10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549 

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2018

Commission File Number 001-11302

Exact name of registrant as specified in its charter:

Ohio	34-6542451
State or other jurisdiction of incorporation or organization:	I.R.S. Employer Identification Number:

127 Public Square, Cleveland, Ohio	44114-1306
Address of principal executive offices:	Zip Code:

(216) 689-3000

Registrant’s telephone number, including area code:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Shares with a par value of $1 each	1,034,530,422 shares
Title of class	Outstanding at October 30, 2018

KEYCORP

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

		Page Number
Item 1.	Financial Statements	52
	Consolidated Balance Sheets	52
	Consolidated Statements of Income	53
	Consolidated Statements of Comprehensive Income	54
	Consolidated Statements of Changes in Equity	55
	Consolidated Statements of Cash Flows	56
	Notes to Consolidated Financial Statements (Unaudited)	57
	Note 1.    Basis of Presentation and Accounting Policies	57
	Note 2.    Earnings Per Common Share	60
	Note 3.    Loan Portfolio	60
	Note 4.    Asset Quality	60
	Note 5.    Fair Value Measurements	70
	Note 6.    Securities	77
	Note 7.    Derivatives and Hedging Activities	79
	Note 8.    Mortgage Servicing Assets	85
	Note 9.   Variable Interest Entities	87
	Note 10.  Income Taxes	88
	Note 11.  Acquisitions, Divestiture, and Discontinued Operations	90
	Note 12.  Securities Financing Activities	91
	Note 13.  Employee Benefits	92
	Note 14.  Trust Preferred Securities Issued by Unconsolidated Subsidiaries	92
	Note 15.  Contingent Liabilities and Guarantees	93
	Note 16.  Accumulated Other Comprehensive Income	96
	Note 17.  Shareholders’ Equity	97
	Note 18.  Line of Business Results	97
	Note 19. Revenue from Contracts with Customers	100
	Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	101

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Item 2.	Management’s Discussion & Analysis of Financial Condition & Results of Operations	4
	Introduction	4
	Terminology	4
	Forward-looking statements	5
	Selected financial data	7
	Long-term financial targets	9
	Strategic developments	10
	Demographics	11
	Supervision and regulation	11
	Results of Operations	17
	Earnings overview	17
	Net interest income	17
	Provision for credit losses	21
	Noninterest income	21
	Noninterest expense	23
	Income taxes	25
	Line of Business Results	25
	Key Community Bank summary of operations	26
	Key Corporate Bank summary of operations	27
	Other Segments	28
	Financial Condition	29
	Loans and loans held for sale	29
	Securities	33
	Deposits and other sources of funds	34
	Capital	34
	Risk Management	38
	Overview	38
	Market risk management	38
	Liquidity risk management	42
	Credit risk management	43
	Operational and compliance risk management	46
	Critical Accounting Policies and Estimates	48
	Accounting and Reporting Developments	48
	European Sovereign and Non-Sovereign Debt Exposures	51
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	102
Item 4.	Controls and Procedures	102

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	102
Item 1A.	Risk Factors	102
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	102
Item 6.	Exhibits	103
	Signature	105

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PART I. FINANCIAL INFORMATION

Item 2. Management’s Discussion & Analysis of Financial Condition & Results of Operations

Introduction

This section reviews the financial condition and results of operations of KeyCorp and its subsidiaries for the quarterly and year-to-date periods ended September 30, 2018, and September 30, 2017. Some tables may include additional periods to comply with disclosure requirements or to illustrate trends in greater depth. When you read this discussion, you should also refer to the consolidated financial statements and related notes in this report. The page locations of specific sections and notes that we refer to are presented in the Table of Contents.

References to our “2017 Form 10-K” refer to our Form 10-K for the year ended December 31, 2017, which has been filed with the SEC and is available on its website (www.sec.gov) and on our website (www.key.com/ir).

Terminology

Throughout this discussion, references to “Key,” “we,” “our,” “us,” and similar terms refer to the consolidated entity consisting of KeyCorp and its subsidiaries. “KeyCorp” refers solely to the parent holding company, and “KeyBank” refers to KeyCorp’s subsidiary bank, KeyBank National Association.

We want to explain some industry-specific terms at the outset so you can better understand the discussion that follows.

• We use the phrase continuing operations in this document to mean all of our businesses other than the education lending business and Austin. The education lending business and Austin have been accounted for as discontinued operations since 2009.

• Our exit loan portfolios are separate from our discontinued operations. These portfolios, which are in a run-off mode, stem from product lines we decided to cease because they no longer fit with our corporate strategy. These exit loan portfolios are included in Other Segments.

• We engage in capital markets activities primarily through business conducted by our Key Corporate 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.

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The acronyms and abbreviations identified below are used in the Management’s Discussion & Analysis of Financial Condition & Results of Operations as well as in the Notes to Consolidated Financial Statements (Unaudited). You may find it helpful to refer back to this page as you read this report.

ALCO: Asset/Liability Management Committee.	KBCM: KeyBanc Capital Markets, Inc.
ALLL: Allowance for loan and lease losses.	KCC: Key Capital Corporation.
A/LM: Asset/liability management.	KCDC: Key Community Development Corporation.
AOCI: Accumulated other comprehensive income (loss).	KEF: Key Equipment Finance.
APBO: Accumulated postretirement benefit obligation.	KEF: Key Equipment Finance.
ASC: Accounting Standards Codification.	KIBS: Key Insurance & Benefits Services, Inc.
Austin: Austin Capital Management, Ltd.	KMS: Key Merchant Services, LLC.
BHCs: Bank holding companies.	KPP: Key Principal Partners.
Board: KeyCorp Board of Directors.	KREEC: Key Real Estate Equity Capital, Inc.
Cain Brothers: Cain Brothers & Company, LLC.	LCR: Liquidity coverage ratio.
CCAR: Comprehensive Capital Analysis and Review.	LIBOR: London Interbank Offered Rate.
CMBS: Commercial mortgage-backed securities.	LIHTC: Low-income housing tax credit.
CME: Chicago Mercantile Exchange.	LTV: Loan-to-value.
CMO: Collateralized mortgage obligation.	Moody’s: Moody’s Investor Services, Inc.
Common Shares: KeyCorp common shares, $1 par value.	MRC: Market Risk Committee.
DIF: Deposit Insurance Fund of the FDIC.	MRM: Market Risk Management group.
Dodd-Frank Act: Dodd-Frank Wall Street Reform and	N/A: Not applicable.
Consumer Protection Act of 2010.	NASDAQ: The NASDAQ Stock Market LLC.
EBITDA: Earnings before interest, taxes, depreciation, and	NAV: Net asset value.
amortization.	N/M: Not meaningful.
EPS: Earnings per share.	NMTC: New market tax credit.
ERISA: Employee Retirement Income Security Act of 1974.	NOW: Negotiable Order of Withdrawal.
ERM: Enterprise risk management.	NPR: Notice of proposed rulemaking.
EVE: Economic value of equity.	NYSE: New York Stock Exchange.
FASB: Financial Accounting Standards Board.	OCC: Office of the Comptroller of the Currency.
FDIC: Federal Deposit Insurance Corporation.	OCI: Other comprehensive income (loss).
Federal Reserve: Board of Governors of the Federal	OREO: Other real estate owned.
Reserve System.	OTTI: Other-than-temporary impairment.
FHLB: Federal Home Loan Bank of Cincinnati.	PBO: Projected benefit obligation.
FHLMC: Federal Home Loan Mortgage Corporation.	PCI: Purchased credit impaired.
FICO: Fair Isaac Corporation.	S&P: Standard and Poor’s Ratings Services,
First Niagara: First Niagara Financial Group, Inc.	a Division of The McGraw-Hill Companies, Inc.
FNMA: Federal National Mortgage Association, or Fannie	SEC: U.S. Securities and Exchange Commission.
Mae.	TCJ Act: Tax Cuts and Jobs Act.
FSOC: Financial Stability Oversight Council.	TDR: Troubled debt restructuring.
GAAP: U.S. generally accepted accounting principles.	TE: Taxable-equivalent.
GNMA: Government National Mortgage Association, or	U.S. Treasury: United States Department of the
Ginnie Mae.	Treasury.
HelloWallet: HelloWallet, LLC.	VaR: Value at risk.
HTC: Historic tax credit.	VEBA: Voluntary Employee Beneficiary Association.
ISDA: International Swaps and Derivatives Association.	VIE: Variable interest entity.
KAHC: Key Affordable Housing Corporation.

Forward-looking statements

From time to time, we have made or will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as “goal,” “objective,” “plan,” “expect,” “assume,” “anticipate,” “intend,” “project,” “believe,” “estimate,” or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results or aspirations. Our disclosures in this report contain forward-looking statements. We may also make forward-looking

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statements in other documents filed with or furnished to the SEC. In addition, we may make forward-looking statements orally to analysts, investors, representatives of the media, and others.

Forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause our actual results to differ from those described in forward-looking statements include, but are not limited to:

• deterioration of commercial real estate market fundamentals;

• defaults by our loan counterparties or clients;

• adverse changes in credit quality trends;

• declining asset prices;

• our concentrated credit exposure in commercial and industrial loans;

• 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 cybersecurity threats;

• negative outcomes from claims or litigation;

• failure or circumvention of our controls and procedures;

• the occurrence of natural or man-made disasters, conflicts, or 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 subsidiary, KeyBank;

• unanticipated changes in our liquidity position, including but not limited to, changes in our access to or the cost of funding and our ability to secure alternative funding sources;

• 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;

• deterioration of economic conditions in the geographic regions where we operate;

• the soundness of other financial institutions;

• tax reform and other changes in tax laws, including the impact of the TCJ Act;

• 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 from banks and non-banks;

• 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 realize the anticipated benefits of the First Niagara merger; and

• our ability to develop and effectively use the quantitative models we rely upon in our business planning.

Any forward-looking statements made by us or on our behalf speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances. Before making an investment decision, you should carefully consider all risks and uncertainties disclosed in our 2017 Form 10-K and any subsequent reports filed with the SEC by Key as well as our registration statements under the Securities Act of 1933, as amended, all of which are or will upon filing be accessible on the SEC’s website at www.sec.gov and on our website at www.key.com/ir.

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Selected financial data          

Our financial performance for each of the last five quarters is summarized in Figure 1.

Figure 1. Selected Financial Data

	2018									2017						Nine months ended September 30,
dollars in millions, except per share amounts	Third			Second			First			Fourth			Third			2018			2017
FOR THE PERIOD
Interest income	$	1,239		$	1,205		$	1,137		$	1,114		$	1,109		$	3,581		$	3,276
Interest expense	253			226			193			176			161			672			437
Net interest income	986			979			944			938			948			2,909			2,839
Provision for credit losses	62			64			61			49			51			187			180
Noninterest income	609			660			601			656			592			1,870			1,822
Noninterest expense	964			993			1,006			1,098			992			2,963			3,000
Income (loss) from continuing operations before income taxes	569			582			478			447			497			1,629			1,481
Income (loss) from continuing operations attributable to Key	482			479			416			195			363			1,377			1,094
Income (loss) from discontinued operations, net of taxes	—			3			2			1			1			5			6
Net income (loss) attributable to Key	482			482			418			196			364			1,382			1,100
Income (loss) from continuing operations attributable to Key common shareholders	468			464			402			181			349			1,334			1,038
Income (loss) from discontinued operations, net of taxes	—			3			2			1			1			5			6
Net income (loss) attributable to Key common shareholders	468			467			404			182			350			1,339			1,044
PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.45		$	.44		$	.38		$	.17		$	.32		$	1.28		$	.96
Income (loss) from discontinued operations, net of taxes	—			—			—			—			—			.01			.01
Net income (loss) attributable to Key common shareholders (a)	.45			.44			.38			.17			.32			1.27			.97
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	.45			.44			.38			.17			.32			1.26			.95
Income (loss) from discontinued operations, net of taxes — assuming dilution	—			—			—			—			—			.01			.01
Net income (loss) attributable to Key common shareholders — assuming dilution (a)	.45			.44			.38			.17			.32			1.26			.96
Cash dividends paid	.17			.12			.105			.105			.095			.395			.275
Book value at period end	13.33			13.29			13.07			13.09			13.18			13.33			13.18
Tangible book value at period end	10.59			10.59			10.35			10.35			10.52			10.59			10.52
Market price:
High	21.91			21.05			22.40			20.58			19.48			22.40			19.37
Low	19.38			18.72			19.00			17.40			16.28			18.72			16.47
Close	19.89			19.54			19.55			20.17			18.82			19.89			18.82
Weighted-average common shares outstanding (000)	1,036,479			1,052,652			1,056,037			1,062,348			1,073,390			1,048,397			1,075,296
Weighted-average common shares and potential common shares outstanding (000) (b)	1,049,976			1,065,793			1,071,786			1,079,330			1,088,841			1,062,816			1,091,655
AT PERIOD END
Loans	$	89,268		$	88,222		$	88,089		$	86,405		$	86,492		$	89,268		$	86,492
Earning assets	125,007			123,472			122,961			123,490			122,625			125,007			122,625
Total assets	138,805			137,792			137,049			137,698			136,733			138,805			136,733
Deposits	105,780			104,548			104,751			105,235			103,446			105,780			103,446
Long-term debt	13,849			13,853			13,749			14,333			15,100			13,849			15,100
Key common shareholders’ equity	13,758			14,075			13,919			13,998			14,224			13,758			14,224
Key shareholders’ equity	15,208			15,100			14,944			15,023			15,249			15,208			15,249
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
Return on average total assets	1.40		%	1.41		%	1.25		%	.57		%	1.07		%	1.35		%	1.10		%
Return on average common equity	13.36			13.29			11.76			5.04			9.74			12.81			9.89
Return on average tangible common equity (c)	16.81			16.73			14.89			6.35			12.21			16.16			12.36
Net interest margin (TE)	3.18			3.19			3.15			3.09			3.15			3.17			3.19
Cash efficiency ratio (c)	58.7			58.8			62.9			66.7			62.2			60.1			62.4
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
Return on average total assets	1.39		%	1.40		%	1.24		%	.57		%	1.06		%	1.35		%	1.09		%
Return on average common equity	13.36			13.37			11.82			5.07			9.77			12.86			9.95
Return on average tangible common equity (c)	16.81			16.84			14.97			6.39			12.25			16.22			12.43
Net interest margin (TE)	3.16			3.17			3.13			3.07			3.13			3.15			3.17
Loan-to-deposit (d)	87.0			86.9			86.9			84.4			86.2			87.0			86.2
CAPITAL RATIOS AT PERIOD END
Key shareholders’ equity to assets	10.96		%	10.96		%	10.90		%	10.91		%	11.15		%	10.96		%	11.15		%
Key common shareholders’ equity to assets	9.93			10.21			10.16			10.17			10.40			9.93			10.40
Tangible common equity to tangible assets (c)	8.05			8.32			8.22			8.23			8.49			8.05			8.49
Common Equity Tier 1	9.95			10.13			9.99			10.16			10.26			9.95			10.26
Tier 1 risk-based capital	11.11			10.95			10.82			11.01			11.11			11.11			11.11
Total risk-based capital	12.99			12.83			12.73			12.92			13.09			12.99			13.09
Leverage	10.03			9.87			9.76			9.73			9.83			10.03			9.83
TRUST ASSETS
Assets under management	$	40,575		$	39,663		$	39,003		$	39,588		$	38,660		$	40,575		$	38,660
OTHER DATA
Average full-time-equivalent employees	18,150			18,376			18,540			18,379			18,548			18,354			18,427
Branches	1,166			1,177			1,192			1,197			1,208			1,166			1,208

(a) EPS may not foot due to rounding.

(b) Assumes conversion of Common Share options and other stock awards as applicable.

(c) See Figure 2 entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” The table reconciles 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.

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Figure 2 presents certain non-GAAP financial measures related to “tangible common equity,” “return on tangible common equity,” “pre-provision net revenue,” “cash efficiency ratio,” and “Common Equity Tier 1 under the Regulatory Capital Rules (estimates).”

The tangible common equity ratio and the return on tangible common equity ratio have been a focus for some investors, and management believes that these ratios may assist investors in analyzing Key’s capital position without regard to the effects of intangible assets and preferred stock. Since analysts and banking regulators may assess our capital adequacy using tangible common equity, we believe it is useful to enable investors to assess our capital adequacy on these same bases. Figure 2 reconciles the GAAP performance measures to the corresponding non-GAAP measures.

Figure 2 also shows the computation for and reconciliation of pre-provision net revenue, which is not formally defined by GAAP. We believe that eliminating the effects of the provision for credit losses makes it easier to analyze

our results by presenting them on a more comparable basis.

The cash efficiency ratio is a ratio of two non-GAAP performance measures. Accordingly, there is no directly comparable GAAP performance measure. The cash efficiency ratio excludes the impact of our intangible asset amortization from the calculation. We believe this ratio provides greater consistency and comparability between our results and those of our peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, nor as a substitute for analyses of results as reported under GAAP.

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Figure 2. GAAP to Non-GAAP Reconciliations

		Three months ended															Nine months ended
dollars in millions		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017			9/30/2018			9/30/2017
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)		$	15,208		$	15,100		$	14,944		$	15,023		$	15,249
Less:	Intangible assets (a)	2,838			2,858			2,902			2,928			2,870
	Preferred Stock (b)	1,421			1,009			1,009			1,009			1,009
	Tangible common equity (non-GAAP)	$	10,949		$	11,233		$	11,033		$	11,086		$	11,370
Total assets (GAAP)		$	138,805		$	137,792		$	137,049		$	137,698		$	136,733
Less:	Intangible assets (a)	2,838			2,858			2,902			2,928			2,870
	Tangible assets (non-GAAP)	$	135,967		$	134,934		$	134,147		$	134,770		$	133,863
	Tangible common equity to tangible assets ratio (non-GAAP)	8.05		%	8.32		%	8.22		%	8.23		%	8.49		%
Average tangible common equity
Average Key shareholders’ equity (GAAP)		$	15,210		$	15,032		$	14,889		$	15,268		$	15,241		$	15,045		$	15,208
Less:	Intangible assets (average) (c)	2,848			2,883			2,916			2,939			2,878			2,882			2,802
	Preferred Stock (average)	1,316			1,025			1,025			1,025			1,025			1,123			1,175
	Average tangible common equity (non-GAAP)	$	11,046		$	11,124		$	10,948		$	11,304		$	11,338		$	11,040		$	11,231
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)		$	468		$	464		$	402		$	181		$	349		$	1,334		$	1,038
Average tangible common equity (non-GAAP)		11,046			11,124			10,948			11,304			11,338			11,040			11,231
Return on average tangible common equity from continuing operations (non-GAAP)		16.81		%	16.73		%	14.89		%	6.35		%	12.21		%	16.16		%	12.36		%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)		$	468		$	467		$	404		$	182		$	350		$	1,339		$	1,044
Average tangible common equity (non-GAAP)		11,046			11,124			10,948			11,304			11,338			11,040			11,231
Return on average tangible common equity consolidated (non-GAAP)		16.81		%	16.84		%	14.97		%	6.39		%	12.25		%	16.22		%	12.43		%
Pre-provision net revenue
Net interest income (GAAP)		$	986		$	979		$	944		$	938		$	948		$	2,909		$	2,839
Plus:	Taxable-equivalent adjustment	7			8			8			14			14			23			39
	Noninterest income (GAAP)	609			660			601			656			592			1,870			1,822
Less:	Noninterest expense (GAAP)	964			993			1,006			1,098			992			2,963			3,000
	Pre-provision net revenue from continuing operations (non-GAAP)	$	638		$	654		$	547		$	510		$	562		$	1,839		$	1,700
Cash efficiency ratio
Noninterest expense (GAAP)		$	964		$	993		$	1,006		$	1,098		$	992		$	2,963		$	3,000
Less:	Intangible asset amortization	23			25			29			26			25			77			69
Adjusted noninterest expense (non-GAAP)		$	941		$	968		$	977		$	1,072		$	967		$	2,886		$	2,931
Net interest income (GAAP)		$	986		$	979		$	944		$	938		$	948		$	2,909		$	2,839
Plus:	Taxable-equivalent adjustment	7			8			8			14			14			23			39
	Noninterest income (GAAP)	609			660			601			656			592			1,870			1,822
Total taxable-equivalent revenue (non-GAAP)		$	1,602		$	1,647		$	1,553		$	1,608		$	1,554		$	4,802		$	4,700
Cash efficiency ratio (non-GAAP)		58.7		%	58.8		%	62.9		%	66.7		%	62.2		%	60.1		%	62.4		%

 

	Three months ended September 30, 2018
Common Equity Tier 1 under the Regulatory Capital Rules (estimates)
Common Equity Tier 1 under current Regulatory Capital Rules	$	12,235
Adjustments from current Regulatory Capital Rules to the fully phased-in Regulatory Capital Rules:
Deferred tax assets and other intangible assets (d)	—
Common Equity Tier 1 anticipated under the fully phased-in Regulatory Capital Rules (e)	$	12,235
Net risk-weighted assets under current Regulatory Capital Rules	$	122,908
Adjustments from current Regulatory Capital Rules to the fully phased-in Regulatory Capital Rules:
Mortgage servicing assets (f)	755
Deferred tax assets	276
Total risk-weighted assets anticipated under the fully phased-in Regulatory Capital Rules (e)	$	123,939
Common Equity Tier 1 ratio under the fully phased-in Regulatory Capital Rules (e)	9.87		%

(a) For the three months ended September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017, intangible assets exclude $17 million, $20 million, $23 million, $26 million, and $30 million, respectively, of period-end purchased credit card receivables.

(b) Net of capital surplus.

(c) For the three months ended September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017, average intangible assets exclude $18 million, $21 million, $24 million, $28 million, and $32 million, respectively, of average purchased credit card receivables. For the nine months ended September 30, 2018, and September 30, 2017, average intangible assets exclude $21 million and $36 million, respectively, of average purchased credit card receivables.

(d) 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.

(e) The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on January 1, 2019); we are subject to the Regulatory Capital Rules under the “standardized approach.”

(f) Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250%.

Long-term financial targets

Our long-term financial targets are as follows:

• Generate positive operating leverage and a cash efficiency ratio in the range of 54.0% to 56.0%;

• Maintain a moderate risk profile by targeting a net loan charge-offs to average loans ratio in the range of .40% to .60%; and

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• Achieve a return on tangible common equity ratio in the range of 16.00% to 19.00%.

Figure 3 shows the evaluation of our long-term financial targets for the three and nine months ended September 30, 2018.

Figure 3. Evaluation of Our Long-Term Targets

	Key Metrics (a)	3Q18		YTD 2018		Targets
Positive operating leverage	Cash efficiency ratio (b)	58.7	%	60.1	%	54.0 - 56.0%
Moderate Risk Profile	Net loan charge-offs to average loans	.27	%	.26	%	.40 - .60%
Financial Returns	Return on average tangible common equity (b)	16.81	%	16.16	%	16.00 - 19.00%

(a) Calculated from continuing operations, unless otherwise noted.

(b) Non-GAAP measure; see Figure 2 entitled “GAAP to Non-GAAP Reconciliations” for reconciliation.

Strategic developments

Our actions and results during the third quarter of 2018 supported our corporate strategy described in the “Introduction” section under the “Corporate strategy” heading on page 38 of our 2017 Form 10-K.

• We continued to grow profitably during the third quarter of 2018. Our cash efficiency ratio improved to 58.7%, a decrease of over 300 basis points when compared to the year-ago quarter. This improvement was driven by an increase in both net interest income and noninterest income, with total revenue increasing 3.1% when compared to the third quarter of 2017. Net interest income benefited from higher interest rates and earning asset balances. Noninterest income saw an increase from the same period one year ago because of our continued investment in our differentiated business model.

• Our 2017 acquisitions of Cain Brothers and KMS as well as continued strength in our core businesses contributed to the increase in noninterest income during the third quarter of 2018 compared to the year-ago quarter as we acquire and expand targeted client relationships. Investment banking and debt placement fees grew $25 million from the year-ago quarter, benefiting from organic growth and the Cain Brothers acquisition. Excluding the impact of the new revenue recognition accounting standard, cards and payments income increased due to growth in credit and debit card fees, purchase and prepaid card fees, and merchant services income.

• During the third quarter of 2018, we effectively managed risk and rewards as net loan charge-offs were .27% of average loans, below our targeted range. While net loan charge-offs for the three months ended September 30, 2018, increased from the same period one year ago, this was primarily due to a large recovery that occurred in the third quarter of 2017.

• Maintaining financial strength while driving long-term shareholder value was again a focus during the third quarter of 2018. At September 30, 2018, our Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.95% and 11.11%, respectively. Consistent with our 2018 Capital Plan, we completed $542 million of common share repurchases. The Board also declared an increase to our common share dividend, up to $.17 per share from $.12 during the quarter, consistent with our 2018 Capital Plan. In total, we have completed $3.4 billion of common share repurchases since 2012.

• During the third quarter, we were recognized by G.I. Jobs and Military Spouse magazines as a Military Friendly^® and Military Friendly^® Spouse Employer. Also, during the third quarter, we received the Leading Disability Employer Seal from the National Organization on Disability. In September, we hosted the 2018 KeyBank Supplier Summit to lead the conversation on supplier diversity. These awards and initiatives highlight our strategy to engage a high-performing, talented, and diverse workforce.

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Demographics

We have two major business segments: Key Community Bank and Key Corporate Bank.

Key Community Bank serves individuals and small to mid-sized businesses by offering a variety of deposit and investment, lending, mortgage and home equity, credit card, and personalized wealth management products and business advisory services. Key Community Bank also purchases retail auto sales contracts via a network of auto dealerships. These products and services are provided through our relationship managers and specialists working in our 15-state branch network, which is organized into ten internally defined geographic regions: Washington, Oregon/Alaska, Rocky Mountains, Indiana/Northwest Ohio/Michigan, Central/Southwest Ohio, East Ohio/Western Pennsylvania, Atlantic, Western New York, Eastern New York, and New England. In addition, some of these product capabilities are delivered by Key Corporate Bank to clients of Key Community Bank.

Key Corporate Bank is a full-service corporate and investment bank focused principally on serving the needs of middle market clients in seven industry sectors: consumer, energy, healthcare, industrial, public sector, real estate, and technology. Key Corporate Bank delivers a broad suite of banking and capital markets products to its clients, including syndicated finance, debt and equity capital markets, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory, and public finance. Key Corporate Bank is also a significant servicer of commercial mortgage loans and a significant special servicer of CMBS. Key Corporate Bank delivers many of its product capabilities to clients of Key Community Bank.

Supervision and regulation

The following discussion provides a summary of recent regulatory developments and should be read in conjunction with the disclosure included in our 2017 Form 10-K under the heading “Supervision and Regulation” in Item 1. Business and under the heading “II. Compliance Risk” in Item 1A. Risk Factors.

Regulatory capital requirements

The final rule to implement the Basel III international capital framework (“Basel III”) was effective January 1, 2015, with a multi-year transition period ending on December 31, 2018 (“Regulatory Capital Rules”). The Basel III capital framework and the U.S. implementation of the Basel III capital framework are discussed in more detail in Item 1. Business of our 2017 Form 10-K under the heading “Supervision and Regulation - Regulatory capital requirements.”

Under the Regulatory Capital Rules, standardized approach banking organizations, such as KeyCorp and KeyBank, are required to meet the minimum capital and leverage ratios set forth in Figure 4 below. At September 30, 2018, Key had an estimated Common Equity Tier 1 Capital Ratio of 9.87% under the fully phased-in Regulatory Capital Rules. Also, at September 30, 2018, based on the fully phased-in Regulatory Capital Rules, Key estimates that its capital and leverage ratios, after adjustment for market risk, would be as set forth in Figure 4.

Figure 4. Pro Forma Ratios vs. Minimum Capital Ratios Calculated Under the Fully Phased-In Regulatory Capital Rules

Ratios (including capital conservation buffer)	Key September 30, 2018 Pro forma		Minimum January 1, 2018		Phase-in Period	Minimum January 1,  2019
Common Equity Tier 1 (a)	9.87	%	4.5	%	None	4.5	%
Capital conservation buffer (b)			—		1/1/16-1/1/19	2.5
Common Equity Tier 1 + Capital conservation buffer			4.5		1/1/16-1/1/19	7.0
Tier 1 Capital	11.02	%	6.0		None	6.0
Tier 1 Capital + Capital conservation buffer			6.0		1/1/16-1/1/19	8.5
Total Capital	12.89	%	8.0		None	8.0
Total Capital + Capital conservation buffer			8.0		1/1/16-1/1/19	10.5
Leverage (c)	10.03	%	4.0		None	4.0

(a) See Figure 2 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) 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.

(c) As a standardized approach banking organization, KeyCorp is not subject to the 3% supplemental leverage ratio requirement, which became effective January 1, 2018.

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Revised prompt corrective action framework

The federal prompt corrective action (“PCA”) framework under the FDIA groups FDIC-insured depository institutions into one of five prompt corrective action capital categories: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” In addition to implementing the Basel III capital framework in the United States, the Regulatory Capital Rules also revised the prompt corrective action capital category threshold ratios applicable to FDIC-insured depository institutions such as KeyBank, with an effective date of January 1, 2015. The revised prompt corrective action framework table in Figure 5 identifies the capital category thresholds for a “well capitalized” and an “adequately capitalized” institution under the Prompt Corrective Action Framework.

Figure 5. "Well Capitalized" and "Adequately Capitalized" Capital Category Ratios under Revised PCA Framework

Prompt Corrective Action	Capital Category
Ratio	Well Capitalized (a)		Adequately Capitalized
Common Equity Tier 1 Risk-Based	6.5	%	4.5	%
Tier 1 Risk-Based	8.0		6.0
Total Risk-Based	10.0		8.0
Tier 1 Leverage (b)	5.0		4.0

(a) A “well capitalized” institution also must not be subject to any written agreement, order, or directive to meet and maintain a specific capital level for any capital measure.

(b) As a “standardized approach” banking organization, KeyBank is not subject to the 3% supplemental leverage ratio requirement, which became effective January 1, 2018.

We believe that, as of September 30, 2018, KeyBank (consolidated) satisfied the risk-based and leverage capital requirements necessary to be considered “well capitalized” for purposes of the PCA framework. However, investors should not regard this determination as a representation of the overall financial condition or prospects of KeyBank because the prompt corrective action framework is intended to serve a limited supervisory function. Moreover, it is important to note that the prompt corrective action framework does not apply to BHCs, like KeyCorp.

Recent regulatory capital-related developments

On September 27, 2017, the federal banking agencies issued a joint proposal to simplify certain aspects of the Regulatory Capital Rules for standardized approach banking organizations (the “Simplification Proposal”), including Key. In anticipation of the Simplification Proposal, on August 22, 2017, the agencies issued a companion proposal to extend the current capital treatment for certain items that are part of the Simplification Proposal and also subject to the multi-year transition period for the Regulatory Capital Rules, which ends on December 31, 2018 (the “Transitions Proposal”). The Transitions Proposal was published as a final rule in the Federal Register on November 21, 2017, and is expected to alleviate the burden that would have resulted from the continued phase-in of those capital requirements as the agencies seek public comment on and work to finalize the Simplification Proposal. The Simplification Proposal and the Transitions Proposal are discussed in more detail in Item 1. Business of our 2017 Form 10-K under the heading “Supervision and Regulation - Regulatory capital requirements - Recent regulatory capital-related developments.”

In December 2017, the Basel Committee released its final revisions to Basel III. The revisions seek to restore credibility in the calculation of risk-weighted assets and improve the comparability of regulatory capital ratios across banking organizations. The revisions are discussed in more detail in Item 1. Business of our 2017 Form 10-K under the heading “Supervision and Regulation - Regulatory capital requirements - Recent regulatory capital-related developments.”

The U.S. federal banking agencies released a statement announcing their support for the Basel Committee’s efforts, but cautioned that they will consider how to appropriately incorporate these revisions into the Regulatory Capital Rules, and that any proposed changes based on the Basel Committee revisions would be subject to notice-and-comment rulemaking. In view of the prohibition under the Dodd-Frank Act on the use of credit ratings in federal regulation, there is some uncertainty as to whether or how the agencies would implement the ratings-based aspects of the Basel Committee revisions to Basel III, as well as any other aspect of the Basel Committee revisions that permit the U.S. agencies to exercise home-country discretion, for example, due to differences in accounting or market practices, and legal requirements.

Subsequently, in February 2018, the Basel Committee released for public consultation a proposal to update the Pillar 3 disclosure framework, to more appropriately align it to the changes adopted under the Basel Committee’s final revisions to Basel III. The public consultation period ended on May 25, 2018. Before any action is taken by the

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federal banking agencies with respect to the revised Pillar 3 disclosure framework, it first must be adopted in final form by the Basel Committee, and the federal agencies must determine whether and to what extent they will implement the final revisions to Basel III released by the Basel Committee in December 2017.

In April 2018, the federal banking agencies released a joint proposal to amend their Regulatory Capital Rules to address the regulatory capital effects of forthcoming changes to GAAP set forth in Accounting Standards Update No. 2016-13, Topic 326, Financial Instruments - Credit Losses (ASU 2016-13), which introduces the current expected credit losses methodology. The proposal identifies which credit loss allowances under the new accounting standard would be eligible for inclusion in a banking organization’s regulatory capital and provides banking organizations with the option to phase in over a three-year period the adverse day-one regulatory capital effects of adoption of the new accounting standard on retained earnings, deferred tax assets, credit loss allowances, and average total consolidated assets. For SEC reporting companies, the new accounting standard will become effective for the first fiscal year starting after December 15, 2019. The banking agencies’ proposal was published in the Federal Register on May 14, 2018, with a 60-day public comment period that ended on July 13, 2018.

Capital planning and stress testing

On December 7, 2017, the Federal Reserve released for public comment a package of proposals that would increase the transparency of its stress testing program while maintaining the Federal Reserve’s ability to test the resilience of the nation’s largest, most complex banks. The proposals responded to public and industry calls for more transparency around the CCAR program. The proposals are discussed in more detail in Item 1. Business of our 2017 Form 10-K under the heading “Supervision and Regulation - Regulatory capital requirements - Recent developments in capital planning and stress testing.”

In a separate release, published April 10, 2018, the Federal Reserve invited comment on a proposal to integrate certain aspects of the Federal Reserve’s Regulatory Capital Rules with the CCAR and stress test rules, in order to simplify the overall capital framework that is currently applicable to banking organizations subject to the capital plan rule (including KeyCorp).  Under the proposal, the Federal Reserve would (1) amend the capital conservation buffer requirement under the Regulatory Capital Rules by replacing the static risk-weighted assets component of the buffer with a new measure, the stress capital buffer, which would be based on the results of an individual banking organization’s annual supervisory stress test; (2) introduce a stress leverage buffer requirement that would replace the existing Tier 1 leverage requirement under CCAR; (3) modify certain assumptions under the supervisory stress test; (4) remove the 30% dividend payout ratio limitation as a criterion for heightened supervisory scrutiny of an organization’s capital plan; and (5) eliminate the CCAR quantitative objection. 

Under the proposed rule, a banking organization would not be subject to any limitations on capital distributions and discretionary bonus payments if it satisfies all minimum capital requirements and its capital conservation requirement (as amended to incorporate the stress capital buffer), stress leverage buffer requirement, and, if applicable, the advanced approaches capital conservation buffer requirement and supplementary leverage ratio standard (the latter two of which do not apply to KeyCorp). If it is adopted as a final rule, the proposal would be effective December 31, 2018; however, the stress capital buffer and stress leverage buffer requirements would generally not be effective until October 1, 2019. The comment period for this proposal ended on June 25, 2018. Key expects that the proposal would have a marginally favorable impact on its capital requirements.

Liquidity requirements

In October 2014, the federal banking agencies published a final rule to implement the Basel III liquidity coverage ratio (“Basel III LCR”) for U.S. banking organizations (the “Liquidity Coverage Rules”) that establishes a minimum LCR for certain internationally active bank and nonbank financial companies (excluding KeyCorp) and a modified version of the LCR (“Modified LCR”) for BHCs and other depository institution holding companies with over $50 billion in consolidated assets that are not internationally active (including KeyCorp). KeyBank will not be subject to the LCR or the Modified LCR under the Liquidity Coverage Rules unless the OCC affirmatively determines that application to KeyBank is appropriate in light of KeyBank’s asset size, level of complexity, risk profile, scope of operations, affiliation with foreign or domestic covered entities, or risk to the financial system.

Under the Liquidity Coverage Rules, KeyCorp must calculate a Modified LCR on a monthly basis, and was required to satisfy a minimum Modified LCR requirement of 100% by January 1, 2017. At September 30, 2018, Key’s Modified LCR was above 100%. In the future, KeyCorp may change the composition of our investment portfolio,

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increase the size of the overall investment portfolio, and modify product offerings to enhance or optimize our liquidity position.

Net stable funding ratio

The federal banking agencies commenced the U.S. implementation of the Basel III net stable funding ratio (“NSFR”) in April and May 2016, with the release of a proposed rule to implement a NSFR requirement for certain internationally active banking organizations (excluding KeyCorp) and a modified version of the minimum NSFR requirement (“Modified NSFR”) for BHCs and other depository institution holding companies with over $50 billion in consolidated assets that are not internationally active (including KeyCorp), together with quarterly public disclosure requirements. The proposed rule would require banking organizations to satisfy a minimum NSFR requirement of 1.0 on an ongoing basis. However, banking organizations subject to the Modified NSFR (like KeyCorp) would be required to maintain a lower minimum amount of available stable funding, equal to 70% of the required stable funding under the NSFR. The proposed rule was scheduled to be effective on January 1, 2018; however, it has not been adopted in final form. The comment period for the NPR expired on August 5, 2016. If the proposed NSFR requirement is adopted as a final rule, then similar to actions taken in connection with the implementation of the Liquidity Coverage Rules, KeyCorp may adjust its balance sheet or modify product offerings to enhance its liquidity position.

Resolution and recovery planning

BHCs with at least $50 billion in total consolidated assets, like KeyCorp, are required to periodically submit to the Federal Reserve and FDIC a plan discussing how the company could be rapidly and efficiently resolved if the company failed or experienced material financial distress. Insured depository institutions with at least $50 billion in total consolidated assets, like KeyBank, are also required to submit a resolution plan to the FDIC. These plans are due annually unless the requirement to submit the plans is deferred by the regulators. On December 1, 2017, KeyCorp submitted its resolution plan to the Federal Reserve and the FDIC. KeyBank submitted its resolution plan to the FDIC on June 20, 2018. KeyCorp will not be required to submit a resolution plan for 2018 because the FDIC and Federal Reserve deferred such requirement (for 14 firms, including KeyCorp) until December 2019. KeyBank will not be required to submit a resolution plan in 2019 because the FDIC extended the next filing due date for all depository institution resolution plan submissions until no sooner than July 1, 2020. The Federal Reserve and FDIC make available on their websites the public sections of resolution plans for the companies, including KeyCorp and KeyBank, that submitted plans. The public sections of the resolution plans of KeyCorp and KeyBank are available at http://www.federalreserve.gov/supervisionreg/resolution-plans.htm and https://www.fdic.gov/regulations/reform/resplans/.

On September 28, 2016, the OCC released final guidelines that establish standards for recovery planning by certain large OCC-regulated institutions, including KeyBank. The guidelines require such institutions to establish a comprehensive framework for evaluating the financial effects of severe stress events, and recovery actions an institution may pursue to remain a viable, going concern during a period of severe financial stress. Under the final guidelines, an institution’s recovery plan must include triggers to alert the institution of severe stress events, escalation procedures, recovery options, and a process for periodic review and approval by senior management and the board of directors. The recovery plan should be tailored to the complexity, scope of operations, and risk profile of the institution. Because KeyBank had average total consolidated assets of greater than $100 billion but less than $750 billion as reported on KeyBank’s Consolidated Reports of Condition and Income for the four most recent consecutive quarters prior to January 1, 2017, it was required to be in compliance with the guidelines not later than January 1, 2018. We believe that KeyBank is in compliance with the guidelines. On September 19, 2018, the OCC issued a proposal to amend its recovery planning guidelines to increase, from $50 billion to $250 billion, the asset threshold for applying the guidelines to national banks. Comments on this proposal are due by November 5, 2018. If this proposal is adopted, KeyBank will no longer be subject to the guidelines.

Economic Growth, Regulatory Relief, and Consumer Protection Act

On May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) into law. EGRRCPA made certain amendments to the Dodd-Frank Act and other federal banking laws. EGRRCPA raised, from $50 billion to $250 billion, the asset threshold above which the Federal Reserve is required to apply to BHCs enhanced prudential standards (including supervisory and company-run stress tests, resolution plan requirements, single counterparty credit limits, risk management requirements, and liquidity requirements) and early remediation requirements (collectively, “EPSs”). EPSs, which were imposed by Sections

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165 and 166 of the Dodd-Frank Act, are discussed in more detail in Item 1. Business of our 2017 Form 10-K under the heading “Supervision and Regulation - Other Regulatory Developments under the Dodd-Frank Act - Enhanced prudential standards and early remediation requirements.”

EGRRCPA raised the asset threshold for applying EPSs to BHCs in two stages. BHCs having total consolidated assets less than $100 billion were no longer subject to such EPSs immediately upon enactment of this statute. BHCs having at least $100 billion but less than $250 billion in total consolidated assets (like KeyCorp) will be no longer subject to these requirements as of 18 months after the date of enactment. However, under this statute, the Federal Reserve is required, after the end of this 18-month period, to conduct periodic supervisory stress tests of BHCs with assets between $100 billion and $250 billion (like KeyCorp), and the requirement for a publicly traded BHC to have a risk committee continues to apply if a BHC has assets of at least $50 billion. In addition, EGRRCPA gives the Federal Reserve the authority, following certain notice and comment procedures, to continue to apply other EPSs to any such firm or firms (including KeyCorp) if it determines that the application of the EPS is appropriate to prevent or mitigate risks to financial stability or to promote the safety and soundness of the BHC or BHCs, taking into consideration the BHC’s or BHCs’ capital structure, riskiness, complexity, financial activities, size, and other relevant factors. The Federal Reserve is also authorized to exempt any BHC with assets between $100 billion and $250 billion from any EPS prior to the end of the 18-month period following enactment of EGRRCPA.

On October 31, 2018, the federal banking agencies issued two Notices of Proposed Rulemaking related to the implementation of EGRRCPA. The proposed rules would establish four risk-based categories of institutions and apply tailored capital and liquidity requirements for each respective category. Based on Key’s analysis of the proposal, KeyCorp would fall into the least restrictive of those categories. We are assessing the full extent of the impact to Key.

In addition to raising the asset threshold for the application of EPSs to BHCs, EGRRCPA raised the asset threshold that triggers the requirement in Section 165(i)(2) of the Dodd-Frank Act for federally regulated banks (like KeyBank) to conduct company-run stress tests on an annual basis from $10 billion to $250 billion in total consolidated assets. This provision is effective 18 months after the date of enactment of EGRRCPA.

EGRRCPA also amended the capital requirements for certain acquisition, development, and construction (“ADC”) loans. This statute allows the federal banking agencies to require depository institutions to assign a heightened risk weight to a high volatility commercial real estate (“HVCRE”) exposure under the Regulatory Capital Rules only if such exposure comes within the definition of an HVCRE ADC Loan as defined in EGRRCPA. The effect of this provision is to narrow the scope of exposures subject to a heightened risk weight. On July 6, 2018, the federal banking agencies issued a statement providing depository institutions (including KeyBank) and BHCs (including KeyCorp) with interim guidance concerning the application of this provision. On September 18, 2018, the federal banking agencies released a proposal to amend their regulatory capital rules to revise the definition of an HVCRE exposure to conform to the statutory definition of an HVCRE ADC Loan and requested comment on various interpretive issues relating to this proposal. This proposal was published in the Federal Register on September 28, 2018, with comments due by November 27, 2018.

Single counterparty credit limits

On June 14, 2018, the Federal Reserve released a final rule establishing single counterparty credit limits for BHCs with $250 billion or more in total consolidated assets. The final rule, which implements Section 165(e) of the Dodd-Frank Act, limits the aggregate net credit exposure of such a BHC to a single counterparty to 25% of the BHC’s tier 1 capital and limits the aggregate net credit exposure of a global systemically important bank (“GSIB”) to another GSIB to 15% of the GSIB’s tier 1 capital. Although the final rule does not apply to KeyCorp, the Federal Reserve said that it will consider, at a later date, the extent to which credit exposure limits or other EPSs should be applied to BHCs with assets between $100 billion and $250 billion (such as KeyCorp).

Volcker Rule

On June 5, 2018, five federal agencies announced that they are requesting public comment on a proposal that would amend the Volcker Rule. The Volcker Rule implements Section 619 of the Dodd-Frank Act, which prohibits “banking entities,” such as KeyCorp, KeyBank, and their affiliates and subsidiaries, from owning, sponsoring, or having certain relationships with hedge funds and private equity funds (referred to as “covered funds”) and engaging in short-term proprietary trading of financial instruments, including securities, derivatives, commodity futures, and options on these instruments. The Volcker Rule is discussed in more detail in Item 1. Business of our

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2017 Form 10-K under the heading “Supervision and Regulation - Other Regulatory Developments under the Dodd-Frank Act - Volcker Rule.”

The stated objective of the new proposal is to simplify and tailor compliance requirements relating to the Volcker Rule. Among other things, the new proposal would (1) tailor the rule’s compliance requirements based on the size of a firm’s trading assets and liabilities; (2) revise the term “trading account” by replacing the short-term intent-based prong with a new accounting-based prong; (3) modify the eligibility criteria for a banking entity to be able to rely on certain exemptions from the proprietary trading and covered fund prohibitions; and (4) simplify the trading activity information that a banking entity is required to provide to the agencies. In addition to requesting comment on the proposed changes, the five agencies requested comment on a large number of specific questions on various issues concerning implementation of the Volcker Rule. The proposal was published in the Federal Register on July 17, 2018, with a 60-day comment period. The comment period was later extended to October 17, 2018.

Deposit insurance and assessments

As required under the Dodd-Frank Act, in March 2015, the FDIC approved a final rule to impose a surcharge on the quarterly deposit insurance assessments of insured depository institutions having total consolidated assets of at least $10 billion (like KeyBank). The surcharge is 4.5 cents per $100 of the institution’s assessment base (after making certain adjustments). The final rule became effective on July 1, 2016. As of July 1, 2016, KeyBank must pay a surcharge to assist in bringing the reserve ratio to the statutory minimum of 1.35%. Surcharges will continue through the quarter that the DIF reserve ratio reaches or exceeds 1.35%, but not later than December 31, 2018. If the reserve ratio does not reach 1.35% by December 31, 2018 (provided it is at least 1.15%), the FDIC will impose a shortfall assessment on March 31, 2019, on insured depository institutions with total consolidated assets of $10 billion or more (like KeyBank).

In December 2016, the FDIC issued a final rule that imposes recordkeeping requirements on insured depository institutions with two million or more deposit accounts (including KeyBank) in order to facilitate rapid payment of insured deposits to customers if the institutions were to fail. The rule requires those insured depository institutions to: (i) maintain complete and accurate data on each depositor’s ownership interest by right and capacity for all of the institution’s deposit accounts; and (ii) develop the capability to calculate the insured and uninsured amounts for each deposit owner within 24 hours of failure. The FDIC will conduct periodic testing of compliance with these requirements, and institutions subject to the rule must submit to the FDIC a certification of compliance, signed by the bank’s chief executive officer, and a deposit insurance coverage summary report on or before the mandatory compliance date and annually thereafter. The final rule became effective on April 1, 2017, with a mandatory compliance date of April 1, 2020. The FDIC has been releasing Frequently Asked Questions on a rolling basis, and has committed to continue this practice as institutions subject to the rule present issues associated with its implementation that require FDIC consultation.

ERISA fiduciary standard

In April 2016, the Department of Labor published final rules and amendments to certain prohibited transaction exemptions regarding service providers who would be regarded as fiduciaries under ERISA for making investment advice recommendations to: (i) certain retirement plan fiduciaries, participants, or beneficiaries; and (ii) owners or beneficiaries of individual retirement accounts and health savings accounts, among other retirement plans. The purpose of the rules were to place fiduciary obligations, rather than the lesser legal obligations that currently apply, on these service providers. On March 15, 2018, the United States Court of Appeals for the Fifth Circuit invalidated the rule in its entirety and issued a mandate on June 21, 2018, invalidating the rule on a nationwide basis.

Community Reinvestment Act

The Community Reinvestment Act (“CRA”) was enacted in 1977 to encourage depository institutions to help meet the credit needs of the communities that they serve, including low- and moderate-income (“LMI”) neighborhoods, consistent with the institutions’ safe and sound operations. The CRA requires the federal banking agencies to assess the record of each institution that it supervises in meeting the credit needs of its entire community, including LMI neighborhoods.

On September 5, 2018, the OCC published in the Federal Register an advance notice of proposed rulemaking (“ANPR”) requesting public input on ways to revise the agency’s CRA regulations to update the framework by which the OCC assesses a bank’s CRA performance. The OCC stated that the purpose of updating the agency’s CRA

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regulations is to encourage more community and economic development in areas that need it most, bring greater clarity, consistency and certainty to the CRA evaluation process, and provide flexibility to accommodate banks with different business strategies. The OCC invited comments on a number of questions, including ones that concern the use of a metrics-based framework, the redefinition of assessment areas, and the expansion of CRA-qualifying activities. Comments on the ANPR are due by November 19, 2018. Any revision to the OCC’s CRA regulations would apply to national banks, including KeyBank.

Results of Operations

Earnings overview

The following chart provides a reconciliation of net income from continuing operations attributable to Key common shareholders for the three months ended September 30, 2017, to the three months ended September 30, 2018 (dollars in millions):

The following discussion explains the key factors that caused these elements to change.

Net interest income

One of our principal sources of revenue is net interest income. Net interest income is the difference between interest income received on earning assets (such as loans and securities) and loan-related fee income, and interest expense paid on deposits and borrowings. There are several factors that affect net interest income, including:

• the volume, pricing, mix, and maturity of earning assets and interest-bearing liabilities;

• the volume and value of net free funds, such as noninterest-bearing deposits and equity capital;

• the use of derivative instruments to manage interest rate risk;

• interest rate fluctuations and competitive conditions within the marketplace;

• asset quality; and

• fair value accounting of acquired earning assets and interest-bearing liabilities.

To make it easier to compare both the results across several periods and the yields on various types of earning assets (some taxable, some not), we present net interest income in this discussion on a “TE basis” (i.e., as if all income were taxable and at the same rate). For example, $100 of tax-exempt income would be presented as $126, an amount that, if taxed at the statutory federal income tax rate of 21%, would yield $100. Prior to 2018, $100 of tax-exempt income would be presented as $154, an amount that, if taxed at the previous statutory federal income tax rate of 35%, would yield $100.

Figure 6 shows the various components of our balance sheet that affect interest income and expense, and their respective yields or rates over the past five quarters. This figure also presents a reconciliation of TE net interest

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income to net interest income reported in accordance with GAAP for each of those quarters. The net interest margin, which is an indicator of the profitability of the earning assets portfolio less cost of funding, is calculated by dividing annualized TE net interest income by average earning assets.

TE net interest income was $993 million for the third quarter of 2018, and the net interest margin was 3.18%, compared to TE net interest income of $962 million and a net interest margin of 3.15% for the third quarter of 2017, reflecting the benefit from higher interest rates and higher earning asset balances. Third quarter 2018 net interest income included $26 million of purchase accounting accretion, a decline of $22 million from the third quarter of 2017. For the fourth quarter of 2018, we expect net interest income to be up 1% to 3% compared to the third quarter of 2018.

For the nine months ended September 30, 2018, TE net interest income was $2.9 billion and the net interest margin was 3.17%. Compared to the same period last year, net interest income increased $54 million and the net interest margin decreased two basis points. Both net interest income and the net interest margin in 2018 benefited from higher interest rates and higher earning asset balances. These benefits were partially offset by higher wholesale funding costs, in addition to a continued expected decline in purchase accounting accretion.

Average loans were $88.5 billion for the third quarter of 2018, an increase of $1.7 billion compared to the third quarter of 2017, reflecting broad-based growth in commercial and industrial loans, partially offset by higher paydowns in commercial real estate balances and home equity lines of credit. For the fourth quarter of 2018, we expect average loans to be up 1% to 3% compared to the third quarter of 2018.

Average deposits totaled $105.6 billion for the third quarter of 2018, an increase of $2.5 billion compared to the year-ago quarter, reflecting growth in higher-yielding deposit products, as well as strength in our retail banking franchise and growth from commercial relationships. For the fourth quarter of 2018, we expect average deposits to be within 2% of our third quarter of 2018 results.

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Figure 6. Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates and Components of Net Interest Income Changes from Continuing Operations

	Three months ended September 30, 2018							Three months ended September 30, 2017							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)	$	44,749		$	495	4.39	%	$	41,416		$	414	3.97	%	$	35		$	46		$	81
Real estate — commercial mortgage	14,268			176		4.89		14,850			169		4.51		(7		)	14			7
Real estate — construction	1,759			22		5.05		2,054			23		4.51		(4		)	3			(1		)
Commercial lease financing	4,444			43		3.88		4,694			46		3.89		(2		)	(1		)	(3		)
Total commercial loans	65,220			736		4.49		63,014			652		4.11		22			62			84
Real estate — residential mortgage	5,466			55		3.99		5,493			54		3.92		—			1			1
Home equity loans	11,415			137		4.80		12,314			136		4.41		(10		)	11			1
Consumer direct loans	1,789			35		7.71		1,774			33		7.26		—			2			2
Credit cards	1,095			32		11.43		1,049			30		11.34		1			1			2
Consumer indirect loans	3,482			37		4.25		3,170			37		4.64		3			(3		)	—
Total consumer loans	23,247			296		5.06		23,800			290		4.85		(6		)	12			6
Total loans	88,467			1,032		4.64		86,814			942		4.31		16			74			90
Loans held for sale	1,117			12		4.59		1,607			17		4.13		(5		)	—			(5		)
Securities available for sale (b), (e)	17,631			102		2.22		18,574			91		1.96		(5		)	16			11
Held-to-maturity securities (b)	12,065			72		2.40		10,469			55		2.12		9			8			17
Trading account assets	787			7		3.37		889			7		2.74		(1		)	1			—
Short-term investments	2,928			15		1.93		2,166			6		1.21		3			6			9
Other investments (e)	685			6		3.27		728			5		2.46		—			1			1
Total earning assets	123,680			1,246		3.98		121,247			1,123		3.68		17			106			123
Allowance for loan and lease losses	(886		)					(868		)
Accrued income and other assets	13,935							13,977
Discontinued assets	1,186							1,417
Total assets	$	137,915						$	135,773
LIABILITIES
NOW and money market deposit accounts	$	56,391		82		.58		$	53,826		37		.27		2			43			45
Savings deposits	5,413			3		.20		6,697			5		.25		(1		)	(1		)	(2		)
Certificates of deposit ($100,000 or more)	8,186			38		1.86		6,402			21		1.31		7			10			17
Other time deposits	5,026			17		1.40		4,664			9		.81		1			7			8
Total interest-bearing deposits	75,016			140		.74		71,589			72		.40		9			59			68
Federal funds purchased and securities sold under repurchase agreements	552			1		1.00		456			—		.23		—			1			1
Bank notes and other short-term borrowings	596			4		2.76		865			3		1.49		(1		)	2			1
Long-term debt (f), (g)	12,678			108		3.34		12,631			86		2.75		—			22			22
Total interest-bearing liabilities	88,842			253		1.13		85,541			161		.75		8			84			92
Noninterest-bearing deposits	30,610							31,516
Accrued expense and other liabilities	2,065							2,057
Discontinued liabilities (g)	1,186							1,417
Total liabilities	122,703							120,531
EQUITY
Key shareholders’ equity	15,210							15,241
Noncontrolling interests	2							1
Total equity	15,212							15,242
Total liabilities and equity	$	137,915						$	135,773
Interest rate spread (TE)						2.85	%						2.93	%
Net interest income (TE) and net interest margin (TE)				993		3.18	%				962		3.15	%	$	9		$	22		31
TE adjustment (b)				7							14
Net interest income, GAAP basis				$	986						$	948

(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% and 35% for the three months ended September 30, 2018, and September 30, 2017, respectively.

(c) For purposes of these computations, nonaccrual loans are included in average loan balances.

(d) Commercial and industrial average balances include $128 million and $117 million of assets from commercial credit cards for the three months ended September 30, 2018, and September 30, 2017, 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.

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Figure 6. Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates and Components of Net Interest Income Changes from Continuing Operations

	Nine months ended September 30, 2018							Nine months ended September 30, 2017							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)	$	44,178		$	1,414	4.28	%	$	40,700		$	1,196	3.93	%	$	107		$	111		$	218
Real estate — commercial mortgage	14,137			513		4.85		15,043			520		4.62		(32		)	25			(7		)
Real estate — construction	1,834			67		4.88		2,203			80		4.86		(13		)	—			(13		)
Commercial lease financing	4,552			125		3.67		4,673			140		3.99		(4		)	(11		)	(15		)
Total commercial loans	64,701			2,119		4.38		62,619			1,936		4.13		58			125			183
Real estate — residential mortgage	5,466			163		3.97		5,507			160		3.88		(1		)	4			3
Home equity loans	11,629			406		4.67		12,465			402		4.32		(28		)	32			4
Consumer direct loans	1,774			101		7.59		1,760			94		7.10		1			6			7
Credit cards	1,085			92		11.32		1,053			88		11.15		3			1			4
Consumer indirect loans	3,363			107		4.27		3,081			112		4.85		10			(15		)	(5		)
Total consumer loans	23,317			869		4.98		23,866			856		4.79		(15		)	28			13
Total loans	88,018			2,988		4.54		86,485			2,792		4.31		43			153			196
Loans held for sale	1,226			40		4.40		1,293			39		4.01		(2		)	3			1
Securities available for sale (b), (e)	17,653			294		2.14		18,582			276		1.96		(14		)	32			18
Held-to-maturity securities (b)	12,111			213		2.35		10,311			161		2.08		30			22			52
Trading account assets	879			21		3.19		966			21		2.84		(2		)	2			—
Short-term investments	2,334			31		1.76		1,918			14		1.00		4			13			17
Other investments (e)	706			17		3.10		708			12		2.20		—			5			5
Total earning assets	122,927			3,604		3.90		120,263			3,315		3.68		59			230			289
Allowance for loan and lease losses	(879		)					(862		)
Accrued income and other assets	13,966							13,801
Discontinued assets	1,243							1,477
Total assets	$	137,257						$	134,679
LIABILITIES
NOW and money market deposit accounts	$	54,891		187		.46		$	54,178		103		.25		1			83			84
Savings deposits	5,971			13		.28		6,635			10		.19		(1		)	4			3
Certificates of deposit ($100,000 or more)	7,563			97		1.72		6,050			56		1.24		16			25			41
Other time deposits	4,947			46		1.25		4,673			27		.78		2			17			19
Total interest-bearing deposits	73,372			343		.63		71,536			196		.37		18			129			147
Federal funds purchased and securities sold under repurchase agreements	1,146			10		1.22		570			1		.27		2			7			9
Bank notes and other short-term borrowings	1,015			17		2.19		1,291			12		1.27		(3		)	8			5
Long-term debt (f), (g)	12,631			302		3.17		11,510			228		2.66		24			50			74
Total interest-bearing liabilities	88,164			672		1.02		84,907			437		.69		41			194			235
Noninterest-bearing deposits	30,701							31,123
Accrued expense and other liabilities	2,102							1,962
Discontinued liabilities (g)	1,243							1,478
Total liabilities	122,210							119,470
EQUITY
Key shareholders’ equity	15,045							15,208
Noncontrolling interests	2							1
Total equity	15,047							15,209
Total liabilities and equity	$	137,257						$	134,679
Interest rate spread (TE)						2.88	%						2.99	%
Net interest income (TE) and net interest margin (TE)				2,932		3.17	%				2,878		3.19	%	$	18		$	36		$	54
TE adjustment (b)				23							39
Net interest income, GAAP basis				$	2,909						$	2,839

(a) Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.

(b) Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% and 35% for the nine months ended September 30, 2018, and September 30, 2017, respectively.

(c) For purposes of these computations, nonaccrual loans are included in average loan balances.

(d) Commercial and industrial average balances include $125 million and $116 million of assets from commercial credit cards for the nine months ended September 30, 2018, and September 30, 2017, 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 Key’s matched funds transfer pricing methodology to discontinued operations.

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Provision for credit losses

Our provision for credit losses was $62 million for the three months ended September 30, 2018, compared to $51 million for the three months ended September 30, 2017. The increase of $11 million in our provision for credit losses was related to an increase in net loan-charge offs during the third quarter of 2018 compared to one year ago. For the fourth quarter of 2018, we expect the provision for credit losses and net loan charge-offs to remain relatively stable with our third quarter of 2018 results.

Noninterest income

As shown in Figure 7, noninterest income was $609 million for the third quarter of 2018, compared to $592 million for the year-ago quarter. Noninterest income represented 38% and 39% of total revenue for the three and nine months ended September 30, 2018, respectively, compared to 38% and 39% for the three and nine months ended September 30, 2017, respectively. For the fourth quarter of 2018, we expect noninterest income to be up 4% to 6% compared to the third quarter of 2018.

The following discussion explains the composition of certain elements of our noninterest income and the factors that caused those elements to change.

Figure 7. Noninterest Income

(a) Other noninterest income includes operating lease income and other leasing gains, corporate services income, corporate-owned life insurance income, consumer mortgage income, mortgage servicing fees, and other income. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.

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Trust and investment services income 

Trust and investment services income consists of brokerage commissions, trust and asset management fees, and insurance income. The assets under management that primarily generate these revenues are shown in Figure 8. For the three months ended September 30, 2018, trust and investment services income decreased $18 million, or 13.3%, compared to the same period one year ago. For the nine months ended September 30, 2018, trust and investment services income was down $26 million, or 6.4%, from the nine months ended September 30, 2017. These decreases were primarily the result of the sale of KIBS in the second quarter of 2018 and lower equity and fixed income commissions in the Key Corporate Bank line of business. 

A significant portion of our trust and investment services income depends on the value and mix of assets under management. At September 30, 2018, our bank, trust, and registered investment advisory subsidiaries had assets under management of $40.6 billion, compared to $38.7 billion at September 30, 2017. The increase in assets under management, as shown in Figure 8, was primarily attributable to market growth over the past 12 months.

Figure 8. Assets Under Management 

in millions	September 30, 2018		June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017
Assets under management by investment type:
Equity	$	24,958	$	24,125	$	23,629	$	24,081	$	23,342
Securities lending	1,049		977		837		947		876
Fixed income	10,946		11,276		11,098		10,930		11,009
Money market	3,622		3,285		3,439		3,630		3,433
Total assets under management	$	40,575	$	39,663	$	39,003	$	39,588	$	38,660

Investment banking and debt placement fees

Investment banking and debt placement fees consists of syndication fees, debt and equity financing fees, financial adviser fees, gains on sales of commercial mortgages, and agency origination fees. Investment banking and debt placement fees increased $25 million, or 17.7%, from the year-ago quarter. For the nine months ended September

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30, 2018, investment banking and debt placement fees increased $61 million, or 15.1%, from the nine months ended September 30, 2017. These increases were caused by growth in investment banking advisory fees, partially driven by the acquisition of Cain Brothers in the fourth quarter of 2017.

Cards and payments income

Cards and payments income, which consists of debit card, consumer and commercial credit card, and merchant services income, decreased $6 million, or 8.0%, from the year-ago quarter. For the nine months ended September 30, 2018, cards and payments income was down $8 million, or 3.8%, from the nine months ended September 30, 2017. Cards and payments income and other expense were both impacted by the 2018 adoption of the revenue recognition accounting standard. The new accounting standard had no impact to net income during 2018. Excluding the impact of the new revenue recognition accounting standard, cards and payments income increased for the three and nine months ended September 30, 2018, due to growth in credit and debit card fees, purchase and prepaid card fees, and merchant services income.

Service charges on deposit accounts

Service charges on deposit accounts decreased $6 million, or 6.6%, for the three months ended September 30, 2018, compared to the same period one year ago. For the nine months ended September 30, 2018, service charges on deposit accounts was down $3 million, or 1.1%, from the nine months ended September 30, 2017.

Other noninterest income

Other noninterest income includes operating lease income and other leasing gains, corporate services income,

corporate-owned life insurance income, consumer mortgage income, mortgage servicing fees, and other income. Other noninterest income increased $22 million, or 14.7%, from the year-ago quarter. This increase was primarily attributable to an increase in operating lease income and other leasing gains due to higher volumes, as well as $13 million of lease residual losses in the year-ago period.

For the nine months ended September 30, 2018, other noninterest income was up $24 million, or 4.5%, from the nine months ended September 30, 2017. Other income included a $78 million gain related to the sale of KIBS during the second quarter of 2018, compared to a $64 million gain from acquiring the remaining ownership in a merchant services joint venture in the second quarter of 2017. Corporate services income also contributed to the increase due to higher derivative income. Operating lease income and other leasing gains were negatively impacted by a $42 million lease residual loss in the second quarter of 2018, partially offset by $13 million of lease residual losses recognized in the third quarter of 2017.

Noninterest expense

As shown in Figure 9, noninterest expense was $964 million for the third quarter of 2018, compared to $992 million for the third quarter of 2017. Figure 9 gives a breakdown of our major categories of noninterest expense as a percentage of total noninterest expense for the third quarter of 2018. For the fourth quarter of 2018, we expect noninterest expense to be within 2% of our third quarter of 2018 results.

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Figure 9. Noninterest Expense 

(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.

(a) See Figure 2 entitled “GAAP to Non-GAAP Reconciliations” which presents the computations of certain financial measures related to “cash efficiency.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measure, which provides a basis for period-to-period comparisons.

Personnel

As shown in Figure 10, personnel expense, the largest category of our noninterest expense, decreased by $6 million, or 1.1%, for the three months ended September 30, 2018, compared to the same period one year ago. This decrease was driven by lower levels of severance, salaries, and contract labor.

For the nine months ended September 30, 2018, personnel expense was up $64 million, or 3.8%, from the nine months ended September 30, 2017. This increase was partially due to recent acquisitions as well as accelerated technology investments and higher performance-based compensation.

Figure 10. Personnel Expense 

	Three months ended September 30,				Change					Nine months ended September 30,				Change
dollars in millions	2018		2017		Amount			Percent		2018		2017		Amount		Percent
Salaries and contract labor	$	335	$	339	$	(4	)	(1.2	)%	$	1,015	$	995	$	20	2.0	%
Incentive and stock-based compensation	138		134		4			3.0		430		398		32		8.0
Employee benefits	79		81		(2		)	(2.5	)	266		256		10		3.9
Severance	1		5		(4		)	(80.0	)	22		20		2		10.0
Total personnel expense	$	553	$	559	$	(6	)	(1.1	)%	$	1,733	$	1,669	$	64	3.8	%

Net occupancy

Net occupancy expense increased $2 million, or 2.7%, for the third quarter of 2018, compared to the same period one year ago. The increase during the third quarter of 2018 was primarily due to higher property reserve expenses partially offset by lower rental expenses.

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For the nine months ended September 30, 2018, net occupancy expense was down $6 million, or 2.5%, from the nine months ended September 30, 2017. The decrease was primarily due to lower property reserves, rental expenses, and property management fees.

Other noninterest expense

Other noninterest expense includes equipment, operating lease expense, marketing, FDIC assessment, intangible asset amortization, OREO expense, and other miscellaneous expense categories. Other noninterest expense decreased $14 million, or 5.5%, from the year-ago quarter. For the nine months ended September 30, 2018, other noninterest expense was down $74 million, or 9.5%, from the nine months ended September 30, 2017. The declines in other expense were primarily driven by $20 million charitable contributions made in both the first and second quarters of 2017. Other miscellaneous expenses also declined from the three and nine months ended September 30, 2017. These declines were partially offset by higher operating lease expenses driven by increased operating lease originations and costs related to recent acquisitions.

Income taxes

We recorded tax expense from continuing operations of $87 million for the third quarter of 2018 and $134 million for the third quarter of 2017. For the nine months ended September 30, 2018, we recorded tax expense from continuing operations of $252 million, compared to $386 million for the same period one year ago.

Our federal tax expense differs from the amount that would be calculated using the federal statutory tax rate, primarily because we generate income from investments in tax-advantaged assets, such as corporate-owned life insurance and credits associated with renewable energy and low-income housing investments, and make periodic adjustments to our tax reserves. Tax expense for the three months ended September 30, 2018, and September 30, 2017, was affected by net discrete income tax benefits of $12 million and $13 million, respectively. Excluding the discrete income tax expense, the tax expense for the third quarter of 2018 was $99 million.

Additional information pertaining to how our tax expense (benefit) and the resulting effective tax rates were derived is included in Note 14 (“Income Taxes”) beginning on page 156 of our 2017 Form 10-K.

Line of Business Results

This section summarizes the financial performance of our two major business segments (operating segments): Key Community Bank and Key Corporate Bank. Note 18 (“Line of Business Results”) describes the products and services offered by each of these business segments, provides more detailed financial information pertaining to the segments, and explains “Other Segments” and “Reconciling Items.”

Figure 11 summarizes the contribution made by each major business segment to our “taxable-equivalent revenue from continuing operations” and “income (loss) from continuing operations attributable to Key” for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

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Figure 11. Major Business Segments — Taxable-Equivalent Revenue from Continuing Operations and Income (Loss) from Continuing Operations Attributable to Key

	Three months ended September 30,					Change					Nine months ended September 30,					Change
dollars in millions	2018		2017			Amount			Percent		2018		2017			Amount			Percent
REVENUE FROM CONTINUING OPERATIONS (TE)
Key Community Bank	$	994	$	945		$	49		5.2	%	$	2,949	$	2,834		$	115		4.1	%
Key Corporate Bank	574		561			13			2.3		1,674		1,736			(62		)	(3.6	)
Other Segments	24		42			(18		)	(42.9	)	99		132			(33		)	(25.0	)
Total Segments	1,592		1,548			44			2.8		4,722		4,702			20			.4
Reconciling Items (a)	10		6			4			N/M		80		(2		)	82			N/M
Total	$	1,602	$	1,554		$	48		3.1	%	$	4,802	$	4,700		$	102		2.2	%
INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO KEY
Key Community Bank	$	241	$	163		$	78		47.9	%	$	681	$	506		$	175		34.6	%
Key Corporate Bank	199		190			9			4.7		574		595			(21		)	(3.5	)
Other Segments	22		21			1			4.8		65		66			(1		)	(1.5	)
Total Segments	462		374			88			23.5		1,320		1,167			153			13.1
Reconciling Items (a)	20		(11		)	31			N/M		57		(73		)	130			N/M
Total	$	482	$	363		$	119		32.8	%	$	1,377	$	1,094		$	283		25.9	%

(a) Reconciling items consists primarily of the gain on the sale of KIBS for the nine-months ended September 30, 2018, the unallocated portion of merger-related charges for the three- and nine-months ended September 30, 2017, and items not allocated to the business segments because they do not reflect their normal operations.

Key Community Bank summary of operations

As shown in Figure 12, Key Community Bank recorded net income attributable to Key of $241 million for the third quarter of 2018, compared to $163 million for the year-ago quarter, benefiting from momentum in Key's core businesses and a lower tax rate as a result of tax reform.

TE net interest income increased in the third quarter of 2018 compared to the third quarter of 2017, primarily attributable to the benefit from higher interest rates and balance sheet growth, partially offset by lower purchase accounting accretion. Average loans and leases increased from the year-ago quarter largely driven by an $831 million, or 4.4%, increase in commercial and industrial loans. Additionally, average deposits increased driven by growth across multiple businesses, from the third quarter of 2017.

The provision for credit losses decreased from the year-ago quarter. Net loan charge-offs increased $2 million, or 4.9%, from the third quarter of 2017, as overall credit quality remained stable.

Noninterest income was down from the year-ago quarter, driven by lower service charges on deposit accounts and cards and payments income, which were impacted by the revenue recognition changes. This was partially offset by higher trust and investment services income which increased primarily due to higher assets under management from market growth.

Noninterest expense increased from the year-ago quarter. Personnel expense increased, primarily driven by higher production related incentive compensation and ongoing investments, including residential mortgage.

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Figure 12. Key Community Bank

	Three months ended September 30,				Change					Nine months ended September 30,				Change
dollars in millions	2018		2017		Amount			Percent		2018		2017		Amount			Percent
SUMMARY OF OPERATIONS
Net interest income (TE)	$	726	$	673	$	53		7.9	%	$	2,129	$	1,978	$	151		7.6	%
Noninterest income	268		272		(4		)	(1.5	)	820		856		(36		)	(4.2	)
Total revenue (TE)	994		945		49			5.2		2,949		2,834		115			4.1
Provision for credit losses	43		59		(16		)	(27.1	)	128		152		(24		)	(15.8	)
Noninterest expense	635		626		9			1.4		1,928		1,876		52			2.8
Income (loss) before income taxes (TE)	316		260		56			21.5		893		806		87			10.8
Allocated income taxes and TE adjustments	75		97		(22		)	(22.7	)	212		300		(88		)	(29.3	)
Net income (loss) attributable to Key	$	241	$	163	$	78		47.9	%	$	681	$	506	$	175		34.6	%
AVERAGE BALANCES
Loans and leases	$	47,862	$	47,614	$	248		.5	%	$	47,844	$	47,396	$	448		.9	%
Total assets	51,740		51,642		98			.2		51,739		51,361		378			.7
Deposits	82,259		79,563		2,696			3.4		81,053		79,439		1,614			2.0
Assets under management at period end	$	40,575	$	38,660	$	1,915		5.0	%	$	40,575	$	38,660	$	1,915		5.0	%

ADDITIONAL KEY COMMUNITY BANK DATA

	Three months ended September 30,						Change					Nine months ended September 30,				Change
dollars in millions	2018			2017			Amount			Percent		2018		2017		Amount			Percent
NONINTEREST INCOME
Trust and investment services income	$	90		$	85		$	5		5.9	%	$	271	$	253	$	18		7.1	%
Services charges on deposit accounts	72			78			(6		)	(7.7	)	226		230		(4		)	(1.7	)
Cards and payments income	59			65			(6		)	(9.2	)	170		180		(10		)	(5.6	)
Other noninterest income	47			44			3			6.8		153		193		(40		)	(20.7	)
Total noninterest income	$	268		$	272		$	(4	)	(1.5	)%	$	820	$	856	$	(36	)	(4.2	)%
AVERAGE DEPOSITS OUTSTANDING
NOW and money market deposit accounts	$	45,967		$	44,481		$	1,486		3.3		$	45,129	$	44,795	$	334		.7	%
Savings deposits	4,923			5,165			(242		)	(4.7	)%	5,019		5,242		(223		)	(4.3	)
Certificates of deposits ($100,000 or more)	5,608			4,195			1,413			33.7		5,269		4,031		1,238			30.7
Other time deposits	5,019			4,657			362			7.8		4,937		4,663		274			5.9
Noninterest-bearing deposits	20,742			21,065			(323		)	(1.5	)	20,699		20,708		(9		)	—
Total deposits	$	82,259		$	79,563		$	2,696		3.4	%	$	81,053	$	79,439	$	1,614		2.0	%
HOME EQUITY LOANS
Average balance	$	11,317		$	12,182
Combined weighted-average loan-to-value ratio (at date of origination)	70		%	69		%
Percent first lien positions	60			60
OTHER DATA
Branches	1,166			1,208
Automated teller machines	1,518			1,588

Key Corporate Bank summary of operations

As shown in Figure 13, Key Corporate Bank recorded net income attributable to Key of $199 million for the third quarter of 2018, compared to $190 million for the same period one year ago.

TE net interest income decreased in the third quarter of 2018 compared to the third quarter of 2017. This decline is primarily related to $7 million of lower purchase accounting accretion, as well as loan spread compression. Average loans and leases increased from the year-ago quarter driven by broad-based growth in commercial and industrial loans. Average deposit balances decreased from the year-ago quarter driven by the managed exit of higher cost corporate and public sector deposits offsetting growth in core deposits.

The provision for credit losses increased compared to the third quarter of 2017, mostly due to higher net loan charge-offs.

Noninterest income was up from the prior year. Investment banking and debt placement fees increased related to the acquisition of Cain Brothers and organic growth. Operating lease income and other leasing gains increased due

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to higher volumes, as well as lease residual losses in the year-ago period. These increases were slightly offset by lower trust and investment services income as well as declines in both mortgage fees due to lower transactional fees and corporate services income due to lower derivatives income.

Noninterest expense increased from the third quarter of 2017. The increase from the prior year was largely related to acquisitions and investments made throughout the year driving increases in personnel expense and intangible amortization, as well as higher operating lease expense, driven by increased volume.

Figure 13. Key Corporate Bank  

	Three months ended September 30,					Change					Nine months ended September 30,				Change
dollars in millions	2018		2017			Amount			Percent		2018		2017		Amount			Percent
SUMMARY OF OPERATIONS
Net interest income (TE)	$	273	$	292		$	(19	)	(6.5	)%	$	822	$	909	$	(87	)	(9.6	)%
Noninterest income	301		269			32			11.9		852		827		25			3.0
Total revenue (TE)	574		561			13			2.3		1,674		1,736		(62		)	(3.6	)
Provision for credit losses	20		(11		)	31			N/M		62		26		36			138.5
Noninterest expense	316		303			13			4.3		953		902		51			5.7
Income (loss) before income taxes (TE)	238		269			(31		)	(11.5	)	659		808		(149		)	(18.4	)
Allocated income taxes and TE adjustments	39		79			(40		)	(50.6	)	85		213		(128		)	(60.1	)
Net income (loss) attributable to Key	$	199	$	190		$	9		4.7	%	$	574	$	595	$	(21	)	(3.5	)%
AVERAGE BALANCES
Loans and leases	$	39,714	$	38,021		$	1,693		4.5	%	$	39,232	$	37,804	$	1,428		3.8	%
Loans held for sale	1,042		1,521			(479		)	(31.5	)	1,152		1,208		(56		)	(4.6	)
Total assets	46,860		45,257			1,603			3.5		46,544		44,506		2,038			4.6
Deposits	21,056		21,559			(503		)	(2.3	)%	20,977		21,237		(260		)	(1.2	)%

ADDITIONAL KEY CORPORATE BANK DATA

	Three months ended September 30,				Change					Nine months ended September 30,				Change
dollars in millions	2018		2017		Amount			Percent		2018		2017		Amount			Percent
NONINTEREST INCOME
Trust and investment services income	$	27	$	34	$	(7	)	(20.6	)%	$	85	$	106	$	(21	)	(19.8	)%
Investment banking and debt placement fees	162		137		25			18.2		456		395		61			15.4
Operating lease income and other leasing gains	34		13		21			161.5		51		56		(5		)	(8.9	)
Corporate services income	37		40		(3		)	(7.5	)	124		116		8			6.9
Service charges on deposit accounts	13		13		—			—		39		37		2			5.4
Cards and payments income	10		10		—			—		32		29		3			10.3
Payments and services income	60		63		(3		)	(4.8	)	195		182		13			7.1
Mortgage servicing fees	15		18		(3		)	(16.7	)	51		47		4			8.5
Other noninterest income	3		4		(1		)	(25.0	)	14		41		(27		)	(65.9	)
Total noninterest income	$	301	$	269	$	32		11.9	%	$	852	$	827	$	25		3.0	%

Other Segments

Other Segments consist of Corporate Treasury, Key’s Principal Investing unit, and various exit portfolios. Other Segments generated net income attributable to Key of $22 million for the third quarter of 2018, compared to $21 million for the same period last year.

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Financial Condition

Loans and loans held for sale

Figure 14. Breakdown of Loans at September 30, 2018

(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.

At September 30, 2018, total loans outstanding from continuing operations were $89.3 billion, compared to $86.4 billion at December 31, 2017. For more information on balance sheet carrying value, see Note 1 (“Summary of Significant Accounting Policies”) under the headings “Loans” and “Loans Held for Sale” on page 100 of our 2017 Form 10-K.

Commercial loan portfolio

Commercial loans outstanding were $66.0 billion at September 30, 2018, an increase of $3.2 billion, or 5.2%, compared to December 31, 2017, primarily driven by an increase in commercial and industrial loans. Figure 15 provides our commercial loan portfolios by industry classification at September 30, 2018, and December 31, 2017.

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Figure 15. Commercial Loans by Industry

September 30, 2018	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	1,022	$	174	$	119	$	1,315	2.0	%
Automotive	1,943		452		46		2,441		3.7
Business products	1,527		122		35		1,684		2.6
Business services	2,791		139		223		3,153		4.8
Chemicals	930		39		57		1,026		1.6
Commercial real estate	5,868		10,985		20		16,873		25.6
Construction materials and contractors	1,757		216		199		2,172		3.3
Consumer discretionary	3,805		534		485		4,824		7.3
Consumer services	3,252		779		212		4,243		6.4
Equipment	1,609		96		81		1,786		2.7
Finance	5,182		610		349		6,141		9.3
Healthcare	3,129		1,951		375		5,455		8.3
Materials manufacturing and mining	1,077		53		38		1,168		1.8
Oil and gas	1,647		42		59		1,748		2.6
Public exposure	2,670		47		992		3,709		5.6
Technology	930		26		66		1,022		1.5
Transportation	1,388		210		801		2,399		3.6
Utilities	3,912		4		313		4,229		6.4
Other	584		—		—		584		.9
Total	$	45,023	$	16,479	$	4,470	$	65,972	100.0	%
December 31, 2017	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	995	$	188	$	142	$	1,325	2.1	%
Automotive	2,156		473		73		2,702		4.3
Business products	1,395		132		36		1,563		2.5
Business services	2,735		159		237		3,131		5.0
Chemicals	856		48		63		967		1.5
Commercial real estate	5,731		10,600		23		16,354		26.1
Construction materials and contractors	1,635		243		161		2,039		3.3
Consumer discretionary	3,642		584		546		4,772		7.6
Consumer services	2,907		800		263		3,970		6.3
Equipment	1,496		134		89		1,719		2.7
Finance	3,999		49		341		4,389		7.0
Healthcare	3,236		2,224		390		5,850		9.3
Materials manufacturing and mining	1,156		46		38		1,240		2.0
Oil and gas	1,163		30		60		1,253		2.0
Public exposure	2,796		52		1,054		3,902		6.2
Technology	961		24		80		1,065		1.7
Transportation	1,435		245		890		2,570		4.1
Utilities	3,075		10		340		3,425		5.5
Other	490		7		—		497		.8
Total	$	41,859	$	16,048	$	4,826	$	62,733	100.0	%

Commercial and industrial. Commercial and industrial loans are the largest component of our loan portfolio, representing 50% of our total loan portfolio at September 30, 2018, and 48% at December 31, 2017. This portfolio is approximately 83% variable rate and consists of loans originated in both Key Corporate Bank and Key Community Bank to large corporate, middle market, and small business clients.

Commercial and industrial loans totaled $45.0 billion at September 30, 2018, an increase of $3.2 billion, or 7.6%, compared to December 31, 2017. The growth was broad-based and spread across most industry categories, including increased lending in the finance, utilities, and oil and gas industries, which, combined, accounted for approximately 79% of the growth at September 30, 2018.

Commercial real estate loans. Our commercial real estate portfolio includes both mortgage and

construction loans, and is originated through two primary sources: our 15-state banking franchise, and KeyBank

Real Estate Capital, a national line of business that cultivates relationships with owners of commercial real estate

located both within and beyond the branch system. Approximately 70% of our average commercial real estate loans are generated by our KeyBank Real Estate Capital line of business. Nonowner-occupied properties, generally properties for which at least 50% of the debt service is provided by rental income from nonaffiliated third parties, represented 81% of total commercial real estate loans outstanding at September 30, 2018. Construction loans, which provide a stream of funding for properties not fully leased at origination to support debt service payments over the term of the contract or project, represented 11% of commercial real estate loans at period end.

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At September 30, 2018, commercial real estate loans totaled $16.5 billion, which includes $1.8 billion of construction loans. Compared to December 31, 2017, this portfolio increased $431 million, or 2.7%. We continue to focus primarily on owners of completed and stabilized commercial real estate in accordance with our relationship strategy.

As shown in Figure 16, our commercial real estate loan portfolio includes various property types and geographic

locations of the underlying collateral. These loans include commercial mortgage and construction loans in both Key

Community Bank and Key Corporate Bank.

Figure 16. Commercial Real Estate Loans

	Geographic Region														Total		Percent of Total		Construction		Commercial Mortgage
dollars in millions	West		Southwest		Central		Midwest		Southeast		Northeast		National
September 30, 2018
Nonowner-occupied:
Retail properties	$	130	$	95	$	117	$	191	$	186	$	723	$	352	$	1,794	10.9	%	$	125	$	1,669
Multifamily properties	441		335		892		516		1,082		1,861		840		5,967		36.2		1,212		4,755
Health facilities	53		—		55		107		189		792		448		1,644		10.0		9		1,635
Office buildings	249		7		125		115		160		946		121		1,723		10.4		107		1,616
Warehouses	87		33		16		41		62		291		131		661		4.0		56		605
Manufacturing facilities	24		—		19		40		25		61		64		233		1.4		16		217
Hotels/Motels	95		—		19		—		6		225		30		375		2.3		—		375
Residential properties	1		—		—		3		20		159		—		183		1.1		72		111
Land and development	22		4		5		2		1		58		—		92		.6		70		22
Other	96		—		47		102		3		372		18		638		3.9		12		626
Total nonowner-occupied	1,198		474		1,295		1,117		1,734		5,488		2,004		13,310		80.8		1,679		11,631
Owner-occupied	858		24		266		504		69		1,448		—		3,169		19.2		84		3,085
Total	$	2,056	$	498	$	1,561	$	1,621	$	1,803	$	6,936	$	2,004	16,479		100.0	%	$	1,763	$	14,716
December 31, 2017
Total	$	2,071	$	387	$	1,320	$	1,730	$	1,939	$	7,758	$	843	$	16,048			$	1,960	$	14,088
September 30, 2018
Nonowner-occupied:
Nonperforming loans	—		—		—		$	1	$	9	$	10	$	62	$	82	N/M		—		$	82
Accruing loans past due 90 days or more	—		—		—		3		—		16		—		19		N/M		$	6	13
Accruing loans past due 30 through 89 days	$	7	$	—	$	1	8		11		50		—		77		N/M		35		42

West –	Alaska, California, Hawaii, Idaho, Montana, Oregon, Washington, and Wyoming
Southwest –	Arizona, Nevada, and New Mexico
Central –	Arkansas, Colorado, Oklahoma, Texas, and Utah
Midwest –	Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin
Southeast –	Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Washington D.C., and West Virginia
Northeast –	Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont
National –	Accounts in three or more regions

Consumer loan portfolio

Consumer loans outstanding decreased by $376 million, or 1.6%, from December 31, 2017, driven by continued declines in the home equity loan portfolio, largely the result of paydowns on home equity lines of credit, partly offset by growth in indirect auto lending.

The home equity portfolio is comprised of loans originated by our Key Community Bank within our 15-state footprint and is the largest segment of our consumer loan portfolio, representing 49% of consumer loans outstanding at September 30, 2018. 

As shown in Figure 12, we held the first lien position for approximately 60% of the Key Community Bank home equity portfolio at both September 30, 2018, and September 30, 2017. For loans with real estate collateral, we track borrower performance monthly. Regardless of the lien position, credit metrics are refreshed quarterly, including recent FICO scores as well as updated loan-to-value ratios. This information is used in establishing the ALLL. Our methodology is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” beginning on page 102 of our 2017 Form 10-K.

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Figure 17. Consumer Loans by State

September 30, 2018	Real estate — residential mortgage		Home equity loans		Consumer direct loans		Credit cards		Consumer indirect loans		Total
State
New York	$	1,140	$	2,949	$	399	$	396	$	745	$	5,629
Ohio	461		1,568		389		242		451		3,111
Washington	700		1,745		227		101		11		2,784
Pennsylvania	280		746		79		48		261		1,414
California	49		28		13		4		42		136
Colorado	248		516		78		34		2		878
Connecticut	1,124		424		26		22		147		1,743
Texas	1		16		9		3		19		48
Oregon	357		909		82		45		3		1,396
Massachusetts	263		50		21		5		336		675
Other	874		2,386		484		197		1,538		5,479
Total	$	5,497	$	11,339	$	1,807	$	1,098	$	3,555	$	23,296
December 31, 2017
Total	$	5,483	$	12,028	$	1,794	$	1,106	$	3,261	$	23,672

Loan sales

As shown in Figure 18, during the first nine months of 2018, we sold $8.3 billion of loans. Sales of loans classified as held for sale generated net gains of $130 million in the first nine months of 2018.

Figure 18 summarizes our loan sales for the first nine months of 2018 and all of 2017.

Figure 18. Loans Sold (Including Loans Held for Sale)  

in millions	Commercial		Commercial Real Estate		Commercial Lease Financing		Residential Real Estate		Total
2018
Third quarter	$	45	$	2,161	$	52	$	302	$	2,560
Second quarter	253		2,266		144		308		2,971
First quarter	141		2,251		66		284		2,742
Total	$	439	$	6,678	$	262	$	894	$	8,273
2017
Fourth quarter	$	88	$	3,394	$	81	$	275	$	3,838
Third quarter	337		2,534		93		279		3,243
Second quarter	205		2,097		14		230		2,546
First quarter	49		2,011		83		194		2,337
Total	$	679	$	10,036	$	271	$	978	$	11,964

Figure 19 shows loans that are either administered or serviced by us, but not recorded on the balance sheet; this includes loans that were sold.

Figure 19. Loans Administered or Serviced  

in millions	September 30, 2018		June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017
Commercial real estate loans	$	270,771	$	256,062	$	246,089	$	238,718	$	224,361
Residential mortgage	5,046		4,893		4,585		4,582		4,458
Education loans	804		845		888		932		974
Commercial lease financing	892		915		873		862		856
Commercial loans	534		518		498		488		458
Total	$	278,047	$	263,233	$	252,933	$	245,582	$	231,107

In the event of default by a borrower, we are subject to recourse with respect to approximately $3.8 billion of the $278.0 billion of loans administered or serviced at September 30, 2018. Additional information about this recourse arrangement is included in Note 15 (“Contingent Liabilities and Guarantees”) under the heading “Recourse agreement with FNMA.”

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We derive income from several sources when retaining the right to administer or service loans that are sold. We earn noninterest income (recorded as “mortgage servicing fees”) from fees for servicing or administering loans. This fee income is reduced by the amortization of related servicing assets. In addition, we earn interest income from investing funds generated by escrow deposits collected in connection with the servicing loans. Additional information about our mortgage servicing assets is included in Note 8 (“Mortgage Servicing Assets”).

Securities

Our securities portfolio totaled $30.2 billion at September 30, 2018, compared to $30.0 billion at December 31, 2017. Available-for-sale securities were $18.3 billion at September 30, 2018, compared to $18.1 billion at December 31, 2017. Held-to-maturity securities were $11.9 billion at September 30, 2018, and $11.8 billion at December 31, 2017.

As shown in Figure 20, all of our mortgage-backed securities, which include both securities available for sale and held-to-maturity securities, are issued by government-sponsored enterprises or GNMA and traded in liquid secondary markets. These securities are recorded on the balance sheet at fair value for the available-for-sale portfolio and at amortized cost for the held-to-maturity portfolio. For more information about these securities, see Note 5 (“Fair Value Measurements”) under the heading “Qualitative Disclosures of Valuation Techniques,” and Note 6 (“Securities”).

Figure 20. Mortgage-Backed Securities by Issuer 

in millions	September 30, 2018		December 31, 2017
FHLMC	$	5,820	$	5,897
FNMA	10,781		10,328
GNMA	13,425		13,543
Total (a)	$	30,026	$	29,768

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

Securities available for sale

The majority of our securities available for sale portfolio consists of federal agency CMOs and mortgage-backed securities. CMOs are debt securities secured by a pool of mortgages or mortgage-backed securities. These mortgage securities generate interest income, serve as collateral to support certain pledging agreements, and provide liquidity value under regulatory requirements.

Figure 21 shows the composition, yields, and remaining maturities of our securities available for sale. For more information about these securities, including gross unrealized gains and losses by type of security and securities pledged, see Note 6 (“Securities”).

Figure 21. Securities Available for Sale

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)
September 30, 2018
Remaining maturity:
One year or less	—			$	3		$	77		$	13		—			—		$	93		3.32	%
After one through five years	$	143		4			8,465			1,177			$	2,037		$	20	11,846			2.30
After five through ten years	1			—			5,650			460			279			—		6,390			2.40
After ten years	1			—			—			11			—			—		12			3.06
Fair value	$	145		$	7		$	14,192		$	1,661		$	2,316		$	20	$	18,341		—
Amortized cost	150			7			14,804			1,708			2,439			17		19,125			2.34	%
Weighted-average yield (b)	1.78		%	5.30		%	2.31		%	2.41		%	2.53		%	—		2.34		%	—
Weighted-average maturity	3.6 years			1.4 years			4.8 years			4.2 years			4.1 years			1.5 years		4.6 years			—
December 31, 2017
Fair value	$	157		$	9		$	14,660		$	1,439		$	1,854		$	20	$	18,139		—
Amortized cost	159			9			14,985			1,456			1,920			17		18,546			2.09	%

 

(a) Maturity is based upon expected average lives rather than contractual terms.

(b) Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year.

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Held-to-maturity securities

Federal agency CMOs and mortgage-backed securities constitute essentially all of our held-to-maturity securities. The remaining balance is comprised of foreign bonds. Figure 22 shows the composition, yields, and remaining maturities of these securities.

Figure 22. Held-to-Maturity Securities

dollars in millions	Agency Residential Collateralized Mortgage Obligations (a)			Agency Residential Mortgage-backed Securities (a)			Agency Commercial Mortgage-backed Securities (a)			Other Securities			Total			Weighted-Average Yield (b)
September 30, 2018
Remaining maturity:
One year or less	$	25		—			—			$	6		$	31		2.32	%
After one through five years	4,104			—			$	2,071		6			6,181			2.36
After five through ten years	3,201			$	508		1,948			—			5,657			2.45
After ten years	—			—			—			—			—			—
Amortized cost	$	7,330		$	508		$	4,019		$	12		$	11,869		2.40	%
Fair value	6,930			486			3,833			12			11,261			—
Weighted-average yield	2.10		%	2.68		%	2.91		%	2.85		%	2.40		%	—
Weighted-average maturity	4.8 years			6.2 years			6.2 years			1.2 years			5.3 years			—
December 31, 2017
Amortized cost	$	8,055		$	574		$	3,186		$	15		$	11,830		2.27	%
Fair value	7,831			571			3,148			15			11,565			—

(a) Maturity is based upon expected average lives rather than contractual terms.

(b) Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year.

Deposits and other sources of funds

Figure 23. Breakdown of Deposits at September 30, 2018

Deposits are our primary source of funding. At September 30, 2018, our deposits totaled $105.8 billion, an increase of $545 million compared to December 31, 2017. The increase reflects strength in our retail banking franchise and growth from commercial relationships, as well as clients shifting to higher-yielding deposit products.

Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $15.8 billion at September 30, 2018, compared to $15.3 billion at December 31, 2017. The increase in wholesale funds from December 31, 2017, reflects an increase in short-term borrowings driven by commercial lending.

Capital

The objective of capital management is to maintain capital levels consistent with our risk appetite and of a sufficient amount to operate under a wide range of economic conditions. We have identified three primary uses of capital:

1. Investing in our businesses, supporting our clients, and loan growth;

2. Maintaining or increasing our Common Share dividend; and

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3. Returning capital in the form of Common Share repurchases to our shareholders.

The following sections discuss certain ways we have deployed our capital. For further information, see the Consolidated Statements of Changes in Equity and Note 17 (“Shareholders' Equity”).

Dividends

Consistent with our 2018 capital plan, we paid a quarterly dividend of $.17 per Common Share for the third quarter of 2018. We made a payment of $12.50 per depositary share on the depositary shares related to our Series D Preferred Stock during the third quarter of 2018, for a total of $7 million. We made a payment of $.382813 per depositary share on the depositary shares related to our Series E Preferred Stock during the third quarter of 2018, for a total of $7 million.

Further information regarding the capital planning process and CCAR is included under the heading “Capital planning and stress testing” in the “Supervision and Regulation” section beginning on page 12 of our 2017 Form 10-K.

Common shares outstanding

Our Common Shares are traded on the NYSE under the symbol KEY with 34,865 holders of record at September 30, 2018. Our book value per Common Share was $13.33 based on 1.034 billion shares outstanding at September 30, 2018, compared to $13.09 per Common Share based on 1.069 billion shares outstanding at December 31, 2017. At September 30, 2018, our tangible book value per Common Share was $10.59, compared to $10.35 per Common Share at December 31, 2017.

Figure 24 shows activities that caused the change in outstanding common shares over the past five quarters.

Figure 24. Changes in Common Shares Outstanding 

	2018						2017
in thousands	Third		Second		First		Fourth		Third
Shares outstanding at beginning of period	1,058,944		1,064,939		1,069,084		1,079,039		1,092,739
Open market repurchases and return of shares under employee compensation plans	(25,418	)	(6,259	)	(9,399	)	(10,617	)	(15,298	)
Shares issued under employee compensation plans (net of cancellations)	761		264		5,254		662		1,598
Shares outstanding at end of period	1,034,287		1,058,944		1,064,939		1,069,084		1,079,039

As shown above, Common Shares outstanding decreased by 24.7 million shares during the third quarter of 2018. This decrease was primarily due to common share repurchases under our 2018 capital plan.

At September 30, 2018, we had 222.4 million treasury shares, compared to 187.6 million treasury shares at December 31, 2017. Going forward we expect to reissue treasury shares as needed in connection with stock-based compensation awards and for other corporate purposes.

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Information on repurchases of Common Shares by KeyCorp is included in Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” of this report.

Preferred stock

On July 30, 2018, we issued $425 million of depositary shares, each representing a 1/40^th ownership interest in a share of our Fixed Rate Perpetual Noncumulative Series F Preferred Stock. For more information on our preferred stock, see Note 17 (“Shareholders' Equity”).

Capital adequacy

Capital adequacy is an important indicator of financial stability and performance. All of our capital ratios remained in excess of regulatory requirements at September 30, 2018. Our capital and liquidity levels are intended to position us to weather an adverse operating environment while continuing to serve our clients’ needs, as well as to meet the Regulatory Capital Rules described in the “Supervision and regulation” section of Item 2 of this report. Our shareholders’ equity to assets ratio was 10.96% at September 30, 2018, compared to 10.91% at December 31, 2017. Our tangible common equity to tangible assets ratio was 8.05% at September 30, 2018, compared to 8.23% at December 31, 2017. The minimum capital and leverage ratios under the Regulatory Capital Rules together with the estimated ratios of KeyCorp at September 30, 2018, calculated on a fully phased-in basis, are set forth under the heading “Basel III” in the “Supervision and regulation — Regulatory capital requirements” section in Item 2 of this report.

Figure 25 represents the details of our regulatory capital positions at September 30, 2018, and December 31, 2017, under the Regulatory Capital Rules. Information regarding the regulatory capital ratios of KeyCorp’s banking subsidiaries is presented annually, in Note 24 (“Shareholders' Equity”) beginning on page 182 of our 2017 Form 10-K.

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Figure 25. Capital Components and Risk-Weighted Assets 

	dollars in millions	September 30, 2018			December 31, 2017
COMMON EQUITY TIER 1
Key shareholders’ equity (GAAP)		$	15,208		$	15,023
Less:	Preferred Stock (a)	1,421			1,009
	Common Equity Tier 1 capital before adjustments and deductions	13,787			14,014
Less:	Goodwill, net of deferred taxes	2,460			2,495
	Intangible assets, net of deferred taxes	267			266
	Deferred tax assets	27			2
	Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes	(599		)	(311		)
	Accumulated gains (losses) on cash flow hedges, net of deferred taxes	(220		)	(122		)
	Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes	(383		)	(391		)
	Total Common Equity Tier 1 capital	$	12,235		$	12,075
TIER 1 CAPITAL
Common Equity Tier 1		$	12,235		$	12,075
Additional Tier 1 capital instruments and related surplus		1,421			1,009
Less:	Deductions	—			1
	Total Tier 1 capital	13,656			13,083
TIER 2 CAPITAL
Tier 2 capital instruments and related surplus		1,344			1,310
Allowance for losses on loans and liability for losses on lending-related commitments (b)		962			952
Less:	Deductions	—			—
	Total Tier 2 capital	2,306			2,262
	Total risk-based capital	$	15,962		$	15,345
RISK-WEIGHTED ASSETS
Risk-weighted assets on balance sheet		$	98,200		$	94,735
Risk-weighted off-balance sheet exposure		23,725			23,058
Market risk-equivalent assets		983			1,019
Gross risk-weighted assets		122,908			118,812
Less:	Excess allowance for loan and lease losses	—			—
	Net risk-weighted assets	$	122,908		$	118,812
AVERAGE QUARTERLY TOTAL ASSETS		$	136,201		$	134,484
CAPITAL RATIOS
Tier 1 risk-based capital		11.11		%	11.01		%
Total risk-based capital		12.99			12.92
Leverage (c)		10.03			9.73
Common Equity Tier 1		9.95			10.16

(a) Net of capital surplus.

(b) 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 $14 million and $16 million of allowance classified as “discontinued assets” on the balance sheet at September 30, 2018, and December 31, 2017, respectively.

(c) 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.

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Risk Management

Overview

Like all financial services companies, we engage in business activities and assume the related risks. The most significant risks we face are credit, compliance, operational, liquidity, market, reputation, strategic, and model risks. Our risk management activities are focused on ensuring that we properly identify, measure, and manage such risks across the entire enterprise to maintain safety and soundness, and to maximize profitability. There have been no significant changes in our Risk Management practices as described under the heading “Risk Management” beginning on page 67 of our 2017 Form 10-K.

Market risk management

Market risk is the risk that movements in market risk factors, including interest rates, foreign exchange rates, equity prices, commodity prices, credit spreads, and volatilities will reduce Key’s income and the value of its portfolios. These factors influence prospective yields, values, or prices associated with the instrument. We are exposed to market risk both in our trading and nontrading activities, which include asset and liability management activities. Information regarding our fair value policies, procedures, and methodologies is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements” on page 103 of our 2017 Form 10-K and Note 5 (“Fair Value Measurements”) in this report.

Trading market risk

Key incurs market risk as a result of trading activities that are used in support of client facilitation and hedging activities, principally within our investment banking and capital markets businesses. Key has exposures to a wide range of risk factors including interest rates, equity prices, foreign exchange rates, credit spreads, and commodity prices, as well as the associated implied volatilities and spreads.  Our primary market risk exposures are a result of trading and hedging activities in the derivative, fixed income, and foreign exchange markets, including securitization exposures. At September 30, 2018, we did not have any re-securitization positions.  We maintain modest trading inventories to facilitate customer flow, make markets in securities, and hedge certain risks including but not limited to credit risk and interest rate risk. The risks associated with these activities are mitigated in accordance with the Market Risk hedging policy.  The majority of our positions are traded in active markets.

Market risk management is an integral part of Key’s risk culture. The Risk Committee of our Board provides oversight of trading market risks. The ERM Committee and the Market Risk Committee regularly review and discuss market risk reports prepared by our MRM that contain our market risk exposures and results of monitoring activities. Market risk policies and procedures have been defined and approved by the Market Risk Committee, a Tier 2 Risk Governance Committee, and take into account our tolerance for risk and consideration for the business environment. For more information regarding monitoring of trading positions and the activities related to the Market Risk Rule compliance see ”Market Risk Management” beginning on page 68 of our 2017 Form 10-K.

VaR and stressed VaR.  VaR is the estimate of the maximum amount of loss on an instrument or portfolio due to adverse market conditions during a given time interval within a stated confidence level.  Stressed VaR is used to assess extreme conditions on market risk within our trading portfolios.  The MRM calculates VaR and stressed VaR on a daily basis, and the results are distributed to appropriate management. VaR and stressed VaR results are also provided to our regulators and utilized in regulatory capital calculations.

We use a historical simulation VaR model to measure the potential adverse effect of changes in interest rates, foreign exchange rates, equity prices, and credit spreads on the fair value of our covered positions and other non-covered positions. We analyze market risk by portfolios and do not separately measure and monitor our portfolios by risk type. VaR is calculated using daily observations over a one-year time horizon and approximates a 95% confidence level.  Statistically, this means that we would expect to incur losses greater than VaR, on average, five out of 100 trading days, or three to four times each quarter.  We also calculate VaR and stressed VaR at a 99% confidence level. For more information regarding our VaR model, its governance and assumptions, see ”Market Risk Management” on page 68 of our 2017 Form 10-K.

Actual losses for the total covered positions did not exceed aggregate daily VaR on any day during the quarters ended September 30, 2018, and September 30, 2017. The MRM backtests our VaR model on a daily basis to evaluate its predictive power. The test compares VaR model results at the 99% confidence level to daily held profit

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and loss. Results of backtesting are provided to the MRC. Backtesting exceptions occur when trading losses exceed VaR. We do not engage in correlation trading, or utilize the internal model approach for measuring default and credit migration risk. Our net VaR approach incorporates diversification, but our VaR calculation does not include the impact of counterparty risk and our own credit spreads on derivatives.

The aggregate VaR at the 99% confidence level with a one day holding period for all covered positions was $.8 million at September 30, 2018, and $.6 million at September 30, 2017. Figure 26 summarizes our VaR at the 99% confidence level with a one day holding period for significant portfolios of covered positions for the three months ended September 30, 2018, and September 30, 2017.

Figure 26. VaR for Significant Portfolios of Covered Positions 

	2018								2017
	Three months ended September 30,								Three months ended September 30,
in millions	High		Low		Mean		September 30,		High		Low		Mean		September 30,
Trading account assets:
Fixed income	$	.9	$	.4	$	.7	$	.4	$	1.0	$	.3	$	.6	$	.3
Derivatives:
Interest rate	$	.2	.1		$	.1	$	.1	$	.2	$	.1	$	.1	$	.1

Stressed VaR is calculated by running the portfolios through a predetermined stress period which is approved by the MRC and is calculated at the 99% confidence level using the same model and assumptions used for general VaR. The aggregate stressed VaR for all covered positions was $5.9 million at September 30, 2018, and $2.9 million at September 30, 2017. Figure 27 summarizes our stressed VaR at the 99% confidence level with a one day holding period for significant portfolios of covered positions for the three months ended September 30, 2018, and September 30, 2017.

Figure 27. Stressed VaR for Significant Portfolios of Covered Positions 

	2018								2017
	Three months ended September 30,								Three months ended September 30,
in millions	High		Low		Mean		September 30,		High		Low		Mean		September 30,
Trading account assets:
Fixed income	$	4.9	$	2.7	$	4.0	$	4.2	$	4.0	$	1.9	$	2.5	$	1.9
Derivatives:
Interest rate	$	.7	$	.3	$	.4	$	.7	$	.4	$	.1	$	.2	$	.4

Internal capital adequacy assessment. Market risk is a component of our internal capital adequacy assessment. Our risk-weighted assets include a market risk-equivalent asset amount, which consists of a VaR component, stressed VaR component, a de minimis exposure amount, and a specific risk add-on including the securitization positions. The aggregate market value of the securitization positions as defined by the Market Risk Rule was $27 million at September 30, 2018, all of which were nonagency mortgage-backed securities positions. Specific risk is the price risk of individual financial instruments, which is not accounted for by changes in broad market risk factors and is measured through a standardized approach. Market risk weighted assets, including the specific risk calculations, are run quarterly by the MRM in accordance with the Market Risk Rule, and approved by the Chief Market Risk Officer.

Nontrading market risk

Most of our nontrading market risk is derived from interest rate fluctuations and its impacts on our traditional loan and deposit products, as well as investments, hedging relationships, long-term debt, and certain short-term borrowings. Interest rate risk, which is inherent in the banking industry, is measured by the potential for fluctuations in net interest income and the EVE that result from changes in interest rates and differences in the repricing and maturity characteristics of assets and liabilities. We manage the exposure to changes in net interest income and the EVE in accordance with our risk appetite and in accordance with the Board approved ERM policy.

Interest rate risk positions are influenced by a number of factors, including the balance sheet positioning that arises out of customer preferences for loan and deposit products, economic conditions, the competitive environment within our markets, changes in market interest rates that affect client activity, and our hedging, investing, funding, and capital positions. The primary components of interest rate risk exposure consist of reprice risk, basis risk, yield curve risk, and option risk.

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• “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.

The management of nontrading market risk is centralized within Corporate Treasury. The Risk Committee of our Board provides oversight of nontrading market risk. The ERM Committee and the ALCO review reports on the interest rate risk exposures described above. In addition, the ALCO reviews reports on stress tests and sensitivity analyses related to interest rate risk. The ERM Committee and the ALCO have various responsibilities related to managing nontrading market risk, including recommending, approving, and monitoring strategies that maintain risk positions within approved tolerance ranges. The A/LM policy provides the framework for the oversight and management of interest rate risk and is administered by the ALCO. The MRM, as the second line of defense, provides additional oversight.

Net interest income simulation analysis. The primary tool we use to measure our interest rate risk is simulation analysis. For purposes of this analysis, we estimate our net interest income based on the current and projected composition of our on- and off-balance sheet positions, accounting for recent and anticipated trends in customer activity. The analysis also incorporates assumptions for the current and projected interest rate environments, and balance sheet growth projections based on a most likely macroeconomic view. The results of simulation analysis reflect management’s desired interest rate risk positioning. The modeling incorporates investment portfolio and swap portfolio balances consistent with management’s desired interest rate risk positioning. The simulation model estimates the amount of net interest income at risk by simulating the change in net interest income that would occur if interest rates were to gradually increase or decrease over the next 12 months. Our standard rate scenarios encompass a gradual, parallel increase or decrease of 200 basis points. After calculating the amount of net interest income at risk to interest rate changes, we compare that amount with the net interest income generated in an unchanged interest rate environment.

Figure 28 presents the results of the simulation analysis at September 30, 2018, and September 30, 2017. At September 30, 2018, our simulated impact to changes in interest rates was modestly asset-sensitive. In September 2018, the Federal Reserve increased the range for the Federal Funds Target Rate, which led to an increase in the magnitude of the declining rate scenario to 200 basis points. Tolerance levels for risk management require the development of remediation plans to maintain residual risk within tolerance if simulation modeling demonstrates that a gradual, parallel 200 basis point increase or 200 basis point decrease in interest rates over the next 12 months would adversely affect net interest income over the same period by more than 5.5%.

Figure 28. Simulated Change in Net Interest Income

	September 30, 2018				September 30, 2017
Basis point change assumption (short-term rates)	-200		+200		-125		+200
Tolerance level	-5.50	%	-5.50	%	-5.50	%	-5.50	%
Interest rate risk assessment	-5.25	%	2.95	%	-5.24	%	1.07	%

Simulation analysis produces a sophisticated estimate of interest rate exposure based on assumptions input into the model. We tailor certain assumptions to the specific interest rate environment and yield curve shape being modeled, and validate those assumptions on a regular basis. However, actual results may differ from those derived in simulation analysis due to unanticipated changes to the balance sheet composition, customer behavior, product pricing, market interest rates, changes in management’s desired interest rate risk positioning, investment, funding and hedging activities, and repercussions from unanticipated or unknown events.

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We also perform regular stress tests and sensitivity analyses on the model inputs that could materially change the resulting risk assessments. Assessments are performed using different shapes of the yield curve, including steepening or flattening of the yield curve, immediate changes in market interest rates, and changes in the relationship of money market interest rates. Assessments are also performed on changes to the following assumptions: loan and deposit balances, the pricing of deposits without contractual maturities, changes in lending spreads, prepayments on loans and securities, investment, funding and hedging activities, and liquidity and capital management strategies.

The results of additional assessments indicate that net interest income could increase or decrease from the base simulation results presented in Figure 28. Net interest income is highly dependent on the timing, magnitude, frequency, and path of interest rate changes and the associated assumptions for deposit repricing relationships, lending spreads, and the balance behavior of transaction accounts. If fixed rate assets increase by $1 billion, or fixed rate liabilities decrease by $1 billion, then the benefit to rising rates would decrease by approximately 25 basis points. If the interest-bearing liquid deposit beta assumption increases or decreases by 5% (e.g. 50% to 55%), then the benefit to rising rates would change by approximately 85 basis points.

Our current interest rate risk position could fluctuate to higher or lower levels of risk depending on the competitive environment and client behavior that may affect the actual volume, mix, maturity, and repricing characteristics of loan and deposit flows. Corporate Treasury discretionary activities related to funding, investing, and hedging may also change as a result of changes in customer business flows or changes in management’s desired interest rate risk positioning. As changes occur to both the configuration of the balance sheet and the outlook for the economy, management proactively evaluates hedging opportunities that may change our interest rate risk profile.

We also conduct simulations that measure the effect of changes in market interest rates in the second and third years of a three-year horizon. These simulations are conducted in a manner similar to those based on a 12-month horizon. To capture longer-term exposures, we calculate exposures to changes of the EVE as discussed in the following section.

Economic value of equity modeling. EVE complements net interest income simulation analysis as it estimates risk exposure beyond 12-, 24-, and 36-month horizons. EVE modeling measures the extent to which the economic values of assets, liabilities and off-balance sheet instruments may change in response to fluctuations in interest rates. EVE is calculated by subjecting the balance sheet to an immediate 200 basis point increase or decrease in interest rates, measuring the resulting change in the values of assets, liabilities, and off-balance sheet instruments, and comparing those amounts with the base case of the current interest rate environment.  This analysis is highly dependent upon assumptions applied to assets and liabilities with non-contractual maturities. Those assumptions are based on historical behaviors, as well as our expectations. We develop remediation plans that would maintain residual risk within tolerance if this analysis indicates that our EVE will decrease by more than 15% in response to an immediate increase or decrease in interest rates. We are operating within these guidelines as of September 30, 2018.

Management of interest rate exposure. We use the results of our various interest rate risk analyses to formulate A/LM strategies to achieve the desired risk profile while managing to our objectives for capital adequacy and liquidity risk exposures. Specifically, we manage interest rate risk positions by purchasing securities, issuing term debt with floating or fixed interest rates, and using derivatives. We predominantly use interest rate swaps and options, which modify the interest rate characteristics of certain assets and liabilities. During the three months ended September 30, 2018, we terminated $5.2 billion of swaps that were scheduled to mature in 2019 and invested in interest rate floor contracts to enhance our asset sensitivity position and maintain our moderate risk profile.

Figure 29 shows all swap positions that we hold for A/LM purposes. These positions are used to convert the contractual interest rate index of agreed-upon amounts of assets and liabilities (i.e., notional amounts) to another interest rate index. For example, fixed-rate debt is converted to a floating rate through a “receive fixed/pay variable” interest rate swap. The volume, maturity, and mix of portfolio swaps change frequently as we adjust our broader A/LM objectives and the balance sheet positions to be hedged. For more information about how we use interest rate swaps to manage our risk profile, see Note 7 (“Derivatives and Hedging Activities”).

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Figure 29. Portfolio Swaps by Interest Rate Risk Management Strategy 

	September 30, 2018
							Weighted-Average					December 31, 2017
dollars in millions	Notional Amount		Fair Value				Maturity (Years)	Receive Rate		Pay Rate		Notional Amount		Fair Value
Receive fixed/pay variable — conventional A/LM (a)	$	12,345	$	(217	)		2.4	2.0	%	2.1	%	$	16,425	$	(126	)
Receive fixed/pay variable — conventional debt	10,141		(145		)		3.0	1.9		2.2		9,691		(9		)
Floors — conventional A/LM (b)	4,760		—				1.0	—		—		—		—
Pay fixed/receive variable — conventional debt	50		(2		)		9.8	2.3		3.6		50		(6		)
Total portfolio swaps	$	27,296	$	(364	)	(c)	2.4	1.6	%	1.8	%	$	26,166	$	(141	)	(c)

(a) Portfolio swaps designated as A/LM are used to manage interest rate risk tied to both assets and liabilities.

(b) Conventional 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 $404 million and $176 million at September 30, 2018, and December 31, 2017, respectively.

Liquidity risk management

Liquidity risk, which is inherent in the banking industry, is measured by our ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, and fund new business opportunities at a reasonable cost, in a timely manner, and without adverse consequences. Liquidity management involves maintaining sufficient and diverse sources of funding to accommodate planned, as well as unanticipated, changes in assets and liabilities under both normal and adverse conditions.

Factors affecting liquidity

Our liquidity could be adversely affected by both direct and indirect events. An example of a direct event would be a downgrade in our public credit ratings by a rating agency. Examples of indirect events (events unrelated to us) that could impair our access to liquidity would be an act of terrorism or war, natural disasters, political events, or the default or bankruptcy of a major corporation, mutual fund or hedge fund. Similarly, market speculation, or rumors about us or the banking industry in general, may adversely affect the cost and availability of normal funding sources.

Our credit ratings at September 30, 2018, are shown in Figure 30. We believe these credit ratings, under normal conditions in the capital markets, would enable KeyCorp or KeyBank to issue fixed income securities to investors.

Figure 30. Credit Ratings 

September 30, 2018	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 (low)	BBB (high)	BBB (high)	BBB (low)
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 (low)	A	A	A (low)	N/A	N/A

Sources of liquidity

Our primary source of funding for KeyBank is retail and commercial deposits. As of September 30, 2018, our loan-to-deposit ratio was 87%. In addition, we also have access to various sources of wholesale funding, maintain a portfolio of liquid assets, and have borrowing capacity at the FHLB and Federal Reserve Bank of Cleveland. Our liquid asset portfolio at September 30, 2018, totaled $23.5 billion, consisting of $21.3 billion of unpledged securities, $217 million of securities available for secured funding at the FHLB, and $2.0 billion of net balances of federal funds sold and balances in our Federal Reserve account. Additionally, as of September 30, 2018, our unused borrowing capacity secured by loan collateral was $26.0 billion at the Federal Reserve Bank of Cleveland and $7.2 billion at the FHLB. During the third quarter of 2018, our outstanding FHLB advances increased as $30 million of term advances were added.

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Liquidity for KeyCorp 

The primary source of liquidity for KeyCorp is from subsidiary dividends, primarily from KeyBank. KeyCorp has sufficient liquidity when it can service its debt, support customary corporate operations and activities (including acquisitions), support occasional guarantees of subsidiaries’ obligations in transactions with third parties at a reasonable cost, in a timely manner, and without adverse consequences, and pay dividends to shareholders.

At September 30, 2018, KeyCorp held $3.1 billion in cash, which we projected to be sufficient to meet our projected obligations, including the repayment of our maturing debt obligations for the periods prescribed by our risk tolerance.

Typically, KeyCorp meets its liquidity requirements through regular dividends from KeyBank. During the third quarter of 2018, KeyBank paid $400 million in dividends to KeyCorp. As of September 30, 2018, KeyBank had regulatory capacity to pay $1.3 billion in dividends to KeyCorp without prior regulatory approval.

Our liquidity position and recent activity

Over the past quarter, our liquid asset portfolio, which includes overnight and short-term investments, as well as unencumbered, high quality liquid securities held as protection against a range of potential liquidity stress scenarios, has decreased as a result of lower balances held at the Federal Reserve. The liquid asset portfolio continues to exceed the amount that we estimate would be necessary to manage through an adverse liquidity event by providing sufficient time to develop and execute a longer-term solution.

We generate cash flows from operations and from investing and financing activities. We have approximately $157 million of cash, cash equivalents, and short-term investments in international tax jurisdictions as of September 30, 2018. As we consider alternative long-term strategic and liquidity plans, opportunities to repatriate these amounts would result in approximately $2 million in taxes to be paid. We have included the appropriate amount as a deferred tax liability at September 30, 2018.

The Consolidated Statements of Cash Flows summarize our sources and uses of cash by type of activity for the nine-month periods ended September 30, 2018, and September 30, 2017.

For more information regarding liquidity governance structure, factorings affecting liquidity, management of liquidity risk at KeyBank and KeyCorp, long-term liquidity strategies, and other liquidity programs, see ”Liquidity Risk Management” beginning on page 73 of our 2017 Form 10-K.

Credit risk management

Credit risk is the risk of loss to us arising from an obligor’s inability or failure to meet contractual payment or performance terms. Like other financial services institutions, we make loans, extend credit, purchase securities, add financial and payments products, and enter into financial derivative contracts, all of which have related credit risk.

Credit policy, approval, and evaluation

We manage credit risk exposure through a multifaceted program. The Credit Risk Committee approves management credit policies and recommends for approval significant credit policies to the appropriate Board committee or to the Board. These policies are communicated throughout the organization to foster a consistent approach to granting credit. There have been no significant changes in our Credit Risk Management practices as described under the heading “Credit risk management” beginning on page 76 of our 2017 Form 10-K.

Allowance for loan and lease losses

We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology used is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” beginning on page 102 of our 2017 Form 10-K. Briefly, our allowance applies incurred loss rates to existing loans with similar risk characteristics. We exercise judgment to assess any adjustment to the incurred loss rates for the impact of factors such as changes in economic conditions, lending policies including underwriting standards, and the level of credit risk associated with specific industries and markets. The ALLL at September 30, 2018, represents

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our best estimate of the incurred credit losses inherent in the loan portfolio at that date. For more information about impaired loans, see Note 4 (“Asset Quality”).

As shown in Figure 31, our ALLL from continuing operations increased by $10 million, or 1.1%, from December 31, 2017. Our commercial ALLL increased by $19 million, or 2.6%, from December 31, 2017, primarily because of loan growth in the commercial and industrial loan portfolio, as well as credit quality migration. Our consumer ALLL decreased by $9 million, or 6.3%, from December 31, 2017, primarily due to continued improvement in credit quality metrics and modest decreases in the portfolio.

Figure 31. Allocation of the Allowance for Loan Lease Losses 

	September 30, 2018						December 31, 2017
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	$	543	61.2	%	50.4	%	$	529	60.3	%	48.4	%
Commercial real estate:
Commercial mortgage	143		16.1		16.5		133		15.2		16.3
Construction	31		3.5		2.0		30		3.4		2.3
Total commercial real estate loans	174		19.6		18.5		163		18.6		18.6
Commercial lease financing	37		4.2		5.0		43		4.9		5.6
Total commercial loans	754		85.0		73.9		735		83.8		72.6
Real estate — residential mortgage	9		1.0		6.2		7		.8		6.3
Home equity loans	34		3.8		12.7		43		4.9		13.9
Consumer direct loans	26		2.9		2.0		28		3.2		2.1
Credit cards	45		5.1		1.2		44		5.0		1.3
Consumer indirect loans	19		2.2		4.0		20		2.3		3.8
Total consumer loans	133		15.0		26.1		142		16.2		27.4
Total loans (a)	$	887	100.0	%	100.0	%	$	877	100.0	%	100.0	%

(a) Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of $14 million at September 30, 2018, and $16 million at December 31, 2017.

Net loan charge-offs 

Figure 32 shows the trend in our net loan charge-offs by loan type, while the composition of loan charge-offs and recoveries by type of loan is presented in Figure 33.

Over the past 12 months, net loan charge-offs increased $28 million. This increase includes a large recovery that occurred in the third quarter of 2017.

Figure 32. Net Loan Charge-offs from Continuing Operations ^(a) 

	2018									2017
dollars in millions	Third			Second			First			Fourth			Third
Commercial and industrial	$	33		$	32		$	31		$	24		$	4
Real estate — Commercial mortgage	5			1			1			1			5
Real estate — Construction	—			—			(1		)	—			2
Commercial lease financing	1			4			—			4			(2		)
Total commercial loans	39			37			31			29			9
Real estate — Residential mortgage	—			—			1			1			(1		)
Home equity loans	1			3			1			4			2
Consumer direct loans	9			7			6			6			7
Credit cards	8			10			11			9			10
Consumer indirect loans	3			3			4			3			5
Total consumer loans	21			23			23			23			23
Total net loan charge-offs	$	60		$	60		$	54		$	52		$	32
Net loan charge-offs to average loans	.27		%	.27		%	.25		%	.24		%	.15		%
Net loan charge-offs from discontinued operations — education lending business	$	3		$	2		$	2		$	4		$	8

(a) Credit amounts indicate that recoveries exceeded charge-offs.

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Figure 33. Summary of Loan and Lease Loss Experience from Continuing Operations

	Three months ended September 30,						Nine months ended September 30,
dollars in millions	2018			2017			2018			2017
Average loans outstanding	$	88,467		$	86,814		$	88,018		$	86,485
Allowance for loan and lease losses at beginning of period	$	887		$	870		$	877		$	858
Loans charged off:
Commercial and industrial	38			29			114			101
Real estate — commercial mortgage	6			6			9			9
Real estate — construction	—			2			—			2
Commercial lease financing	4			1			9			9
Total commercial loans	48			38			132			121
Real estate — residential mortgage	2			—			3			2
Home equity loans	4			6			14			23
Consumer direct loans	10			8			27			26
Credit cards	10			11			34			34
Consumer indirect loans	7			8			22			24
Total consumer loans	33			33			100			109
Total loans charged off	81			71			232			230
Recoveries:
Commercial and industrial	5			25			18			32
Real estate — commercial mortgage	1			1			2			1
Real estate — construction	—			—			1			1
Commercial lease financing	3			3			4			5
Total commercial loans	9			29			25			39
Real estate — residential mortgage	2			1			2			4
Home equity loans	3			4			9			12
Consumer direct loans	1			1			5			4
Credit cards	2			1			5			4
Consumer indirect loans	4			3			12			11
Total consumer loans	12			10			33			35
Total recoveries	21			39			58			74
Net loan charge-offs	(60		)	(32		)	(174		)	(156		)
Provision (credit) for loan and lease losses	60			42			184			178
Allowance for loan and lease losses at end of period	$	887		$	880		$	887		$	880
Liability for credit losses on lending-related commitments at beginning of period	$	58		$	48		$	57		$	55
Provision (credit) for losses on lending-related commitments	2			9			3			2
Liability for credit losses on lending-related commitments at end of period (a)	$	60		$	57		$	60		$	57
Total allowance for credit losses at end of period	$	947		$	937		$	947		$	937
Net loan charge-offs to average total loans	.27		%	.15		%	.26		%	.24		%
Allowance for loan and lease losses to period-end loans	.99			1.02			.99			1.02
Allowance for credit losses to period-end loans	1.06			1.08			1.06			1.08
Allowance for loan and lease losses to nonperforming loans	137.5			170.2			137.5			170.2
Allowance for credit losses to nonperforming loans	146.8			181.2			146.8			181.2
Discontinued operations — education lending business:
Loans charged off	$	4		$	10		$	11		$	20
Recoveries	1			2			4			6
Net loan charge-offs	$	(3	)	$	(8	)	$	(7	)	$	(14	)

(a) Included in “accrued expense and other liabilities” on the balance sheet.

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Nonperforming assets

Figure 34 shows the composition of our nonperforming assets. As shown in Figure 34, nonperforming assets at September 30, 2018, increased $140 million from December 31, 2017. This increase was largely driven by several credits that were not concentrated in a particular industry or geography. Overall, our credit quality trends remain benign. For a summary of our nonaccrual and charge-off policies, see Note 1 (“Summary of Significant Accounting Policies”) under the headings “Nonperforming Loans,” “Impaired Loans,” and “Allowance for Loan and Lease Losses” beginning on page 101 of our 2017 Form 10-K.

Figure 34. Summary of Nonperforming Assets and Past Due Loans from Continuing Operations 

dollars in millions	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
Commercial and industrial	$	227		$	178		$	189		$	153		$	169
Real estate — commercial mortgage	98			42			33			30			30
Real estate — construction	2			2			2			2			2
Total commercial real estate loans (a)	100			44			35			32			32
Commercial lease financing	10			21			5			6			11
Total commercial loans (b)	337			243			229			191			212
Real estate — residential mortgage	62			55			59			58			57
Home equity loans	221			222			229			229			227
Consumer direct loans	4			4			4			4			3
Credit cards	2			2			2			2			2
Consumer indirect loans	19			19			18			19			16
Total consumer loans	308			302			312			312			305
Total nonperforming loans (c)	645			545			541			503			517
OREO	28			26			28			31			39
Other nonperforming assets	1			—			—			—			—
Total nonperforming assets (c)	$	674		$	571		$	569		$	534		$	556
Accruing loans past due 90 days or more	$	87		$	103		$	82		$	89		$	86
Accruing loans past due 30 through 89 days	368			429			305			359			329
Restructured loans — accruing and nonaccruing (d)	366			347			317			317			315
Restructured loans included in nonperforming loans (d)	211			184			179			189			187
Nonperforming assets from discontinued operations — education lending business	6			6			6			7			8
Nonperforming loans to period-end portfolio loans (c)	.72		%	.62		%	.61		%	.58		%	.60		%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (c)	.75			.65		%	.65		%	.62		%	.64		%

(a) See Figure 16 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 15 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio.

(c) Nonperforming loan balances exclude $606 million, $629 million, $690 million, $738 million, and $783 million of PCI loans at September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017, respectively.

(d) 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.

Figure 35 shows the types of activity that caused the change in our nonperforming loan balance during each of the last five quarters.

Figure 35. Summary of Changes in Nonperforming Loans from Continuing Operations 

	2018									2017
in millions	Third			Second			First			Fourth			Third
Balance at beginning of period	$	545		$	541		$	503		$	517		$	507
Loans placed on nonaccrual status	263			175			182			137			181
Charge-offs	(81		)	(78		)	(70		)	(67		)	(71		)
Loans sold	—			(1		)	—			—			(1		)
Payments	(57		)	(33		)	(29		)	(52		)	(32		)
Transfers to OREO	(5		)	(5		)	(4		)	(8		)	(10		)
Loans returned to accrual status	(20		)	(54		)	(41		)	(24		)	(57		)
Balance at end of period (a)	$	645		$	545		$	541		$	503		$	517

(a) Nonperforming loan balances exclude $606 million, $629 million, $690 million, $738 million, and $783 million of PCI loans at September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017, respectively.

Operational and compliance risk management

Like all businesses, we are subject to operational risk, which is the risk of loss resulting from human error or malfeasance, inadequate or failed internal processes and systems, and external events. These events include,

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among other things, threats to our cybersecurity, as we are reliant upon information systems and the Internet to conduct our business activities. Operational risk also encompasses compliance risk, which is the risk of loss from violations of, or noncompliance with, laws, rules and regulations, prescribed practices, and ethical standards. Under the Dodd-Frank Act, large financial companies like Key are subject to heightened prudential standards and regulation. This heightened level of regulation has increased our operational risk. Resulting operational risk losses and/or additional regulatory compliance costs could take the form of explicit charges, increased operational costs, harm to our reputation, or foregone opportunities.

We seek to mitigate operational risk through identification and measurement of risk, alignment of business strategies with risk appetite and tolerance, and a system of internal controls and reporting. We continuously strive to strengthen our system of internal controls to improve the oversight of our operational risk and to ensure compliance with laws, rules, and regulations. For example, an operational event database tracks the amounts and sources of operational risk and losses. This tracking mechanism helps to identify weaknesses and to highlight the need to take corrective action. We also rely upon software programs designed to assist in assessing operational risk and monitoring our control processes. This technology has enhanced the reporting of the effectiveness of our controls to senior management and the Board.

The Operational Risk Management Program provides the framework for the structure, governance, roles, and responsibilities, as well as the content, to manage operational risk for Key. The Compliance Risk Committee serves the same function in managing compliance risk for Key. The Operational Risk Committee supports the ERM Committee by identifying early warning events and trends, escalating emerging risks, and discussing forward-looking assessments. The Operational Risk Committee includes attendees from each of the Three Lines of Defense. Primary responsibility for managing and monitoring internal control mechanisms lies with the managers of our various lines of business. The Operational Risk Committee and Compliance Risk Committee are senior management committees that oversee our level of operational and compliance risk and direct and support our operational and compliance infrastructure and related activities. These committees and the Operational Risk Management and Compliance functions are an integral part of our ERM Program. Our Risk Review function regularly assesses the overall effectiveness of our Operational Risk Management and Compliance Programs and our system of internal controls. Risk Review reports the results of reviews on internal controls and systems to senior management and the Risk and Audit Committees and independently supports the Risk Committee’s oversight of these controls.

Cybersecurity

We maintain comprehensive Cyber Incident Response Plans, and we devote significant time and resources to maintaining and regularly updating our technology systems and processes to protect the security of our computer systems, software, networks, and other technology assets against attempts by third parties to obtain unauthorized access to confidential information, destroy data, disrupt or degrade service, sabotage systems, or cause other damage. We and many other U.S. financial institutions have experienced distributed denial-of-service attacks from technologically sophisticated third parties. These attacks are intended to disrupt or disable online banking services and prevent banking transactions. We also periodically experience other attempts to breach the security of our systems and data. These cyberattacks have not, to date, resulted in any material disruption of our operations or material harm to our customers, and have not had a material adverse effect on our results of operations.

Cyberattack risks may also occur with our third-party technology service providers, and may result in financial loss or liability that could adversely affect our financial condition or results of operations. Cyberattacks could also interfere with third-party providers’ ability to fulfill their contractual obligations to us. Recent high-profile cyberattacks have targeted retailers, credit bureaus, and other businesses for the purpose of acquiring the confidential information (including personal, financial, and credit card information) of customers, some of whom are customers of ours. We may incur expenses related to the investigation of such attacks or related to the protection of our customers from identity theft as a result of such attacks. We may also incur expenses to enhance our systems or processes to protect against cyber or other security incidents. Risks and exposures related to cyberattacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking, and other technology-based products and services by us and our clients.

As described in more detail starting on page 67 of our 2017 Form 10-K under the heading “Risk Management - Overview,” the Board serves in an oversight capacity ensuring that Key’s risks are managed in a manner that is effective and balanced and adds value for the shareholders. The Board’s Risk Committee has primary oversight for

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enterprise-wide risk at KeyCorp, including operational risk (which includes cybersecurity). The Risk Committee reviews and provides oversight of management’s activities related to the enterprise-wide risk management framework, including cyber-related risk. The ERM Committee, chaired by the Chief Executive Officer and comprising other senior level executives, is responsible for managing risk (including cyber-related risk) and ensuring that the corporate risk profile is managed in a manner consistent with our risk appetite. The ERM Committee reports to the Board’s Risk Committee.

Critical Accounting Policies and Estimates

Our business is dynamic and complex. Consequently, we must exercise judgment in choosing and applying accounting policies and methodologies. These choices are critical – not only are they necessary to comply with GAAP, they also reflect our view of the appropriate way to record and report our overall financial performance. All accounting policies are important, and all policies described in Note 1 (“Summary of Significant Accounting Policies”) beginning on page 100 of our 2017 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. Note 1 (“Basis of Presentation and Accounting Policies”) of this report should also be reviewed for more information on accounting standards that have been adopted during the period.

In our opinion, some accounting policies are more likely than others to have a critical effect on our financial results and to expose those results to potentially greater volatility. These policies apply to areas of relatively greater business importance, or require us to exercise judgment and to make assumptions and estimates that affect amounts reported in the financial statements. Because these assumptions and estimates are based on current circumstances, they may prove to be inaccurate, or we may find it necessary to change them.

We rely heavily on the use of judgment, assumptions, and estimates to make a number of core decisions, including accounting for the ALLL; contingent liabilities, guarantees and income taxes; derivatives and related hedging activities; and assets and liabilities that involve valuation methodologies. In addition, we may employ outside valuation experts to assist us in determining fair values of certain assets and liabilities. A brief discussion of each of these areas appears on pages 86 through 89 of our 2017 Form 10-K.

During the first nine months of 2018, we did not significantly alter the manner in which we applied our critical accounting policies or developed related assumptions and estimates.

Accounting and Reporting Developments

Accounting Guidance Pending Adoption at September 30, 2018

Standard	Required Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2016-02, Leases (Topic 842) ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient ASU 2018-10 Codification Improvements to Topic 842 ASU 2018-11, Leases (Topic 842): Targeted Improvements	January 1, 2019 Early adoption is permitted	The ASU creates ASC Topic 842, Leases, and supersedes Topic 840, Leases. The ASU requires that a lessee recognize assets and liabilities for leases with lease terms of more than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Leveraged leases that commenced before the effective date of the new guidance are grandfathered. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, the ASU will require both types of leases to be recognized on the balance sheet. It also requires enhanced disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The guidance should be adopted using a modified retrospective approach. However, entities may choose to measure and present the changes at the beginning of the earliest period presented, or to reflect the changes as of the adoption date.	The implementation team has substantially completed the identification of leases for adoption of the standard including the evaluation of service contracts for embedded leases. Ongoing implementation efforts include the consideration of available practical expedients, development of new lease accounting policies, and deployment of a new lease software solution. Additionally, in conjunction with the implementation, Key is reviewing business processes and evaluating potential changes to the control environment. Key’s adoption of this guidance on January 1, 2019, will result in an increase in right-of-use assets and associated lease liabilities arising from operating leases in which Key is the lessee on our Consolidated Balance Sheet. Key will utilize the adoption date transition method and record a cumulative effect adjustment to retained earnings on January 1, 2019. Therefore, right of use assets, lease liabilities, and other changes as a result of adoption will not be reflected in comparable periods presented prior to that date. The amount of the right-of-use assets and associated lease liabilities recorded at adoption will be primarily based on the present value of unpaid future minimum lease payments, the amount of which will reflect the population of leases in effect at the date of adoption. Key’s minimum future rental payments under noncancelable operating leases at December 31, 2017 were $962 million (refer to Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) in our 2017 Form 10-K). Based on the lease portfolio at that time, Key would anticipate a balance sheet impact upon adoption in the range of $850 million to $950 million. Key expects the impact on January 1, 2019, to be consistent with this estimate, subject to changes to Key’s lease portfolio and the applicable discount rates at adoption. The evaluation and review of leases and service contracts will continue through the adoption date as Key enters into new agreements and as lease portfolios change. We do not expect the adoption of this guidance to have a material impact on the recognition of operating lease expense in our Consolidated Statements of Income.

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Standard	Required Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	January 1, 2019 Early adoption is permitted.	The ASU amends ASC Topic 310-20, Receivables — Nonrefundable Fees and Other Costs, and shortens the amortization period to the earliest call date for certain callable debt securities held at a premium. Securities held at a discount will continue to be amortized to maturity. The guidance should be implemented on a modified retrospective basis using a cumulative-effect adjustment.	The adoption of this guidance is not expected to have a material effect on our financial condition or results of operations.
ASU 2016-13 Measurement of Credit Losses on Financial Instruments	January 1, 2020 Early adoption is permitted as of January 1, 2019	The ASU amends ASC Topic 326, Financial Instruments-Credit Losses, and significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaces today’s “incurred loss” approach with an “expected loss” model for instruments such as loans and held-to-maturity securities that are measured at amortized cost. The standard requires credit losses relating to available-for-sale debt securities to be recorded through an allowance rather than a reduction of the carrying amount. It also changes the accounting for purchased credit-impaired debt securities and loans. The ASU retains many of the current disclosure requirements in current GAAP and expands certain disclosure requirements.	This new guidance will affect the accounting for our loans, debt securities held to maturity and available for sale, and liabilities for credit losses on unfunded lending related commitments as well as purchased financial assets with a more-than insignificant amount of credit deterioration since origination. Key has formed cross-functional implementation working groups comprised of teams throughout Key, including finance, credit, and modeling. The implementation team has developed a detailed project plan, identified and documented certain key policy decisions, and determined modeling techniques and technology solutions to meet the requirements of the new guidance. Education sessions on the substantial changes caused by the standard are ongoing. Significant progress has been made on the identification of required data, development and validation of models, establishment of macroeconomic forecasting methodologies and approaches, including the reasonable and supportable period, and documentation of accounting policy decisions. Additionally, a software tool is being implemented to execute models in a controlled, automated environment. A CECL parallel production is expected to be run during 2019. Key expects that the new guidance will generally result in an increase in its allowance for credit losses for loans, unfunded lending-related commitments, and purchased financial assets with credit deterioration, as it will cover credit losses over the full remaining expected life of loans and commitments and will consider future changes in macroeconomic conditions. Since the magnitude of the anticipated increase in the allowance for credit losses will be impacted by economic conditions and trends in the Company’s portfolio at the time of adoption and the implementation and testing of forecasting methodologies, the quantitative impact cannot yet be reasonably estimated. While we are still assessing the new standard, the adoption of this guidance is not anticipated to have a material impact on the available-for-sale debt securities or held-to-maturity securities measured at amortized cost.
ASU 2017-04, Simplifying the Test for Goodwill Impairment	January 1, 2020 Early adoption is permitted	The ASU amends ASC Topic 350, Intangibles - Goodwill and Other and eliminates the second step of the test for goodwill impairment. Under the new guidance, entities will compare the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the reporting unit’s fair value, the entity is required to recognize an impairment charge for this amount. The new method applies to all reporting units and the performance of a qualitative assessment is still allowable. The guidance should be implemented using a prospective approach.	The adoption of this accounting guidance is not expected to have a material effect on our financial condition or results of operations.

49

Standard	Required Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans	January 1, 2020 Early adoption is permitted	The ASU amends the disclosure requirements for sponsors of defined benefit plans. Entities are required to provide new disclosures, including the weighted-average interest crediting rate for cash balance plans and explanations for the significant gains and losses related to changes in the benefit obligation for the period. Certain existing disclosure requirements are eliminated.                                                                          The guidance should be adopted using a retrospective approach.	The adoption of this standard will not result in significant changes to Key’s disclosures and there will be no effect to our financial condition or results of operations.
ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract	January 1, 2020 Early adoption is permitted	The ASU amends ASC Topic 350-40 to align the accounting for costs incurred in a cloud computing arrangement with the guidance on developing internal use software. Specifically, if a cloud computing arrangement is deemed to be a service contract, certain implementation costs are eligible for capitalization. The new guidance prescribes the balance sheet and income statement presentation and cash flow classification for the capitalized costs and related amortization expense. It also requires additional quantitative and qualitative disclosures. The guidance may be adopted prospectively or retrospectively.	Key is evaluating the impact of the adoption of this accounting guidance on its financial statements and related disclosures.

50

European Sovereign and Nonsovereign Debt Exposures

Our total European sovereign and Nonsovereign debt exposure is presented in Figure 36.

Figure 36. European Sovereign and Nonsovereign Debt Exposures

September 30, 2018	Short-and Long- Term Commercial Total (a)		Foreign Exchange and Derivatives with Collateral (b)			Net Exposure
in millions
France:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		$	(2	)	$	(2	)
Nonsovereign non-financial institutions	$	2	—			2
Total	2		(2		)	—
Germany:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		—			—
Nonsovereign non-financial institutions	19		—			19
Total	19		—			19
Italy:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		—			—
Nonsovereign non-financial institutions	4		—			4
Total	4		—			4
Luxembourg:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		—			—
Nonsovereign non-financial institutions	8		—			8
Total	8		—			8
Spain:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		—			—
Nonsovereign non-financial institutions	1		—			1
Total	1		—			1
Switzerland:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		(1		)	(1		)
Nonsovereign non-financial institutions	56		—			56
Total	56		(1		)	55
United Kingdom:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		142			142
Nonsovereign non-financial institutions	29		—			29
Total	29		142			171
Other Europe: (c)
Sovereigns	—		—			—
Nonsovereign financial institutions	—		—			—
Nonsovereign non-financial institutions	—		—			—
Total	—		—			—
Total Europe:
Sovereigns	—		—			—
Nonsovereign financial institutions	—		139			139
Nonsovereign non-financial institutions	119		—			119
Total	$	119	$	139		$	258

 

(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.

(c) Other Europe consists of the following countries: Austria, Belarus, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Sweden, and Ukraine. 100% of our current exposure in Other Europe is in Austria.

Our credit risk exposure is largely concentrated in developed countries with emerging market exposure essentially limited to commercial facilities; these exposures are actively monitored by management. We do not have at-risk exposures in the rest of the world.

51

Item 1. Financial Statements

Consolidated Balance Sheets

in millions, except per share data	September 30, 2018			December 31, 2017
	(Unaudited)
ASSETS
Cash and due from banks	$	319		$	671
Short-term investments	2,272			4,447
Trading account assets	958			836
Securities available for sale	18,341			18,139
Held-to-maturity securities (fair value: $11,261 and $11,565)	11,869			11,830
Other investments	681			726
Loans, net of unearned income of $674 and $736	89,268			86,405
Less: Allowance for loan and lease losses	(887		)	(877		)
Net loans	88,381			85,528
Loans held for sale (a)	1,618			1,107
Premises and equipment	891			930
Operating lease assets	930			821
Goodwill	2,516			2,538
Other intangible assets	338			416
Corporate-owned life insurance	4,156			4,132
Accrued income and other assets	4,378			4,237
Discontinued assets	1,157			1,340
Total assets	$	138,805		$	137,698
LIABILITIES
Deposits in domestic offices:
NOW and money market deposit accounts	$	57,219		$	53,627
Savings deposits	4,948			6,296
Certificates of deposit ($100,000 or more)	8,453			6,849
Other time deposits	5,130			4,798
Total interest-bearing deposits	75,750			71,570
Noninterest-bearing deposits	30,030			33,665
Total deposits	105,780			105,235
Federal funds purchased and securities sold under repurchase agreements	1,285			377
Bank notes and other short-term borrowings	637			634
Accrued expense and other liabilities	2,044			2,094
Long-term debt	13,849			14,333
Total liabilities	123,595			122,673
EQUITY
Preferred stock	1,450			1,025
Common Shares, $1 par value; authorized 1,400,000,000 shares; issued 1,256,702,081, and 1,256,702,081 shares	1,257			1,257
Capital surplus	6,315			6,335
Retained earnings	11,262			10,335
Treasury stock, at cost (222,414,857 and 187,617,832 shares)	(3,910		)	(3,150		)
Accumulated other comprehensive income (loss)	(1,166		)	(779		)
Key shareholders’ equity	15,208			15,023
Noncontrolling interests	2			2
Total equity	15,210			15,025
Total liabilities and equity	$	138,805		$	137,698

(a) Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $87 million at September 30, 2018, and $71 million at December 31, 2017.

See Notes to Consolidated Financial Statements (Unaudited).

52

Consolidated Statements of Income

dollars in millions, except per share amounts	Three months ended September 30,				Nine months ended September 30,
(Unaudited)	2018		2017		2018		2017
INTEREST INCOME
Loans	$	1,025	$	928	$	2,965	$	2,753
Loans held for sale	12		17		40		39
Securities available for sale	102		91		294		276
Held-to-maturity securities	72		55		213		161
Trading account assets	7		7		21		21
Short-term investments	15		6		31		14
Other investments	6		5		17		12
Total interest income	1,239		1,109		3,581		3,276
INTEREST EXPENSE
Deposits	140		72		343		196
Federal funds purchased and securities sold under repurchase agreements	1		—		10		1
Bank notes and other short-term borrowings	4		3		17		12
Long-term debt	108		86		302		228
Total interest expense	253		161		672		437
NET INTEREST INCOME	986		948		2,909		2,839
Provision for credit losses	62		51		187		180
Net interest income after provision for credit losses	924		897		2,722		2,659
NONINTEREST INCOME
Trust and investment services income	117		135		378		404
Investment banking and debt placement fees	166		141		464		403
Service charges on deposit accounts	85		91		265		268
Operating lease income and other leasing gains	35		16		61		69
Corporate services income	52		54		175		163
Cards and payments income	69		75		202		210
Corporate-owned life insurance income	34		31		98		94
Consumer mortgage income	9		7		23		19
Mortgage servicing fees	19		21		61		54
Other income (a)	23		21		143		138
Total noninterest income	609		592		1,870		1,822
NONINTEREST EXPENSE
Personnel	553		559		1,733		1,669
Net occupancy	76		74		233		239
Computer processing	52		56		155		171
Business services and professional fees	43		49		135		140
Equipment	27		29		79		83
Operating lease expense	31		24		88		64
Marketing	26		34		77		85
FDIC assessment	21		21		63		62
Intangible asset amortization	23		25		77		69
OREO expense, net	3		3		5		8
Other expense	109		118		318		410
Total noninterest expense	964		992		2,963		3,000
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	569		497		1,629		1,481
Income taxes	87		134		252		386
INCOME (LOSS) FROM CONTINUING OPERATIONS	482		363		1,377		1,095
Income (loss) from discontinued operations	—		1		5		6
NET INCOME (LOSS)	482		364		1,382		1,101
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		1
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	$	482	$	364	$	1,382	$	1,100
Income (loss) from continuing operations attributable to Key common shareholders	$	468	$	349	$	1,334	$	1,038
Net income (loss) attributable to Key common shareholders	468		350		1,339		1,044
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders	$	.45	$	.32	$	1.28	$	.96
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.45		.32		1.27		.97
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders	$	.45	$	.32	$	1.26	$	.95
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.45		.32		1.26		.96
Cash dividends declared per Common Share	$	.17	$	.095	$	.395	$	.275
Weighted-average Common Shares outstanding (000)	1,036,479		1,073,390		1,048,397		1,075,296
Effect of Common Share options and other stock awards	13,497		15,451		14,419		16,359
Weighted-average Common Shares and potential Common Shares outstanding (000) (c)	1,049,976		1,088,841		1,062,816		1,091,655

(a) For the three and nine months ended September 30, 2018, net securities gains totaled less than $1 million. For the three and nine months ended September 30, 2017, net securities gains totaled $1 million. For the three and nine months ended September 30, 2018, and September 30, 2017, we 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.

See Notes to Consolidated Financial Statements (Unaudited).

53

Consolidated Statements of Comprehensive Income

in millions	Three months ended September 30,						Nine months ended September 30,
(Unaudited)	2018			2017			2018			2017
Net income (loss)	$	482		$	364		$	1,382		$	1,101
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($22), $0, ($89), and $24	(72		)	—			(288		)	40
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($5), ($6), ($29), and ($16)	(12		)	(10		)	(92		)	(27		)
Foreign currency translation adjustments, net of income taxes of $0, $4, $3, and $8	1			7			(15		)	14
Net pension and postretirement benefit costs, net of income taxes of $1, $1, $3, and $4	2			3			8			8
Total other comprehensive income (loss), net of tax	(81		)	—			(387		)	35
Comprehensive income (loss)	401			364			995			1,136
Less: Comprehensive income attributable to noncontrolling interests	—			—			—			1
Comprehensive income (loss) attributable to Key	$	401		$	364		$	995		$	1,135

See Notes to Consolidated Financial Statements (Unaudited).

54

Consolidated Statements of Changes in Equity

	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, 2017	521	1,069,084		$	1,025	$	1,257	$	6,335		$	10,335		$	(3,150	)	$	(779	)	$	2
Cumulative effect from changes in accounting principle (a)											(2		)
Other reclassification of AOCI											5
Net income (loss)											1,382									—
Other comprehensive income (loss)																	(387		)
Deferred compensation								16
Cash dividends declared
Common Shares ($.395 per share)											(415		)
Series D Preferred Stock ($37.50 per depositary share)											(20		)
Series E Preferred Stock ($1.148439 per depositary share)											(23		)
Issuance of Series F Preferred Stock	425			425				(13		)
Open market Common Share repurchases		(38,806	)											(820		)
Employee equity compensation program Common Share repurchases		(2,271	)											(47		)
Common Shares reissued (returned) for stock options and other employee benefit plans		6,280						(23		)				107
BALANCE AT SEPTEMBER 30, 2018	946	1,034,287		$	1,450	$	1,257	$	6,315		$	11,262		$	(3,910	)	$	(1,166	)	$	2
BALANCE AT JUNE 30, 2018	521	1,058,944		1,025		1,257		6,315			10,970			(3,382		)	(1,085		)	2
Net income (loss)											482									—
Other comprehensive income (loss)																	(81		)
Deferred compensation								4
Cash dividends declared
Common Shares ($.17 per share)											(176		)
Series D Preferred Stock ($12.50 per depositary share)											(7		)
Series E Preferred Stock ($.382813 per depositary share)											(7		)
Issuance of Series F Preferred Stock	425			425				(13		)
Open market Common Share repurchases		(25,368	)											(541		)
Employee equity compensation program Common Share repurchases		(50	)											(1		)
Common Shares reissued (returned) for stock options and other employee benefit plans		761						9						14
Net contribution from (distribution to) noncontrolling interests																				—
BALANCE AT SEPTEMBER 30, 2018	946	1,034,287		$	1,450	$	1,257	$	6,315		$	11,262		$	(3,910	)	$	(1,166	)	$	2

(a) Includes the impact of implementing ASU 2014-09, ASU 2016-01, and ASU 2017-12.

See Notes to Consolidated Financial Statements (Unaudited).

Consolidated Statements of Changes in Equity

	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, 2016	17,421		1,079,314		$	1,665		$	1,257	$	6,385		$	9,378		$	(2,904	)	$	(541	)	$	—
Net income (loss)													1,100									1
Other comprehensive income (loss)																			35
Deferred compensation										11
Cash dividends declared
Common Shares ($.275 per share)													(296		)
Series A Preferred Stock ($1.9375 per share)													(6		)
Series C Preferred Stock ($.539063 per share)													(7		)
Series D Preferred Stock ($37.50 per depositary share)													(20		)
Series E Preferred Stock ($1.161199 per depositary share)													(24		)
Open market Common Share repurchases			(25,564	)												(466		)
Employee equity compensation program Common Share repurchases			(3,479	)												(65		)
Series A Preferred Stock exchanged for Common Shares	(2,900	)	20,568		(290		)			(49		)				338
Redemption of Series C Preferred Stock	(14,000	)			(350		)
Common Shares reissued (returned) for stock options and other employee benefit plans			8,200							(37		)				135
BALANCE AT SEPTEMBER 30, 2017	521		1,079,039		$	1,025		$	1,257	$	6,310		$	10,125		$	(2,962	)	$	(506	)	$	1
BALANCE AT JUNE 30, 2017	521		1,092,739		$	1,025		$	1,257	$	6,310		$	9,878		$	(2,711	)	$	(506	)	$	2
Net income (loss)													364									—
Other comprehensive income (loss):																			$	—
Deferred compensation										4
Cash dividends declared
Common Shares ($.095 per share)													(102		)
Series D Preferred Stock ($12.50 per depositary share)													(7		)
Series E Preferred Stock ($.382813 per depositary share)													(8		)
Open market Common Share repurchases			(14,962	)												(270		)
Employee equity compensation program Common Share repurchases			(336	)												(6		)
Common shares reissued (returned) for stock options and other employee benefit plans			1,598							(4		)				25
Net contribution from (distribution to) noncontrolling interests																						(1		)
BALANCE AT SEPTEMBER 30, 2017	521		1,079,039		$	1,025		$	1,257	$	6,310		$	10,125		$	(2,962	)	$	(506	)	$	1

See Notes to Consolidated Financial Statements (Unaudited).

55

Consolidated Statements of Cash Flows

in millions	Nine months ended September 30,
(Unaudited)	2018			2017
OPERATING ACTIVITIES
Net income (loss)	$	1,382		$	1,101
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	187			180
Depreciation and amortization expense, net	290			301
Accretion of acquired loans	69			171
Increase in cash surrender value of corporate-owned life insurance	(84		)	(85		)
Stock-based compensation expense	78			74
FDIC reimbursement (payments), net of FDIC expense	2			(2		)
Deferred income taxes (benefit)	103			134
Proceeds from sales of loans held for sale	8,234			8,109
Originations of loans held for sale, net of repayments	(8,631		)	(8,287		)
Net losses (gains) on sales of loans held for sale	(130		)	(111		)
Net losses (gains) and writedown on OREO	(2		)	3
Net losses (gains) on leased equipment	(34		)	2
Net securities losses (gains)	—			(1		)
Net losses (gains) on sales of fixed assets	8			16
Net decrease (increase) in trading account assets	(122		)	84
Gain on sale of KIBS	(83		)	—
Other operating activities, net	(473		)	(610		)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	794			1,079
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	—			(74		)
Proceeds from sale of KIBS	124			—
Net decrease (increase) in short-term investments, excluding acquisitions	2,175			(1,218		)
Purchases of securities available for sale	(3,058		)	(2,725		)
Proceeds from sales of securities available for sale	—			914
Proceeds from prepayments and maturities of securities available for sale	2,456			3,038
Proceeds from prepayments and maturities of held-to-maturity securities	1,206			1,350
Purchases of held-to-maturity securities	(1,242		)	(1,395		)
Purchases of other investments	(21		)	(78		)
Proceeds from sales of other investments	36			99
Proceeds from prepayments and maturities of other investments	37			2
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(3,249		)	(896		)
Proceeds from sales of portfolio loans	143			129
Proceeds from corporate-owned life insurance	60			40
Purchases of premises, equipment, and software	(73		)	(56		)
Proceeds from sales of premises and equipment	1			—
Proceeds from sales of OREO	22			37
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(1,383		)	(833		)
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	545			(641		)
Net increase (decrease) in short-term borrowings	911			(1,322		)
Net proceeds from issuance of long-term debt	1,802			2,850
Payments on long-term debt	(2,127		)	(43		)
Issuance of preferred shares	412			—
Open market Common Share repurchases	(820		)	(466		)
Employee equity compensation program Common Share repurchases	(47		)	(65		)
Redemption of Preferred Stock Series C	—			(350		)
Net proceeds from reissuance of Common Shares	19			29
Cash dividends paid	(458		)	(353		)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	237			(361		)
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	(352		)	(115		)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	671			677
CASH AND DUE FROM BANKS AT END OF PERIOD	$	319		$	562
Additional disclosures relative to cash flows:
Interest paid	$	632		$	442
Income taxes paid (refunded)	22			3
Noncash items:
Reduction of secured borrowing and related collateral	$	18		33
Loans transferred to portfolio from held for sale	21			93
Loans transferred to held for sale from portfolio	7			41
Loans transferred to OREO	19			29

See Notes to Consolidated Financial Statements (Unaudited).

56

Notes to Consolidated Financial Statements (Unaudited)

1. Basis of Presentation and Accounting Policies

The consolidated financial statements include the accounts of KeyCorp and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Some previously reported amounts have been reclassified to conform to current reporting practices.

The consolidated financial statements include any voting rights entities in which we have a controlling financial interest. In accordance with the applicable accounting guidance for consolidations, we consolidate a VIE if we have: (i) a variable interest in the entity; (ii) the power to direct activities of the VIE that most significantly affect the entity’s economic performance; and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary). Variable interests can include equity interests, subordinated debt, derivative contracts, leases, service agreements, guarantees, standby letters of credit, loan commitments, and other contracts, agreements, and financial instruments. See Note 9 (“Variable Interest Entities”) for information on our involvement with VIEs.

We use the equity method to account for unconsolidated investments in voting rights entities or VIEs if we have significant influence over the entity’s operating and financing decisions (usually defined as a voting or economic interest of 20% to 50%, but not controlling). Unconsolidated investments in voting rights entities or VIEs in which we have a voting or economic interest of less than 20% are carried at the cost measurement alternative or at fair value. Investments held by our registered broker-dealer and investment company subsidiaries (principal investing entities and Real Estate Capital line of business) are carried at fair value.

We believe that the unaudited consolidated interim financial statements reflect all adjustments of a normal recurring nature and disclosures that are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year. The interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our 2017 Form 10-K.

In preparing these financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all shareholders and other financial statement users or filed with the SEC.

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Accounting Guidance Adopted in 2018

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Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only) An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date	The ASU amends disclosure requirements related to fair value measurements. Specifically, entities are no longer required to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, or qualitatively disclose the valuation process for Level 3 fair value measurements. The updated guidance requires disclosure of the changes in unrealized gains and losses for the period included in Other Comprehensive Income for recurring Level 3 fair value measurements. Entities also will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The additional provisions of the guidance should be adopted prospectively, while the eliminated requirements should be adopted retrospectively.	Key has early adopted the disclosures no longer required by the guidance as of September 30, 2018, and anticipates early adopting the additional provisions of the standard in the first quarter of 2019. The adoption of this standard will not result in significant changes to Key’s disclosures and there will be no effect to our financial condition or results of operations.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2015-14, Deferral of Effective Date ASU 2016-08, Principal versus Agent Considerations ASU 2016-10, Identifying Performance Obligations and Licensing ASU 2016-11, Rescission of SEC Guidance because of Accounting Standard Updates 2014-09 and 2014-16 pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ASU 2016-12, Narrow-scope Improvements and Practical Expedients ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers	January 1, 2018	These ASUs supersede the revenue recognition guidance in ASC 605, Revenue Recognition, and most industry-specific guidance. The core principle of these ASUs is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. These ASUs can be implemented using a retrospective method, or a cumulative-effect approach to new contracts and existing contracts with performance obligations as of the effective date.	On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective method for those contracts which were not completed as of that date. Results for reporting periods beginning January 1, 2018, are presented under ASC 606. As allowed under the new guidance, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As a result of adopting ASC 606, we changed the timing of recognition for revenues related to insurance commissions, securities underwriting, and deposit account maintenance fees, however, those changes did not have a material impact on our consolidated financial statements, results of operations, equity, or cash flows as of the adoption date or for the nine months ended September 30, 2018. The presentation of underwriting costs and reimbursed out-of-pocket expenses related to underwriting and M&A advisory services was changed from net to gross within the income statement as Key acts as the principal in the transactions. Securities underwriting revenue is recorded within "investment banking and debt placement fees" and underwriting costs and reimbursed out-of-pocket expenses within "other expense" on the income statement. Additionally, because Key acts as an agent, certain credit and debit card reward costs and certain card network costs were changed from a gross presentation to net within "cards and payment income" on the income statement. Credit and debit card reward costs and card network costs were recorded as "other expense" on the income statement in prior periods. These changes in presentation did not have a material impact on our consolidated financial statements for the nine months ended September 30, 2018. ASC 606 requires quantitative disclosure of the allocation of the transaction price to the remaining performance obligations when those amounts are expected to be recognized as revenue. However, the standard provides exemptions from this disclosure for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services provided. Most of our revenue subject to ASC 606 fits into one of these exemptions, or is immaterial. We elected to use the optional exemption to not disclose the aggregate amount of the transaction price to remaining performance obligations.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	January 1, 2018	The ASU amends ASC Topic 815, Derivatives and Hedging, to simplify the requirements for hedge accounting and facilitate financial reporting that more closely aligns with an entity’s risk management activities. Key amendments include: eliminating the requirement to separately measure and report hedge ineffectiveness, requiring changes in the value of the hedging instrument to be presented in the same income statement line as the earnings effect of the hedged item, and the ability to measure the hedged item based on the benchmark interest rate component of the total contractual coupon for fair value hedges. Additional disclosures are also required for reporting periods subsequent to the date of adoption. The guidance should be implemented on a modified retrospective basis to existing hedge relationships as of the adoption date.	On January 1, 2018, we adopted this ASU using a modified retrospective basis. Accordingly, our financial statements for the quarter ended September 30, 2018, include an immaterial cumulative-effect adjustment to decrease opening retained earnings to reflect the application of the new guidance as of January 1, 2018. The primary impact to Key at adoption was the election to measure the change in fair value of hedged items in fair value hedges on the basis of the benchmark interest rate component of contractual coupon cash flows. This change has resulted in a reduction of hedge ineffectiveness for impacted fair value hedges. Instruments designated as hedges are recorded at fair value and included in “accrued income and other assets” or “accrued expense and other liabilities” on the balance sheet. Under the revised guidance, the change in the fair value of an instrument designated as a fair value hedge is recorded in earnings at the same time and in the same income statement line as the offsetting change in the fair value of the hedged item. For cash flow hedges, the change in the fair value of an instrument designated as a cash flow hedge is initially recorded in AOCI on the balance sheet. This amount is subsequently reclassified into income when the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	January 1, 2018	The ASU amends ASC Topic 825, Financial Instruments-Overall, and requires equity investments, except those accounted for under the equity method of accounting or consolidated, to be measured at fair value with changes recognized in net income. If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost and changes the presentation of financial assets and financial liabilities on the balance sheet or in the footnotes. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in the fair value of a liability resulting from credit risk to be presented in OCI. With the exception of disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	January 1, 2018	The ASU amends ASC Topic 230, Statement of Cash Flows, and clarifies how cash receipts and cash payments in certain transactions should be presented and classified in the statement of cash flows. These specific transactions include, but are not limited to, debt prepayment or extinguishment costs, contingent considerations made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions from equity method investees. This guidance also clarifies that in instances of cash flows with multiple aspects that cannot be separately identified, classification should be based on the activity that is likely to be the predominant source of or use of cash flow. The guidance should be implemented using a retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-01, Clarifying the Definition of a Business	January 1, 2018	The ASU amends Topic 805, Business Combinations, and clarifies the definition of a business and removes the requirement for a market participant to consider whether it could replace missing elements in an integrated set of assets and activities. The guidance states that if substantially all of the fair value of the assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance should be implemented using a prospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-05, Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets	January 1, 2018	The ASU amends ASC Topic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets to clarify the scope of the Topic by clarifying the definition of the term "in substance nonfinancial asset" and also adding guidance for partial sales of nonfinancial assets. Under the new guidance, an entity will derecognize a nonfinancial asset when it does not have or ceases to have a controlling interest in the legal entity that holds the asset and when control of the asset has transferred in accordance with ASC 606. The ASU can be adopted on a retrospective or modified retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	January 1, 2018	The ASU amends ASC Topic 715, Compensation - Retirement Benefits, and requires service costs to be included in the same line item as certain other compensation costs related to services rendered by employees. We record compensation costs under personnel expense on the income statement. Other elements of net benefit cost should be presented separately. The guidance should be implemented on a retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-09, Scope of Modification Accounting	January 1, 2018	The ASU amends ASC Topic 718, Compensation - Stock Compensation, and clarifies when changes to terms and conditions for share-based payment awards should be accounted for as modifications. Under the new guidance, entities should apply the modification guidance unless the fair value of the modified award is the same as the fair value of the original award immediately before modification, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before modification, and the classification of the modified award (as equity or liability instrument) is the same as the classification of the original award immediately before modification. The guidance should be applied on a prospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.

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2. Earnings Per Common Share

Basic earnings per share is the amount of earnings (adjusted for dividends declared on our preferred stock) available to each Common Share outstanding during the reporting periods. Diluted earnings per share is the amount of earnings available to each Common Share outstanding during the reporting periods adjusted to include the effects of potentially dilutive Common Shares. Potentially dilutive Common Shares include stock options and other stock-based awards. Potentially dilutive Common Shares are excluded from the computation of diluted earnings per share in the periods where the effect would be antidilutive. 

Our basic and diluted earnings per Common Share are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2018		2017		2018		2017
EARNINGS
Income (loss) from continuing operations	$	482	$	363	$	1,377	$	1,095
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		1
Income (loss) from continuing operations attributable to Key	482		363		1,377		1,094
Less: Dividends on Preferred Stock	14		14		43		56
Income (loss) from continuing operations attributable to Key common shareholders	468		349		1,334		1,038
Income (loss) from discontinued operations, net of taxes	—		1		5		6
Net income (loss) attributable to Key common shareholders	$	468	$	350	$	1,339	$	1,044
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	1,036,479		1,073,390		1,048,397		1,075,296
Effect of Common Share options and other stock awards	13,497		15,451		14,419		16,359
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	1,049,976		1,088,841		1,062,816		1,091,655
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.45	$	.32	$	1.28	$	.96
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.45		.32		1.27		.97
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.45	$	.32	$	1.26	$	.95
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.45		.32		1.26		.96

(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.

3. Loan Portfolio

in millions	September 30, 2018		December 31, 2017
Commercial and industrial (a)	$	45,023	$	41,859
Commercial real estate:
Commercial mortgage	14,716		14,088
Construction	1,763		1,960
Total commercial real estate loans	16,479		16,048
Commercial lease financing (b)	4,470		4,826
Total commercial loans	65,972		62,733
Residential — prime loans:
Real estate — residential mortgage	5,497		5,483
Home equity loans	11,339		12,028
Total residential — prime loans	16,836		17,511
Consumer direct loans	1,807		1,794
Credit cards	1,098		1,106
Consumer indirect loans	3,555		3,261
Total consumer loans	23,296		23,672
Total loans (c)	$	89,268	$	86,405

(a) Loan balances include $129 million and $119 million of commercial credit card balances at September 30, 2018, and December 31, 2017, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $12 million and $24 million at September 30, 2018, and December 31, 2017, 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 174 of our 2017 Form 10-K.

(c) Total loans exclude loans of $1.1 billion at September 30, 2018, and $1.3 billion at December 31, 2017, related to the discontinued operations of the education lending business.

4. Asset Quality

We assess the credit quality of the loan portfolio by monitoring net credit losses, levels of nonperforming assets, delinquencies, and credit quality ratings as defined by management.

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Credit Quality Indicators

The prevalent risk characteristic for both commercial and consumer loans is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Evaluation of this risk is stratified and monitored by the loan risk rating grades assigned for the commercial loan portfolios and the refreshed FICO score assigned for the consumer loan portfolios.

Most extensions of credit are subject to loan grading or scoring. Loan grades are assigned at the time of origination, verified by credit risk management, and periodically re-evaluated thereafter. This risk rating methodology blends our judgment with quantitative modeling. Commercial loans generally are assigned two internal risk ratings. The first rating reflects the probability that the borrower will default on an obligation; the second rating reflects expected recovery rates on the credit facility. Default probability is determined based on, among other factors, the financial strength of the borrower, an assessment of the borrower’s management, the borrower’s competitive position within its industry sector, and our view of industry risk in the context of the general economic outlook. Types of exposure, transaction structure, and collateral, including credit risk mitigants, affect the expected recovery assessment.

Commercial Credit Exposure — Excluding PCI

Credit Risk Profile by Creditworthiness Category ^{(a), (b)} 

	Commercial and industrial				RE — Commercial				RE — Construction				Commercial lease				Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
RATING	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
Pass	$	43,052	$	39,833	$	14,016	$	13,328	$	1,679	$	1,894	$	4,405	$	4,730	$	63,152	$	59,785
Criticized (Accruing)	1,691		1,790		398		482		79		38		55		90		2,223		2,400
Criticized (Nonaccruing)	226		153		98		30		2		2		10		6		336		191
Total	$	44,969	$	41,776	$	14,512	$	13,840	$	1,760	$	1,934	$	4,470	$	4,826	$	65,711	$	62,376

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) The term criticized refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.

Consumer Credit Exposure — Excluding PCI

Non-PCI Loans by Refreshed FICO Score ^(a) 

	Residential — Prime				Consumer direct loans				Credit cards				Consumer indirect loans				Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
FICO SCORE	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
750 and above	$	10,040	$	10,226	$	551	$	519	$	485	$	477	$	1,620	$	1,472	$	12,696	$	12,694
660 to 749	4,850		5,181		701		690		501		508		1,315		1,184		7,367		7,563
Less than 660	1,384		1,519		211		225		112		121		514		529		2,221		2,394
No Score	220		208		341		356		—		—		106		76		667		640
Total	$	16,494	$	17,134	$	1,804	$	1,790	$	1,098	$	1,106	$	3,555	$	3,261	$	22,951	$	23,291

(a) Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.

Commercial Credit Exposure — PCI

Credit Risk Profile by Creditworthiness Category ^{(a), (b)} 

	Commercial and Industrial				RE — Commercial				RE — Construction				Commercial Lease		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,		December 31,
RATING	2018		2017		2018		2017		2018		2017		2018	2017	2018		2017
Pass	$	23	$	41	$	134	$	153	$	3	$	26	—	—	$	160	$	220
Criticized	31		42		70		95		—		—		—	—	101		137
Total	$	54	$	83	$	204	$	248	$	3	$	26	—	—	$	261	$	357

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) The term “criticized” refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.

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Consumer Credit Exposure — PCI

PCI Loans by Refreshed FICO Score ^(a) 

	Residential — Prime				Consumer direct loans				Credit cards		Consumer indirect loans		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,	December 31,	September 30,		December 31,
FICO SCORE	2018		2017		2018		2017		2018	2017	2018	2017	2018		2017
750 and above	$	138	$	149	—		—		—	—	—	—	$	138	$	149
660 to 749	97		117		$	1	$	2	—	—	—	—	98		119
Less than 660	99		105		2		2		—	—	—	—	101		107
No Score	8		6		—		—		—	—	—	—	8		6
Total	$	342	$	377	$	3	$	4	—	—	—	—	$	345	$	381

(a) Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.

Nonperforming and Past Due Loans

Our policies for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans, and resuming accrual of interest for our commercial and consumer loan portfolios are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” beginning on page 101 of our 2017 Form 10-K.

The following aging analysis of past due and current loans as of September 30, 2018, and December 31, 2017, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio ^(a) 

September 30, 2018	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 (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	44,561	$	74	$	83	$	24	$	227	$	408	$	54	$	45,023
Commercial real estate:
Commercial mortgage	14,347		24		20		23		98		165		204		14,716
Construction	1,715		20		14		9		2		45		3		1,763
Total commercial real estate loans	16,062		44		34		32		100		210		207		16,479
Commercial lease financing	4,449		9		1		1		10		21		—		4,470
Total commercial loans	$	65,072	$	127	$	118	$	57	$	337	$	639	$	261	$	65,972
Real estate — residential mortgage	$	5,094	$	13	$	3	$	2	$	62	$	80	$	323	$	5,497
Home equity loans	11,044		36		11		8		221		276		19		11,339
Consumer direct loans	1,779		9		5		7		4		25		3		1,807
Credit cards	1,075		6		5		10		2		23		—		1,098
Consumer indirect loans	3,498		29		6		3		19		57		—		3,555
Total consumer loans	$	22,490	$	93	$	30	$	30	$	308	$	461	$	345	$	23,296
Total loans	$	87,562	$	220	$	148	$	87	$	645	$	1,100	$	606	$	89,268

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, 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.

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

(d) Future accretable yield related to PCI loans is not included in the analysis of the loan portfolio.

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December 31, 2017	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 (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	41,444	$	111	$	34	$	34	$	153	$	332	83		$	41,859
Commercial real estate:
Commercial mortgage	13,750		26		13		21		30		90		248		14,088
Construction	1,919		4		9		—		2		15		26		1,960
Total commercial real estate loans	15,669		30		22		21		32		105		274		16,048
Commercial lease financing	4,791		23		4		2		6		35		—		4,826
Total commercial loans	$	61,904	$	164	$	60	$	57	$	191	$	472	357		$	62,733
Real estate — residential mortgage	$	5,043	$	16	$	7	$	4	$	58	$	85	$	355	$	5,483
Home equity loans	11,721		32		15		9		229		285		22		12,028
Consumer direct loans	1,768		9		4		5		4		22		4		1,794
Credit cards	1,081		7		5		11		2		25		—		1,106
Consumer indirect loans	3,199		33		7		3		19		62		—		3,261
Total consumer loans	$	22,812	$	97	$	38	$	32	$	312	$	479	$	381	$	23,672
Total loans	$	84,716	$	261	$	98	$	89	$	503	$	951	$	738	$	86,405

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, 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.

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

(d) Future accretable yield related to purchased credit impaired loans is not included in the analysis of the loan portfolio.

At September 30, 2018, the approximate carrying amount of our commercial nonperforming loans outstanding represented 80% of their original contractual amount owed, total nonperforming loans outstanding represented 83% of their original contractual amount owed, and nonperforming assets in total were carried at 83% of their original contractual amount owed.

Nonperforming loans and loans held for sale reduced expected interest income by $8 million and $22 million for the three and nine months ended September 30, 2018, respectively, and $6 million and $18 million for the three and nine months ended September 30, 2017, respectively.

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The following tables set forth a further breakdown of individually impaired loans as of September 30, 2018, and December 31, 2017: 

	September 30, 2018						December 31, 2017
	Recorded Investment (a)		Unpaid Principal Balance (b)		Specific Allowance		Recorded Investment (a)		Unpaid Principal Balance (b)		Specific Allowance
in millions
With no related allowance recorded:
Commercial and industrial	$	187	$	255	—		$	126	$	153	—
Commercial real estate:
Commercial mortgage	11		15		—		12		18		—
Total commercial real estate loans	11		15		—		12		18		—
Total commercial loans	198		270		—		138		171		—
Real estate — residential mortgage	15		22		—		17		17		—
Home equity loans	50		57		—		56		56		—
Consumer Direct	—		1		—		—		—		—
Consumer indirect loans	2		4		—		2		2		—
Total consumer loans	67		84		—		75		75		—
Total loans with no related allowance recorded	265		354		—		213		246		—
With an allowance recorded:
Commercial and industrial	45		48		$	5	10		28		$	6
Commercial real estate:
Commercial mortgage	65		66		11		—		—		—
Total commercial real estate loans	65		66		11		—		—		—
Total commercial loans	110		114		16		10		28		6
Real estate — residential mortgage	34		52		4		32		32		5
Home equity loans	77		84		7		61		61		9
Consumer direct loans	4		4		—		4		4		—
Credit cards	3		3		—		2		2		—
Consumer indirect loans	33		33		3		32		32		3
Total consumer loans	151		176		14		131		131		17
Total loans with an allowance recorded	261		290		30		141		159		23
Total	$	526	$	644	$	30	$	354	$	405	$	23

(a) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.

(b) The Unpaid Principal Balance represents the customer’s legal obligation to us.

The following table sets forth a further breakdown of the average individually impaired loans reported by Key:

Average Recorded Investment (a)	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2018		2017		2018		2017
Commercial and industrial	$	209	$	162	$	184	$	221
Commercial real estate:
Commercial mortgage	48		14		44		8
Total commercial real estate loans	48		14		44		8
Total commercial loans	257		176		228		229
Real estate — residential mortgage	49		49		49		50
Home equity loans	126		118		122		121
Consumer direct loans	4		4		4		3
Credit cards	3		2		3		3
Consumer indirect loans	35		33		34		32
Total consumer loans	217		206		212		209
Total	$	474	$	382	$	440	$	438

(a) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.

Interest income recognized on the outstanding balances of accruing impaired loans totaled $4 million and $9 million for the three and nine months ended September 30, 2018, respectively, and $3 million and $9 million for the three and nine months ended September 30, 2017, respectively.

TDRs

We classify loan modifications as TDRs when a borrower is experiencing financial difficulties and we have granted a concession without commensurate financial, structural, or legal consideration. An acquired loan may only be classified as a TDR if a modification meeting the above TDR criteria is performed after the acquisition date. PCI loans cannot be classified as TDRs. All commercial and consumer loan TDRs, regardless of size, are individually evaluated for impairment to determine the probable loss content and are assigned a specific loan allowance. This

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designation has the effect of moving the loan from the general reserve methodology (i.e., collectively evaluated) to the specific reserve methodology (i.e., individually evaluated) and may impact the ALLL through a charge-off or increased loan loss provision. These components affect the ultimate allowance level.

As TDRs are individually evaluated for impairment under the specific reserve methodology, subsequent defaults do not generally have a significant additional impact on the ALLL. Commitments outstanding to lend additional funds to borrowers whose loan terms have been modified in TDRs are $4 million and $2 million at September 30, 2018, and December 31, 2017, respectively.

Our loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. The consumer TDR other concession category primarily includes those borrowers’ debts that are discharged through bankruptcy and have not been formally re-affirmed. At September 30, 2018, and December 31, 2017, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $130 million and $142 million, respectively. At September 30, 2018, and December 31, 2017, we had $28 million and $31 million, respectively, of OREO which included the carrying value of foreclosed residential real estate of approximately $25 million and $26 million, respectively.

The following table shows the post-modification outstanding recorded investment by concession type for our commercial and consumer accruing and nonaccruing TDRs that occurred during the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2018		2017		2018		2017
Commercial loans:
Extension of Maturity Date	$	20	$	7	$	20	$	24
Payment or Covenant Modification/Deferment	26		—		46		32
Bankruptcy Plan Modification	—		—		7		30
Total	$	46	$	7	$	73	$	86
Consumer loans:
Interest rate reduction	$	4	$	3	$	22	$	10
Other	10		8		29		21
Total	$	14	$	11	$	51	$	31
Total commercial and consumer TDRs	$	60	$	18	$	124	$	117

The following table summarizes the change in the post-modification outstanding recorded investment of our accruing and nonaccruing TDRs during the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of the period	$	347		$	333		$	317		$	280
Additions	58			20			133			134
Payments	(28		)	(36		)	(69		)	(83		)
Charge-offs	(11		)	(2		)	(15		)	(16		)
Balance at end of period (a)	$	366		$	315		$	366		$	315

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A further breakdown of TDRs included in nonperforming loans by loan category for the periods indicated are as follows:

	September 30, 2018					December 31, 2017
	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	30	$	120	$	101	20	$	109	$	86
Commercial real estate:
Commercial mortgage	6	14		10		8	16		12
Total commercial real estate loans	6	14		10		8	16		12
Total commercial loans	36	134		111		28	125		98
Real estate — residential mortgage	257	18		18		308	18		18
Home equity loans	1,233	72		66		1,025	64		57
Consumer direct loans	137	2		2		114	2		2
Credit cards	249	1		1		322	2		1
Consumer indirect loans	973	17		13		825	16		13
Total consumer loans	2,849	110		100		2,594	102		91
Total nonperforming TDRs	2,885	244		211		2,622	227		189
Prior-year accruing:(a)
Commercial and industrial	18	53		37		4	30		13
Total commercial loans	18	53		37		4	30		13
Real estate — residential mortgage	508	37		31		484	31		31
Home equity loans	1,305	77		61		1,276	75		59
Consumer direct loans	81	4		2		48	3		2
Credit cards	522	3		2		430	1		1
Consumer indirect loans	512	34		22		320	31		22
Total consumer loans	2,928	155		118		2,558	141		115
Total prior-year accruing TDRs	2,946	208		155		2,562	171		128
Total TDRs	5,831	$	452	$	366	5,184	$	398	$	317

(a) All TDRs that were restructured prior to January 1, 2018, and January 1, 2017, and are fully accruing.

Commercial loan TDRs are considered defaulted when principal and interest payments are 90 days past due. Consumer loan TDRs are considered defaulted when principal and interest payments are more than 60 days past due. During the three months ended September 30, 2018, there were no commercial loan TDRs and 82 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2017. During the three months ended September 30, 2017, there were no commercial loan TDRs and 45 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2016.

During the nine months ended September 30, 2018, there were no commercial loan TDRs and 178 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2017. During the nine months ended September 30, 2017, there were no commercial loan TDRs and 100 consumer loan TDRs with a combined recorded investment of $3 million that experienced payment defaults after modifications resulting in TDR status during 2016.

ALLL and Liability for Credit Losses on Unfunded Lending-Related Commitments

We determine the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” beginning on page 102 of our 2017 Form 10-K.

The ALLL on the acquired non-impaired loan portfolio is estimated using the same methodology as the originated portfolio, however, the estimated ALLL is compared to the remaining accretable yield to determine if an ALLL must be recorded. For PCI loans, Key estimates cash flows expected to be collected quarterly. Decreases in expected cash flows are recognized as impairment through a provision for loan and lease losses and an increase in the ALLL. There was less than $1 million of provision for loan and lease losses on PCI loans during the nine months ended September 30, 2018, and a credit of $1 million during the three months ended September 30, 2018. There was $4 million of provision for loan and lease losses on PCI loans during the nine months ended September 30, 2017, and less than $1 million of provision for loan and lease losses on PCI loans during the three months ended September 30, 2017. There was $3 million of provision for loan and lease losses on PCI loans during the twelve months ended December 31, 2017.

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The ALLL at September 30, 2018, represents our best estimate of the incurred credit losses inherent in the loan portfolio at that date. The changes in the ALLL by loan category for the periods indicated are as follows:

Three months ended September 30, 2018:

in millions	June 30, 2018		Provision				Charge-offs			Recoveries		September 30, 2018
Commercial and Industrial	$	542	$	34			$	(38	)	$	5	$	543
Commercial real estate:
Real estate — commercial mortgage	139		9				(6		)	1		143
Real estate — construction	28		3				—			—		31
Total commercial real estate loans	167		12				(6		)	1		174
Commercial lease financing	40		(2		)		(4		)	3		37
Total commercial loans	749		44				(48		)	9		754
Real estate — residential mortgage	10		(1		)		(2		)	2		9
Home equity loans	37		(2		)		(4		)	3		34
Consumer direct loans	26		9				(10		)	1		26
Credit cards	46		7				(10		)	2		45
Consumer indirect loans	19		3				(7		)	4		19
Total consumer loans	138		16				(33		)	12		133
Total ALLL — continuing operations	887		60			(a)	(81		)	21		887
Discontinued operations	14		3				(4		)	1		14
Total ALLL — including discontinued operations	$	901	$	63			$	(85	)	$	22	$	901

(a) Excludes a provision for losses on lending-related commitments of $2 million.

Three months ended September 30, 2017:

in millions	June 30, 2017		Provision				Charge-offs			Recoveries		September 30, 2017
Commercial and Industrial	$	528	$	8			$	(29	)	$	25	$	532
Commercial real estate:
Real estate — commercial mortgage	144		(1		)		(6		)	1		138
Real estate — construction	28		3				(2		)	—		29
Total commercial real estate loans	172		2				(8		)	1		167
Commercial lease financing	40		1				(1		)	3		43
Total commercial loans	740		11				(38		)	29		742
Real estate — residential mortgage	9		(2		)		—			1		8
Home equity loans	42		(1		)		(6		)	4		39
Consumer direct loans	25		10				(8		)	1		28
Credit cards	44		10				(11		)	1		44
Consumer indirect loans	10		14				(8		)	3		19
Total consumer loans	130		31				(33		)	10		138
Total ALLL — continuing operations	870		42			(a)	(71		)	39		880
Discontinued operations	21		5				(10		)	2		18
Total ALLL — including discontinued operations	$	891	$	47			$	(81	)	$	41	$	898

(a) Excludes a provision for losses on lending-related commitments of $9 million.

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Nine months ended September 30, 2018:

in millions	December 31, 2017		Provision				Charge-offs			Recoveries		September 30, 2018
Commercial and Industrial	529		$	110			$	(114	)	$	18	$	543
Commercial real estate:
Real estate — commercial mortgage	133		17				(9		)	2		143
Real estate — construction	30		—				—			1		31
Total commercial real estate loans	163		17				(9		)	3		174
Commercial lease financing	43		(1		)		(9		)	4		37
Total commercial loans	735		126				(132		)	25		754
Real estate — residential mortgage	7		3				(3		)	2		9
Home equity loans	43		(4		)		(14		)	9		34
Consumer direct loans	28		20				(27		)	5		26
Credit cards	44		30				(34		)	5		45
Consumer indirect loans	20		9				(22		)	12		19
Total consumer loans	142		58				(100		)	33		133
Total ALLL — continuing operations	877		184			(a)	(232		)	58		887
Discontinued operations	16		5				(11		)	4		14
Total ALLL — including discontinued operations	$	893	$	189			$	(243	)	$	62	$	901

(a) Excludes a provision for losses on lending-related commitments of $3 million.

Nine months ended September 30, 2017:

in millions	December 31, 2016		Provision				Charge-offs			Recoveries		September 30, 2017
Commercial and Industrial	$	508	$	93			$	(101	)	$	32	$	532
Commercial real estate:
Real estate — commercial mortgage	144		2				(9		)	1		138
Real estate — construction	22		8				(2		)	1		29
Total commercial real estate loans	166		10				(11		)	2		167
Commercial lease financing	42		5				(9		)	5		43
Total commercial loans	716		108				(121		)	39		742
Real estate — residential mortgage	17		(11		)		(2		)	4		8
Home equity loans	54		(4		)		(23		)	12		39
Consumer direct loans	24		26				(26		)	4		28
Credit cards	38		36				(34		)	4		44
Consumer indirect loans	9		23				(24		)	11		19
Total consumer loans	142		70				(109		)	35		138
Total ALLL — continuing operations	858		178			(a)	(230		)	74		880
Discontinued operations	24		8				(20		)	6		18
Total ALLL — including discontinued operations	$	882	$	186			$	(250	)	$	80	$	898

(a) Excludes a provision for losses on lending-related commitments of $2 million.

A breakdown of the individual and collective ALLL and the corresponding loan balances as of September 30, 2018, follows:

	Allowance						Outstanding
September 30, 2018	Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment		Purchased Credit Impaired		Loans			Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment			Purchased Credit Impaired
in millions
Commercial and industrial	$	5	$	536	$	2	$	45,023		$	232	$	44,737		$	54
Commercial real estate:
Commercial mortgage	11		129		3		14,716			76		14,436			204
Construction	—		31		—		1,763			—		1,760			3
Total commercial real estate loans	11		160		3		16,479			76		16,196			207
Commercial lease financing	—		37		—		4,470			—		4,470			—
Total commercial loans	16		733		5		65,972			308		65,403			261
Real estate — residential mortgage	4		5		—		5,497			49		5,125			323
Home equity loans	7		26		1		11,339			127		11,193			19
Consumer direct loans	—		26		—		1,807			4		1,800			3
Credit cards	—		45		—		1,098			3		1,095			—
Consumer indirect loans	3		16		—		3,555			35		3,520			—
Total consumer loans	14		118		1		23,296			218		22,733			345
Total ALLL — continuing operations	30		851		6		89,268			526		88,136			606
Discontinued operations	2		12		—		1,130		(a)	22		1,108		(a)	—
Total ALLL — including discontinued operations	$	32	$	863	$	6	$	90,398		$	548	$	89,244		$	606

(a) Amount includes $2 million of loans carried at fair value that are excluded from ALLL consideration.

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A breakdown of the individual and collective ALLL and the corresponding loan balances as of December 31, 2017, follows:

	Allowance						Outstanding
December 31, 2017	Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment		Purchased Credit Impaired		Loans			Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment			Purchased Credit Impaired
in millions
Commercial and Industrial	$	6	$	520	$	3	$	41,859		$	136	$	41,640		$	83
Commercial real estate:
Commercial mortgage	—		131		2		14,088			12		13,828			248
Construction	—		30		—		1,960			—		1,934			26
Total commercial real estate loans	—		161		2		16,048			12		15,762			274
Commercial lease financing	—		43		—		4,826			—		4,826			—
Total commercial loans	6		724		5		62,733			148		62,228			357
Real estate — residential mortgage	5		2		—		5,483			49		5,079			355
Home equity loans	9		33		1		12,028			117		11,889			22
Consumer direct loans	—		28		—		1,794			4		1,786			4
Credit cards	—		44		—		1,106			2		1,104			—
Consumer indirect loans	3		17		—		3,261			34		3,227			—
Total consumer loans	17		124		1		23,672			206		23,085			381
Total ALLL — continuing operations	23		848		6		86,405			354		85,313			738
Discontinued operations	3		13		—		1,314		(a)	21		1,293		(a)	—
Total ALLL — including discontinued operations	$	26	$	861	$	6	$	87,719		$	375	$	86,606		$	738

(a) Amount includes $2 million of loans carried at fair value that are excluded from ALLL consideration.

The liability for credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. We establish the amount of this reserve by considering both historical trends and current market conditions quarterly, or more often if deemed necessary.

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2018		2017		2018		2017
Balance at beginning of period	$	58	$	48	$	57	$	55
Provision (credit) for losses on lending-related commitments	2		9		3		2
Balance at end of period	$	60	$	57	$	60	$	57

PCI Loans

Purchased loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that all contractually required payments will not be collected are deemed PCI. Our policies for determining, recording payments on, and derecognizing PCI loans are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Purchased Loans” beginning on page 107 of our 2017 Form 10-K.

We have PCI loans from two separate acquisitions, one in 2012 and one in 2016. The following tables present the roll-forward of the accretable yield and the beginning and ending outstanding unpaid principal balance and carrying amount of all PCI loans for the three and nine months ended September 30, 2018, and the twelve months ended December 31, 2017.

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018							2018
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance		Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	121		$	622	$	669	$	131		$	738	$	803
Accretion	(10		)					(33		)
Net reclassifications from nonaccretable to accretable	13							41
Payments received, net	(3		)					(18		)
Balance at end of period	$	121		$	599	$	642	$	121		$	599	$	642

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	Twelve Months Ended December 31,
	2017
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	197		$	865	$	1,002
Additions	(32		)
Accretion	(44		)
Net reclassifications from nonaccretable to accretable	15
Payments received, net	(4		)
Disposals	(1		)
Balance at end of period	$	131		$	738	$	803

5. Fair Value Measurements

Fair Value Determination

In accordance with GAAP, Key measures certain assets and liabilities at fair value. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants in our principal market.

Additional information regarding our accounting policies for determining fair value is provided in Note 7 (“Fair Value Measurements”) and Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements” of our 2017 Form 10-K.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

Certain assets and liabilities are measured at fair value on a recurring basis in accordance with GAAP. The following tables present these assets and liabilities at September 30, 2018, and December 31, 2017.

	September 30, 2018									December 31, 2017
	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	—		$	759	—		$	759		—		615		—		615
States and political subdivisions	—		54		—		54			—		37		—		37
Other mortgage-backed securities	—		86		—		86			—		104		—		104
Other securities	3		39		—		42			—		65		—		65
Total trading account securities	3		938		—		941			—		821		—		821
Commercial loans	—		17		—		17			—		15		—		15
Total trading account assets	3		955		—		958			—		836		—		836
Securities available for sale:
U.S. Treasury, agencies and corporations	—		145		—		145			—		157		—		157
States and political subdivisions	—		7		—		7			—		9		—		9
Agency residential collateralized mortgage obligations	—		14,192		—		14,192			—		14,660		—		14,660
Agency residential mortgage-backed securities	—		1,661		—		1,661			—		1,439		—		1,439
Agency commercial mortgage-backed securities	—		2,316		—		2,316			—		1,854		—		1,854
Other securities	—		—		$	20	20			—		—		20		20
Total securities available for sale	—		18,321		20		18,341			—		18,119		20		18,139
Other investments:
Principal investments:
Direct	—		—		12		12			—		—		13		13
Indirect (measured at NAV) (a)	—		—		—		101			—		—		—		124
Total principal investments	—		—		12		113			—		—		13		137
Equity investments:
Direct	—		1		7		8			—		4		3		7
Direct (measured at NAV) (a)	—		—		—		1			—		—		—		—
Total equity investments	—		1		7		9			—		4		3		7
Total other investments	—		1		19		122			—		4		16		144
Loans, net of unearned income	—		—		3		3			—		—		2		2
Loans held for sale	—		87		—		87			—		70		1		71
Derivative assets:
Interest rate	—		304		6		310			—		713		9		722
Foreign exchange	$	70	32		—		102			$	100	$	30	$	—	$	130
Commodity	—		491		—		491			—		255		—		255
Credit	—		—		—		—			—		—		1		1
Other	—		5		2		7			—		1		3		4
Derivative assets	70		832		8		910			100		999		13		1,112
Netting adjustments (b)	—		—		—		(162		)	—		—		—		(443		)
Total derivative assets	70		832		8		748			100		999		13		669
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	73	$	20,196	$	50	$	20,259		$	100	$	20,028	$	52	$	19,861
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	37	$	600	—		$	637		$	72	$	562	$	—	$	634
Derivative liabilities:
Interest rate	—		445		—		445			—		520		—		520
Foreign exchange	62		31		—		93			98		26		—		124
Commodity	—		481		—		481			—		246		—		246
Credit	—		3		—		3			—		4		—		4
Other	—		3		—		3			—		13		—		13
Derivative liabilities	62		963		—		1,025			98		809		—		907
Netting adjustments (b)	—		—		—		(582		)	—		—		—		(616		)
Total derivative liabilities	62		963		—		443			98		809		—		291
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	99	$	1,563	—		$	1,080		$	170	$	1,371	$	—	$	925

(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.

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Qualitative Disclosures of Valuation Techniques

The following describes the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities:

Securities (trading account assets and available for sale). We own several types of securities, requiring a range of valuation methods:

• Level 2 securities include municipal bonds, bonds backed by the U.S. government, corporate bonds, agency residential and CMBS, securities issued by the U.S. Treasury, money markets, and certain agency and corporate CMOs. Fair value is determined using pricing models (either by a third-party pricing service or internally) or quoted prices of similar securities.

• Our Level 3 instruments consist principally of debt securities. The securities are valued using a cash flow analysis of the associated private company issuers based on internal models or a third-party valuation service. We also employ a market approach that utilizes revenue multiples of comparable companies. We reference guideline public companies with growth prospects, margin, and risks that are comparable to the subject companies. The valuations of the securities are negatively affected by projected net losses of the associated private companies and positively affected by projected net gains.

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. We validate the pricing methodologies utilized by our third-party pricing service to ensure that the fair value determination is consistent with the applicable accounting guidance. This includes comparing the actual inputs used by our third-party pricing service to comparable inputs for similar securities and comparing the fair values to prices from other independent sources for the same and similar securities.

Commercial loans (trading account assets). Commercial loans recorded as trading account assets are valued based on market spreads since there is an active market for similar assets. Bid and ask prices are received from multiple loan dealers and valuations reflect prices within the bid-ask spread that are most representative of fair value for the respective loans. The price point used within the bid/ask spread is further validated using an independent, third party service provider.

Principal investments. Principal investments consist of investments in equity and debt instruments made by our principal investing entities. They include direct investments (investments made in a particular company) and indirect investments (investments made through funds that include other investors). In most cases, quoted market prices are not available for our direct investments, and we must estimate the fair value based on operating performance, market multiples for comparable businesses, and unique facts and circumstances related to each individual investment. Indirect investments are valued using a methodology that is consistent with accounting guidance allowing us 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).

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at September 30, 2018, as well as financial support provided for the three and nine months ended September 30, 2018, and September 30, 2017.

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					Financial support provided
					Three months ended September 30,					Nine months ended September 30,
	September 30, 2018				2018		2017			2018			2017
in millions	Fair Value		Unfunded Commitments		Funded Commitments	Funded Other	Funded Commitments		Funded Other	Funded Commitments		Funded Other	Funded Commitments		Funded Other
INVESTMENT TYPE
Direct investments (a)	$	12	—		—	—	—		—	—		—	—		$	—
Indirect investments (measured at NAV)	101		$	28	—	—	$	—	—	$	1	—	$	1	—
Total	$	113	$	28	—	—	$	—	—	$	1	—	$	1	$	—

 

(a) Our direct investments consist of equity and debt investments directly in independent business enterprises. Operations of the business enterprises are handled by management of the portfolio company. The purpose of funding these enterprises is to provide financial support for business development and acquisition strategies. We infuse equity capital based on an initial contractual cash contribution and later from additional requests on behalf of the companies’ management.

(b) 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. We estimate that the underlying investments of the funds will be liquidated over a period of one to six years. 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.

Other Equity Investments. Our other equity investments measured on a recurring basis are direct investments in equity instruments of private companies. Quoted market prices are not available for these investments and we must perform valuations using other methods in a similar manner to our direct principal investments.

Loans Held for Sale and Held for Investment. Residential mortgage loans are valued based on quoted market prices, where available, prices for other traded mortgage loans with similar characteristics, and purchase commitments and bid information received from market participants. We have elected the fair value option for residential mortgage loans held for sale as this aligns with the related forward mortgage loan sale commitments.

Our residential mortgage activity also includes temporarily unsalable residential mortgage loans that are included in “Loans, net of unearned income” and loans with salability issues included in “Loans held for sale” on the balance sheet.  These loans have an origination defect that makes them temporarily unable to be sold into the performing loan sales market. Because transaction details regarding sales of this type of loan are often unavailable, unobservable bid information from brokers and investors is heavily relied upon. Accordingly, based on the significance of unobservable inputs, these loans are classified as Level 3.

Derivatives. The majority of our derivative positions are Level 2 instruments, which are valued using internally developed models, based on market convention. These models use observable market inputs, such as interest rate curves, LIBOR and Overnight Index Swap discount rates and curves, index pricing curves, foreign currency curves, volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity) and current prices for mortgage securities and investor supplied prices.

Level 3 derivative instruments primarily consist of interest rate lock commitments and several customized derivative instruments. The value of interest rate lock commitments is based on interest rates observable in the market and the probability of the loan closing.  Therefore, the valuation methodology employs a model which uses current interest rates and adjusts the probability of the loan closing at the approved terms in the current interest rate environment. Various other customized derivative instruments are priced using internally developed models which leverage market and internal data and assumptions.

Liability for short positions. Level 2 items are fixed income securities held by our broker dealer in its trading inventory. These items are measured at fair value based upon market activity, spreads, credit ratings and interest rates for each security type. Additionally, recent values used in transactions for the same or similar securities are also utilized in the valuation.

Changes in Level 3 Fair Value Measurements

The following table shows the components of the change in the fair values of our Level 3 financial instruments for the three and nine months ended September 30, 2018, and September 30, 2017. 

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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 (a)			Transfers out of Level 3 (a)				End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2018
Securities available for sale
Other securities	$	20		$	—	—				—	—		—		—		—			—				$	20	—
Other investments
Principal investments
Direct	13			—		$	(1	)	(b)	1	(1	)	—		—		—			—				12		$	1		(b)
Equity investments
Direct	3			—		—				—	—		—		—		$	4		—				7		—
Loans held for sale	1			—		—				—	(1	)	—		—		—			—				—		—
Loans held for investment	2			—		—				—	—		—		1		—			—				3		—
Derivative instruments (c)
Interest rate	9			—		(2		)	(d)	1	(2	)	—		—		6		(e)	$	(6	)	(e)	6		—
Credit	1			—		(26		)	(d)	—	—		$	25	—		—			—				—		—
Other (f)	3			—		—				—	—		—		(1	)	—			—				2		—
Three months ended September 30, 2018
Securities available for sale
Other securities	$	20		$	—	—				—	—		—		—		—			$	—			$	20	—
Other investments
Principal investments
Direct	13			—		$	(1	)	(b)	—	—		—		—		—			—				12		(1		)	(b)
Equity investments
Direct	7			—		—				—	—		—		—		—			—				7		—
Loans held for sale	—			—		—				—	—		—		—		—			—				—		—
Loans held for investment	3			—		—				—	—		—		—		—			—				3		—
Derivative instruments (c)
Interest rate	5			—		—			(d)	—	—		—		—		2		(e)	(1		)	(e)	6		—
Credit	(9		)	—		(6		)	(d)	—	—		$	15	—		—			—				—		—
Other (f)	3			—		—				—	—		—		(1	)	—			—				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 (a)			Transfers out of Level 3 (a)				End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2017
Securities available for sale
Other securities	$	17	$	3	—				—		—			—		—		—			—				$	20	—
Other investments
Principal investments
Direct	27		$	—	$	(7	)	(b)	—		$	(7	)	—		—		—			—				13		$	(1	)	(b)
Loans held for sale	—		—		—				—		(1		)	—		3		—			—				2		—
Derivative instruments (c)
Interest rate	7		—		—				—		—			—		—		$	13	(e)	$	(9	)	(e)	11		—
Credit	1		—		(12		)	(d)	—		—			$	12	—		—			—				1		—
Other (f)	2		—		—				—		—			—		$	2	—			—				4		—
Three months ended September 30, 2017
Securities available for sale
Other securities	$	20	$	1	—				—		—			—		—		—			$	(1	)		$	20	—
Other investments
Principal investments
Direct	15		$	—	$	(2	)	(b)	—		$	—		—		—		—			—				13		$	2		(b)
Loans held for sale	—		—		—				—		(1		)	—		3		—			—				2		—
Derivative instruments (c)
Interest rate	16		—		—				—		—			—		—		$	1	(e)	$	(6	)	(e)	11		—
Credit	1		—		(5		)	(d)	—		—			$	5	—		—			—				1		—
Other (f)	4		—		—				$	—	—			—		$	—	—			—				4		—

(a) Our policy is to recognize transfers into and transfers out of Level 3 as of the end of the reporting period.

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

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

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

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

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

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in accordance with GAAP. The adjustments to fair value generally result from the application of accounting guidance that requires assets and liabilities to be recorded at the lower of cost or fair value, or assessed for impairment. There were no liabilities measured at fair value on a nonrecurring basis at September 30, 2018, and December 31, 2017.

The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2018, and December 31, 2017:

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	September 30, 2018							December 31, 2017
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	—	$	—	$	97	$	97	—	—		$	9		$	9
Accrued income and other assets	—	—		24		24		—	$	5	133		(a)	138
Total assets on a nonrecurring basis at fair value	—	$	—	$	121	$	121	—	$	5	$	142		$	147

(a) At December 31, 2017, we recorded $31 million of impairment related to $119 million of LIHTC and Historic Tax Credit investments impacted by the enactment of the TCJ Act. Refer to the “LIHTC and Historic Tax Credit Investments” section below for a description of the valuation technique and inputs applied for this fair value measurement.

Impaired loans and leases. The following two internal methods are used to value impaired loans and leases:

• Cash flow analysis considers internally developed inputs, such as discount rates, default rates, costs of foreclosure, and changes in collateral values.

• The fair value of the underlying collateral, which may take the form of real estate or personal property, is based on internal estimates, field observations, and assessments provided by third-party appraisers. 

Reviews are done on a quarterly basis for non-accrual and TDRs greater than $2.5 million to determine the amount of specific allocations for impairment needed. Impairment valuations are back-tested each quarter, based on a look-back of actual incurred losses on closed deals previously evaluated for impairment. The overall percent variance of actual net loan charge-offs on closed deals compared to the specific allocations on such deals is considered in determining each quarter’s specific allocations.

Commercial loans held for sale. Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. For loans sold in an active market, we utilize non-binding bids for the respective loans or similar loans, or recent sales to determine the fair value. For inactive markets, we assess appraisal values, strength of sponsor/guarantor, loan pricing relative to current comparable transactions, current market conditions and market demographics. Our analysis concluded that there were no commercial loans held for sale adjusted to fair value at September 30, 2018, and December 31, 2017.

Direct financing leases and operating lease assets held for sale. Valuations of direct financing leases and operating lease assets held for sale are performed using an internal model that relies on market data, such as swap rates and bond ratings, as well as on our own assumptions about the exit market for the leases and details about the individual leases in the portfolio. The inputs based on our assumptions include changes in the value of leased items and internal credit ratings. These leases have been classified as Level 3 assets. Leases for which we receive a current nonbinding bid, and for which the sale is considered probable, may be classified as Level 2. No direct financing leases and operating lease assets held for sale were adjusted to fair value at September 30, 2018, and December 31, 2017.

Other assets. OREO and other repossessed properties are valued based on inputs such as appraisals and third-party price opinions, less estimated selling costs. Generally, we classify these assets as Level 3, but OREO and other repossessed properties for which we receive binding purchase agreements are classified as Level 2. Returned lease inventory is valued based on market data for similar assets and is classified as Level 2.

LIHTC, HTC, and NMTC Investments. Valuation of LIHTC, HTC, and NMTC investments involves measuring the present value of future tax benefits and comparing that value against the current carrying value of the investments. LIHTC, HTC, and NMTC investments are impaired when it is more likely than not that the carrying amount of the investments will not be realized. A primary driver of impairment in the fourth quarter of 2017 was the enactment of the TCJ Act, which reduced future depreciation tax benefits expected to be realized by certain LIHTC, HTC, and NMTC investments. No impairment was recorded for the three and nine months ended September 30, 2018.

Other Equity Investments. We have other investments in equity securities that do not have readily determinable fair values and do not qualify for the practical expedient to measure the investment using a net asset value per share. We have elected to measure these securities at cost less impairment plus or minus adjustments due to observable orderly transactions. Impairment is recorded when there is evidence that the expected fair value of the investment has declined to below the recorded cost. At each reporting period, we assess if these investments continue to qualify for this measurement alternative. At September 30, 2018, the carrying amount of equity investments recorded under this method was $106 million. No impairment was recorded for the three and nine months ended September 30, 2018.

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Quantitative Information about Level 3 Fair Value Measurements

The range and weighted average of the significant unobservable inputs used to fair value our material Level 3 recurring and nonrecurring assets at September 30, 2018, and December 31, 2017, along with the valuation techniques used, are shown in the following table:

September 30, 2018	Fair Value of Level 3 Assets		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Recurring
Other investments — principal investments — direct:	$	12	Individual analysis of the  condition of each investment
Debt instruments				EBITDA multiple	N/A (6.88)
Equity instruments of private companies				EBITDA multiple	N/A (6.88)
Nonrecurring
Impaired loans	97		Fair value of underlying collateral	Discount	0.00 - 75.00% (20.00%)

December 31, 2017	Fair Value of Level 3 Assets		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Recurring
Other investments — principal investments — direct:	$	13	Individual analysis of the condition of each investment
Debt instruments				EBITDA multiple	N/A (6.00)
Equity instruments of private companies				EBITDA multiple	N/A (6.00)
Nonrecurring
Impaired loans	9		Fair value of underlying collateral	Discount	0.00 - 50.00% (23.00%)

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at September 30, 2018, and December 31, 2017, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 30, 2018
				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)	$	958		3		$	955		—		—		—				$	958
Other investments (b)	681			—		1			$	578	$	102	—				681
Loans, net of unearned income (d)	3			—		—			3		—		—				3
Loans held for sale (b)	87			—		87			—		—		—				87
Derivative assets - trading (b)	700			$	68	794			8		—		$	(170	)	(f)	700
Fair value - OCI
Securities available for sale (b)	18,341			—		18,321			$	20	—		—				18,341
Derivative assets - hedging (b)	48			2		38			—		—		8			(f)	48
Amortized cost
Held-to-maturity securities (c)	11,869			—		11,261			—		—		—				11,261
Loans, net of unearned income (d)	88,378			—		—			86,418		—		—				86,418
Loans held for sale (b)	1,531			—		—			1,531		—		—				1,531
Other
Cash and short-term investments (a)	2,591			2,591		—			—		—		—				2,591
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	446		$	61	$	967		—		—		$	(582	)	(f)	$	446
Fair value - OCI
Derivative liabilities - hedging (b)	(3		)	1		(4		)	—		—		—			(f)	(3		)
Amortized cost
Time deposits (e)	13,583			—		13,654			—		—		—				13,654
Short-term borrowings (a)	1,922			$	37	1,885			—		—		—				1,922
Long-term debt (e)	13,849			12,659		1,205			—		—		—				13,864
Other
Deposits with no stated maturity (a)	92,197			—		92,197			—		—		—				92,197

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	December 31, 2017
				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)	$	836		—		$	836	—		—		—				$	836
Other investments (b)	726			—		4		$	598	$	124	—				726
Loans, net of unearned income (d)	2			—		—		2		—		—				2
Loans held for sale (b)	71			—		70		1		—		—				71
Derivative assets - trading (b)	681			$	99	918		13		—		$	(349	)	(f)	681
Fair value - OCI
Securities available for sale (b)	18,139			—		18,119		20		—		—				18,139
Derivative assets - hedging (b)	(12		)	1		81		—		—		(94		)	(f)	(12		)
Amortized cost
Held-to-maturity securities (c)	11,830			—		11,565		—		—		—				11,565
Loans, net of unearned income (d)	85,526			—		—		84,003		—		—				84,003
Loans held for sale (b)	1,036			—		—		1,036		—		—				1,036
Other
Cash and short-term investments (a)	5,118			5,118		—		—		—		—				5,118
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	289		$	94	$	763	—		—		$	(568	)	(f)	$	289
Fair value - OCI
Derivative liabilities - hedging (b)	2			4		46		—		—		(48		)	(f)	2
Amortized cost
Time deposits (e)	11,647			—		11,750		—		—		—				11,750
Short-term borrowings (a)	1,011			72		939		—		—		—				1,011
Long-term debt (e)	14,333			13,407		$	1,219	—		—		—				14,626
Other
Deposits with no stated maturity (a)	93,588			—		93,588		—		—		—				93,588

Valuation Methods and Assumptions

(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.

Education lending business. The discontinued education lending business consists of loans in portfolio recorded at carrying value with appropriate valuation reserves, and loans in portfolio recorded at fair value. All of these loans were excluded from the table above as follows:

• Loans at carrying value, net of allowance, of $1.1 billion ($1.0 billion at fair value) at September 30, 2018, and $1.3 billion ($1.0 billion at fair value) at December 31, 2017;

• Portfolio loans at fair value of $2 million at September 30, 2018, and $2 million at December 31, 2017.

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

6. Securities

The amortized cost, unrealized gains and losses, and approximate fair value of our securities available for sale and held-to-maturity securities are presented in the following tables. Gross unrealized gains and losses represent the difference between the amortized cost and the fair value of securities on the balance sheet as of the dates indicated. Accordingly, the amount of these gains and losses may change in the future as market conditions change.

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	September 30, 2018								December 31, 2017
in millions	Amortized Cost		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	$	150	—		$	5	$	145	$	159	—		$	2	$	157
States and political subdivisions	7		—		—		7		9		—		—		9
Agency residential collateralized mortgage obligations	14,804		$	4	616		14,192		14,985		$	10	335		14,660
Agency residential mortgage-backed securities	1,708		2		49		1,661		1,456		3		20		1,439
Agency commercial mortgage-backed securities	2,439		—		123		2,316		1,920		—		66		1,854
Other securities	17		3		—		20		17		3		—		20
Total securities available for sale	$	19,125	$	9	$	793	$	18,341	$	18,546	$	16	$	423	$	18,139
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	7,330	—		$	400	$	6,930	$	8,055	—		$	224	$	7,831
Agency residential mortgage-backed securities	508		—		22		486		574		$	1	4		571
Agency commercial mortgage-backed securities	4,019		—		186		3,833		3,186		6		44		3,148
Other securities	12		—		—		12		15		—		—		15
Total held-to-maturity securities	$	11,869	$	—	$	608	$	11,261	$	11,830	$	7	$	272	$	11,565

The following table summarizes our securities that were in an unrealized loss position as of September 30, 2018, and December 31, 2017.

	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
September 30, 2018
Securities available for sale:
U.S Treasury, agencies, and corporations	—		—		$	145	$	5	$	145	$	5
Agency residential collateralized mortgage obligations	$	3,121	54		10,062		562		13,183		616
Agency residential mortgage-backed securities	409		3		1,089		46		1,498		49
Agency commercial mortgage-backed securities	558		2		1,758		121		2,316		123
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,275		44		5,655		356		6,930		400
Agency residential mortgage-backed securities	153		6		333		16		486		22
Agency commercial mortgage-backed securities	2,629		98		1,205		88		3,834		186
Other securities (a)	2		—		—		—		2		—
Total temporarily impaired securities	$	8,147	$	207	$	20,247	$	1,194	$	28,394	$	1,401
December 31, 2017
Securities available for sale:
U.S. Treasury, agencies, and corporations	$	41	—		$	116	2		$	157	$	2
Agency residential collateralized mortgage obligations	6,153		$	74	7,270		$	261	13,423		335
Agency residential mortgage-backed securities	666		7		702		13		1,368		20
Agency commercial mortgage-backed securities	205		4		1,649		62		1,854		66
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	2,201		27		5,599		197		7,800		224
Agency residential mortgage-backed securities	252		1		206		3		458		4
Agency commercial mortgage-backed securities	1,470		12		495		32		1,965		44
Other securities (a)	3		—		4		—		7		—
Total temporarily impaired securities	$	10,991	$	125	$	16,041	$	570	$	27,032	$	695

(a) Gross unrealized losses totaled less than $1 million for other securities held-to maturity at September 30, 2018, and December 31, 2017.

At September 30, 2018, we had $616 million of gross unrealized losses related to 482 fixed-rate agency residential CMOs that we invested in as part of our overall A/LM strategy. These securities had a weighted-average maturity of 4.69 years at September 30, 2018. At September 30, 2018, we also had $49 million of gross unrealized losses related to 262 agency residential mortgage-backed securities positions and $123 million of gross unrealized losses related to 20 agency commercial mortgage backed securities positions with weighted-average maturities of 4.30 years and 4.15 years, respectively. Because these securities have a fixed interest rate, their fair value is sensitive to movements in market interest rates. These unrealized losses are considered temporary since we expect to collect all contractually due amounts from these securities. Accordingly, these investments were reduced to their fair value through OCI, not through earnings.

We regularly assess our securities portfolio for OTTI. The assessments are based on the nature of the securities, the underlying collateral, the financial condition of the issuer, the extent and duration of the loss, our intent related to

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the individual securities, and the likelihood that we will have to sell securities prior to expected recovery. As shown in the following table, we did not have any impairment losses recognized in earnings for the nine months ended September 30, 2018.

Nine months ended September 30, 2018
in millions
Balance at December 31, 2017	$	4
Impairment recognized in earnings	—
Balance at September 30, 2018	$	4

At September 30, 2018, securities available for sale and held-to-maturity securities totaling $8.4 billion were pledged to secure securities sold under repurchase agreements, to secure public and trust deposits, to facilitate access to secured funding, and for other purposes required or permitted by law.

The following table shows our securities by remaining maturity. CMOs and other mortgage-backed securities in the available for sale portfolio and held-to-maturity portfolio are presented based on their expected average lives. The remaining securities, in both the available-for-sale and held-to-maturity portfolios, are presented based on their remaining contractual maturity. Actual maturities may differ from expected or contractual maturities since borrowers have the right to prepay obligations with or without prepayment penalties.

	Securities Available for Sale				Held to Maturity Securities
September 30, 2018	Amortized Cost		Fair Value		Amortized Cost		Fair Value
in millions
Due in one year or less	$	93	$	93	$	31	$	30
Due after one through five years	12,365		11,846		6,181		5,910
Due after five through ten years	6,655		6,390		5,657		5,321
Due after ten years	12		12		—		—
Total	$	19,125	$	18,341	$	11,869	$	11,261

7. Derivatives and Hedging Activities

We are a party to various derivative instruments, mainly through our subsidiary, KeyBank. The primary derivatives that we use are interest rate swaps, caps, floors, and futures; foreign exchange contracts; commodity derivatives; and credit derivatives. Generally, these instruments help us manage exposure to interest rate risk, mitigate the credit risk inherent in our loan portfolio, hedge against changes in foreign currency exchange rates, and meet client financing and hedging needs.

At September 30, 2018, after taking into account the effects of bilateral collateral and master netting agreements, we had $48 million of derivative assets and a positive $3 million of derivative liabilities that relate to contracts entered into for hedging purposes. As of the same date, after taking into account the effects of bilateral collateral and master netting agreements and a reserve for potential future losses, we had derivative assets of $700 million and derivative liabilities of $446 million that were not designated as hedging instruments. These positions are primarily comprised of derivative contracts entered into for client accommodation purposes.

Additional information regarding our accounting policies for derivatives is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 105 of our 2017 Form 10-K. Our derivative strategies and related risk management objectives are described in Note 9 (“Derivatives and Hedging Activities”) beginning on page 143 of our 2017 Form 10-K.

Fair Values, Volume of Activity, and Gain/Loss Information Related to Derivative Instruments

The following table summarizes the fair values of our derivative instruments on a gross and net basis as of September 30, 2018, and December 31, 2017. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable 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. Securities collateral related to legally enforceable master netting

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agreements is not offset on the balance sheet. Our derivative instruments are included in “accrued income and other assets” or “accrued expenses and other liabilities” on the balance sheet, as follows:

	September 30, 2018								December 31, 2017
			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	$	27,445	$	38		$	(4	)	$	26,176	$	81		$	46
Foreign exchange	254		2			1			302		1			4
Total	27,699		40			(3		)	26,478		82			50
Derivatives not designated as hedging instruments:
Interest rate	65,617		272			449			61,390		641			474
Foreign exchange	7,695		100			92			8,317		129			120
Commodity	2,235		491			481			1,687		255			246
Credit	401		—			3			315		1			4
Other (a)	1,795		7			3			2,006		4			13
Total	77,743		870			1,028			73,715		1,030			857
Netting adjustments (b)	—		(162		)	(582		)	—		(443		)	(616		)
Net derivatives in the balance sheet	105,442		748			443			100,193		669			291
Other collateral (c)	—		(1		)	(50		)	—		(5		)	(84		)
Net derivative amounts	$	105,442	$	747		$	393		$	100,193	$	664		$	207

(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 when-issued security transactions in connection with an “at-the-market” equity offering program.

(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.

Fair value hedges. During the nine-month period ended September 30, 2018, we did not exclude any portion of fair value hedging instruments from the assessment of hedge effectiveness.

The following table summarizes the amounts that were recorded on the balance sheet as of September 30, 2018, related to cumulative basis adjustments for fair value hedges.

	September 30, 2018
in millions	Balance sheet line item in which the hedge item is included	Carrying amount of hedged item (a)		Hedge accounting basis adjustment (b)
Interest rate contracts	Long-term debt	$	9,442	$	(145	)
Interest rate contracts	Certificate of deposit ($100,000 or more)	344		(1		)
Interest rate contracts	Other time deposits	178		—

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

(b) Basis adjustment includes $10 million related to de-designated hedged items no longer in qualifying fair value hedging relationships.

Cash flow hedges. During the nine-month period ended September 30, 2018, we did not exclude any portion of cash flow hedging instruments from the assessment of hedge effectiveness.

Considering the interest rates, yield curves, and notional amounts as of September 30, 2018, we expect to reclassify an estimated $45 million of after-tax net gains on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months. In addition, we expect to reclassify approximately $45 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months. As of September 30, 2018, the maximum length of time over which we hedge forecasted transactions is 10 years.

The following tables summarize the effect of fair value and cash flow hedge accounting on the income statement for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

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	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships (a)
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Three months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(108	)	$	1,025		$	(140	)	$	23
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	41			—			—			—
Recognized on derivatives designated as hedging instruments	(46		)	—			—			—
Net income (expense) recognized on fair value hedges	(5		)	—			—			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	(15		)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(15	)	—			—
Three months ended September 30, 2017
Total amounts presented in the consolidated statement of income	$	(86	)	$	928		$	(72	)	$	21
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	—			—			—			20
Recognized on derivatives designated as hedging instruments	10			—			—			(19		)
Net income (expense) recognized on fair value hedges	10			—			—			1
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(1		)	1			—			—
Gains (losses) (before tax) recognized in income for hedge ineffectiveness	—			—			—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	1		—			—

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships (a)
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Nine months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(302	)	$	2,965		$	(343	)	$	143
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	134			—			1			—
Recognized on derivatives designated as hedging instruments	(140		)	—			—			—
Net income (expense) recognized on fair value hedges	(6		)	—			1			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	(42		)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(42	)	—			—
Nine months ended September 30, 2017
Total amounts presented in the consolidated statement of income	$	(228	)	$	2,753		$	(196	)	$	138
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	—			—			—			50
Recognized on derivatives designated as hedging instruments	42			—			—			(49		)
Net income (expense) recognized on fair value hedges	42			—			—			1
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(3		)	21			—			—
Gains (losses) (before tax) recognized in income for hedge ineffectiveness	—			—			—			—
Net income (expense) recognized on cash flow hedges	$	(3	)	$	21		—			—

(a) Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.

Net investment hedges. We enter into foreign currency forward contracts to hedge our exposure to changes in the carrying value of our investments as a result of changes in the related foreign exchange rates. At September 30, 2018, AOCI reflected unrecognized, after-tax gains totaling $43 million related to cumulative changes in the fair value of our net investment hedges, which offset the unrecognized, after-tax foreign currency losses on net investment balances. We did not exclude any portion of our hedging instruments from the assessment of hedge effectiveness during the nine-month period ended September 30, 2018.

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The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and nine-month periods ended September 30, 2018, and September 30, 2017, and where they are recorded on the income statement. The table includes net gains (losses) recognized in OCI during the period and net gains (losses) reclassified from OCI into income during the current period.

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(a)			Net Gains (Losses) Recognized in Other Income(a)
Three months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(32	)	Interest income — Loans	$	(15	)	$	—
Interest rate	(1		)	Interest expense — Long-term debt	(2		)	—
Interest rate	1			Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(2		)	Other Income	—			—
Total	$	(34	)		$	(17	)	$	—
Three months ended September 30, 2017
Cash Flow Hedges
Interest rate	$	(1	)	Interest income — Loans	$	1		$	—
Interest rate	(1		)	Interest expense — Long-term debt	(1		)	—
Interest rate	(1		)	Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(12		)	Other Income	—			—
Total	$	(15	)		$	—		$	—

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(a)			Net Gains (Losses) Recognized in Other Income(a)
Nine months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(178	)	Interest income — Loans	$	(42	)	$	—
Interest rate	3			Interest expense — Long-term debt	(2		)	—
Interest rate	2			Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	8			Other Income	—			—
Total	$	(165	)		$	(44	)	$	—
Nine months ended September 30, 2017
Cash Flow Hedges
Interest rate	$	(1	)	Interest income — Loans	$	21		$	—
Interest rate	(1		)	Interest expense — Long-term debt	(3		)	—
Interest rate	(1		)	Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(22		)	Other Income	—			—
Total	$	(25	)		$	18		$	—

(a) Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.

Nonhedging instruments

The following tables summarize the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and nine-month periods ended September 30, 2018, and September 30, 2017, and where they are recorded on the income statement.

	Three months ended September 30, 2018										Three months ended September 30, 2017
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	$	8	$	—	$	2		$	10		$	5	—			$	1		$	6
Foreign exchange	10		—		—			10			10		—			—			10
Commodity	—		—		—			—			1		—			—			1
Credit	—		—		(7		)	(7		)	—		—			(6		)	(6		)
Other	—		1		1			2			—		$	(1	)	7			6
Total net gains (losses)	$	18	$	1	$	(4	)	$	15		$	16	$	(1	)	$	2		$	17

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	Nine months ended September 30, 2018										Nine months ended September 30, 2017
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	$	28	$	—	$	4		$	32		$	21	—		$	(1	)	$	20
Foreign exchange	32		—		—			32			31		—		—			31
Commodity	6		—		—			6			4		—		—			4
Credit	2		—		(26		)	(24		)	1		—		(16		)	(15		)
Other	—		1		13			14			—		$	—	(4		)	(4		)
Total net gains (losses)	$	68	$	1	$	(9	)	$	60		$	57	$	—	$	(21	)	$	36

Counterparty Credit Risk

We use several means to mitigate and manage exposure to credit risk on derivative contracts. We enter into bilateral collateral and master netting agreements that provide for the net settlement of all contracts with a single counterparty in the event of default. Additionally, we monitor counterparty credit risk exposure on each contract to determine appropriate limits on our total credit exposure across all product types. We review our collateral positions on a daily basis and exchange collateral with our counterparties in accordance with standard ISDA documentation, central clearing rules, and other related agreements. We hold collateral in the form of cash and highly rated securities issued by the U.S. Treasury, government-sponsored enterprises, or GNMA. Cash collateral of $116 million was included in derivative assets on the balance sheet at September 30, 2018, compared to $23 million of cash collateral netted against derivative assets at December 31, 2017. The cash collateral netted against derivative liabilities totaled $304 million at September 30, 2018, and $150 million at December 31, 2017.

The following table summarizes the fair value of our derivative assets by type at the dates indicated. These assets represent our gross exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.

in millions	September 30, 2018			December 31, 2017
Interest rate	$	189		$	401
Foreign exchange	61			77
Commodity	376			163
Credit	(1		)	1
Other	7			4
Derivative assets before collateral	632			646
Less: Related collateral	(116		)	(23		)
Total derivative assets	$	748		$	669

We enter into derivative transactions with two primary groups: broker-dealers and banks, and clients. Given that these groups have different economic characteristics, we have different methods for managing counterparty credit exposure and credit risk.

We enter into transactions with broker-dealers and banks for various risk management purposes. At September 30, 2018, we had gross exposure of $148 million to broker-dealers and banks. We had net exposure of $215 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $205 million after considering $10 million of additional collateral held in the form of securities.

We enter into transactions with clients to accommodate their business needs. Due to the smaller size and magnitude of the individual contracts with clients, we generally do not exchange collateral in connection with these derivative transactions. To address the risk of default associated with the uncollateralized contracts, we have established a credit valuation adjustment (included in “accrued income and other assets”) in the amount of $4 million at September 30, 2018, which we estimate to be the potential future losses on amounts due from client counterparties in the event of default. At September 30, 2018, we had gross exposure of $592 million to client counterparties and other entities that are not broker-dealers or banks for derivatives that have associated master netting agreements. We had net exposure of $534 million on our derivatives with these counterparties after the application of master netting agreements, collateral, and the related reserve. 

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Credit Derivatives

We are a buyer and, under limited circumstances, may be a seller of credit protection through the credit derivative market. We purchase credit derivatives to manage the credit risk associated with swap obligations as well as exposures to debt securities.

The following table summarizes the fair value of our credit derivatives purchased and sold by type as of September 30, 2018, and December 31, 2017. The fair value of credit derivatives presented below does not take into account the effects of bilateral collateral or master netting agreements.

	September 30, 2018								December 31, 2017
in millions	Purchased			Sold		Net			Purchased			Sold	Net
Single-name credit default swaps	$	(1	)	—		$	(1	)	$	(1	)	—	$	(1	)
Traded credit default swap indices	(1		)	—		(1		)	(2		)	—	(2		)
Other	—			(1	)	(1		)	—			—	—
Total credit derivatives	$	(2	)	(1	)	$	(3	)	$	(3	)	—	$	(3	)

The majority of transactions represented by the “other” category shown in the above table consist of risk participation agreements as described in Note 9. Derivatives and Hedging Activities of our 2017 Form 10-K under the heading “Credit Derivatives.” In addition, the other category includes credit default swap options in which we are given the right, but not the obligation, to purchase credit protection on a stated entity for a specified period of time.

The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at September 30, 2018, and December 31, 2017. The notional amount represents the maximum amount that the seller could be required to pay. The payment/performance risk assessment is based on the default probabilities for the underlying reference entities’ debt obligations using a Moody’s credit ratings matrix known as Moody’s “Idealized” Cumulative Default Rates. The payment/performance risk shown in the table represents a weighted-average of the default probabilities for all reference entities in the respective portfolios. These default probabilities are directly correlated to the probability that we will have to make a payment under the credit derivative contracts.

	September 30, 2018					December 31, 2017
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	12	2.47	5.01	%	$	15	3.08	6.64	%
Total credit derivatives sold	$	12	—	—		$	15	—	—

Credit Risk Contingent Features

We have entered into certain derivative contracts that require us to post collateral to the counterparties when these contracts are in a net liability position. The amount of collateral to be posted is based on the amount of the net liability and thresholds generally related to our long-term senior unsecured credit ratings with Moody’s and S&P. Collateral requirements also are based on minimum transfer amounts, which are specific to each Credit Support Annex (a component of the ISDA Master Agreement) that we have signed with the counterparties. In a limited number of instances, counterparties have the right to terminate their ISDA Master Agreements with us if our ratings fall below a certain level, usually investment-grade level (i.e., “Baa3” for Moody’s and “BBB-” for S&P). At September 30, 2018, KeyBank’s rating was “A3” with Moody’s and “A-” with S&P, and KeyCorp’s rating was “Baa1” with Moody’s and “BBB+” with S&P. As of September 30, 2018, the aggregate fair value of all derivative contracts with credit risk contingent features (i.e., those containing collateral posting or termination provisions based on our ratings) held by KeyBank that were in a net liability position totaled $335 million, which was comprised of $144 million in derivative assets and $479 million in derivative liabilities. We had $317 million in cash and securities collateral posted to cover those positions as of September 30, 2018. There were no derivative contracts with credit risk contingent features held by KeyCorp at September 30, 2018.

The following table summarizes the additional cash and securities collateral that KeyBank would have been required to deliver under the ISDA Master Agreements had the credit risk contingent features been triggered for the derivative contracts in a net liability position as of September 30, 2018, and December 31, 2017. The additional collateral amounts were calculated based on scenarios under which KeyBank’s ratings are downgraded one, two, or three ratings as of September 30, 2018, and December 31, 2017, and take into account all collateral already posted. A similar calculation was performed for KeyCorp, and no additional collateral would have been required as

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of September 30, 2018, and December 31, 2017. For more information about the credit ratings for KeyBank and KeyCorp, see the discussion under the heading “Factors affecting liquidity” in the section entitled “Liquidity risk management” in Item 2 of this report.

	September 30, 2018				December 31, 2017
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	$	2	$	2
Two rating downgrades	1		1		2		2
Three rating downgrades	1		1		2		2

KeyBank’s long-term senior unsecured credit rating was four ratings above noninvestment grade at Moody’s and S&P as of September 30, 2018, and December 31, 2017. If KeyBank’s ratings had been downgraded below investment grade as of September 30, 2018, or December 31, 2017, payments of up to $2 million and $12 million, respectively, would have been required to either terminate the contracts or post additional collateral for those contracts in a net liability position, taking into account all collateral already posted. If KeyCorp’s ratings had been downgraded below investment grade as of September 30, 2018, or December 31, 2017, no payments would have been required to either terminate the contracts or post additional collateral for those contracts in a net liability position, taking into account all collateral already posted.

8. Mortgage Servicing Assets

We originate and periodically sell commercial and residential mortgage loans but continue to service those loans for the buyers. We also may purchase the right to service commercial mortgage loans for other lenders. We record a servicing asset if we purchase or retain the right to service loans in exchange for servicing fees that exceed the going market servicing rate and are considered more than adequate compensation for servicing. Additional information pertaining to the accounting for mortgage and other servicing assets is included in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Servicing Assets” beginning on page 106 of our 2017 Form 10-K.

Commercial

Changes in the carrying amount of commercial mortgage servicing assets are summarized as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of period	$	451		$	373		$	412		$	356
Servicing retained from loan sales	25			24			81			71
Purchases	17			10			50			24
Amortization	(25		)	(22		)	(75		)	(66		)
Balance at end of period	$	468		$	385		$	468		$	385
Fair value at end of period	$	672		$	508		$	672		$	508

The fair value of commercial mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted average of the significant unobservable inputs used to determine the fair value of our commercial mortgage servicing assets at September 30, 2018, and September 30, 2017, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2018	September 30, 2017
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 3.00% (1.16%)	1.00 - 3.00% (1.20%)
	Residual cash flows discount rate	7.00 - 15.00% (9.10%)	7.00 - 15.00% (8.90%)
	Escrow earn rate	2.38 - 3.94% (3.07%)	.80 - 3.00% (2.40%)
	Servicing cost	$150 - $38,500 ($1,445)	$150 - $38,500 ($1,468)
	Loan assumption rate	0.00 - 3.22% (1.34%)	0.00 - 3.00% (1.24%)
	Percentage late	0.00 - 2.00% (.20%)	0.00 - 2.00% (.27%)

If these economic assumptions change or prove incorrect, the fair value of commercial mortgage servicing assets may also change. Expected credit losses, escrow earning rates, and discount rates are critical to the valuation of

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commercial mortgage servicing assets. Estimates of these assumptions are based on how a market participant would view the respective rates, and reflect historical data associated with the commercial mortgage loans, industry trends, and other considerations. Actual rates may differ from those estimated due to changes in a variety of economic factors. A decrease in the value assigned to the escrow earning rates would cause a decrease in the fair value of our commercial mortgage servicing assets. An increase in the assumed default rates of commercial mortgage loans or an increase in the assigned discount rates would cause a decrease in the fair value of our commercial mortgage servicing assets. Prepayment activity on commercial serviced loans does not significantly affect the valuation of our commercial mortgage servicing assets. Unlike residential mortgages, commercial mortgages experience significantly lower prepayments due to certain contractual restrictions affecting the borrower’s ability to prepay the mortgage.

The amortization of commercial servicing assets is determined in proportion to, and over the period of, the estimated net servicing income. The amortization of commercial servicing assets for each period, as shown in the table at the beginning of this note, is recorded as a reduction to contractual fee income. The contractual fee income from servicing commercial mortgage loans totaled $126 million for the nine-month period ended September 30, 2018, and $113 million for the nine-month period ended September 30, 2017. This fee income was offset by $75 million of amortization for the nine-month period ended September 30, 2018, and $66 million for the nine-month period ended September 30, 2017. Both the contractual fee income and the amortization are recorded, net, in “mortgage servicing fees” on the income statement.

Residential

Changes in the carrying amount of residential mortgage servicing assets are summarized as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of period	$	34		$	29		$	31		$	28
Servicing retained from loan sales	2			2			7			5
Purchases	—			—			—			—
Amortization	(1		)	(1		)	(3		)	(3		)
Balance at end of period	$	35		$	30		$	35		$	30
Fair value at end of period	$	49		$	34		$	49		$	34

The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2018, and September 30, 2017, along with the valuation techniques, are shown in the following table:

dollars in millions		September 30, 2018	September 30, 2017
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	8.27 - 55.15% (9.35%)	7.95 - 32.49% (10.15%)
	Discount rate	7.50 - 10.00% (7.54%)	8.50 - 11.00% (8.55%)
	Servicing cost	$62 - $4,375 ($67.76)	$76 - $3,335 ($82.19)

If these economic assumptions change or prove incorrect, the fair value of residential mortgage servicing assets may also change. Prepayment speed, discount rates, and servicing cost are critical to the valuation of servicing assets. Estimates of these assumptions are based on how a market participant would view the respective rates, and reflect historical data associated with the loans, industry trends, and other considerations. Actual rates may differ from those estimated due to changes in a variety of economic factors. An increase in the prepayment speed, assigned discount rates, and servicing cost assumptions would also cause a negative impact on the fair value of our residential mortgage servicing assets.

The amortization of residential servicing assets is determined in proportion to, and over the period of, the estimated net residential servicing income. The amortization of servicing assets for September 30, 2018, as shown in the table above, is recorded as a reduction to contractual fee income. The contractual fee income from servicing residential mortgage loans totaled $10 million for the nine-month period ended September 30, 2018, and $11 million for the nine-month period ended September 30, 2017. This fee income was offset by $3 million of amortization for both the

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nine-month periods ended September 30, 2018, and September 30, 2017. Both the contractual fee income and the amortization are recorded, net, in “mortgage servicing fees” on the income statement.

9. Variable Interest Entities

A VIE is a partnership, limited liability company, trust, or other legal entity that meets any one of the following criteria:

• The entity does not have sufficient equity to conduct its activities without additional subordinated financial support from another party.

• The entity’s investors lack the power to direct the activities that most significantly affect the entity’s economic performance.

• The entity’s equity at risk holders do not have the obligation to absorb losses or the right to receive residual returns.

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

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

LIHTC investments. Through KCDC, we have made investments directly and indirectly in LIHTC operating partnerships formed by third parties. As a limited partner in these operating partnerships, we are allocated tax credits and deductions associated with the underlying properties. We have determined that we are not the primary beneficiary of these investments because the general partners have the power to direct the activities that most significantly influence the economic performance of their respective partnerships and have the obligation to absorb expected losses and the right to receive residual returns. As we are not the primary beneficiary of these investments, we do not consolidate them.

Our maximum exposure to loss in connection with these partnerships consists of our unamortized investment balance plus any unfunded equity commitments and tax credits claimed but subject to recapture. We had $1.3 billion of investments in LIHTC operating partnerships at both September 30, 2018, and December 31, 2017. These investments are recorded in “accrued income and other assets” on our balance sheet. We do not have any loss reserves recorded related to these investments because we believe the likelihood of any loss to be remote. For all legally binding, unfunded equity commitments, we increase our recognized investment and recognize a liability. As of September 30, 2018, and December 31, 2017, we had liabilities of $447 million and $476 million, respectively, related to investments in qualified affordable housing projects, which are recorded in “accrued expenses and other liabilities” on our balance sheet. We continue to invest in these LIHTC operating partnerships.

The assets and liabilities presented in the table below convey the size of KCDC’s direct and indirect investments at September 30, 2018, and December 31, 2017. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our balance sheet.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2018
LIHTC investments	$	5,955	$	2,589	$	1,567
December 31, 2017
LIHTC investments	$	6,003	$	2,943	$	1,561

We amortize our LIHTC investments over the period that we expect to receive the tax benefits. During the first nine months of 2018, we recognized $126 million of amortization and $122 million of tax credits associated with these investments within “income taxes” on our income statement. During the first nine months of 2017, we recognized $124 million of amortization and $115 million of tax credits associated with these investments within “income taxes” on our income statement.

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Principal investments. Through our principal investing entities, we have made investments in private equity funds engaged in venture- and growth-oriented investing. As a limited partner to these funds, we record these investments at fair value and receive distributions from the funds in accordance with the funds’ partnership agreements. We are not the primary beneficiary of these investments as we do not hold the power to direct the activities that most significantly affect the funds’ economic performance. Such power rests with the funds’ general partners. In addition, we have neither the obligation to absorb the funds’ expected losses nor the right to receive their residual returns. Our voting rights are also disproportionate to our economic interests, and substantially all of the funds’ activities are conducted on behalf of investors with disproportionately few voting rights. Because we are not the primary beneficiary of these investments, we do not consolidate them.

Our maximum exposure to loss associated with indirect principal investments consists of the investments’ fair value plus any unfunded equity commitments. The fair value of our indirect principal investments totaled $101 million and $124 million at September 30, 2018, and December 31, 2017, respectively. These investments are recorded in “other investments” on our balance sheet. Additional information on indirect principal investments is provided in Note 5 (“Fair Value Measurements”). The table below reflects the size of the private equity funds in which we were invested as well as our maximum exposure to loss in connection with these investments at September 30, 2018 and December 31, 2017.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2018
Indirect investments	$	21,088	$	376	$	129
December 31, 2017
Indirect investments	$	26,817	$	292	$	153

Through our principal investing entities, we have formed and funded operating entities that provide management and other related services to our investment company funds, which directly invest in portfolio companies. In return for providing services to our direct investment funds, these entities receive a minority equity interest in the funds. This minority equity ownership is recorded at fair value on the entities’ financial statements. Additional information on our direct principal investments is provided in Note 5 (“Fair Value Measurements”). While other equity investors manage the daily operations of these entities, we retain the power, through voting rights, to direct the activities of the entities that most significantly affect their economic performance. In addition, we have the obligation to absorb losses and the right to receive residual returns that could potentially be significant to these entities. As a result, we have determined that we are the primary beneficiary of these funds and have consolidated them since formation. The entities had no assets at September 30, 2018, that can only be used to settle the entities’ obligations, and $4 million of such assets at December 31, 2017. These assets are recorded in “cash and due from banks” and “accrued income and other assets” on our balance sheet. The entities had no liabilities at September 30, 2018, and December 31, 2017, and other equity investors have no recourse to our general credit.

Other unconsolidated VIEs. We are involved with other various entities in the normal course of business which we have determined to be VIEs. We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance. Our assets associated with these unconsolidated VIEs totaled $220 million at September 30, 2018, and $230 million at December 31, 2017. These assets are recorded in “accrued income and other assets,” “other investments,” “securities available for sale”, and “loans, net of unearned income” on our balance sheet. We had liabilities totaling less than $1 million and $4 million associated with these unconsolidated VIEs at September 30, 2018 and December 31, 2017, respectively. These liabilities are recorded in “accrued expenses and other liabilities” on our balance sheet. We have excluded certain transactions with unconsolidated VIEs from the balances above where we determine our continuing involvement is not significant.  In addition, where we only have a lending arrangement in the normal course of business with unconsolidated VIEs we present the balances related to the lending arrangements in Note 4 (“Asset Quality”).

10. Income Taxes

Bipartisan Budget Act of 2018

On February 9, 2018, the Bipartisan Budget Act (“BBA”) of 2018 was signed into law. The BBA includes a retroactive one year tax extenders package back to January 1, 2017, which reinstated several energy investment

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tax credits that had expired on December 31, 2016. Due to these retroactive provisions, Key recognized additional net investment tax credits in the first quarter of 2018 of $14 million, or a 2.8% reduction to our income tax provision, for energy tax credit transactions entered into during 2017.

TCJ Act

On December 22, 2017, the TCJ Act was signed into law. This comprehensive tax legislation provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, that impact corporate taxation requirements, such as the reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The TCJ Act retains the low-income housing and research and development credits and repeals the corporate alternative minimum tax. Other relevant corporate changes include earlier recognition of certain revenue; accelerating expensing of investments in tangible property, including leasing assets; and limiting several deductions such as FDIC premiums, certain executive compensation, and meals and entertainment expenses.

Key was required to re-value certain tax-related assets under the provisions of the TCJ Act at December 31, 2017. Under current U.S. GAAP, deferred tax assets and liabilities are to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. The tax-related assets consist primarily of deferred tax assets and liabilities and investments in low-income housing transactions. Due to the close proximity of our year end to the date the TCJ Act was signed into law, we estimated the impact of the income tax effects as of December 31, 2017, based upon currently available information which resulted in a reduction to our net income of $161 million. The significant components of this reduction included a $14 million reduction in our investments in certain low-income housing that is reflected in other expenses and a $147 million, or 7.6%, increase in our income tax provision for the twelve months ended December 31, 2017, due to the reduction to our net deferred tax asset and related actions. This reduction was primarily the result of the lower federal corporate income tax rate and was based on information available at that time.

During the current quarter, Key completed and filed its 2017 federal income tax return and management finalized its assessment of the initial impact of the TCJ Act and related regulatory guidance. As a result, our income tax provision was increased by $7 million during the quarter, and the total impact to Key of the TCJ Act was a reduction to our net income of $168 million.

The accounting for the changes in tax law resulted in stranded tax effects within accumulated other comprehensive income for items that were originally recognized in other comprehensive income rather than in net income. The FASB issued an accounting standard update allowing companies to reclassify stranded tax effects resulting from the TCJ Act from accumulated other comprehensive income to retained earnings. We early adopted this guidance during the quarter ended December 31, 2017, and utilizing the portfolio method reclassified $141 million from accumulated other comprehensive income to retained earnings to eliminate the stranded tax effects.

Income Tax Provision

In accordance with the applicable accounting guidance, the principal method established for computing the provision for income taxes in interim periods requires us to make our best estimate of the effective tax rate expected to be applicable for the full year. This estimated effective tax rate is then applied to interim consolidated pre-tax operating income to determine the interim provision for income taxes.

The effective tax rate, which is the provision for income taxes as a percentage of income from continuing operations before income taxes, was 15.5% for the third quarter of 2018 and 26.9% for the third quarter of 2017. The effective tax rates are below our combined federal and state statutory tax rate of 23.7% for the third quarter of 2018 and 37.2% for the third quarter of 2017, primarily due to income from investments in tax-advantaged assets such as corporate-owned life insurance and credits associated with renewable energy and low-income housing investments. The effective tax rates for the three months ended September 30, 2018, and September 30, 2017, were affected by net discrete income tax benefit of 2.2%, respectively.

Deferred Tax Asset

At September 30, 2018, from continuing operations we had a net deferred tax asset of $331 million, compared to a net deferred tax asset of $320 million at December 31, 2017, included in “accrued income and other assets” on the balance sheet.

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To determine the amount of deferred tax assets that are more likely than not to be realized, and therefore recorded, we conduct a quarterly assessment of all available evidence. This evidence includes, but is not limited to, taxable income in prior periods, projected future taxable income, and projected future reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo change. Based on these criteria, we had a valuation allowance of $11 million at September 30, 2018, and $15 million at December 31, 2017. The valuation allowance is associated with certain state net operating loss carryforwards, state credit carryforwards, and federal and state capital loss carryforwards.

Unrecognized Tax Benefits

As permitted under the applicable accounting guidance for income taxes, it is our policy to recognize interest and penalties related to unrecognized tax benefits in “income tax expense.” At September 30, 2018, Key’s unrecognized tax benefits were $46 million.

Pre-1988 Bank Reserves Acquired in a Business Combination

Retained earnings of KeyBank included approximately $92 million of allocated bad debt deductions for which no income taxes have been recorded. Under current federal law, these reserves are subject to recapture into taxable income if KeyBank, or any successor, fails to maintain its bank status under the Internal Revenue Code or makes non-dividend distributions or distributions greater than its accumulated earnings and profits. No deferred tax liability has been established as these events are not expected to occur in the foreseeable future.

11. Acquisitions, Divestiture, and Discontinued Operations

Acquisitions

Cain Brothers & Company, LLC. On October 2, 2017, KBCM acquired all outstanding interests in Cain Brothers, a healthcare-focused investment banking and public finance firm. This acquisition expands KBCM’s investment banking group in the healthcare vertical by adding distinctive capabilities and broadening KBCM’s existing healthcare investment banking network. The acquisition was accounted for as a business combination. As a result of the acquisition, Key recognized identifiable intangible assets with a fair value of $30 million and goodwill of $53 million, which are deductible for tax purposes. The valuation of the acquired assets and liabilities of Cain Brothers was final at March 31, 2018.

HelloWallet Holdings, Inc. On July 1, 2017, KeyBank acquired all of the outstanding capital stock of HelloWallet Holdings, Inc., the sole owner of HelloWallet, LLC, a digital financial wellness company. Key’s retail banking franchise is leveraging HelloWallet’s technology to provide data-driven insights to clients, allowing clients to better understand and improve their personal finances. The acquisition was accounted for as a business combination. As a result of the acquisition, Key recognized identifiable intangible assets with a fair value of $12 million, comprised primarily of proprietary software, and goodwill of $17 million, which are not deductible for tax purposes. The valuation of the acquired assets and liabilities of HelloWallet was final at March 31, 2018.

Key Merchant Services, LLC. On June 30, 2017, KeyBank (consolidated) acquired an additional 51% interest in KMS, increasing our ownership interest from 49% to 100%. This acquisition enables us to grow our merchant services business and enhance our merchant product offerings. This transaction is accounted for as a business combination achieved in stages. Prior to the acquisition, KMS was operated as a merchant services joint venture and accounted for as an equity method investment in our consolidated financial statements.

As of June 30, 2017, the provisional estimated fair value of our equity interest in KMS immediately before the acquisition was $74 million. The fair value of our previously held equity interest was measured using discounted cash flow modeling that incorporates an appropriate risk premium and forecast earnings information. On June 30, 2017, we recognized a provisional non-cash holding gain of $64 million for the difference between the fair value and the book value of our previously held equity interest. In the third quarter of 2017, we recognized a measurement-period adjustment of $5 million to reduce the provisional estimated fair value of our equity interest immediately before the acquisition to $69 million, which reduced the total non-cash holding gain to $59 million. The initial gain and subsequent adjustment were included in “other income” on the income statement for the three months ended September 30, 2017. Upon acquisition, we recorded estimated identifiable intangible assets of $95 million and goodwill of less than $1 million. In the third quarter of 2017, we recognized a measurement-period adjustment of

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$10 million to reduce the fair value of acquired intangible assets to $85 million. In the fourth quarter of 2017, we recognized a measurement period adjustment increasing deferred tax assets and decreasing goodwill by $2 million. In aggregate, the measurement-period adjustments recognized as of December 31, 2017, increased goodwill recorded in connection with the KMS acquisition to $4 million. The valuation of the acquired assets and liabilities of Key Merchant Services, LLC was final at June 30, 2018.

Divestiture

Key Insurance & Benefits Services, Inc. On March 29, 2018, we announced that we had entered into a definitive agreement to sell KIBS to USI Insurance Services. We acquired KIBS as a part of the 2016 merger with First Niagara. We completed the sale to USI Insurance Services on May 4, 2018. At the close of the sale, we recognized a $73 million net gain on sale. In the third quarter of 2018, we recognized an additional $5 million gain upon the finalization of the purchase price.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed education lending business. At September 30, 2018, and December 31, 2017, approximately $1.1 billion and $1.3 billion, respectively, of education loans are included in discontinued assets on the consolidated balance sheets. Net interest income after provision for credit losses for this business is not material and is included in income (loss) from discontinued operations, net of taxes on the consolidated statements of income.

12. Securities Financing Activities

We enter into repurchase agreements to finance overnight customer sweep deposits. We also enter into repurchase and reverse repurchase agreements to settle other securities obligations. We account for these securities financing agreements as collateralized financing transactions. Repurchase and reverse repurchase agreements are recorded on the balance sheet at the amounts for which the securities will be subsequently sold or repurchased. Securities borrowed transactions are recorded on the balance sheet at the amounts of cash collateral advanced. While our securities financing agreements incorporate a right of set off, the assets and liabilities are reported on a gross basis. Reverse repurchase agreements and securities borrowed transactions are included in “short-term investments” on the balance sheet; repurchase agreements are included in “federal funds purchased and securities sold under repurchase agreements.” Additional information regarding our securities financing activities, including risk management activities, is provided in Note 16. Securities Financing Activities beginning on page 160 of our 2017 Form 10-K.

The following table summarizes our securities financing agreements at September 30, 2018, and December 31, 2017:

	September 30, 2018									December 31, 2017
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	$	7	$	(1	)	$	(6	)	—	$	3	$	(3	)	—			—
Total	$	7	$	(1	)	$	(6	)	—	$	3	$	(3	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	285	$	(2	)	$	(283	)	—	$	374	$	(4	)	$	(370	)	—
Total	$	285	$	(2	)	$	(283	)	—	$	374	$	(4	)	$	(370	)	—

(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.

As of September 30, 2018, the carrying amount of assets pledged as collateral against repurchase agreements totaled $416 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At September 30, 2018, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $283 million. The collateral pledged under customer sweep repurchase agreements is posted to a third-party custodian and cannot be sold or

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

13. Employee Benefits

Pension Plans

Effective December 31, 2009, we amended our cash balance pension plan and other defined benefit plans to freeze all benefit accruals and close the plans to new employees. We will continue to credit participants’ existing account balances for interest until they receive their plan benefits. We changed certain pension plan assumptions after freezing the plans.

The components of net pension cost (benefit) for all funded and unfunded plans are as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Interest cost on PBO	$	10		$	12		$	30		$	36
Expected return on plan assets	(13		)	(17		)	(39		)	(51		)
Amortization of losses	4			4			12			12
Net pension cost	$	1		$	(1	)	$	3		$	(3	)

Other Postretirement Benefit Plans

We sponsor a retiree healthcare plan in which all employees age 55 with five years of service (or employees age 50 with 15 years of service who are terminated under conditions that entitle them to a severance benefit) are eligible to participate. Participant contributions are adjusted annually. Key may provide a subsidy toward the cost of coverage for certain employees hired before 2001 with a minimum of 15 years of service at the time of termination. We use a separate VEBA trust to fund the retiree healthcare plan.

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Interest cost on APBO	$	1		$	1		$	1		$	1
Expected return on plan assets	(1		)	(1		)	(1		)	(1		)
Net postretirement benefit cost	—			—			—			—

14. Trust Preferred Securities Issued by Unconsolidated Subsidiaries

We own the outstanding common stock of business trusts formed by us that issued corporation-obligated, mandatorily redeemable, trust preferred securities. The trusts used the proceeds from the issuance of their trust preferred securities and common stock to buy debentures issued by KeyCorp. These debentures are the trusts’ only assets; the interest payments from the debentures finance the distributions paid on the mandatorily redeemable trust preferred securities. The outstanding common stock of these business trusts is recorded in “other investments” on our balance sheet.

We unconditionally guarantee the following payments or distributions on behalf of the trusts:

• 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.

The Regulatory Capital Rules, discussed in “Supervision and regulation” in Item 2 of this report, require us to treat our mandatorily redeemable trust preferred securities as Tier 2 capital.

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The trust preferred securities, common stock, and related debentures are summarized as follows:

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
September 30, 2018
KeyCorp Capital I	$	155	$	6	$	161	3.077	%	2028
KeyCorp Capital II	99		4		103		6.875		2029
KeyCorp Capital III	128		4		132		7.750		2029
HNC Statutory Trust III	18		1		19		3.710		2035
Willow Grove Statutory Trust I	18		1		19		3.644		2036
HNC Statutory Trust IV	16		1		17		3.619		2037
Westbank Capital Trust II	7		—		7		4.528		2034
Westbank Capital Trust III	7		—		7		4.528		2034
Total	$	448	$	17	$	465	5.364	%	—
December 31, 2017	$	463	$	17	$	480	4.977	%	—

(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 $40 million at September 30, 2018, and $55 million at December 31, 2017. 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 $40 million at September 30, 2018, and $55 million at December 31, 2017. 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.

15. Contingent Liabilities and Guarantees

Legal Proceedings

Litigation. From time to time, in the ordinary course of business, we and our subsidiaries are subject to various litigation, investigations, and administrative proceedings. Private, civil litigations may range from individual actions involving a single plaintiff to putative class action lawsuits with potentially thousands of class members. Investigations may involve both formal and informal proceedings, by both government agencies and self-regulatory bodies. These matters may involve claims for substantial monetary relief. At times, these matters may present novel claims or legal theories. Due to the complex nature of these various other matters, it may be years before some matters are resolved. While it is impossible to ascertain the ultimate resolution or range of financial liability, based on information presently known to us, we do not believe there is any matter to which we are a party, or involving any of our properties that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on our financial condition. We continually monitor and reassess the potential materiality of these litigation matters. We note, however, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established reserves. As a result, the outcome of a particular matter, or a combination of matters, may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.

Guarantees

We are a guarantor in various agreements with third parties. The following table shows the types of guarantees that we had outstanding at September 30, 2018. Information pertaining to the basis for determining the liabilities recorded in connection with these guarantees is included in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Guarantees” beginning on page 108 of our 2017 Form 10-K.

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September 30, 2018	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,097	$	71
Recourse agreement with FNMA	3,750		7
Residential mortgage reserve	1,500		6
Return guarantee agreement with LIHTC investors	2		2
Written put options (a)	2,346		82
Total	$	10,695	$	168

(a) The maximum potential undiscounted future payments represent notional amounts of derivatives qualifying as guarantees.

We determine the payment/performance risk associated with each type of guarantee described below based on the probability that we could be required to make the maximum potential undiscounted future payments shown in the preceding table. We use a scale of low (0% to 30% probability of payment), moderate (greater than 30% to 70% probability of payment), or high (greater than 70% probability of payment) to assess the payment/performance risk, and have determined that the payment/performance risk associated with each type of guarantee outstanding at September 30, 2018, is low.

Standby letters of credit. KeyBank issues standby letters of credit to address clients’ financing needs. These instruments obligate us to pay a specified third party when a client fails to repay an outstanding loan or debt instrument or fails to perform some contractual nonfinancial obligation. Any amounts drawn under standby letters of credit are treated as loans to the client; they bear interest (generally at variable rates) and pose the same credit risk to us as a loan. At September 30, 2018, our standby letters of credit had a remaining weighted-average life of two years, with remaining actual lives ranging from less than one year to as many as 16 years.

Recourse agreement with FNMA. We participate as a lender in the FNMA Delegated Underwriting and Servicing program. FNMA delegates responsibility for originating, underwriting, and servicing mortgages, and we assume a limited portion of the risk of loss during the remaining term on each commercial mortgage loan that we sell to FNMA. We maintain a reserve for such potential losses in an amount that we believe approximates the fair value of our liability. At September 30, 2018, the outstanding commercial mortgage loans in this program had a weighted-average remaining term of 7.9 years, and the unpaid principal balance outstanding of loans sold by us as a participant was $13.1 billion. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 29% of the principal balance of loans outstanding at September 30, 2018. If we are required to make a payment, we would have an interest in the collateral underlying the related commercial mortgage loan; any loss we incur could be offset by the amount of any recovery from the collateral.

Residential Mortgage Banking. We often originate and sell residential mortgage loans with servicing retained. Our loan sales activity is generally conducted through loan sales in a secondary market sponsored by FNMA and FHLMC. Subsequent to the sale of mortgage loans, we do not typically retain any interest in the underlying loans except through our relationship as the servicer of the loans.

As is customary in the mortgage banking industry, we, or banks we have acquired, have made certain representations and warranties related to the sale of residential mortgage loans (including loans sold with servicing released) and to the performance of our obligations as servicer. The breach of any such representations or warranties could result in losses for us. Our maximum exposure to loss is equal to the outstanding principal balance of the sold loans; however, any loss would be reduced by any payments received on the loans or through the sale of collateral.

At September 30, 2018, the outstanding residential mortgage loans in this program had a weighted-average LTV ratio of 74%, and the unpaid principal balance outstanding of loans sold by us was $5.0 billion. The risk assessment is low for the residential mortgage product. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 30% of the principal balance of loans outstanding at September 30, 2018. 

Our liability for estimated repurchase obligations on loans sold, which is included in other liabilities on our balance sheet, was $6.0 million at September 30, 2018.

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Return guarantee agreement with LIHTC investors. KAHC, a subsidiary of KeyBank, offered limited partnership interests to qualified investors. Partnerships formed by KAHC invested in low-income residential rental properties that qualify for federal low-income housing tax credits under Section 42 of the Internal Revenue Code. In certain partnerships, investors paid a fee to KAHC for a guaranteed return that is based on the financial performance of the property and the property’s confirmed LIHTC status throughout a 15-year compliance period. Typically, KAHC fulfills these guaranteed returns by distributing tax credits and deductions associated with the specific properties. If KAHC defaults on its obligation to provide the guaranteed return, KeyBank is obligated to make any necessary payments to investors. No recourse or collateral is available to offset our guarantee obligation other than the underlying income streams from the properties and the residual value of the operating partnership interests.

As shown in the previous table, KAHC maintained a reserve in the amount of $2 million at September 30, 2018, which is sufficient to cover estimated future obligations under the guarantees. The maximum exposure to loss reflected in the table represents undiscounted future payments due to investors for the return on and of their investments.

These guarantees have expiration dates that extend through 2018, but KAHC has not formed any new partnerships under this program since October 2003. Additional information regarding these partnerships is included in Note 9 (“Variable Interest Entities”).

Written put options. In the ordinary course of business, we “write” put options for clients that wish to mitigate their exposure to changes in interest rates and commodity prices. At September 30, 2018, our written put options had an average life of three years. These instruments are considered to be guarantees, as we are required to make payments to the counterparty (the client) based on changes in an underlying variable that is related to an asset, a liability, or an equity security that the client holds. We are obligated to pay the client if the applicable benchmark interest rate or commodity price is above or below a specified level (known as the “strike rate”). These written put options are accounted for as derivatives at fair value, as further discussed in Note 7 (“Derivatives and Hedging Activities”). We mitigate our potential future payment obligations by entering into offsetting positions with third parties.

Written put options where the counterparty is a broker-dealer or bank are accounted for as derivatives at fair value but are not considered guarantees since these counterparties typically do not hold the underlying instruments. In addition, we are a purchaser and seller of credit derivatives, which are further discussed in Note 7 (“Derivatives and Hedging Activities”).

Default guarantees. Some lines of business participate in guarantees that obligate us to perform if the debtor (typically a client) fails to satisfy all of its payment obligations to third parties. We generally undertake these guarantees for one of two possible reasons: (i) either the risk profile of the debtor should provide an investment return, or (ii) we are supporting our underlying investment in the debtor. We do not hold collateral for the default guarantees. If we were required to make a payment under a guarantee, we would receive a pro rata share should the third party collect some or all of the amounts due from the debtor. At September 30, 2018, we had less than $1 million of default guarantees.

Other Off-Balance Sheet Risk

Other off-balance sheet risk stems from financial instruments that do not meet the definition of a guarantee as specified in the applicable accounting guidance, and from other relationships.

Indemnifications provided in the ordinary course of business. We provide certain indemnifications, primarily through representations and warranties in contracts that we execute in the ordinary course of business in connection with loan and lease sales and other ongoing activities, as well as in connection with purchases and sales of businesses. We maintain reserves, when appropriate, with respect to liability that reasonably could arise as a result of these indemnities.

Intercompany guarantees. KeyCorp, KeyBank, and certain of our affiliates are parties to various guarantees that facilitate the ongoing business activities of other affiliates. These business activities include issuing debt, assuming certain lease and insurance obligations, and purchasing or issuing investments and securities.

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16. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and nine months ended September 30, 2018, and September 30, 2017, are as follows:

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, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(288		)	(126		)	(10		)	—			(424		)
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			8			42
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(288		)	(92		)	(15		)	8			(387		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Other comprehensive income before reclassification, net of income taxes	(72		)	(26		)	1			—			(97		)
Amounts reclassified from AOCI, net of income taxes (a)	—			14			—			2			16
Other amounts reclassified from AOCI, net of income taxes	—			—			—			—			—
Net current-period other comprehensive income, net of income taxes	(72		)	(12		)	1			2			(81		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at December 31, 2016	$	(185	)	$	(14	)	$	(3	)	$	(339	)	$	(541	)
Other comprehensive income before reclassification, net of income taxes	40			(16		)	14			—			38
Amounts reclassified from AOCI, net of income taxes (a)	—			(11		)	—			8			(3		)
Net current-period other comprehensive income, net of income taxes	40			(27		)	14			8			35
Balance at September 30, 2017	$	(145	)	$	(41	)	$	11		$	(331	)	$	(506	)
Balance at June 30, 2017	(145		)	$	(31	)	$	4		$	(334	)	$	(506	)
Other comprehensive income before reclassification, net of income taxes	—			(10		)	7			—			(3		)
Amounts reclassified from AOCI, net of income taxes (a)	—			—			—			3			3
Net current-period other comprehensive income, net of income taxes	—			(10		)	7			3			—
Balance at September 30, 2017	$	(145	)	$	(41	)	$	11		$	(331	)	$	(506	)

(a) See table below for details about these reclassifications.

Our reclassifications out of AOCI for the three and nine months ended September 30, 2018, and September 30, 2017, are as follows:

	Nine months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2018			2017
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(42	)	$	21		Interest income — Loans
Interest rate	(2		)	(3		)	Interest expense — Long-term debt
	(44		)	18			Income (loss) from continuing operations before income taxes
	(10		)	7			Income taxes
	$	(34	)	$	11		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(12	)	$	(12	)	Personnel expense
	(12		)	(12		)	Income (loss) from continuing operations before income taxes
	(4		)	(4		)	Income taxes
	$	(8	)	$	(8	)	Income (loss) from continuing operations

	Three months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2018			2017
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(15	)	$	1		Interest income — Loans
Interest rate	(2		)	(1		)	Interest expense — Long-term debt
	(17		)	—			Income (loss) from continuing operations before income taxes
	(3		)	—			Income taxes
	$	(14	)	—			Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(4	)	(4		)	Personnel expense
	(4		)	(4		)	Income (loss) from continuing operations before income taxes
	(2		)	(1		)	Income taxes
	$	(2	)	$	(3	)	Income (loss) from continuing operations

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17. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2018 capital plan (which is effective through the second quarter of 2019) submitted and not objected to by the Federal Reserve, we have authority to repurchase up to $1.225 billion of our Common Shares. We completed $542 million of Common Share repurchases, including $541 million of Common Share repurchases in the open market and $1 million of Common Share repurchases related to employee equity compensation programs, in the third quarter of 2018 under this authorization.

Consistent with our 2018 capital plan, the Board declared a quarterly dividend of $.17 per Common Share for the third quarter of 2018.

Preferred Stock

On July 30, 2018, we issued $425 million of depositary shares, each representing a 1/40^th ownership interest in a share of our Fixed Rate Perpetual Noncumulative Series F Preferred Stock. Our Series F Preferred Stock has a $1 par value with a $1,000 liquidation preference (equivalent to $25 per depositary share). 

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		Third quarter 2018 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		—

18. Line of Business Results

The specific lines of business that constitute each of the major business segments (operating segments) align with how management reviews performance and makes business decisions. We have two major business segments, Key Community Bank and Key Corporate Bank. We also have Other Segments that consists of corporate treasury, our principal investing unit, and various exit portfolios. Total assets included under “Reconciling Items” 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. For more information on our business segments, see Note 25 ("Line of Business Results") on page 183 of our 2017 Form 10-K.

The development and application of the methodologies that we use to allocate items among our lines of business is a dynamic process. Accordingly, financial results may be revised periodically to reflect enhanced alignment of expense base allocations drivers, changes in the risk profile of a particular business, or changes in our organizational structure.

The table on the following pages shows selected financial data for our major business segments for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

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Three months ended September 30,	Key Community Bank						Key Corporate Bank
dollars in millions	2018			2017			2018			2017
SUMMARY OF OPERATIONS
Net interest income (TE)	$	726		$	673		$	273		$	292
Noninterest income	268			272			301			269
Total revenue (TE) (a)	994			945			574			561
Provision for credit losses	43			59			20			(11		)
Depreciation and amortization expense	27			30			34			25
Other noninterest expense	608			596			282			278
Income (loss) from continuing operations before income taxes (TE)	316			260			238			269
Allocated income taxes and TE adjustments	75			97			39			79
Income (loss) from continuing operations	241			163			199			190
Income (loss) from discontinued operations, net of taxes	—			—			—			—
Net income (loss)	241			163			199			190
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—
Net income (loss) attributable to Key	$	241		$	163		$	199		$	190
AVERAGE BALANCES (b)
Loans and leases	$	47,862		$	47,614		$	39,714		$	38,021
Total assets (a)	51,740			51,642			46,860			45,257
Deposits	82,259			79,563			21,056			21,559
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	43		$	41		$	19		$	(9	)
Return on average allocated equity (b)	19.80		%	13.39		%	26.91		%	27.08		%
Return on average allocated equity	19.80			13.39			26.91			27.08
Average full-time equivalent employees (c)	10,529			10,696			2,546			2,460

Nine months ended September 30,	Key Community Bank						Key Corporate Bank
dollars in millions	2018			2017			2018			2017
SUMMARY OF OPERATIONS
Net interest income (TE)	$	2,129		$	1,978		$	822		$	909
Noninterest income	820			856			852			827
Total revenue (TE) (a)	2,949			2,834			1,674			1,736
Provision for credit losses	128			152			62			26
Depreciation and amortization expense	84			86			101			68
Other noninterest expense	1,844			1,790			852			834
Income (loss) from continuing operations before income taxes (TE)	893			806			659			808
Allocated income taxes and TE adjustments	212			300			85			213
Income (loss) from continuing operations	681			506			574			595
Income (loss) from discontinued operations, net of taxes	—			—			—			—
Net income (loss)	681			506			574			595
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—
Net income (loss) attributable to Key	$	681		$	506		$	574		$	595
AVERAGE BALANCES (b)
Loans and leases	$	47,844		$	47,396		$	39,232		$	37,804
Total assets (a)	51,739			51,361			46,544			44,506
Deposits	81,053			79,439			20,977			21,237
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	119		$	131		$	56		$	24
Return on average allocated equity (b)	18.80		%	14.14		%	26.36		%	27.93		%
Return on average allocated equity	18.80			14.14			26.36			27.93
Average full-time equivalent employees (c)	10,604			10,573			2,542			2,403

(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.

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Other Segments						Total Segments						Reconciling Items						Key
2018			2017			2018			2017			2018			2017			2018			2017
$	(13	)	$	(10	)	$	986		$	955		$	7		$	7		$	993		$	962
37			52			606			593			3			(1		)	609			592
24			42			1,592			1,548			10			6			1,602			1,554
(2		)	2			61			50			1			1			62			51
—			1			61			56			37			41			98			97
7			25			897			899			(31		)	(4		)	866			895
19			14			573			543			3			(32		)	576			511
(3		)	(6		)	111			170			(17		)	(22		)	94			148
22			20			462			373			20			(10		)	482			363
—			—			—			—			—			1			—			1
22			20			462			373			20			(9		)	482			364
—			(1		)	—			(1		)	—			1			—			—
$	22		$	21		$	462		$	374		$	20		$	(10	)	$	482		$	364
$	888		$	1,175		$	88,464		$	86,810		$	3		$	4		$	88,467		$	86,814
37,769			36,895			136,369			133,794			360			562			136,729			134,356
2,292			2,010			105,607			103,132			19			(27		)	105,626			103,105
(1)			—			$	62		$	32		(1		)	$	—		$	60		$	32
73.35		%	55.54		%	23.26		%	19.11		%	1.08		%	(.58		)%	12.57		%	9.45		%
73.35			55.54			23.26			19.11			1.08			(0.53		)	12.57			9.48
2			337			13,077			13,493			5,073			5,055			18,150			18,548

Other Segments						Total Segments						Reconciling Items						Key
2018			2017			2018			2017			2018			2017			2018			2017
$	(40	)	$	(22	)	$	2,911		$	2,865		$	21		$	13		$	2,932		$	2,878
139			154			1,811			1,837			59			(15		)	1,870			1,822
99			132			4,722			4,702			80			(2		)	4,802			4,700
(4		)	2			186			180			1			—			187			180
1			2			186			156			114			127			300			283
47			77			2,743			2,701			(80		)	16			2,663			2,717
55			51			1,607			1,665			45			(145		)	1,652			1,520
(10		)	(16		)	287			497			(12		)	(72		)	275			425
65			67			1,320			1,168			57			(73		)	1,377			1,095
—			—			—			—			5			6			5			6
65			67			1,320			1,168			62			(67		)	1,382			1,101
—			1			—			1			—			—			—			1
$	65		$	66		$	1,320		$	1,167		$	62		$	(67	)	$	1,382		$	1,100
$	938		$	1,263		$	88,014		$	86,463		$	4		$	22		$	88,018		$	86,485
37,345			36,569			135,628			132,436			386			766			136,014			133,202
1,992			2,030			104,022			102,706			51			(47		)	104,073			102,659
—			$	1		$	175		$	156		(1)			—			$	174		$	156
67.37		%	56.20		%	22.39		%	20.03		%	1.06		%	(1.32		)%	12.24		%	9.62		%
67.37			56.20			22.39			20.03			1.16			(1.21		)	12.28			9.67
173			341			13,319			13,317			5,035			5,110			18,354			18,427

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19. Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers, by line of business, for the three- and nine-month periods ended September 30, 2018:

Three months ended September 30, 2018
dollars in millions	Key Community Bank		Key Corporate Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	90	$	16	$	106
Investment banking and debt placement fees	1		69		70
Services charges on deposit accounts	72		13		85
Cards and payments income	40		28		68
Other noninterest income	5		—		5
Total revenue from contracts with customers	$	208	$	126	$	334
Other noninterest income (a)					$	235
Noninterest income from other segments (b)					37
Reconciling items (c)					3
Total noninterest income					$	609

(a) Noninterest income considered earned outside the scope of contracts with customers.

(b) Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.

(c) Reconciling items consists of intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.

Nine months ended September 30, 2018
dollars in millions	Key Community Bank		Key Corporate Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	268	$	50	$	318
Investment banking and debt placement fees	2		183		185
Services charges on deposit accounts	226		39		265
Cards and payments income	115		82		197
Other noninterest income	15		1		16
Total revenue from contracts with customers	$	626	$	355	$	981
Other noninterest income (a)					$	691
Noninterest income from other segments (b)					139
Reconciling items (c)					59
Total noninterest income					$	1,870

(a) Noninterest income considered earned outside the scope of contracts with customers.

(b) Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.

(c) Reconciling items consists primarily of the gain on the sale of, and contract revenue recognized prior to the sale of, KIBS for the second quarter of 2018, intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.

We have no material contract assets or contract liabilities for the three- and nine-month periods ended September 30, 2018.

100

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of KeyCorp

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of KeyCorp as of September 30, 2018, the related consolidated statements of income, comprehensive income and consolidated statements of changes in equity for the three- and nine-month periods ended September 30, 2018 and 2017, and consolidated statement of cash flows for the nine-month periods ended September 30, 2018 and 2017, and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of KeyCorp as of December 31, 2017, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 26, 2018, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2017 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the KeyCorp’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to KeyCorp in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Cleveland, Ohio

November 1, 2018

101

Item 3. Quantitative and Qualitative Disclosure about Market Risk

The information presented in the “Market risk management” section of the Management’s Discussion & Analysis of Financial Condition & Results of Operations is incorporated herein by reference.

Item 4. Controls and Procedures

As of the end of the period covered by this report, KeyCorp carried out an evaluation, under the supervision and with the participation of KeyCorp’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of KeyCorp’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)), to ensure that information required to be disclosed by KeyCorp in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to KeyCorp’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Based upon that evaluation, KeyCorp’s Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective, in all material respects, as of the end of the period covered by this report.

No changes were made to KeyCorp’s internal control over financial reporting (as defined in Rule 13a-15(f) under

the Exchange Act) during the last quarter that materially affected, or are reasonably likely to materially affect,

KeyCorp’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information presented in the Legal Proceedings section of Note 15 (“Contingent Liabilities and Guarantees”) of the Notes to Consolidated Financial Statements (Unaudited) is incorporated herein by reference.

On at least a quarterly basis, we assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal reserves may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we have not accrued legal reserves, consistent with applicable accounting guidance. Based on information currently available to us, advice of counsel, and available insurance coverage, we believe that our established reserves are adequate and the liabilities arising from the legal proceedings will not have a material adverse effect on our consolidated financial condition. We note, however, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established reserves. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.

Item 1A. Risk Factors

For a discussion of certain risk factors affecting us, see the section titled “Supervision and Regulation” in Part I, Item 1. Business, on pages 8-20 of our 2017 Form 10-K; Part I, Item 1A. Risk Factors, on pages 20-29 of our 2017 Form 10-K; the section titled “Supervision and regulation” in this Form 10-Q; and our disclosure regarding forward-looking statements in this Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

From time to time, KeyCorp or its principal subsidiary, KeyBank, may seek to retire, repurchase, or exchange outstanding debt of KeyCorp or KeyBank, and capital securities or preferred stock of KeyCorp, through cash purchase, privately negotiated transactions, or otherwise. Such transactions, if any, depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions, and other factors. The amounts involved may be material.

102

In April 2018, we submitted to the Federal Reserve and provided to the OCC our 2018 capital plan under the annual CCAR process. On June 28, 2018, the Federal Reserve announced that it did not object to our 2018 capital plan. Share repurchases of up to $1.225 billion were included in the 2018 capital plan, which is effective from the third quarter of 2018 through the second quarter of 2019. 

We completed $542 million of Common Share repurchases, including $541 million of Common Share repurchases in the open market and $1 million of Common Share repurchases related to employee equity compensation programs, in the third quarter of 2018 under our 2018 capital plan authorization.

The following table summarizes our repurchases of our Common Shares for the three months ended September 30, 2018.

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)
July 1-31	7,414,270	21.07	7,414,270	51,210,190
August 1-31	16,527,481	21.47	16,527,481	33,885,363
September 1-30	1,426,124	21.06	1,426,124	34,385,928
Total	25,367,875	21.33	25,367,875

 

(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 July 31, 2018 at $20.87; on August 31, 2018, at $21.07; and on September 28, 2018, at $19.89.

Item 6. Exhibits

3.1	Certificate of Amendment to Second Amended and Restated Articles of Incorporation of KeyCorp, effective July 26, 2018, filed as Exhibit 4.1 to Form 8-K on July 30, 2018.
4.1	Form of Certificate representing Fixed Rate Perpetual Non-Cumulative Preferred Stock, Series F, filed as Exhibit 4.2 to Form 8-K on July 30, 2018.
4.2	Deposit Agreement, dated July 30, 2018, among KeyCorp, Computershare Inc. and Computershare Trust Company, N.A., jointly as depositary, and the holders from time to time of the depositary receipts described therein, filed as Exhibit 4.3 to Form 8-K on July 30, 2018.
4.3	Form of Depositary Receipt (included as part of Exhibit 4.2), filed as Exhibit 4.4 to Form 8-K on July 30, 2018.
15	Acknowledgment of Independent Registered Public Accounting Firm.
10.1	Form of Performance Shares Award Agreement (2018-2020).
10.2	Form of Stock Option Award Agreement under KeyCorp 2013 Equity Compensation Plan.
10.3	Form of Restricted Stock Unit Award Agreement under KeyCorp 2013 Equity Compensation Plan.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101	The following materials from KeyCorp’s Form 10-Q Report for the quarterly period ended September 30, 2018, formatted in inline XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income and Consolidated Statements of Comprehensive Income; (iii) the Consolidated Statements of Changes in Equity; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements.

*  Furnished herewith.

103

Information Available on Website

KeyCorp makes available free of charge on its website, www.key.com, its 2017 Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports as soon as reasonably practicable after KeyCorp electronically files such material with, or furnishes it to, the SEC. We also make available a summary of filings made with the SEC of statements of beneficial ownership of our equity securities filed by our directors and officers under Section 16 of the Exchange Act. The “Regulatory Disclosures and Filings” tab of the investor relations section of our website includes public disclosures concerning our annual and mid-year stress-testing activities under the Dodd-Frank Act. Information contained on or accessible through our website or any other website referenced in this report is not part of this report.

104

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the date indicated.

	KEYCORP
	(Registrant)
Date: November 1, 2018	/s/ Douglas M. Schosser
	By:  Douglas M. Schosser
	Chief Accounting Officer (Principal Accounting Officer)

105

EX-10.1

EXHIBIT 10.1

CASH PERFORMANCE SHARES AWARD AGREEMENT

KeyCorp grants to the Participant named below, in accordance with the terms, and subject to the conditions, of the KeyCorp 2013 Equity Compensation Plan (the “Plan”), this Cash Performance Shares Award Agreement (the “Award Agreement”) and the attached Acceptance Agreement, an award of the target number of performance shares (“Performance Shares” or “Award”), on the Date of Grant, each as set forth below. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan.

Each Performance Share represents the contingent right to receive a payment in cash equal to the Fair Market Value of one Common Share, subject to the terms and conditions set forth in the Plan, this Award Agreement and the Acceptance Agreement. The Participant’s right to receive payment of all, a portion, or a multiple of the Performance Shares shall be contingent upon the level of achievement of the Performance Goals and the Participant’s continued employment, each as provided herein, in all cases subject to the other terms and conditions of this Award Agreement, the Plan and the Acceptance Agreement.

Name of Participant: [•]

Target Number of Performance Shares: [•]

Date of Grant: February __, 2018

Vesting Date: February 17, 2021, subject to approval of the Compensation and Organization Committee of the Board of Directors, and subject to your continued employment on this date and the achievement of the Performance Goals set forth below (except as otherwise provided in this Award Agreement)

Performance Period: January 1, 2018 through December 31, 2020

Performance Goals: The Participant may vest in between 0% and 150% of the target number of Performance Shares subject to this Award based on the weighted level of achievement of the following “Performance Goals” during the Performance Period:

Performance Goals					Other Factors (Vesting Reduction Only)
Performance Metric	Weight	Threshold	Target	Maximum
		50% Weighted Vesting	100% Weighted Vesting	150% Weighted Vesting
Total Shareholder Return vs. Peers	25%	25% ile	50% ile	75% ile	ERM Dashboard
Return on Tangible Common Equity v. Peers	25%	25% ile	50% ile	75% ile	Execution of Strategic Priorities
Cumulative Earnings Per Share	50%	75% of EPS at Plan*	100% of EPS at Plan*	125% of EPS at Plan*	Other factors, as appropriate

Straight line interpolation applies for performance between Threshold and Maximum levels.

The Committee shall determine the level of achievement of the Performance Goals within two and one-half months after the end of the Performance Period in accordance with the provisions of this Award Agreement, the Plan and the Acceptance Agreement. Notwithstanding any other provision of the Award Agreement, the Committee may reduce the number of Performance Shares otherwise vesting based on the Other Factors set forth above, as determined by the Committee in its sole discretion.

For purposes of this Award Agreement:

*EPS at Plan: The Cumulative Earnings Per Share as set forth in the KeyCorp 2018-2020 Long Term Incentive Compensation Plan, which excludes any impact to Cumulative Earnings Per Share based on changes to interest rates. EPS at Plan may be adjusted by KeyCorp, in its discretion, to correspond to changes in interest rates.

Total Shareholder Return vs. Peers: KeyCorp’s percentile ranking among the companies in the Peer Group (as defined below) for total shareholder return for the Performance Period, calculated based on the average closing share price over the last 20 trading days in 2017 compared to the average closing share price over the last 20 days in 2020 plus investment of dividends paid during the Performance Period.

Return on Tangible Common Equity

vs. Peers: KeyCorp’s percentile ranking among the companies in the Peer Group (as defined below) for average annual return on tangible common equity during the three fiscal years of (or ending during) the Performance Period, with return on tangible common equity calculated as net income from continuing operations attributable to common shareholders divided by average tangible common equity from continuing operations.

Cumulative Earnings Per Share: The sum of KeyCorp’s annual earnings per share for the three fiscal years in the Performance Period, as reported in the Form 10-Ks filed by KeyCorp for such fiscal years.

Peer Group: The companies in the S&P Banks Index on the Date of Grant, excluding Wells Fargo & Company and Hudson City Bancorp, with such adjustments to the composition of the Peer Group as may be determined by the Committee, in its sole discretion. The Committee reviews the companies in the Peer Group annually.

____________________________________________________________________________

The Participant must accept the Award online in accordance with the procedures established by KeyCorp and the Award administrator or this Award Agreement may be cancelled by KeyCorp, in its sole discretion. By accepting the Award in accordance with these procedures, the Participant acknowledges that:

• This Award is subject to the KeyCorp Incentive Compensation Program and Policy, as amended from time to time. The Participant understands and agrees that the Award is subject to risk adjustment in accordance with the procedures set forth in the Incentive Compensation Program and Policy. These procedures permit Key, in its sole discretion, to decrease, forfeit, or initiate a clawback, of all or any part of the Award under certain circumstances, including in the event that the Participant receives a "Does Not Meet" risk rating as part of his or her annual performance review, and/or in the event that the Participant's business unit experiences negative pre-provision net revenue (before allocated costs) or significant credit, market or operational losses. If a significant risk event occurs, whether at the individual or business level, a root cause analysis may be conducted, which may result in a risk adjustment of the Award.

• The Participant understands that as a condition to receiving the Award, the Participant must agree to be bound by and comply with the terms and conditions of the Plan, the Award Agreement and related Acceptance Agreement. As soon as the Participant accepts the Award, the terms and conditions of the Award Agreement and Acceptance Agreement will constitute a legal contract that will bind both the Participant and KeyCorp.

Additional Terms

1.Effect of Termination.

(a)    In General. The Award shall be forfeited automatically without further action or notice if the Participant ceases to be continuously employed by Key prior to the Vesting Date, except as otherwise provided in this Section 1. For purposes of this Section 1, the continuous employment of the Participant shall not be deemed to have been interrupted, and the Participant shall not be deemed to have ceased to be an employee of Key, by reason of the transfer of employment among KeyCorp and its affiliates.

(b)    Certain Terminations. Notwithstanding Section 1(a), if, prior to the Vesting Date:

(i)     the Participant’s continuous employment is terminated as a result of the Participant’s death or Disability, the Participant will immediately vest in the target number of Performance Shares; or

(ii)    the Participant’s continuous employment is terminated as a result of Retirement, the Participant shall, (A) for any unvested Performance Shares that were granted one year or more prior to the Participant’s effective termination date, fully vest in such Performance Shares, and (B) for any unvested Performance Shares that were granted less than one year prior to Participant’s effective termination date, vest in a pro rata portion of such Performance Shares; provided, however, that Key may, in its sole discretion, provide that any unvested Performance Shares that would otherwise be subject to Section 1(b)(ii)(B) (i.e., vest in a pro rata portion as a result of Retirement because such Performance Shares were granted less than one year prior to Participant’s effective termination date) may instead be treated consistent with Section 1(b)(ii)(A) (i.e., fully vest); or

(iii)    the Participant’s Voluntary Resignation on or after attaining age 55 and completion of at least 5 years of service (excluding a Retirement), the Participant will vest in a pro rata portion of any unvested Performance Shares; or

(iv)    the Participant’s continuous employment is terminated as a result of a Termination Under Limited Circumstances, subject to the Participant executing a release of claims in Key’s favor in a form agreeable to Key, the Participant will vest in any unvested Performance Shares on the scheduled Vesting Date(s); provided, however, that should Key determine, in its sole discretion, that full vesting of any unvested Performance Shares would result in the unjust enrichment of the Participant, Key may provide, instead, that the Participant will vest only in a pro rata portion of any unvested Performance Shares.

Subject to Section 11 hereof, Performance Shares vested under the provisions of Section 1(b)(i) shall be paid in cash within 45 days after the termination of the Participant’s employment, and Performance Shares vested under the provisions of Section 1(b)(ii), (iii) or (iv) shall be paid in cash within 45 days after the scheduled Vesting Date(s).

For purposes of this Award Agreement, the Participant’s “Retirement” shall mean the Participant’s Voluntary Resignation on or after attaining age 60 and completion of at least 10 years of service. The Participant’s “Termination Under Limited Circumstances” shall mean the Participant’s termination from Key under circumstances in which the Participant becomes entitled to receive: (i) a severance under the KeyCorp Separation Pay Plan as in effect at the time of the Participant’s termination, or (ii) under circumstances under which the Participant is entitled to receive salary continuation benefits under the terms and conditions of an employment separation or letter agreement with Key, including, without limitation, a Change of Control Agreement.

The pro rata vesting provided for under this Award Agreement shall be determined by multiplying the number of unvested Performance Shares as of the date of the Participant’s termination by a fraction, the numerator of which shall be the number of full months of Participant’s continuous employment from the Date of Grant through the date of termination and the denominator of which shall be 36, and adjusting this number at the end of the Performance Period based on the level of achievement of the Performance Goals (and the satisfaction of the other terms and conditions of this Award Agreement, the Plan and the Acceptance Agreement).

(c)    Certain Terminations Within Two Years After a Change of Control. Notwithstanding the foregoing provisions of Section 1, if, prior to the Vesting Date, the Participant’s continuous employment with Key is terminated within two years following the date of a Change of Control for any reason other than a Voluntary Resignation (excluding a Voluntary Resignation that constitutes a Retirement, as defined above) or a Termination for Cause, the target number of Performance Shares (or if such Change of Control and termination of employment occurs after the end of the Performance Period, the number of Performance Shares earned under this Award Agreement based upon achievement of the Performance Goals) shall become immediately vested (without pro ration). Subject to Section 11 hereof, Performance Shares vested under the provisions of this Section 1(c) shall be paid in cash within 45 days after the termination of the Participant’s employment.

2.Payment of Vested Performance Shares. Except as otherwise provided in Sections 1(b) or 1(c), any Performance Shares earned pursuant to this Award Agreement shall become vested only if the Participant remains continuously employed by Key from the Date of Grant through the Vesting Date. Payment of any earned and vested Performance Shares, rounded down to the nearest Common Share, shall be made in the form of cash. Each Performance Share shall have a value equal to the average of the Fair Market Value of one Common Share over the 30 trading days immediately prior to the date of payment of the Performance Share. Except as otherwise provided in Sections 1(b) or 1(c), and further subject to Section 11 hereof, payment of vested Performance Shares shall occur within 45 days after the Vesting Date.

3.Dividend Equivalents. Dividend equivalents shall be credited on the target number of Performance Shares which shall be deemed reinvested and be subject to the same terms and restrictions otherwise applicable to the Performance Shares (including but not limited to vesting requirements) under this Award Agreement, the Plan and the Acceptance Agreement.

4.Harmful Activity. Notwithstanding any other provision of this Award Agreement to the contrary, if the Participant engages in any Harmful Activity prior to or within twelve months after the Participant’s termination of employment with Key, then the Performance Shares shall be immediately forfeited without further action or notice, and the Participant shall pay to KeyCorp, upon KeyCorp’s demand, the amount of any cash payment received by the Participant pursuant to this Award Agreement within one year prior to the Participant’s termination of employment. This Section 4 shall survive the termination of Participant’s employment.

5.KeyCorp’s Reservation of Rights. As a condition of receiving this Award, the Participant acknowledges and agrees that Key intends to comply with the requirements of (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act (including clawback provisions), as the same may be amended from time to time; (b) the banking regulatory agencies’ Guidance on Sound Incentive Compensation Policies; and (c) KeyCorp’s risk requirements and policies. As a condition of receiving this Award, the Participant understands and agrees that KeyCorp may, in its sole discretion, (x) decrease or cause the forfeiture of all or any part of this Award, (y) initiate a clawback of all or any part of this Award, and/or (z) demand the Participant’s repayment to KeyCorp of any cash paid to the Participant under this Award if KeyCorp determines that such action is necessary or desirable.

6.Relation to Other Benefits. Any economic or other benefit to the Participant under this Award Agreement shall not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by Key and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of Key.

7.Taxes and Withholding. To the extent that Key is required to withhold any federal, state, local or other taxes in connection with the delivery of Common Shares under this Award Agreement, then Key shall retain a number of Common Shares otherwise deliverable hereunder with a value equal to the required withholding (based on the Fair Market Value of the Common Shares on the date of delivery). To the extent that Key is required to withhold any federal, state, local or other taxes at any time other than upon delivery of Common Shares under this Award Agreement, then Key shall have the right in its sole discretion to (a) require the Participant to pay or provide for payment of the required tax withholding, (b) retain a number of Common Shares that otherwise would remain subject to this Award with a value equal to the required withholding amount (determined based on the Fair Market Value of the Common Shares on the date the applicable taxes are required to be withheld) and make a corresponding reduction in the number of Performance Shares subject to this Award, or (c) deduct the required tax withholding from any other compensation payable in cash to the Participant. To the extent that withholding taxes are satisfied by the retention of Common Shares, the value of the Common Shares so retained shall not exceed the amount of taxes required to be withheld based on the maximum statutory tax rates in the applicable taxing jurisdictions. Further, to the extent that this Award constitutes a deferral of compensation subject to Section 409A of the Code, any retention of Common Shares pursuant to clause (b) of the immediately preceding sentence to satisfy tax withholding requirements at any time other than at the time of delivery of Common Shares shall be effected only as permitted pursuant to Treasury Regulations Sections 1.409A-3(j)(4)(vi) and 1.409A-3(j)(4)(xi), as applicable.

8.Entire Agreement; Amendments. This Award Agreement, along with the Plan and the related Acceptance Agreement, contains the entire agreement and understanding of the parties with respect to the subject matter contained therein, and supersedes all prior written or oral communications, representations and negotiations in respect thereto. KeyCorp may modify or amend this Award Agreement at any time upon written notice to the Participant, provided that KeyCorp may not amend this Award Agreement in a manner adverse to the interests of the Participant without the Participant’s consent. Notwithstanding any other provision of this Award Agreement, if the Committee determines that a change in the business, operations, corporate structure or capital structure of KeyCorp, the manner in which it conducts business or other events or circumstances render the Performance Goals to be unsuitable, the Committee may modify the Performance Goals and/or the related threshold, target and maximum levels of achievement, in whole or in part, as the Committee deems appropriate. In the event of any inconsistency between the provisions of this Award Agreement or the related Acceptance Agreement, on the one hand, and the Plan, on the other, the Plan shall govern.

9.Administration. KeyCorp shall have the right, in accordance with the Plan, to determine any questions which arise in connection with the Award. All such determinations and decisions shall be final, conclusive and binding on all persons, including Key, the Participant and the Participant’s estate and beneficiaries.

10.Successors and Assigns. Without limiting Section 14.1 of the Plan, the provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of KeyCorp.

11. Compliance with Section 409A of the Internal Revenue Code. To the extent applicable, it is intended that this Award comply with the provisions of Section 409A of the Code (“Section 409A”). The Award shall accordingly be administered in a manner consistent with this intent, and any provision that would cause the Award to fail to satisfy Section 409A shall have no force and effect until amended to comply with Section 409A. In particular, to the extent that the Participant’s right to receive payment under the Award becomes vested and the event triggering the Participant’s right to payment is the Participant’s termination of employment, then notwithstanding anything herein to the contrary, payment will be made to the Participant, to the extent necessary to comply with Section 409A, on the earlier of (a) the Participant’s “separation from service” (determined in accordance with Section 409A); provided, however, that if the Participant is a “specified employee” (determined in accordance with KeyCorp’s policies), the date of payment shall not occur on the otherwise scheduled payment date, but shall instead be paid, without interest, on the tenth business day of the seventh month following the date of the Participant’s separation from service with Key. Further, but solely to the extent necessary to comply with Section 409A, a transaction shall be considered a Change of Control only if it also qualifies as a “change in the ownership” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of KeyCorp within the meaning of Section 409A, and the Participant’s “Disability” will be treated as such only if the Participant would also be considered “disabled” within the meaning of Section 409A.

ACCEPTANCE AGREEMENT

I acknowledge receipt of the attached Award and in consideration thereof, I accept such Award subject to the terms and conditions of the Plan, the Award Agreement, and the restrictions that are set forth in this Acceptance Agreement.

I also understand and agree that the restrictions set forth in this Acceptance Agreement are (i) in addition to, and do not in any way limit or vary the restrictions that are contained in any other agreement, plan, policy, or practice that are applicable to me as an employee of Key, and (ii) binding upon me regardless of whether I vest, sell, transfer, pledge, hypothecate, or otherwise dispose of the Award or any amount to be paid to me pursuant to the Award.

1. I recognize the importance of preserving the confidentiality of Non-Public Information of Key, and I acknowledge and agree that: (a) during my employment with Key, I will acquire, reproduce, and use such Non-Public Information only to the extent reasonably necessary for the proper performance of my duties; (b) both during and after my employment with Key, I will not use, publish, sell, trade or otherwise disclose such Non-Public Information; and (c) upon the termination of my employment with Key, I will immediately return to Key all documents, data, information and equipment in my possession or to which I have access that may contain such Non-Public Information. I also agree to enter into and to execute nondisclosure agreements in favor of Key and others doing business with Key with whom Key has a confidential relationship.

I acknowledge that Key has informed me that I will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of Non-Public Information that: (1) is made (a) in confidence to a Federal, state or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Disclosure of Non-Public Information to attorneys, made under seal, or pursuant to court order is also protected in certain circumstances under the federal Defend Trade Secrets Act. This provision does not limit my right to respond accurately and fully to any question, inquiry or request for information when required by legal process or from initiating communications directly with, or responding to any inquiry from, or providing testimony before, any self-regulatory organization or state or federal regulatory authority, regarding Key, my employment, or this provision. Furthermore, I am not required to contact Key regarding the subject matter of any such communications before engaging in such communications. I understand that my rights as set forth in this paragraph apply to this agreement, as well as any similar agreement that I have entered into, or may enter into, with Key regarding non-disclosure of information.

2. I acknowledge and agree that the duties of my position at Key may include the development of Intellectual Property, and that any Intellectual Property which I create with any of Key’s resources or assistance, in whole or in part, and which pertains to the business of Key is the property of Key. I hereby agree and I hereby assign to Key all right, title,

and interest in and absolute title to such Intellectual Property, including, without limitation, copyrights, trademarks, service marks, and patents in or to (or associated with) such Intellectual Property and I agree that I will execute all patent applications and assignments thereof on Key’s behalf without additional compensation.

3.Except in the proper performance of my duties for Key, I acknowledge and agree that from the date hereof through a period of one (1) year after the termination of my employment with Key for any reason, I will not, directly or indirectly, for myself or on behalf of any other person or entity, hire or solicit or entice for employment any Key Employee, without the written consent of Key (which consent Key may grant or withhold in its discretion). “Key Employees” shall include (i) all current Key employees, and (ii) all persons who were employed by Key at any time during the six (6) month period prior to my termination from Key.

4. (a) Except in the proper performance of my duties for Key, I acknowledge and agree that from the date hereof through a period of one (1) year after the termination of my employment with Key for any reason, I will not, directly or indirectly, for myself or on behalf of any other person or entity, call upon, solicit, or do business with any Key customer or prospective customer of Key with whom I interacted or learned of during the course of my employment at Key, without the written consent of Key (which consent Key may grant or withhold in its discretion).

(b) In the event that my employment with Key is terminated as a result of a Termination Under Limited Circumstances, the restrictions in paragraph 4(a) of this Acceptance Agreement shall become inapplicable to me; however, the restrictions in paragraphs 1, 2, and 3 of this Acceptance Agreement shall remain in full force and effect.

5. The aforementioned restrictions in paragraphs 1, 2, 3 and 4(a) shall not apply in the event that, within the 2-year period commencing on a Change of Control: (i) my employment with Key is terminated as a result of a Termination Under Limited Circumstances, or (ii) I terminate employment with Key after a relocation of my principal place of employment more than 35 miles from my principal place of employment immediately prior to the Change of Control, or after a reduction in my base salary after a Change of Control.

6. I agree that the Plan, the Award Agreement and this Acceptance Agreement will be governed by Ohio law without regard to conflicts of laws principles, and that if any term, condition, clause or provision of the Plan, the Award Agreement or this Acceptance Agreement is determined by a Court of competent jurisdiction to be void or invalid at law, then only that term, condition, clause or provision determined to be void or invalid shall be stricken, and the remainder of the Plan, the Award Agreement and this Acceptance Agreement shall remain in full force and effect in all other aspects.

I also understand and agree that if I engage in any activity that is in violation of the Plan, the Award Agreement or this Acceptance Agreement, such conduct may cause serious damage and irreparable injury to Key, and Key at its election may terminate my employment (if I am still employed), seek monetary damages and attorney fees, and injunctive relief without the necessity of posting bond, as well as any and all other equitable relief to which it may be entitled under the law, the Plan, the Award Agreement and this Acceptance Agreement.

* * * * *

EX-10.2

EXHIBIT 10.2

STOCK OPTION AWARD AGREEMENT

KeyCorp grants to the Participant named below, in accordance with the terms, and subject to the conditions, of the KeyCorp 2013 Equity Compensation Plan (the “Plan”), this Stock Option Award Agreement (the “Award Agreement”) and the attached Acceptance Agreement, an option to purchase the number of Common Shares set forth below (rounded down to the nearest whole Common Share) (“Options” or “Award”) at the exercise price per share set forth below (the “Exercise Price”). Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. Each Option shall be a Nonqualified Option.

Name of Participant:	[Participant Name]
Number of Common Shares:	[Shares Granted]
Date of Grant:	[Grant Date]
Exercise Price:	[Exercise Price Per Common Share]
Vesting:	The Options shall vest and become exercisable in accordance with the “vesting schedule” reflected in the records of the Plan administrator and viewable on the Participant’s homescreen (the date that the Options become vested and exercisable being the “Vesting Date” if only one such date, or if more than one such date, each a “Vesting Date”), provided that the Participant shall have remained in the continuous employ of KeyCorp and its affiliates (“Key”) through the applicable Vesting Date, except as otherwise provided herein.
Expiration Date:	[Tenth Anniversary of Date of Grant]

The Participant must accept the Award online in accordance with the procedures established by KeyCorp and the Award administrator or this Award Agreement may be cancelled by KeyCorp, in its sole discretion. By accepting the Award in accordance with these procedures, the Participant acknowledges that:

• This Award is subject to the KeyCorp Incentive Compensation Program and Policy, as amended from time to time. The Participant understands and agrees that the Award is subject to risk adjustment in accordance with the procedures set forth in the Incentive Compensation Program and Policy. These procedures permit Key, in its sole discretion, to decrease, forfeit, or initiate a clawback, of all or any part of the Award under certain circumstances, including in the event that the Participant receives a "Does Not Meet" risk rating as part of his or her annual performance review, and/or in the event that the Participant's business unit experiences negative pre-provision net revenue (before allocated costs) or significant credit, market or operational losses. If a significant risk event occurs, whether at the individual or business level, a root cause analysis may be conducted, which may result in a risk adjustment of the Award.

• The Participant understands that as a condition to receiving the Award, the Participant must agree to be bound by and comply with the terms and conditions of the Plan, the Award Agreement and related Acceptance Agreement. As soon as the Participant accepts the Award, the terms and conditions of the Award Agreement and Acceptance Agreement will constitute a legal contract that will bind both the Participant and KeyCorp.

Additional Terms

1. Effect of Termination.

(a)    In General. To the extent unvested, the Options shall be forfeited automatically without further action or notice if the Participant ceases to be continuously employed by Key prior to any Vesting Date, except as otherwise provided in this Section 1. To the extent vested, the Options shall be exercisable until the earlier of (x) the Expiration Date set forth above, (y) such other date that the Options expire in accordance with Section 1(b) or 1(c) of this Award Agreement, or (z) the date that is 6 months after the Participant’s termination of employment with Key for any reason other than Termination for Cause or a termination described in Section 1(b) or 1(c). Notwithstanding any other provision of this Award Agreement to the contrary, the Options, whether vested or unvested, shall be forfeited automatically without further action or notice upon the Participant’s Termination for Cause. For purposes of this Section 1, the continuous employment of the Participant shall not be deemed to have been interrupted, and the Participant shall not

be deemed to have ceased to be an employee of Key, by reason of the transfer of employment among KeyCorp and its affiliates.

(b)    Certain Terminations. Notwithstanding Section 1(a), if, prior to the Vesting Date:

(i)    the Participant’s continuous employment is terminated as a result of the Participant’s death, the unvested Options shall immediately vest and become exercisable, and the Participant’s estate shall have up to 4 years following the Participant’s date of death to exercise the vested Options (but in no event later than the Expiration Date).

(ii)    the Participant’s continuous employment is terminated as a result of the Participant’s Disability, the Options shall immediately vest and become exercisable, and the Participant shall have up to 5 years following the Participant’s termination of employment to exercise the vested Options (but in no event later than the Expiration Date).

(iii)    the Participant’s continuous employment is terminated as a result of Retirement, the Participant shall, (1) for any unvested Options that were granted one year or more prior to the Participant’s effective termination date, continue to vest in such Options which shall become exercisable on the scheduled Vesting Date(s), and (2) for any unvested Options that were granted less than one year prior to Participant’s effective termination date, immediately vest in a pro rata portion of such Options, which Options shall become immediately exercisable. Key may, in its sole discretion, provide that any unvested Options that would otherwise be subject to Section 1(b)(iii)(2) (i.e., vest in a pro rata portion as a result of Retirement because such Options were granted less than one year prior to Participant’s effective termination date) may instead be treated consistent with Section 1(b)(iii)(1) (i.e., continue to vest). The Participant shall have up to 5 years following his or her effective termination date to exercise the vested Options (but in no event later than the Expiration Date.)

(iv)     the Participant’s continuous employment is terminated as a result of the Participant’s Voluntary Resignation on or after attaining the age of 55 and completion of at least 5 years of service, a pro rata portion of the unvested Options shall immediately vest and become exercisable, and the Participant shall have up to 5 years following his or her effective termination date to exercise the vested Options (but in no event later than the Expiration Date).

(v)    the Participant’s continuous employment is terminated as a result of the Participant’s Termination Under Limited Circumstances, subject to the Participant executing a release of claims in Key’s favor in a form agreeable to Key, the unvested Options shall vest and become exercisable on the scheduled Vesting Date(s), and the Participant shall have up to 3 years following Termination Under Limited Circumstances to exercise the vested Options (but in no event later than the Expiration Date); provided, however, that should Key determine, in its sole discretion, that full vesting of any unvested Options would result in the unjust enrichment of the Participant, Key may provide, instead, that the Participant will vest only in a pro rata portion of any unvested Options.

For purposes of this Award Agreement, the Participant’s “Retirement” shall mean the Participant’s Voluntary Resignation on or after attaining age 60 and completion of at least 10 years of service. The Participant’s “Termination Under Limited Circumstances” shall mean the Participant’s termination from Key under circumstances in which the Participant becomes entitled to receive: (1) a severance under the KeyCorp Separation Pay Plan as in effect at the time of the Participant’s termination, or (2) under circumstances under which the Participant is entitled to receive salary continuation benefits under the terms and conditions of an employment separation or letter agreement with Key, including, without limitation, a Change of Control Agreement.

The pro rata vesting provided for under this Award Agreement shall be determined by multiplying the number of Common Shares subject to the unvested Options as of the date of the Participant’s termination by a fraction, the numerator of which shall be the number of full months of Participant’s continuous employment from the Date of Grant through the date of termination and the denominator of which shall be number of full months between the Date of Grant and latest Vesting Date.

(c)    Certain Terminations Within Two Years After a Change of Control. If the Participant’s continuous employment is terminated within two years following the date of a Change of Control for any reason other than a

Voluntary Resignation (excluding a Voluntary Resignation described in Section 1(b)(iv), above) or a Termination for Cause, the Options shall vest in full and the Participant shall have up to the later of 2 years or such other period provided pursuant to this Section 1(b) to exercise the vested Options (but in no event later than the Expiration Date).

2.Harmful Activity. Notwithstanding any other provision of this Award Agreement to the contrary, if the Participant engages in any Harmful Activity prior to or within twelve months after the Participant’s termination of employment with Key, then the Options shall be immediately forfeited without further action or notice, and any Common Shares delivered upon exercise of the Options within one year prior to the Participant’s termination of employment, and any Profits realized by the Participant from the exercise of the Options, shall become immediately due and payable to KeyCorp on KeyCorp’s demand. This Section 2 shall survive the termination of Participant’s employment.

3.KeyCorp’s Reservation of Rights. As a condition of receiving this Award, the Participant acknowledges and agrees that Key intends to comply with the requirements of (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act (including clawback provisions), as the same may be amended from time to time; (b) the banking regulatory agencies’ Guidance on Sound Incentive Compensation Policies; and (c) KeyCorp’s risk requirements and policies. As a condition of receiving this Award, the Participant understands and agrees that KeyCorp may, in its sole discretion, (x) decrease or cause the forfeiture of all or any part of this Award, (y) initiate a clawback of all or any part of this Award, and/or (z) demand the Participant’s repayment to KeyCorp of any Profits realized from the exercise of the Option, if KeyCorp determines that such action is necessary or desirable.

4.Relation to Other Benefits. Any economic or other benefit to the Participant under this Award Agreement shall not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by Key and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of Key.

5. KeyCorp Stock Ownership Guidelines. If the Participant is subject to and has not met the KeyCorp Stock Ownership Guidelines, the Participant may not sell or otherwise transfer the Common Shares provided upon exercise of the Options (if any) until and unless the Participant meets the Stock Ownership Guidelines or terminates employment with Key; provided, however, that notwithstanding the foregoing, the Participant may sell the number of Common Shares necessary to satisfy any withholding tax obligation that may arise in connection with the exercise of the Options even if the Participant has not met the Stock Ownership Guidelines.

6.Taxes and Withholding. To the extent that Key is required to withhold any federal, state, local or other taxes in connection with the delivery of Common Shares under this Award Agreement, then Key shall retain a number of Common Shares otherwise deliverable hereunder with a value equal to the required withholding (based on the Fair Market Value of the Common Shares on the date of delivery). To the extent that Key is required to withhold any federal, state, local or other taxes at any time other than upon delivery of Common Shares under this Award Agreement, then Key shall have the right in its sole discretion to (a) require the Participant to pay or provide for payment of the required tax withholding, (b) retain a number of Common Shares that otherwise would remain subject to this Award with a value equal to the required withholding amount (determined based on the Fair Market Value of the Common Shares on the date the applicable taxes are required to be withheld) and make a corresponding reduction in the number of Performance Shares subject to this Award, or (c) deduct the required tax withholding from any other compensation payable in cash to the Participant. To the extent that withholding taxes are satisfied by the retention of Common Shares, the value of the Common Shares so retained shall not exceed the amount of taxes required to be withheld based on the maximum statutory tax rates in the applicable taxing jurisdictions. Further, to the extent that this Award constitutes a deferral of compensation subject to Section 409A of the Code, any retention of Common Shares pursuant to clause (b) of the immediately preceding sentence to satisfy tax withholding requirements at any time other than at the time of delivery of Common Shares shall be effected only as permitted pursuant to Treasury Regulations Sections 1.409A-3(j)(4)(vi) and 1.409A-3(j)(4)(xi), as applicable.

7.Entire Agreement; Amendments. This Award Agreement, along with the Plan and the related Acceptance Agreement, contains the entire agreement and understanding of the parties with respect to the subject matter contained therein, and supersedes all prior written or oral communications, representations and negotiations in respect thereto. KeyCorp may modify or amend this Award Agreement at any time upon written notice to the Participant, provided that KeyCorp may not amend this Award Agreement in a manner adverse to the interests of the Participant without the Participant’s consent. In the event of any inconsistency between the provisions of this Award Agreement or the related Acceptance Agreement, on the one hand, and the Plan, on the other, the Plan shall govern.

8.Administration. KeyCorp shall have the right, in accordance with the Plan, to determine any questions which arise in connection with the Award. All such determinations and decisions shall be final, conclusive and binding on all persons, including Key, the Participant and the Participant’s estate and beneficiaries.

9.Successors and Assigns. Without limiting Section 14.1 of the Plan, the provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of KeyCorp.

10. Compliance with Section 409A of the Internal Revenue Code. It is intended that this Award be exempt from the provisions of Section 409A of the Code (“Section 409A”). The Award shall accordingly be administered in a manner consistent with this intent, and any provision that would cause the Award to fail to satisfy Section 409A shall have no force and effect until amended to comply with Section 409A.

ACCEPTANCE AGREEMENT

I acknowledge receipt of the attached Award and in consideration thereof, I accept such Award subject to the terms and conditions of the Plan, the Award Agreement, and the restrictions that are set forth in this Acceptance Agreement.

I also understand and agree that the restrictions set forth in this Acceptance Agreement are (i) in addition to, and do not in any way limit or vary the restrictions that are contained in any other agreement, plan, policy, or practice that are applicable to me as an employee of Key, and (ii) binding upon me regardless of whether I vest, sell, transfer, pledge, hypothecate, or otherwise dispose of the Award or any of the Common Shares to be paid to me upon exercise of the Award.

1. I recognize the importance of preserving the confidentiality of Non-Public Information of Key, and I acknowledge and agree that: (a) during my employment with Key, I will acquire, reproduce, and use such Non-Public Information only to the extent reasonably necessary for the proper performance of my duties; (b) both during and after my employment with Key, I will not use, publish, sell, trade or otherwise disclose such Non-Public Information; and (c) upon the termination of my employment with Key, I will immediately return to Key all documents, data, information and equipment in my possession or to which I have access that may contain such Non-Public Information. I also agree to enter into and to execute nondisclosure agreements in favor of Key and others doing business with Key with whom Key has a confidential relationship.

I acknowledge that Key has informed me that I will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of Non-Public Information that: (1) is made (a) in confidence to a Federal, state or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Disclosure of Non-Public Information to attorneys, made under seal, or pursuant to court order is also protected in certain circumstances under the federal Defend Trade Secrets Act. This provision does not limit my right to respond accurately and fully to any question, inquiry or request for information when required by legal process or from initiating communications directly with, or responding to any inquiry from, or providing testimony before, any self-regulatory organization or state or federal regulatory authority, regarding Key, my employment, or this provision. Furthermore, I am not required to contact Key regarding the subject matter of any such communications before engaging in such communications. I understand that my rights as set forth in this paragraph apply to this agreement, as well as any similar agreement that I have entered into, or may enter into, with Key regarding non-disclosure of information.

2. I acknowledge and agree that the duties of my position at Key may include the development of Intellectual Property, and that any Intellectual Property which I create with any of Key’s resources or assistance, in whole or in part, and which pertains to the business of Key is the property of Key. I hereby agree and I hereby assign to Key all right, title, and interest in and absolute title to such Intellectual Property, including, without limitation, copyrights, trademarks, service marks, and patents in or to (or associated with) such Intellectual Property and I agree that I will execute all patent applications and assignments thereof on Key’s behalf without additional compensation.

3.Except in the proper performance of my duties for Key, I acknowledge and agree that from the date hereof through a period of one (1) year after the termination of my employment with Key for any reason, I will not, directly or indirectly, for myself or on behalf of any other person or entity, hire or solicit or entice for employment any Key Employee, without the written consent of Key (which consent Key may grant or withhold in its discretion). “Key Employees” shall include (i) all current Key employees, and (ii) all persons who were employed by Key at any time during the six (6) month period prior to my termination from Key.

4. (a) Except in the proper performance of my duties for Key, I acknowledge and agree that from the date hereof through a period of one (1) year after the termination of my employment with Key for any reason, I will not, directly or

indirectly, for myself or on behalf of any other person or entity, call upon, solicit, or do business with any Key customer or prospective customer of Key with whom I interacted or learned of during the course of my employment at Key, without the written consent of Key (which consent Key may grant or withhold in its discretion).

(b) In the event that my employment with Key is terminated as a result of a Termination Under Limited Circumstances, the restrictions in paragraph 4(a) of this Acceptance Agreement shall become inapplicable to me; however, the restrictions in paragraphs 1, 2, and 3 of this Acceptance Agreement shall remain in full force and effect.

5. The aforementioned restrictions in paragraphs 1, 2, 3 and 4(a) shall not apply in the event that, within the 2-year period commencing on a Change of Control: (i) my employment with Key is terminated as a result of a Termination Under Limited Circumstances, or (ii) I terminate employment with Key after a relocation of my principal place of employment more than 35 miles from my principal place of employment immediately prior to the Change of Control, or after a reduction in my base salary after a Change of Control.

6. I agree that the Plan, the Award Agreement and this Acceptance Agreement will be governed by Ohio law without regard to the conflicts of laws principles, and that if any term, condition, clause or provision of the Plan, the Award Agreement or this Acceptance Agreement is determined by a Court of competent jurisdiction to be void or invalid at law, then only that term, condition, clause or provision determined to be void or invalid shall be stricken, and the remainder of the Plan, the Award Agreement and this Acceptance Agreement shall remain in full force and effect in all other aspects.

I also understand and agree that if I engage in any activity that is in violation of the Plan, the Award Agreement or this Acceptance Agreement, such conduct may cause serious damage and irreparable injury to Key, and Key at its election may terminate my employment (if I am still employed), seek monetary damages and attorney fees, and injunctive relief without the necessity of posting bond, as well as any and all other equitable relief to which it may be entitled under the law, the Plan, the Award Agreement and this Acceptance Agreement.

* * * * *

EX-10.3

EXHIBIT 10.3

RESTRICTED STOCK UNIT AWARD AGREEMENT

KeyCorp grants to the Participant named below, in accordance with the terms, and subject to the conditions, of the KeyCorp 2013 Equity Compensation Plan (the “Plan”), this Restricted Stock Unit Award Agreement (the “Award Agreement”) and the attached Acceptance Agreement, an award of the number of Restricted Stock Units (“Units” or “Award”), on the Date of Grant, each as set forth below. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan.

Each Unit represents the contingent right to receive one Common Share (rounded down to the nearest whole Common Share), subject to the terms and conditions set forth in the Plan, this Award Agreement and the Acceptance Agreement.

Name of Participant:	[Participant Name]
Number of Units:	[Shares Granted]
Date of Grant:	[Grant Date]
Vesting:	The Units shall vest in accordance with the “distribution schedule” reflected in the records of the Plan administrator and viewable on the Participant’s homescreen (the “Vesting Date” if only one such date, or if more than one such date, each a “Vesting Date”), provided that the Participant shall have remained in the continuous employ of KeyCorp and its affiliates (“Key”) through the applicable Vesting Date, except as otherwise provided herein.
Payment:	The Common Shares underlying any portion of the Award that becomes vested (including dividend equivalents as provided pursuant to Section 2 of this Award Agreement) shall be delivered within 45 days after the applicable Vesting Date, except as otherwise provided in this this Award Agreement.

The Participant must accept the Award online in accordance with the procedures established by KeyCorp and the Award administrator or this Award Agreement may be cancelled by KeyCorp, in its sole discretion. By accepting the Award in accordance with these procedures, the Participant acknowledges that:

• This Award is subject to the KeyCorp Incentive Compensation Program and Policy, as amended from time to time. The Participant understands and agrees that the Award is subject to risk adjustment in accordance with the procedures set forth in the Incentive Compensation Program and Policy. These procedures permit Key, in its sole discretion, to decrease, forfeit, or initiate a clawback, of all or any part of the Award under certain circumstances, including in the event that the Participant receives a "Does Not Meet" risk rating as part of his or her annual performance review, and/or in the event that the Participant's business unit experiences negative pre-provision net revenue (before allocated costs) or significant credit, market or operational losses. If a significant risk event occurs, whether at the individual or business level, a root cause analysis may be conducted, which may result in a risk adjustment of the Award.

• The Participant understands that as a condition to receiving the Award, the Participant must agree to be bound by and comply with the terms and conditions of the Plan, the Award Agreement and related Acceptance Agreement. As soon as the Participant accepts the Award, the terms and conditions of the Award Agreement and Acceptance Agreement will constitute a legal contract that will bind both the Participant and KeyCorp.

Additional Terms

1. Effect of Termination.

(a)    In General. Any unvested Units shall be forfeited automatically without further action or notice if the Participant ceases to be continuously employed by Key prior to any Vesting Date, except as otherwise provided in this Section 1. For purposes of this Section 1, the continuous employment of the Participant shall not be deemed to have been interrupted, and the Participant shall not be deemed to have ceased to be an employee of Key, by reason of the transfer of employment among KeyCorp and its affiliates.

(b)    Certain Terminations. Notwithstanding Section 1(a), if, prior to the Vesting Date:

(i) the Participant’s continuous employment is terminated as a result of the Participant’s death or Disability, the Participant will immediately vest in any unvested Units; or

(ii) the Participant’s continuous employment is terminated as a result of Retirement, the Participant shall, (A) for any unvested Units that were granted one year or more prior to the Participant’s effective termination date, fully vest in such Units, and (B) for any unvested Units that were granted less than one year prior to Participant’s effective termination date, immediately vest in a pro rata portion of such Units. Key may, in its sole discretion, provide that any unvested Units that would otherwise be subject to Section 1(b)(ii)(B) (i.e., vest in a pro rata portion as a result of Retirement because such Units were granted less than one year prior to Participant’s effective termination date) may instead be treated consistent with Section 1(b)(ii)(A) (i.e., fully vest); or

(iii) the Participant’s continuous employment is terminated as a result of a Voluntary Resignation on or after attaining age 55 and completion of at least 5 years of service (excluding a Retirement), the Participant shall immediately vest in a pro rata portion of such Units; or

(iv) the Participant’s continuous employment is terminated as a result of a Termination Under Limited Circumstances, subject to the Participant executing a release of claims in Key’s favor in a form agreeable to Key, the Participant will vest in any unvested Units on the scheduled Vesting Date(s); provided, however, that should Key determine, in its sole discretion, that full vesting of any unvested Units would result in the unjust enrichment of the Participant, Key may provide, instead, that the Participant will vest only in a pro rata portion of any unvested Units.

Subject to Section 11 hereof, Units vested under the provisions of Section 1(b)(i) or (iii) shall be distributed within 45 days of the termination, and Units vested under the provisions of Section 1(b)(ii) or (iv) shall be distributed within 45 days of the scheduled Vesting Date(s).

For purposes of this Award Agreement, the Participant’s “Retirement” shall mean the Participant’s Voluntary Resignation on or after attaining age 60 and completion of at least 10 years of service. The Participant’s “Termination Under Limited Circumstances” shall mean the Participant’s termination from Key under circumstances in which the Participant becomes entitled to receive: (i) a severance under the KeyCorp Separation Pay Plan as in effect at the time of the Participant’s termination, or (ii) under circumstances under which the Participant is entitled to receive salary continuation benefits under the terms and conditions of an employment separation or letter agreement with Key, including, without limitation, a Change of Control Agreement.

The pro rata vesting provided for under this Award Agreement shall be determined by multiplying the number of unvested Units as of the date of the Participant’s termination of employment by a fraction, the numerator of which shall be the number of full months of Participant’s continuous employment from the Date of Grant through the date of termination and the denominator of which shall be number of full months between the Date of Grant and latest Vesting Date.

(c)    Certain Terminations Within Two Years After a Change of Control. Subject to Section 11 hereof, if the Participant’s continuous employment is terminated within two years following the date of a Change of Control for any reason other than a Voluntary Resignation (excluding a Voluntary Resignation described in Section 1(b)(iii), above) or a Termination for Cause, any unvested Units shall vest in full and be distributed within 45 days following the Participant’s termination.

2.Dividend Equivalents. Each Unit is granted with a related dividend equivalent which is subject to the same terms and conditions as the Units. Each dividend equivalent represents the right to be credited with of any dividends paid on a Common Share between the Date of Grant and the Vesting Date of the related Unit. Dividend equivalents are deemed reinvested in Common Shares (based upon the Fair Market Value per Common Share on the date the related dividend is paid to KeyCorp shareholders), which will be delivered at the same time as the Common Shares are delivered upon vesting in the related Unit.

3.Harmful Activity. Notwithstanding any other provision of this Award Agreement to the contrary, if the Participant engages in any Harmful Activity prior to or within twelve months after the Participant’s termination of employment with Key, then the Units shall be immediately forfeited without further action or notice, and any Common Shares delivered in payment of the Award within one year prior to the Participant’s termination of employment, and any Profits realized

by the Participant from the sale of such Common Shares, shall become immediately due and payable to KeyCorp on KeyCorp’s demand. This Section 3 shall survive the termination of Participant’s employment.

4.KeyCorp’s Reservation of Rights. As a condition of receiving this Award, the Participant acknowledges and agrees that Key intends to comply with the requirements of (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act (including clawback provisions), as the same may be amended from time to time; (b) the banking regulatory agencies’ Guidance on Sound Incentive Compensation Policies; and (c) KeyCorp’s risk requirements and policies. As a condition of receiving this Award, the Participant understands and agrees that KeyCorp may, in its sole discretion, (x) decrease or cause the forfeiture of all or any part of this Award, (y) initiate a clawback of all or any part of this Award, and/or (z) demand the Participant’s repayment to KeyCorp of any Common Shares paid to the Participant under this Award, or the Profits realized from the sale of such Common Shares, if KeyCorp determines that such action is necessary or desirable.

5.Relation to Other Benefits. Any economic or other benefit to the Participant under this Award Agreement shall not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by Key and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of Key.

6. KeyCorp Stock Ownership Guidelines. If the Participant is subject to and has not met the KeyCorp Stock Ownership Guidelines, the Participant may not sell or otherwise transfer the Common Shares provided upon vesting of the Award (if any) until and unless the Participant meets the Stock Ownership Guidelines or terminates employment with Key; provided, however, that notwithstanding the foregoing, the Participant may sell the number of Common Shares necessary to satisfy any withholding tax obligation that may arise in connection with the vesting of this Award even if the Participant has not met the Stock Ownership Guidelines.

7.Taxes and Withholding. To the extent that Key is required to withhold any federal, state, local or other taxes in connection with the delivery of Common Shares under this Award Agreement, then Key shall retain a number of Common Shares otherwise deliverable hereunder with a value equal to the required withholding (based on the Fair Market Value of the Common Shares on the date of delivery). To the extent that Key is required to withhold any federal, state, local or other taxes at any time other than upon delivery of Common Shares under this Award Agreement, then Key shall have the right in its sole discretion to (a) require the Participant to pay or provide for payment of the required tax withholding, (b) retain a number of Common Shares that otherwise would remain subject to this Award with a value equal to the required withholding amount (determined based on the Fair Market Value of the Common Shares on the date the applicable taxes are required to be withheld) and make a corresponding reduction in the number of Units subject to this Award, or (c) deduct the required tax withholding from any other compensation payable in cash to the Participant. To the extent that withholding taxes are satisfied by the retention of Common Shares, the value of the Common Shares so retained shall not exceed the amount of taxes required to be withheld based on the maximum statutory tax rates in the applicable taxing jurisdictions. Further, to the extent that this Award constitutes a deferral of compensation subject to Section 409A of the Code, any retention of Common Shares pursuant to clause (b) of the immediately preceding sentence to satisfy tax withholding requirements at any time other than at the time of delivery of Common Shares shall be effected only as permitted pursuant to Treasury Regulations Sections 1.409A-3(j)(4)(vi) and 1.409A-3(j)(4)(xi), as applicable.

8.Entire Agreement; Amendments. This Award Agreement, along with the Plan and the related Acceptance Agreement, contains the entire agreement and understanding of the parties with respect to the subject matter contained therein, and supersedes all prior written or oral communications, representations and negotiations in respect thereto. KeyCorp may modify or amend this Award Agreement at any time upon written notice to the Participant, provided that KeyCorp may not amend this Award Agreement in a manner adverse to the interests of the Participant without the Participant’s consent. In the event of any inconsistency between the provisions of this Award Agreement or the related Acceptance Agreement, on the one hand, and the Plan, on the other, the Plan shall govern.

9.Administration. KeyCorp shall have the right, in accordance with the Plan, to determine any questions which arise in connection with the Award. All such determinations and decisions shall be final, conclusive and binding on all persons, including Key, the Participant and the Participant’s estate and beneficiaries.

10.Successors and Assigns. Without limiting Section 14.1 of the Plan, the provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of KeyCorp.

11. Compliance with Section 409A of the Internal Revenue Code. To the extent applicable, it is intended that this Award comply with the provisions of Section 409A of the Code (“Section 409A”). The Award shall accordingly be administered in a manner consistent with this intent, and any provision that would cause the Award to fail to satisfy Section 409A shall have no force and effect until amended to comply with Section 409A. In particular, to the extent

that the Participant’s right to receive payment under the Award becomes vested and the event triggering the Participant’s right to payment is the Participant’s termination of employment, then notwithstanding anything herein to the contrary, payment will be made to the Participant, to the extent necessary to comply with Section 409A, on the earlier of (a) the Participant’s “separation from service” (determined in accordance with Section 409A); provided, however, that if the Participant is a “specified employee” (determined in accordance with KeyCorp’s policies), the date of payment shall not occur on the otherwise scheduled payment date, but shall instead be paid, without interest, on the tenth business day of the seventh month following the date of the Participant’s separation from service with Key. Further, but solely to the extent necessary to comply with Section 409A, a transaction shall be considered a Change of Control only if it also qualifies as a “change in the ownership” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of KeyCorp within the meaning of Section 409A, and the Participant’s “Disability” will be treated as such only if the Participant would also be considered “disabled” within the meaning of Section 409A.

ACCEPTANCE AGREEMENT

I acknowledge receipt of the attached Award and in consideration thereof, I accept such Award subject to the terms and conditions of the Plan, the Award Agreement, and the restrictions that are set forth in this Acceptance Agreement.

I also understand and agree that the restrictions set forth in this Acceptance Agreement are (i) in addition to, and do not in any way limit or vary the restrictions that are contained in any other agreement, plan, policy, or practice that are applicable to me as an employee of Key, and (ii) binding upon me regardless of whether I vest, sell, transfer, pledge, hypothecate, or otherwise dispose of the Award or any of the Common Shares to be paid to me upon vesting in the Award.

1. I recognize the importance of preserving the confidentiality of Non-Public Information of Key, and I acknowledge and agree that: (a) during my employment with Key, I will acquire, reproduce, and use such Non-Public Information only to the extent reasonably necessary for the proper performance of my duties; (b) both during and after my employment with Key, I will not use, publish, sell, trade or otherwise disclose such Non-Public Information; and (c) upon the termination of my employment with Key, I will immediately return to Key all documents, data, information and equipment in my possession or to which I have access that may contain such Non-Public Information. I also agree to enter into and to execute nondisclosure agreements in favor of Key and others doing business with Key with whom Key has a confidential relationship.

I acknowledge that Key has informed me that I will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of Non-Public Information that: (1) is made (a) in confidence to a Federal, state or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Disclosure of Non-Public Information to attorneys, made under seal, or pursuant to court order is also protected in certain circumstances under the federal Defend Trade Secrets Act. This provision does not limit my right to respond accurately and fully to any question, inquiry or request for information when required by legal process or from initiating communications directly with, or responding to any inquiry from, or providing testimony before, any self-regulatory organization or state or federal regulatory authority, regarding Key, my employment, or this provision. Furthermore, I am not required to contact Key regarding the subject matter of any such communications before engaging in such communications. I understand that my rights as set forth in this paragraph apply to this agreement, as well as any similar agreement that I have entered into, or may enter into, with Key regarding non-disclosure of information.

2. I acknowledge and agree that the duties of my position at Key may include the development of Intellectual Property, and that any Intellectual Property which I create with any of Key’s resources or assistance, in whole or in part, and which pertains to the business of Key is the property of Key. I hereby agree and I hereby assign to Key all right, title, and interest in and absolute title to such Intellectual Property, including, without limitation, copyrights, trademarks, service marks, and patents in or to (or associated with) such Intellectual Property and I agree that I will execute all patent applications and assignments thereof on Key’s behalf without additional compensation.

3.Except in the proper performance of my duties for Key, I acknowledge and agree that from the date hereof through a period of one (1) year after the termination of my employment with Key for any reason, I will not, directly or indirectly, for myself or on behalf of any other person or entity, hire or solicit or entice for employment any Key Employee, without the written consent of Key (which consent Key may grant or withhold in its discretion). “Key Employees” shall include (i) all current Key employees, and (ii) all persons who were employed by Key at any time during the six (6) month period prior to my termination from Key.

4. (a) Except in the proper performance of my duties for Key, I acknowledge and agree that from the date hereof through a period of one (1) year after the termination of my employment with Key for any reason, I will not, directly or indirectly, for myself or on behalf of any other person or entity, call upon, solicit, or do business with any Key customer or prospective customer of Key with whom I interacted or learned of during the course of my employment at Key, without the written consent of Key (which consent Key may grant or withhold in its discretion).

(b) In the event that my employment with Key is terminated as a result of a Termination Under Limited Circumstances, the restrictions in paragraph 4(a) of this Acceptance Agreement shall become inapplicable to me; however, the restrictions in paragraphs 1, 2, and 3 of this Acceptance Agreement shall remain in full force and effect.

5. The aforementioned restrictions in paragraphs 1, 2, 3 and 4(a) shall not apply in the event that, within the 2-year period commencing on a Change of Control: (i) my employment with Key is terminated as a result of a Termination Under Limited Circumstances, or (ii) I terminate employment with Key after a relocation of my principal place of employment more than 35 miles from my principal place of employment immediately prior to the Change of Control, or after a reduction in my base salary after a Change of Control.

6. I agree that the Plan, the Award Agreement and this Acceptance Agreement will be governed by Ohio law without regard to the conflicts of laws principles, and that if any term, condition, clause or provision of the Plan, the Award Agreement or this Acceptance Agreement is determined by a Court of competent jurisdiction to be void or invalid at law, then only that term, condition, clause or provision determined to be void or invalid shall be stricken, and the remainder of the Plan, the Award Agreement and this Acceptance Agreement shall remain in full force and effect in all other aspects.

I also understand and agree that if I engage in any activity that is in violation of the Plan, the Award Agreement or this Acceptance Agreement, such conduct may cause serious damage and irreparable injury to Key, and Key at its election may terminate my employment (if I am still employed), seek monetary damages and attorney fees, and injunctive relief without the necessity of posting bond, as well as any and all other equitable relief to which it may be entitled under the law, the Plan, the Award Agreement and this Acceptance Agreement.

* * * * *

EX-15

EXHIBIT 15

ACKNOWLEDGMENT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

November 1, 2018

The Board of Directors and Shareholders of KeyCorp

We are aware of the incorporation by reference in the following Registration Statements (including all amendments thereto) of KeyCorp:

Form S-3 No. 333-55959        

Form S-3 No. 333-59175        

Form S-3 No. 333-64601        

Form S-3 No. 333-76619        

Form S-3 No. 333-151608        

Form S-3 No. 333-174865        

Form S-3 No. 333-196641

Form S-3 No. 333-218629        

Form S-8 No. 333-49609        

Form S-8 No. 333-70669                

Form S-8 No. 333-70775        

Form S-8 No. 333-72189        

Form S-8 No. 333-92881        

Form S-8 No. 333-45320        

Form S-8 No. 333-45322        

Form S-8 No. 333-99493        

Form S-8 No. 333-107074        

Form S-8 No. 333-107075        

Form S-8 No. 333-107076                

Form S-8 No. 333-112225        

Form S-8 No. 333-116120        

Form S-8 No. 333-167093        

Form S-8 No. 333-188703

Form S-8 No. 333-208272

of our review report dated November 1, 2018 relating to the unaudited consolidated interim financial statements of KeyCorp that are included in its Form 10-Q for the quarter ended September 30, 2018.

Ernst & Young

Cleveland, Ohio

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Beth E. Mooney, certify that:

1. I have reviewed this quarterly report on Form 10-Q of KeyCorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2018
	Beth E. Mooney
	Chairman, Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Donald R. Kimble, certify that:

1. I have reviewed this quarterly report on Form 10-Q of KeyCorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2018
	Donald R. Kimble
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. 1350, the undersigned officer of KeyCorp (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2018
	Beth E. Mooney
	Chairman, Chief Executive Officer and President

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. 1350, the undersigned officer of KeyCorp (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2018
	Donald R. Kimble
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 30, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	KEYCORP /NEW/
Trading Symbol	KEY
Entity Central Index Key	0000091576
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		1,034,530,422

XML

Consolidated Balance Sheets - USD ($) $ in Millions		Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and due from banks		$ 319	$ 671
Short-term investments		2,272	4,447
Trading account assets		958	836
Securities available for sale		18,341	18,139
Held-to-maturity securities (fair value: $11,261 and $11,565)		11,869	11,830
Other investments		681	726
Loans, net of unearned income of $674 and $736		89,268	86,405
Less: Allowance for loan and lease losses		(887)	(877)
Net loans		88,381	85,528
Loans held for sale	[1]	1,618	1,107
Premises and equipment		891	930
Operating lease assets		930	821
Goodwill		2,516	2,538
Other intangible assets		338	416
Corporate-owned life insurance		4,156	4,132
Accrued income and other assets		4,378	4,237
Discontinued assets		1,157	1,340
Total assets		138,805	137,698
Deposits in domestic offices:
NOW and money market deposit accounts		57,219	53,627
Savings deposits		4,948	6,296
Certificates of deposit ($100,000 or more)		8,453	6,849
Other time deposits		5,130	4,798
Total interest-bearing deposits		75,750	71,570
Noninterest-bearing deposits		30,030	33,665
Total deposits		105,780	105,235
Federal funds purchased and securities sold under repurchase agreements		1,285	377
Bank notes and other short-term borrowings		637	634
Accrued expense and other liabilities		2,044	2,094
Long-term debt		13,849	14,333
Total liabilities		123,595	122,673
EQUITY
Preferred stock		1,450	1,025
Common Shares, $1 par value; authorized 1,400,000,000 shares; issued 1,256,702,081, and 1,256,702,081 shares		1,257	1,257
Capital surplus		6,315	6,335
Retained earnings		11,262	10,335
Treasury stock, at cost (222,414,857 and 187,617,832 shares)		(3,910)	(3,150)
Accumulated other comprehensive income (loss)		(1,166)	(779)
Key shareholders’ equity		15,208	15,023
Noncontrolling interests		2	2
Total equity		15,210	15,025
Total liabilities and equity		$ 138,805	$ 137,698

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $87 million at September 30, 2018, and $71 million at December 31, 2017.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Held-to-maturity securities, fair value	$ 11,261,000,000	$ 11,565,000,000
Unearned income on loans	674,000,000	736,000,000
Loans held for sale	0	0
Aggregate amount of certificates of deposit, denominations	$ 100,000,000,000	$ 100,000,000,000
Common shares, par value (in usd per share)	$ 1	$ 1
Common shares, shares authorized (in shares)	1,400,000,000	1,400,000,000
Common shares, shares issued (in shares)	1,256,702,081	1,256,702,081
Treasury stock, shares (in shares)	222,414,857	187,617,832
Residential Mortgage [Member]
Loans held for sale	$ 87,000,000	$ 71,000,000

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
INTEREST INCOME
Loans		$ 1,025	$ 928	$ 2,965	$ 2,753
Loans held for sale		12	17	40	39
Securities available for sale		102	91	294	276
Held-to-maturity securities		72	55	213	161
Trading account assets		7	7	21	21
Short-term investments		15	6	31	14
Other investments		6	5	17	12
Total interest income		1,239	1,109	3,581	3,276
INTEREST EXPENSE
Deposits		140	72	343	196
Federal funds purchased and securities sold under repurchase agreements		1	0	10	1
Bank notes and other short-term borrowings		4	3	17	12
Long-term debt		108	86	302	228
Total interest expense		253	161	672	437
NET INTEREST INCOME		986	948	2,909	2,839
Provision for credit losses		62	51	187	180
Net interest income after provision for credit losses		924	897	2,722	2,659
NONINTEREST INCOME
Trust and investment services income		117	135	378	404
Investment banking and debt placement fees		166	141	464	403
Service charges on deposit accounts		85	91	265	268
Operating lease income and other leasing gains		35	16	61	69
Corporate services income		52	54	175	163
Cards and payments income		69	75	202	210
Corporate-owned life insurance income		34	31	98	94
Consumer mortgage income		9	7	23	19
Mortgage servicing fees		19	21	61	54
Other income	[1]	23	21	143	138
Total noninterest income		609	592	1,870	1,822
NONINTEREST EXPENSE
Personnel		553	559	1,733	1,669
Net occupancy		76	74	233	239
Computer processing		52	56	155	171
Business services and professional fees		43	49	135	140
Equipment		27	29	79	83
Operating lease expense		31	24	88	64
Marketing		26	34	77	85
FDIC assessment		21	21	63	62
Intangible asset amortization		23	25	77	69
OREO expense, net		3	3	5	8
Other expense		109	118	318	410
Total noninterest expense		964	992	2,963	3,000
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		569	497	1,629	1,481
Income taxes		87	134	252	386
INCOME (LOSS) FROM CONTINUING OPERATIONS		482	363	1,377	1,095
Income (loss) from discontinued operations		0	1	5	6
NET INCOME (LOSS)		482	364	1,382	1,101
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	1
NET INCOME (LOSS) ATTRIBUTABLE TO KEY		482	364	1,382	1,100
Income (loss) from continuing operations attributable to Key common shareholders		468	349	1,334	1,038
Net income (loss) attributable to Key common shareholders		$ 468	$ 350	$ 1,339	$ 1,044
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.45	$ 0.32	$ 1.28	$ 0.96
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.45	0.32	1.27	0.97
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		0.45	0.32	1.26	0.95
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.45	0.32	1.26	0.96
Cash dividends declared per common share (in usd per share)		$ 0.17	$ 0.095	$ 0.395	$ 0.275
Weighted-average common shares outstanding (in shares)		1,036,479	1,073,390	1,048,397	1,075,296
Effect of common share options and other stock awards (in shares)		13,497	15,451	14,419	16,359
Weighted-average common shares and potential common shares outstanding (in shares)	[3]	1,049,976	1,088,841	1,062,816	1,091,655

[1] For the three and nine months ended September 30, 2018, net securities gains totaled less than $1 million. For the three and nine months ended September 30, 2017, net securities gains totaled $1 million. For the three and nine months ended September 30, 2018, and September 30, 2017, we did not have any impairment losses related to securities.

[2] EPS may not foot due to rounding.

[3] Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.

XML

Consolidated Statements of Income (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Net securities gains (losses) (less than)	$ 0	$ 1,000,000	$ 0	$ 1,000,000
Impaired losses related to securities	$ 0	$ 0	$ 0	$ 0

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 482	$ 364	$ 1,382	$ 1,101
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($22), $0, ($89), and $24	(72)	0	(288)	40
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($5), ($6), ($29), and ($16)	(12)	(10)	(92)	(27)
Foreign currency translation adjustments, net of income taxes of $0, $4, $3, and $8	1	7	(15)	14
Net pension and postretirement benefit costs, net of income taxes of $1, $1, $3, and $4	2	3	8	8
Total other comprehensive income (loss), net of tax	(81)	0	(387)	35
Comprehensive income (loss)	401	364	995	1,136
Less: Comprehensive income attributable to noncontrolling interests	0	0	0	1
Comprehensive income (loss) attributable to Key	$ 401	$ 364	$ 995	$ 1,135

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Income taxes effect on net unrealized (losses) gains on securities available for sale	$ (22)	$ 0	$ (89)	$ 24
Income taxes effect on net unrealized gains (losses) on derivative financial instruments	(5)	(6)	(29)	(16)
Income taxes effect on foreign currency translation adjustments	0	4	3	8
Income taxes effect on net pension and postretirement benefit costs	$ 1	$ 1	$ 3	$ 4

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Consolidated Statements of Changes in Equity - USD ($) $ in Millions		Total	Series D Preferred Stock [Member]	Series E Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Retained Earnings [Member] Series A Preferred Stock [Member]	Retained Earnings [Member] Series C Preferred Stock [Member]	Retained Earnings [Member] Series D Preferred Stock [Member]	Retained Earnings [Member] Series E Preferred Stock [Member]	Treasury Stock, at Cost [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interests [Member]
Beginning Balance, Preferred Shares (in shares) at Dec. 31, 2016					17,421,000
Beginning Balance, Common Shares (in shares) at Dec. 31, 2016						1,079,314,000
Beginning Balance at Dec. 31, 2016					$ 1,665	$ 1,257	$ 6,385	$ 9,378					$ (2,904)	$ (541)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		$ 1,101						1,100							1
Other comprehensive income (loss)		35												35
Deferred compensation							11
Cash dividends declared on common shares								(296)
Cash dividends declared on preferred stock									$ (6)	$ (7)	$ (20)	$ (24)
Open market common share repurchases (in shares)						(25,564,000)
Open market Common Share repurchases													(466)
Employee equity compensation program common share repurchase (in shares)						(3,479,000)
Employee equity compensation program Common Share repurchases													(65)
Series A Preferred Stock exchanged for common shares (in shares)					2,900,000	20,568,000
Series A Preferred Stock exchanged for common shares					$ (290)		(49)						338
Redemption of Series C Preferred Stock (in shares)					(14,000,000)
Redemption of Series C Preferred Stock		350			$ (350)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						8,200,000
Series A Preferred Stock exchanged for Common Shares							(37)						135
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2017					521,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2017						1,079,039,000
Ending Balance at Sep. 30, 2017					$ 1,025	$ 1,257	6,310	10,125					(2,962)	(506)	1
Beginning Balance, Preferred Shares (in shares) at Jun. 30, 2017					521,000
Beginning Balance, Common Shares (in shares) at Jun. 30, 2017						1,092,739,000
Beginning Balance at Jun. 30, 2017					$ 1,025	$ 1,257	6,310	9,878					(2,711)	(506)	2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		364						364							0
Other comprehensive income (loss)		0												0
Deferred compensation							4
Cash dividends declared on common shares								(102)
Cash dividends declared on preferred stock											(7)	(8)
Open market common share repurchases (in shares)						(14,962,000)
Open market Common Share repurchases													(270)
Employee equity compensation program common share repurchase (in shares)						(336,000)
Employee equity compensation program Common Share repurchases													(6)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						1,598,000
Series A Preferred Stock exchanged for Common Shares							(4)						25
Net contribution from (distribution to) noncontrolling interests															(1)
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2017					521,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2017						1,079,039,000
Ending Balance at Sep. 30, 2017					$ 1,025	$ 1,257	6,310	10,125					(2,962)	(506)	1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect from changes in accounting principle	[1]							(2)
Beginning Balance, Preferred Shares (in shares) at Dec. 31, 2017					521,000
Beginning Balance, Common Shares (in shares) at Dec. 31, 2017						1,069,084,000
Beginning Balance at Dec. 31, 2017		15,025			$ 1,025	$ 1,257	6,335	10,335					(3,150)	(779)	2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other reclassification of AOCI		(5)						5
Net income (loss)		1,382						1,382							0
Other comprehensive income (loss)		(387)												(387)
Deferred compensation							16
Cash dividends declared on common shares								(415)
Cash dividends declared on preferred stock											(20)	(23)
Issuance of Series F Preferred Stock (in shares)					425,000
Issuance of Series F Preferred Stock					$ 425		(13)
Open market common share repurchases (in shares)						(38,806,000)
Open market Common Share repurchases													(820)
Employee equity compensation program common share repurchase (in shares)						(2,271,000)
Employee equity compensation program Common Share repurchases													(47)
Redemption of Series C Preferred Stock		0
Common shares reissued (returned) for stock options and other employee benefit plans, shares						6,280,000
Series A Preferred Stock exchanged for Common Shares							(23)						107
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2018			21,000	500,000	946,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2018						1,034,287,000
Ending Balance at Sep. 30, 2018		15,210			$ 1,450	$ 1,257	6,315	11,262					(3,910)	(1,166)	2
Beginning Balance, Preferred Shares (in shares) at Jun. 30, 2018					521,000
Beginning Balance, Common Shares (in shares) at Jun. 30, 2018						1,058,944,000
Beginning Balance at Jun. 30, 2018					$ 1,025	$ 1,257	6,315	10,970					(3,382)	(1,085)	2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other reclassification of AOCI		0
Net income (loss)		482						482							0
Other comprehensive income (loss)		(81)												(81)
Deferred compensation							4
Cash dividends declared on common shares								(176)
Cash dividends declared on preferred stock											$ (7)	$ (7)
Issuance of Series F Preferred Stock (in shares)					425,000
Issuance of Series F Preferred Stock					$ 425		(13)
Open market common share repurchases (in shares)						(25,368,000)
Open market Common Share repurchases													(541)
Employee equity compensation program common share repurchase (in shares)						(50,000)
Employee equity compensation program Common Share repurchases													(1)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						761,000
Series A Preferred Stock exchanged for Common Shares							9						14
Net contribution from (distribution to) noncontrolling interests															0
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2018			21,000	500,000	946,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2018						1,034,287,000
Ending Balance at Sep. 30, 2018		$ 15,210			$ 1,450	$ 1,257	$ 6,315	$ 11,262					$ (3,910)	$ (1,166)	$ 2

[1] Includes the impact of implementing ASU 2014-09, ASU 2016-01, and ASU 2017-12.

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Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Cash dividends declared on common shares (in usd per share)	$ 0.17	$ 0.095	$ 0.395	$ 0.275
Series A Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)				1.9375
Series C Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)				0.539063
Series D Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	12.50	12.50	37.50	37.50
Series E Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	$ 0.382813	$ 0.382813	$ 1.148439	$ 1.161199

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
OPERATING ACTIVITIES
Net income (loss)	$ 1,382	$ 1,101
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	187	180
Depreciation and amortization expense, net	290	301
Accretion of acquired loans	69	171
Increase in cash surrender value of corporate-owned life insurance	(84)	(85)
Stock-based compensation expense	78	74
FDIC reimbursement (payments), net of FDIC expense	2	(2)
Deferred income taxes (benefit)	103	134
Proceeds from sales of loans held for sale	8,234	8,109
Originations of loans held for sale, net of repayments	(8,631)	(8,287)
Net losses (gains) on sales of loans held for sale	(130)	(111)
Net losses (gains) and writedown on OREO	(2)	3
Net losses (gains) on leased equipment	(34)	2
Net securities losses (gains)	0	(1)
Net losses (gains) on sales of fixed assets	8	16
Net decrease (increase) in trading account assets	(122)	84
Gain on sale of KIBS	(83)	0
Other operating activities, net	(473)	(610)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	794	1,079
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	0	(74)
Proceeds from sale of KIBS	124	0
Net decrease (increase) in short-term investments, excluding acquisitions	2,175	(1,218)
Purchases of securities available for sale	(3,058)	(2,725)
Proceeds from sales of securities available for sale	0	914
Proceeds from prepayments and maturities of securities available for sale	2,456	3,038
Proceeds from prepayments and maturities of held-to-maturity securities	1,206	1,350
Purchases of held-to-maturity securities	(1,242)	(1,395)
Purchases of other investments	(21)	(78)
Proceeds from sales of other investments	36	99
Proceeds from prepayments and maturities of other investments	37	2
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(3,249)	(896)
Proceeds from sales of portfolio loans	143	129
Proceeds from corporate-owned life insurance	60	40
Purchases of premises, equipment, and software	(73)	(56)
Proceeds from sales of premises and equipment	1	0
Proceeds from sales of OREO	22	37
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(1,383)	(833)
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	545	(641)
Net increase (decrease) in short-term borrowings	911	(1,322)
Net proceeds from issuance of long-term debt	1,802	2,850
Payments on long-term debt	(2,127)	(43)
Issuance of preferred shares	412	0
Open market Common Share repurchases	(820)	(466)
Employee equity compensation program Common Share repurchases	(47)	(65)
Redemption of Preferred Stock Series C	0	(350)
Net proceeds from reissuance of Common Shares	19	29
Cash dividends paid	(458)	(353)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	237	(361)
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	(352)	(115)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	671	677
CASH AND DUE FROM BANKS AT END OF PERIOD	319	562
Additional disclosures relative to cash flows:
Interest paid	632	442
Income taxes paid (refunded)	22	3
Noncash items:
Reduction of secured borrowing and related collateral	18	33
Loans transferred to portfolio from held for sale	21	93
Loans transferred to held for sale from portfolio	7	41
Loans transferred to OREO	$ 19	$ 29

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Basis of Presentation and Accounting Policies

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Accounting Policies

1. Basis of Presentation and Accounting Policies

The consolidated financial statements include the accounts of KeyCorp and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Some previously reported amounts have been reclassified to conform to current reporting practices.

The consolidated financial statements include any voting rights entities in which we have a controlling financial interest. In accordance with the applicable accounting guidance for consolidations, we consolidate a VIE if we have: (i) a variable interest in the entity; (ii) the power to direct activities of the VIE that most significantly affect the entity’s economic performance; and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary). Variable interests can include equity interests, subordinated debt, derivative contracts, leases, service agreements, guarantees, standby letters of credit, loan commitments, and other contracts, agreements, and financial instruments. See Note 9 (“Variable Interest Entities”) for information on our involvement with VIEs.

We use the equity method to account for unconsolidated investments in voting rights entities or VIEs if we have significant influence over the entity’s operating and financing decisions (usually defined as a voting or economic interest of 20% to 50%, but not controlling). Unconsolidated investments in voting rights entities or VIEs in which we have a voting or economic interest of less than 20% are carried at the cost measurement alternative or at fair value. Investments held by our registered broker-dealer and investment company subsidiaries (principal investing entities and Real Estate Capital line of business) are carried at fair value.

We believe that the unaudited consolidated interim financial statements reflect all adjustments of a normal recurring nature and disclosures that are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year. The interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our 2017 Form 10-K.

In preparing these financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all shareholders and other financial statement users or filed with the SEC.

Accounting Guidance Adopted in 2018

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only) An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date	The ASU amends disclosure requirements related to fair value measurements. Specifically, entities are no longer required to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, or qualitatively disclose the valuation process for Level 3 fair value measurements. The updated guidance requires disclosure of the changes in unrealized gains and losses for the period included in Other Comprehensive Income for recurring Level 3 fair value measurements. Entities also will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The additional provisions of the guidance should be adopted prospectively, while the eliminated requirements should be adopted retrospectively.	Key has early adopted the disclosures no longer required by the guidance as of September 30, 2018, and anticipates early adopting the additional provisions of the standard in the first quarter of 2019. The adoption of this standard will not result in significant changes to Key’s disclosures and there will be no effect to our financial condition or results of operations.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2015-14, Deferral of Effective Date ASU 2016-08, Principal versus Agent Considerations ASU 2016-10, Identifying Performance Obligations and Licensing ASU 2016-11, Rescission of SEC Guidance because of Accounting Standard Updates 2014-09 and 2014-16 pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ASU 2016-12, Narrow-scope Improvements and Practical Expedients ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers	January 1, 2018	These ASUs supersede the revenue recognition guidance in ASC 605, Revenue Recognition, and most industry-specific guidance. The core principle of these ASUs is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. These ASUs can be implemented using a retrospective method, or a cumulative-effect approach to new contracts and existing contracts with performance obligations as of the effective date.	On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective method for those contracts which were not completed as of that date. Results for reporting periods beginning January 1, 2018, are presented under ASC 606. As allowed under the new guidance, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As a result of adopting ASC 606, we changed the timing of recognition for revenues related to insurance commissions, securities underwriting, and deposit account maintenance fees, however, those changes did not have a material impact on our consolidated financial statements, results of operations, equity, or cash flows as of the adoption date or for the nine months ended September 30, 2018. The presentation of underwriting costs and reimbursed out-of-pocket expenses related to underwriting and M&A advisory services was changed from net to gross within the income statement as Key acts as the principal in the transactions. Securities underwriting revenue is recorded within "investment banking and debt placement fees" and underwriting costs and reimbursed out-of-pocket expenses within "other expense" on the income statement. Additionally, because Key acts as an agent, certain credit and debit card reward costs and certain card network costs were changed from a gross presentation to net within "cards and payment income" on the income statement. Credit and debit card reward costs and card network costs were recorded as "other expense" on the income statement in prior periods. These changes in presentation did not have a material impact on our consolidated financial statements for the nine months ended September 30, 2018. ASC 606 requires quantitative disclosure of the allocation of the transaction price to the remaining performance obligations when those amounts are expected to be recognized as revenue. However, the standard provides exemptions from this disclosure for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services provided. Most of our revenue subject to ASC 606 fits into one of these exemptions, or is immaterial. We elected to use the optional exemption to not disclose the aggregate amount of the transaction price to remaining performance obligations.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	January 1, 2018	The ASU amends ASC Topic 815, Derivatives and Hedging, to simplify the requirements for hedge accounting and facilitate financial reporting that more closely aligns with an entity’s risk management activities. Key amendments include: eliminating the requirement to separately measure and report hedge ineffectiveness, requiring changes in the value of the hedging instrument to be presented in the same income statement line as the earnings effect of the hedged item, and the ability to measure the hedged item based on the benchmark interest rate component of the total contractual coupon for fair value hedges. Additional disclosures are also required for reporting periods subsequent to the date of adoption. The guidance should be implemented on a modified retrospective basis to existing hedge relationships as of the adoption date.	On January 1, 2018, we adopted this ASU using a modified retrospective basis. Accordingly, our financial statements for the quarter ended September 30, 2018, include an immaterial cumulative-effect adjustment to decrease opening retained earnings to reflect the application of the new guidance as of January 1, 2018. The primary impact to Key at adoption was the election to measure the change in fair value of hedged items in fair value hedges on the basis of the benchmark interest rate component of contractual coupon cash flows. This change has resulted in a reduction of hedge ineffectiveness for impacted fair value hedges. Instruments designated as hedges are recorded at fair value and included in “accrued income and other assets” or “accrued expense and other liabilities” on the balance sheet. Under the revised guidance, the change in the fair value of an instrument designated as a fair value hedge is recorded in earnings at the same time and in the same income statement line as the offsetting change in the fair value of the hedged item. For cash flow hedges, the change in the fair value of an instrument designated as a cash flow hedge is initially recorded in AOCI on the balance sheet. This amount is subsequently reclassified into income when the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	January 1, 2018	The ASU amends ASC Topic 825, Financial Instruments-Overall, and requires equity investments, except those accounted for under the equity method of accounting or consolidated, to be measured at fair value with changes recognized in net income. If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost and changes the presentation of financial assets and financial liabilities on the balance sheet or in the footnotes. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in the fair value of a liability resulting from credit risk to be presented in OCI. With the exception of disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	January 1, 2018	The ASU amends ASC Topic 230, Statement of Cash Flows, and clarifies how cash receipts and cash payments in certain transactions should be presented and classified in the statement of cash flows. These specific transactions include, but are not limited to, debt prepayment or extinguishment costs, contingent considerations made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions from equity method investees. This guidance also clarifies that in instances of cash flows with multiple aspects that cannot be separately identified, classification should be based on the activity that is likely to be the predominant source of or use of cash flow. The guidance should be implemented using a retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-01, Clarifying the Definition of a Business	January 1, 2018	The ASU amends Topic 805, Business Combinations, and clarifies the definition of a business and removes the requirement for a market participant to consider whether it could replace missing elements in an integrated set of assets and activities. The guidance states that if substantially all of the fair value of the assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance should be implemented using a prospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-05, Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets	January 1, 2018	The ASU amends ASC Topic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets to clarify the scope of the Topic by clarifying the definition of the term "in substance nonfinancial asset" and also adding guidance for partial sales of nonfinancial assets. Under the new guidance, an entity will derecognize a nonfinancial asset when it does not have or ceases to have a controlling interest in the legal entity that holds the asset and when control of the asset has transferred in accordance with ASC 606. The ASU can be adopted on a retrospective or modified retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	January 1, 2018	The ASU amends ASC Topic 715, Compensation - Retirement Benefits, and requires service costs to be included in the same line item as certain other compensation costs related to services rendered by employees. We record compensation costs under personnel expense on the income statement. Other elements of net benefit cost should be presented separately. The guidance should be implemented on a retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-09, Scope of Modification Accounting	January 1, 2018	The ASU amends ASC Topic 718, Compensation - Stock Compensation, and clarifies when changes to terms and conditions for share-based payment awards should be accounted for as modifications. Under the new guidance, entities should apply the modification guidance unless the fair value of the modified award is the same as the fair value of the original award immediately before modification, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before modification, and the classification of the modified award (as equity or liability instrument) is the same as the classification of the original award immediately before modification. The guidance should be applied on a prospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Common Share

2. Earnings Per Common Share

Basic earnings per share is the amount of earnings (adjusted for dividends declared on our preferred stock) available to each Common Share outstanding during the reporting periods. Diluted earnings per share is the amount of earnings available to each Common Share outstanding during the reporting periods adjusted to include the effects of potentially dilutive Common Shares. Potentially dilutive Common Shares include stock options and other stock-based awards. Potentially dilutive Common Shares are excluded from the computation of diluted earnings per share in the periods where the effect would be antidilutive. 

Our basic and diluted earnings per Common Share are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2018		2017		2018		2017
EARNINGS
Income (loss) from continuing operations	$	482	$	363	$	1,377	$	1,095
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		1
Income (loss) from continuing operations attributable to Key	482		363		1,377		1,094
Less: Dividends on Preferred Stock	14		14		43		56
Income (loss) from continuing operations attributable to Key common shareholders	468		349		1,334		1,038
Income (loss) from discontinued operations, net of taxes	—		1		5		6
Net income (loss) attributable to Key common shareholders	$	468	$	350	$	1,339	$	1,044
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	1,036,479		1,073,390		1,048,397		1,075,296
Effect of Common Share options and other stock awards	13,497		15,451		14,419		16,359
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	1,049,976		1,088,841		1,062,816		1,091,655
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.45	$	.32	$	1.28	$	.96
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.45		.32		1.27		.97
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.45	$	.32	$	1.26	$	.95
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.45		.32		1.26		.96

(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.

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Loan Portfolio

9 Months Ended

Sep. 30, 2018

Loans Receivables [Abstract]

Loan Portfolio

3. Loan Portfolio

in millions	September 30, 2018		December 31, 2017
Commercial and industrial (a)	$	45,023	$	41,859
Commercial real estate:
Commercial mortgage	14,716		14,088
Construction	1,763		1,960
Total commercial real estate loans	16,479		16,048
Commercial lease financing (b)	4,470		4,826
Total commercial loans	65,972		62,733
Residential — prime loans:
Real estate — residential mortgage	5,497		5,483
Home equity loans	11,339		12,028
Total residential — prime loans	16,836		17,511
Consumer direct loans	1,807		1,794
Credit cards	1,098		1,106
Consumer indirect loans	3,555		3,261
Total consumer loans	23,296		23,672
Total loans (c)	$	89,268	$	86,405

(a) Loan balances include $129 million and $119 million of commercial credit card balances at September 30, 2018, and December 31, 2017, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $12 million and $24 million at September 30, 2018, and December 31, 2017, 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 174 of our 2017 Form 10-K.

(c)

Total loans exclude loans of $1.1 billion at September 30, 2018, and $1.3 billion at December 31, 2017, related to the discontinued operations of the education lending business.

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Asset Quality

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Asset Quality

4. Asset Quality

We assess the credit quality of the loan portfolio by monitoring net credit losses, levels of nonperforming assets, delinquencies, and credit quality ratings as defined by management.

Credit Quality Indicators

The prevalent risk characteristic for both commercial and consumer loans is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Evaluation of this risk is stratified and monitored by the loan risk rating grades assigned for the commercial loan portfolios and the refreshed FICO score assigned for the consumer loan portfolios.

Most extensions of credit are subject to loan grading or scoring. Loan grades are assigned at the time of origination, verified by credit risk management, and periodically re-evaluated thereafter. This risk rating methodology blends our judgment with quantitative modeling. Commercial loans generally are assigned two internal risk ratings. The first rating reflects the probability that the borrower will default on an obligation; the second rating reflects expected recovery rates on the credit facility. Default probability is determined based on, among other factors, the financial strength of the borrower, an assessment of the borrower’s management, the borrower’s competitive position within its industry sector, and our view of industry risk in the context of the general economic outlook. Types of exposure, transaction structure, and collateral, including credit risk mitigants, affect the expected recovery assessment.

Commercial Credit Exposure — Excluding PCI

Credit Risk Profile by Creditworthiness Category ^{(a), (b)} 

	Commercial and industrial				RE — Commercial				RE — Construction				Commercial lease				Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
RATING	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
Pass	$	43,052	$	39,833	$	14,016	$	13,328	$	1,679	$	1,894	$	4,405	$	4,730	$	63,152	$	59,785
Criticized (Accruing)	1,691		1,790		398		482		79		38		55		90		2,223		2,400
Criticized (Nonaccruing)	226		153		98		30		2		2		10		6		336		191
Total	$	44,969	$	41,776	$	14,512	$	13,840	$	1,760	$	1,934	$	4,470	$	4,826	$	65,711	$	62,376

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) The term criticized refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.

Consumer Credit Exposure — Excluding PCI

Non-PCI Loans by Refreshed FICO Score ^(a) 

	Residential — Prime				Consumer direct loans				Credit cards				Consumer indirect loans				Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
FICO SCORE	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
750 and above	$	10,040	$	10,226	$	551	$	519	$	485	$	477	$	1,620	$	1,472	$	12,696	$	12,694
660 to 749	4,850		5,181		701		690		501		508		1,315		1,184		7,367		7,563
Less than 660	1,384		1,519		211		225		112		121		514		529		2,221		2,394
No Score	220		208		341		356		—		—		106		76		667		640
Total	$	16,494	$	17,134	$	1,804	$	1,790	$	1,098	$	1,106	$	3,555	$	3,261	$	22,951	$	23,291

(a) Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.

Commercial Credit Exposure — PCI

Credit Risk Profile by Creditworthiness Category ^{(a), (b)} 

	Commercial and Industrial				RE — Commercial				RE — Construction				Commercial Lease		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,		December 31,
RATING	2018		2017		2018		2017		2018		2017		2018	2017	2018		2017
Pass	$	23	$	41	$	134	$	153	$	3	$	26	—	—	$	160	$	220
Criticized	31		42		70		95		—		—		—	—	101		137
Total	$	54	$	83	$	204	$	248	$	3	$	26	—	—	$	261	$	357

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) The term “criticized” refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.

Consumer Credit Exposure — PCI

PCI Loans by Refreshed FICO Score ^(a) 

	Residential — Prime				Consumer direct loans				Credit cards		Consumer indirect loans		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,	December 31,	September 30,		December 31,
FICO SCORE	2018		2017		2018		2017		2018	2017	2018	2017	2018		2017
750 and above	$	138	$	149	—		—		—	—	—	—	$	138	$	149
660 to 749	97		117		$	1	$	2	—	—	—	—	98		119
Less than 660	99		105		2		2		—	—	—	—	101		107
No Score	8		6		—		—		—	—	—	—	8		6
Total	$	342	$	377	$	3	$	4	—	—	—	—	$	345	$	381

(a) Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.

Nonperforming and Past Due Loans

Our policies for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans, and resuming accrual of interest for our commercial and consumer loan portfolios are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” beginning on page 101 of our 2017 Form 10-K.

The following aging analysis of past due and current loans as of September 30, 2018, and December 31, 2017, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio ^(a) 

September 30, 2018	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 (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	44,561	$	74	$	83	$	24	$	227	$	408	$	54	$	45,023
Commercial real estate:
Commercial mortgage	14,347		24		20		23		98		165		204		14,716
Construction	1,715		20		14		9		2		45		3		1,763
Total commercial real estate loans	16,062		44		34		32		100		210		207		16,479
Commercial lease financing	4,449		9		1		1		10		21		—		4,470
Total commercial loans	$	65,072	$	127	$	118	$	57	$	337	$	639	$	261	$	65,972
Real estate — residential mortgage	$	5,094	$	13	$	3	$	2	$	62	$	80	$	323	$	5,497
Home equity loans	11,044		36		11		8		221		276		19		11,339
Consumer direct loans	1,779		9		5		7		4		25		3		1,807
Credit cards	1,075		6		5		10		2		23		—		1,098
Consumer indirect loans	3,498		29		6		3		19		57		—		3,555
Total consumer loans	$	22,490	$	93	$	30	$	30	$	308	$	461	$	345	$	23,296
Total loans	$	87,562	$	220	$	148	$	87	$	645	$	1,100	$	606	$	89,268

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, 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.

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

(d) Future accretable yield related to PCI loans is not included in the analysis of the loan portfolio.

December 31, 2017	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 (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	41,444	$	111	$	34	$	34	$	153	$	332	83		$	41,859
Commercial real estate:
Commercial mortgage	13,750		26		13		21		30		90		248		14,088
Construction	1,919		4		9		—		2		15		26		1,960
Total commercial real estate loans	15,669		30		22		21		32		105		274		16,048
Commercial lease financing	4,791		23		4		2		6		35		—		4,826
Total commercial loans	$	61,904	$	164	$	60	$	57	$	191	$	472	357		$	62,733
Real estate — residential mortgage	$	5,043	$	16	$	7	$	4	$	58	$	85	$	355	$	5,483
Home equity loans	11,721		32		15		9		229		285		22		12,028
Consumer direct loans	1,768		9		4		5		4		22		4		1,794
Credit cards	1,081		7		5		11		2		25		—		1,106
Consumer indirect loans	3,199		33		7		3		19		62		—		3,261
Total consumer loans	$	22,812	$	97	$	38	$	32	$	312	$	479	$	381	$	23,672
Total loans	$	84,716	$	261	$	98	$	89	$	503	$	951	$	738	$	86,405

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, 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.

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

(d) Future accretable yield related to purchased credit impaired loans is not included in the analysis of the loan portfolio.

At September 30, 2018, the approximate carrying amount of our commercial nonperforming loans outstanding represented 80% of their original contractual amount owed, total nonperforming loans outstanding represented 83% of their original contractual amount owed, and nonperforming assets in total were carried at 83% of their original contractual amount owed.

Nonperforming loans and loans held for sale reduced expected interest income by $8 million and $22 million for the three and nine months ended September 30, 2018, respectively, and $6 million and $18 million for the three and nine months ended September 30, 2017, respectively.

The following tables set forth a further breakdown of individually impaired loans as of September 30, 2018, and December 31, 2017: 

	September 30, 2018						December 31, 2017
	Recorded Investment (a)		Unpaid Principal Balance (b)		Specific Allowance		Recorded Investment (a)		Unpaid Principal Balance (b)		Specific Allowance
in millions
With no related allowance recorded:
Commercial and industrial	$	187	$	255	—		$	126	$	153	—
Commercial real estate:
Commercial mortgage	11		15		—		12		18		—
Total commercial real estate loans	11		15		—		12		18		—
Total commercial loans	198		270		—		138		171		—
Real estate — residential mortgage	15		22		—		17		17		—
Home equity loans	50		57		—		56		56		—
Consumer Direct	—		1		—		—		—		—
Consumer indirect loans	2		4		—		2		2		—
Total consumer loans	67		84		—		75		75		—
Total loans with no related allowance recorded	265		354		—		213		246		—
With an allowance recorded:
Commercial and industrial	45		48		$	5	10		28		$	6
Commercial real estate:
Commercial mortgage	65		66		11		—		—		—
Total commercial real estate loans	65		66		11		—		—		—
Total commercial loans	110		114		16		10		28		6
Real estate — residential mortgage	34		52		4		32		32		5
Home equity loans	77		84		7		61		61		9
Consumer direct loans	4		4		—		4		4		—
Credit cards	3		3		—		2		2		—
Consumer indirect loans	33		33		3		32		32		3
Total consumer loans	151		176		14		131		131		17
Total loans with an allowance recorded	261		290		30		141		159		23
Total	$	526	$	644	$	30	$	354	$	405	$	23

(a) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.

(b) The Unpaid Principal Balance represents the customer’s legal obligation to us.

The following table sets forth a further breakdown of the average individually impaired loans reported by Key:

Average Recorded Investment (a)	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2018		2017		2018		2017
Commercial and industrial	$	209	$	162	$	184	$	221
Commercial real estate:
Commercial mortgage	48		14		44		8
Total commercial real estate loans	48		14		44		8
Total commercial loans	257		176		228		229
Real estate — residential mortgage	49		49		49		50
Home equity loans	126		118		122		121
Consumer direct loans	4		4		4		3
Credit cards	3		2		3		3
Consumer indirect loans	35		33		34		32
Total consumer loans	217		206		212		209
Total	$	474	$	382	$	440	$	438

(a) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.

Interest income recognized on the outstanding balances of accruing impaired loans totaled $4 million and $9 million for the three and nine months ended September 30, 2018, respectively, and $3 million and $9 million for the three and nine months ended September 30, 2017, respectively.

TDRs

We classify loan modifications as TDRs when a borrower is experiencing financial difficulties and we have granted a concession without commensurate financial, structural, or legal consideration. An acquired loan may only be classified as a TDR if a modification meeting the above TDR criteria is performed after the acquisition date. PCI loans cannot be classified as TDRs. All commercial and consumer loan TDRs, regardless of size, are individually evaluated for impairment to determine the probable loss content and are assigned a specific loan allowance. This

designation has the effect of moving the loan from the general reserve methodology (i.e., collectively evaluated) to the specific reserve methodology (i.e., individually evaluated) and may impact the ALLL through a charge-off or increased loan loss provision. These components affect the ultimate allowance level.

As TDRs are individually evaluated for impairment under the specific reserve methodology, subsequent defaults do not generally have a significant additional impact on the ALLL. Commitments outstanding to lend additional funds to borrowers whose loan terms have been modified in TDRs are $4 million and $2 million at September 30, 2018, and December 31, 2017, respectively.

Our loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. The consumer TDR other concession category primarily includes those borrowers’ debts that are discharged through bankruptcy and have not been formally re-affirmed. At September 30, 2018, and December 31, 2017, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $130 million and $142 million, respectively. At September 30, 2018, and December 31, 2017, we had $28 million and $31 million, respectively, of OREO which included the carrying value of foreclosed residential real estate of approximately $25 million and $26 million, respectively.

The following table shows the post-modification outstanding recorded investment by concession type for our commercial and consumer accruing and nonaccruing TDRs that occurred during the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2018		2017		2018		2017
Commercial loans:
Extension of Maturity Date	$	20	$	7	$	20	$	24
Payment or Covenant Modification/Deferment	26		—		46		32
Bankruptcy Plan Modification	—		—		7		30
Total	$	46	$	7	$	73	$	86
Consumer loans:
Interest rate reduction	$	4	$	3	$	22	$	10
Other	10		8		29		21
Total	$	14	$	11	$	51	$	31
Total commercial and consumer TDRs	$	60	$	18	$	124	$	117

The following table summarizes the change in the post-modification outstanding recorded investment of our accruing and nonaccruing TDRs during the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of the period	$	347		$	333		$	317		$	280
Additions	58			20			133			134
Payments	(28		)	(36		)	(69		)	(83		)
Charge-offs	(11		)	(2		)	(15		)	(16		)
Balance at end of period (a)	$	366		$	315		$	366		$	315

A further breakdown of TDRs included in nonperforming loans by loan category for the periods indicated are as follows:

	September 30, 2018					December 31, 2017
	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	30	$	120	$	101	20	$	109	$	86
Commercial real estate:
Commercial mortgage	6	14		10		8	16		12
Total commercial real estate loans	6	14		10		8	16		12
Total commercial loans	36	134		111		28	125		98
Real estate — residential mortgage	257	18		18		308	18		18
Home equity loans	1,233	72		66		1,025	64		57
Consumer direct loans	137	2		2		114	2		2
Credit cards	249	1		1		322	2		1
Consumer indirect loans	973	17		13		825	16		13
Total consumer loans	2,849	110		100		2,594	102		91
Total nonperforming TDRs	2,885	244		211		2,622	227		189
Prior-year accruing:(a)
Commercial and industrial	18	53		37		4	30		13
Total commercial loans	18	53		37		4	30		13
Real estate — residential mortgage	508	37		31		484	31		31
Home equity loans	1,305	77		61		1,276	75		59
Consumer direct loans	81	4		2		48	3		2
Credit cards	522	3		2		430	1		1
Consumer indirect loans	512	34		22		320	31		22
Total consumer loans	2,928	155		118		2,558	141		115
Total prior-year accruing TDRs	2,946	208		155		2,562	171		128
Total TDRs	5,831	$	452	$	366	5,184	$	398	$	317

(a) All TDRs that were restructured prior to January 1, 2018, and January 1, 2017, and are fully accruing.

Commercial loan TDRs are considered defaulted when principal and interest payments are 90 days past due. Consumer loan TDRs are considered defaulted when principal and interest payments are more than 60 days past due. During the three months ended September 30, 2018, there were no commercial loan TDRs and 82 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2017. During the three months ended September 30, 2017, there were no commercial loan TDRs and 45 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2016.

During the nine months ended September 30, 2018, there were no commercial loan TDRs and 178 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2017. During the nine months ended September 30, 2017, there were no commercial loan TDRs and 100 consumer loan TDRs with a combined recorded investment of $3 million that experienced payment defaults after modifications resulting in TDR status during 2016.

ALLL and Liability for Credit Losses on Unfunded Lending-Related Commitments

We determine the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” beginning on page 102 of our 2017 Form 10-K.

The ALLL on the acquired non-impaired loan portfolio is estimated using the same methodology as the originated portfolio, however, the estimated ALLL is compared to the remaining accretable yield to determine if an ALLL must be recorded. For PCI loans, Key estimates cash flows expected to be collected quarterly. Decreases in expected cash flows are recognized as impairment through a provision for loan and lease losses and an increase in the ALLL. There was less than $1 million of provision for loan and lease losses on PCI loans during the nine months ended September 30, 2018, and a credit of $1 million during the three months ended September 30, 2018. There was $4 million of provision for loan and lease losses on PCI loans during the nine months ended September 30, 2017, and less than $1 million of provision for loan and lease losses on PCI loans during the three months ended September 30, 2017. There was $3 million of provision for loan and lease losses on PCI loans during the twelve months ended December 31, 2017.

The ALLL at September 30, 2018, represents our best estimate of the incurred credit losses inherent in the loan portfolio at that date. The changes in the ALLL by loan category for the periods indicated are as follows:

Three months ended September 30, 2018:

in millions	June 30, 2018		Provision				Charge-offs			Recoveries		September 30, 2018
Commercial and Industrial	$	542	$	34			$	(38	)	$	5	$	543
Commercial real estate:
Real estate — commercial mortgage	139		9				(6		)	1		143
Real estate — construction	28		3				—			—		31
Total commercial real estate loans	167		12				(6		)	1		174
Commercial lease financing	40		(2		)		(4		)	3		37
Total commercial loans	749		44				(48		)	9		754
Real estate — residential mortgage	10		(1		)		(2		)	2		9
Home equity loans	37		(2		)		(4		)	3		34
Consumer direct loans	26		9				(10		)	1		26
Credit cards	46		7				(10		)	2		45
Consumer indirect loans	19		3				(7		)	4		19
Total consumer loans	138		16				(33		)	12		133
Total ALLL — continuing operations	887		60			(a)	(81		)	21		887
Discontinued operations	14		3				(4		)	1		14
Total ALLL — including discontinued operations	$	901	$	63			$	(85	)	$	22	$	901

(a) Excludes a provision for losses on lending-related commitments of $2 million.

Three months ended September 30, 2017:

in millions	June 30, 2017		Provision				Charge-offs			Recoveries		September 30, 2017
Commercial and Industrial	$	528	$	8			$	(29	)	$	25	$	532
Commercial real estate:
Real estate — commercial mortgage	144		(1		)		(6		)	1		138
Real estate — construction	28		3				(2		)	—		29
Total commercial real estate loans	172		2				(8		)	1		167
Commercial lease financing	40		1				(1		)	3		43
Total commercial loans	740		11				(38		)	29		742
Real estate — residential mortgage	9		(2		)		—			1		8
Home equity loans	42		(1		)		(6		)	4		39
Consumer direct loans	25		10				(8		)	1		28
Credit cards	44		10				(11		)	1		44
Consumer indirect loans	10		14				(8		)	3		19
Total consumer loans	130		31				(33		)	10		138
Total ALLL — continuing operations	870		42			(a)	(71		)	39		880
Discontinued operations	21		5				(10		)	2		18
Total ALLL — including discontinued operations	$	891	$	47			$	(81	)	$	41	$	898

(a) Excludes a provision for losses on lending-related commitments of $9 million.

Nine months ended September 30, 2018:

in millions	December 31, 2017		Provision				Charge-offs			Recoveries		September 30, 2018
Commercial and Industrial	529		$	110			$	(114	)	$	18	$	543
Commercial real estate:
Real estate — commercial mortgage	133		17				(9		)	2		143
Real estate — construction	30		—				—			1		31
Total commercial real estate loans	163		17				(9		)	3		174
Commercial lease financing	43		(1		)		(9		)	4		37
Total commercial loans	735		126				(132		)	25		754
Real estate — residential mortgage	7		3				(3		)	2		9
Home equity loans	43		(4		)		(14		)	9		34
Consumer direct loans	28		20				(27		)	5		26
Credit cards	44		30				(34		)	5		45
Consumer indirect loans	20		9				(22		)	12		19
Total consumer loans	142		58				(100		)	33		133
Total ALLL — continuing operations	877		184			(a)	(232		)	58		887
Discontinued operations	16		5				(11		)	4		14
Total ALLL — including discontinued operations	$	893	$	189			$	(243	)	$	62	$	901

(a) Excludes a provision for losses on lending-related commitments of $3 million.

Nine months ended September 30, 2017:

in millions	December 31, 2016		Provision				Charge-offs			Recoveries		September 30, 2017
Commercial and Industrial	$	508	$	93			$	(101	)	$	32	$	532
Commercial real estate:
Real estate — commercial mortgage	144		2				(9		)	1		138
Real estate — construction	22		8				(2		)	1		29
Total commercial real estate loans	166		10				(11		)	2		167
Commercial lease financing	42		5				(9		)	5		43
Total commercial loans	716		108				(121		)	39		742
Real estate — residential mortgage	17		(11		)		(2		)	4		8
Home equity loans	54		(4		)		(23		)	12		39
Consumer direct loans	24		26				(26		)	4		28
Credit cards	38		36				(34		)	4		44
Consumer indirect loans	9		23				(24		)	11		19
Total consumer loans	142		70				(109		)	35		138
Total ALLL — continuing operations	858		178			(a)	(230		)	74		880
Discontinued operations	24		8				(20		)	6		18
Total ALLL — including discontinued operations	$	882	$	186			$	(250	)	$	80	$	898

(a) Excludes a provision for losses on lending-related commitments of $2 million.

A breakdown of the individual and collective ALLL and the corresponding loan balances as of September 30, 2018, follows:

	Allowance						Outstanding
September 30, 2018	Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment		Purchased Credit Impaired		Loans			Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment			Purchased Credit Impaired
in millions
Commercial and industrial	$	5	$	536	$	2	$	45,023		$	232	$	44,737		$	54
Commercial real estate:
Commercial mortgage	11		129		3		14,716			76		14,436			204
Construction	—		31		—		1,763			—		1,760			3
Total commercial real estate loans	11		160		3		16,479			76		16,196			207
Commercial lease financing	—		37		—		4,470			—		4,470			—
Total commercial loans	16		733		5		65,972			308		65,403			261
Real estate — residential mortgage	4		5		—		5,497			49		5,125			323
Home equity loans	7		26		1		11,339			127		11,193			19
Consumer direct loans	—		26		—		1,807			4		1,800			3
Credit cards	—		45		—		1,098			3		1,095			—
Consumer indirect loans	3		16		—		3,555			35		3,520			—
Total consumer loans	14		118		1		23,296			218		22,733			345
Total ALLL — continuing operations	30		851		6		89,268			526		88,136			606
Discontinued operations	2		12		—		1,130		(a)	22		1,108		(a)	—
Total ALLL — including discontinued operations	$	32	$	863	$	6	$	90,398		$	548	$	89,244		$	606

(a) Amount includes $2 million of loans carried at fair value that are excluded from ALLL consideration.

A breakdown of the individual and collective ALLL and the corresponding loan balances as of December 31, 2017, follows:

	Allowance						Outstanding
December 31, 2017	Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment		Purchased Credit Impaired		Loans			Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment			Purchased Credit Impaired
in millions
Commercial and Industrial	$	6	$	520	$	3	$	41,859		$	136	$	41,640		$	83
Commercial real estate:
Commercial mortgage	—		131		2		14,088			12		13,828			248
Construction	—		30		—		1,960			—		1,934			26
Total commercial real estate loans	—		161		2		16,048			12		15,762			274
Commercial lease financing	—		43		—		4,826			—		4,826			—
Total commercial loans	6		724		5		62,733			148		62,228			357
Real estate — residential mortgage	5		2		—		5,483			49		5,079			355
Home equity loans	9		33		1		12,028			117		11,889			22
Consumer direct loans	—		28		—		1,794			4		1,786			4
Credit cards	—		44		—		1,106			2		1,104			—
Consumer indirect loans	3		17		—		3,261			34		3,227			—
Total consumer loans	17		124		1		23,672			206		23,085			381
Total ALLL — continuing operations	23		848		6		86,405			354		85,313			738
Discontinued operations	3		13		—		1,314		(a)	21		1,293		(a)	—
Total ALLL — including discontinued operations	$	26	$	861	$	6	$	87,719		$	375	$	86,606		$	738

(a) Amount includes $2 million of loans carried at fair value that are excluded from ALLL consideration.

The liability for credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. We establish the amount of this reserve by considering both historical trends and current market conditions quarterly, or more often if deemed necessary.

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2018		2017		2018		2017
Balance at beginning of period	$	58	$	48	$	57	$	55
Provision (credit) for losses on lending-related commitments	2		9		3		2
Balance at end of period	$	60	$	57	$	60	$	57

PCI Loans

Purchased loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that all contractually required payments will not be collected are deemed PCI. Our policies for determining, recording payments on, and derecognizing PCI loans are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Purchased Loans” beginning on page 107 of our 2017 Form 10-K.

We have PCI loans from two separate acquisitions, one in 2012 and one in 2016. The following tables present the roll-forward of the accretable yield and the beginning and ending outstanding unpaid principal balance and carrying amount of all PCI loans for the three and nine months ended September 30, 2018, and the twelve months ended December 31, 2017.

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018							2018
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance		Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	121		$	622	$	669	$	131		$	738	$	803
Accretion	(10		)					(33		)
Net reclassifications from nonaccretable to accretable	13							41
Payments received, net	(3		)					(18		)
Balance at end of period	$	121		$	599	$	642	$	121		$	599	$	642

	Twelve Months Ended December 31,
	2017
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	197		$	865	$	1,002
Additions	(32		)
Accretion	(44		)
Net reclassifications from nonaccretable to accretable	15
Payments received, net	(4		)
Disposals	(1		)
Balance at end of period	$	131		$	738	$	803

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

Fair Value Determination

In accordance with GAAP, Key measures certain assets and liabilities at fair value. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants in our principal market.

Additional information regarding our accounting policies for determining fair value is provided in Note 7 (“Fair Value Measurements”) and Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements” of our 2017 Form 10-K.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Certain assets and liabilities are measured at fair value on a recurring basis in accordance with GAAP. The following tables present these assets and liabilities at September 30, 2018, and December 31, 2017.

	September 30, 2018									December 31, 2017
	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	—		$	759	—		$	759		—		615		—		615
States and political subdivisions	—		54		—		54			—		37		—		37
Other mortgage-backed securities	—		86		—		86			—		104		—		104
Other securities	3		39		—		42			—		65		—		65
Total trading account securities	3		938		—		941			—		821		—		821
Commercial loans	—		17		—		17			—		15		—		15
Total trading account assets	3		955		—		958			—		836		—		836
Securities available for sale:
U.S. Treasury, agencies and corporations	—		145		—		145			—		157		—		157
States and political subdivisions	—		7		—		7			—		9		—		9
Agency residential collateralized mortgage obligations	—		14,192		—		14,192			—		14,660		—		14,660
Agency residential mortgage-backed securities	—		1,661		—		1,661			—		1,439		—		1,439
Agency commercial mortgage-backed securities	—		2,316		—		2,316			—		1,854		—		1,854
Other securities	—		—		$	20	20			—		—		20		20
Total securities available for sale	—		18,321		20		18,341			—		18,119		20		18,139
Other investments:
Principal investments:
Direct	—		—		12		12			—		—		13		13
Indirect (measured at NAV) (a)	—		—		—		101			—		—		—		124
Total principal investments	—		—		12		113			—		—		13		137
Equity investments:
Direct	—		1		7		8			—		4		3		7
Direct (measured at NAV) (a)	—		—		—		1			—		—		—		—
Total equity investments	—		1		7		9			—		4		3		7
Total other investments	—		1		19		122			—		4		16		144
Loans, net of unearned income	—		—		3		3			—		—		2		2
Loans held for sale	—		87		—		87			—		70		1		71
Derivative assets:
Interest rate	—		304		6		310			—		713		9		722
Foreign exchange	$	70	32		—		102			$	100	$	30	$	—	$	130
Commodity	—		491		—		491			—		255		—		255
Credit	—		—		—		—			—		—		1		1
Other	—		5		2		7			—		1		3		4
Derivative assets	70		832		8		910			100		999		13		1,112
Netting adjustments (b)	—		—		—		(162		)	—		—		—		(443		)
Total derivative assets	70		832		8		748			100		999		13		669
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	73	$	20,196	$	50	$	20,259		$	100	$	20,028	$	52	$	19,861
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	37	$	600	—		$	637		$	72	$	562	$	—	$	634
Derivative liabilities:
Interest rate	—		445		—		445			—		520		—		520
Foreign exchange	62		31		—		93			98		26		—		124
Commodity	—		481		—		481			—		246		—		246
Credit	—		3		—		3			—		4		—		4
Other	—		3		—		3			—		13		—		13
Derivative liabilities	62		963		—		1,025			98		809		—		907
Netting adjustments (b)	—		—		—		(582		)	—		—		—		(616		)
Total derivative liabilities	62		963		—		443			98		809		—		291
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	99	$	1,563	—		$	1,080		$	170	$	1,371	$	—	$	925

(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.

Qualitative Disclosures of Valuation Techniques

The following describes the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities:

Securities (trading account assets and available for sale). We own several types of securities, requiring a range of valuation methods:

• Level 2 securities include municipal bonds, bonds backed by the U.S. government, corporate bonds, agency residential and CMBS, securities issued by the U.S. Treasury, money markets, and certain agency and corporate CMOs. Fair value is determined using pricing models (either by a third-party pricing service or internally) or quoted prices of similar securities.

• Our Level 3 instruments consist principally of debt securities. The securities are valued using a cash flow analysis of the associated private company issuers based on internal models or a third-party valuation service. We also employ a market approach that utilizes revenue multiples of comparable companies. We reference guideline public companies with growth prospects, margin, and risks that are comparable to the subject companies. The valuations of the securities are negatively affected by projected net losses of the associated private companies and positively affected by projected net gains.

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. We validate the pricing methodologies utilized by our third-party pricing service to ensure that the fair value determination is consistent with the applicable accounting guidance. This includes comparing the actual inputs used by our third-party pricing service to comparable inputs for similar securities and comparing the fair values to prices from other independent sources for the same and similar securities.

Commercial loans (trading account assets). Commercial loans recorded as trading account assets are valued based on market spreads since there is an active market for similar assets. Bid and ask prices are received from multiple loan dealers and valuations reflect prices within the bid-ask spread that are most representative of fair value for the respective loans. The price point used within the bid/ask spread is further validated using an independent, third party service provider.

Principal investments. Principal investments consist of investments in equity and debt instruments made by our principal investing entities. They include direct investments (investments made in a particular company) and indirect investments (investments made through funds that include other investors). In most cases, quoted market prices are not available for our direct investments, and we must estimate the fair value based on operating performance, market multiples for comparable businesses, and unique facts and circumstances related to each individual investment. Indirect investments are valued using a methodology that is consistent with accounting guidance allowing us 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).

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at September 30, 2018, as well as financial support provided for the three and nine months ended September 30, 2018, and September 30, 2017.

					Financial support provided
					Three months ended September 30,					Nine months ended September 30,
	September 30, 2018				2018		2017			2018			2017
in millions	Fair Value		Unfunded Commitments		Funded Commitments	Funded Other	Funded Commitments		Funded Other	Funded Commitments		Funded Other	Funded Commitments		Funded Other
INVESTMENT TYPE
Direct investments (a)	$	12	—		—	—	—		—	—		—	—		$	—
Indirect investments (measured at NAV)	101		$	28	—	—	$	—	—	$	1	—	$	1	—
Total	$	113	$	28	—	—	$	—	—	$	1	—	$	1	$	—

 

(a) Our direct investments consist of equity and debt investments directly in independent business enterprises. Operations of the business enterprises are handled by management of the portfolio company. The purpose of funding these enterprises is to provide financial support for business development and acquisition strategies. We infuse equity capital based on an initial contractual cash contribution and later from additional requests on behalf of the companies’ management.

(b) 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. We estimate that the underlying investments of the funds will be liquidated over a period of one to six years. 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.

Other Equity Investments. Our other equity investments measured on a recurring basis are direct investments in equity instruments of private companies. Quoted market prices are not available for these investments and we must perform valuations using other methods in a similar manner to our direct principal investments.

Loans Held for Sale and Held for Investment. Residential mortgage loans are valued based on quoted market prices, where available, prices for other traded mortgage loans with similar characteristics, and purchase commitments and bid information received from market participants. We have elected the fair value option for residential mortgage loans held for sale as this aligns with the related forward mortgage loan sale commitments.

Our residential mortgage activity also includes temporarily unsalable residential mortgage loans that are included in “Loans, net of unearned income” and loans with salability issues included in “Loans held for sale” on the balance sheet.  These loans have an origination defect that makes them temporarily unable to be sold into the performing loan sales market. Because transaction details regarding sales of this type of loan are often unavailable, unobservable bid information from brokers and investors is heavily relied upon. Accordingly, based on the significance of unobservable inputs, these loans are classified as Level 3.

Derivatives. The majority of our derivative positions are Level 2 instruments, which are valued using internally developed models, based on market convention. These models use observable market inputs, such as interest rate curves, LIBOR and Overnight Index Swap discount rates and curves, index pricing curves, foreign currency curves, volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity) and current prices for mortgage securities and investor supplied prices.

Level 3 derivative instruments primarily consist of interest rate lock commitments and several customized derivative instruments. The value of interest rate lock commitments is based on interest rates observable in the market and the probability of the loan closing.  Therefore, the valuation methodology employs a model which uses current interest rates and adjusts the probability of the loan closing at the approved terms in the current interest rate environment. Various other customized derivative instruments are priced using internally developed models which leverage market and internal data and assumptions.

Liability for short positions. Level 2 items are fixed income securities held by our broker dealer in its trading inventory. These items are measured at fair value based upon market activity, spreads, credit ratings and interest rates for each security type. Additionally, recent values used in transactions for the same or similar securities are also utilized in the valuation.

Changes in Level 3 Fair Value Measurements

The following table shows the components of the change in the fair values of our Level 3 financial instruments for the three and nine months ended September 30, 2018, and September 30, 2017. 

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 (a)			Transfers out of Level 3 (a)				End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2018
Securities available for sale
Other securities	$	20		$	—	—				—	—		—		—		—			—				$	20	—
Other investments
Principal investments
Direct	13			—		$	(1	)	(b)	1	(1	)	—		—		—			—				12		$	1		(b)
Equity investments
Direct	3			—		—				—	—		—		—		$	4		—				7		—
Loans held for sale	1			—		—				—	(1	)	—		—		—			—				—		—
Loans held for investment	2			—		—				—	—		—		1		—			—				3		—
Derivative instruments (c)
Interest rate	9			—		(2		)	(d)	1	(2	)	—		—		6		(e)	$	(6	)	(e)	6		—
Credit	1			—		(26		)	(d)	—	—		$	25	—		—			—				—		—
Other (f)	3			—		—				—	—		—		(1	)	—			—				2		—
Three months ended September 30, 2018
Securities available for sale
Other securities	$	20		$	—	—				—	—		—		—		—			$	—			$	20	—
Other investments
Principal investments
Direct	13			—		$	(1	)	(b)	—	—		—		—		—			—				12		(1		)	(b)
Equity investments
Direct	7			—		—				—	—		—		—		—			—				7		—
Loans held for sale	—			—		—				—	—		—		—		—			—				—		—
Loans held for investment	3			—		—				—	—		—		—		—			—				3		—
Derivative instruments (c)
Interest rate	5			—		—			(d)	—	—		—		—		2		(e)	(1		)	(e)	6		—
Credit	(9		)	—		(6		)	(d)	—	—		$	15	—		—			—				—		—
Other (f)	3			—		—				—	—		—		(1	)	—			—				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 (a)			Transfers out of Level 3 (a)				End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2017
Securities available for sale
Other securities	$	17	$	3	—				—		—			—		—		—			—				$	20	—
Other investments
Principal investments
Direct	27		$	—	$	(7	)	(b)	—		$	(7	)	—		—		—			—				13		$	(1	)	(b)
Loans held for sale	—		—		—				—		(1		)	—		3		—			—				2		—
Derivative instruments (c)
Interest rate	7		—		—				—		—			—		—		$	13	(e)	$	(9	)	(e)	11		—
Credit	1		—		(12		)	(d)	—		—			$	12	—		—			—				1		—
Other (f)	2		—		—				—		—			—		$	2	—			—				4		—
Three months ended September 30, 2017
Securities available for sale
Other securities	$	20	$	1	—				—		—			—		—		—			$	(1	)		$	20	—
Other investments
Principal investments
Direct	15		$	—	$	(2	)	(b)	—		$	—		—		—		—			—				13		$	2		(b)
Loans held for sale	—		—		—				—		(1		)	—		3		—			—				2		—
Derivative instruments (c)
Interest rate	16		—		—				—		—			—		—		$	1	(e)	$	(6	)	(e)	11		—
Credit	1		—		(5		)	(d)	—		—			$	5	—		—			—				1		—
Other (f)	4		—		—				$	—	—			—		$	—	—			—				4		—

(a) Our policy is to recognize transfers into and transfers out of Level 3 as of the end of the reporting period.

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

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

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

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

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

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in accordance with GAAP. The adjustments to fair value generally result from the application of accounting guidance that requires assets and liabilities to be recorded at the lower of cost or fair value, or assessed for impairment. There were no liabilities measured at fair value on a nonrecurring basis at September 30, 2018, and December 31, 2017.

The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2018, and December 31, 2017:

	September 30, 2018							December 31, 2017
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	—	$	—	$	97	$	97	—	—		$	9		$	9
Accrued income and other assets	—	—		24		24		—	$	5	133		(a)	138
Total assets on a nonrecurring basis at fair value	—	$	—	$	121	$	121	—	$	5	$	142		$	147

(a) At December 31, 2017, we recorded $31 million of impairment related to $119 million of LIHTC and Historic Tax Credit investments impacted by the enactment of the TCJ Act. Refer to the “LIHTC and Historic Tax Credit Investments” section below for a description of the valuation technique and inputs applied for this fair value measurement.

Impaired loans and leases. The following two internal methods are used to value impaired loans and leases:

• Cash flow analysis considers internally developed inputs, such as discount rates, default rates, costs of foreclosure, and changes in collateral values.

• The fair value of the underlying collateral, which may take the form of real estate or personal property, is based on internal estimates, field observations, and assessments provided by third-party appraisers. 

Reviews are done on a quarterly basis for non-accrual and TDRs greater than $2.5 million to determine the amount of specific allocations for impairment needed. Impairment valuations are back-tested each quarter, based on a look-back of actual incurred losses on closed deals previously evaluated for impairment. The overall percent variance of actual net loan charge-offs on closed deals compared to the specific allocations on such deals is considered in determining each quarter’s specific allocations.

Commercial loans held for sale. Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. For loans sold in an active market, we utilize non-binding bids for the respective loans or similar loans, or recent sales to determine the fair value. For inactive markets, we assess appraisal values, strength of sponsor/guarantor, loan pricing relative to current comparable transactions, current market conditions and market demographics. Our analysis concluded that there were no commercial loans held for sale adjusted to fair value at September 30, 2018, and December 31, 2017.

Direct financing leases and operating lease assets held for sale. Valuations of direct financing leases and operating lease assets held for sale are performed using an internal model that relies on market data, such as swap rates and bond ratings, as well as on our own assumptions about the exit market for the leases and details about the individual leases in the portfolio. The inputs based on our assumptions include changes in the value of leased items and internal credit ratings. These leases have been classified as Level 3 assets. Leases for which we receive a current nonbinding bid, and for which the sale is considered probable, may be classified as Level 2. No direct financing leases and operating lease assets held for sale were adjusted to fair value at September 30, 2018, and December 31, 2017.

Other assets. OREO and other repossessed properties are valued based on inputs such as appraisals and third-party price opinions, less estimated selling costs. Generally, we classify these assets as Level 3, but OREO and other repossessed properties for which we receive binding purchase agreements are classified as Level 2. Returned lease inventory is valued based on market data for similar assets and is classified as Level 2.

LIHTC, HTC, and NMTC Investments. Valuation of LIHTC, HTC, and NMTC investments involves measuring the present value of future tax benefits and comparing that value against the current carrying value of the investments. LIHTC, HTC, and NMTC investments are impaired when it is more likely than not that the carrying amount of the investments will not be realized. A primary driver of impairment in the fourth quarter of 2017 was the enactment of the TCJ Act, which reduced future depreciation tax benefits expected to be realized by certain LIHTC, HTC, and NMTC investments. No impairment was recorded for the three and nine months ended September 30, 2018.

Other Equity Investments. We have other investments in equity securities that do not have readily determinable fair values and do not qualify for the practical expedient to measure the investment using a net asset value per share. We have elected to measure these securities at cost less impairment plus or minus adjustments due to observable orderly transactions. Impairment is recorded when there is evidence that the expected fair value of the investment has declined to below the recorded cost. At each reporting period, we assess if these investments continue to qualify for this measurement alternative. At September 30, 2018, the carrying amount of equity investments recorded under this method was $106 million. No impairment was recorded for the three and nine months ended September 30, 2018.

Quantitative Information about Level 3 Fair Value Measurements

The range and weighted average of the significant unobservable inputs used to fair value our material Level 3 recurring and nonrecurring assets at September 30, 2018, and December 31, 2017, along with the valuation techniques used, are shown in the following table:

September 30, 2018	Fair Value of Level 3 Assets		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Recurring
Other investments — principal investments — direct:	$	12	Individual analysis of the  condition of each investment
Debt instruments				EBITDA multiple	N/A (6.88)
Equity instruments of private companies				EBITDA multiple	N/A (6.88)
Nonrecurring
Impaired loans	97		Fair value of underlying collateral	Discount	0.00 - 75.00% (20.00%)

December 31, 2017	Fair Value of Level 3 Assets		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Recurring
Other investments — principal investments — direct:	$	13	Individual analysis of the condition of each investment
Debt instruments				EBITDA multiple	N/A (6.00)
Equity instruments of private companies				EBITDA multiple	N/A (6.00)
Nonrecurring
Impaired loans	9		Fair value of underlying collateral	Discount	0.00 - 50.00% (23.00%)

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at September 30, 2018, and December 31, 2017, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 30, 2018
				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)	$	958		3		$	955		—		—		—				$	958
Other investments (b)	681			—		1			$	578	$	102	—				681
Loans, net of unearned income (d)	3			—		—			3		—		—				3
Loans held for sale (b)	87			—		87			—		—		—				87
Derivative assets - trading (b)	700			$	68	794			8		—		$	(170	)	(f)	700
Fair value - OCI
Securities available for sale (b)	18,341			—		18,321			$	20	—		—				18,341
Derivative assets - hedging (b)	48			2		38			—		—		8			(f)	48
Amortized cost
Held-to-maturity securities (c)	11,869			—		11,261			—		—		—				11,261
Loans, net of unearned income (d)	88,378			—		—			86,418		—		—				86,418
Loans held for sale (b)	1,531			—		—			1,531		—		—				1,531
Other
Cash and short-term investments (a)	2,591			2,591		—			—		—		—				2,591
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	446		$	61	$	967		—		—		$	(582	)	(f)	$	446
Fair value - OCI
Derivative liabilities - hedging (b)	(3		)	1		(4		)	—		—		—			(f)	(3		)
Amortized cost
Time deposits (e)	13,583			—		13,654			—		—		—				13,654
Short-term borrowings (a)	1,922			$	37	1,885			—		—		—				1,922
Long-term debt (e)	13,849			12,659		1,205			—		—		—				13,864
Other
Deposits with no stated maturity (a)	92,197			—		92,197			—		—		—				92,197

	December 31, 2017
				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)	$	836		—		$	836	—		—		—				$	836
Other investments (b)	726			—		4		$	598	$	124	—				726
Loans, net of unearned income (d)	2			—		—		2		—		—				2
Loans held for sale (b)	71			—		70		1		—		—				71
Derivative assets - trading (b)	681			$	99	918		13		—		$	(349	)	(f)	681
Fair value - OCI
Securities available for sale (b)	18,139			—		18,119		20		—		—				18,139
Derivative assets - hedging (b)	(12		)	1		81		—		—		(94		)	(f)	(12		)
Amortized cost
Held-to-maturity securities (c)	11,830			—		11,565		—		—		—				11,565
Loans, net of unearned income (d)	85,526			—		—		84,003		—		—				84,003
Loans held for sale (b)	1,036			—		—		1,036		—		—				1,036
Other
Cash and short-term investments (a)	5,118			5,118		—		—		—		—				5,118
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	289		$	94	$	763	—		—		$	(568	)	(f)	$	289
Fair value - OCI
Derivative liabilities - hedging (b)	2			4		46		—		—		(48		)	(f)	2
Amortized cost
Time deposits (e)	11,647			—		11,750		—		—		—				11,750
Short-term borrowings (a)	1,011			72		939		—		—		—				1,011
Long-term debt (e)	14,333			13,407		$	1,219	—		—		—				14,626
Other
Deposits with no stated maturity (a)	93,588			—		93,588		—		—		—				93,588

Valuation Methods and Assumptions

(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.

Education lending business. The discontinued education lending business consists of loans in portfolio recorded at carrying value with appropriate valuation reserves, and loans in portfolio recorded at fair value. All of these loans were excluded from the table above as follows:

• Loans at carrying value, net of allowance, of $1.1 billion ($1.0 billion at fair value) at September 30, 2018, and $1.3 billion ($1.0 billion at fair value) at December 31, 2017;

• Portfolio loans at fair value of $2 million at September 30, 2018, and $2 million at December 31, 2017.

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

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Securities

9 Months Ended

Sep. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Securities

6. Securities

The amortized cost, unrealized gains and losses, and approximate fair value of our securities available for sale and held-to-maturity securities are presented in the following tables. Gross unrealized gains and losses represent the difference between the amortized cost and the fair value of securities on the balance sheet as of the dates indicated. Accordingly, the amount of these gains and losses may change in the future as market conditions change.

	September 30, 2018								December 31, 2017
in millions	Amortized Cost		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	$	150	—		$	5	$	145	$	159	—		$	2	$	157
States and political subdivisions	7		—		—		7		9		—		—		9
Agency residential collateralized mortgage obligations	14,804		$	4	616		14,192		14,985		$	10	335		14,660
Agency residential mortgage-backed securities	1,708		2		49		1,661		1,456		3		20		1,439
Agency commercial mortgage-backed securities	2,439		—		123		2,316		1,920		—		66		1,854
Other securities	17		3		—		20		17		3		—		20
Total securities available for sale	$	19,125	$	9	$	793	$	18,341	$	18,546	$	16	$	423	$	18,139
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	7,330	—		$	400	$	6,930	$	8,055	—		$	224	$	7,831
Agency residential mortgage-backed securities	508		—		22		486		574		$	1	4		571
Agency commercial mortgage-backed securities	4,019		—		186		3,833		3,186		6		44		3,148
Other securities	12		—		—		12		15		—		—		15
Total held-to-maturity securities	$	11,869	$	—	$	608	$	11,261	$	11,830	$	7	$	272	$	11,565

The following table summarizes our securities that were in an unrealized loss position as of September 30, 2018, and December 31, 2017.

	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
September 30, 2018
Securities available for sale:
U.S Treasury, agencies, and corporations	—		—		$	145	$	5	$	145	$	5
Agency residential collateralized mortgage obligations	$	3,121	54		10,062		562		13,183		616
Agency residential mortgage-backed securities	409		3		1,089		46		1,498		49
Agency commercial mortgage-backed securities	558		2		1,758		121		2,316		123
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,275		44		5,655		356		6,930		400
Agency residential mortgage-backed securities	153		6		333		16		486		22
Agency commercial mortgage-backed securities	2,629		98		1,205		88		3,834		186
Other securities (a)	2		—		—		—		2		—
Total temporarily impaired securities	$	8,147	$	207	$	20,247	$	1,194	$	28,394	$	1,401
December 31, 2017
Securities available for sale:
U.S. Treasury, agencies, and corporations	$	41	—		$	116	2		$	157	$	2
Agency residential collateralized mortgage obligations	6,153		$	74	7,270		$	261	13,423		335
Agency residential mortgage-backed securities	666		7		702		13		1,368		20
Agency commercial mortgage-backed securities	205		4		1,649		62		1,854		66
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	2,201		27		5,599		197		7,800		224
Agency residential mortgage-backed securities	252		1		206		3		458		4
Agency commercial mortgage-backed securities	1,470		12		495		32		1,965		44
Other securities (a)	3		—		4		—		7		—
Total temporarily impaired securities	$	10,991	$	125	$	16,041	$	570	$	27,032	$	695

(a) Gross unrealized losses totaled less than $1 million for other securities held-to maturity at September 30, 2018, and December 31, 2017.

At September 30, 2018, we had $616 million of gross unrealized losses related to 482 fixed-rate agency residential CMOs that we invested in as part of our overall A/LM strategy. These securities had a weighted-average maturity of 4.69 years at September 30, 2018. At September 30, 2018, we also had $49 million of gross unrealized losses related to 262 agency residential mortgage-backed securities positions and $123 million of gross unrealized losses related to 20 agency commercial mortgage backed securities positions with weighted-average maturities of 4.30 years and 4.15 years, respectively. Because these securities have a fixed interest rate, their fair value is sensitive to movements in market interest rates. These unrealized losses are considered temporary since we expect to collect all contractually due amounts from these securities. Accordingly, these investments were reduced to their fair value through OCI, not through earnings.

We regularly assess our securities portfolio for OTTI. The assessments are based on the nature of the securities, the underlying collateral, the financial condition of the issuer, the extent and duration of the loss, our intent related to

the individual securities, and the likelihood that we will have to sell securities prior to expected recovery. As shown in the following table, we did not have any impairment losses recognized in earnings for the nine months ended September 30, 2018.

Nine months ended September 30, 2018
in millions
Balance at December 31, 2017	$	4
Impairment recognized in earnings	—
Balance at September 30, 2018	$	4

At September 30, 2018, securities available for sale and held-to-maturity securities totaling $8.4 billion were pledged to secure securities sold under repurchase agreements, to secure public and trust deposits, to facilitate access to secured funding, and for other purposes required or permitted by law.

The following table shows our securities by remaining maturity. CMOs and other mortgage-backed securities in the available for sale portfolio and held-to-maturity portfolio are presented based on their expected average lives. The remaining securities, in both the available-for-sale and held-to-maturity portfolios, are presented based on their remaining contractual maturity. Actual maturities may differ from expected or contractual maturities since borrowers have the right to prepay obligations with or without prepayment penalties.

	Securities Available for Sale				Held to Maturity Securities
September 30, 2018	Amortized Cost		Fair Value		Amortized Cost		Fair Value
in millions
Due in one year or less	$	93	$	93	$	31	$	30
Due after one through five years	12,365		11,846		6,181		5,910
Due after five through ten years	6,655		6,390		5,657		5,321
Due after ten years	12		12		—		—
Total	$	19,125	$	18,341	$	11,869	$	11,261

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

7. Derivatives and Hedging Activities

We are a party to various derivative instruments, mainly through our subsidiary, KeyBank. The primary derivatives that we use are interest rate swaps, caps, floors, and futures; foreign exchange contracts; commodity derivatives; and credit derivatives. Generally, these instruments help us manage exposure to interest rate risk, mitigate the credit risk inherent in our loan portfolio, hedge against changes in foreign currency exchange rates, and meet client financing and hedging needs.

At September 30, 2018, after taking into account the effects of bilateral collateral and master netting agreements, we had $48 million of derivative assets and a positive $3 million of derivative liabilities that relate to contracts entered into for hedging purposes. As of the same date, after taking into account the effects of bilateral collateral and master netting agreements and a reserve for potential future losses, we had derivative assets of $700 million and derivative liabilities of $446 million that were not designated as hedging instruments. These positions are primarily comprised of derivative contracts entered into for client accommodation purposes.

Additional information regarding our accounting policies for derivatives is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 105 of our 2017 Form 10-K. Our derivative strategies and related risk management objectives are described in Note 9 (“Derivatives and Hedging Activities”) beginning on page 143 of our 2017 Form 10-K.

Fair Values, Volume of Activity, and Gain/Loss Information Related to Derivative Instruments

The following table summarizes the fair values of our derivative instruments on a gross and net basis as of September 30, 2018, and December 31, 2017. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable 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. Securities collateral related to legally enforceable master netting

agreements is not offset on the balance sheet. Our derivative instruments are included in “accrued income and other assets” or “accrued expenses and other liabilities” on the balance sheet, as follows:

	September 30, 2018								December 31, 2017
			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	$	27,445	$	38		$	(4	)	$	26,176	$	81		$	46
Foreign exchange	254		2			1			302		1			4
Total	27,699		40			(3		)	26,478		82			50
Derivatives not designated as hedging instruments:
Interest rate	65,617		272			449			61,390		641			474
Foreign exchange	7,695		100			92			8,317		129			120
Commodity	2,235		491			481			1,687		255			246
Credit	401		—			3			315		1			4
Other (a)	1,795		7			3			2,006		4			13
Total	77,743		870			1,028			73,715		1,030			857
Netting adjustments (b)	—		(162		)	(582		)	—		(443		)	(616		)
Net derivatives in the balance sheet	105,442		748			443			100,193		669			291
Other collateral (c)	—		(1		)	(50		)	—		(5		)	(84		)
Net derivative amounts	$	105,442	$	747		$	393		$	100,193	$	664		$	207

(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 when-issued security transactions in connection with an “at-the-market” equity offering program.

(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.

Fair value hedges. During the nine-month period ended September 30, 2018, we did not exclude any portion of fair value hedging instruments from the assessment of hedge effectiveness.

The following table summarizes the amounts that were recorded on the balance sheet as of September 30, 2018, related to cumulative basis adjustments for fair value hedges.

	September 30, 2018
in millions	Balance sheet line item in which the hedge item is included	Carrying amount of hedged item (a)		Hedge accounting basis adjustment (b)
Interest rate contracts	Long-term debt	$	9,442	$	(145	)
Interest rate contracts	Certificate of deposit ($100,000 or more)	344		(1		)
Interest rate contracts	Other time deposits	178		—

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

(b) Basis adjustment includes $10 million related to de-designated hedged items no longer in qualifying fair value hedging relationships.

Cash flow hedges. During the nine-month period ended September 30, 2018, we did not exclude any portion of cash flow hedging instruments from the assessment of hedge effectiveness.

Considering the interest rates, yield curves, and notional amounts as of September 30, 2018, we expect to reclassify an estimated $45 million of after-tax net gains on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months. In addition, we expect to reclassify approximately $45 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months. As of September 30, 2018, the maximum length of time over which we hedge forecasted transactions is 10 years.

The following tables summarize the effect of fair value and cash flow hedge accounting on the income statement for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships (a)
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Three months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(108	)	$	1,025		$	(140	)	$	23
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	41			—			—			—
Recognized on derivatives designated as hedging instruments	(46		)	—			—			—
Net income (expense) recognized on fair value hedges	(5		)	—			—			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	(15		)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(15	)	—			—
Three months ended September 30, 2017
Total amounts presented in the consolidated statement of income	$	(86	)	$	928		$	(72	)	$	21
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	—			—			—			20
Recognized on derivatives designated as hedging instruments	10			—			—			(19		)
Net income (expense) recognized on fair value hedges	10			—			—			1
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(1		)	1			—			—
Gains (losses) (before tax) recognized in income for hedge ineffectiveness	—			—			—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	1		—			—

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships (a)
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Nine months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(302	)	$	2,965		$	(343	)	$	143
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	134			—			1			—
Recognized on derivatives designated as hedging instruments	(140		)	—			—			—
Net income (expense) recognized on fair value hedges	(6		)	—			1			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	(42		)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(42	)	—			—
Nine months ended September 30, 2017
Total amounts presented in the consolidated statement of income	$	(228	)	$	2,753		$	(196	)	$	138
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	—			—			—			50
Recognized on derivatives designated as hedging instruments	42			—			—			(49		)
Net income (expense) recognized on fair value hedges	42			—			—			1
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(3		)	21			—			—
Gains (losses) (before tax) recognized in income for hedge ineffectiveness	—			—			—			—
Net income (expense) recognized on cash flow hedges	$	(3	)	$	21		—			—

(a) Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.

Net investment hedges. We enter into foreign currency forward contracts to hedge our exposure to changes in the carrying value of our investments as a result of changes in the related foreign exchange rates. At September 30, 2018, AOCI reflected unrecognized, after-tax gains totaling $43 million related to cumulative changes in the fair value of our net investment hedges, which offset the unrecognized, after-tax foreign currency losses on net investment balances. We did not exclude any portion of our hedging instruments from the assessment of hedge effectiveness during the nine-month period ended September 30, 2018.

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and nine-month periods ended September 30, 2018, and September 30, 2017, and where they are recorded on the income statement. The table includes net gains (losses) recognized in OCI during the period and net gains (losses) reclassified from OCI into income during the current period.

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(a)			Net Gains (Losses) Recognized in Other Income(a)
Three months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(32	)	Interest income — Loans	$	(15	)	$	—
Interest rate	(1		)	Interest expense — Long-term debt	(2		)	—
Interest rate	1			Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(2		)	Other Income	—			—
Total	$	(34	)		$	(17	)	$	—
Three months ended September 30, 2017
Cash Flow Hedges
Interest rate	$	(1	)	Interest income — Loans	$	1		$	—
Interest rate	(1		)	Interest expense — Long-term debt	(1		)	—
Interest rate	(1		)	Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(12		)	Other Income	—			—
Total	$	(15	)		$	—		$	—

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(a)			Net Gains (Losses) Recognized in Other Income(a)
Nine months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(178	)	Interest income — Loans	$	(42	)	$	—
Interest rate	3			Interest expense — Long-term debt	(2		)	—
Interest rate	2			Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	8			Other Income	—			—
Total	$	(165	)		$	(44	)	$	—
Nine months ended September 30, 2017
Cash Flow Hedges
Interest rate	$	(1	)	Interest income — Loans	$	21		$	—
Interest rate	(1		)	Interest expense — Long-term debt	(3		)	—
Interest rate	(1		)	Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(22		)	Other Income	—			—
Total	$	(25	)		$	18		$	—

(a) Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.

Nonhedging instruments

The following tables summarize the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and nine-month periods ended September 30, 2018, and September 30, 2017, and where they are recorded on the income statement.

	Three months ended September 30, 2018										Three months ended September 30, 2017
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	$	8	$	—	$	2		$	10		$	5	—			$	1		$	6
Foreign exchange	10		—		—			10			10		—			—			10
Commodity	—		—		—			—			1		—			—			1
Credit	—		—		(7		)	(7		)	—		—			(6		)	(6		)
Other	—		1		1			2			—		$	(1	)	7			6
Total net gains (losses)	$	18	$	1	$	(4	)	$	15		$	16	$	(1	)	$	2		$	17

	Nine months ended September 30, 2018										Nine months ended September 30, 2017
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	$	28	$	—	$	4		$	32		$	21	—		$	(1	)	$	20
Foreign exchange	32		—		—			32			31		—		—			31
Commodity	6		—		—			6			4		—		—			4
Credit	2		—		(26		)	(24		)	1		—		(16		)	(15		)
Other	—		1		13			14			—		$	—	(4		)	(4		)
Total net gains (losses)	$	68	$	1	$	(9	)	$	60		$	57	$	—	$	(21	)	$	36

Counterparty Credit Risk

We use several means to mitigate and manage exposure to credit risk on derivative contracts. We enter into bilateral collateral and master netting agreements that provide for the net settlement of all contracts with a single counterparty in the event of default. Additionally, we monitor counterparty credit risk exposure on each contract to determine appropriate limits on our total credit exposure across all product types. We review our collateral positions on a daily basis and exchange collateral with our counterparties in accordance with standard ISDA documentation, central clearing rules, and other related agreements. We hold collateral in the form of cash and highly rated securities issued by the U.S. Treasury, government-sponsored enterprises, or GNMA. Cash collateral of $116 million was included in derivative assets on the balance sheet at September 30, 2018, compared to $23 million of cash collateral netted against derivative assets at December 31, 2017. The cash collateral netted against derivative liabilities totaled $304 million at September 30, 2018, and $150 million at December 31, 2017.

The following table summarizes the fair value of our derivative assets by type at the dates indicated. These assets represent our gross exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.

in millions	September 30, 2018			December 31, 2017
Interest rate	$	189		$	401
Foreign exchange	61			77
Commodity	376			163
Credit	(1		)	1
Other	7			4
Derivative assets before collateral	632			646
Less: Related collateral	(116		)	(23		)
Total derivative assets	$	748		$	669

We enter into derivative transactions with two primary groups: broker-dealers and banks, and clients. Given that these groups have different economic characteristics, we have different methods for managing counterparty credit exposure and credit risk.

We enter into transactions with broker-dealers and banks for various risk management purposes. At September 30, 2018, we had gross exposure of $148 million to broker-dealers and banks. We had net exposure of $215 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $205 million after considering $10 million of additional collateral held in the form of securities.

We enter into transactions with clients to accommodate their business needs. Due to the smaller size and magnitude of the individual contracts with clients, we generally do not exchange collateral in connection with these derivative transactions. To address the risk of default associated with the uncollateralized contracts, we have established a credit valuation adjustment (included in “accrued income and other assets”) in the amount of $4 million at September 30, 2018, which we estimate to be the potential future losses on amounts due from client counterparties in the event of default. At September 30, 2018, we had gross exposure of $592 million to client counterparties and other entities that are not broker-dealers or banks for derivatives that have associated master netting agreements. We had net exposure of $534 million on our derivatives with these counterparties after the application of master netting agreements, collateral, and the related reserve. 

Credit Derivatives

We are a buyer and, under limited circumstances, may be a seller of credit protection through the credit derivative market. We purchase credit derivatives to manage the credit risk associated with swap obligations as well as exposures to debt securities.

The following table summarizes the fair value of our credit derivatives purchased and sold by type as of September 30, 2018, and December 31, 2017. The fair value of credit derivatives presented below does not take into account the effects of bilateral collateral or master netting agreements.

	September 30, 2018								December 31, 2017
in millions	Purchased			Sold		Net			Purchased			Sold	Net
Single-name credit default swaps	$	(1	)	—		$	(1	)	$	(1	)	—	$	(1	)
Traded credit default swap indices	(1		)	—		(1		)	(2		)	—	(2		)
Other	—			(1	)	(1		)	—			—	—
Total credit derivatives	$	(2	)	(1	)	$	(3	)	$	(3	)	—	$	(3	)

The majority of transactions represented by the “other” category shown in the above table consist of risk participation agreements as described in Note 9. Derivatives and Hedging Activities of our 2017 Form 10-K under the heading “Credit Derivatives.” In addition, the other category includes credit default swap options in which we are given the right, but not the obligation, to purchase credit protection on a stated entity for a specified period of time.

The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at September 30, 2018, and December 31, 2017. The notional amount represents the maximum amount that the seller could be required to pay. The payment/performance risk assessment is based on the default probabilities for the underlying reference entities’ debt obligations using a Moody’s credit ratings matrix known as Moody’s “Idealized” Cumulative Default Rates. The payment/performance risk shown in the table represents a weighted-average of the default probabilities for all reference entities in the respective portfolios. These default probabilities are directly correlated to the probability that we will have to make a payment under the credit derivative contracts.

	September 30, 2018					December 31, 2017
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	12	2.47	5.01	%	$	15	3.08	6.64	%
Total credit derivatives sold	$	12	—	—		$	15	—	—

Credit Risk Contingent Features

We have entered into certain derivative contracts that require us to post collateral to the counterparties when these contracts are in a net liability position. The amount of collateral to be posted is based on the amount of the net liability and thresholds generally related to our long-term senior unsecured credit ratings with Moody’s and S&P. Collateral requirements also are based on minimum transfer amounts, which are specific to each Credit Support Annex (a component of the ISDA Master Agreement) that we have signed with the counterparties. In a limited number of instances, counterparties have the right to terminate their ISDA Master Agreements with us if our ratings fall below a certain level, usually investment-grade level (i.e., “Baa3” for Moody’s and “BBB-” for S&P). At September 30, 2018, KeyBank’s rating was “A3” with Moody’s and “A-” with S&P, and KeyCorp’s rating was “Baa1” with Moody’s and “BBB+” with S&P. As of September 30, 2018, the aggregate fair value of all derivative contracts with credit risk contingent features (i.e., those containing collateral posting or termination provisions based on our ratings) held by KeyBank that were in a net liability position totaled $335 million, which was comprised of $144 million in derivative assets and $479 million in derivative liabilities. We had $317 million in cash and securities collateral posted to cover those positions as of September 30, 2018. There were no derivative contracts with credit risk contingent features held by KeyCorp at September 30, 2018.

The following table summarizes the additional cash and securities collateral that KeyBank would have been required to deliver under the ISDA Master Agreements had the credit risk contingent features been triggered for the derivative contracts in a net liability position as of September 30, 2018, and December 31, 2017. The additional collateral amounts were calculated based on scenarios under which KeyBank’s ratings are downgraded one, two, or three ratings as of September 30, 2018, and December 31, 2017, and take into account all collateral already posted. A similar calculation was performed for KeyCorp, and no additional collateral would have been required as

of September 30, 2018, and December 31, 2017. For more information about the credit ratings for KeyBank and KeyCorp, see the discussion under the heading “Factors affecting liquidity” in the section entitled “Liquidity risk management” in Item 2 of this report.

	September 30, 2018				December 31, 2017
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	$	2	$	2
Two rating downgrades	1		1		2		2
Three rating downgrades	1		1		2		2

KeyBank’s long-term senior unsecured credit rating was four ratings above noninvestment grade at Moody’s and S&P as of September 30, 2018, and December 31, 2017. If KeyBank’s ratings had been downgraded below investment grade as of September 30, 2018, or December 31, 2017, payments of up to $2 million and $12 million, respectively, would have been required to either terminate the contracts or post additional collateral for those contracts in a net liability position, taking into account all collateral already posted. If KeyCorp’s ratings had been downgraded below investment grade as of September 30, 2018, or December 31, 2017, no payments would have been required to either terminate the contracts or post additional collateral for those contracts in a net liability position, taking into account all collateral already posted.

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Mortgage Servicing Assets

9 Months Ended

Sep. 30, 2018

Servicing Asset [Abstract]

Mortgage Servicing Assets

8. Mortgage Servicing Assets

We originate and periodically sell commercial and residential mortgage loans but continue to service those loans for the buyers. We also may purchase the right to service commercial mortgage loans for other lenders. We record a servicing asset if we purchase or retain the right to service loans in exchange for servicing fees that exceed the going market servicing rate and are considered more than adequate compensation for servicing. Additional information pertaining to the accounting for mortgage and other servicing assets is included in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Servicing Assets” beginning on page 106 of our 2017 Form 10-K.

Commercial

Changes in the carrying amount of commercial mortgage servicing assets are summarized as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of period	$	451		$	373		$	412		$	356
Servicing retained from loan sales	25			24			81			71
Purchases	17			10			50			24
Amortization	(25		)	(22		)	(75		)	(66		)
Balance at end of period	$	468		$	385		$	468		$	385
Fair value at end of period	$	672		$	508		$	672		$	508

The fair value of commercial mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted average of the significant unobservable inputs used to determine the fair value of our commercial mortgage servicing assets at September 30, 2018, and September 30, 2017, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2018	September 30, 2017
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 3.00% (1.16%)	1.00 - 3.00% (1.20%)
	Residual cash flows discount rate	7.00 - 15.00% (9.10%)	7.00 - 15.00% (8.90%)
	Escrow earn rate	2.38 - 3.94% (3.07%)	.80 - 3.00% (2.40%)
	Servicing cost	$150 - $38,500 ($1,445)	$150 - $38,500 ($1,468)
	Loan assumption rate	0.00 - 3.22% (1.34%)	0.00 - 3.00% (1.24%)
	Percentage late	0.00 - 2.00% (.20%)	0.00 - 2.00% (.27%)

If these economic assumptions change or prove incorrect, the fair value of commercial mortgage servicing assets may also change. Expected credit losses, escrow earning rates, and discount rates are critical to the valuation of

commercial mortgage servicing assets. Estimates of these assumptions are based on how a market participant would view the respective rates, and reflect historical data associated with the commercial mortgage loans, industry trends, and other considerations. Actual rates may differ from those estimated due to changes in a variety of economic factors. A decrease in the value assigned to the escrow earning rates would cause a decrease in the fair value of our commercial mortgage servicing assets. An increase in the assumed default rates of commercial mortgage loans or an increase in the assigned discount rates would cause a decrease in the fair value of our commercial mortgage servicing assets. Prepayment activity on commercial serviced loans does not significantly affect the valuation of our commercial mortgage servicing assets. Unlike residential mortgages, commercial mortgages experience significantly lower prepayments due to certain contractual restrictions affecting the borrower’s ability to prepay the mortgage.

The amortization of commercial servicing assets is determined in proportion to, and over the period of, the estimated net servicing income. The amortization of commercial servicing assets for each period, as shown in the table at the beginning of this note, is recorded as a reduction to contractual fee income. The contractual fee income from servicing commercial mortgage loans totaled $126 million for the nine-month period ended September 30, 2018, and $113 million for the nine-month period ended September 30, 2017. This fee income was offset by $75 million of amortization for the nine-month period ended September 30, 2018, and $66 million for the nine-month period ended September 30, 2017. Both the contractual fee income and the amortization are recorded, net, in “mortgage servicing fees” on the income statement.

Residential

Changes in the carrying amount of residential mortgage servicing assets are summarized as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of period	$	34		$	29		$	31		$	28
Servicing retained from loan sales	2			2			7			5
Purchases	—			—			—			—
Amortization	(1		)	(1		)	(3		)	(3		)
Balance at end of period	$	35		$	30		$	35		$	30
Fair value at end of period	$	49		$	34		$	49		$	34

The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2018, and September 30, 2017, along with the valuation techniques, are shown in the following table:

dollars in millions		September 30, 2018	September 30, 2017
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	8.27 - 55.15% (9.35%)	7.95 - 32.49% (10.15%)
	Discount rate	7.50 - 10.00% (7.54%)	8.50 - 11.00% (8.55%)
	Servicing cost	$62 - $4,375 ($67.76)	$76 - $3,335 ($82.19)

If these economic assumptions change or prove incorrect, the fair value of residential mortgage servicing assets may also change. Prepayment speed, discount rates, and servicing cost are critical to the valuation of servicing assets. Estimates of these assumptions are based on how a market participant would view the respective rates, and reflect historical data associated with the loans, industry trends, and other considerations. Actual rates may differ from those estimated due to changes in a variety of economic factors. An increase in the prepayment speed, assigned discount rates, and servicing cost assumptions would also cause a negative impact on the fair value of our residential mortgage servicing assets.

The amortization of residential servicing assets is determined in proportion to, and over the period of, the estimated net residential servicing income. The amortization of servicing assets for September 30, 2018, as shown in the table above, is recorded as a reduction to contractual fee income. The contractual fee income from servicing residential mortgage loans totaled $10 million for the nine-month period ended September 30, 2018, and $11 million for the nine-month period ended September 30, 2017. This fee income was offset by $3 million of amortization for both the

nine-month periods ended September 30, 2018, and September 30, 2017. Both the contractual fee income and the amortization are recorded, net, in “mortgage servicing fees” on the income statement.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

9. Variable Interest Entities

A VIE is a partnership, limited liability company, trust, or other legal entity that meets any one of the following criteria:

• The entity does not have sufficient equity to conduct its activities without additional subordinated financial support from another party.

• The entity’s investors lack the power to direct the activities that most significantly affect the entity’s economic performance.

• The entity’s equity at risk holders do not have the obligation to absorb losses or the right to receive residual returns.

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

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

LIHTC investments. Through KCDC, we have made investments directly and indirectly in LIHTC operating partnerships formed by third parties. As a limited partner in these operating partnerships, we are allocated tax credits and deductions associated with the underlying properties. We have determined that we are not the primary beneficiary of these investments because the general partners have the power to direct the activities that most significantly influence the economic performance of their respective partnerships and have the obligation to absorb expected losses and the right to receive residual returns. As we are not the primary beneficiary of these investments, we do not consolidate them.

Our maximum exposure to loss in connection with these partnerships consists of our unamortized investment balance plus any unfunded equity commitments and tax credits claimed but subject to recapture. We had $1.3 billion of investments in LIHTC operating partnerships at both September 30, 2018, and December 31, 2017. These investments are recorded in “accrued income and other assets” on our balance sheet. We do not have any loss reserves recorded related to these investments because we believe the likelihood of any loss to be remote. For all legally binding, unfunded equity commitments, we increase our recognized investment and recognize a liability. As of September 30, 2018, and December 31, 2017, we had liabilities of $447 million and $476 million, respectively, related to investments in qualified affordable housing projects, which are recorded in “accrued expenses and other liabilities” on our balance sheet. We continue to invest in these LIHTC operating partnerships.

The assets and liabilities presented in the table below convey the size of KCDC’s direct and indirect investments at September 30, 2018, and December 31, 2017. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our balance sheet.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2018
LIHTC investments	$	5,955	$	2,589	$	1,567
December 31, 2017
LIHTC investments	$	6,003	$	2,943	$	1,561

We amortize our LIHTC investments over the period that we expect to receive the tax benefits. During the first nine months of 2018, we recognized $126 million of amortization and $122 million of tax credits associated with these investments within “income taxes” on our income statement. During the first nine months of 2017, we recognized $124 million of amortization and $115 million of tax credits associated with these investments within “income taxes” on our income statement.

Principal investments. Through our principal investing entities, we have made investments in private equity funds engaged in venture- and growth-oriented investing. As a limited partner to these funds, we record these investments at fair value and receive distributions from the funds in accordance with the funds’ partnership agreements. We are not the primary beneficiary of these investments as we do not hold the power to direct the activities that most significantly affect the funds’ economic performance. Such power rests with the funds’ general partners. In addition, we have neither the obligation to absorb the funds’ expected losses nor the right to receive their residual returns. Our voting rights are also disproportionate to our economic interests, and substantially all of the funds’ activities are conducted on behalf of investors with disproportionately few voting rights. Because we are not the primary beneficiary of these investments, we do not consolidate them.

Our maximum exposure to loss associated with indirect principal investments consists of the investments’ fair value plus any unfunded equity commitments. The fair value of our indirect principal investments totaled $101 million and $124 million at September 30, 2018, and December 31, 2017, respectively. These investments are recorded in “other investments” on our balance sheet. Additional information on indirect principal investments is provided in Note 5 (“Fair Value Measurements”). The table below reflects the size of the private equity funds in which we were invested as well as our maximum exposure to loss in connection with these investments at September 30, 2018 and December 31, 2017.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2018
Indirect investments	$	21,088	$	376	$	129
December 31, 2017
Indirect investments	$	26,817	$	292	$	153

Through our principal investing entities, we have formed and funded operating entities that provide management and other related services to our investment company funds, which directly invest in portfolio companies. In return for providing services to our direct investment funds, these entities receive a minority equity interest in the funds. This minority equity ownership is recorded at fair value on the entities’ financial statements. Additional information on our direct principal investments is provided in Note 5 (“Fair Value Measurements”). While other equity investors manage the daily operations of these entities, we retain the power, through voting rights, to direct the activities of the entities that most significantly affect their economic performance. In addition, we have the obligation to absorb losses and the right to receive residual returns that could potentially be significant to these entities. As a result, we have determined that we are the primary beneficiary of these funds and have consolidated them since formation. The entities had no assets at September 30, 2018, that can only be used to settle the entities’ obligations, and $4 million of such assets at December 31, 2017. These assets are recorded in “cash and due from banks” and “accrued income and other assets” on our balance sheet. The entities had no liabilities at September 30, 2018, and December 31, 2017, and other equity investors have no recourse to our general credit.

Other unconsolidated VIEs. We are involved with other various entities in the normal course of business which we have determined to be VIEs. We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance. Our assets associated with these unconsolidated VIEs totaled $220 million at September 30, 2018, and $230 million at December 31, 2017. These assets are recorded in “accrued income and other assets,” “other investments,” “securities available for sale”, and “loans, net of unearned income” on our balance sheet. We had liabilities totaling less than $1 million and $4 million associated with these unconsolidated VIEs at September 30, 2018 and December 31, 2017, respectively. These liabilities are recorded in “accrued expenses and other liabilities” on our balance sheet. We have excluded certain transactions with unconsolidated VIEs from the balances above where we determine our continuing involvement is not significant.  In addition, where we only have a lending arrangement in the normal course of business with unconsolidated VIEs we present the balances related to the lending arrangements in Note 4 (“Asset Quality”).

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

Bipartisan Budget Act of 2018

On February 9, 2018, the Bipartisan Budget Act (“BBA”) of 2018 was signed into law. The BBA includes a retroactive one year tax extenders package back to January 1, 2017, which reinstated several energy investment

tax credits that had expired on December 31, 2016. Due to these retroactive provisions, Key recognized additional net investment tax credits in the first quarter of 2018 of $14 million, or a 2.8% reduction to our income tax provision, for energy tax credit transactions entered into during 2017.

TCJ Act

On December 22, 2017, the TCJ Act was signed into law. This comprehensive tax legislation provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, that impact corporate taxation requirements, such as the reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The TCJ Act retains the low-income housing and research and development credits and repeals the corporate alternative minimum tax. Other relevant corporate changes include earlier recognition of certain revenue; accelerating expensing of investments in tangible property, including leasing assets; and limiting several deductions such as FDIC premiums, certain executive compensation, and meals and entertainment expenses.

Key was required to re-value certain tax-related assets under the provisions of the TCJ Act at December 31, 2017. Under current U.S. GAAP, deferred tax assets and liabilities are to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. The tax-related assets consist primarily of deferred tax assets and liabilities and investments in low-income housing transactions. Due to the close proximity of our year end to the date the TCJ Act was signed into law, we estimated the impact of the income tax effects as of December 31, 2017, based upon currently available information which resulted in a reduction to our net income of $161 million. The significant components of this reduction included a $14 million reduction in our investments in certain low-income housing that is reflected in other expenses and a $147 million, or 7.6%, increase in our income tax provision for the twelve months ended December 31, 2017, due to the reduction to our net deferred tax asset and related actions. This reduction was primarily the result of the lower federal corporate income tax rate and was based on information available at that time.

During the current quarter, Key completed and filed its 2017 federal income tax return and management finalized its assessment of the initial impact of the TCJ Act and related regulatory guidance. As a result, our income tax provision was increased by $7 million during the quarter, and the total impact to Key of the TCJ Act was a reduction to our net income of $168 million.

The accounting for the changes in tax law resulted in stranded tax effects within accumulated other comprehensive income for items that were originally recognized in other comprehensive income rather than in net income. The FASB issued an accounting standard update allowing companies to reclassify stranded tax effects resulting from the TCJ Act from accumulated other comprehensive income to retained earnings. We early adopted this guidance during the quarter ended December 31, 2017, and utilizing the portfolio method reclassified $141 million from accumulated other comprehensive income to retained earnings to eliminate the stranded tax effects.

Income Tax Provision

In accordance with the applicable accounting guidance, the principal method established for computing the provision for income taxes in interim periods requires us to make our best estimate of the effective tax rate expected to be applicable for the full year. This estimated effective tax rate is then applied to interim consolidated pre-tax operating income to determine the interim provision for income taxes.

The effective tax rate, which is the provision for income taxes as a percentage of income from continuing operations before income taxes, was 15.5% for the third quarter of 2018 and 26.9% for the third quarter of 2017. The effective tax rates are below our combined federal and state statutory tax rate of 23.7% for the third quarter of 2018 and 37.2% for the third quarter of 2017, primarily due to income from investments in tax-advantaged assets such as corporate-owned life insurance and credits associated with renewable energy and low-income housing investments. The effective tax rates for the three months ended September 30, 2018, and September 30, 2017, were affected by net discrete income tax benefit of 2.2%, respectively.

Deferred Tax Asset

At September 30, 2018, from continuing operations we had a net deferred tax asset of $331 million, compared to a net deferred tax asset of $320 million at December 31, 2017, included in “accrued income and other assets” on the balance sheet.

To determine the amount of deferred tax assets that are more likely than not to be realized, and therefore recorded, we conduct a quarterly assessment of all available evidence. This evidence includes, but is not limited to, taxable income in prior periods, projected future taxable income, and projected future reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo change. Based on these criteria, we had a valuation allowance of $11 million at September 30, 2018, and $15 million at December 31, 2017. The valuation allowance is associated with certain state net operating loss carryforwards, state credit carryforwards, and federal and state capital loss carryforwards.

Unrecognized Tax Benefits

As permitted under the applicable accounting guidance for income taxes, it is our policy to recognize interest and penalties related to unrecognized tax benefits in “income tax expense.” At September 30, 2018, Key’s unrecognized tax benefits were $46 million.

Pre-1988 Bank Reserves Acquired in a Business Combination

Retained earnings of KeyBank included approximately $92 million of allocated bad debt deductions for which no income taxes have been recorded. Under current federal law, these reserves are subject to recapture into taxable income if KeyBank, or any successor, fails to maintain its bank status under the Internal Revenue Code or makes non-dividend distributions or distributions greater than its accumulated earnings and profits. No deferred tax liability has been established as these events are not expected to occur in the foreseeable future.

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Acquisition, Divestiture, and Discontinued Operations

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Acquisition, Divestiture, and Discontinued Operations

11. Acquisitions, Divestiture, and Discontinued Operations

Acquisitions

Cain Brothers & Company, LLC. On October 2, 2017, KBCM acquired all outstanding interests in Cain Brothers, a healthcare-focused investment banking and public finance firm. This acquisition expands KBCM’s investment banking group in the healthcare vertical by adding distinctive capabilities and broadening KBCM’s existing healthcare investment banking network. The acquisition was accounted for as a business combination. As a result of the acquisition, Key recognized identifiable intangible assets with a fair value of $30 million and goodwill of $53 million, which are deductible for tax purposes. The valuation of the acquired assets and liabilities of Cain Brothers was final at March 31, 2018.

HelloWallet Holdings, Inc. On July 1, 2017, KeyBank acquired all of the outstanding capital stock of HelloWallet Holdings, Inc., the sole owner of HelloWallet, LLC, a digital financial wellness company. Key’s retail banking franchise is leveraging HelloWallet’s technology to provide data-driven insights to clients, allowing clients to better understand and improve their personal finances. The acquisition was accounted for as a business combination. As a result of the acquisition, Key recognized identifiable intangible assets with a fair value of $12 million, comprised primarily of proprietary software, and goodwill of $17 million, which are not deductible for tax purposes. The valuation of the acquired assets and liabilities of HelloWallet was final at March 31, 2018.

Key Merchant Services, LLC. On June 30, 2017, KeyBank (consolidated) acquired an additional 51% interest in KMS, increasing our ownership interest from 49% to 100%. This acquisition enables us to grow our merchant services business and enhance our merchant product offerings. This transaction is accounted for as a business combination achieved in stages. Prior to the acquisition, KMS was operated as a merchant services joint venture and accounted for as an equity method investment in our consolidated financial statements.

As of June 30, 2017, the provisional estimated fair value of our equity interest in KMS immediately before the acquisition was $74 million. The fair value of our previously held equity interest was measured using discounted cash flow modeling that incorporates an appropriate risk premium and forecast earnings information. On June 30, 2017, we recognized a provisional non-cash holding gain of $64 million for the difference between the fair value and the book value of our previously held equity interest. In the third quarter of 2017, we recognized a measurement-period adjustment of $5 million to reduce the provisional estimated fair value of our equity interest immediately before the acquisition to $69 million, which reduced the total non-cash holding gain to $59 million. The initial gain and subsequent adjustment were included in “other income” on the income statement for the three months ended September 30, 2017. Upon acquisition, we recorded estimated identifiable intangible assets of $95 million and goodwill of less than $1 million. In the third quarter of 2017, we recognized a measurement-period adjustment of

$10 million to reduce the fair value of acquired intangible assets to $85 million. In the fourth quarter of 2017, we recognized a measurement period adjustment increasing deferred tax assets and decreasing goodwill by $2 million. In aggregate, the measurement-period adjustments recognized as of December 31, 2017, increased goodwill recorded in connection with the KMS acquisition to $4 million. The valuation of the acquired assets and liabilities of Key Merchant Services, LLC was final at June 30, 2018.

Divestiture

Key Insurance & Benefits Services, Inc. On March 29, 2018, we announced that we had entered into a definitive agreement to sell KIBS to USI Insurance Services. We acquired KIBS as a part of the 2016 merger with First Niagara. We completed the sale to USI Insurance Services on May 4, 2018. At the close of the sale, we recognized a $73 million net gain on sale. In the third quarter of 2018, we recognized an additional $5 million gain upon the finalization of the purchase price.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed education lending business. At September 30, 2018, and December 31, 2017, approximately $1.1 billion and $1.3 billion, respectively, of education loans are included in discontinued assets on the consolidated balance sheets. Net interest income after provision for credit losses for this business is not material and is included in income (loss) from discontinued operations, net of taxes on the consolidated statements of income.

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Securities Financing Activities

9 Months Ended

Sep. 30, 2018

Banking and Thrift [Abstract]

Securities Financing Activities

12. Securities Financing Activities

We enter into repurchase agreements to finance overnight customer sweep deposits. We also enter into repurchase and reverse repurchase agreements to settle other securities obligations. We account for these securities financing agreements as collateralized financing transactions. Repurchase and reverse repurchase agreements are recorded on the balance sheet at the amounts for which the securities will be subsequently sold or repurchased. Securities borrowed transactions are recorded on the balance sheet at the amounts of cash collateral advanced. While our securities financing agreements incorporate a right of set off, the assets and liabilities are reported on a gross basis. Reverse repurchase agreements and securities borrowed transactions are included in “short-term investments” on the balance sheet; repurchase agreements are included in “federal funds purchased and securities sold under repurchase agreements.” Additional information regarding our securities financing activities, including risk management activities, is provided in Note 16. Securities Financing Activities beginning on page 160 of our 2017 Form 10-K.

The following table summarizes our securities financing agreements at September 30, 2018, and December 31, 2017:

	September 30, 2018									December 31, 2017
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	$	7	$	(1	)	$	(6	)	—	$	3	$	(3	)	—			—
Total	$	7	$	(1	)	$	(6	)	—	$	3	$	(3	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	285	$	(2	)	$	(283	)	—	$	374	$	(4	)	$	(370	)	—
Total	$	285	$	(2	)	$	(283	)	—	$	374	$	(4	)	$	(370	)	—

(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.

As of September 30, 2018, the carrying amount of assets pledged as collateral against repurchase agreements totaled $416 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At September 30, 2018, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $283 million. The collateral pledged under customer sweep repurchase agreements is posted to a third-party custodian and cannot be sold or

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

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Employee Benefits

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Employee Benefits

13. Employee Benefits

Pension Plans

Effective December 31, 2009, we amended our cash balance pension plan and other defined benefit plans to freeze all benefit accruals and close the plans to new employees. We will continue to credit participants’ existing account balances for interest until they receive their plan benefits. We changed certain pension plan assumptions after freezing the plans.

The components of net pension cost (benefit) for all funded and unfunded plans are as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Interest cost on PBO	$	10		$	12		$	30		$	36
Expected return on plan assets	(13		)	(17		)	(39		)	(51		)
Amortization of losses	4			4			12			12
Net pension cost	$	1		$	(1	)	$	3		$	(3	)

Other Postretirement Benefit Plans

We sponsor a retiree healthcare plan in which all employees age 55 with five years of service (or employees age 50 with 15 years of service who are terminated under conditions that entitle them to a severance benefit) are eligible to participate. Participant contributions are adjusted annually. Key may provide a subsidy toward the cost of coverage for certain employees hired before 2001 with a minimum of 15 years of service at the time of termination. We use a separate VEBA trust to fund the retiree healthcare plan.

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Interest cost on APBO	$	1		$	1		$	1		$	1
Expected return on plan assets	(1		)	(1		)	(1		)	(1		)
Net postretirement benefit cost	—			—			—			—

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries

9 Months Ended

Sep. 30, 2018

Banking and Thrift [Abstract]

Trust Preferred Securities Issued by Unconsolidated Subsidiaries

14. Trust Preferred Securities Issued by Unconsolidated Subsidiaries

We own the outstanding common stock of business trusts formed by us that issued corporation-obligated, mandatorily redeemable, trust preferred securities. The trusts used the proceeds from the issuance of their trust preferred securities and common stock to buy debentures issued by KeyCorp. These debentures are the trusts’ only assets; the interest payments from the debentures finance the distributions paid on the mandatorily redeemable trust preferred securities. The outstanding common stock of these business trusts is recorded in “other investments” on our balance sheet.

We unconditionally guarantee the following payments or distributions on behalf of the trusts:

• 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.

The Regulatory Capital Rules, discussed in “Supervision and regulation” in Item 2 of this report, require us to treat our mandatorily redeemable trust preferred securities as Tier 2 capital.

The trust preferred securities, common stock, and related debentures are summarized as follows:

dollars in millions	Trust Preferred 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
September 30, 2018
KeyCorp Capital I	$	155	$	6	$	161	3.077	%	2028
KeyCorp Capital II	99		4		103		6.875		2029
KeyCorp Capital III	128		4		132		7.750		2029
HNC Statutory Trust III	18		1		19		3.710		2035
Willow Grove Statutory Trust I	18		1		19		3.644		2036
HNC Statutory Trust IV	16		1		17		3.619		2037
Westbank Capital Trust II	7		—		7		4.528		2034
Westbank Capital Trust III	7		—		7		4.528		2034
Total	$	448	$	17	$	465	5.364	%	—
December 31, 2017	$	463	$	17	$	480	4.977	%	—

(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 $40 million at September 30, 2018, and $55 million at December 31, 2017. 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 $40 million at September 30, 2018, and $55 million at December 31, 2017. 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.

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Contingent Liabilities and Guarantees

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities and Guarantees

15. Contingent Liabilities and Guarantees

Legal Proceedings

Litigation. From time to time, in the ordinary course of business, we and our subsidiaries are subject to various litigation, investigations, and administrative proceedings. Private, civil litigations may range from individual actions involving a single plaintiff to putative class action lawsuits with potentially thousands of class members. Investigations may involve both formal and informal proceedings, by both government agencies and self-regulatory bodies. These matters may involve claims for substantial monetary relief. At times, these matters may present novel claims or legal theories. Due to the complex nature of these various other matters, it may be years before some matters are resolved. While it is impossible to ascertain the ultimate resolution or range of financial liability, based on information presently known to us, we do not believe there is any matter to which we are a party, or involving any of our properties that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on our financial condition. We continually monitor and reassess the potential materiality of these litigation matters. We note, however, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established reserves. As a result, the outcome of a particular matter, or a combination of matters, may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.

Guarantees

We are a guarantor in various agreements with third parties. The following table shows the types of guarantees that we had outstanding at September 30, 2018. Information pertaining to the basis for determining the liabilities recorded in connection with these guarantees is included in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Guarantees” beginning on page 108 of our 2017 Form 10-K.

September 30, 2018	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,097	$	71
Recourse agreement with FNMA	3,750		7
Residential mortgage reserve	1,500		6
Return guarantee agreement with LIHTC investors	2		2
Written put options (a)	2,346		82
Total	$	10,695	$	168

(a) The maximum potential undiscounted future payments represent notional amounts of derivatives qualifying as guarantees.

We determine the payment/performance risk associated with each type of guarantee described below based on the probability that we could be required to make the maximum potential undiscounted future payments shown in the preceding table. We use a scale of low (0% to 30% probability of payment), moderate (greater than 30% to 70% probability of payment), or high (greater than 70% probability of payment) to assess the payment/performance risk, and have determined that the payment/performance risk associated with each type of guarantee outstanding at September 30, 2018, is low.

Standby letters of credit. KeyBank issues standby letters of credit to address clients’ financing needs. These instruments obligate us to pay a specified third party when a client fails to repay an outstanding loan or debt instrument or fails to perform some contractual nonfinancial obligation. Any amounts drawn under standby letters of credit are treated as loans to the client; they bear interest (generally at variable rates) and pose the same credit risk to us as a loan. At September 30, 2018, our standby letters of credit had a remaining weighted-average life of two years, with remaining actual lives ranging from less than one year to as many as 16 years.

Recourse agreement with FNMA. We participate as a lender in the FNMA Delegated Underwriting and Servicing program. FNMA delegates responsibility for originating, underwriting, and servicing mortgages, and we assume a limited portion of the risk of loss during the remaining term on each commercial mortgage loan that we sell to FNMA. We maintain a reserve for such potential losses in an amount that we believe approximates the fair value of our liability. At September 30, 2018, the outstanding commercial mortgage loans in this program had a weighted-average remaining term of 7.9 years, and the unpaid principal balance outstanding of loans sold by us as a participant was $13.1 billion. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 29% of the principal balance of loans outstanding at September 30, 2018. If we are required to make a payment, we would have an interest in the collateral underlying the related commercial mortgage loan; any loss we incur could be offset by the amount of any recovery from the collateral.

Residential Mortgage Banking. We often originate and sell residential mortgage loans with servicing retained. Our loan sales activity is generally conducted through loan sales in a secondary market sponsored by FNMA and FHLMC. Subsequent to the sale of mortgage loans, we do not typically retain any interest in the underlying loans except through our relationship as the servicer of the loans.

As is customary in the mortgage banking industry, we, or banks we have acquired, have made certain representations and warranties related to the sale of residential mortgage loans (including loans sold with servicing released) and to the performance of our obligations as servicer. The breach of any such representations or warranties could result in losses for us. Our maximum exposure to loss is equal to the outstanding principal balance of the sold loans; however, any loss would be reduced by any payments received on the loans or through the sale of collateral.

At September 30, 2018, the outstanding residential mortgage loans in this program had a weighted-average LTV ratio of 74%, and the unpaid principal balance outstanding of loans sold by us was $5.0 billion. The risk assessment is low for the residential mortgage product. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 30% of the principal balance of loans outstanding at September 30, 2018. 

Our liability for estimated repurchase obligations on loans sold, which is included in other liabilities on our balance sheet, was $6.0 million at September 30, 2018.

Return guarantee agreement with LIHTC investors. KAHC, a subsidiary of KeyBank, offered limited partnership interests to qualified investors. Partnerships formed by KAHC invested in low-income residential rental properties that qualify for federal low-income housing tax credits under Section 42 of the Internal Revenue Code. In certain partnerships, investors paid a fee to KAHC for a guaranteed return that is based on the financial performance of the property and the property’s confirmed LIHTC status throughout a 15-year compliance period. Typically, KAHC fulfills these guaranteed returns by distributing tax credits and deductions associated with the specific properties. If KAHC defaults on its obligation to provide the guaranteed return, KeyBank is obligated to make any necessary payments to investors. No recourse or collateral is available to offset our guarantee obligation other than the underlying income streams from the properties and the residual value of the operating partnership interests.

As shown in the previous table, KAHC maintained a reserve in the amount of $2 million at September 30, 2018, which is sufficient to cover estimated future obligations under the guarantees. The maximum exposure to loss reflected in the table represents undiscounted future payments due to investors for the return on and of their investments.

These guarantees have expiration dates that extend through 2018, but KAHC has not formed any new partnerships under this program since October 2003. Additional information regarding these partnerships is included in Note 9 (“Variable Interest Entities”).

Written put options. In the ordinary course of business, we “write” put options for clients that wish to mitigate their exposure to changes in interest rates and commodity prices. At September 30, 2018, our written put options had an average life of three years. These instruments are considered to be guarantees, as we are required to make payments to the counterparty (the client) based on changes in an underlying variable that is related to an asset, a liability, or an equity security that the client holds. We are obligated to pay the client if the applicable benchmark interest rate or commodity price is above or below a specified level (known as the “strike rate”). These written put options are accounted for as derivatives at fair value, as further discussed in Note 7 (“Derivatives and Hedging Activities”). We mitigate our potential future payment obligations by entering into offsetting positions with third parties.

Written put options where the counterparty is a broker-dealer or bank are accounted for as derivatives at fair value but are not considered guarantees since these counterparties typically do not hold the underlying instruments. In addition, we are a purchaser and seller of credit derivatives, which are further discussed in Note 7 (“Derivatives and Hedging Activities”).

Default guarantees. Some lines of business participate in guarantees that obligate us to perform if the debtor (typically a client) fails to satisfy all of its payment obligations to third parties. We generally undertake these guarantees for one of two possible reasons: (i) either the risk profile of the debtor should provide an investment return, or (ii) we are supporting our underlying investment in the debtor. We do not hold collateral for the default guarantees. If we were required to make a payment under a guarantee, we would receive a pro rata share should the third party collect some or all of the amounts due from the debtor. At September 30, 2018, we had less than $1 million of default guarantees.

Other Off-Balance Sheet Risk

Other off-balance sheet risk stems from financial instruments that do not meet the definition of a guarantee as specified in the applicable accounting guidance, and from other relationships.

Indemnifications provided in the ordinary course of business. We provide certain indemnifications, primarily through representations and warranties in contracts that we execute in the ordinary course of business in connection with loan and lease sales and other ongoing activities, as well as in connection with purchases and sales of businesses. We maintain reserves, when appropriate, with respect to liability that reasonably could arise as a result of these indemnities.

Intercompany guarantees. KeyCorp, KeyBank, and certain of our affiliates are parties to various guarantees that facilitate the ongoing business activities of other affiliates. These business activities include issuing debt, assuming certain lease and insurance obligations, and purchasing or issuing investments and securities.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income

16. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and nine months ended September 30, 2018, and September 30, 2017, are as follows:

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, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(288		)	(126		)	(10		)	—			(424		)
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			8			42
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(288		)	(92		)	(15		)	8			(387		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Other comprehensive income before reclassification, net of income taxes	(72		)	(26		)	1			—			(97		)
Amounts reclassified from AOCI, net of income taxes (a)	—			14			—			2			16
Other amounts reclassified from AOCI, net of income taxes	—			—			—			—			—
Net current-period other comprehensive income, net of income taxes	(72		)	(12		)	1			2			(81		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at December 31, 2016	$	(185	)	$	(14	)	$	(3	)	$	(339	)	$	(541	)
Other comprehensive income before reclassification, net of income taxes	40			(16		)	14			—			38
Amounts reclassified from AOCI, net of income taxes (a)	—			(11		)	—			8			(3		)
Net current-period other comprehensive income, net of income taxes	40			(27		)	14			8			35
Balance at September 30, 2017	$	(145	)	$	(41	)	$	11		$	(331	)	$	(506	)
Balance at June 30, 2017	(145		)	$	(31	)	$	4		$	(334	)	$	(506	)
Other comprehensive income before reclassification, net of income taxes	—			(10		)	7			—			(3		)
Amounts reclassified from AOCI, net of income taxes (a)	—			—			—			3			3
Net current-period other comprehensive income, net of income taxes	—			(10		)	7			3			—
Balance at September 30, 2017	$	(145	)	$	(41	)	$	11		$	(331	)	$	(506	)

(a) See table below for details about these reclassifications.

Our reclassifications out of AOCI for the three and nine months ended September 30, 2018, and September 30, 2017, are as follows:

	Nine months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2018			2017
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(42	)	$	21		Interest income — Loans
Interest rate	(2		)	(3		)	Interest expense — Long-term debt
	(44		)	18			Income (loss) from continuing operations before income taxes
	(10		)	7			Income taxes
	$	(34	)	$	11		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(12	)	$	(12	)	Personnel expense
	(12		)	(12		)	Income (loss) from continuing operations before income taxes
	(4		)	(4		)	Income taxes
	$	(8	)	$	(8	)	Income (loss) from continuing operations

	Three months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2018			2017
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(15	)	$	1		Interest income — Loans
Interest rate	(2		)	(1		)	Interest expense — Long-term debt
	(17		)	—			Income (loss) from continuing operations before income taxes
	(3		)	—			Income taxes
	$	(14	)	—			Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(4	)	(4		)	Personnel expense
	(4		)	(4		)	Income (loss) from continuing operations before income taxes
	(2		)	(1		)	Income taxes
	$	(2	)	$	(3	)	Income (loss) from continuing operations

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Shareholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Shareholder' Equity

17. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2018 capital plan (which is effective through the second quarter of 2019) submitted and not objected to by the Federal Reserve, we have authority to repurchase up to $1.225 billion of our Common Shares. We completed $542 million of Common Share repurchases, including $541 million of Common Share repurchases in the open market and $1 million of Common Share repurchases related to employee equity compensation programs, in the third quarter of 2018 under this authorization.

Consistent with our 2018 capital plan, the Board declared a quarterly dividend of $.17 per Common Share for the third quarter of 2018.

Preferred Stock

On July 30, 2018, we issued $425 million of depositary shares, each representing a 1/40^th ownership interest in a share of our Fixed Rate Perpetual Noncumulative Series F Preferred Stock. Our Series F Preferred Stock has a $1 par value with a $1,000 liquidation preference (equivalent to $25 per depositary share). 

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		Third quarter 2018 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		—

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Line of Business Results

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Line of Business Results

18. Line of Business Results

The specific lines of business that constitute each of the major business segments (operating segments) align with how management reviews performance and makes business decisions. We have two major business segments, Key Community Bank and Key Corporate Bank. We also have Other Segments that consists of corporate treasury, our principal investing unit, and various exit portfolios. Total assets included under “Reconciling Items” 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. For more information on our business segments, see Note 25 ("Line of Business Results") on page 183 of our 2017 Form 10-K.

The development and application of the methodologies that we use to allocate items among our lines of business is a dynamic process. Accordingly, financial results may be revised periodically to reflect enhanced alignment of expense base allocations drivers, changes in the risk profile of a particular business, or changes in our organizational structure.

The table on the following pages shows selected financial data for our major business segments for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

Three months ended September 30,	Key Community Bank						Key Corporate Bank
dollars in millions	2018			2017			2018			2017
SUMMARY OF OPERATIONS
Net interest income (TE)	$	726		$	673		$	273		$	292
Noninterest income	268			272			301			269
Total revenue (TE) (a)	994			945			574			561
Provision for credit losses	43			59			20			(11		)
Depreciation and amortization expense	27			30			34			25
Other noninterest expense	608			596			282			278
Income (loss) from continuing operations before income taxes (TE)	316			260			238			269
Allocated income taxes and TE adjustments	75			97			39			79
Income (loss) from continuing operations	241			163			199			190
Income (loss) from discontinued operations, net of taxes	—			—			—			—
Net income (loss)	241			163			199			190
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—
Net income (loss) attributable to Key	$	241		$	163		$	199		$	190
AVERAGE BALANCES (b)
Loans and leases	$	47,862		$	47,614		$	39,714		$	38,021
Total assets (a)	51,740			51,642			46,860			45,257
Deposits	82,259			79,563			21,056			21,559
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	43		$	41		$	19		$	(9	)
Return on average allocated equity (b)	19.80		%	13.39		%	26.91		%	27.08		%
Return on average allocated equity	19.80			13.39			26.91			27.08
Average full-time equivalent employees (c)	10,529			10,696			2,546			2,460

Nine months ended September 30,	Key Community Bank						Key Corporate Bank
dollars in millions	2018			2017			2018			2017
SUMMARY OF OPERATIONS
Net interest income (TE)	$	2,129		$	1,978		$	822		$	909
Noninterest income	820			856			852			827
Total revenue (TE) (a)	2,949			2,834			1,674			1,736
Provision for credit losses	128			152			62			26
Depreciation and amortization expense	84			86			101			68
Other noninterest expense	1,844			1,790			852			834
Income (loss) from continuing operations before income taxes (TE)	893			806			659			808
Allocated income taxes and TE adjustments	212			300			85			213
Income (loss) from continuing operations	681			506			574			595
Income (loss) from discontinued operations, net of taxes	—			—			—			—
Net income (loss)	681			506			574			595
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—
Net income (loss) attributable to Key	$	681		$	506		$	574		$	595
AVERAGE BALANCES (b)
Loans and leases	$	47,844		$	47,396		$	39,232		$	37,804
Total assets (a)	51,739			51,361			46,544			44,506
Deposits	81,053			79,439			20,977			21,237
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	119		$	131		$	56		$	24
Return on average allocated equity (b)	18.80		%	14.14		%	26.36		%	27.93		%
Return on average allocated equity	18.80			14.14			26.36			27.93
Average full-time equivalent employees (c)	10,604			10,573			2,542			2,403

(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.

Other Segments						Total Segments						Reconciling Items						Key
2018			2017			2018			2017			2018			2017			2018			2017
$	(13	)	$	(10	)	$	986		$	955		$	7		$	7		$	993		$	962
37			52			606			593			3			(1		)	609			592
24			42			1,592			1,548			10			6			1,602			1,554
(2		)	2			61			50			1			1			62			51
—			1			61			56			37			41			98			97
7			25			897			899			(31		)	(4		)	866			895
19			14			573			543			3			(32		)	576			511
(3		)	(6		)	111			170			(17		)	(22		)	94			148
22			20			462			373			20			(10		)	482			363
—			—			—			—			—			1			—			1
22			20			462			373			20			(9		)	482			364
—			(1		)	—			(1		)	—			1			—			—
$	22		$	21		$	462		$	374		$	20		$	(10	)	$	482		$	364
$	888		$	1,175		$	88,464		$	86,810		$	3		$	4		$	88,467		$	86,814
37,769			36,895			136,369			133,794			360			562			136,729			134,356
2,292			2,010			105,607			103,132			19			(27		)	105,626			103,105
(1)			—			$	62		$	32		(1		)	$	—		$	60		$	32
73.35		%	55.54		%	23.26		%	19.11		%	1.08		%	(.58		)%	12.57		%	9.45		%
73.35			55.54			23.26			19.11			1.08			(0.53		)	12.57			9.48
2			337			13,077			13,493			5,073			5,055			18,150			18,548

Other Segments						Total Segments						Reconciling Items						Key
2018			2017			2018			2017			2018			2017			2018			2017
$	(40	)	$	(22	)	$	2,911		$	2,865		$	21		$	13		$	2,932		$	2,878
139			154			1,811			1,837			59			(15		)	1,870			1,822
99			132			4,722			4,702			80			(2		)	4,802			4,700
(4		)	2			186			180			1			—			187			180
1			2			186			156			114			127			300			283
47			77			2,743			2,701			(80		)	16			2,663			2,717
55			51			1,607			1,665			45			(145		)	1,652			1,520
(10		)	(16		)	287			497			(12		)	(72		)	275			425
65			67			1,320			1,168			57			(73		)	1,377			1,095
—			—			—			—			5			6			5			6
65			67			1,320			1,168			62			(67		)	1,382			1,101
—			1			—			1			—			—			—			1
$	65		$	66		$	1,320		$	1,167		$	62		$	(67	)	$	1,382		$	1,100
$	938		$	1,263		$	88,014		$	86,463		$	4		$	22		$	88,018		$	86,485
37,345			36,569			135,628			132,436			386			766			136,014			133,202
1,992			2,030			104,022			102,706			51			(47		)	104,073			102,659
—			$	1		$	175		$	156		(1)			—			$	174		$	156
67.37		%	56.20		%	22.39		%	20.03		%	1.06		%	(1.32		)%	12.24		%	9.62		%
67.37			56.20			22.39			20.03			1.16			(1.21		)	12.28			9.67
173			341			13,319			13,317			5,035			5,110			18,354			18,427

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Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

19. Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers, by line of business, for the three- and nine-month periods ended September 30, 2018:

Three months ended September 30, 2018
dollars in millions	Key Community Bank		Key Corporate Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	90	$	16	$	106
Investment banking and debt placement fees	1		69		70
Services charges on deposit accounts	72		13		85
Cards and payments income	40		28		68
Other noninterest income	5		—		5
Total revenue from contracts with customers	$	208	$	126	$	334
Other noninterest income (a)					$	235
Noninterest income from other segments (b)					37
Reconciling items (c)					3
Total noninterest income					$	609

(a) Noninterest income considered earned outside the scope of contracts with customers.

(b) Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.

(c) Reconciling items consists of intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.

Nine months ended September 30, 2018
dollars in millions	Key Community Bank		Key Corporate Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	268	$	50	$	318
Investment banking and debt placement fees	2		183		185
Services charges on deposit accounts	226		39		265
Cards and payments income	115		82		197
Other noninterest income	15		1		16
Total revenue from contracts with customers	$	626	$	355	$	981
Other noninterest income (a)					$	691
Noninterest income from other segments (b)					139
Reconciling items (c)					59
Total noninterest income					$	1,870

(a) Noninterest income considered earned outside the scope of contracts with customers.

(b) Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.

(c) Reconciling items consists primarily of the gain on the sale of, and contract revenue recognized prior to the sale of, KIBS for the second quarter of 2018, intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.

We have no material contract assets or contract liabilities for the three- and nine-month periods ended September 30, 2018.

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Basis of Presentation and Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation

The consolidated financial statements include the accounts of KeyCorp and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Some previously reported amounts have been reclassified to conform to current reporting practices.

The consolidated financial statements include any voting rights entities in which we have a controlling financial interest. In accordance with the applicable accounting guidance for consolidations, we consolidate a VIE if we have: (i) a variable interest in the entity; (ii) the power to direct activities of the VIE that most significantly affect the entity’s economic performance; and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary). Variable interests can include equity interests, subordinated debt, derivative contracts, leases, service agreements, guarantees, standby letters of credit, loan commitments, and other contracts, agreements, and financial instruments. See Note 9 (“Variable Interest Entities”) for information on our involvement with VIEs.

We use the equity method to account for unconsolidated investments in voting rights entities or VIEs if we have significant influence over the entity’s operating and financing decisions (usually defined as a voting or economic interest of 20% to 50%, but not controlling). Unconsolidated investments in voting rights entities or VIEs in which we have a voting or economic interest of less than 20% are carried at the cost measurement alternative or at fair value. Investments held by our registered broker-dealer and investment company subsidiaries (principal investing entities and Real Estate Capital line of business) are carried at fair value.

We believe that the unaudited consolidated interim financial statements reflect all adjustments of a normal recurring nature and disclosures that are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year. The interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our 2017 Form 10-K.

Subsequent Events

In preparing these financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all shareholders and other financial statement users or filed with the SEC.

Accounting Guidance Adopted and Pending Adoption

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only) An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date	The ASU amends disclosure requirements related to fair value measurements. Specifically, entities are no longer required to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, or qualitatively disclose the valuation process for Level 3 fair value measurements. The updated guidance requires disclosure of the changes in unrealized gains and losses for the period included in Other Comprehensive Income for recurring Level 3 fair value measurements. Entities also will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The additional provisions of the guidance should be adopted prospectively, while the eliminated requirements should be adopted retrospectively.	Key has early adopted the disclosures no longer required by the guidance as of September 30, 2018, and anticipates early adopting the additional provisions of the standard in the first quarter of 2019. The adoption of this standard will not result in significant changes to Key’s disclosures and there will be no effect to our financial condition or results of operations.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2015-14, Deferral of Effective Date ASU 2016-08, Principal versus Agent Considerations ASU 2016-10, Identifying Performance Obligations and Licensing ASU 2016-11, Rescission of SEC Guidance because of Accounting Standard Updates 2014-09 and 2014-16 pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ASU 2016-12, Narrow-scope Improvements and Practical Expedients ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers	January 1, 2018	These ASUs supersede the revenue recognition guidance in ASC 605, Revenue Recognition, and most industry-specific guidance. The core principle of these ASUs is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. These ASUs can be implemented using a retrospective method, or a cumulative-effect approach to new contracts and existing contracts with performance obligations as of the effective date.	On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective method for those contracts which were not completed as of that date. Results for reporting periods beginning January 1, 2018, are presented under ASC 606. As allowed under the new guidance, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As a result of adopting ASC 606, we changed the timing of recognition for revenues related to insurance commissions, securities underwriting, and deposit account maintenance fees, however, those changes did not have a material impact on our consolidated financial statements, results of operations, equity, or cash flows as of the adoption date or for the nine months ended September 30, 2018. The presentation of underwriting costs and reimbursed out-of-pocket expenses related to underwriting and M&A advisory services was changed from net to gross within the income statement as Key acts as the principal in the transactions. Securities underwriting revenue is recorded within "investment banking and debt placement fees" and underwriting costs and reimbursed out-of-pocket expenses within "other expense" on the income statement. Additionally, because Key acts as an agent, certain credit and debit card reward costs and certain card network costs were changed from a gross presentation to net within "cards and payment income" on the income statement. Credit and debit card reward costs and card network costs were recorded as "other expense" on the income statement in prior periods. These changes in presentation did not have a material impact on our consolidated financial statements for the nine months ended September 30, 2018. ASC 606 requires quantitative disclosure of the allocation of the transaction price to the remaining performance obligations when those amounts are expected to be recognized as revenue. However, the standard provides exemptions from this disclosure for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services provided. Most of our revenue subject to ASC 606 fits into one of these exemptions, or is immaterial. We elected to use the optional exemption to not disclose the aggregate amount of the transaction price to remaining performance obligations.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	January 1, 2018	The ASU amends ASC Topic 815, Derivatives and Hedging, to simplify the requirements for hedge accounting and facilitate financial reporting that more closely aligns with an entity’s risk management activities. Key amendments include: eliminating the requirement to separately measure and report hedge ineffectiveness, requiring changes in the value of the hedging instrument to be presented in the same income statement line as the earnings effect of the hedged item, and the ability to measure the hedged item based on the benchmark interest rate component of the total contractual coupon for fair value hedges. Additional disclosures are also required for reporting periods subsequent to the date of adoption. The guidance should be implemented on a modified retrospective basis to existing hedge relationships as of the adoption date.	On January 1, 2018, we adopted this ASU using a modified retrospective basis. Accordingly, our financial statements for the quarter ended September 30, 2018, include an immaterial cumulative-effect adjustment to decrease opening retained earnings to reflect the application of the new guidance as of January 1, 2018. The primary impact to Key at adoption was the election to measure the change in fair value of hedged items in fair value hedges on the basis of the benchmark interest rate component of contractual coupon cash flows. This change has resulted in a reduction of hedge ineffectiveness for impacted fair value hedges. Instruments designated as hedges are recorded at fair value and included in “accrued income and other assets” or “accrued expense and other liabilities” on the balance sheet. Under the revised guidance, the change in the fair value of an instrument designated as a fair value hedge is recorded in earnings at the same time and in the same income statement line as the offsetting change in the fair value of the hedged item. For cash flow hedges, the change in the fair value of an instrument designated as a cash flow hedge is initially recorded in AOCI on the balance sheet. This amount is subsequently reclassified into income when the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	January 1, 2018	The ASU amends ASC Topic 825, Financial Instruments-Overall, and requires equity investments, except those accounted for under the equity method of accounting or consolidated, to be measured at fair value with changes recognized in net income. If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost and changes the presentation of financial assets and financial liabilities on the balance sheet or in the footnotes. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in the fair value of a liability resulting from credit risk to be presented in OCI. With the exception of disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	January 1, 2018	The ASU amends ASC Topic 230, Statement of Cash Flows, and clarifies how cash receipts and cash payments in certain transactions should be presented and classified in the statement of cash flows. These specific transactions include, but are not limited to, debt prepayment or extinguishment costs, contingent considerations made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions from equity method investees. This guidance also clarifies that in instances of cash flows with multiple aspects that cannot be separately identified, classification should be based on the activity that is likely to be the predominant source of or use of cash flow. The guidance should be implemented using a retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-01, Clarifying the Definition of a Business	January 1, 2018	The ASU amends Topic 805, Business Combinations, and clarifies the definition of a business and removes the requirement for a market participant to consider whether it could replace missing elements in an integrated set of assets and activities. The guidance states that if substantially all of the fair value of the assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance should be implemented using a prospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-05, Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets	January 1, 2018	The ASU amends ASC Topic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets to clarify the scope of the Topic by clarifying the definition of the term "in substance nonfinancial asset" and also adding guidance for partial sales of nonfinancial assets. Under the new guidance, an entity will derecognize a nonfinancial asset when it does not have or ceases to have a controlling interest in the legal entity that holds the asset and when control of the asset has transferred in accordance with ASC 606. The ASU can be adopted on a retrospective or modified retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	January 1, 2018	The ASU amends ASC Topic 715, Compensation - Retirement Benefits, and requires service costs to be included in the same line item as certain other compensation costs related to services rendered by employees. We record compensation costs under personnel expense on the income statement. Other elements of net benefit cost should be presented separately. The guidance should be implemented on a retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-09, Scope of Modification Accounting	January 1, 2018	The ASU amends ASC Topic 718, Compensation - Stock Compensation, and clarifies when changes to terms and conditions for share-based payment awards should be accounted for as modifications. Under the new guidance, entities should apply the modification guidance unless the fair value of the modified award is the same as the fair value of the original award immediately before modification, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before modification, and the classification of the modified award (as equity or liability instrument) is the same as the classification of the original award immediately before modification. The guidance should be applied on a prospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.

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Basis of Presentation and Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Accounting Guidance Adopted in 2018

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only) An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date	The ASU amends disclosure requirements related to fair value measurements. Specifically, entities are no longer required to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, or qualitatively disclose the valuation process for Level 3 fair value measurements. The updated guidance requires disclosure of the changes in unrealized gains and losses for the period included in Other Comprehensive Income for recurring Level 3 fair value measurements. Entities also will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The additional provisions of the guidance should be adopted prospectively, while the eliminated requirements should be adopted retrospectively.	Key has early adopted the disclosures no longer required by the guidance as of September 30, 2018, and anticipates early adopting the additional provisions of the standard in the first quarter of 2019. The adoption of this standard will not result in significant changes to Key’s disclosures and there will be no effect to our financial condition or results of operations.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2015-14, Deferral of Effective Date ASU 2016-08, Principal versus Agent Considerations ASU 2016-10, Identifying Performance Obligations and Licensing ASU 2016-11, Rescission of SEC Guidance because of Accounting Standard Updates 2014-09 and 2014-16 pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ASU 2016-12, Narrow-scope Improvements and Practical Expedients ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers	January 1, 2018	These ASUs supersede the revenue recognition guidance in ASC 605, Revenue Recognition, and most industry-specific guidance. The core principle of these ASUs is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. These ASUs can be implemented using a retrospective method, or a cumulative-effect approach to new contracts and existing contracts with performance obligations as of the effective date.	On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective method for those contracts which were not completed as of that date. Results for reporting periods beginning January 1, 2018, are presented under ASC 606. As allowed under the new guidance, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As a result of adopting ASC 606, we changed the timing of recognition for revenues related to insurance commissions, securities underwriting, and deposit account maintenance fees, however, those changes did not have a material impact on our consolidated financial statements, results of operations, equity, or cash flows as of the adoption date or for the nine months ended September 30, 2018. The presentation of underwriting costs and reimbursed out-of-pocket expenses related to underwriting and M&A advisory services was changed from net to gross within the income statement as Key acts as the principal in the transactions. Securities underwriting revenue is recorded within "investment banking and debt placement fees" and underwriting costs and reimbursed out-of-pocket expenses within "other expense" on the income statement. Additionally, because Key acts as an agent, certain credit and debit card reward costs and certain card network costs were changed from a gross presentation to net within "cards and payment income" on the income statement. Credit and debit card reward costs and card network costs were recorded as "other expense" on the income statement in prior periods. These changes in presentation did not have a material impact on our consolidated financial statements for the nine months ended September 30, 2018. ASC 606 requires quantitative disclosure of the allocation of the transaction price to the remaining performance obligations when those amounts are expected to be recognized as revenue. However, the standard provides exemptions from this disclosure for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services provided. Most of our revenue subject to ASC 606 fits into one of these exemptions, or is immaterial. We elected to use the optional exemption to not disclose the aggregate amount of the transaction price to remaining performance obligations.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	January 1, 2018	The ASU amends ASC Topic 815, Derivatives and Hedging, to simplify the requirements for hedge accounting and facilitate financial reporting that more closely aligns with an entity’s risk management activities. Key amendments include: eliminating the requirement to separately measure and report hedge ineffectiveness, requiring changes in the value of the hedging instrument to be presented in the same income statement line as the earnings effect of the hedged item, and the ability to measure the hedged item based on the benchmark interest rate component of the total contractual coupon for fair value hedges. Additional disclosures are also required for reporting periods subsequent to the date of adoption. The guidance should be implemented on a modified retrospective basis to existing hedge relationships as of the adoption date.	On January 1, 2018, we adopted this ASU using a modified retrospective basis. Accordingly, our financial statements for the quarter ended September 30, 2018, include an immaterial cumulative-effect adjustment to decrease opening retained earnings to reflect the application of the new guidance as of January 1, 2018. The primary impact to Key at adoption was the election to measure the change in fair value of hedged items in fair value hedges on the basis of the benchmark interest rate component of contractual coupon cash flows. This change has resulted in a reduction of hedge ineffectiveness for impacted fair value hedges. Instruments designated as hedges are recorded at fair value and included in “accrued income and other assets” or “accrued expense and other liabilities” on the balance sheet. Under the revised guidance, the change in the fair value of an instrument designated as a fair value hedge is recorded in earnings at the same time and in the same income statement line as the offsetting change in the fair value of the hedged item. For cash flow hedges, the change in the fair value of an instrument designated as a cash flow hedge is initially recorded in AOCI on the balance sheet. This amount is subsequently reclassified into income when the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	January 1, 2018	The ASU amends ASC Topic 825, Financial Instruments-Overall, and requires equity investments, except those accounted for under the equity method of accounting or consolidated, to be measured at fair value with changes recognized in net income. If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost and changes the presentation of financial assets and financial liabilities on the balance sheet or in the footnotes. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in the fair value of a liability resulting from credit risk to be presented in OCI. With the exception of disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	January 1, 2018	The ASU amends ASC Topic 230, Statement of Cash Flows, and clarifies how cash receipts and cash payments in certain transactions should be presented and classified in the statement of cash flows. These specific transactions include, but are not limited to, debt prepayment or extinguishment costs, contingent considerations made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions from equity method investees. This guidance also clarifies that in instances of cash flows with multiple aspects that cannot be separately identified, classification should be based on the activity that is likely to be the predominant source of or use of cash flow. The guidance should be implemented using a retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-01, Clarifying the Definition of a Business	January 1, 2018	The ASU amends Topic 805, Business Combinations, and clarifies the definition of a business and removes the requirement for a market participant to consider whether it could replace missing elements in an integrated set of assets and activities. The guidance states that if substantially all of the fair value of the assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance should be implemented using a prospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-05, Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets	January 1, 2018	The ASU amends ASC Topic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets to clarify the scope of the Topic by clarifying the definition of the term "in substance nonfinancial asset" and also adding guidance for partial sales of nonfinancial assets. Under the new guidance, an entity will derecognize a nonfinancial asset when it does not have or ceases to have a controlling interest in the legal entity that holds the asset and when control of the asset has transferred in accordance with ASC 606. The ASU can be adopted on a retrospective or modified retrospective approach.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	January 1, 2018	The ASU amends ASC Topic 715, Compensation - Retirement Benefits, and requires service costs to be included in the same line item as certain other compensation costs related to services rendered by employees. We record compensation costs under personnel expense on the income statement. Other elements of net benefit cost should be presented separately. The guidance should be implemented on a retrospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2017-09, Scope of Modification Accounting	January 1, 2018	The ASU amends ASC Topic 718, Compensation - Stock Compensation, and clarifies when changes to terms and conditions for share-based payment awards should be accounted for as modifications. Under the new guidance, entities should apply the modification guidance unless the fair value of the modified award is the same as the fair value of the original award immediately before modification, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before modification, and the classification of the modified award (as equity or liability instrument) is the same as the classification of the original award immediately before modification. The guidance should be applied on a prospective basis.	The adoption of this guidance did not have a material effect on our financial condition or results of operations.

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Common Share

Our basic and diluted earnings per Common Share are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2018		2017		2018		2017
EARNINGS
Income (loss) from continuing operations	$	482	$	363	$	1,377	$	1,095
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		1
Income (loss) from continuing operations attributable to Key	482		363		1,377		1,094
Less: Dividends on Preferred Stock	14		14		43		56
Income (loss) from continuing operations attributable to Key common shareholders	468		349		1,334		1,038
Income (loss) from discontinued operations, net of taxes	—		1		5		6
Net income (loss) attributable to Key common shareholders	$	468	$	350	$	1,339	$	1,044
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	1,036,479		1,073,390		1,048,397		1,075,296
Effect of Common Share options and other stock awards	13,497		15,451		14,419		16,359
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	1,049,976		1,088,841		1,062,816		1,091,655
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.45	$	.32	$	1.28	$	.96
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.45		.32		1.27		.97
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.45	$	.32	$	1.26	$	.95
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.45		.32		1.26		.96

(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.

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Loan Portfolio (Tables)

9 Months Ended

Sep. 30, 2018

Loans Receivables [Abstract]

Loans by Category

in millions	September 30, 2018		December 31, 2017
Commercial and industrial (a)	$	45,023	$	41,859
Commercial real estate:
Commercial mortgage	14,716		14,088
Construction	1,763		1,960
Total commercial real estate loans	16,479		16,048
Commercial lease financing (b)	4,470		4,826
Total commercial loans	65,972		62,733
Residential — prime loans:
Real estate — residential mortgage	5,497		5,483
Home equity loans	11,339		12,028
Total residential — prime loans	16,836		17,511
Consumer direct loans	1,807		1,794
Credit cards	1,098		1,106
Consumer indirect loans	3,555		3,261
Total consumer loans	23,296		23,672
Total loans (c)	$	89,268	$	86,405

(a) Loan balances include $129 million and $119 million of commercial credit card balances at September 30, 2018, and December 31, 2017, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $12 million and $24 million at September 30, 2018, and December 31, 2017, 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 174 of our 2017 Form 10-K.

(c)

Total loans exclude loans of $1.1 billion at September 30, 2018, and $1.3 billion at December 31, 2017, related to the discontinued operations of the education lending business.

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Asset Quality (Tables)

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Financing Receivable Credit Quality Indicators

Commercial Credit Exposure — Excluding PCI

Credit Risk Profile by Creditworthiness Category ^{(a), (b)} 

	Commercial and industrial				RE — Commercial				RE — Construction				Commercial lease				Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
RATING	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
Pass	$	43,052	$	39,833	$	14,016	$	13,328	$	1,679	$	1,894	$	4,405	$	4,730	$	63,152	$	59,785
Criticized (Accruing)	1,691		1,790		398		482		79		38		55		90		2,223		2,400
Criticized (Nonaccruing)	226		153		98		30		2		2		10		6		336		191
Total	$	44,969	$	41,776	$	14,512	$	13,840	$	1,760	$	1,934	$	4,470	$	4,826	$	65,711	$	62,376

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) The term criticized refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.

Consumer Credit Exposure — Excluding PCI

Non-PCI Loans by Refreshed FICO Score ^(a) 

	Residential — Prime				Consumer direct loans				Credit cards				Consumer indirect loans				Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
FICO SCORE	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
750 and above	$	10,040	$	10,226	$	551	$	519	$	485	$	477	$	1,620	$	1,472	$	12,696	$	12,694
660 to 749	4,850		5,181		701		690		501		508		1,315		1,184		7,367		7,563
Less than 660	1,384		1,519		211		225		112		121		514		529		2,221		2,394
No Score	220		208		341		356		—		—		106		76		667		640
Total	$	16,494	$	17,134	$	1,804	$	1,790	$	1,098	$	1,106	$	3,555	$	3,261	$	22,951	$	23,291

(a) Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.

Commercial Credit Exposure — PCI

Credit Risk Profile by Creditworthiness Category ^{(a), (b)} 

	Commercial and Industrial				RE — Commercial				RE — Construction				Commercial Lease		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,		December 31,
RATING	2018		2017		2018		2017		2018		2017		2018	2017	2018		2017
Pass	$	23	$	41	$	134	$	153	$	3	$	26	—	—	$	160	$	220
Criticized	31		42		70		95		—		—		—	—	101		137
Total	$	54	$	83	$	204	$	248	$	3	$	26	—	—	$	261	$	357

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) The term “criticized” refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.

Consumer Credit Exposure — PCI

PCI Loans by Refreshed FICO Score ^(a) 

	Residential — Prime				Consumer direct loans				Credit cards		Consumer indirect loans		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,	December 31,	September 30,		December 31,
FICO SCORE	2018		2017		2018		2017		2018	2017	2018	2017	2018		2017
750 and above	$	138	$	149	—		—		—	—	—	—	$	138	$	149
660 to 749	97		117		$	1	$	2	—	—	—	—	98		119
Less than 660	99		105		2		2		—	—	—	—	101		107
No Score	8		6		—		—		—	—	—	—	8		6
Total	$	342	$	377	$	3	$	4	—	—	—	—	$	345	$	381

(a) Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.

Past Due Loans Including Current Loans

The following aging analysis of past due and current loans as of September 30, 2018, and December 31, 2017, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio ^(a) 

September 30, 2018	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 (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	44,561	$	74	$	83	$	24	$	227	$	408	$	54	$	45,023
Commercial real estate:
Commercial mortgage	14,347		24		20		23		98		165		204		14,716
Construction	1,715		20		14		9		2		45		3		1,763
Total commercial real estate loans	16,062		44		34		32		100		210		207		16,479
Commercial lease financing	4,449		9		1		1		10		21		—		4,470
Total commercial loans	$	65,072	$	127	$	118	$	57	$	337	$	639	$	261	$	65,972
Real estate — residential mortgage	$	5,094	$	13	$	3	$	2	$	62	$	80	$	323	$	5,497
Home equity loans	11,044		36		11		8		221		276		19		11,339
Consumer direct loans	1,779		9		5		7		4		25		3		1,807
Credit cards	1,075		6		5		10		2		23		—		1,098
Consumer indirect loans	3,498		29		6		3		19		57		—		3,555
Total consumer loans	$	22,490	$	93	$	30	$	30	$	308	$	461	$	345	$	23,296
Total loans	$	87,562	$	220	$	148	$	87	$	645	$	1,100	$	606	$	89,268

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, 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.

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

(d) Future accretable yield related to PCI loans is not included in the analysis of the loan portfolio.

December 31, 2017	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 (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	41,444	$	111	$	34	$	34	$	153	$	332	83		$	41,859
Commercial real estate:
Commercial mortgage	13,750		26		13		21		30		90		248		14,088
Construction	1,919		4		9		—		2		15		26		1,960
Total commercial real estate loans	15,669		30		22		21		32		105		274		16,048
Commercial lease financing	4,791		23		4		2		6		35		—		4,826
Total commercial loans	$	61,904	$	164	$	60	$	57	$	191	$	472	357		$	62,733
Real estate — residential mortgage	$	5,043	$	16	$	7	$	4	$	58	$	85	$	355	$	5,483
Home equity loans	11,721		32		15		9		229		285		22		12,028
Consumer direct loans	1,768		9		4		5		4		22		4		1,794
Credit cards	1,081		7		5		11		2		25		—		1,106
Consumer indirect loans	3,199		33		7		3		19		62		—		3,261
Total consumer loans	$	22,812	$	97	$	38	$	32	$	312	$	479	$	381	$	23,672
Total loans	$	84,716	$	261	$	98	$	89	$	503	$	951	$	738	$	86,405

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, 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.

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

(d) Future accretable yield related to purchased credit impaired loans is not included in the analysis of the loan portfolio.

Breakdown of Individually Impaired Loans

The following tables set forth a further breakdown of individually impaired loans as of September 30, 2018, and December 31, 2017: 

	September 30, 2018						December 31, 2017
	Recorded Investment (a)		Unpaid Principal Balance (b)		Specific Allowance		Recorded Investment (a)		Unpaid Principal Balance (b)		Specific Allowance
in millions
With no related allowance recorded:
Commercial and industrial	$	187	$	255	—		$	126	$	153	—
Commercial real estate:
Commercial mortgage	11		15		—		12		18		—
Total commercial real estate loans	11		15		—		12		18		—
Total commercial loans	198		270		—		138		171		—
Real estate — residential mortgage	15		22		—		17		17		—
Home equity loans	50		57		—		56		56		—
Consumer Direct	—		1		—		—		—		—
Consumer indirect loans	2		4		—		2		2		—
Total consumer loans	67		84		—		75		75		—
Total loans with no related allowance recorded	265		354		—		213		246		—
With an allowance recorded:
Commercial and industrial	45		48		$	5	10		28		$	6
Commercial real estate:
Commercial mortgage	65		66		11		—		—		—
Total commercial real estate loans	65		66		11		—		—		—
Total commercial loans	110		114		16		10		28		6
Real estate — residential mortgage	34		52		4		32		32		5
Home equity loans	77		84		7		61		61		9
Consumer direct loans	4		4		—		4		4		—
Credit cards	3		3		—		2		2		—
Consumer indirect loans	33		33		3		32		32		3
Total consumer loans	151		176		14		131		131		17
Total loans with an allowance recorded	261		290		30		141		159		23
Total	$	526	$	644	$	30	$	354	$	405	$	23

(a) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.

(b) The Unpaid Principal Balance represents the customer’s legal obligation to us.

The following table sets forth a further breakdown of the average individually impaired loans reported by Key:

Average Recorded Investment (a)	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2018		2017		2018		2017
Commercial and industrial	$	209	$	162	$	184	$	221
Commercial real estate:
Commercial mortgage	48		14		44		8
Total commercial real estate loans	48		14		44		8
Total commercial loans	257		176		228		229
Real estate — residential mortgage	49		49		49		50
Home equity loans	126		118		122		121
Consumer direct loans	4		4		4		3
Credit cards	3		2		3		3
Consumer indirect loans	35		33		34		32
Total consumer loans	217		206		212		209
Total	$	474	$	382	$	440	$	438

(a)

The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.

Post-Modification Outstanding Recorded Investment by Concession Type for Our Commercial Accruing and Nonaccruing TDRs

The following table shows the post-modification outstanding recorded investment by concession type for our commercial and consumer accruing and nonaccruing TDRs that occurred during the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2018		2017		2018		2017
Commercial loans:
Extension of Maturity Date	$	20	$	7	$	20	$	24
Payment or Covenant Modification/Deferment	26		—		46		32
Bankruptcy Plan Modification	—		—		7		30
Total	$	46	$	7	$	73	$	86
Consumer loans:
Interest rate reduction	$	4	$	3	$	22	$	10
Other	10		8		29		21
Total	$	14	$	11	$	51	$	31
Total commercial and consumer TDRs	$	60	$	18	$	124	$	117

Summary Of Post-Modification Outstanding Recorded Investment, Accruing And Nonaccruing TDRs

The following table summarizes the change in the post-modification outstanding recorded investment of our accruing and nonaccruing TDRs during the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of the period	$	347		$	333		$	317		$	280
Additions	58			20			133			134
Payments	(28		)	(36		)	(69		)	(83		)
Charge-offs	(11		)	(2		)	(15		)	(16		)
Balance at end of period (a)	$	366		$	315		$	366		$	315

Breakdown of Nonperforming TDRs by Loans Category

A further breakdown of TDRs included in nonperforming loans by loan category for the periods indicated are as follows:

	September 30, 2018					December 31, 2017
	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	30	$	120	$	101	20	$	109	$	86
Commercial real estate:
Commercial mortgage	6	14		10		8	16		12
Total commercial real estate loans	6	14		10		8	16		12
Total commercial loans	36	134		111		28	125		98
Real estate — residential mortgage	257	18		18		308	18		18
Home equity loans	1,233	72		66		1,025	64		57
Consumer direct loans	137	2		2		114	2		2
Credit cards	249	1		1		322	2		1
Consumer indirect loans	973	17		13		825	16		13
Total consumer loans	2,849	110		100		2,594	102		91
Total nonperforming TDRs	2,885	244		211		2,622	227		189
Prior-year accruing:(a)
Commercial and industrial	18	53		37		4	30		13
Total commercial loans	18	53		37		4	30		13
Real estate — residential mortgage	508	37		31		484	31		31
Home equity loans	1,305	77		61		1,276	75		59
Consumer direct loans	81	4		2		48	3		2
Credit cards	522	3		2		430	1		1
Consumer indirect loans	512	34		22		320	31		22
Total consumer loans	2,928	155		118		2,558	141		115
Total prior-year accruing TDRs	2,946	208		155		2,562	171		128
Total TDRs	5,831	$	452	$	366	5,184	$	398	$	317

(a) All TDRs that were restructured prior to January 1, 2018, and January 1, 2017, and are fully accruing.

Changes in Allowance for Loan and Lease Losses by Loan Category

The changes in the ALLL by loan category for the periods indicated are as follows:

Three months ended September 30, 2018:

in millions	June 30, 2018		Provision				Charge-offs			Recoveries		September 30, 2018
Commercial and Industrial	$	542	$	34			$	(38	)	$	5	$	543
Commercial real estate:
Real estate — commercial mortgage	139		9				(6		)	1		143
Real estate — construction	28		3				—			—		31
Total commercial real estate loans	167		12				(6		)	1		174
Commercial lease financing	40		(2		)		(4		)	3		37
Total commercial loans	749		44				(48		)	9		754
Real estate — residential mortgage	10		(1		)		(2		)	2		9
Home equity loans	37		(2		)		(4		)	3		34
Consumer direct loans	26		9				(10		)	1		26
Credit cards	46		7				(10		)	2		45
Consumer indirect loans	19		3				(7		)	4		19
Total consumer loans	138		16				(33		)	12		133
Total ALLL — continuing operations	887		60			(a)	(81		)	21		887
Discontinued operations	14		3				(4		)	1		14
Total ALLL — including discontinued operations	$	901	$	63			$	(85	)	$	22	$	901

(a) Excludes a provision for losses on lending-related commitments of $2 million.

Three months ended September 30, 2017:

in millions	June 30, 2017		Provision				Charge-offs			Recoveries		September 30, 2017
Commercial and Industrial	$	528	$	8			$	(29	)	$	25	$	532
Commercial real estate:
Real estate — commercial mortgage	144		(1		)		(6		)	1		138
Real estate — construction	28		3				(2		)	—		29
Total commercial real estate loans	172		2				(8		)	1		167
Commercial lease financing	40		1				(1		)	3		43
Total commercial loans	740		11				(38		)	29		742
Real estate — residential mortgage	9		(2		)		—			1		8
Home equity loans	42		(1		)		(6		)	4		39
Consumer direct loans	25		10				(8		)	1		28
Credit cards	44		10				(11		)	1		44
Consumer indirect loans	10		14				(8		)	3		19
Total consumer loans	130		31				(33		)	10		138
Total ALLL — continuing operations	870		42			(a)	(71		)	39		880
Discontinued operations	21		5				(10		)	2		18
Total ALLL — including discontinued operations	$	891	$	47			$	(81	)	$	41	$	898

(a) Excludes a provision for losses on lending-related commitments of $9 million.

Nine months ended September 30, 2018:

in millions	December 31, 2017		Provision				Charge-offs			Recoveries		September 30, 2018
Commercial and Industrial	529		$	110			$	(114	)	$	18	$	543
Commercial real estate:
Real estate — commercial mortgage	133		17				(9		)	2		143
Real estate — construction	30		—				—			1		31
Total commercial real estate loans	163		17				(9		)	3		174
Commercial lease financing	43		(1		)		(9		)	4		37
Total commercial loans	735		126				(132		)	25		754
Real estate — residential mortgage	7		3				(3		)	2		9
Home equity loans	43		(4		)		(14		)	9		34
Consumer direct loans	28		20				(27		)	5		26
Credit cards	44		30				(34		)	5		45
Consumer indirect loans	20		9				(22		)	12		19
Total consumer loans	142		58				(100		)	33		133
Total ALLL — continuing operations	877		184			(a)	(232		)	58		887
Discontinued operations	16		5				(11		)	4		14
Total ALLL — including discontinued operations	$	893	$	189			$	(243	)	$	62	$	901

(a) Excludes a provision for losses on lending-related commitments of $3 million.

Nine months ended September 30, 2017:

in millions	December 31, 2016		Provision				Charge-offs			Recoveries		September 30, 2017
Commercial and Industrial	$	508	$	93			$	(101	)	$	32	$	532
Commercial real estate:
Real estate — commercial mortgage	144		2				(9		)	1		138
Real estate — construction	22		8				(2		)	1		29
Total commercial real estate loans	166		10				(11		)	2		167
Commercial lease financing	42		5				(9		)	5		43
Total commercial loans	716		108				(121		)	39		742
Real estate — residential mortgage	17		(11		)		(2		)	4		8
Home equity loans	54		(4		)		(23		)	12		39
Consumer direct loans	24		26				(26		)	4		28
Credit cards	38		36				(34		)	4		44
Consumer indirect loans	9		23				(24		)	11		19
Total consumer loans	142		70				(109		)	35		138
Total ALLL — continuing operations	858		178			(a)	(230		)	74		880
Discontinued operations	24		8				(20		)	6		18
Total ALLL — including discontinued operations	$	882	$	186			$	(250	)	$	80	$	898

(a)

Excludes a provision for losses on lending-related commitments of $2 million.

Allowance for Loan and Lease Losses and Corresponding Loan Balances

A breakdown of the individual and collective ALLL and the corresponding loan balances as of September 30, 2018, follows:

	Allowance						Outstanding
September 30, 2018	Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment		Purchased Credit Impaired		Loans			Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment			Purchased Credit Impaired
in millions
Commercial and industrial	$	5	$	536	$	2	$	45,023		$	232	$	44,737		$	54
Commercial real estate:
Commercial mortgage	11		129		3		14,716			76		14,436			204
Construction	—		31		—		1,763			—		1,760			3
Total commercial real estate loans	11		160		3		16,479			76		16,196			207
Commercial lease financing	—		37		—		4,470			—		4,470			—
Total commercial loans	16		733		5		65,972			308		65,403			261
Real estate — residential mortgage	4		5		—		5,497			49		5,125			323
Home equity loans	7		26		1		11,339			127		11,193			19
Consumer direct loans	—		26		—		1,807			4		1,800			3
Credit cards	—		45		—		1,098			3		1,095			—
Consumer indirect loans	3		16		—		3,555			35		3,520			—
Total consumer loans	14		118		1		23,296			218		22,733			345
Total ALLL — continuing operations	30		851		6		89,268			526		88,136			606
Discontinued operations	2		12		—		1,130		(a)	22		1,108		(a)	—
Total ALLL — including discontinued operations	$	32	$	863	$	6	$	90,398		$	548	$	89,244		$	606

(a) Amount includes $2 million of loans carried at fair value that are excluded from ALLL consideration.

A breakdown of the individual and collective ALLL and the corresponding loan balances as of December 31, 2017, follows:

	Allowance						Outstanding
December 31, 2017	Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment		Purchased Credit Impaired		Loans			Individually Evaluated  for Impairment		Collectively Evaluated  for Impairment			Purchased Credit Impaired
in millions
Commercial and Industrial	$	6	$	520	$	3	$	41,859		$	136	$	41,640		$	83
Commercial real estate:
Commercial mortgage	—		131		2		14,088			12		13,828			248
Construction	—		30		—		1,960			—		1,934			26
Total commercial real estate loans	—		161		2		16,048			12		15,762			274
Commercial lease financing	—		43		—		4,826			—		4,826			—
Total commercial loans	6		724		5		62,733			148		62,228			357
Real estate — residential mortgage	5		2		—		5,483			49		5,079			355
Home equity loans	9		33		1		12,028			117		11,889			22
Consumer direct loans	—		28		—		1,794			4		1,786			4
Credit cards	—		44		—		1,106			2		1,104			—
Consumer indirect loans	3		17		—		3,261			34		3,227			—
Total consumer loans	17		124		1		23,672			206		23,085			381
Total ALLL — continuing operations	23		848		6		86,405			354		85,313			738
Discontinued operations	3		13		—		1,314		(a)	21		1,293		(a)	—
Total ALLL — including discontinued operations	$	26	$	861	$	6	$	87,719		$	375	$	86,606		$	738

(a) Amount includes $2 million of loans carried at fair value that are excluded from ALLL consideration.

Changes in Liability for Credit Losses on Lending Related Commitments

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2018		2017		2018		2017
Balance at beginning of period	$	58	$	48	$	57	$	55
Provision (credit) for losses on lending-related commitments	2		9		3		2
Balance at end of period	$	60	$	57	$	60	$	57

Schedule of Changes in Outstanding Unpaid Principal Balance, Carrying Amount, and Accretable Yield for PCI Loans

The following tables present the roll-forward of the accretable yield and the beginning and ending outstanding unpaid principal balance and carrying amount of all PCI loans for the three and nine months ended September 30, 2018, and the twelve months ended December 31, 2017.

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018							2018
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance		Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	121		$	622	$	669	$	131		$	738	$	803
Accretion	(10		)					(33		)
Net reclassifications from nonaccretable to accretable	13							41
Payments received, net	(3		)					(18		)
Balance at end of period	$	121		$	599	$	642	$	121		$	599	$	642

	Twelve Months Ended December 31,
	2017
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	197		$	865	$	1,002
Additions	(32		)
Accretion	(44		)
Net reclassifications from nonaccretable to accretable	15
Payments received, net	(4		)
Disposals	(1		)
Balance at end of period	$	131		$	738	$	803

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value of Direct and Indirect Investments, Related Unfunded Commitments and Financial Support Provided

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at September 30, 2018, as well as financial support provided for the three and nine months ended September 30, 2018, and September 30, 2017.

					Financial support provided
					Three months ended September 30,					Nine months ended September 30,
	September 30, 2018				2018		2017			2018			2017
in millions	Fair Value		Unfunded Commitments		Funded Commitments	Funded Other	Funded Commitments		Funded Other	Funded Commitments		Funded Other	Funded Commitments		Funded Other
INVESTMENT TYPE
Direct investments (a)	$	12	—		—	—	—		—	—		—	—		$	—
Indirect investments (measured at NAV)	101		$	28	—	—	$	—	—	$	1	—	$	1	—
Total	$	113	$	28	—	—	$	—	—	$	1	—	$	1	$	—

 

(a) Our direct investments consist of equity and debt investments directly in independent business enterprises. Operations of the business enterprises are handled by management of the portfolio company. The purpose of funding these enterprises is to provide financial support for business development and acquisition strategies. We infuse equity capital based on an initial contractual cash contribution and later from additional requests on behalf of the companies’ management.

(b)

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. We estimate that the underlying investments of the funds will be liquidated over a period of one to six years. 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.

Fair Value of Assets and Liabilities Measured on Recurring Basis

The following tables present these assets and liabilities at September 30, 2018, and December 31, 2017.

	September 30, 2018									December 31, 2017
	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	—		$	759	—		$	759		—		615		—		615
States and political subdivisions	—		54		—		54			—		37		—		37
Other mortgage-backed securities	—		86		—		86			—		104		—		104
Other securities	3		39		—		42			—		65		—		65
Total trading account securities	3		938		—		941			—		821		—		821
Commercial loans	—		17		—		17			—		15		—		15
Total trading account assets	3		955		—		958			—		836		—		836
Securities available for sale:
U.S. Treasury, agencies and corporations	—		145		—		145			—		157		—		157
States and political subdivisions	—		7		—		7			—		9		—		9
Agency residential collateralized mortgage obligations	—		14,192		—		14,192			—		14,660		—		14,660
Agency residential mortgage-backed securities	—		1,661		—		1,661			—		1,439		—		1,439
Agency commercial mortgage-backed securities	—		2,316		—		2,316			—		1,854		—		1,854
Other securities	—		—		$	20	20			—		—		20		20
Total securities available for sale	—		18,321		20		18,341			—		18,119		20		18,139
Other investments:
Principal investments:
Direct	—		—		12		12			—		—		13		13
Indirect (measured at NAV) (a)	—		—		—		101			—		—		—		124
Total principal investments	—		—		12		113			—		—		13		137
Equity investments:
Direct	—		1		7		8			—		4		3		7
Direct (measured at NAV) (a)	—		—		—		1			—		—		—		—
Total equity investments	—		1		7		9			—		4		3		7
Total other investments	—		1		19		122			—		4		16		144
Loans, net of unearned income	—		—		3		3			—		—		2		2
Loans held for sale	—		87		—		87			—		70		1		71
Derivative assets:
Interest rate	—		304		6		310			—		713		9		722
Foreign exchange	$	70	32		—		102			$	100	$	30	$	—	$	130
Commodity	—		491		—		491			—		255		—		255
Credit	—		—		—		—			—		—		1		1
Other	—		5		2		7			—		1		3		4
Derivative assets	70		832		8		910			100		999		13		1,112
Netting adjustments (b)	—		—		—		(162		)	—		—		—		(443		)
Total derivative assets	70		832		8		748			100		999		13		669
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	73	$	20,196	$	50	$	20,259		$	100	$	20,028	$	52	$	19,861
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	37	$	600	—		$	637		$	72	$	562	$	—	$	634
Derivative liabilities:
Interest rate	—		445		—		445			—		520		—		520
Foreign exchange	62		31		—		93			98		26		—		124
Commodity	—		481		—		481			—		246		—		246
Credit	—		3		—		3			—		4		—		4
Other	—		3		—		3			—		13		—		13
Derivative liabilities	62		963		—		1,025			98		809		—		907
Netting adjustments (b)	—		—		—		(582		)	—		—		—		(616		)
Total derivative liabilities	62		963		—		443			98		809		—		291
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	99	$	1,563	—		$	1,080		$	170	$	1,371	$	—	$	925

(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.

Change in Fair Values of Level 3 Financial Instruments

The following table shows the components of the change in the fair values of our Level 3 financial instruments for the three and nine months ended September 30, 2018, and September 30, 2017. 

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 (a)			Transfers out of Level 3 (a)				End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2018
Securities available for sale
Other securities	$	20		$	—	—				—	—		—		—		—			—				$	20	—
Other investments
Principal investments
Direct	13			—		$	(1	)	(b)	1	(1	)	—		—		—			—				12		$	1		(b)
Equity investments
Direct	3			—		—				—	—		—		—		$	4		—				7		—
Loans held for sale	1			—		—				—	(1	)	—		—		—			—				—		—
Loans held for investment	2			—		—				—	—		—		1		—			—				3		—
Derivative instruments (c)
Interest rate	9			—		(2		)	(d)	1	(2	)	—		—		6		(e)	$	(6	)	(e)	6		—
Credit	1			—		(26		)	(d)	—	—		$	25	—		—			—				—		—
Other (f)	3			—		—				—	—		—		(1	)	—			—				2		—
Three months ended September 30, 2018
Securities available for sale
Other securities	$	20		$	—	—				—	—		—		—		—			$	—			$	20	—
Other investments
Principal investments
Direct	13			—		$	(1	)	(b)	—	—		—		—		—			—				12		(1		)	(b)
Equity investments
Direct	7			—		—				—	—		—		—		—			—				7		—
Loans held for sale	—			—		—				—	—		—		—		—			—				—		—
Loans held for investment	3			—		—				—	—		—		—		—			—				3		—
Derivative instruments (c)
Interest rate	5			—		—			(d)	—	—		—		—		2		(e)	(1		)	(e)	6		—
Credit	(9		)	—		(6		)	(d)	—	—		$	15	—		—			—				—		—
Other (f)	3			—		—				—	—		—		(1	)	—			—				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 (a)			Transfers out of Level 3 (a)				End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2017
Securities available for sale
Other securities	$	17	$	3	—				—		—			—		—		—			—				$	20	—
Other investments
Principal investments
Direct	27		$	—	$	(7	)	(b)	—		$	(7	)	—		—		—			—				13		$	(1	)	(b)
Loans held for sale	—		—		—				—		(1		)	—		3		—			—				2		—
Derivative instruments (c)
Interest rate	7		—		—				—		—			—		—		$	13	(e)	$	(9	)	(e)	11		—
Credit	1		—		(12		)	(d)	—		—			$	12	—		—			—				1		—
Other (f)	2		—		—				—		—			—		$	2	—			—				4		—
Three months ended September 30, 2017
Securities available for sale
Other securities	$	20	$	1	—				—		—			—		—		—			$	(1	)		$	20	—
Other investments
Principal investments
Direct	15		$	—	$	(2	)	(b)	—		$	—		—		—		—			—				13		$	2		(b)
Loans held for sale	—		—		—				—		(1		)	—		3		—			—				2		—
Derivative instruments (c)
Interest rate	16		—		—				—		—			—		—		$	1	(e)	$	(6	)	(e)	11		—
Credit	1		—		(5		)	(d)	—		—			$	5	—		—			—				1		—
Other (f)	4		—		—				$	—	—			—		$	—	—			—				4		—

(a) Our policy is to recognize transfers into and transfers out of Level 3 as of the end of the reporting period.

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

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

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

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

(f)

Amounts represent Level 3 interest rate lock commitments.

Assets and Liabilities Measured at Fair Value on Nonrecurring Basis

The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2018, and December 31, 2017:

	September 30, 2018							December 31, 2017
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	—	$	—	$	97	$	97	—	—		$	9		$	9
Accrued income and other assets	—	—		24		24		—	$	5	133		(a)	138
Total assets on a nonrecurring basis at fair value	—	$	—	$	121	$	121	—	$	5	$	142		$	147

(a)

At December 31, 2017, we recorded $31 million of impairment related to $119 million of LIHTC and Historic Tax Credit investments impacted by the enactment of the TCJ Act. Refer to the “LIHTC and Historic Tax Credit Investments” section below for a description of the valuation technique and inputs applied for this fair value measurement.

Quantitative Information about Level 3 Fair Value Measurements

The range and weighted average of the significant unobservable inputs used to fair value our material Level 3 recurring and nonrecurring assets at September 30, 2018, and December 31, 2017, along with the valuation techniques used, are shown in the following table:

September 30, 2018	Fair Value of Level 3 Assets		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Recurring
Other investments — principal investments — direct:	$	12	Individual analysis of the  condition of each investment
Debt instruments				EBITDA multiple	N/A (6.88)
Equity instruments of private companies				EBITDA multiple	N/A (6.88)
Nonrecurring
Impaired loans	97		Fair value of underlying collateral	Discount	0.00 - 75.00% (20.00%)

December 31, 2017	Fair Value of Level 3 Assets		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Recurring
Other investments — principal investments — direct:	$	13	Individual analysis of the condition of each investment
Debt instruments				EBITDA multiple	N/A (6.00)
Equity instruments of private companies				EBITDA multiple	N/A (6.00)
Nonrecurring
Impaired loans	9		Fair value of underlying collateral	Discount	0.00 - 50.00% (23.00%)

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at September 30, 2018, and December 31, 2017, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 30, 2018
				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)	$	958		3		$	955		—		—		—				$	958
Other investments (b)	681			—		1			$	578	$	102	—				681
Loans, net of unearned income (d)	3			—		—			3		—		—				3
Loans held for sale (b)	87			—		87			—		—		—				87
Derivative assets - trading (b)	700			$	68	794			8		—		$	(170	)	(f)	700
Fair value - OCI
Securities available for sale (b)	18,341			—		18,321			$	20	—		—				18,341
Derivative assets - hedging (b)	48			2		38			—		—		8			(f)	48
Amortized cost
Held-to-maturity securities (c)	11,869			—		11,261			—		—		—				11,261
Loans, net of unearned income (d)	88,378			—		—			86,418		—		—				86,418
Loans held for sale (b)	1,531			—		—			1,531		—		—				1,531
Other
Cash and short-term investments (a)	2,591			2,591		—			—		—		—				2,591
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	446		$	61	$	967		—		—		$	(582	)	(f)	$	446
Fair value - OCI
Derivative liabilities - hedging (b)	(3		)	1		(4		)	—		—		—			(f)	(3		)
Amortized cost
Time deposits (e)	13,583			—		13,654			—		—		—				13,654
Short-term borrowings (a)	1,922			$	37	1,885			—		—		—				1,922
Long-term debt (e)	13,849			12,659		1,205			—		—		—				13,864
Other
Deposits with no stated maturity (a)	92,197			—		92,197			—		—		—				92,197

	December 31, 2017
				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)	$	836		—		$	836	—		—		—				$	836
Other investments (b)	726			—		4		$	598	$	124	—				726
Loans, net of unearned income (d)	2			—		—		2		—		—				2
Loans held for sale (b)	71			—		70		1		—		—				71
Derivative assets - trading (b)	681			$	99	918		13		—		$	(349	)	(f)	681
Fair value - OCI
Securities available for sale (b)	18,139			—		18,119		20		—		—				18,139
Derivative assets - hedging (b)	(12		)	1		81		—		—		(94		)	(f)	(12		)
Amortized cost
Held-to-maturity securities (c)	11,830			—		11,565		—		—		—				11,565
Loans, net of unearned income (d)	85,526			—		—		84,003		—		—				84,003
Loans held for sale (b)	1,036			—		—		1,036		—		—				1,036
Other
Cash and short-term investments (a)	5,118			5,118		—		—		—		—				5,118
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	289		$	94	$	763	—		—		$	(568	)	(f)	$	289
Fair value - OCI
Derivative liabilities - hedging (b)	2			4		46		—		—		(48		)	(f)	2
Amortized cost
Time deposits (e)	11,647			—		11,750		—		—		—				11,750
Short-term borrowings (a)	1,011			72		939		—		—		—				1,011
Long-term debt (e)	14,333			13,407		$	1,219	—		—		—				14,626
Other
Deposits with no stated maturity (a)	93,588			—		93,588		—		—		—				93,588

Valuation Methods and Assumptions

(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

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Securities (Tables)

9 Months Ended

Sep. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Details of Securities

The amortized cost, unrealized gains and losses, and approximate fair value of our securities available for sale and held-to-maturity securities are presented in the following tables. Gross unrealized gains and losses represent the difference between the amortized cost and the fair value of securities on the balance sheet as of the dates indicated. Accordingly, the amount of these gains and losses may change in the future as market conditions change.

	September 30, 2018								December 31, 2017
in millions	Amortized Cost		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	$	150	—		$	5	$	145	$	159	—		$	2	$	157
States and political subdivisions	7		—		—		7		9		—		—		9
Agency residential collateralized mortgage obligations	14,804		$	4	616		14,192		14,985		$	10	335		14,660
Agency residential mortgage-backed securities	1,708		2		49		1,661		1,456		3		20		1,439
Agency commercial mortgage-backed securities	2,439		—		123		2,316		1,920		—		66		1,854
Other securities	17		3		—		20		17		3		—		20
Total securities available for sale	$	19,125	$	9	$	793	$	18,341	$	18,546	$	16	$	423	$	18,139
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	7,330	—		$	400	$	6,930	$	8,055	—		$	224	$	7,831
Agency residential mortgage-backed securities	508		—		22		486		574		$	1	4		571
Agency commercial mortgage-backed securities	4,019		—		186		3,833		3,186		6		44		3,148
Other securities	12		—		—		12		15		—		—		15
Total held-to-maturity securities	$	11,869	$	—	$	608	$	11,261	$	11,830	$	7	$	272	$	11,565

Schedule of Unrealized Loss on Investments

The following table summarizes our securities that were in an unrealized loss position as of September 30, 2018, and December 31, 2017.

	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
September 30, 2018
Securities available for sale:
U.S Treasury, agencies, and corporations	—		—		$	145	$	5	$	145	$	5
Agency residential collateralized mortgage obligations	$	3,121	54		10,062		562		13,183		616
Agency residential mortgage-backed securities	409		3		1,089		46		1,498		49
Agency commercial mortgage-backed securities	558		2		1,758		121		2,316		123
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,275		44		5,655		356		6,930		400
Agency residential mortgage-backed securities	153		6		333		16		486		22
Agency commercial mortgage-backed securities	2,629		98		1,205		88		3,834		186
Other securities (a)	2		—		—		—		2		—
Total temporarily impaired securities	$	8,147	$	207	$	20,247	$	1,194	$	28,394	$	1,401
December 31, 2017
Securities available for sale:
U.S. Treasury, agencies, and corporations	$	41	—		$	116	2		$	157	$	2
Agency residential collateralized mortgage obligations	6,153		$	74	7,270		$	261	13,423		335
Agency residential mortgage-backed securities	666		7		702		13		1,368		20
Agency commercial mortgage-backed securities	205		4		1,649		62		1,854		66
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	2,201		27		5,599		197		7,800		224
Agency residential mortgage-backed securities	252		1		206		3		458		4
Agency commercial mortgage-backed securities	1,470		12		495		32		1,965		44
Other securities (a)	3		—		4		—		7		—
Total temporarily impaired securities	$	10,991	$	125	$	16,041	$	570	$	27,032	$	695

(a) Gross unrealized losses totaled less than $1 million for other securities held-to maturity at September 30, 2018, and December 31, 2017.

Cumulative Credit Portion of Impairments on Debt Securities

As shown in the following table, we did not have any impairment losses recognized in earnings for the nine months ended September 30, 2018.

Nine months ended September 30, 2018
in millions
Balance at December 31, 2017	$	4
Impairment recognized in earnings	—
Balance at September 30, 2018	$	4

Securities by Maturity

The following table shows our securities by remaining maturity. CMOs and other mortgage-backed securities in the available for sale portfolio and held-to-maturity portfolio are presented based on their expected average lives. The remaining securities, in both the available-for-sale and held-to-maturity portfolios, are presented based on their remaining contractual maturity. Actual maturities may differ from expected or contractual maturities since borrowers have the right to prepay obligations with or without prepayment penalties.

	Securities Available for Sale				Held to Maturity Securities
September 30, 2018	Amortized Cost		Fair Value		Amortized Cost		Fair Value
in millions
Due in one year or less	$	93	$	93	$	31	$	30
Due after one through five years	12,365		11,846		6,181		5,910
Due after five through ten years	6,655		6,390		5,657		5,321
Due after ten years	12		12		—		—
Total	$	19,125	$	18,341	$	11,869	$	11,261

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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Values, Volume of Activity and Gain (Loss) Information Related to Derivative Instruments

The following table summarizes the fair values of our derivative instruments on a gross and net basis as of September 30, 2018, and December 31, 2017. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable 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. Securities collateral related to legally enforceable master netting

agreements is not offset on the balance sheet. Our derivative instruments are included in “accrued income and other assets” or “accrued expenses and other liabilities” on the balance sheet, as follows:

	September 30, 2018								December 31, 2017
			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	$	27,445	$	38		$	(4	)	$	26,176	$	81		$	46
Foreign exchange	254		2			1			302		1			4
Total	27,699		40			(3		)	26,478		82			50
Derivatives not designated as hedging instruments:
Interest rate	65,617		272			449			61,390		641			474
Foreign exchange	7,695		100			92			8,317		129			120
Commodity	2,235		491			481			1,687		255			246
Credit	401		—			3			315		1			4
Other (a)	1,795		7			3			2,006		4			13
Total	77,743		870			1,028			73,715		1,030			857
Netting adjustments (b)	—		(162		)	(582		)	—		(443		)	(616		)
Net derivatives in the balance sheet	105,442		748			443			100,193		669			291
Other collateral (c)	—		(1		)	(50		)	—		(5		)	(84		)
Net derivative amounts	$	105,442	$	747		$	393		$	100,193	$	664		$	207

(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 when-issued security transactions in connection with an “at-the-market” equity offering program.

(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.

Pre-Tax Net Gains (Losses) on Fair Value Hedges

The following table summarizes the amounts that were recorded on the balance sheet as of September 30, 2018, related to cumulative basis adjustments for fair value hedges.

	September 30, 2018
in millions	Balance sheet line item in which the hedge item is included	Carrying amount of hedged item (a)		Hedge accounting basis adjustment (b)
Interest rate contracts	Long-term debt	$	9,442	$	(145	)
Interest rate contracts	Certificate of deposit ($100,000 or more)	344		(1		)
Interest rate contracts	Other time deposits	178		—

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

(b)

Basis adjustment includes $10 million related to de-designated hedged items no longer in qualifying fair value hedging relationships.

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following tables summarize the effect of fair value and cash flow hedge accounting on the income statement for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships (a)
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Three months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(108	)	$	1,025		$	(140	)	$	23
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	41			—			—			—
Recognized on derivatives designated as hedging instruments	(46		)	—			—			—
Net income (expense) recognized on fair value hedges	(5		)	—			—			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	(15		)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(15	)	—			—
Three months ended September 30, 2017
Total amounts presented in the consolidated statement of income	$	(86	)	$	928		$	(72	)	$	21
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	—			—			—			20
Recognized on derivatives designated as hedging instruments	10			—			—			(19		)
Net income (expense) recognized on fair value hedges	10			—			—			1
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(1		)	1			—			—
Gains (losses) (before tax) recognized in income for hedge ineffectiveness	—			—			—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	1		—			—

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships (a)
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Nine months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(302	)	$	2,965		$	(343	)	$	143
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	134			—			1			—
Recognized on derivatives designated as hedging instruments	(140		)	—			—			—
Net income (expense) recognized on fair value hedges	(6		)	—			1			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	(42		)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(42	)	—			—
Nine months ended September 30, 2017
Total amounts presented in the consolidated statement of income	$	(228	)	$	2,753		$	(196	)	$	138
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	—			—			—			50
Recognized on derivatives designated as hedging instruments	42			—			—			(49		)
Net income (expense) recognized on fair value hedges	42			—			—			1
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(3		)	21			—			—
Gains (losses) (before tax) recognized in income for hedge ineffectiveness	—			—			—			—
Net income (expense) recognized on cash flow hedges	$	(3	)	$	21		—			—

(a) Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.

Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and nine-month periods ended September 30, 2018, and September 30, 2017, and where they are recorded on the income statement. The table includes net gains (losses) recognized in OCI during the period and net gains (losses) reclassified from OCI into income during the current period.

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(a)			Net Gains (Losses) Recognized in Other Income(a)
Three months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(32	)	Interest income — Loans	$	(15	)	$	—
Interest rate	(1		)	Interest expense — Long-term debt	(2		)	—
Interest rate	1			Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(2		)	Other Income	—			—
Total	$	(34	)		$	(17	)	$	—
Three months ended September 30, 2017
Cash Flow Hedges
Interest rate	$	(1	)	Interest income — Loans	$	1		$	—
Interest rate	(1		)	Interest expense — Long-term debt	(1		)	—
Interest rate	(1		)	Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(12		)	Other Income	—			—
Total	$	(15	)		$	—		$	—

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(a)			Net Gains (Losses) Recognized in Other Income(a)
Nine months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(178	)	Interest income — Loans	$	(42	)	$	—
Interest rate	3			Interest expense — Long-term debt	(2		)	—
Interest rate	2			Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	8			Other Income	—			—
Total	$	(165	)		$	(44	)	$	—
Nine months ended September 30, 2017
Cash Flow Hedges
Interest rate	$	(1	)	Interest income — Loans	$	21		$	—
Interest rate	(1		)	Interest expense — Long-term debt	(3		)	—
Interest rate	(1		)	Investment banking and debt placement fees	—			—
Net Investment Hedges
Foreign exchange contracts	(22		)	Other Income	—			—
Total	$	(25	)		$	18		$	—

(a)

Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.

Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments

The following tables summarize the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and nine-month periods ended September 30, 2018, and September 30, 2017, and where they are recorded on the income statement.

	Three months ended September 30, 2018										Three months ended September 30, 2017
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	$	8	$	—	$	2		$	10		$	5	—			$	1		$	6
Foreign exchange	10		—		—			10			10		—			—			10
Commodity	—		—		—			—			1		—			—			1
Credit	—		—		(7		)	(7		)	—		—			(6		)	(6		)
Other	—		1		1			2			—		$	(1	)	7			6
Total net gains (losses)	$	18	$	1	$	(4	)	$	15		$	16	$	(1	)	$	2		$	17

	Nine months ended September 30, 2018										Nine months ended September 30, 2017
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	$	28	$	—	$	4		$	32		$	21	—		$	(1	)	$	20
Foreign exchange	32		—		—			32			31		—		—			31
Commodity	6		—		—			6			4		—		—			4
Credit	2		—		(26		)	(24		)	1		—		(16		)	(15		)
Other	—		1		13			14			—		$	—	(4		)	(4		)
Total net gains (losses)	$	68	$	1	$	(9	)	$	60		$	57	$	—	$	(21	)	$	36

Fair Value of Derivative Assets by Type

The following table summarizes the fair value of our derivative assets by type at the dates indicated. These assets represent our gross exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.

in millions	September 30, 2018			December 31, 2017
Interest rate	$	189		$	401
Foreign exchange	61			77
Commodity	376			163
Credit	(1		)	1
Other	7			4
Derivative assets before collateral	632			646
Less: Related collateral	(116		)	(23		)
Total derivative assets	$	748		$	669

Fair Value of Credit Derivatives Purchased and Sold

The following table summarizes the fair value of our credit derivatives purchased and sold by type as of September 30, 2018, and December 31, 2017. The fair value of credit derivatives presented below does not take into account the effects of bilateral collateral or master netting agreements.

	September 30, 2018								December 31, 2017
in millions	Purchased			Sold		Net			Purchased			Sold	Net
Single-name credit default swaps	$	(1	)	—		$	(1	)	$	(1	)	—	$	(1	)
Traded credit default swap indices	(1		)	—		(1		)	(2		)	—	(2		)
Other	—			(1	)	(1		)	—			—	—
Total credit derivatives	$	(2	)	(1	)	$	(3	)	$	(3	)	—	$	(3	)

Credit Derivatives Sold and Held

The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at September 30, 2018, and December 31, 2017. The notional amount represents the maximum amount that the seller could be required to pay. The payment/performance risk assessment is based on the default probabilities for the underlying reference entities’ debt obligations using a Moody’s credit ratings matrix known as Moody’s “Idealized” Cumulative Default Rates. The payment/performance risk shown in the table represents a weighted-average of the default probabilities for all reference entities in the respective portfolios. These default probabilities are directly correlated to the probability that we will have to make a payment under the credit derivative contracts.

	September 30, 2018					December 31, 2017
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	12	2.47	5.01	%	$	15	3.08	6.64	%
Total credit derivatives sold	$	12	—	—		$	15	—	—

Credit Risk Contingent Feature

The following table summarizes the additional cash and securities collateral that KeyBank would have been required to deliver under the ISDA Master Agreements had the credit risk contingent features been triggered for the derivative contracts in a net liability position as of September 30, 2018, and December 31, 2017. The additional collateral amounts were calculated based on scenarios under which KeyBank’s ratings are downgraded one, two, or three ratings as of September 30, 2018, and December 31, 2017, and take into account all collateral already posted. A similar calculation was performed for KeyCorp, and no additional collateral would have been required as

of September 30, 2018, and December 31, 2017. For more information about the credit ratings for KeyBank and KeyCorp, see the discussion under the heading “Factors affecting liquidity” in the section entitled “Liquidity risk management” in Item 2 of this report.

	September 30, 2018				December 31, 2017
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	$	2	$	2
Two rating downgrades	1		1		2		2
Three rating downgrades	1		1		2		2

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Mortgage Servicing Assets (Tables)

9 Months Ended

Sep. 30, 2018

Servicing Asset [Abstract]

Changes in Carrying Amount of Mortgage Servicing Assets

Changes in the carrying amount of residential mortgage servicing assets are summarized as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of period	$	34		$	29		$	31		$	28
Servicing retained from loan sales	2			2			7			5
Purchases	—			—			—			—
Amortization	(1		)	(1		)	(3		)	(3		)
Balance at end of period	$	35		$	30		$	35		$	30
Fair value at end of period	$	49		$	34		$	49		$	34

Changes in the carrying amount of commercial mortgage servicing assets are summarized as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Balance at beginning of period	$	451		$	373		$	412		$	356
Servicing retained from loan sales	25			24			81			71
Purchases	17			10			50			24
Amortization	(25		)	(22		)	(75		)	(66		)
Balance at end of period	$	468		$	385		$	468		$	385
Fair value at end of period	$	672		$	508		$	672		$	508

Schedule of Range and Weighted-Average of Significant Unobservable Inputs

The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2018, and September 30, 2017, along with the valuation techniques, are shown in the following table:

dollars in millions		September 30, 2018	September 30, 2017
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	8.27 - 55.15% (9.35%)	7.95 - 32.49% (10.15%)
	Discount rate	7.50 - 10.00% (7.54%)	8.50 - 11.00% (8.55%)
	Servicing cost	$62 - $4,375 ($67.76)	$76 - $3,335 ($82.19)

The range and weighted average of the significant unobservable inputs used to determine the fair value of our commercial mortgage servicing assets at September 30, 2018, and September 30, 2017, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2018	September 30, 2017
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 3.00% (1.16%)	1.00 - 3.00% (1.20%)
	Residual cash flows discount rate	7.00 - 15.00% (9.10%)	7.00 - 15.00% (8.90%)
	Escrow earn rate	2.38 - 3.94% (3.07%)	.80 - 3.00% (2.40%)
	Servicing cost	$150 - $38,500 ($1,445)	$150 - $38,500 ($1,468)
	Loan assumption rate	0.00 - 3.22% (1.34%)	0.00 - 3.00% (1.24%)
	Percentage late	0.00 - 2.00% (.20%)	0.00 - 2.00% (.27%)

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities Information

The assets and liabilities presented in the table below convey the size of KCDC’s direct and indirect investments at September 30, 2018, and December 31, 2017. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our balance sheet.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2018
LIHTC investments	$	5,955	$	2,589	$	1,567
December 31, 2017
LIHTC investments	$	6,003	$	2,943	$	1,561

The table below reflects the size of the private equity funds in which we were invested as well as our maximum exposure to loss in connection with these investments at September 30, 2018 and December 31, 2017.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2018
Indirect investments	$	21,088	$	376	$	129
December 31, 2017
Indirect investments	$	26,817	$	292	$	153

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Securities Financing Activities (Tables)

9 Months Ended

Sep. 30, 2018

Banking and Thrift [Abstract]

Summarized Securities Financing Agreements

The following table summarizes our securities financing agreements at September 30, 2018, and December 31, 2017:

	September 30, 2018									December 31, 2017
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	$	7	$	(1	)	$	(6	)	—	$	3	$	(3	)	—			—
Total	$	7	$	(1	)	$	(6	)	—	$	3	$	(3	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	285	$	(2	)	$	(283	)	—	$	374	$	(4	)	$	(370	)	—
Total	$	285	$	(2	)	$	(283	)	—	$	374	$	(4	)	$	(370	)	—

(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.

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2018

Retirement Benefits [Abstract]

Net Pension Cost (Benefit) for All Funded and Unfunded Plans

The components of net pension cost (benefit) for all funded and unfunded plans are as follows:

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Interest cost on PBO	$	10		$	12		$	30		$	36
Expected return on plan assets	(13		)	(17		)	(39		)	(51		)
Amortization of losses	4			4			12			12
Net pension cost	$	1		$	(1	)	$	3		$	(3	)

We use a separate VEBA trust to fund the retiree healthcare plan.

	Three months ended September 30,						Nine months ended September 30,
in millions	2018			2017			2018			2017
Interest cost on APBO	$	1		$	1		$	1		$	1
Expected return on plan assets	(1		)	(1		)	(1		)	(1		)
Net postretirement benefit cost	—			—			—			—

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2018

Banking and Thrift [Abstract]

Summary of Trust Preferred Securities, Common Stock and Related Debentures

The trust preferred securities, common stock, and related debentures are summarized as follows:

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
September 30, 2018
KeyCorp Capital I	$	155	$	6	$	161	3.077	%	2028
KeyCorp Capital II	99		4		103		6.875		2029
KeyCorp Capital III	128		4		132		7.750		2029
HNC Statutory Trust III	18		1		19		3.710		2035
Willow Grove Statutory Trust I	18		1		19		3.644		2036
HNC Statutory Trust IV	16		1		17		3.619		2037
Westbank Capital Trust II	7		—		7		4.528		2034
Westbank Capital Trust III	7		—		7		4.528		2034
Total	$	448	$	17	$	465	5.364	%	—
December 31, 2017	$	463	$	17	$	480	4.977	%	—

(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 $40 million at September 30, 2018, and $55 million at December 31, 2017. 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 $40 million at September 30, 2018, and $55 million at December 31, 2017. 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.

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Contingent Liabilities and Guarantees (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Guarantees

The following table shows the types of guarantees that we had outstanding at September 30, 2018. Information pertaining to the basis for determining the liabilities recorded in connection with these guarantees is included in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Guarantees” beginning on page 108 of our 2017 Form 10-K.

September 30, 2018	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,097	$	71
Recourse agreement with FNMA	3,750		7
Residential mortgage reserve	1,500		6
Return guarantee agreement with LIHTC investors	2		2
Written put options (a)	2,346		82
Total	$	10,695	$	168

(a)

The maximum potential undiscounted future payments represent notional amounts of derivatives qualifying as guarantees.

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Changes in AOCI

Our changes in AOCI for the three and nine months ended September 30, 2018, and September 30, 2017, are as follows:

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, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(288		)	(126		)	(10		)	—			(424		)
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			8			42
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(288		)	(92		)	(15		)	8			(387		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Other comprehensive income before reclassification, net of income taxes	(72		)	(26		)	1			—			(97		)
Amounts reclassified from AOCI, net of income taxes (a)	—			14			—			2			16
Other amounts reclassified from AOCI, net of income taxes	—			—			—			—			—
Net current-period other comprehensive income, net of income taxes	(72		)	(12		)	1			2			(81		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at December 31, 2016	$	(185	)	$	(14	)	$	(3	)	$	(339	)	$	(541	)
Other comprehensive income before reclassification, net of income taxes	40			(16		)	14			—			38
Amounts reclassified from AOCI, net of income taxes (a)	—			(11		)	—			8			(3		)
Net current-period other comprehensive income, net of income taxes	40			(27		)	14			8			35
Balance at September 30, 2017	$	(145	)	$	(41	)	$	11		$	(331	)	$	(506	)
Balance at June 30, 2017	(145		)	$	(31	)	$	4		$	(334	)	$	(506	)
Other comprehensive income before reclassification, net of income taxes	—			(10		)	7			—			(3		)
Amounts reclassified from AOCI, net of income taxes (a)	—			—			—			3			3
Net current-period other comprehensive income, net of income taxes	—			(10		)	7			3			—
Balance at September 30, 2017	$	(145	)	$	(41	)	$	11		$	(331	)	$	(506	)

(a)

See table below for details about these reclassifications.

Reclassifications Out of AOCI

Our reclassifications out of AOCI for the three and nine months ended September 30, 2018, and September 30, 2017, are as follows:

	Nine months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2018			2017
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(42	)	$	21		Interest income — Loans
Interest rate	(2		)	(3		)	Interest expense — Long-term debt
	(44		)	18			Income (loss) from continuing operations before income taxes
	(10		)	7			Income taxes
	$	(34	)	$	11		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(12	)	$	(12	)	Personnel expense
	(12		)	(12		)	Income (loss) from continuing operations before income taxes
	(4		)	(4		)	Income taxes
	$	(8	)	$	(8	)	Income (loss) from continuing operations

	Three months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2018			2017
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(15	)	$	1		Interest income — Loans
Interest rate	(2		)	(1		)	Interest expense — Long-term debt
	(17		)	—			Income (loss) from continuing operations before income taxes
	(3		)	—			Income taxes
	$	(14	)	—			Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(4	)	(4		)	Personnel expense
	(4		)	(4		)	Income (loss) from continuing operations before income taxes
	(2		)	(1		)	Income taxes
	$	(2	)	$	(3	)	Income (loss) from continuing operations

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of Stockholders Equity

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		Third quarter 2018 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		—

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Line of Business Results (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Financial Information of Business Groups

The table on the following pages shows selected financial data for our major business segments for the three- and nine-month periods ended September 30, 2018, and September 30, 2017.

Three months ended September 30,	Key Community Bank						Key Corporate Bank
dollars in millions	2018			2017			2018			2017
SUMMARY OF OPERATIONS
Net interest income (TE)	$	726		$	673		$	273		$	292
Noninterest income	268			272			301			269
Total revenue (TE) (a)	994			945			574			561
Provision for credit losses	43			59			20			(11		)
Depreciation and amortization expense	27			30			34			25
Other noninterest expense	608			596			282			278
Income (loss) from continuing operations before income taxes (TE)	316			260			238			269
Allocated income taxes and TE adjustments	75			97			39			79
Income (loss) from continuing operations	241			163			199			190
Income (loss) from discontinued operations, net of taxes	—			—			—			—
Net income (loss)	241			163			199			190
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—
Net income (loss) attributable to Key	$	241		$	163		$	199		$	190
AVERAGE BALANCES (b)
Loans and leases	$	47,862		$	47,614		$	39,714		$	38,021
Total assets (a)	51,740			51,642			46,860			45,257
Deposits	82,259			79,563			21,056			21,559
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	43		$	41		$	19		$	(9	)
Return on average allocated equity (b)	19.80		%	13.39		%	26.91		%	27.08		%
Return on average allocated equity	19.80			13.39			26.91			27.08
Average full-time equivalent employees (c)	10,529			10,696			2,546			2,460

Nine months ended September 30,	Key Community Bank						Key Corporate Bank
dollars in millions	2018			2017			2018			2017
SUMMARY OF OPERATIONS
Net interest income (TE)	$	2,129		$	1,978		$	822		$	909
Noninterest income	820			856			852			827
Total revenue (TE) (a)	2,949			2,834			1,674			1,736
Provision for credit losses	128			152			62			26
Depreciation and amortization expense	84			86			101			68
Other noninterest expense	1,844			1,790			852			834
Income (loss) from continuing operations before income taxes (TE)	893			806			659			808
Allocated income taxes and TE adjustments	212			300			85			213
Income (loss) from continuing operations	681			506			574			595
Income (loss) from discontinued operations, net of taxes	—			—			—			—
Net income (loss)	681			506			574			595
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—
Net income (loss) attributable to Key	$	681		$	506		$	574		$	595
AVERAGE BALANCES (b)
Loans and leases	$	47,844		$	47,396		$	39,232		$	37,804
Total assets (a)	51,739			51,361			46,544			44,506
Deposits	81,053			79,439			20,977			21,237
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	119		$	131		$	56		$	24
Return on average allocated equity (b)	18.80		%	14.14		%	26.36		%	27.93		%
Return on average allocated equity	18.80			14.14			26.36			27.93
Average full-time equivalent employees (c)	10,604			10,573			2,542			2,403

(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.

Other Segments						Total Segments						Reconciling Items						Key
2018			2017			2018			2017			2018			2017			2018			2017
$	(13	)	$	(10	)	$	986		$	955		$	7		$	7		$	993		$	962
37			52			606			593			3			(1		)	609			592
24			42			1,592			1,548			10			6			1,602			1,554
(2		)	2			61			50			1			1			62			51
—			1			61			56			37			41			98			97
7			25			897			899			(31		)	(4		)	866			895
19			14			573			543			3			(32		)	576			511
(3		)	(6		)	111			170			(17		)	(22		)	94			148
22			20			462			373			20			(10		)	482			363
—			—			—			—			—			1			—			1
22			20			462			373			20			(9		)	482			364
—			(1		)	—			(1		)	—			1			—			—
$	22		$	21		$	462		$	374		$	20		$	(10	)	$	482		$	364
$	888		$	1,175		$	88,464		$	86,810		$	3		$	4		$	88,467		$	86,814
37,769			36,895			136,369			133,794			360			562			136,729			134,356
2,292			2,010			105,607			103,132			19			(27		)	105,626			103,105
(1)			—			$	62		$	32		(1		)	$	—		$	60		$	32
73.35		%	55.54		%	23.26		%	19.11		%	1.08		%	(.58		)%	12.57		%	9.45		%
73.35			55.54			23.26			19.11			1.08			(0.53		)	12.57			9.48
2			337			13,077			13,493			5,073			5,055			18,150			18,548

Other Segments						Total Segments						Reconciling Items						Key
2018			2017			2018			2017			2018			2017			2018			2017
$	(40	)	$	(22	)	$	2,911		$	2,865		$	21		$	13		$	2,932		$	2,878
139			154			1,811			1,837			59			(15		)	1,870			1,822
99			132			4,722			4,702			80			(2		)	4,802			4,700
(4		)	2			186			180			1			—			187			180
1			2			186			156			114			127			300			283
47			77			2,743			2,701			(80		)	16			2,663			2,717
55			51			1,607			1,665			45			(145		)	1,652			1,520
(10		)	(16		)	287			497			(12		)	(72		)	275			425
65			67			1,320			1,168			57			(73		)	1,377			1,095
—			—			—			—			5			6			5			6
65			67			1,320			1,168			62			(67		)	1,382			1,101
—			1			—			1			—			—			—			1
$	65		$	66		$	1,320		$	1,167		$	62		$	(67	)	$	1,382		$	1,100
$	938		$	1,263		$	88,014		$	86,463		$	4		$	22		$	88,018		$	86,485
37,345			36,569			135,628			132,436			386			766			136,014			133,202
1,992			2,030			104,022			102,706			51			(47		)	104,073			102,659
—			$	1		$	175		$	156		(1)			—			$	174		$	156
67.37		%	56.20		%	22.39		%	20.03		%	1.06		%	(1.32		)%	12.24		%	9.62		%
67.37			56.20			22.39			20.03			1.16			(1.21		)	12.28			9.67
173			341			13,319			13,317			5,035			5,110			18,354			18,427

XML

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table represents a disaggregation of revenue from contracts with customers, by line of business, for the three- and nine-month periods ended September 30, 2018:

Three months ended September 30, 2018
dollars in millions	Key Community Bank		Key Corporate Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	90	$	16	$	106
Investment banking and debt placement fees	1		69		70
Services charges on deposit accounts	72		13		85
Cards and payments income	40		28		68
Other noninterest income	5		—		5
Total revenue from contracts with customers	$	208	$	126	$	334
Other noninterest income (a)					$	235
Noninterest income from other segments (b)					37
Reconciling items (c)					3
Total noninterest income					$	609

(a) Noninterest income considered earned outside the scope of contracts with customers.

(b) Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.

(c) Reconciling items consists of intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.

Nine months ended September 30, 2018
dollars in millions	Key Community Bank		Key Corporate Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	268	$	50	$	318
Investment banking and debt placement fees	2		183		185
Services charges on deposit accounts	226		39		265
Cards and payments income	115		82		197
Other noninterest income	15		1		16
Total revenue from contracts with customers	$	626	$	355	$	981
Other noninterest income (a)					$	691
Noninterest income from other segments (b)					139
Reconciling items (c)					59
Total noninterest income					$	1,870

(a) Noninterest income considered earned outside the scope of contracts with customers.

(b) Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.

(c)

Reconciling items consists primarily of the gain on the sale of, and contract revenue recognized prior to the sale of, KIBS for the second quarter of 2018, intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.

XML

Earnings Per Common Share - Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
EARNINGS
Income (loss) from continuing operations		$ 482	$ 363	$ 1,377	$ 1,095
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	1
Income (loss) from continuing operations attributable to Key		482	363	1,377	1,094
Less: Dividends on Preferred Stock		14	14	43	56
Income (loss) from continuing operations attributable to Key common shareholders		468	349	1,334	1,038
Income (loss) from discontinued operations, net of taxes		0	1	5	6
Net income (loss) attributable to Key common shareholders		$ 468	$ 350	$ 1,339	$ 1,044
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average common shares outstanding (in shares)		1,036,479	1,073,390	1,048,397	1,075,296
Effect of common share options and other stock awards (in shares)		13,497	15,451	14,419	16,359
Weighted-average common shares and potential common shares outstanding (in shares)	[1]	1,049,976	1,088,841	1,062,816	1,091,655
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.45	$ 0.32	$ 1.28	$ 0.96
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.45	0.32	1.27	0.97
Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution (in usd per share)		0.45	0.32	1.26	0.95
Income (loss) from discontinued operations, net of taxes - assuming dilution (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	$ 0.45	$ 0.32	$ 1.26	$ 0.96

[1] Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.

[2] EPS may not foot due to rounding.

XML

Loan Portfolio - Loans by Category (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Residential — prime loans:
Total loans	$ 89,268	$ 86,405
Commercial lease financing includes receivables held as collateral for secured borrowing	12	24
Loans	88,381	85,528
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial and industrial	45,023	41,859
Commercial real estate:
Commercial mortgage	14,716	14,088
Construction	1,763	1,960
Total commercial real estate loans	16,479	16,048
Commercial lease financing	4,470	4,826
Total commercial/consumer loans	65,972	62,733
Residential — prime loans:
Total loans	65,972	62,733
Consumer Portfolio Segment [Member]
Commercial real estate:
Total commercial/consumer loans	23,296	23,672
Residential — prime loans:
Real estate — residential mortgage	5,497	5,483
Home equity loans	11,339	12,028
Total residential — prime loans	16,836	17,511
Consumer direct loans	1,807	1,794
Credit cards	1,098	1,106
Consumer indirect loans	3,555	3,261
Total loans	23,296	23,672
Commercial Credit Card [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial and industrial	129	119
Education Lending [Member] | Discontinued Operations [Member]
Residential — prime loans:
Loans	$ 1,100	$ 1,300

XML

Asset Quality - Financing Receivable Credit Quality Indicators (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 89,268	$ 86,405
Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	345	381
Consumer Portfolio Segment, PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	342	377
Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	3	4
Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	22,951	23,291
Consumer Portfolio Segment Excluding PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	16,494	17,134
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,804	1,790
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,098	1,106
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,555	3,261
Commercial Portfolio Segment Excluding PCI Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	65,711	62,376
Commercial Portfolio Segment Excluding PCI Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	63,152	59,785
Commercial Portfolio Segment Excluding PCI Loans [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,223	2,400
Commercial Portfolio Segment Excluding PCI Loans [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	336	191
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	44,969	41,776
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	43,052	39,833
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,691	1,790
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	226	153
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	14,512	13,840
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	14,016	13,328
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	398	482
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	98	30
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,760	1,934
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,679	1,894
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Construction [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	79	38
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Construction [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2	2
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,470	4,826
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,405	4,730
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	55	90
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	10	6
Commercial Portfolio Segment, PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	261	357
Commercial Portfolio Segment, PCI [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	160	220
Commercial Portfolio Segment, PCI [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	101	137
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	54	83
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	23	41
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	31	42
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	204	248
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	134	153
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	70	95
Commercial Portfolio Segment, PCI [Member] | RE Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	3	26
Commercial Portfolio Segment, PCI [Member] | RE Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	3	26
Commercial Portfolio Segment, PCI [Member] | RE Construction [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial Portfolio Segment, PCI [Member] | Commercial Leases [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial Portfolio Segment, PCI [Member] | Commercial Leases [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial Portfolio Segment, PCI [Member] | Commercial Leases [Member] | Criticized (Accruing) [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	138	149
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	138	149
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	12,696	12,694
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	10,040	10,226
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	551	519
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	485	477
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,620	1,472
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	98	119
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	97	117
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1	2
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	7,367	7,563
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,850	5,181
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	701	690
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	501	508
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,315	1,184
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	101	107
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	99	105
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2	2
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,221	2,394
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,384	1,519
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	211	225
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	112	121
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	514	529
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	8	6
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	8	6
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	667	640
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential Prime Financing Receivables [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	220	208
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	341	356
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 106	$ 76

XML

Asset Quality - Aging Analysis of Past Due and Current Loans (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 87,562	$ 84,716
Days Past Due	1,100	951
Non-performing Loans	645	503
Purchased Credit Impaired	606	738
Total loans	89,268	86,405
Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	65,072	61,904
Days Past Due	639	472
Non-performing Loans	337	191
Purchased Credit Impaired	261	357
Total loans	65,972	62,733
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	22,490	22,812
Days Past Due	461	479
Non-performing Loans	308	312
Purchased Credit Impaired	345	381
Total loans	23,296	23,672
Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	44,561	41,444
Days Past Due	408	332
Non-performing Loans	227	153
Purchased Credit Impaired	54	83
Total loans	45,023	41,859
Commercial Real Estate: Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	14,347	13,750
Days Past Due	165	90
Non-performing Loans	98	30
Purchased Credit Impaired	204	248
Total loans	14,716	14,088
Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,715	1,919
Days Past Due	45	15
Non-performing Loans	2	2
Purchased Credit Impaired	3	26
Total loans	1,763	1,960
Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	16,062	15,669
Days Past Due	210	105
Non-performing Loans	100	32
Purchased Credit Impaired	207	274
Total loans	16,479	16,048
Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	4,449	4,791
Days Past Due	21	35
Non-performing Loans	10	6
Purchased Credit Impaired	0	0
Total loans	4,470	4,826
Real Estate - Residential Mortgage [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	5,094	5,043
Days Past Due	80	85
Non-performing Loans	62	58
Purchased Credit Impaired	323	355
Total loans	5,497	5,483
Home Equity Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	11,044	11,721
Days Past Due	276	285
Non-performing Loans	221	229
Purchased Credit Impaired	19	22
Total loans	11,339	12,028
Consumer Direct Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,779	1,768
Days Past Due	25	22
Non-performing Loans	4	4
Purchased Credit Impaired	3	4
Total loans	1,807	1,794
Consumer Credit Card Financing Receivable [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,075	1,081
Days Past Due	23	25
Non-performing Loans	2	2
Purchased Credit Impaired	0	0
Total loans	1,098	1,106
Consumer Indirect Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,498	3,199
Days Past Due	57	62
Non-performing Loans	19	19
Purchased Credit Impaired	0	0
Total loans	3,555	3,261
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	220	261
30-59 Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	127	164
30-59 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	93	97
30-59 Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	74	111
30-59 Days Past Due [Member] | Commercial Real Estate: Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	24	26
30-59 Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	20	4
30-59 Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	44	30
30-59 Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	9	23
30-59 Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	13	16
30-59 Days Past Due [Member] | Home Equity Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	36	32
30-59 Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	9	9
30-59 Days Past Due [Member] | Consumer Credit Card Financing Receivable [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	6	7
30-59 Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	29	33
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	148	98
60-89 Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	118	60
60-89 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	30	38
60-89 Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	83	34
60-89 Days Past Due [Member] | Commercial Real Estate: Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	20	13
60-89 Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	14	9
60-89 Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	34	22
60-89 Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	1	4
60-89 Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	3	7
60-89 Days Past Due [Member] | Home Equity Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	11	15
60-89 Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	5	4
60-89 Days Past Due [Member] | Consumer Credit Card Financing Receivable [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	5	5
60-89 Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	6	7
90 and Greater Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	87	89
90 and Greater Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	57	57
90 and Greater Days Past Due [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	30	32
90 and Greater Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	24	34
90 and Greater Days Past Due [Member] | Commercial Real Estate: Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	23	21
90 and Greater Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	9	0
90 and Greater Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	32	21
90 and Greater Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	1	2
90 and Greater Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	2	4
90 and Greater Days Past Due [Member] | Home Equity Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	8	9
90 and Greater Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	7	5
90 and Greater Days Past Due [Member] | Consumer Credit Card Financing Receivable [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	10	11
90 and Greater Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Days Past Due	$ 3	$ 3

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Asset Quality - Additional Information (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($) SecurityLoan	Sep. 30, 2017 USD ($) SecurityLoan	Sep. 30, 2018 USD ($) SecurityLoan	Sep. 30, 2017 USD ($) SecurityLoan	Dec. 31, 2017 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for losses on lending-related commitments	$ 2	$ 9	$ 3	$ 2
Percentage of carrying amount of our commercial nonperforming loans outstanding	80.00%		80.00%
Percentage of nonperforming loans outstanding face value	83.00%		83.00%
Percentage of loans held for sale and other nonperforming assets	83.00%		83.00%
Net reduction to interest income	$ 8	6	$ 22	18
Financial receivable, modifications, subsequent default, recorded investment	2	1	4	3
Commitments outstanding to lend additional funds to borrowers	4		4		$ 2
Provision (credit) for loan and lease losses	63	$ 47	189	$ 186
Other real estate owned nonperforming loan	$ 28		$ 28		31
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | SecurityLoan	0
Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | SecurityLoan	82	45	178	100
Real Estate - Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial receivable, modifications, subsequent default, recorded investment			$ 130	$ 142
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income recognized on outstanding balances	$ 4	$ 3	9	9
Continuing Operations [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for loan and lease losses	60	42	184	178
Continuing Operations [Member] | Purchase Credit Impaired Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for loan and lease losses	(1)	1	1	4	3
Continuing Operations [Member] | Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for loan and lease losses	44	11	126	108
Continuing Operations [Member] | Consumer Portfolio Segment [Member] | Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for loan and lease losses	16	31	58	70
Continuing Operations [Member] | Consumer Portfolio Segment [Member] | Real Estate - Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for loan and lease losses	(1)	$ (2)	3	$ (11)
Foreclosed Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned nonperforming loan	$ 25		$ 25		$ 26

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Asset Quality - Breakdown of Individually Impaired Loans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	$ 265		$ 265		$ 213
With related allowance recorded, Recorded Investment	261		261		141
Recorded Investment	526		526		354
With no related allowance recorded, Unpaid Principal Balance	354		354		246
With related allowance recorded, Unpaid Principal Balance	290		290		159
Unpaid Principal Balance	644		644		405
Specific Allowance	30		30		23
Average Recorded Investment	474	$ 382	440	$ 438
Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	198		198		138
With related allowance recorded, Recorded Investment	110		110		10
With no related allowance recorded, Unpaid Principal Balance	270		270		171
With related allowance recorded, Unpaid Principal Balance	114		114		28
Specific Allowance	16		16		6
Average Recorded Investment	257	176	228	229
Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	67		67		75
With related allowance recorded, Recorded Investment	151		151		131
With no related allowance recorded, Unpaid Principal Balance	84		84		75
With related allowance recorded, Unpaid Principal Balance	176		176		131
Specific Allowance	14		14		17
Average Recorded Investment	217	206	212	209
Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	187		187		126
With related allowance recorded, Recorded Investment	45		45		10
With no related allowance recorded, Unpaid Principal Balance	255		255		153
With related allowance recorded, Unpaid Principal Balance	48		48		28
Specific Allowance	5		5		6
Average Recorded Investment	209	162	184	221
Commercial Real Estate: Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	11		11		12
With related allowance recorded, Recorded Investment	65		65		0
With no related allowance recorded, Unpaid Principal Balance	15		15		18
With related allowance recorded, Unpaid Principal Balance	66		66		0
Specific Allowance	11		11		0
Average Recorded Investment	48	14	44	8
Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	11		11		12
With related allowance recorded, Recorded Investment	65		65		0
With no related allowance recorded, Unpaid Principal Balance	15		15		18
With related allowance recorded, Unpaid Principal Balance	66		66		0
Specific Allowance	11		11		0
Average Recorded Investment	48	14	44	8
Real Estate - Residential Mortgage [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	15		15		17
With related allowance recorded, Recorded Investment	34		34		32
With no related allowance recorded, Unpaid Principal Balance	22		22		17
With related allowance recorded, Unpaid Principal Balance	52		52		32
Specific Allowance	4		4		5
Average Recorded Investment	49	49	49	50
Home Equity Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	50		50		56
With related allowance recorded, Recorded Investment	77		77		61
With no related allowance recorded, Unpaid Principal Balance	57		57		56
With related allowance recorded, Unpaid Principal Balance	84		84		61
Specific Allowance	7		7		9
Average Recorded Investment	126	118	122	121
Consumer Direct Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	0		0		0
With related allowance recorded, Recorded Investment	4		4		4
With no related allowance recorded, Unpaid Principal Balance	1		1		0
With related allowance recorded, Unpaid Principal Balance	4		4		4
Specific Allowance	0		0		0
Average Recorded Investment	4	4	4	3
Consumer Indirect Loans [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	2		2		2
With related allowance recorded, Recorded Investment	33		33		32
With no related allowance recorded, Unpaid Principal Balance	4		4		2
With related allowance recorded, Unpaid Principal Balance	33		33		32
Specific Allowance	3		3		3
Average Recorded Investment	35	33	34	32
Credit Cards [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
With related allowance recorded, Recorded Investment	3		3		2
With related allowance recorded, Unpaid Principal Balance	3		3		2
Specific Allowance	0		0		$ 0
Average Recorded Investment	$ 3	$ 2	$ 3	$ 3

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Asset Quality - Post-Modification Outstanding Recorded Investment by Concession Type for Our Commercial Accruing and Nonaccruing TDRs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Financing Receivable, Modifications [Line Items]
Total commercial and consumer TDRs	$ 60	$ 18	$ 124	$ 117
Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Extension of Maturity Date	20	7	20	24
Payment or Covenant Modification/Deferment	26	0	46	32
Bankruptcy Plan Modification	0	0	7	30
Total	46	7	73	86
Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Interest rate reduction	4	3	22	10
Other	10	8	29	21
Total	$ 14	$ 11	$ 51	$ 31

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Asset Quality - Summary of Post-Modification Outstanding Recorded Investment TDRs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Financing Receivables, Modifications, Rollforward [Roll Forward]
Balance at beginning of the period	$ 347	$ 333	$ 317	$ 280
Additions	58	20	133	134
Payments	(28)	(36)	(69)	(83)
Charge-offs	(11)	(2)	(15)	(16)
Balance at end of period	$ 366	$ 315	$ 366	$ 315

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Asset Quality - Breakdown of Nonperforming TDRs by Loans Category (Details) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($) SecurityLoan	Dec. 31, 2017 USD ($) SecurityLoan
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	5,831	5,184
Pre-modification Outstanding Recorded Investment	$ 452	$ 398
Post-modification Outstanding Recorded Investment	$ 366	$ 317
Nonperforming [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,885	2,622
Pre-modification Outstanding Recorded Investment	$ 244	$ 227
Post-modification Outstanding Recorded Investment	$ 211	$ 189
Nonperforming [Member] | Commercial Loans [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	36	28
Pre-modification Outstanding Recorded Investment	$ 134	$ 125
Post-modification Outstanding Recorded Investment	$ 111	$ 98
Nonperforming [Member] | Consumer Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,849	2,594
Pre-modification Outstanding Recorded Investment	$ 110	$ 102
Post-modification Outstanding Recorded Investment	$ 100	$ 91
Prior-Year Accruing [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,946	2,562
Pre-modification Outstanding Recorded Investment	$ 208	$ 171
Post-modification Outstanding Recorded Investment	$ 155	$ 128
Prior-Year Accruing [Member] | Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	18	4
Pre-modification Outstanding Recorded Investment	$ 53	$ 30
Post-modification Outstanding Recorded Investment	$ 37	$ 13
Prior-Year Accruing [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	2,928	2,558
Pre-modification Outstanding Recorded Investment	$ 155	$ 141
Post-modification Outstanding Recorded Investment	$ 118	$ 115
Commercial and Industrial [Member] | Nonperforming [Member] | Commercial Loans [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	30	20
Pre-modification Outstanding Recorded Investment	$ 120	$ 109
Post-modification Outstanding Recorded Investment	$ 101	$ 86
Commercial and Industrial [Member] | Prior-Year Accruing [Member] | Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	18	4
Pre-modification Outstanding Recorded Investment	$ 53	$ 30
Post-modification Outstanding Recorded Investment	$ 37	$ 13
Commercial Real Estate: Commercial Mortgage [Member] | Nonperforming [Member] | Commercial Real Estate Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	6	8
Pre-modification Outstanding Recorded Investment	$ 14	$ 16
Post-modification Outstanding Recorded Investment	$ 10	$ 12
Commercial Real Estate Loans [Member] | Nonperforming [Member] | Commercial Real Estate Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	6	8
Pre-modification Outstanding Recorded Investment	$ 14	$ 16
Post-modification Outstanding Recorded Investment	$ 10	$ 12
Real Estate - Residential Mortgage [Member] | Nonperforming [Member] | Consumer Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	257	308
Pre-modification Outstanding Recorded Investment	$ 18	$ 18
Post-modification Outstanding Recorded Investment	$ 18	$ 18
Real Estate - Residential Mortgage [Member] | Prior-Year Accruing [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	508	484
Pre-modification Outstanding Recorded Investment	$ 37	$ 31
Post-modification Outstanding Recorded Investment	$ 31	$ 31
Home Equity Loans [Member] | Consumer Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	1,233	1,025
Pre-modification Outstanding Recorded Investment	$ 72	$ 64
Post-modification Outstanding Recorded Investment	$ 66	$ 57
Home Equity Loans [Member] | Prior-Year Accruing [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	1,305	1,276
Pre-modification Outstanding Recorded Investment	$ 77	$ 75
Post-modification Outstanding Recorded Investment	$ 61	$ 59
Consumer Direct Loans [Member] | Nonperforming [Member] | Consumer Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	137	114
Pre-modification Outstanding Recorded Investment	$ 2	$ 2
Post-modification Outstanding Recorded Investment	$ 2	$ 2
Consumer Direct Loans [Member] | Prior-Year Accruing [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	81	48
Pre-modification Outstanding Recorded Investment	$ 4	$ 3
Post-modification Outstanding Recorded Investment	$ 2	$ 2
Consumer Credit Card [Member] | Nonperforming [Member] | Consumer Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	249	322
Pre-modification Outstanding Recorded Investment	$ 1	$ 2
Post-modification Outstanding Recorded Investment	$ 1	$ 1
Consumer Credit Card [Member] | Prior-Year Accruing [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	522	430
Pre-modification Outstanding Recorded Investment	$ 3	$ 1
Post-modification Outstanding Recorded Investment	$ 2	$ 1
Consumer Indirect Loans [Member] | Consumer Portfolio Segment [Member] | Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	973	825
Pre-modification Outstanding Recorded Investment	$ 17	$ 16
Post-modification Outstanding Recorded Investment	$ 13	$ 13
Consumer Indirect Loans [Member] | Prior-Year Accruing [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | SecurityLoan	512	320
Pre-modification Outstanding Recorded Investment	$ 34	$ 31
Post-modification Outstanding Recorded Investment	$ 22	$ 22

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Asset Quality - Changes in Allowance for Loan and Lease Losses by Loan Category (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 901	$ 891	$ 893	$ 882	$ 882
Provision	63	47	189	186
Charge-offs	(85)	(81)	(243)	(250)
Recoveries	22	41	62	80
Ending balance	901	898	901	898	893
Provision (credit) for losses on lending-related commitments	2	9	3	2
Continuing Operations [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	887	870	877	858	858
Provision	60	42	184	178
Charge-offs	(81)	(71)	(232)	(230)
Recoveries	21	39	58	74
Ending balance	887	880	887	880	877
Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	749	740	735	716	716
Provision	44	11	126	108
Charge-offs	(48)	(38)	(132)	(121)
Recoveries	9	29	25	39
Ending balance	754	742	754	742	735
Continuing Operations [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	542	528	529	508	508
Provision	34	8	110	93
Charge-offs	(38)	(29)	(114)	(101)
Recoveries	5	25	18	32
Ending balance	543	532	543	532	529
Continuing Operations [Member] | Commercial Real Estate: Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	139	144	133	144	144
Provision	9	(1)	17	2
Charge-offs	(6)	(6)	(9)	(9)
Recoveries	1	1	2	1
Ending balance	143	138	143	138	133
Continuing Operations [Member] | RE Construction [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	28	28	30	22	22
Provision	3	3	0	8
Charge-offs	0	(2)	0	(2)
Recoveries	0	0	1	1
Ending balance	31	29	31	29	30
Continuing Operations [Member] | Commercial Real Estate [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	167	172	163	166	166
Provision	12	2	17	10
Charge-offs	(6)	(8)	(9)	(11)
Recoveries	1	1	3	2
Ending balance	174	167	174	167	163
Continuing Operations [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	40	40	43	42	42
Provision	(2)	1	(1)	5
Charge-offs	(4)	(1)	(9)	(9)
Recoveries	3	3	4	5
Ending balance	37	43	37	43	43
Continuing Operations [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	10	9	7	17	17
Provision	(1)	(2)	3	(11)
Charge-offs	(2)	0	(3)	(2)
Recoveries	2	1	2	4
Ending balance	9	8	9	8	7
Continuing Operations [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	37	42	43	54	54
Provision	(2)	(1)	(4)	(4)
Charge-offs	(4)	(6)	(14)	(23)
Recoveries	3	4	9	12
Ending balance	34	39	34	39	43
Continuing Operations [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	26	25	28	24	24
Provision	9	10	20	26
Charge-offs	(10)	(8)	(27)	(26)
Recoveries	1	1	5	4
Ending balance	26	28	26	28	28
Continuing Operations [Member] | Credit Cards [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	46	44	44	38	38
Provision	7	10	30	36
Charge-offs	(10)	(11)	(34)	(34)
Recoveries	2	1	5	4
Ending balance	45	44	45	44	44
Continuing Operations [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	19	10	20	9	9
Provision	3	14	9	23
Charge-offs	(7)	(8)	(22)	(24)
Recoveries	4	3	12	11
Ending balance	19	19	19	19	20
Continuing Operations [Member] | Consumer Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	138	130	142	142	142
Provision	16	31	58	70
Charge-offs	(33)	(33)	(100)	(109)
Recoveries	12	10	33	35
Ending balance	133	138	133	138	142
Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	14	21	16	24	24
Provision	3	5	5	8
Charge-offs	(4)	(10)	(11)	(20)
Recoveries	1	2	4	6
Ending balance	$ 14	$ 18	$ 14	$ 18	$ 16

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Asset Quality - Breakdown of Allowance for Loan and Lease Losses and Corresponding Loan Balances (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance, Total ALLL - Including Discontinued Operations	$ 32	$ 26
Collectively Evaluated for Impairment, Allowance, Total ALLL - Including Discontinued Operations	863	861
Purchased Credit Impaired, Allowance, Total ALLL - Including Discontinued Operations	6	6
Loans, Outstanding, Total ALLL - Including Discontinued Operations	90,398	87,719
Individually Evaluated for Impairment, Outstanding, Total ALLL - Including Discontinued Operations	548	375
Collectively Evaluated for Impairment, Outstanding, Total ALLL - Including Discontinued Operations	89,244	86,606
Purchased Credit Impaired, Outstanding, Total ALLL - Including Discontinued Operations	606	738
Continuing Operations [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	30	23
Collectively Evaluated for Impairment, Allowance	851	848
Purchase Credit Impairment, Allowance	6	6
Total loans	89,268	86,405
Individually Evaluated for Impairment, Outstanding	526	354
Collectively Evaluated for Impairment, Outstanding	88,136	85,313
Purchase Credit Impairment, Outstanding	606	738
Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	16	6
Collectively Evaluated for Impairment, Allowance	733	724
Purchase Credit Impairment, Allowance	5	5
Total loans	65,972	62,733
Individually Evaluated for Impairment, Outstanding	308	148
Collectively Evaluated for Impairment, Outstanding	65,403	62,228
Purchase Credit Impairment, Outstanding	261	357
Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	14	17
Collectively Evaluated for Impairment, Allowance	118	124
Purchase Credit Impairment, Allowance	1	1
Total loans	23,296	23,672
Individually Evaluated for Impairment, Outstanding	218	206
Collectively Evaluated for Impairment, Outstanding	22,733	23,085
Purchase Credit Impairment, Outstanding	345	381
Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	2	3
Collectively Evaluated for Impairment, Allowance	12	13
Purchase Credit Impairment, Allowance	0	0
Total loans	1,130	1,314
Individually Evaluated for Impairment, Outstanding	22	21
Collectively Evaluated for Impairment, Outstanding	1,108	1,293
Purchase Credit Impairment, Outstanding	0	0
Commercial and Industrial [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	5	6
Collectively Evaluated for Impairment, Allowance	536	520
Purchase Credit Impairment, Allowance	2	3
Total loans	45,023	41,859
Individually Evaluated for Impairment, Outstanding	232	136
Collectively Evaluated for Impairment, Outstanding	44,737	41,640
Purchase Credit Impairment, Outstanding	54	83
Commercial Real Estate: Commercial Mortgage [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	11	0
Collectively Evaluated for Impairment, Allowance	129	131
Purchase Credit Impairment, Allowance	3	2
Total loans	14,716	14,088
Individually Evaluated for Impairment, Outstanding	76	12
Collectively Evaluated for Impairment, Outstanding	14,436	13,828
Purchase Credit Impairment, Outstanding	204	248
Commercial Real Estate: Construction [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	31	30
Purchase Credit Impairment, Allowance	0	0
Total loans	1,763	1,960
Individually Evaluated for Impairment, Outstanding	0	0
Collectively Evaluated for Impairment, Outstanding	1,760	1,934
Purchase Credit Impairment, Outstanding	3	26
Commercial Real Estate Loans [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	11	0
Collectively Evaluated for Impairment, Allowance	160	161
Purchase Credit Impairment, Allowance	3	2
Total loans	16,479	16,048
Individually Evaluated for Impairment, Outstanding	76	12
Collectively Evaluated for Impairment, Outstanding	16,196	15,762
Purchase Credit Impairment, Outstanding	207	274
Commercial Lease Financing [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	37	43
Purchase Credit Impairment, Allowance	0	0
Total loans	4,470	4,826
Individually Evaluated for Impairment, Outstanding	0	0
Collectively Evaluated for Impairment, Outstanding	4,470	4,826
Purchase Credit Impairment, Outstanding	0	0
Real Estate - Residential Mortgage [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	4	5
Collectively Evaluated for Impairment, Allowance	5	2
Purchase Credit Impairment, Allowance	0	0
Total loans	5,497	5,483
Individually Evaluated for Impairment, Outstanding	49	49
Collectively Evaluated for Impairment, Outstanding	5,125	5,079
Purchase Credit Impairment, Outstanding	323	355
Home Equity Loans [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	7	9
Collectively Evaluated for Impairment, Allowance	26	33
Purchase Credit Impairment, Allowance	1	1
Total loans	11,339	12,028
Individually Evaluated for Impairment, Outstanding	127	117
Collectively Evaluated for Impairment, Outstanding	11,193	11,889
Purchase Credit Impairment, Outstanding	19	22
Consumer Direct Loans [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	26	28
Purchase Credit Impairment, Allowance	0	0
Total loans	1,807	1,794
Individually Evaluated for Impairment, Outstanding	4	4
Collectively Evaluated for Impairment, Outstanding	1,800	1,786
Purchase Credit Impairment, Outstanding	3	4
Consumer Credit Card Financing Receivable [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	45	44
Purchase Credit Impairment, Allowance	0	0
Total loans	1,098	1,106
Individually Evaluated for Impairment, Outstanding	3	2
Collectively Evaluated for Impairment, Outstanding	1,095	1,104
Purchase Credit Impairment, Outstanding	0	0
Consumer Indirect Loans [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually Evaluated for Impairment, Allowance	3	3
Collectively Evaluated for Impairment, Allowance	16	17
Purchase Credit Impairment, Allowance	0	0
Total loans	3,555	3,261
Individually Evaluated for Impairment, Outstanding	35	34
Collectively Evaluated for Impairment, Outstanding	3,520	3,227
Purchase Credit Impairment, Outstanding	0	0
Education Lending [Member] | Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans at fair value	$ 2	$ 2

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Asset Quality - Changes in Liability for Credit Losses on Lending Related Commitments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	$ 58	$ 48	$ 57	$ 55
Provision (credit) for losses on lending-related commitments	2	9	3	2
Balance at end of period	$ 60	$ 57	$ 60	$ 57

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Asset Quality - Changes in Outstanding Unpaid Principal Balance, Carrying Amount, and Accretable Yield for PCI Loans (Details) - PCI Loans [Member] - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017	Jun. 30, 2018	Dec. 31, 2016
Accretable Yield
Balance at beginning of period	$ 121	$ 131	$ 197
Additions			(32)
Accretion	(10)	(33)	(44)
Net reclassifications from nonaccretable to accretable	13	41	15
Payments received, net	(3)	(18)	(4)
Disposals			(1)
Balance at end of period	121	121	131
Carrying Amount	599	599	738	$ 622	$ 865
Outstanding Unpaid Principal Balance	$ 642	$ 642	$ 803	$ 669	$ 1,002

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Fair Value Measurements - Fair Value of Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	$ 958,000,000	$ 836,000,000
Securities available for sale	18,341,000,000	18,139,000,000
Loans, net of unearned income	89,268,000,000	86,405,000,000
Loans held for sale	0	0
Derivative assets, netting adjustments	(162,000,000)	(443,000,000)
Total derivative assets	748,000,000	669,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, netting adjustments	(582,000,000)	(616,000,000)
US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	145,000,000	157,000,000
US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	7,000,000	9,000,000
Other Debt Obligations [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	20,000,000	20,000,000
Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,661,000,000	1,439,000,000
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	2,316,000,000	1,854,000,000
Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	941,000,000	821,000,000
Commercial loans	17,000,000	15,000,000
Total trading account assets	958,000,000	836,000,000
Securities available for sale	18,341,000,000	18,139,000,000
Total other investments	122,000,000	144,000,000
Loans, net of unearned income	3,000,000	2,000,000
Loans held for sale	87,000,000	71,000,000
Derivative assets, gross	910,000,000	1,112,000,000
Derivative assets, netting adjustments	(162,000,000)	(443,000,000)
Total derivative assets	748,000,000	669,000,000
Accrued income and other assets	0	0
Total assets at fair value	20,259,000,000	19,861,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	1,080,000,000	925,000,000
Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	759,000,000	615,000,000
Securities available for sale	145,000,000	157,000,000
Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	54,000,000	37,000,000
Securities available for sale	7,000,000	9,000,000
Recurring [Member] | Other Debt Obligations [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	42,000,000	65,000,000
Securities available for sale	20,000,000	20,000,000
Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	2,316,000,000	1,854,000,000
Recurring [Member] | Principal Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	12,000,000	13,000,000
Recurring [Member] | Principal Investments Indirect [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	101,000,000	124,000,000
Recurring [Member] | Principal Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	113,000,000	137,000,000
Recurring [Member] | Equity Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	8,000,000	7,000,000
Recurring [Member] | Equity Investments Direct, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	0
Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	9,000,000	7,000,000
Recurring [Member] | Other Mortgage-Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	86,000,000	104,000,000
Recurring [Member] | Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,661,000,000	1,439,000,000
Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	637,000,000	634,000,000
Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	1,025,000,000	907,000,000
Derivative liabilities, netting adjustments	(582,000,000)	(616,000,000)
Total derivative liabilities	443,000,000	291,000,000
Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	310,000,000	722,000,000
Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	445,000,000	520,000,000
Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	102,000,000	130,000,000
Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	93,000,000	124,000,000
Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	491,000,000	255,000,000
Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	481,000,000	246,000,000
Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	1,000,000
Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	3,000,000	4,000,000
Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	7,000,000	4,000,000
Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	3,000,000	13,000,000
Level 1 [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	3,000,000	0
Commercial loans	0	0
Total trading account assets	3,000,000	0
Securities available for sale	0	0
Total other investments	0	0
Loans, net of unearned income	0	0
Loans held for sale	0	0
Derivative assets, gross	70,000,000	100,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	70,000,000	100,000,000
Accrued income and other assets	0	0
Total assets at fair value	73,000,000	100,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	99,000,000	170,000,000
Level 1 [Member] | Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 1 [Member] | Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 1 [Member] | Recurring [Member] | Other Debt Obligations [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	3,000,000	0
Securities available for sale	0	0
Level 1 [Member] | Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 1 [Member] | Recurring [Member] | Principal Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 [Member] | Recurring [Member] | Principal Investments Indirect [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 [Member] | Recurring [Member] | Principal Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 [Member] | Recurring [Member] | Equity Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 [Member] | Recurring [Member] | Equity Investments Direct, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 [Member] | Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Level 1 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 1 [Member] | Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	37,000,000	72,000,000
Level 1 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	62,000,000	98,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	62,000,000	98,000,000
Level 1 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 [Member] | Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 1 [Member] | Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	70,000,000	100,000,000
Level 1 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	62,000,000	98,000,000
Level 1 [Member] | Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 [Member] | Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 1 [Member] | Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 1 [Member] | Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 [Member] | Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 2 [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	938,000,000	821,000,000
Commercial loans	17,000,000	15,000,000
Total trading account assets	955,000,000	836,000,000
Securities available for sale	18,321,000,000	18,119,000,000
Total other investments	1,000,000	4,000,000
Loans, net of unearned income	0	0
Loans held for sale	87,000,000	70,000,000
Derivative assets, gross	832,000,000	999,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	832,000,000	999,000,000
Accrued income and other assets	0	0
Total assets at fair value	20,196,000,000	20,028,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	1,563,000,000	1,371,000,000
Level 2 [Member] | Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	759,000,000	615,000,000
Securities available for sale	145,000,000	157,000,000
Level 2 [Member] | Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	54,000,000	37,000,000
Securities available for sale	7,000,000	9,000,000
Level 2 [Member] | Recurring [Member] | Other Debt Obligations [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	39,000,000	65,000,000
Securities available for sale	0	0
Level 2 [Member] | Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	2,316,000,000	1,854,000,000
Level 2 [Member] | Recurring [Member] | Principal Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 [Member] | Recurring [Member] | Principal Investments Indirect [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 [Member] | Recurring [Member] | Principal Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 [Member] | Recurring [Member] | Equity Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	4,000,000
Level 2 [Member] | Recurring [Member] | Equity Investments Direct, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 [Member] | Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	4,000,000
Level 2 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	86,000,000	104,000,000
Level 2 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,661,000,000	1,439,000,000
Level 2 [Member] | Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	600,000,000	562,000,000
Level 2 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	963,000,000	809,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	963,000,000	809,000,000
Level 2 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	304,000,000	713,000,000
Level 2 [Member] | Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	445,000,000	520,000,000
Level 2 [Member] | Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	32,000,000	30,000,000
Level 2 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	31,000,000	26,000,000
Level 2 [Member] | Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	491,000,000	255,000,000
Level 2 [Member] | Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	481,000,000	246,000,000
Level 2 [Member] | Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 2 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	3,000,000	4,000,000
Level 2 [Member] | Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	5,000,000	1,000,000
Level 2 [Member] | Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	3,000,000	13,000,000
Level 3 [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Commercial loans	0	0
Total trading account assets	0	0
Securities available for sale	20,000,000	20,000,000
Total other investments	19,000,000	16,000,000
Loans, net of unearned income	3,000,000	2,000,000
Loans held for sale	0	1,000,000
Derivative assets, gross	8,000,000	13,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	8,000,000	13,000,000
Accrued income and other assets	0	0
Total assets at fair value	50,000,000	52,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	0	0
Level 3 [Member] | Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 3 [Member] | Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 3 [Member] | Recurring [Member] | Other Debt Obligations [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	20,000,000	20,000,000
Level 3 [Member] | Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 3 [Member] | Recurring [Member] | Principal Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	12,000,000	13,000,000
Level 3 [Member] | Recurring [Member] | Principal Investments Indirect [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 3 [Member] | Recurring [Member] | Principal Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	12,000,000	13,000,000
Level 3 [Member] | Recurring [Member] | Equity Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	7,000,000	3,000,000
Level 3 [Member] | Recurring [Member] | Equity Investments Direct, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 3 [Member] | Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	7,000,000	3,000,000
Level 3 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Level 3 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 3 [Member] | Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	0	0
Level 3 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	0	0
Level 3 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	6,000,000	9,000,000
Level 3 [Member] | Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 [Member] | Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 3 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 [Member] | Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 3 [Member] | Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 [Member] | Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	1,000,000
Level 3 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 [Member] | Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	2,000,000	3,000,000
Level 3 [Member] | Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Collateralized Mortgage Obligations [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	14,192,000,000	14,660,000,000
Collateralized Mortgage Obligations [Member] | Level 1 [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Collateralized Mortgage Obligations [Member] | Level 2 [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	14,192,000,000	14,660,000,000
Collateralized Mortgage Obligations [Member] | Level 3 [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	$ 0	$ 0

XML

Fair Value Measurements - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impairment review threshold amount	$ 2,500,000
Loans held for sale adjusted to fair value	0	$ 0
Other equity investments	106,000,000
Loans, net of allowance	88,381,000,000	85,528,000,000
Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	1,100,000,000	1,300,000,000
Loans at fair value	2,000,000	2,000,000
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale adjusted to fair value	87,000,000	71,000,000
Loans, net of allowance	86,418,000,000	84,003,000,000
Loans at fair value	3,000,000	2,000,000
Fair Value [Member] | Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	1,000,000,000.0	1,000,000,000.0
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale adjusted to fair value	87,000,000	71,000,000
Loans, net of allowance	88,378,000,000	85,526,000,000
Loans at fair value	3,000,000	2,000,000
Carrying Amount [Member] | Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	1,100,000,000	1,300,000,000
Level 3 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale adjusted to fair value	0	1,000,000
Loans, net of allowance	86,418,000,000	84,003,000,000
Loans at fair value	3,000,000	2,000,000
Fair Value, Measurements, Nonrecurring [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities measured at fair value on non recurring basis	$ 0	$ 0

XML

Fair Value Measurements - Fair Value of Direct and Indirect Investments, Related Unfunded Commitments and Financial Support Provided (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Minimum [Member] | Indirect Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Liquidation period of funds			1 year
Maximum [Member] | Indirect Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Liquidation period of funds			6 years
Principal Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 113		$ 113
Unfunded Commitments	28		28
Funded Commitments	0	$ 0	1	$ 1
Funded Other	0	0	0	0
Principal Investments [Member] | Direct Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	12		12
Unfunded Commitments	0		0
Funded Commitments	0	0	0	0
Funded Other	0	0	0	0
Principal Investments [Member] | Indirect Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	101		101
Unfunded Commitments	28		28
Funded Commitments	0	0	1	1
Funded Other	$ 0	$ 0	$ 0	$ 0

XML

Fair Value Measurements - Change in Fair Values of Level 3 Financial Instruments (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Securities Available for Sale [Member] | Other Debt Obligations [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	$ 20	$ 20	$ 20	$ 17
Gains (Losses) Included in Other Comprehensive Income	0	1	0	3
Gains (Losses) Included in Earnings	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	(1)	0	0
Ending Balance	20	20	20	20
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Other Investments [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	7		3
Gains (Losses) Included in Other Comprehensive Income	0		0
Gains (Losses) Included in Earnings	0		0
Purchases	0		0
Sales	0		0
Settlements	0		0
Transfers Other	0		0
Transfers into Level 3	0		4
Transfers out of Level 3	0		0
Ending Balance	7		7
Unrealized Gains (Losses) Included in Earnings	0		0
Other Investments [Member] | Principal Investments Direct [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	13	15	13	27
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	(1)	(2)	(1)	(7)
Purchases	0	0	1	0
Sales	0	0	(1)	(7)
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Ending Balance	12	13	12	13
Unrealized Gains (Losses) Included in Earnings	(1)	2	1	(1)
Interest Rate [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	5	16	9	7
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	0	(2)	0
Purchases	0	0	1	0
Sales	0	0	(2)	0
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	2	1	6	13
Transfers out of Level 3	(1)	(6)	(6)	(9)
Ending Balance	6	11	6	11
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Credit [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	(9)	1	1	1
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	(6)	(5)	(26)	(12)
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	15	5	25	12
Transfers Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Ending Balance	0	1	0	1
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Other [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	3	4	3	2
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Transfers Other	(1)	0	(1)	2
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Ending Balance	2	4	2	4
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Loans Held For Sale Fair Value [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	0	0	1	0
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	0	0	0
Purchases	0	0	0	0
Sales	0	(1)	(1)	(1)
Settlements	0	0	0	0
Transfers Other	0	3	0	3
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Ending Balance	0	2	0	2
Unrealized Gains (Losses) Included in Earnings	0	$ 0	0	$ 0
Loans Held For Investment Fair Value [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance	3		2
Gains (Losses) Included in Other Comprehensive Income	0		0
Gains (Losses) Included in Earnings	0		0
Purchases	0		0
Sales	0		0
Settlements	0		0
Transfers Other	0		1
Transfers into Level 3	0		0
Transfers out of Level 3	0		0
Ending Balance	3		3
Unrealized Gains (Losses) Included in Earnings	$ 0		$ 0

XML

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Detail) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2018
ASSETS MEASURED ON A NONRECURRING BASIS
Tax credit carryforward, provisional impairment charges	$ 31
Fair Value, Measurements, Nonrecurring [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	9	$ 97
Accrued income and other assets	138	24
Total assets at fair value	147	121
Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	0	0
Accrued income and other assets	0	0
Total assets at fair value	0	0
Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	0	0
Accrued income and other assets	5	0
Total assets at fair value	5	0
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	9	97
Accrued income and other assets	133	24
Total assets at fair value	142	$ 121
LIHTC And Historic Tax Credit Investments [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Tax credit carryforward, amount	$ 119

XML

Fair Value Measurements - Quantitative Information about Level 3 Fair Value Measurements (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 681	$ 726
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans and leases	97	9
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans and leases	$ 97	9
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs	0.00%
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs	75.00%
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs	20.00%
Level 3 [Member] | Other Investments [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 12	$ 13
Level 3 [Member] | EBITDA Multiple [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs	6.88%	6.00%
Level 3 [Member] | EBITDA Multiple (Where Applicable) [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs	6.88%	6.00%
Measurement Input, Discount Rate [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs		0.00%
Measurement Input, Discount Rate [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs		50.00%
Measurement Input, Discount Rate [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Percentage of significant unobservable inputs		23.00%

XML

Fair Value Measurements - Fair Value Disclosures of Financial Instruments (Detail) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
ASSETS
Trading account assets		$ 958,000,000	$ 836,000,000
Loans held for sale		0	0
Derivative assets		748,000,000	669,000,000
Securities available for sale		18,341,000,000	18,139,000,000
Amortized Cost		11,869,000,000	11,830,000,000
Held-to-maturity securities		11,261,000,000	11,565,000,000
Loans, net of allowance		88,381,000,000	85,528,000,000
Loans held for sale	[1]	1,618,000,000	1,107,000,000
LIABILITIES
Long-term debt		13,849,000,000	14,333,000,000
Carrying Amount [Member]
ASSETS
Trading account assets		958,000,000	836,000,000
Other investments		681,000,000	726,000,000
Loans, net of allowance		3,000,000	2,000,000
Loans held for sale		87,000,000	71,000,000
Securities available for sale		18,341,000,000	18,139,000,000
Amortized Cost		11,869,000,000	11,830,000,000
Loans, net of allowance		88,378,000,000	85,526,000,000
Loans held for sale		1,531,000,000	1,036,000,000
Cash and short-term investments		2,591,000,000	5,118,000,000
LIABILITIES
Time deposits		13,583,000,000	11,647,000,000
Short-term borrowings		1,922,000,000	1,011,000,000
Long-term debt		13,849,000,000	14,333,000,000
Deposits with no stated maturity		92,197,000,000	93,588,000,000
Fair Value [Member]
ASSETS
Trading account assets		958,000,000	836,000,000
Other investments		681,000,000	726,000,000
Loans, net of allowance		3,000,000	2,000,000
Loans held for sale		87,000,000	71,000,000
Securities available for sale		18,341,000,000	18,139,000,000
Held-to-maturity securities		11,261,000,000	11,565,000,000
Loans, net of allowance		86,418,000,000	84,003,000,000
Loans held for sale		1,531,000,000	1,036,000,000
Cash and short-term investments		2,591,000,000	5,118,000,000
LIABILITIES
Time deposits		13,654,000,000	11,750,000,000
Short-term borrowings		1,922,000,000	1,011,000,000
Long-term debt		13,864,000,000	14,626,000,000
Deposits with no stated maturity		92,197,000,000	93,588,000,000
Fair Value [Member] | Level 1 [Member]
ASSETS
Trading account assets		3,000,000	0
Other investments		0	0
Loans, net of allowance		0	0
Loans held for sale		0	0
Securities available for sale		0	0
Held-to-maturity securities		0	0
Loans, net of allowance		0	0
Loans held for sale		0	0
Cash and short-term investments		2,591,000,000	5,118,000,000
LIABILITIES
Time deposits		0	0
Short-term borrowings		37,000,000	72,000,000
Long-term debt		12,659,000,000	13,407,000,000
Deposits with no stated maturity		0	0
Fair Value [Member] | Level 2 [Member]
ASSETS
Trading account assets		955,000,000	836,000,000
Other investments		1,000,000	4,000,000
Loans, net of allowance		0	0
Loans held for sale		87,000,000	70,000,000
Securities available for sale		18,321,000,000	18,119,000,000
Held-to-maturity securities		11,261,000,000	11,565,000,000
Loans, net of allowance		0	0
Loans held for sale		0	0
Cash and short-term investments		0	0
LIABILITIES
Time deposits		13,654,000,000	11,750,000,000
Short-term borrowings		1,885,000,000	939,000,000
Long-term debt		1,205,000,000	1,219,000,000
Deposits with no stated maturity		92,197,000,000	93,588,000,000
Fair Value [Member] | Level 3 [Member]
ASSETS
Trading account assets		0	0
Other investments		578,000,000	598,000,000
Loans, net of allowance		3,000,000	2,000,000
Loans held for sale		0	1,000,000
Securities available for sale		20,000,000	20,000,000
Held-to-maturity securities		0	0
Loans, net of allowance		86,418,000,000	84,003,000,000
Loans held for sale		1,531,000,000	1,036,000,000
Cash and short-term investments		0	0
LIABILITIES
Time deposits		0	0
Short-term borrowings		0	0
Long-term debt		0	0
Deposits with no stated maturity		0	0
Fair Value [Member] | Fair Value Measured at Net Asset Value Per Share [Member]
ASSETS
Other investments		102,000,000	124,000,000
Derivatives Designated as Hedging Instruments [Member] | Carrying Amount [Member]
ASSETS
Derivative assets		48,000,000	(12,000,000)
LIABILITIES
Derivative liabilities		(3,000,000)	2,000,000
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member]
ASSETS
Derivative assets		48,000,000	(12,000,000)
Derivative assets, Netting Adjustment		8,000,000	(94,000,000)
LIABILITIES
Derivative liabilities		(3,000,000)	2,000,000
Derivative liabilities, Netting Adjustment			(48,000,000)
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 1 [Member]
ASSETS
Derivative assets		2,000,000	1,000,000
LIABILITIES
Derivative liabilities		1,000,000	4,000,000
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 2 [Member]
ASSETS
Derivative assets		38,000,000	81,000,000
LIABILITIES
Derivative liabilities		(4,000,000)	46,000,000
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 3 [Member]
ASSETS
Derivative assets		0	0
LIABILITIES
Derivative liabilities		0	0
Derivatives Not Designated as Hedging Instruments [Member] | Carrying Amount [Member]
ASSETS
Derivative assets		700,000,000	681,000,000
LIABILITIES
Derivative liabilities		446,000,000	289,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
ASSETS
Derivative assets		700,000,000	681,000,000
Derivative assets, Netting Adjustment		(170,000,000)	(349,000,000)
LIABILITIES
Derivative liabilities		446,000,000	289,000,000
Derivative liabilities, Netting Adjustment		(582,000,000)	(568,000,000)
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 1 [Member]
ASSETS
Derivative assets		68,000,000	99,000,000
LIABILITIES
Derivative liabilities		61,000,000	94,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 2 [Member]
ASSETS
Derivative assets		794,000,000	918,000,000
LIABILITIES
Derivative liabilities		967,000,000	763,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 3 [Member]
ASSETS
Derivative assets		8,000,000	13,000,000
LIABILITIES
Derivative liabilities		$ 0	$ 0

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $87 million at September 30, 2018, and $71 million at December 31, 2017.

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Securities - Details of Securities (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
SECURITIES AVAILABLE FOR SALE
Amortized Cost	$ 19,125	$ 18,546
Gross Unrealized Gains	9	16
Gross Unrealized Losses	793	423
Fair Value	18,341	18,139
HELD-TO-MATURITY SECURITIES
Amortized Cost	11,869	11,830
Gross Unrealized Gains	0	7
Gross Unrealized Losses	608	272
Fair Value	11,261	11,565
US Treasury and Government [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	150	159
Gross Unrealized Gains	0	0
Gross Unrealized Losses	5	2
Fair Value	145	157
US States and Political Subdivisions Debt Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	7	9
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	7	9
Collateralized Mortgage Obligations [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	14,804	14,985
Gross Unrealized Gains	4	10
Gross Unrealized Losses	616	335
Fair Value	14,192	14,660
HELD-TO-MATURITY SECURITIES
Amortized Cost	7,330	8,055
Gross Unrealized Gains	0	0
Gross Unrealized Losses	400	224
Fair Value	6,930	7,831
Residential Mortgage Backed Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	1,708	1,456
Gross Unrealized Gains	2	3
Gross Unrealized Losses	49	20
Fair Value	1,661	1,439
HELD-TO-MATURITY SECURITIES
Amortized Cost	508	574
Gross Unrealized Gains	0	1
Gross Unrealized Losses	22	4
Fair Value	486	571
Other Debt Obligations [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	17	17
Gross Unrealized Gains	3	3
Gross Unrealized Losses	0	0
Fair Value	20	20
HELD-TO-MATURITY SECURITIES
Amortized Cost	12	15
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	12	15
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	2,439	1,920
Gross Unrealized Gains	0	0
Gross Unrealized Losses	123	66
Fair Value	2,316	1,854
HELD-TO-MATURITY SECURITIES
Amortized Cost	4,019	3,186
Gross Unrealized Gains	0	6
Gross Unrealized Losses	186	44
Fair Value	$ 3,833	$ 3,148

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Securities - Available for Sale Securities (Unrealized Loss Position) (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Held-to-maturity securities:
Temporarily impaired securities, fair value, less than 12 months	$ 8,147	$ 10,991
Temporarily impaired securities, gross unrealized losses, less than 12 months	207	125
Temporarily impaired securities, fair value, 12 months or longer	20,247	16,041
Temporarily impaired securities, gross unrealized losses, 12 months or longer	1,194	570
Temporarily impaired securities, fair value	28,394	27,032
Temporarily impaired securities, gross unrealized losses	1,401	695
US Treasury and Government [Member]
Securities available for sale:
Fair value, less than 12 months	0	41
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	145	116
Gross unrealized losses, 12 months or longer	5	2
Fair value	145	157
Gross unrealized losses	5	2
Collateralized Mortgage Obligations [Member]
Securities available for sale:
Fair value, less than 12 months	3,121	6,153
Gross unrealized losses, less than 12 months	54	74
Fair value, 12 months or longer	10,062	7,270
Gross unrealized losses, 12 months or longer	562	261
Fair value	13,183	13,423
Gross unrealized losses	616	335
Held-to-maturity securities:
Fair value, less than 12 months	1,275	2,201
Gross unrealized losses, less than 12 months	44	27
Fair value, 12 months or longer	5,655	5,599
Gross unrealized losses, 12 months or longer	356	197
Fair value	6,930	7,800
Gross unrealized losses (less than $1 million for other securities)	400	224
Commercial Mortgage Backed Securities [Member]
Securities available for sale:
Fair value, less than 12 months	558	205
Gross unrealized losses, less than 12 months	2	4
Fair value, 12 months or longer	1,758	1,649
Gross unrealized losses, 12 months or longer	121	62
Fair value	2,316	1,854
Gross unrealized losses		66
Held-to-maturity securities:
Fair value, less than 12 months	2,629	1,470
Gross unrealized losses, less than 12 months	98	12
Fair value, 12 months or longer	1,205	495
Gross unrealized losses, 12 months or longer	88	32
Fair value	3,834	1,965
Gross unrealized losses (less than $1 million for other securities)	186	44
Other Debt Obligations [Member]
Held-to-maturity securities:
Fair value, less than 12 months	2	3
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	0	4
Gross unrealized losses, 12 months or longer	0	0
Fair value	2	7
Gross unrealized losses (less than $1 million for other securities)	1	1
Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
Securities available for sale:
Fair value, less than 12 months	409	666
Gross unrealized losses, less than 12 months	3	7
Fair value, 12 months or longer	1,089	702
Gross unrealized losses, 12 months or longer	46	13
Fair value	1,498	1,368
Gross unrealized losses	49	20
Held-to-maturity securities:
Fair value, less than 12 months	153	252
Gross unrealized losses, less than 12 months	6	1
Fair value, 12 months or longer	333	206
Gross unrealized losses, 12 months or longer	16	3
Fair value	486	458
Gross unrealized losses (less than $1 million for other securities)	22	$ 4
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
Securities available for sale:
Gross unrealized losses	$ 123

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Securities - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($) loan position	Dec. 31, 2017 USD ($)
Debt Securities, Available-for-sale [Line Items]
Loans pledged as collateral	$ 8,400
Collateralized Mortgage Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Number of fixed rate collateralized mortgage obligations | loan	482
Weighted average maturity collateralized mortgage life	4 years 8 months 8 days
Residential Mortgage Backed Securities [Member] | Agency residential mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses	$ 49	$ 20
Securities in unrealized loss positions, number of positions | position	262
Weighted average maturity mortgage backed securities	4 years 3 months 18 days
Commercial Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses		$ 66
Commercial Mortgage Backed Securities [Member] | Agency residential mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses	$ 123
Securities in unrealized loss positions, number of positions | position	20
Weighted average maturity mortgage backed securities	4 years 1 month 24 days

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Securities - Cumulative Credit Portion of Impairments on Debt Securities (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Cumulative Impairments on Debt Securities, Beginning Balance	$ 4
Impairment recognized in earnings	0
Cumulative Impairments on Debt Securities, Ending Balance	$ 4

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Securities - Securities by Maturity (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Amortized Cost of Securities Available for sale, Due in one year or less	$ 93
Amortized Cost of Securities Available for sale, Due after one through five years	12,365
Amortized Cost of Securities Available for sale, Due after five through ten years	6,655
Amortized Cost of Securities Available for sale, Due after ten years	12
Amortized Cost	19,125	$ 18,546
Fair Value of Securities Available for sale, Due in one year or less	93
Fair Value of Securities Available for sale, Due after one through five years	11,846
Fair Value of Securities Available for sale, Due after five through ten years	6,390
Fair Value of Securities Available for sale, Due after ten years	12
Total Fair Value of Securities Available For Sale	18,341	18,139
Amortized Cost of Held-to-Maturity Securities, Due in one year or less	31
Amortized Cost of Held-to-Maturity Securities, Due after one through five years	6,181
Amortized Cost of Held-to-Maturity Securities, Due after five through ten years	5,657
Amortized Cost of Held-to-Maturity Securities, Due after ten years	0
Amortized Cost	11,869	11,830
Fair Value of Held-to-Maturity Securities, Due in one year or less	30
Fair Value of Held-to-Maturity Securities, Due after one through five years	5,910
Fair Value of Held-to-Maturity Securities, Due after five through ten years	5,321
Fair Value of Held-to-Maturity Securities, Due after ten years	0
Total Fair Value of Held-to-Maturity Securities	$ 11,261	$ 11,565

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Derivatives and Hedging Activities - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($) derivative rating	Dec. 31, 2017 USD ($)
Credit Derivatives [Line Items]
Derivative assets after effects of bilateral collateral and master netting agreements	$ 48
Derivative liabilities after effects of bilateral collateral and master netting agreements	(3)
Derivative assets not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	700
Derivative liabilities not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	446
Reclassify of after-tax net losses on derivative instruments from AOCI	$ 45
Length of time hedge in cash flow hedge	12 months
Reclassification of net losses related to terminated cash flow hedges from AOCI to income	$ 45
Maximum length of time over which forecasted transactions are hedged, years	10 years
Other Comprehensive income unrealized gain on derivatives arising during period net of tax	$ 43
Cash collateral netted against derivative assets	(116)	$ (23)
Collateral netted against derivative liabilities	304	150
Gross exposure on derivatives, after taking into account the effects of bilateral collateral and master netting agreements	148
Net exposure on derivatives, after taking into account, the effects of bilateral collateral and master netting agreements	215
Over-collateralization on derivatives to broker-dealers and banks, after the application of master netting agreements and collateral	205
Additional collateral held in the form of securities	10
Default reserve associated with uncollateralized contracts	4
Gross exposure on derivatives after taking into account effects of master netting agreements	592
Net exposure on derivatives with clients after application of master netting agreements collateral and related reserve	534
Banking Subsidiary [Member]
Credit Derivatives [Line Items]
Net liability position totaled	335
Derivative assets included in net liability position	144
Derivative liabilities included in net liability position	479
Cash and securities collateral posted	$ 317
Number of credit risk derivatives held | derivative	0
Additional collateral amount	$ 1	0
Banking Subsidiary [Member] | Unsecured Debt [Member]
Credit Derivatives [Line Items]
Number of ratings above noninvestment | rating	4
Banking Subsidiary [Member] | Maximum [Member] | Unsecured Debt [Member]
Credit Derivatives [Line Items]
Payments to terminate contracts (less than for the $1 million)	$ 2	$ 12

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Derivatives and Hedging Activities - Fair Values, Volume of Activity and Gain (Loss) Information Related to Derivative Instruments (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Notional Amount	$ 105,442	$ 100,193
Derivative assets, netting adjustments	(162)	(443)
Derivative Assets, net	747	664
Derivative liabilities, netting adjustments	(582)	(616)
Derivative Liabilities, net	393	207
Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	27,699	26,478
Derivative Assets	40	82
Derivative Liabilities	(3)	50
Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	77,743	73,715
Derivative Assets	870	1,030
Derivative Liabilities	1,028	857
Interest Rate [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	27,445	26,176
Derivative Assets	38	81
Derivative Liabilities	(4)	46
Interest Rate [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	65,617	61,390
Derivative Assets	272	641
Derivative Liabilities	449	474
Foreign Exchange [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	254	302
Derivative Assets	2	1
Derivative Liabilities	1	4
Foreign Exchange [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	7,695	8,317
Derivative Assets	100	129
Derivative Liabilities	92	120
Commodity [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	2,235	1,687
Derivative Assets	491	255
Derivative Liabilities	481	246
Credit [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	401	315
Derivative Assets	0	1
Derivative Liabilities	3	4
Other [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	1,795	2,006
Derivative Assets	7	4
Derivative Liabilities	3	13
Net Derivatives [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	105,442	100,193
Derivative Assets, net	748	669
Derivative Liabilities, net	443	291
Counterparty And Cash Collateral Netting [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	0	0
Derivative Assets, net	(1)	(5)
Derivative Liabilities, net	$ (50)	$ (84)

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Derivatives and Hedging Activities - Cumulative Basis Adjustments on Fair Value Hedges (Detail) - Interest Rate [Member] $ in Millions	Sep. 30, 2018 USD ($)
Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	$ 9,442
Hedge accounting basis adjustment	(145)
Certificates of Deposit [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	344
Hedge accounting basis adjustment	(1)
Bank Time Deposits [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	178
Hedge accounting basis adjustment	0
Derivatives Not Designated as Hedging Instruments [Member] | Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Hedge accounting basis adjustment	$ (10)

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Derivatives and Hedging Activities - Effect of Fair Value and Cash Flow Hedges on Income (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Interest expense — Long-term debt		$ (108)	$ (86)	$ (302)	$ (228)
Interest income — Loans		1,025	928	2,965	2,753
Deposits		(140)	(72)	(343)	(196)
Other income	[1]	23	21	143	138
Other Income [Member] | Cash Flow Hedging [Member]
Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract]
Gains (losses) (before tax) recognized in income for hedge ineffectiveness			0		0
Interest Rate [Member] | Interest Expense, Long-Term Debt [Member] | Fair Value Hedging [Member]
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract]
Recognized on hedged items		41	0	134	0
Recognized on derivatives designated as hedging instruments		(46)	10	(140)	42
Net income (expense) recognized on fair value hedges		(5)	10	(6)	42
Interest Rate [Member] | Interest Expense, Long-Term Debt [Member] | Cash Flow Hedging [Member]
Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract]
Realized gains (losses) (pre-tax) reclassified from AOCI into net income		(2)	(1)	(2)	(3)
Gains (losses) (before tax) recognized in income for hedge ineffectiveness			0		0
Net income (expense) recognized on cash flow hedges		(2)	(1)	(2)	(3)
Interest Rate [Member] | Interest Income [Member] | Fair Value Hedging [Member]
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract]
Recognized on hedged items		0	0	0	0
Recognized on derivatives designated as hedging instruments		0	0	0	0
Net income (expense) recognized on fair value hedges		0	0	0	0
Interest Rate [Member] | Interest Income [Member] | Cash Flow Hedging [Member]
Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract]
Realized gains (losses) (pre-tax) reclassified from AOCI into net income		(15)	1	(42)	21
Gains (losses) (before tax) recognized in income for hedge ineffectiveness			0
Net income (expense) recognized on cash flow hedges		(15)	1	(42)	21
Interest Rate [Member] | Interest Expense, Deposits [Member] | Fair Value Hedging [Member]
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract]
Recognized on hedged items		0	0	1	0
Recognized on derivatives designated as hedging instruments		0	0	0	0
Net income (expense) recognized on fair value hedges		0	0	1	0
Interest Rate [Member] | Interest Expense, Deposits [Member] | Cash Flow Hedging [Member]
Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract]
Realized gains (losses) (pre-tax) reclassified from AOCI into net income		0	0	0	0
Gains (losses) (before tax) recognized in income for hedge ineffectiveness			0		0
Net income (expense) recognized on cash flow hedges		0	0	0	0
Interest Rate [Member] | Other Income [Member] | Fair Value Hedging [Member]
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract]
Recognized on hedged items		0	20	0	50
Recognized on derivatives designated as hedging instruments		0	(19)	0	(49)
Net income (expense) recognized on fair value hedges		0	1	0	1
Interest Rate [Member] | Other Income [Member] | Cash Flow Hedging [Member]
Cash Flow Hedges Derivative Instruments at Fair Value, Net [Abstract]
Realized gains (losses) (pre-tax) reclassified from AOCI into net income		0	0	0	0
Net income (expense) recognized on cash flow hedges		$ 0	$ 0	$ 0	$ 0

[1] For the three and nine months ended September 30, 2018, net securities gains totaled less than $1 million. For the three and nine months ended September 30, 2017, net securities gains totaled $1 million. For the three and nine months ended September 30, 2018, and September 30, 2017, we did not have any impairment losses related to securities.

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Derivatives and Hedging Activities - Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	$ (34)	$ (15)	$ (165)	$ (25)
Net Gains (Losses) Reclassified From OCI Into Income(a)	(17)	0	(44)	18
Net Gains (Losses) Recognized in Other Income(a)	0	0	0	0
Interest Income [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	(32)	(1)	(178)	(1)
Net Gains (Losses) Reclassified From OCI Into Income(a)	(15)	1	(42)	21
Net Gains (Losses) Recognized in Other Income(a)	0	0	0	0
Interest Expense [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	(1)	(1)	3	(1)
Net Gains (Losses) Reclassified From OCI Into Income(a)	2	(1)	(2)	(3)
Net Gains (Losses) Recognized in Other Income(a)	0	0	0	0
Underwriting Discounts Fees And Commissions [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	1	(1)	2	(1)
Net Gains (Losses) Reclassified From OCI Into Income(a)	0	0	0	0
Net Gains (Losses) Recognized in Other Income(a)	0	0	0	0
Other Income [Member] | Foreign Exchange [Member] | Net Investment Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	(2)	(12)	8	(22)
Net Gains (Losses) Reclassified From OCI Into Income(a)	0	0	0	0
Net Gains (Losses) Recognized in Other Income(a)	$ 0	$ 0	$ 0	$ 0

XML

Derivatives and Hedging Activities - Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ 15	$ 17	$ 60	$ 36
Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	10	6	32	20
Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	10	10	32	31
Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	1	6	4
Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(7)	(6)	(24)	(15)
Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	6	14	(4)
Corporate Services Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	18	16	68	57
Corporate Services Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	8	5	28	21
Corporate Services Income [Member] | Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	10	10	32	31
Corporate Services Income [Member] | Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	1	6	4
Corporate Services Income [Member] | Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	2	1
Corporate Services Income [Member] | Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer Mortgage Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	1	(1)	1	0
Consumer Mortgage Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer Mortgage Income [Member] | Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer Mortgage Income [Member] | Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer Mortgage Income [Member] | Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer Mortgage Income [Member] | Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	1	(1)	1	0
Other Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(4)	2	(9)	(21)
Other Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	1	4	(1)
Other Income [Member] | Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Other Income [Member] | Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Other Income [Member] | Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(7)	(6)	(26)	(16)
Other Income [Member] | Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ 1	$ 7	$ 13	$ (4)

XML

Derivatives and Hedging Activities - Fair Value of Derivative Assets by Type (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 632	$ 646
Less: Related collateral	(116)	(23)
Total derivative assets	748	669
Interest Rate [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	189	401
Foreign Exchange [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	61	77
Commodity [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	376	163
Credit [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	(1)	1
Other [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 7	$ 4

XML

Derivatives and Hedging Activities - Fair Value of Credit Derivatives Purchased and Sold (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Credit Derivatives [Line Items]
Purchased	$ (2)	$ (3)
Sold	(1)	0
Net	(3)	(3)
Single Name Credit Default Swaps [Member]
Credit Derivatives [Line Items]
Purchased	(1)	(1)
Sold	0	0
Net	(1)	(1)
Traded Credit Default Swap Indices [Member]
Credit Derivatives [Line Items]
Purchased	(1)	(2)
Sold	0	0
Net	(1)	(2)
Other [Member]
Credit Derivatives [Line Items]
Purchased	0	0
Sold	(1)	0
Net	$ (1)	$ 0

XML

Derivatives and Hedging Activities - Credit Derivatives Sold and Held (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Credit Derivatives [Line Items]
Notional Amount	$ 12		$ 15
Average Term (Years)	0 years
Payment / Performance Risk	0.00%		0.00%
Other [Member]
Credit Derivatives [Line Items]
Notional Amount	$ 12		$ 15
Average Term (Years)	2 years 5 months 19 days	3 years 29 days
Payment / Performance Risk	5.01%		6.64%

XML

Derivatives and Hedging Activities - Credit Risk Contingent Feature (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 10
Standard & Poor's, A- Rating [Member] | One Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	$ 2
Standard & Poor's, A- Rating [Member] | Two Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	2
Standard & Poor's, A- Rating [Member] | Three Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	2
Moody's, A3 Rating [Member] | One Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	2
Moody's, A3 Rating [Member] | Two Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	2
Moody's, A3 Rating [Member] | Three Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 1	$ 2

XML

Mortgage Servicing Assets - Changes in Carrying Amount of Mortgage Servicing Assets (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Commercial Mortgage Backed Securities [Member]
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	$ 451	$ 373	$ 412	$ 356
Servicing retained from loan sales	25	24	81	71
Purchases	17	10	50	24
Amortization	(25)	(22)	(75)	(66)
Balance at end of period	468	385	468	385
Fair value at end of period	672	508	672	508
Residential Mortgage Backed Securities [Member]
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	34	29	31	28
Servicing retained from loan sales	2	2	7	5
Purchases	0	0	0	0
Amortization	(1)	(1)	(3)	(3)
Balance at end of period	35	30	35	30
Fair value at end of period	$ 49	$ 34	$ 49	$ 34

XML

Mortgage Servicing Assets - Schedule of Range and Weighted-Average of Significant Unobservable Inputs (Detail) - Discounted Cash Flow [Member] - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Commercial Mortgage Backed Securities [Member] | Minimum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	1.00%	1.00%
Residual cash flows discount rate	7.00%	7.00%
Escrow earn rate	2.38%	0.80%
Servicing cost	$ 150,000,000	$ 150,000,000
Loan assumption rate	0.00%	0.00%
Percentage late	0.00%	0.00%
Commercial Mortgage Backed Securities [Member] | Maximum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	3.00%	3.00%
Residual cash flows discount rate	15.00%	15.00%
Escrow earn rate	3.94%	3.00%
Servicing cost	$ 38,500,000,000	$ 38,500,000,000
Loan assumption rate	3.22%	3.00%
Percentage late	2.00%	2.00%
Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	1.16%	1.20%
Residual cash flows discount rate	9.10%	8.90%
Escrow earn rate	3.07%	2.40%
Servicing cost	$ 1,445,000,000	$ 1,468,000,000
Loan assumption rate	1.34%	1.24%
Percentage late	0.20%	0.27%
Residential Mortgage Backed Securities [Member] | Minimum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.50%	8.50%
Servicing cost	$ 62,000,000	$ 76,000,000
Prepayment speed	8.27%	7.95%
Residential Mortgage Backed Securities [Member] | Maximum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	10.00%	11.00%
Servicing cost	$ 4,375,000,000	$ 3,335,000,000
Prepayment speed	55.15%	32.49%
Residential Mortgage Backed Securities [Member] | Weighted Average [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.54%	8.55%
Servicing cost	$ 67,760,000	$ 82,190,000
Prepayment speed	9.35%	10.15%

XML

Mortgage Servicing Assets - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Commercial Mortgage Backed Securities [Member]
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	$ 126	$ 113
Amortization of servicing commercial mortgage loans	75	66
Residential Mortgage Backed Securities [Member]
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	10	11
Amortization of servicing commercial mortgage loans	$ 3	$ 3

XML

Variable Interest Entities - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Variable Interest Entity [Line Items]
Investments in operating partnerships	$ 220,000,000		$ 230,000,000
Liabilities related to investments in qualified affordable housing projects	1,000,000		4,000,000
Recurring [Member]
Variable Interest Entity [Line Items]
Alternative Investment	122,000,000		144,000,000
Recurring [Member] | Principal Investments Indirect [Member]
Variable Interest Entity [Line Items]
Alternative Investment	101,000,000		124,000,000
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Investments in operating partnerships	5,955,000,000		6,003,000,000
Liabilities related to investments in qualified affordable housing projects	2,589,000,000		2,943,000,000
Tax credit of investment	115,000,000
LIHTC Investments [Member] | Qualified affordable housing projects investment [Member]
Variable Interest Entity [Line Items]
Liabilities related to investments in qualified affordable housing projects	447,000,000		476,000,000
LIHTC Investments [Member] | Accrued Income And Other Assets [Member]
Variable Interest Entity [Line Items]
Investments in operating partnerships	1,300,000,000
LIHTC Investments [Member] | Investments [Member]
Variable Interest Entity [Line Items]
Amortization of investment	126,000,000	$ 124,000,000
Tax credit of investment	122,000,000
Guaranteed Funds [Member] | Investments [Member]
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	0		$ 4,000,000
VIE, liabilities	$ 0

XML

Variable Interest Entities - Summary of Variable Interest Entities Information (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Total Assets	$ 220	$ 230
Total Liabilities	1	4
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Total Assets	5,955	6,003
Total Liabilities	2,589	2,943
Maximum Exposure to Loss	1,567	1,561
KCC Indirect Investments [Member]
Variable Interest Entity [Line Items]
Total Assets	21,088	26,817
Total Liabilities	376	292
Maximum Exposure to Loss	$ 129	$ 153

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended			9 Months Ended	12 Months Ended
	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Sep. 30, 2018	Dec. 31, 2017
Income Tax Contingency [Line Items]
Additional net investment tax credits		$ 14
Percent reduction to income tax provision		2.80%
Tax reform, income tax expense (benefit)					$ 161
Tax reform, low-income housing investments, income tax expense (benefit)				$ 14
Tax reform, change in tax rate, income tax expense (benefit)				$ 147
Tax reform, change in enacted tax rate, percent				7.60%
Tax reform, measurement period adjustment	$ 7
Tax reform, total impact				$ 168
Tax reform, reclassification from AOCI to retained earnings, tax effect	$ 141
Total income tax expense (benefit), rate	15.50%		26.90%
Combined federal and state statutory tax rate				23.70%	37.20%
Income tax benefit (as a percent)	2.20%		2.20%
Federal deferred tax asset	$ 331			$ 331	$ 320
Valuation allowance	11			11	$ 15
Key Corp [Member]
Income Tax Contingency [Line Items]
Unrecognized tax benefits	46			46
First Niagara Bank, N.A. [Member]
Income Tax Contingency [Line Items]
Allocated bad debt deductions	$ 92			$ 92

XML

Acquisition, Divestiture, and Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions				3 Months Ended		9 Months Ended
	May 04, 2018	Jun. 30, 2017	Jun. 29, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Oct. 02, 2017	Jul. 01, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill				$ 2,516		$ 2,516		$ 2,538
Gain on sale						83	$ 0
Cain Brothers & Company, LLC. [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Intangible assets acquired									$ 30
Goodwill									$ 53
HelloWallet Holdings, LLC [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Intangible assets acquired										$ 12
Goodwill										$ 17
Key Merchant Services, LLC [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Intangible assets acquired				85	$ 95	85	95
Goodwill					$ 1		$ 1
Business acquisition, percentage of coting interests acquired					51.00%		51.00%
Business combination, percentage held before acquisition date			49.00%
Business combination, ownership percentage					100.00%		100.00%
Exchange of First Niagara preferred stock for KeyCorp preferred stock			$ 74		$ 69
Business combination, noncash holding gain		$ 64			59
Business combination, estimated fair value of equity interest					5
Measurement-period adjustment, intangible assets					$ 10
Goodwill, subsequent recognition of deferred tax asset				2
Tax adjustment on previous fair value measurements						4
Disposal Group, Not Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale	$ 73			5
Discontinued Operations [Member] | Government Guaranteed Loans [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loans included in divestiture				$ 1,100		$ 1,100		$ 1,300

XML

Securities Financing Activities - Summarized Securities Financing Agreements (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	$ 0	$ 0
Total	0	0
Repurchase agreements	0	0
Total	0	0
Counterparty And Cash Collateral Netting [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	(6)	0
Total	(6)	0
Repurchase agreements	(283)	(370)
Total	(283)	(370)
Federal Agency CMOs [Member]
Securities Financing Transaction [Line Items]
Assets pledged as collateral	416
Liabilities pledged as collateral	283
Gross Amounts Presented In Balance Sheets [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	7	3
Total	7	3
Repurchase agreements	285	374
Total	285	374
Netting Adjustments [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	(1)	(3)
Total	(1)	(3)
Repurchase agreements	(2)	(4)
Total	$ (2)	$ (4)

XML

Employee Benefits - Additional Information (Detail) - Other Postretirement Benefit Plans [Member]	9 Months Ended
	Sep. 30, 2018
Defined Benefit Plan Disclosure [Line Items]
Age of employees under condition one	55 years
Period of service under condition one	5 years
Age of employees under condition two	50 years
Period of service under condition two	15 years
Minimum period of service at the time of termination hired before 2001	15 years

XML

Employee Benefits - Net Pension Cost (Benefit) for All Funded and Unfunded Plans (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost on PBO	$ 10	$ 12	$ 30	$ 36
Expected return on plan assets	(13)	(17)	(39)	(51)
Amortization of losses	4	4	12	12
Net pension/postretirement benefit cost	1	(1)	3	(3)
Other Postretirement Benefit Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost on PBO	1	1	1	1
Expected return on plan assets	(1)	(1)	(1)	(1)
Net pension/postretirement benefit cost	$ 0	$ 0	$ 0	$ 0

XML

Trust Preferred Securities Issued by Unconsolidated Subsidiaries - Summary of Trust Preferred Securities, Common Stock and Related Debentures (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Stock	$ 1,257	$ 1,257
Debentures adjustments related to financial instrument hedging	40	55
KeyCorp Capital I [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	155
Common Stock	6
Principal Amount of of Debentures, Net of Discount	$ 161
Interest Rate of Trust Preferred Securities and Debentures	3.077%
KeyCorp Capital II [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 99
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 103
Interest Rate of Trust Preferred Securities and Debentures	6.875%
KeyCorp Capital III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 128
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 132
Interest Rate of Trust Preferred Securities and Debentures	7.75%
HNC Statutory Trust III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 18
Common Stock	1
Principal Amount of of Debentures, Net of Discount	$ 19
Interest Rate of Trust Preferred Securities and Debentures	3.71%
Willow Grove Statutory Trust I [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 18
Common Stock	1
Principal Amount of of Debentures, Net of Discount	$ 19
Interest Rate of Trust Preferred Securities and Debentures	3.644%
HNC Statutory Trust IV [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 16
Common Stock	1
Principal Amount of of Debentures, Net of Discount	$ 17
Interest Rate of Trust Preferred Securities and Debentures	3.619%
Westbank Capital Trust II [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 7
Common Stock	0
Principal Amount of of Debentures, Net of Discount	$ 7
Interest Rate of Trust Preferred Securities and Debentures	4.528%
Westbank Capital Trust III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 7
Common Stock	0
Principal Amount of of Debentures, Net of Discount	$ 7
Interest Rate of Trust Preferred Securities and Debentures	4.528%
Business Trusts [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 448	463
Common Stock	17	17
Principal Amount of of Debentures, Net of Discount	$ 465	$ 480
Interest Rate of Trust Preferred Securities and Debentures	5.364%	4.977%
Treasury Rate [Member] | KeyCorp Capital II [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.20%
Treasury Rate [Member] | KeyCorp Capital III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.25%
London Interbank Offered Rate (LIBOR) [Member] | KeyCorp Capital I [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.74%
London Interbank Offered Rate (LIBOR) [Member] | HNC Statutory Trust III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	1.40%
London Interbank Offered Rate (LIBOR) [Member] | Willow Grove Statutory Trust I [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	1.31%
London Interbank Offered Rate (LIBOR) [Member] | HNC Statutory Trust IV [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	1.28%
London Interbank Offered Rate (LIBOR) [Member] | Westbank Capital Trust II and III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	2.19%
Redemption upon either tax or a capital treatment event [Member] | Treasury Rate [Member] | Keycorp Capital II and III [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.50%

XML

Contingent Liabilities and Guarantees - Guarantees (Detail) $ in Millions	Sep. 30, 2018 USD ($)
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	$ 10,695
Liability Recorded	168
Written Put Options [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	2,346
Liability Recorded	82
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	3,097
Liability Recorded	71
Recourse Agreement with FNMA [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	3,750
Liability Recorded	7
Residential Mortgage Reserve [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	1,500
Liability Recorded	6
Return Guarantee Agreement with LIHTC Investors [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	2
Liability Recorded	$ 2

XML

Contingent Liabilities and Guarantees - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Commitments Contingencies And Guarantees [Line Items]
Default guarantees, value	$ 168
Written Put Options [Member]
Commitments Contingencies And Guarantees [Line Items]
Default guarantees, value	$ 82
Weighted average life of written put options	3 years
Standby Letters of Credit [Member]
Commitments Contingencies And Guarantees [Line Items]
Remaining weighted-average life of standby letters of credit in years	2 years
Default guarantees, value	$ 71
Recourse Agreement with FNMA [Member]
Commitments Contingencies And Guarantees [Line Items]
Weighted-average remaining term for outstanding commercial mortgage loans in years	7 years 10 months 24 days
Unpaid principal balance outstanding of loans sold	$ 13,100
Maximum potential amount of undiscounted future payments possibly required as percentage of principal balance of loans outstanding	29.00%
Default guarantees, value	$ 7
Residential Mortgage Reserve [Member]
Commitments Contingencies And Guarantees [Line Items]
Unpaid principal balance outstanding of loans sold	$ 5,000
Maximum potential amount of undiscounted future payments possibly required as percentage of principal balance of loans outstanding	30.00%
Weighted-average loan to value ratio (as a percent)	74.00%
Liability for estimated repurchase obligations on loans sold	$ 6
Default guarantees, value	$ 6
Return Guarantee Agreement with LIHTC Investors [Member]
Commitments Contingencies And Guarantees [Line Items]
Compliance period of property	15 years
Default guarantees, value	$ 2
Default Guarantees [Member]
Commitments Contingencies And Guarantees [Line Items]
Default guarantees, value	$ 1
Minimum [Member] | Standby Letters of Credit [Member]
Commitments Contingencies And Guarantees [Line Items]
Remaining actual life of standby letters of credit	1 year
Minimum [Member] | Low [Member]
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	0.00%
Minimum [Member] | Moderate [Member]
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	30.00%
Minimum [Member] | High [Member]
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	70.00%
Maximum [Member] | Standby Letters of Credit [Member]
Commitments Contingencies And Guarantees [Line Items]
Remaining actual life of standby letters of credit	16 years
Maximum [Member] | Low [Member]
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	30.00%
Maximum [Member] | Moderate [Member]
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	70.00%

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Accumulated Other Comprehensive Income - Changes in AOCI (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance			$ 15,025
Other comprehensive income before reclassification, net of income taxes	$ (97)	$ (3)	(424)	$ 38
Amounts reclassified from accumulated other comprehensive income, net of income taxes	16	3	42	(3)
Other amounts reclassified from AOCI, net of income taxes	0		(5)
Total other comprehensive income (loss), net of tax	(81)	0	(387)	35
Ending Balance	15,210		15,210
Unrealized Gains (Losses) on Securities Available for Sale [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(527)	(145)	(311)	(185)
Other comprehensive income before reclassification, net of income taxes	(72)	0	(288)	40
Amounts reclassified from accumulated other comprehensive income, net of income taxes	0	0	0	0
Other amounts reclassified from AOCI, net of income taxes	0		0
Total other comprehensive income (loss), net of tax	(72)	0	(288)	40
Ending Balance	(599)	(145)	(599)	(145)
Unrealized Gains (Losses) on Derivative Financial Instruments [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(166)	(31)	(86)	(14)
Other comprehensive income before reclassification, net of income taxes	(26)	(10)	(126)	(16)
Amounts reclassified from accumulated other comprehensive income, net of income taxes	14	0	34	(11)
Other amounts reclassified from AOCI, net of income taxes	0		0
Total other comprehensive income (loss), net of tax	(12)	(10)	(92)	(27)
Ending Balance	(178)	(41)	(178)	(41)
Foreign Currency Translation Adjustment [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(7)	4	9	(3)
Other comprehensive income before reclassification, net of income taxes	1	7	(10)	14
Amounts reclassified from accumulated other comprehensive income, net of income taxes	0	0	0	0
Other amounts reclassified from AOCI, net of income taxes	0		(5)
Total other comprehensive income (loss), net of tax	1	7	(15)	14
Ending Balance	(6)	11	(6)	11
Net Pension and Postretirement Benefit Costs [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(385)	(334)	(391)	(339)
Other comprehensive income before reclassification, net of income taxes	0	0	0	0
Amounts reclassified from accumulated other comprehensive income, net of income taxes	2	3	8	8
Other amounts reclassified from AOCI, net of income taxes	0		0
Total other comprehensive income (loss), net of tax	2	3	8	8
Ending Balance	(383)	(331)	(383)	(331)
AOCI Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(1,085)	(506)	(779)	(541)
Total other comprehensive income (loss), net of tax	(81)	0	(387)	35
Ending Balance	$ (1,166)	$ (506)	$ (1,166)	$ (506)

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Accumulated Other Comprehensive Income - Reclassifications Out of AOCI (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income — Loans	$ 1,025	$ 928	$ 2,965	$ 2,753
Interest expense — Long-term debt	(108)	(86)	(302)	(228)
Income (loss) from continuing operations before income taxes	576	511	1,652	1,520
Income taxes	87	134	252	386
Personnel expense	553	559	1,733	1,669
INCOME (LOSS) FROM CONTINUING OPERATIONS	482	363	1,377	1,095
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Derivative Financial Instruments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) from continuing operations before income taxes	(17)	0	(44)	18
Income taxes	(3)	0	(10)	7
INCOME (LOSS) FROM CONTINUING OPERATIONS	(14)	0	(34)	11
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Pension and Postretirement Benefit Costs [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) from continuing operations before income taxes	(4)	(4)	(12)	(12)
Income taxes	(2)	(1)	(4)	(4)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(2)	(3)	(8)	(8)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Pension and Postretirement Benefit Costs [Member] | Amortization of Losses [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Personnel expense	(4)	(4)	(12)	(12)
Interest Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Derivative Financial Instruments [Member] | Interest Rate [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income — Loans	(15)	1	(42)	21
Interest Expense [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Derivative Financial Instruments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense — Long-term debt	$ (2)	$ (1)	$ (2)	$ (3)

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Shareholders' Equity - Comprehensive Capital Plan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Repurchase of common shares			$ 820,000,000	$ 466,000,000
Cash dividends declared on common shares (in usd per share)	$ 0.17	$ 0.095	$ 0.395	$ 0.275
2018 Capital Plan [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Authorized amount of share repurchases	$ 1,225,000,000		$ 1,225,000,000
Common shares repurchased, value	542,000,000
Repurchase of common shares	541,000,000
Employee equity compensation program Common Share repurchases	$ 1,000,000
Cash dividends declared on common shares (in usd per share)	$ 0.17

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Shareholders' Equity - Preferred Stock (Details)	Sep. 30, 2018 USD ($) $ / shares	Jul. 30, 2018 USD ($) $ / shares	Dec. 31, 2017 USD ($)
Class of Stock [Line Items]
Preferred stock issued	$ 1,450,000,000		$ 1,025,000,000
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock issued		$ 425,000,000
Preferred stock, par value (in usd per share) | $ / shares	$ 1	$ 1
Preferred stock, liquidation preference, value	$ 1,000	$ 1,000
Depository Shares, Series F [Member]
Class of Stock [Line Items]
Depository receipt ratio	25,000.000	0.025
Preferred stock, liquidation preference (in usd per share) | $ / shares	$ 25	$ 25

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Shareholders' Equity - Schedule of Preferred Stock (Details)	Sep. 30, 2018 USD ($) $ / shares shares	Jul. 30, 2018 USD ($) $ / shares
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, amount outstanding | $	$ 525,000,000
Preferred stock, shares authorized (in shares) | shares	21,000
Preferred stock, shares outstanding (in shares) | shares	21,000
Preferred stock, par value (in usd per share)	$ 1
Preferred stock, liquidation preference, value | $	$ 25,000
Depository Shares, Series D [Member]
Class of Stock [Line Items]
Depository receipt ratio	0.04
Preferred stock, liquidation preference (in usd per share)	$ 1,000
Dividend payable per share (in usd per share)	$ 12.50
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, amount outstanding | $	$ 500,000,000
Preferred stock, shares authorized (in shares) | shares	500,000
Preferred stock, shares outstanding (in shares) | shares	500,000
Preferred stock, par value (in usd per share)	$ 1
Preferred stock, liquidation preference, value | $	$ 1,000
Depository Shares, Series E [Member]
Class of Stock [Line Items]
Depository receipt ratio	25,000.000
Preferred stock, liquidation preference (in usd per share)	$ 25
Dividend payable per share (in usd per share)	$ 0.382813
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, amount outstanding | $	$ 425,000,000
Preferred stock, shares authorized (in shares) | shares	425,000
Preferred stock, shares outstanding (in shares) | shares	425,000
Preferred stock, par value (in usd per share)	$ 1	$ 1
Preferred stock, liquidation preference, value | $	$ 1,000	$ 1,000
Depository Shares, Series F [Member]
Class of Stock [Line Items]
Depository receipt ratio	25,000.000	0.025
Preferred stock, liquidation preference (in usd per share)	$ 25	$ 25
Dividend payable per share (in usd per share)	$ 0

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Line of Business Results - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2018 Segment
Segment Reporting [Abstract]
Number of operating segments	2

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Line of Business Results - Financial Information of Business Groups (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) employee	Sep. 30, 2017 USD ($) employee	Sep. 30, 2018 USD ($) employee	Sep. 30, 2017 USD ($) employee
Segment Reporting Information [Line Items]
Net interest income (TE)	$ 993	$ 962	$ 2,932	$ 2,878
Noninterest income	609	592	1,870	1,822
Total revenue (TE)	1,602	1,554	4,802	4,700
Provision for credit losses	62	51	187	180
Depreciation and amortization expense	98	97	300	283
Other noninterest expense	866	895	2,663	2,717
Income (loss) from continuing operations before income taxes	576	511	1,652	1,520
Allocated income taxes and TE adjustments	94	148	275	425
INCOME (LOSS) FROM CONTINUING OPERATIONS	482	363	1,377	1,095
Income (loss) from discontinued operations, net of taxes	0	1	5	6
NET INCOME (LOSS)	482	364	1,382	1,101
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	1
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	482	364	1,382	1,100
AVERAGE BALANCES
Loans and leases	88,467	86,814	88,018	86,485
Total assets	136,729	134,356	136,014	133,202
Deposits	105,626	103,105	104,073	102,659
OTHER FINANCIAL DATA
Net loan charge-offs	$ 60	$ 32	$ 174	$ 156
Return on average allocated equity	12.57%	9.45%	12.24%	9.62%
Return on average allocated equity	12.57%	9.48%	12.28%	9.67%
Average full-time equivalent employees | employee	18,150	18,548	18,354	18,427
Operating Segments [Member]
Segment Reporting Information [Line Items]
Net interest income (TE)	$ 986	$ 955	$ 2,911	$ 2,865
Noninterest income	606	593	1,811	1,837
Total revenue (TE)	1,592	1,548	4,722	4,702
Provision for credit losses	61	50	186	180
Depreciation and amortization expense	61	56	186	156
Other noninterest expense	897	899	2,743	2,701
Income (loss) from continuing operations before income taxes	573	543	1,607	1,665
Allocated income taxes and TE adjustments	111	170	287	497
INCOME (LOSS) FROM CONTINUING OPERATIONS	462	373	1,320	1,168
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	462	373	1,320	1,168
Less: Net income (loss) attributable to noncontrolling interests	0	(1)	0	1
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	462	374	1,320	1,167
AVERAGE BALANCES
Loans and leases	88,464	86,810	88,014	86,463
Total assets	136,369	133,794	135,628	132,436
Deposits	105,607	103,132	104,022	102,706
OTHER FINANCIAL DATA
Net loan charge-offs	$ 62	$ 32	$ 175	$ 156
Return on average allocated equity	23.26%	19.11%	22.39%	20.03%
Return on average allocated equity	23.26%	19.11%	22.39%	20.03%
Average full-time equivalent employees | employee	13,077	13,493	13,319	13,317
Operating Segments [Member] | Key Community Bank [Member]
Segment Reporting Information [Line Items]
Net interest income (TE)	$ 726	$ 673	$ 2,129	$ 1,978
Noninterest income	268	272	820	856
Total revenue (TE)	994	945	2,949	2,834
Provision for credit losses	43	59	128	152
Depreciation and amortization expense	27	30	84	86
Other noninterest expense	608	596	1,844	1,790
Income (loss) from continuing operations before income taxes	316	260	893	806
Allocated income taxes and TE adjustments	75	97	212	300
INCOME (LOSS) FROM CONTINUING OPERATIONS	241	163	681	506
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	241	163	681	506
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	241	163	681	506
AVERAGE BALANCES
Loans and leases	47,862	47,614	47,844	47,396
Total assets	51,740	51,642	51,739	51,361
Deposits	82,259	79,563	81,053	79,439
OTHER FINANCIAL DATA
Net loan charge-offs	$ 43	$ 41	$ 119	$ 131
Return on average allocated equity	19.80%	13.39%	18.80%	14.14%
Return on average allocated equity	19.80%	13.39%	18.80%	14.14%
Average full-time equivalent employees | employee	10,529	10,696	10,604	10,573
Operating Segments [Member] | Key Corporate Bank [Member]
Segment Reporting Information [Line Items]
Net interest income (TE)	$ 273	$ 292	$ 822	$ 909
Noninterest income	301	269	852	827
Total revenue (TE)	574	561	1,674	1,736
Provision for credit losses	20	(11)	62	26
Depreciation and amortization expense	34	25	101	68
Other noninterest expense	282	278	852	834
Income (loss) from continuing operations before income taxes	238	269	659	808
Allocated income taxes and TE adjustments	39	79	85	213
INCOME (LOSS) FROM CONTINUING OPERATIONS	199	190	574	595
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	199	190	574	595
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	199	190	574	595
AVERAGE BALANCES
Loans and leases	39,714	38,021	39,232	37,804
Total assets	46,860	45,257	46,544	44,506
Deposits	21,056	21,559	20,977	21,237
OTHER FINANCIAL DATA
Net loan charge-offs	$ 19	$ (9)	$ 56	$ 24
Return on average allocated equity	26.91%	27.08%	26.36%	27.93%
Return on average allocated equity	26.91%	27.08%	26.36%	27.93%
Average full-time equivalent employees | employee	2,546	2,460	2,542	2,403
Operating Segments [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Net interest income (TE)	$ (13)	$ (10)	$ (40)	$ (22)
Noninterest income	37	52	139	154
Total revenue (TE)	24	42	99	132
Provision for credit losses	(2)	2	(4)	2
Depreciation and amortization expense	0	1	1	2
Other noninterest expense	7	25	47	77
Income (loss) from continuing operations before income taxes	19	14	55	51
Allocated income taxes and TE adjustments	(3)	(6)	(10)	(16)
INCOME (LOSS) FROM CONTINUING OPERATIONS	22	20	65	67
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	22	20	65	67
Less: Net income (loss) attributable to noncontrolling interests	0	(1)	0	1
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	22	21	65	66
AVERAGE BALANCES
Loans and leases	888	1,175	938	1,263
Total assets	37,769	36,895	37,345	36,569
Deposits	2,292	2,010	1,992	2,030
OTHER FINANCIAL DATA
Net loan charge-offs	$ (1)	$ 0	$ 0	$ 1
Return on average allocated equity	73.35%	55.54%	67.37%	56.20%
Return on average allocated equity	73.35%	55.54%	67.37%	56.20%
Average full-time equivalent employees | employee	2	337	173	341
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net interest income (TE)	$ 7	$ 7	$ 21	$ 13
Noninterest income	3	(1)	59	(15)
Total revenue (TE)	10	6	80	(2)
Provision for credit losses	1	1	1	0
Depreciation and amortization expense	37	41	114	127
Other noninterest expense	(31)	(4)	(80)	16
Income (loss) from continuing operations before income taxes	3	(32)	45	(145)
Allocated income taxes and TE adjustments	(17)	(22)	(12)	(72)
INCOME (LOSS) FROM CONTINUING OPERATIONS	20	(10)	57	(73)
Income (loss) from discontinued operations, net of taxes	0	1	5	6
NET INCOME (LOSS)	20	(9)	62	(67)
Less: Net income (loss) attributable to noncontrolling interests	0	1	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	20	(10)	62	(67)
AVERAGE BALANCES
Loans and leases	3	4	4	22
Total assets	360	562	386	766
Deposits	19	(27)	51	(47)
OTHER FINANCIAL DATA
Net loan charge-offs	$ (1)	$ 0	$ (1)	$ 0
Return on average allocated equity	1.08%	(0.58%)	1.06%	(1.32%)
Return on average allocated equity	1.08%	(0.53%)	1.16%	(1.21%)
Average full-time equivalent employees | employee	5,073	5,055	5,035	5,110

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Revenue from Contracts with Customers (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 334		$ 981
Noninterest income	609	$ 592	1,870	$ 1,822
Contract assets	0		0
Contract liabilities	0		0
Trust And Investment Services [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	106		318
Investment Banking And Debt Placement [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	70		185
Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	85		265
Cards And Payments [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	68		197
Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	5		16
Noninterest income	235		691
Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Noninterest income	606	593	1,811	1,837
Operating Segments [Member] | Community Banking [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	208		626
Noninterest income	268	272	820	856
Operating Segments [Member] | Community Banking [Member] | Trust And Investment Services [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	90		268
Operating Segments [Member] | Community Banking [Member] | Investment Banking And Debt Placement [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	1		2
Operating Segments [Member] | Community Banking [Member] | Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	72		226
Operating Segments [Member] | Community Banking [Member] | Cards And Payments [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	40		115
Operating Segments [Member] | Community Banking [Member] | Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	5		15
Operating Segments [Member] | Key Corporate Bank [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	126		355
Noninterest income	301	$ 269	852	$ 827
Operating Segments [Member] | Key Corporate Bank [Member] | Trust And Investment Services [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	16		50
Operating Segments [Member] | Key Corporate Bank [Member] | Investment Banking And Debt Placement [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	69		183
Operating Segments [Member] | Key Corporate Bank [Member] | Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	13		39
Operating Segments [Member] | Key Corporate Bank [Member] | Cards And Payments [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	28		82
Operating Segments [Member] | Key Corporate Bank [Member] | Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 0		$ 1