—
|
|
334
|
|
||||||||
States and political subdivisions
|
—
|
|
4
|
|
—
|
|
4
|
|
—
|
|
4
|
|
—
|
|
4
|
|
||||||||
Agency residential collateralized mortgage obligations
|
—
|
|
12,045
|
|
—
|
|
12,045
|
|
—
|
|
12,783
|
|
—
|
|
12,783
|
|
||||||||
Agency residential mortgage-backed securities
|
—
|
|
1,539
|
|
—
|
|
1,539
|
|
—
|
|
1,714
|
|
—
|
|
1,714
|
|
||||||||
Agency commercial mortgage-backed securities
|
—
|
|
6,869
|
|
—
|
|
6,869
|
|
—
|
|
6,997
|
|
—
|
|
6,997
|
|
||||||||
Other securities
|
—
|
|
—
|
|
$
|
9
|
|
9
|
|
—
|
|
—
|
|
$
|
11
|
|
11
|
|
||||||
Total securities available for sale
|
—
|
|
20,798
|
|
9
|
|
20,807
|
|
—
|
|
21,832
|
|
11
|
|
21,843
|
|
||||||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct
|
—
|
|
—
|
|
1
|
|
1
|
|
—
|
|
—
|
|
1
|
|
1
|
|
||||||||
Indirect (measured at NAV) (a)
|
—
|
|
—
|
|
—
|
|
64
|
|
—
|
|
—
|
|
—
|
|
68
|
|
||||||||
Total principal investments
|
—
|
|
—
|
|
1
|
|
65
|
|
—
|
|
—
|
|
1
|
|
69
|
|
||||||||
Equity investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct
|
—
|
|
—
|
|
10
|
|
10
|
|
—
|
|
—
|
|
12
|
|
12
|
|
||||||||
Direct (measured at NAV) (a)
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
||||||||
Indirect (measured at NAV) (a)
|
—
|
|
—
|
|
—
|
|
8
|
|
—
|
|
—
|
|
—
|
|
8
|
|
||||||||
Total equity investments
|
—
|
|
—
|
|
10
|
|
19
|
|
—
|
|
—
|
|
12
|
|
21
|
|
||||||||
Total other investments
|
—
|
|
—
|
|
11
|
|
84
|
|
—
|
|
—
|
|
13
|
|
90
|
|
||||||||
Loans, net of unearned income (residential)
|
—
|
|
—
|
|
3
|
|
3
|
|
—
|
|
—
|
|
4
|
|
4
|
|
||||||||
Loans held for sale (residential)
|
—
|
|
142
|
|
10
|
|
152
|
|
—
|
|
140
|
|
—
|
|
140
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
—
|
|
1,845
|
|
96
|
|
1,941
|
|
—
|
|
941
|
|
22
|
|
963
|
|
||||||||
Foreign exchange
|
124
|
|
40
|
|
—
|
|
164
|
|
$
|
49
|
|
18
|
|
—
|
|
67
|
|
|||||||
Commodity
|
—
|
|
704
|
|
—
|
|
704
|
|
—
|
|
208
|
|
—
|
|
208
|
|
||||||||
Credit
|
—
|
|
6
|
|
5
|
|
11
|
|
—
|
|
—
|
|
1
|
|
1
|
|
||||||||
Other
|
—
|
|
34
|
|
23
|
|
57
|
|
—
|
|
9
|
|
5
|
|
14
|
|
||||||||
Derivative assets
|
124
|
|
2,629
|
|
124
|
|
2,877
|
|
49
|
|
1,176
|
|
28
|
|
1,253
|
|
||||||||
Netting adjustments (b)
|
—
|
|
—
|
|
—
|
|
(809
|
)
|
—
|
|
—
|
|
—
|
|
(473
|
)
|
||||||||
Total derivative assets
|
124
|
|
2,629
|
|
124
|
|
2,068
|
|
49
|
|
1,176
|
|
28
|
|
780
|
|
||||||||
Accrued income and other assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total assets on a recurring basis at fair value
|
$
|
124
|
|
$
|
24,364
|
|
$
|
157
|
|
$
|
23,909
|
|
$
|
49
|
|
$
|
24,188
|
|
$
|
56
|
|
$
|
23,897
|
|
LIABILITIES MEASURED ON A RECURRING BASIS
|
|
|
|
|
|
|
|
|
||||||||||||||||
Bank notes and other short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Short positions
|
$
|
124
|
|
$
|
482
|
|
—
|
|
$
|
606
|
|
$
|
19
|
|
$
|
686
|
|
—
|
|
$
|
705
|
|
||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
—
|
|
329
|
|
—
|
|
329
|
|
—
|
|
253
|
|
—
|
|
253
|
|
||||||||
Foreign exchange
|
117
|
|
40
|
|
—
|
|
157
|
|
43
|
|
17
|
|
—
|
|
60
|
|
||||||||
Commodity
|
—
|
|
690
|
|
—
|
|
690
|
|
—
|
|
200
|
|
—
|
|
200
|
|
||||||||
Credit
|
—
|
|
—
|
|
$
|
28
|
|
28
|
|
—
|
|
1
|
|
9
|
|
10
|
|
|||||||
Other
|
—
|
|
40
|
|
—
|
|
40
|
|
—
|
|
10
|
|
—
|
|
10
|
|
||||||||
Derivative liabilities
|
117
|
|
1,099
|
|
28
|
|
1,244
|
|
43
|
|
481
|
|
9
|
|
533
|
|
||||||||
Netting adjustments (b)
|
—
|
|
—
|
|
—
|
|
(595
|
)
|
—
|
|
—
|
|
—
|
|
(335
|
)
|
||||||||
Total derivative liabilities
|
117
|
|
1,099
|
|
28
|
|
649
|
|
43
|
|
481
|
|
9
|
|
198
|
|
||||||||
Total liabilities on a recurring basis at fair value
|
$
|
241
|
|
$
|
1,581
|
|
$
|
28
|
|
$
|
1,255
|
|
$
|
62
|
|
$
|
1,167
|
|
9
|
|
$
|
903
|
|
|
|
|
|
|
|
|
|
|
|
(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. 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.
|
Asset/liability class
|
Valuation technique
|
Valuation hierarchy classification(s)
|
Securities (trading account assets and available for sale)
|
Fair value of level 1 securities is determined by:
• Quoted market prices available in an active market for identical securities. This includes exchange-traded equity securities.
Fair value of level 2 securities is determined by:
• Pricing models (either by a third party pricing service or internally). Inputs include: yields, benchmark securities, bids, offers, actual trade data (i.e., spreads, credit ratings, and interest rates) for comparable assets, spread tables, matrices, high-grade scales, and option-adjusted spreads.
• Observable market prices of similar securities.
Fair value of level 3 securities is determined by:
• Internal models, principally discounted cash flow models (income approach).
• Revenue multiples of comparable public companies (market approach).
For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value.
The valuations provided by the third-party pricing service are based on observable market inputs, which include benchmark yields, reported trades, issuer spreads, benchmark securities, bids, offers, and reference data obtained from market research publications. Inputs used by the third-party pricing service in valuing CMOs and other mortgage-backed securities also include new issue data, monthly payment information, whole loan collateral performance, and “To Be Announced” prices. In valuations of securities issued by state and political subdivisions, inputs used by the third-party pricing service also include material event notices.
|
Level 1, 2, and 3 (primarily Level 2)
|
Commercial loans (trading account assets)
|
Fair value is based on:
• Observable market price spreads for similar loans. Valuations reflect prices within the bid-ask spread that are most representative of fair value.
|
Level 2
|
Principal investments (direct)
|
Direct principal investments consist of equity and debt instruments of private companies made by our principal investing entities. Fair value is determined using:
• Operating performance and market multiples of comparable businesses
• Other unique facts and circumstances related to each individual investment
Direct principal investments are accounted for as investment companies in accordance with the applicable accounting guidance, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings.
We are in the process of winding down our direct principal investment portfolio. As of March 31, 2020, the balance is less than $1 million.
|
Level 3
|
Principal investments (indirect)
|
Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed).
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 are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of March 31, 2020, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.
|
NAV
|
|
|
|
|
Financial support provided
|
||||||||||||||||
|
|
|
|
Three months ended March 31,
|
||||||||||||||||
|
March 31, 2020
|
|
2020
|
|
2019
|
|||||||||||||||
in millions
|
Fair
Value
|
Unfunded
Commitments
|
|
Funded
Commitments
|
Funded
Other
|
|
Funded
Commitments
|
Funded
Other
|
||||||||||||
INVESTMENT TYPE
|
|
|
|
|
|
|
|
|
||||||||||||
Direct investments
|
$
|
1
|
|
—
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
1
|
|
|||
Indirect investments (measured at NAV) (a)
|
64
|
|
$
|
20
|
|
|
$
|
—
|
|
—
|
|
|
$
|
1
|
|
—
|
|
|||
Total
|
$
|
65
|
|
$
|
20
|
|
|
—
|
|
$
|
—
|
|
|
$
|
1
|
|
$
|
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. At March 31, 2020, 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)
|
Other direct equity investments
|
Fair value is determined using:
• Discounted cash flows
• Operating performance and market/exit multiples of comparable businesses
• Other unique facts and circumstances related to each individual investment
For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. Level 2 investments reflect the price of recent investments, which is deemed representative of fair value.
|
Level 2 and 3
|
Other direct and indirect equity investments (NAV)
|
Certain direct 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.
|
NAV
|
Loans held for sale and held for investment (residential)
|
Residential mortgage loans held for sale are accounted for at fair value. The election of the fair value option aligns the accounting for these assets with the related forward loan sale commitments. Fair values are based on:
• Quoted market prices, where available
• Prices for other traded mortgage loans with similar characteristics
• Purchase commitments and bid information received from market participants
Prices are adjusted as necessary to include:
• The embedded servicing value in the loans
• 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: Certain residential loans held for sale contain salability exceptions that make them unable to be sold into the performing loan sales market. Loans in this category are transferred to the held to maturity loan portfolio and are included in “Loans, net of unearned income” on the balance sheet. This type of loan is classified as level 3 in the valuation hierarchy as transaction details regarding sales of this type of loan are often unavailable.
Fair value is based upon:
• Unobservable bid information from brokers and investors
Higher (lower) unobservable bid information would have resulted in higher (lower) fair value measurements.
|
Level 1, 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.
The majority of our derivative positions are level 2 and are valued using internally developed models based on market convention and observable market inputs. These derivative contracts include interest rate swaps, certain options, floors, cross currency swaps, credit default swaps, and forward mortgage loan sale commitments. Significant inputs used in the valuation models include:
• Interest rate curves
• Yield curves
• LIBOR and Overnight Index Swap (OIS) discount rates
• LIBOR and OIS curves, index pricing curves, foreign currency curves
• Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity)
|
Level 1, 2, and 3 (primarily level 2)
|
Asset/liability class
|
Valuation technique
|
Valuation hierarchy classification(s)
|
Derivatives (continued)
|
We have customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, including:
• Credit spreads and interest rates
The unobservable internally derived assumptions include:
• Loss given default
• Internal risk assessments of customers and the remaining term of the underlying transactions
The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, a higher loss probability and a lower credit rating would negatively affect the fair value of the risk participations and a lower loss probability and higher credit rating would positively affect the fair value of the risk participations.
We use interest rate lock commitments for our residential mortgage business, which are classified as Level 3 instruments. The significant components of the valuation model include:
• Interest rates observable in the market
• Investor supplied prices for similar securities
• The probability of the loan closing (i.e. the "pull-through" amount, a significant unobservable input). Increases (decreases) in the probability of the loan closing would have resulted in higher (lower) fair value measurements.
Valuation of residential mortgage forward sale commitments utilizes observable market prices of comparable commitments and mortgage securities (Level 2).
|
Level 1, 2, and 3 (primarily level 2)
|
Liability for short positions
|
This includes fixed income securities held by our broker dealer in its trading inventory. Fair value of level 1 securities is determined by:
• Quoted market prices available in an active market for identical securities
Fair value of level 2 securities is determined by:
• Observable market prices of similar securities
• Market activity, spreads, credit ratings and interest rates for each security type
|
Level 1 and 2
|
in millions
|
Beginning of Period Balance
|
Gains (Losses) Included in Other Comprehensive Income
|
Gains (Losses) Included in Earnings
|
Purchases
|
Sales
|
Settlements
|
Transfers Other
|
Transfers into Level 3
|
Transfers out of Level 3
|
End of Period Balance
|
Unrealized Gains (Losses) Included in Earnings
|
||||||||||||||||||||||||
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Other securities
|
$
|
11
|
|
$
|
(2
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
9
|
|
—
|
|
|
||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Direct
|
1
|
|
—
|
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
|
|||||||
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Direct
|
12
|
|
—
|
|
(2
|
)
|
(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
—
|
|
|
—
|
|
|
10
|
|
(2
|
)
|
(a)
|
||||||||
Loans held for sale (residential)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
$
|
10
|
|
—
|
|
|
—
|
|
|
10
|
|
—
|
|
|
||||||||
Loans, net of unearned income (residential)
|
4
|
|
—
|
|
—
|
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
3
|
|
—
|
|
|
|||||||||
Derivative instruments (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate
|
22
|
|
—
|
|
$
|
19
|
|
(c)
|
11
|
|
(1
|
)
|
—
|
|
—
|
|
55
|
|
(d)
|
$
|
(10
|
)
|
(d)
|
96
|
|
—
|
|
|
|||||||
Credit
|
(8
|
)
|
—
|
|
(16
|
)
|
(c)
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
—
|
|
|
|||||||||
Other (e)
|
5
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
18
|
|
—
|
|
|
—
|
|
|
23
|
|
—
|
|
|
in millions
|
Beginning of Period Balance
|
Gains (Losses) Included in Other Comprehensive Income
|
Gains (Losses) Included in Earnings
|
Purchases
|
Sales
|
Settlements
|
Transfers Other
|
Transfers into Level 3
|
Transfers out of Level 3
|
End of Period Balance
|
Unrealized Gains (Losses) Included in Earnings
|
|||||||||||||||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Other securities
|
$
|
20
|
|
5
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
25
|
|
—
|
|
|||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Direct (a)
|
1
|
|
—
|
|
—
|
|
|
$
|
1
|
|
$
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
|||||||
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Direct
|
7
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1
|
|
|
—
|
|
|
8
|
|
—
|
|
||||||||
Loans held for sale (residential)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
$
|
1
|
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
||||||||
Loans, net of unearned income (residential)
|
3
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
3
|
|
—
|
|
|||||||||
Derivative instruments (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate
|
5
|
|
—
|
|
$
|
1
|
|
(c)
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
(d)
|
$
|
(4
|
)
|
(d)
|
3
|
|
—
|
|
|||||||
Credit
|
—
|
|
—
|
|
—
|
|
|
(1
|
)
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
—
|
|
||||||||
Other (e)
|
3
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
$
|
1
|
|
—
|
|
|
—
|
|
|
4
|
|
—
|
|
(a)
|
Realized and unrealized gains and losses on principal investments and other equity investments are reported in “other income” on the income statement.
|
(b)
|
Amounts represent Level 3 derivative assets less Level 3 derivative liabilities.
|
(c)
|
Realized and unrealized gains and losses on derivative instruments are reported in “corporate services income” and “other income” on the income statement.
|
(d)
|
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.
|
(e)
|
Amounts represent Level 3 interest rate lock commitments.
|
|
March 31, 2020
|
|
December 31, 2019
|
|||||||||||||||||||
in millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
ASSETS MEASURED ON A NONRECURRING BASIS
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Impaired loans and leases
|
—
|
|
$
|
—
|
|
$
|
33
|
|
$
|
33
|
|
|
—
|
|
—
|
|
$
|
76
|
|
$
|
76
|
|
Accrued income and other assets
|
—
|
|
—
|
|
64
|
|
64
|
|
|
—
|
|
118
|
|
51
|
|
169
|
|
|||||
Total assets on a nonrecurring basis at fair value
|
—
|
|
$
|
—
|
|
$
|
97
|
|
$
|
97
|
|
|
—
|
|
118
|
|
$
|
127
|
|
$
|
245
|
|
|
|
|
|
|
|
|
|
|
|
Asset/liability class
|
Valuation technique
|
Valuation hierarchy classification(s)
|
Impaired loans and leases
|
Loans are evaluated for impairment on a quarterly basis; impairment typically occurs when there is evidence of a probable loss and the expected value of the loan is less than the contractual value of the loan. The amount of the impairment may be determined based on the estimated present value of future cash flows, the fair value of the underlying collateral (Level 3), or the loan’s observable market price based on recent sales of similar loans and collateral (Level 2).
Cash flow analysis considers internally developed inputs including:
• Discount rates
• Default rates
• Changes in collateral values and costs of foreclosure
|
Level 2 and 3
|
Commercial loans and student loans held for sale
|
Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include:
• Non-binding bids for the respective loans or similar loans
• Recent sales transactions
• Internal models that emulate recent securitizations
|
Level 2 and 3
|
(a)
|
Asset classes included in “Accrued income and other assets” on the Consolidated Balance Sheets
|
|
Level 3 Asset (Liability)
|
Valuation Technique
|
Significant
Unobservable Input
|
Range (Weighted-Average) (b), (c)
|
||||||
dollars in millions
|
March 31, 2020
|
December 31, 2019
|
March 31, 2020
|
December 31, 2019
|
||||||
Recurring
|
|
|
|
|
|
|
||||
Securities available-for-sale:
|
|
|
|
|
|
|
||||
Other securities
|
$
|
9
|
|
$
|
11
|
|
Discounted cash flows
|
Discount rate
|
N/A (14.82%)
|
N/A (16.10%)
|
|
|
|
|
Marketability discount
|
N/A (30.00%)
|
N/A (30.00%)
|
||||
|
|
|
|
Volatility factor
|
N/A (43.00%)
|
N/A (43.00%)
|
||||
Other investments:(a)
|
|
|
|
|
|
|
||||
Equity investments
|
|
|
|
|
|
|
||||
Direct
|
10
|
|
12
|
|
Discounted cash flows
|
Discount rate
|
12.40 - 17.03% (14.75%)
|
13.91 - 17.24% (15.61%)
|
||
|
|
|
|
Marketability discount
|
N/A (30.00%)
|
N/A (30.00%)
|
||||
|
|
|
|
Volatility factor
|
N/A (51.00%)
|
N/A (47.00%)
|
||||
Loans held for sale (residential)
|
10
|
|
—
|
|
Market comparable pricing
|
Comparability factor
|
104.15-107.01% (105.25%)
|
N/A
|
||
Loans, net of unearned income (residential)
|
3
|
|
4
|
|
Market comparable pricing
|
Comparability factor
|
79.00-98.00% (91.07%)
|
79.00 - 98.00% (91.05%)
|
||
Derivative instruments:
|
|
|
|
|
|
|
||||
Interest rate
|
96
|
|
22
|
|
Discounted cash flows
|
Probability of default
|
.02 - 100% (13.90%)
|
.02 - 100% (5.40%)
|
||
|
|
|
|
Internal risk rating
|
1 - 19 (9.178)
|
1 - 19 (9.168)
|
||||
|
|
|
|
Loss given default
|
0 - 1 (.476)
|
0 - 1 (.492)
|
||||
Credit (assets)
|
5
|
|
1
|
|
Discounted cash flows
|
Probability of default
|
.02 - 100% (13.30%)
|
.02 - 100% (4.2%)
|
||
|
|
|
|
Internal risk rating
|
1 - 19 (10.14)
|
1 - 19 (10.13)
|
||||
|
|
|
|
Loss given default
|
0 - 1 (.493)
|
0 - 1 (.498)
|
||||
Credit (liabilities)
|
(28
|
)
|
(9
|
)
|
Discounted cash flows
|
Probability of default
|
.02 - 100% (25.19%)
|
.02 - 100% (12.24%)
|
||
|
|
|
|
Internal risk rating
|
1 - 19 (7.76)
|
1 - 19 (8.058)
|
||||
|
|
|
|
Loss given default
|
0 - 1 (.394)
|
0 - 1 (.411)
|
||||
Other(d)
|
23
|
|
5
|
|
Discounted cash flows
|
Loan closing rates
|
27.34-99.31 % (74.08%)
|
37.71 - 99.69% (79.33%)
|
||
Nonrecurring
|
|
|
|
|
|
|
||||
Impaired loans
|
33
|
|
76
|
|
Fair value of underlying collateral
|
Discount rate
|
0 - 90.00% (23.00%)
|
0 - 60.00% (10.00%)
|
||
Accrued income and other assets:
|
|
|
|
|
|
|
||||
OREO and other Level 3 assets (e)
|
2
|
|
5
|
|
Appraised value
|
Appraised value
|
N/M
|
N/M
|
(a)
|
Principal investments, direct is excluded from this table as the balance at March 31, 2020, and December 31, 2019, is insignificant (less than $1 million).
|
(b)
|
The weighted average of significant unobservable inputs is calculated using a weighting relative to fair value.
|
(c)
|
For significant unobservable inputs with no range, a single figure is reported to denote the single quantitative factor used.
|
(d)
|
Amounts represent interest rate lock commitments.
|
(e)
|
Excludes $62 million and $46 million pertaining to mortgage servicing assets at March 31, 2020 and December 31, 2019. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.
|
|
March 31, 2020
|
|||||||||||||||||||||
|
|
Fair Value
|
||||||||||||||||||||
in millions
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Measured
at NAV
|
Netting
Adjustment
|
|
Total
|
||||||||||||||
ASSETS (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Trading account assets (b)
|
$
|
795
|
|
$
|
—
|
|
$
|
795
|
|
—
|
|
—
|
|
—
|
|
|
$
|
795
|
|
|||
Other investments (b)
|
679
|
|
—
|
|
—
|
|
$
|
606
|
|
$
|
73
|
|
—
|
|
|
679
|
|
|||||
Loans, net of unearned income (residential) (d)
|
3
|
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|
3
|
|
|||||||
Loans held for sale (residential) (b)
|
152
|
|
—
|
|
142
|
|
10
|
|
—
|
|
—
|
|
|
152
|
|
|||||||
Derivative assets - trading (b)
|
2,008
|
|
124
|
|
2,563
|
|
124
|
|
—
|
|
$
|
(803
|
)
|
(f)
|
2,008
|
|
||||||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale (b)
|
20,807
|
|
—
|
|
20,798
|
|
$
|
9
|
|
—
|
|
—
|
|
|
20,807
|
|
||||||
Derivative assets - hedging (b)(g)
|
60
|
|
—
|
|
66
|
|
—
|
|
—
|
|
(6
|
)
|
(f)
|
60
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Held-to-maturity securities (c)
|
9,638
|
|
—
|
|
10,012
|
|
—
|
|
—
|
|
—
|
|
|
10,012
|
|
|||||||
Loans, net of unearned income (d)
|
101,836
|
|
—
|
|
—
|
|
99,535
|
|
—
|
|
—
|
|
|
99,535
|
|
|||||||
Loans held for sale (b)
|
1,991
|
|
—
|
|
—
|
|
1,991
|
|
—
|
|
—
|
|
|
1,991
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and short-term investments (a)
|
4,938
|
|
4,938
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
4,938
|
|
|||||||
LIABILITIES (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - trading (b)
|
$
|
649
|
|
$
|
117
|
|
$
|
1,096
|
|
28
|
|
—
|
|
$
|
(592
|
)
|
(f)
|
$
|
649
|
|
||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - hedging (b)(g)
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
(3
|
)
|
(f)
|
—
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Time deposits (e)
|
10,253
|
|
—
|
|
10,336
|
|
—
|
|
—
|
|
—
|
|
|
10,336
|
|
|||||||
Short-term borrowings (a)
|
7,050
|
|
124
|
|
6,926
|
|
—
|
|
—
|
|
—
|
|
|
7,050
|
|
|||||||
Long-term debt (e)
|
13,732
|
|
13,144
|
|
715
|
|
—
|
|
—
|
|
—
|
|
|
13,859
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits with no stated maturity (a)
|
105,051
|
|
—
|
|
105,051
|
|
—
|
|
—
|
|
—
|
|
|
105,051
|
|
|
December 31, 2019
|
|||||||||||||||||||||
|
|
Fair Value
|
||||||||||||||||||||
in millions
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Measured
at NAV
|
Netting
Adjustment
|
|
Total
|
||||||||||||||
ASSETS (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Trading account assets (b)
|
$
|
1,040
|
|
—
|
|
$
|
1,040
|
|
—
|
|
—
|
|
—
|
|
|
$
|
1,040
|
|
||||
Other investments (b)
|
605
|
|
—
|
|
—
|
|
$
|
528
|
|
$
|
77
|
|
—
|
|
|
605
|
|
|||||
Loans, net of unearned income (residential) (d)
|
4
|
|
—
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|
4
|
|
|||||||
Loans held for sale (residential) (b)
|
140
|
|
—
|
|
140
|
|
—
|
|
—
|
|
—
|
|
|
140
|
|
|||||||
Derivative assets - trading (b)
|
715
|
|
$
|
49
|
|
985
|
|
28
|
|
—
|
|
$
|
(347
|
)
|
(f)
|
715
|
|
|||||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale (b)
|
21,843
|
|
—
|
|
21,832
|
|
11
|
|
—
|
|
—
|
|
|
21,843
|
|
|||||||
Derivative assets - hedging (b)(g)
|
65
|
|
—
|
|
191
|
|
—
|
|
—
|
|
(126
|
)
|
(f)
|
65
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Held-to-maturity securities (c)
|
10,067
|
|
—
|
|
10,116
|
|
—
|
|
—
|
|
—
|
|
|
10,116
|
|
|||||||
Loans, net of unearned income (d)
|
93,742
|
|
—
|
|
—
|
|
92,641
|
|
—
|
|
—
|
|
|
92,641
|
|
|||||||
Loans held for sale (b)
|
1,194
|
|
—
|
|
—
|
|
1,194
|
|
—
|
|
—
|
|
|
1,194
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and short-term investments (a)
|
2,004
|
|
2,004
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,004
|
|
|||||||
LIABILITIES (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - trading (b)
|
$
|
194
|
|
$
|
43
|
|
$
|
461
|
|
9
|
|
—
|
|
$
|
(319
|
)
|
(f)
|
$
|
194
|
|
||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - hedging (b)(g)
|
4
|
|
—
|
|
20
|
|
—
|
|
—
|
|
(16
|
)
|
(f)
|
4
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Time deposits (e)
|
11,652
|
|
—
|
|
11,752
|
|
—
|
|
—
|
|
—
|
|
|
11,752
|
|
|||||||
Short-term borrowings (a)
|
1,092
|
|
19
|
|
1,073
|
|
—
|
|
—
|
|
—
|
|
|
1,092
|
|
|||||||
Long-term debt (e)
|
12,448
|
|
12,694
|
|
249
|
|
—
|
|
—
|
|
—
|
|
|
12,943
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits with no stated maturity (a)
|
100,218
|
|
—
|
|
100,218
|
|
—
|
|
—
|
|
—
|
|
|
100,218
|
|
(a)
|
Fair value equals or approximates carrying amount. 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. 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.
|
(d)
|
The fair value of loans is based on the present value of the expected cash flows. The projected cash flows are based on the contractual terms of the loans, adjusted for prepayments and use of a discount rate based on the relative risk of the cash flows, taking into account the loan type, maturity of the loan, liquidity risk, servicing costs, and a required return on debt and capital. In addition, an incremental liquidity discount is applied to certain loans, using historical sales of loans during periods of similar economic conditions as a benchmark. 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 (“1. Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 105 of our 2019 Form 10-K.
|
•
|
Loans at carrying value, net of allowance, of $778 million ($649 million at fair value) at March 31, 2020, and $855 million ($729 million at fair value) at December 31, 2019;
|
•
|
Portfolio loans at fair value of $2 million at March 31, 2020, and $2 million at December 31, 2019.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||
in millions
|
Amortized
Cost (a)
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair
Value
|
|
Amortized
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair
Value
|
||||||||||||||||
SECURITIES AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury, agencies, and corporations
|
$
|
340
|
|
$
|
1
|
|
—
|
|
$
|
341
|
|
|
$
|
334
|
|
—
|
|
—
|
|
$
|
334
|
|
|||
States and political subdivisions
|
4
|
|
—
|
|
—
|
|
4
|
|
|
4
|
|
—
|
|
—
|
|
4
|
|
||||||||
Agency residential collateralized mortgage obligations
|
11,705
|
|
342
|
|
$
|
2
|
|
12,045
|
|
|
12,772
|
|
$
|
82
|
|
$
|
71
|
|
12,783
|
|
|||||
Agency residential mortgage-backed securities
|
1,472
|
|
67
|
|
—
|
|
1,539
|
|
|
1,677
|
|
41
|
|
4
|
|
1,714
|
|
||||||||
Agency commercial mortgage-backed securities
|
6,597
|
|
277
|
|
5
|
|
6,869
|
|
|
6,898
|
|
139
|
|
40
|
|
6,997
|
|
||||||||
Other securities
|
8
|
|
1
|
|
—
|
|
9
|
|
|
7
|
|
4
|
|
—
|
|
11
|
|
||||||||
Total securities available for sale
|
$
|
20,126
|
|
$
|
688
|
|
$
|
7
|
|
$
|
20,807
|
|
|
$
|
21,692
|
|
$
|
266
|
|
$
|
115
|
|
$
|
21,843
|
|
HELD-TO-MATURITY SECURITIES
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency residential collateralized mortgage obligations
|
$
|
5,354
|
|
$
|
157
|
|
—
|
|
$
|
5,511
|
|
|
$
|
5,692
|
|
$
|
23
|
|
$
|
49
|
|
$
|
5,666
|
|
|
Agency residential mortgage-backed securities
|
390
|
|
19
|
|
—
|
|
409
|
|
|
409
|
|
6
|
|
—
|
|
415
|
|
||||||||
Agency commercial mortgage-backed securities
|
3,868
|
|
198
|
|
—
|
|
4,066
|
|
|
3,940
|
|
78
|
|
9
|
|
4,009
|
|
||||||||
Asset-backed securities
|
11
|
|
—
|
|
—
|
|
11
|
|
|
11
|
|
—
|
|
—
|
|
11
|
|
||||||||
Other securities
|
15
|
|
—
|
|
—
|
|
15
|
|
|
15
|
|
—
|
|
—
|
|
15
|
|
||||||||
Total held-to-maturity securities
|
$
|
9,638
|
|
$
|
374
|
|
—
|
|
$
|
10,012
|
|
|
$
|
10,067
|
|
$
|
107
|
|
$
|
58
|
|
$
|
10,116
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amortized cost amounts exclude accrued interest receivable which is recorded within “other assets” on the balance sheet. At March 31, 2020, accrued interest receivable on available for sale securities and held-to-maturity securities totaled $42 million and $19 million, respectively.
|
|
Duration of Unrealized Loss Position
|
|
|
|
||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
|||||||||||||||
in millions
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
$
|
135
|
|
—
|
|
(a)
|
$
|
416
|
|
$
|
2
|
|
|
$
|
551
|
|
$
|
2
|
|
|
Agency residential mortgage-backed securities
|
10
|
|
—
|
|
(a)
|
7
|
|
—
|
|
(a)
|
17
|
|
—
|
|
||||||
Agency commercial mortgage-backed securities
|
1,083
|
|
$
|
5
|
|
|
—
|
|
—
|
|
|
1,083
|
|
5
|
|
|||||
Other securities
|
1
|
|
—
|
|
(a)
|
—
|
|
—
|
|
|
1
|
|
—
|
|
||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
8
|
|
—
|
|
(a)
|
60
|
|
—
|
|
(a)
|
68
|
|
—
|
|
||||||
Asset-backed securities
|
2
|
|
—
|
|
(a)
|
—
|
|
—
|
|
|
2
|
|
—
|
|
||||||
Other securities
|
8
|
|
—
|
|
(a)
|
—
|
|
—
|
|
|
8
|
|
—
|
|
||||||
Total securities in an unrealized loss position
|
$
|
1,247
|
|
$
|
5
|
|
|
$
|
483
|
|
$
|
2
|
|
|
$
|
1,730
|
|
$
|
7
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury, agencies, and corporations
|
$
|
30
|
|
—
|
|
(b)
|
$
|
30
|
|
—
|
|
(b)
|
$
|
60
|
|
—
|
|
|||
Agency residential collateralized mortgage obligations
|
3,432
|
|
$
|
20
|
|
|
3,221
|
|
$
|
51
|
|
|
6,653
|
|
$
|
71
|
|
|||
Agency residential mortgage-backed securities
|
33
|
|
—
|
|
(b)
|
629
|
|
4
|
|
|
662
|
|
4
|
|
||||||
Agency commercial mortgage-backed securities
|
1,541
|
|
17
|
|
|
1,213
|
|
23
|
|
|
2,754
|
|
40
|
|
||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
1,626
|
|
14
|
|
|
2,289
|
|
35
|
|
|
3,915
|
|
49
|
|
||||||
Agency residential mortgage-backed securities
|
56
|
|
—
|
|
(b)
|
—
|
|
—
|
|
|
56
|
|
—
|
|
||||||
Agency commercial mortgage-backed securities
|
518
|
|
9
|
|
|
—
|
|
—
|
|
|
518
|
|
9
|
|
||||||
Asset-backed securities
|
11
|
|
—
|
|
(b)
|
—
|
|
—
|
|
|
11
|
|
—
|
|
||||||
Other securities
|
3
|
|
—
|
|
(b)
|
—
|
|
—
|
|
|
3
|
|
—
|
|
||||||
Total securities in an unrealized loss position
|
$
|
7,250
|
|
$
|
60
|
|
|
$
|
7,382
|
|
$
|
113
|
|
|
$
|
14,632
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At March 31, 2020, gross unrealized losses totaled less than $1 million for agency residential collateralized mortgage obligations, agency residential mortgage-backed securities, and other securities available for sale with a loss duration of less than 12 months. At March 31, 2020, gross unrealized losses totaled less than $1 million for agency residential collateralized mortgage obligations, asset-backed securities, and other securities held-to-maturity with a loss duration of less than 12 months. At March 31, 2020, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration greater than 12 months or longer. At March 31, 2020, gross unrealized losses totaled less than $1 million for agency residential collateralized mortgage obligations held-to-maturity with a loss duration greater than 12 months or longer.
|
(b)
|
At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months. At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, Agencies, and Corporations securities available for sale with a loss duration greater than 12 months or longer. At December 31, 2019, gross unrealized losses totaled less than $1 million for agency residential residential mortgage-backed securities, asset-backed securities, and other securities held-to-maturity with a loss duration of less than 12 months.
|
March 31, 2020
|
Securities Available for Sale
|
Held to Maturity Securities
|
||||||||||
in millions
|
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||
Due in one year or less
|
$
|
571
|
|
$
|
577
|
|
$
|
60
|
|
$
|
61
|
|
Due after one through five years
|
14,660
|
|
15,101
|
|
6,690
|
|
6,881
|
|
||||
Due after five through ten years
|
4,893
|
|
5,127
|
|
2,888
|
|
3,070
|
|
||||
Due after ten years
|
2
|
|
2
|
|
—
|
|
—
|
|
||||
Total
|
$
|
20,126
|
|
$
|
20,807
|
|
$
|
9,638
|
|
$
|
10,012
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||
|
|
Fair Value
|
|
|
Fair Value
|
||||||||||||||
in millions
|
Notional
Amount
|
Derivative
Assets
|
Derivative
Liabilities
|
|
Notional
Amount
|
Derivative
Assets
|
Derivative
Liabilities
|
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
$
|
25,804
|
|
$
|
66
|
|
$
|
3
|
|
|
$
|
39,208
|
|
$
|
191
|
|
$
|
20
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
77,335
|
|
1,875
|
|
326
|
|
|
71,209
|
|
772
|
|
233
|
|
||||||
Foreign exchange
|
6,340
|
|
164
|
|
157
|
|
|
6,572
|
|
67
|
|
60
|
|
||||||
Commodity
|
4,556
|
|
704
|
|
690
|
|
|
5,324
|
|
208
|
|
200
|
|
||||||
Credit
|
959
|
|
11
|
|
28
|
|
|
427
|
|
1
|
|
10
|
|
||||||
Other (a)
|
5,408
|
|
57
|
|
40
|
|
|
3,337
|
|
14
|
|
10
|
|
||||||
Total
|
94,598
|
|
2,811
|
|
1,241
|
|
|
86,869
|
|
1,062
|
|
513
|
|
||||||
Netting adjustments (b)
|
—
|
|
(809
|
)
|
(595
|
)
|
|
—
|
|
(473
|
)
|
(335
|
)
|
||||||
Net derivatives in the balance sheet
|
120,402
|
|
2,068
|
|
649
|
|
|
126,077
|
|
780
|
|
198
|
|
||||||
Other collateral (c)
|
—
|
|
(3
|
)
|
—
|
|
|
—
|
|
(2
|
)
|
(42
|
)
|
||||||
Net derivative amounts
|
$
|
120,402
|
|
$
|
2,065
|
|
$
|
649
|
|
|
$
|
126,077
|
|
$
|
778
|
|
$
|
156
|
|
|
|
|
|
|
|
|
|
(a)
|
Other derivatives include interest rate lock commitments and 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.
|
(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.
|
(c)
|
Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.
|
(a)
|
The carrying amount represents the portion of the liability designated as the hedged item.
|
(b)
|
Basis adjustments related to de-designated hedged items that no longer qualify as fair value hedges reduced the hedge accounting basis adjustment by $9 million and $9 million at March 31, 2020, and December 31, 2019, respectively,
|
|
Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
|
|||||||||||
in millions
|
Interest expense – long-term debt
|
Interest income – loans
|
Interest expense - deposits
|
Other income
|
||||||||
Three months ended March 31, 2020
|
|
|
|
|
||||||||
Total amounts presented in the consolidated statement of income
|
$
|
(90
|
)
|
$
|
1,026
|
|
$
|
(169
|
)
|
$
|
(88
|
)
|
|
|
|
|
|
||||||||
Net gains (losses) on fair value hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Recognized on hedged items
|
(294
|
)
|
—
|
|
—
|
|
—
|
|
||||
Recognized on derivatives designated as hedging instruments
|
311
|
|
—
|
|
—
|
|
—
|
|
||||
Net income (expense) recognized on fair value hedges
|
$
|
17
|
|
—
|
|
—
|
|
—
|
|
|||
Net gain (loss) on cash flow hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
|
$
|
(1
|
)
|
$
|
34
|
|
—
|
|
—
|
|
||
Net income (expense) recognized on cash flow hedges
|
$
|
(1
|
)
|
$
|
34
|
|
—
|
|
—
|
|
||
|
|
|
|
|
||||||||
Three months ended March 31, 2019
|
|
|
|
|
||||||||
Total amounts presented in the consolidated statement of income
|
$
|
(120
|
)
|
$
|
1,066
|
|
$
|
(202
|
)
|
$
|
10
|
|
|
|
|
|
|
||||||||
Net gains (losses) on fair value hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Recognized on hedged items
|
$
|
(93
|
)
|
—
|
|
$
|
—
|
|
—
|
|
||
Recognized on derivatives designated as hedging instruments
|
82
|
|
—
|
|
—
|
|
—
|
|
||||
Net income (expense) recognized on fair value hedges
|
$
|
(11
|
)
|
—
|
|
$
|
—
|
|
—
|
|
||
Net gain (loss) on cash flow hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
|
$
|
(1
|
)
|
$
|
(24
|
)
|
—
|
|
—
|
|
||
Net income (expense) recognized on cash flow hedges
|
$
|
(1
|
)
|
$
|
(24
|
)
|
—
|
|
—
|
|
||
|
|
|
|
|
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
|
||||
Three months ended March 31, 2020
|
|
|
|
||||
Cash Flow Hedges
|
|
|
|
||||
Interest rate
|
$
|
562
|
|
Interest income — Loans
|
$
|
34
|
|
Interest rate
|
(5
|
)
|
Interest expense — Long-term debt
|
(1
|
)
|
||
Interest rate
|
(30
|
)
|
Investment banking and debt placement fees
|
—
|
|
||
Total
|
$
|
527
|
|
|
$
|
33
|
|
Three months ended March 31, 2019
|
|
|
|
||||
Cash Flow Hedges
|
|
|
|
||||
Interest rate
|
$
|
115
|
|
Interest income — Loans
|
$
|
(24
|
)
|
Interest rate
|
(1
|
)
|
Interest expense — Long-term debt
|
(1
|
)
|
||
Interest rate
|
(5
|
)
|
Investment banking and debt placement fees
|
—
|
|
||
Net Investment Hedges
|
|
|
|
||||
Foreign exchange contracts
|
(3
|
)
|
Other Income
|
—
|
|
||
Total
|
$
|
106
|
|
|
$
|
(25
|
)
|
|
|
|
|
|
Three months ended March 31, 2020
|
|
Three months ended March 31, 2019
|
||||||||||||||||||||
in millions
|
Corporate
services
income
|
Consumer mortgage income
|
Other income
|
Total
|
|
Corporate services income
|
Consumer mortgage income
|
Other income
|
Total
|
||||||||||||||
NET GAINS (LOSSES)
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate
|
$
|
11
|
|
—
|
|
$
|
(9
|
)
|
$
|
2
|
|
|
$
|
8
|
|
—
|
|
$
|
(2
|
)
|
$
|
6
|
|
Foreign exchange
|
12
|
|
—
|
|
—
|
|
12
|
|
|
10
|
|
—
|
|
—
|
|
10
|
|
||||||
Commodity
|
2
|
|
—
|
|
—
|
|
2
|
|
|
1
|
|
—
|
|
—
|
|
1
|
|
||||||
Credit
|
(16
|
)
|
—
|
|
1
|
|
(15
|
)
|
|
1
|
|
—
|
|
(7
|
)
|
(6
|
)
|
||||||
Other
|
—
|
|
4
|
|
9
|
|
13
|
|
|
—
|
|
—
|
|
1
|
|
1
|
|
||||||
Total net gains (losses)
|
$
|
9
|
|
4
|
|
$
|
1
|
|
$
|
14
|
|
|
$
|
20
|
|
—
|
|
$
|
(8
|
)
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
March 31, 2020
|
|
December 31, 2019
|
|
||
Interest rate
|
$
|
1,744
|
|
$
|
848
|
|
Foreign exchange
|
70
|
|
30
|
|
||
Commodity
|
559
|
|
95
|
|
||
Credit
|
8
|
|
—
|
|
||
Other
|
57
|
|
14
|
|
||
Derivative assets before collateral
|
2,438
|
|
987
|
|
||
Less: Related collateral
|
370
|
|
207
|
|
||
Total derivative assets
|
$
|
2,068
|
|
$
|
780
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
dollars in millions
|
Notional
Amount
|
Average
Term
(Years)
|
Payment /
Performance
Risk
|
|
Notional
Amount
|
Average
Term
(Years)
|
Payment /
Performance
Risk
|
||||||||
Other
|
$
|
358
|
|
14.62
|
|
27.09
|
%
|
|
$
|
134
|
|
14.30
|
|
14.56
|
%
|
Total credit derivatives sold
|
$
|
358
|
|
—
|
|
—
|
|
|
$
|
134
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||
in millions
|
Moody’s
|
S&P
|
|
Moody’s
|
S&P
|
||||||||
KeyBank’s long-term senior unsecured credit ratings
|
A3
|
|
A-
|
|
|
A3
|
|
A-
|
|
||||
One rating downgrade
|
$
|
1
|
|
$
|
1
|
|
|
$
|
1
|
|
$
|
1
|
|
Two rating downgrades
|
1
|
|
1
|
|
|
1
|
|
1
|
|
||||
Three rating downgrades
|
1
|
|
1
|
|
|
1
|
|
1
|
|
|
Three months ended March 31,
|
|||||
in millions
|
2020
|
|
2019
|
|
||
Balance at beginning of period
|
$
|
539
|
|
$
|
502
|
|
Servicing retained from loan sales
|
24
|
|
18
|
|
||
Purchases
|
11
|
|
6
|
|
||
Amortization
|
(29
|
)
|
(29
|
)
|
||
Temporary impairments
|
(2
|
)
|
—
|
|
||
Balance at end of period
|
$
|
543
|
|
$
|
497
|
|
Fair value at end of period
|
$
|
655
|
|
$
|
727
|
|
|
|
|
dollars in millions
|
|
March 31, 2020
|
|
March 31, 2019
|
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
|||
Discounted cash flow
|
Expected defaults
|
0.97 - 2.00% (1.14%)
|
|
1.00 - 2.00% (1.14%)
|
|
|
Residual cash flows discount rate
|
7.00 - 11.42% (9.24%)
|
|
7.00 - 15.00% (9.19%)
|
|
|
Escrow earn rate
|
1.20 - 1.92% (1.67%)
|
|
2.22 - 3.70% (2.98%)
|
|
|
Loan assumption rate
|
0.01 - 3.37% (1.32%)
|
|
0.00 - 3.18% (1.39%)
|
|
Three months ended March 31,
|
|||||
in millions
|
2020
|
|
2019
|
|
||
Balance at beginning of period
|
$
|
46
|
|
$
|
37
|
|
Servicing retained from loan sales
|
5
|
|
2
|
|
||
Purchases
|
—
|
|
—
|
|
||
Amortization
|
(2
|
)
|
(1
|
)
|
||
Temporary impairments
|
(9
|
)
|
—
|
|
||
Balance at end of period
|
$
|
40
|
|
$
|
38
|
|
Fair value at end of period
|
$
|
41
|
|
$
|
50
|
|
|
|
|
dollars in millions
|
|
March 31, 2020
|
|
March 31, 2019
|
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
|||
Discounted cash flow
|
Prepayment speed
|
10.50 - 55.60% (17.16%)
|
|
9.32 - 58.76% (9.93%)
|
|
|
Discount rate
|
7.50 - 8.50% (7.52%)
|
|
7.50 - 10.00% (7.54%)
|
|
|
Servicing cost
|
$62 - $8,375 ($68.14)
|
|
$62 - $4,375 ($68.23)
|
|
Three months ended March 31,
|
|||||
in millions
|
2020
|
|
2019
|
|
||
Sales-type and direct financing leases
|
|
|
||||
Interest income on lease receivable
|
$
|
28
|
|
$
|
30
|
|
Interest income related to accretion of unguaranteed residual asset
|
3
|
|
3
|
|
||
Interest income on deferred fees and costs
|
—
|
|
—
|
|
||
Total sales-type and direct financing lease income
|
31
|
|
33
|
|
||
Operating leases
|
|
|
||||
Operating lease income related to lease payments
|
34
|
|
33
|
|
||
Other operating leasing gains
|
(4
|
)
|
4
|
|
||
Total operating lease income and other leasing gains
|
30
|
|
37
|
|
||
Total lease income
|
$
|
61
|
|
$
|
70
|
|
|
|
|
|
Unconsolidated VIEs
|
||||||||
in millions
|
Total
Assets
|
Total
Liabilities
|
Maximum
Exposure to Loss
|
||||||
March 31, 2020
|
|
|
|
||||||
LIHTC investments
|
$
|
6,401
|
|
$
|
2,534
|
|
$
|
1,823
|
|
December 31, 2019
|
|
|
|
||||||
LIHTC investments
|
$
|
6,405
|
|
$
|
2,526
|
|
$
|
1,846
|
|
|
Unconsolidated VIEs
|
||||||||
in millions
|
Total
Assets
|
Total
Liabilities
|
Maximum
Exposure to Loss
|
||||||
March 31, 2020
|
|
|
|
||||||
Indirect investments
|
$
|
12,221
|
|
$
|
182
|
|
$
|
84
|
|
December 31, 2019
|
|
|
|
||||||
Indirect investments
|
$
|
12,954
|
|
$
|
205
|
|
$
|
89
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
in millions
|
Gross Amount
Presented in
Balance Sheet
|
Netting
Adjustments (a)
|
Collateral (b)
|
Net
Amounts
|
|
Gross Amount
Presented in
Balance Sheet
|
Netting
Adjustments (a)
|
Collateral (b)
|
Net
Amounts
|
||||||||||||||
Offsetting of financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Reverse repurchase agreements
|
$
|
4
|
|
$
|
(4
|
)
|
—
|
|
—
|
|
|
$
|
5
|
|
$
|
(5
|
)
|
—
|
|
—
|
|
||
Total
|
$
|
4
|
|
$
|
(4
|
)
|
—
|
|
—
|
|
|
$
|
5
|
|
$
|
(5
|
)
|
—
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Offsetting of financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Repurchase agreements (c)
|
$
|
194
|
|
$
|
(6
|
)
|
$
|
(188
|
)
|
—
|
|
|
$
|
187
|
|
$
|
(7
|
)
|
$
|
(180
|
)
|
—
|
|
Total
|
$
|
194
|
|
$
|
(6
|
)
|
$
|
(188
|
)
|
—
|
|
|
$
|
187
|
|
$
|
(7
|
)
|
$
|
(180
|
)
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(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 collateralized by mortgaged-backed agency securities and are contracted on an overnight or continuous basis.
|
|
Three months ended March 31,
|
|||||
in millions
|
2020
|
|
2019
|
|
||
Interest cost on PBO
|
$
|
9
|
|
$
|
11
|
|
Expected return on plan assets
|
(10
|
)
|
(12
|
)
|
||
Amortization of losses
|
4
|
|
4
|
|
||
Settlement loss
|
4
|
|
—
|
|
||
Net pension cost
|
$
|
7
|
|
$
|
3
|
|
|
|
|
•
|
required distributions on the trust preferred securities;
|
•
|
the redemption price when a capital security is redeemed; and
|
•
|
the amounts due if a trust is liquidated or terminated.
|
dollars in millions
|
Trust Preferred Securities, Net of Discount (a)
|
Common Stock
|
Principal Amount of Debentures, Net of Discount (b)
|
Interest Rate of Trust Preferred Securities and Debentures (c)
|
Maturity of Trust Preferred Securities and Debentures
|
||||||||
March 31, 2020
|
|
|
|
|
|
||||||||
KeyCorp Capital I
|
$
|
156
|
|
$
|
6
|
|
$
|
162
|
|
2.649
|
%
|
2028
|
|
KeyCorp Capital II
|
114
|
|
4
|
|
118
|
|
6.875
|
|
2029
|
|
|||
KeyCorp Capital III
|
149
|
|
4
|
|
153
|
|
7.750
|
|
2029
|
|
|||
HNC Statutory Trust III
|
19
|
|
1
|
|
20
|
|
3.083
|
|
2035
|
|
|||
Willow Grove Statutory Trust I
|
19
|
|
1
|
|
20
|
|
2.051
|
|
2036
|
|
|||
HNC Statutory Trust IV
|
17
|
|
1
|
|
18
|
|
3.050
|
|
2037
|
|
|||
Westbank Capital Trust II
|
8
|
|
—
|
|
8
|
|
3.306
|
|
2034
|
|
|||
Westbank Capital Trust III
|
8
|
|
—
|
|
8
|
|
3.306
|
|
2034
|
|
|||
Total
|
$
|
490
|
|
$
|
17
|
|
$
|
507
|
|
5.213
|
%
|
—
|
|
|
|
|
|
|
|
||||||||
December 31, 2019
|
$
|
466
|
|
$
|
17
|
|
$
|
483
|
|
5.214
|
%
|
—
|
|
|
|
|
|
|
|
(a)
|
The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture. Each issue of trust preferred securities carries an interest rate identical to that of the related debenture. Certain trust preferred securities include basis adjustments related to fair value hedges totaling $77 million at March 31, 2020, and $57 million at December 31, 2019. See Note 7 (“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. The principal amount of certain debentures includes basis adjustments related to fair value hedges totaling $77 million at March 31, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges. The principal amount of debentures, net of discounts, is included in “long-term debt” on the balance sheet.
|
(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 have a floating interest rate, equal to three-month LIBOR plus 74 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust III have a floating interest rate, equal to three-month LIBOR plus 140 basis points, that reprices quarterly. The trust preferred securities issued by Willow Grove Statutory Trust I have a floating interest rate, equal to three-month LIBOR plus 131 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust IV have a floating interest rate, equal to three-month LIBOR plus 128 basis points, that reprices quarterly. The trust preferred securities issued by Westbank Capital Trust II and Westbank Capital Trust III each have a floating interest rate, equal to three-month LIBOR plus 219 basis points, that reprices quarterly. The total interest rates are weighted-average rates.
|
March 31, 2020
|
Maximum Potential Undiscounted Future Payments
|
Liability Recorded
|
||||
in millions
|
||||||
Financial guarantees:
|
|
|
||||
Standby letters of credit
|
$
|
3,352
|
|
$
|
72
|
|
Recourse agreement with FNMA
|
5,098
|
|
20
|
|
||
Residential mortgage reserve
|
1,906
|
|
7
|
|
||
Written put options (a)
|
2,598
|
|
102
|
|
||
Total
|
$
|
12,954
|
|
$
|
201
|
|
|
|
|
(a)
|
The maximum potential undiscounted future payments represent notional amounts of derivatives qualifying as guarantees.
|
in millions
|
Unrealized gains (losses) on securities available for sale
|
Unrealized gains (losses) on derivative financial instruments
|
Foreign currency translation adjustment
|
Net pension and postretirement benefit costs
|
Total
|
||||||||||
Balance at December 31, 2019
|
$
|
115
|
|
$
|
250
|
|
$
|
—
|
|
$
|
(339
|
)
|
$
|
26
|
|
Other comprehensive income before reclassification, net of income taxes
|
408
|
|
402
|
|
—
|
|
—
|
|
810
|
|
|||||
Amounts reclassified from AOCI, net of income taxes (a)
|
(3
|
)
|
(25
|
)
|
—
|
|
6
|
|
(22
|
)
|
|||||
Net current-period other comprehensive income, net of income taxes
|
405
|
|
377
|
|
—
|
|
6
|
|
788
|
|
|||||
Balance at March 31, 2020
|
$
|
520
|
|
$
|
627
|
|
$
|
—
|
|
$
|
(333
|
)
|
$
|
814
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018
|
$
|
(373
|
)
|
$
|
(50
|
)
|
$
|
(14
|
)
|
$
|
(381
|
)
|
$
|
(818
|
)
|
Other comprehensive income before reclassification, net of income taxes
|
184
|
|
80
|
|
3
|
|
(1
|
)
|
266
|
|
|||||
Amounts reclassified from AOCI, net of income taxes (a)
|
—
|
|
19
|
|
—
|
|
3
|
|
22
|
|
|||||
Net current-period other comprehensive income, net of income taxes
|
184
|
|
99
|
|
3
|
|
2
|
|
288
|
|
|||||
Balance at March 31, 2019
|
$
|
(189
|
)
|
$
|
49
|
|
$
|
(11
|
)
|
$
|
(379
|
)
|
$
|
(530
|
)
|
|
|
|
|
|
|
(a)
|
See table below for details about these reclassifications.
|
|
|
|
|
||||
|
Three months ended March 31,
|
Affected Line Item in the Statement Where Net Income is Presented
|
|||||
in millions
|
2020
|
2019
|
|||||
Unrealized gains (losses) on available for sale securities
|
|
|
|
||||
Realized gains
|
$
|
4
|
|
—
|
|
Other income
|
|
|
4
|
|
—
|
|
Income (loss) from continuing operations before income taxes
|
||
|
1
|
|
—
|
|
Income taxes
|
||
|
$
|
3
|
|
—
|
|
Income (loss) from continuing operations
|
|
Unrealized gains (losses) on derivative financial instruments
|
|
|
|
||||
Interest rate
|
$
|
34
|
|
$
|
(24
|
)
|
Interest income — Loans
|
Interest rate
|
(1
|
)
|
(1
|
)
|
Interest expense — Long-term debt
|
||
|
33
|
|
(25
|
)
|
Income (loss) from continuing operations before income taxes
|
||
|
8
|
|
(6
|
)
|
Income taxes
|
||
|
$
|
25
|
|
(19
|
)
|
Income (loss) from continuing operations
|
|
Net pension and postretirement benefit costs
|
|
|
|
||||
Amortization of losses
|
$
|
(4
|
)
|
$
|
(4
|
)
|
Other expense
|
Settlement loss
|
(4
|
)
|
—
|
|
Other expense
|
||
|
(8
|
)
|
(4
|
)
|
Income (loss) from continuing operations before income taxes
|
||
|
(2
|
)
|
(1
|
)
|
Income taxes
|
||
|
$
|
(6
|
)
|
(3
|
)
|
Income (loss) from continuing operations
|
|
|
|
|
|
Preferred stock series
|
Amount outstanding (in millions)
|
|
Shares authorized and outstanding
|
|
Par value
|
|
Liquidation preference
|
|
Ownership interest per depositary share
|
Liquidation preference per depositary share
|
|
First quarter 2020 dividends paid per depositary share
|
|
|||||
Fixed-to-Floating Rate Perpetual Noncumulative Series D
|
$
|
525
|
|
21,000
|
|
$
|
1
|
|
$
|
25,000
|
|
1/25th
|
$
|
1,000
|
|
$
|
12.50
|
|
Fixed-to-Floating Rate Perpetual Noncumulative Series E
|
500
|
|
500,000
|
|
1
|
|
1,000
|
|
1/40th
|
25
|
|
.382813
|
|
|||||
Fixed Rate Perpetual Noncumulative Series F
|
425
|
|
425,000
|
|
1
|
|
1,000
|
|
1/40th
|
25
|
|
.353125
|
|
|||||
Fixed Rate Perpetual Non-Cumulative Series G
|
450
|
|
450,000
|
|
1
|
|
1,000
|
|
1/40th
|
25
|
|
.351563
|
|
|||||
|
|
|
|
|
|
|
|
Three months ended March 31,
|
Consumer Bank
|
|
Commercial Bank
|
|
Other
|
|
Total Key
|
||||||||||||||||||||
dollars in millions
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net interest income (TE)
|
$
|
590
|
|
$
|
591
|
|
|
$
|
410
|
|
$
|
402
|
|
|
$
|
(11
|
)
|
$
|
(8
|
)
|
|
$
|
989
|
|
$
|
985
|
|
Noninterest income
|
230
|
|
214
|
|
|
219
|
|
300
|
|
|
28
|
|
22
|
|
|
477
|
|
536
|
|
||||||||
Total revenue (TE) (a)
|
820
|
|
805
|
|
|
629
|
|
702
|
|
|
17
|
|
14
|
|
|
1,466
|
|
1,521
|
|
||||||||
Provision for credit losses
|
140
|
|
45
|
|
|
214
|
|
16
|
|
|
5
|
|
1
|
|
|
359
|
|
62
|
|
||||||||
Depreciation and amortization expense
|
21
|
|
23
|
|
|
36
|
|
29
|
|
|
35
|
|
36
|
|
|
92
|
|
88
|
|
||||||||
Other noninterest expense
|
522
|
|
517
|
|
|
317
|
|
344
|
|
|
—
|
|
14
|
|
|
839
|
|
875
|
|
||||||||
Income (loss) from continuing operations before income taxes (TE)
|
137
|
|
220
|
|
|
62
|
|
313
|
|
|
(23
|
)
|
(37
|
)
|
|
176
|
|
496
|
|
||||||||
Allocated income taxes and TE adjustments
|
32
|
|
52
|
|
|
(8
|
)
|
63
|
|
|
7
|
|
(25
|
)
|
|
31
|
|
90
|
|
||||||||
Income (loss) from continuing operations
|
105
|
|
168
|
|
|
70
|
|
250
|
|
|
(30
|
)
|
(12
|
)
|
|
145
|
|
406
|
|
||||||||
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
1
|
|
1
|
|
|
1
|
|
1
|
|
||||||||
Net income (loss)
|
105
|
|
168
|
|
|
70
|
|
250
|
|
|
(29
|
)
|
(11
|
)
|
|
146
|
|
407
|
|
||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Net income (loss) attributable to Key
|
$
|
105
|
|
$
|
168
|
|
|
$
|
70
|
|
$
|
250
|
|
|
$
|
(29
|
)
|
$
|
(11
|
)
|
|
$
|
146
|
|
$
|
407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AVERAGE BALANCES (b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans and leases
|
$
|
35,197
|
|
$
|
31,321
|
|
|
$
|
60,082
|
|
$
|
57,267
|
|
|
$
|
895
|
|
$
|
1,061
|
|
|
$
|
96,174
|
|
$
|
89,649
|
|
Total assets (a)
|
38,460
|
|
34,732
|
|
|
69,383
|
|
64,873
|
|
|
38,385
|
|
40,515
|
|
|
146,228
|
|
140,120
|
|
||||||||
Deposits
|
73,320
|
|
71,288
|
|
|
36,058
|
|
34,417
|
|
|
950
|
|
1,871
|
|
|
110,328
|
|
107,576
|
|
||||||||
OTHER FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loan charge-offs (b)
|
$
|
43
|
|
$
|
34
|
|
|
$
|
40
|
|
$
|
30
|
|
|
$
|
1
|
|
—
|
|
|
$
|
84
|
|
$
|
64
|
|
|
Return on average allocated equity (b)
|
12.18
|
%
|
21.27
|
%
|
|
6.00
|
%
|
22.60
|
%
|
|
(1.33
|
)%
|
(.61
|
)%
|
|
3.39
|
%
|
10.49
|
%
|
||||||||
Return on average allocated equity
|
12.18
|
|
21.27
|
|
|
6.00
|
|
22.60
|
|
|
(1.29
|
)
|
(.56
|
)
|
|
3.41
|
|
10.51
|
|
||||||||
Average full-time equivalent employees (c)
|
8,907
|
|
9,622
|
|
|
2,069
|
|
2,370
|
|
|
5,553
|
|
5,562
|
|
|
16,529
|
|
17,554
|
|
(a)
|
Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.
|
(b)
|
From continuing operations.
|
(c)
|
The number of average full-time equivalent employees was not adjusted for discontinued operations.
|
|
Three months ended March 31, 2020
|
|
Three months ended March 31, 2019
|
||||||||||||||||
dollars in millions
|
Consumer Bank
|
Commercial Bank
|
Total Contract Revenue
|
|
Consumer Bank
|
Commercial Bank
|
Total Contract Revenue
|
||||||||||||
NONINTEREST INCOME
|
|
|
|
|
|
|
|
||||||||||||
Trust and investment services income
|
$
|
93
|
|
$
|
19
|
|
$
|
112
|
|
|
$
|
85
|
|
$
|
15
|
|
$
|
100
|
|
Investment banking and debt placement fees
|
—
|
|
47
|
|
47
|
|
|
—
|
|
45
|
|
45
|
|
||||||
Services charges on deposit accounts
|
56
|
|
28
|
|
84
|
|
|
54
|
|
27
|
|
81
|
|
||||||
Cards and payments income
|
38
|
|
26
|
|
64
|
|
|
37
|
|
26
|
|
63
|
|
||||||
Other noninterest income
|
2
|
|
—
|
|
2
|
|
|
3
|
|
—
|
|
3
|
|
||||||
Total revenue from contracts with customers
|
$
|
189
|
|
$
|
120
|
|
$
|
309
|
|
|
$
|
179
|
|
$
|
113
|
|
$
|
292
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other noninterest income (a)
|
|
|
$
|
140
|
|
|
|
|
$
|
222
|
|
||||||||
Noninterest income from Other(b)
|
|
|
28
|
|
|
|
|
22
|
|
||||||||||
Total noninterest income
|
|
|
$
|
477
|
|
|
|
|
$
|
536
|
|
||||||||
|
|
|
|
|
|
|
|
(a)
|
Noninterest income considered earned outside the scope of contracts with customers.
|
(b)
|
Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.
|
|
|
Cleveland, Ohio
|
|
May 1, 2020
|
|
Item 3.
|
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
I.
|
Credit risk
|
II.
|
Operational risk
|
III.
|
Liquidity Risk
|
IV.
|
Market risk
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Calendar month
|
Total number of shares
purchased (a) |
|
Average price paid
per share
|
|
Total number of shares purchased as
part of publicly announced plans or
programs
|
|
Maximum number of shares that may
yet be purchased as part of publicly
announced plans or programs (b)
|
||||
January 1 - 31
|
3,363,906
|
|
|
18.95
|
|
|
3,363,906
|
|
|
23,903,373
|
|
February 1 - 29
|
4,497,918
|
|
|
19.69
|
|
|
4,497,918
|
|
|
21,937,529
|
|
March 1 - 31
|
—
|
|
|
—
|
|
|
—
|
|
|
34,588,100
|
|
Total
|
7,861,824
|
|
|
19.37
|
|
|
7,861,824
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes Common Shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations.
|
(b)
|
Calculated using the remaining general repurchase amount divided by the closing price of KeyCorp Common Shares as follows: on January 31, 2020 at $18.71; on February 28, 2020, at $16.35; and on March 31, 2020, at $10.37.
|
*
|
Furnished herewith.
|
|
KEYCORP
|
|
(Registrant)
|
|
|
Date: May 1, 2020
|
/s/ Douglas M. Schosser
|
|
By: Douglas M. Schosser
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|