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 June 30, 2019

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:

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, $1 par value	KEY	New York Stock Exchange
Depositary Shares (each representing a 1/40th interest in a share of Fixed-to-Floating Rate	KEY PrI	New York Stock Exchange
Perpetual Non-Cumulative Preferred Stock, Series E)
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-	KEY PrJ	New York Stock Exchange
Cumulative Preferred Stock, Series F)
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-	KEY PrK	New York Stock Exchange
Cumulative Preferred Stock, Series G)

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	1,003,258,801 shares
Title of class	Outstanding at July 29, 2019

KEYCORP

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

		Page Number
Item 1.	Financial Statements	48
	Consolidated Balance Sheets	48
	Consolidated Statements of Income	49
	Consolidated Statements of Comprehensive Income	50
	Consolidated Statements of Changes in Equity	51
	Consolidated Statements of Cash Flows	52
	Notes to Consolidated Financial Statements (Unaudited)	53
	Note 1.    Basis of Presentation and Accounting Policies	53
	Note 2.    Earnings Per Common Share	55
	Note 3.    Loan Portfolio	56
	Note 4.    Asset Quality	56
	Note 5.    Fair Value Measurements	65
	Note 6.    Securities	74
	Note 7.    Derivatives and Hedging Activities	76
	Note 8.    Mortgage Servicing Assets	81
	Note 9.    Leases	83
	Note 10.  Variable Interest Entities	86
	Note 11.  Income Taxes	87
	Note 12.  Acquisitions, Divestiture, and Discontinued Operations	87
	Note 13.  Securities Financing Activities	88
	Note 14.  Employee Benefits	89
	Note 15.  Trust Preferred Securities Issued by Unconsolidated Subsidiaries	89
	Note 16.  Contingent Liabilities and Guarantees	90
	Note 17.  Accumulated Other Comprehensive Income	91
	Note 18.  Shareholders’ Equity	92
	Note 19.  Business Segment Reporting	93
	Note 20. Revenue from Contracts with Customers	95
	Note 21. Subsequent Event	96
	Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	97

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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
	Long-term financial targets	7
	Selected financial data	8
	Strategic developments	9
	Demographics	9
	Supervision and regulation	10
	Results of Operations	13
	Earnings overview	13
	Net interest income	13
	Provision for credit losses	18
	Noninterest income	18
	Noninterest expense	20
	Income taxes	22
	Business Segment Results	22
	Consumer Bank	22
	Commercial Bank	23
	Financial Condition	25
	Loans and loans held for sale	25
	Securities	29
	Deposits and other sources of funds	31
	Capital	31
	Risk Management	34
	Overview	34
	Market risk management	34
	Liquidity risk management	38
	Credit risk management	39
	Operational and compliance risk management	43
	GAAP to Non-GAAP Reconciliations	44
	Critical Accounting Policies and Estimates	45
	Accounting and Reporting Developments	46
	European Sovereign and Non-Sovereign Debt Exposures	47
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	98
Item 4.	Controls and Procedures	98

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	98
Item 1A.	Risk Factors	98
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	98
Item 6.	Exhibits	99
	Signature	101

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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 periods ended June 30, 2019, and June 30, 2018. 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 “2018 Form 10-K” refer to our Form 10-K for the year ended December 31, 2018, 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 our government-guaranteed and private education lending businesses and Austin. The government-guaranteed and private education lending business and Austin have been accounted for as discontinued operations since 2009.

• We engage in capital markets activities primarily through business conducted by our Commercial Bank segment. These activities encompass a variety of products and services. Among other things, we trade securities as a dealer, enter into derivative contracts (both to accommodate clients’ financing needs and to mitigate certain risks), and conduct transactions in foreign currencies (both to accommodate clients’ needs and to benefit from fluctuations in exchange rates).

• For regulatory purposes, capital is divided into two classes. Federal regulations currently prescribe that at least one-half of a bank or BHC’s total risk-based capital must qualify as Tier 1 capital. Both total and Tier 1 capital serve as bases for several measures of capital adequacy, which is an important indicator of financial stability and condition. Banking regulators evaluate a component of Tier 1 capital, known as Common Equity Tier 1, under the Regulatory Capital Rules. The “Capital” section of this report under the heading “Capital adequacy” provides more information on total capital, Tier 1 capital, and the Regulatory Capital Rules, including Common Equity Tier 1, and describes how these measures are calculated.

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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.	NAV: Net asset value.
EBITDA: Earnings before interest, taxes, depreciation, and	N/M: Not meaningful.
amortization.	NMTC: New market tax credit.
EPS: Earnings per share.	NOW: Negotiable Order of Withdrawal.
ERISA: Employee Retirement Income Security Act of 1974.	NPR: Notice of proposed rulemaking.
ERM: Enterprise risk management.	NYSE: New York Stock Exchange.
EVE: Economic value of equity.	OCC: Office of the Comptroller of the Currency.
FASB: Financial Accounting Standards Board.	OCI: Other comprehensive income (loss).
FDIC: Federal Deposit Insurance Corporation.	OREO: Other real estate owned.
Federal Reserve: Board of Governors of the Federal	OTTI: Other-than-temporary impairment.
Reserve System.	PBO: Projected benefit obligation.
FHLB: Federal Home Loan Bank of Cincinnati.	PCI: Purchased credit impaired.
FHLMC: Federal Home Loan Mortgage Corporation.	RMBS: Residential mortgage-backed securities.
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 subsidiaries, including 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;

• uncertainty regarding the future of LIBOR;

• 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;

• 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 2018 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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Long-term financial targets

(a) See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “cash efficiency.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(a) See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

Positive Operating Leverage

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

We saw solid revenue trends during the second quarter of 2019, reflecting balance sheet growth and momentum in our fee-based businesses. We also have realized substantially all of our $200 million in cost savings. We expect to reach our targeted cash efficiency ratio range of 54.0% to 56.0% in the second half of 2019.

Moderate Risk Profile

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

During the second quarter of 2019, our net loan charge-offs to average loans ratio remained below our targeted range. We continue to remain consistent and disciplined in our credit underwriting and portfolio management and are committed to maintaining our moderate risk profile in 2019.

Financial Return

A return on average tangible common equity in the range of 16.00% to 19.00%.

During the second quarter of 2019, we repurchased $180 million of Common Shares. On April 18, 2019, we announced our 2019 capital plan which includes $1.0 billion of Common Share repurchases beginning in the third quarter of 2019. Our 2019 capital plan also includes a 9% increase in our Common Stock dividend to $.185 per Common Share, which was approved by our Board of Directors on July 17, 2019. We remain committed to consistently delivering on our stated priorities of supporting organic growth, increasing dividends, and prudently repurchasing Common Shares.

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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

	2019						2018									Six months ended June 30,
dollars in millions, except per share amounts	Second			First			Fourth			Third			Second			2019			2018
FOR THE PERIOD
Interest income	$	1,329		$	1,304		$	1,297		$	1,239		$	1,205		$	2,633		$	2,342
Interest expense	348			327			297			253			226			675			419
Net interest income	981			977			1,000			986			979			1,958			1,923
Provision for credit losses	74			62			59			62			64			136			125
Noninterest income	622			536			645			609			660			1,158			1,261
Noninterest expense	1,019			963			1,012			964			993			1,982			1,999
Income (loss) from continuing operations before income taxes	510			488			574			569			582			998			1,060
Income (loss) from continuing operations attributable to Key	423			406			482			482			479			829			895
Income (loss) from discontinued operations, net of taxes	2			1			2			—			3			3			5
Net income (loss) attributable to Key	425			407			484			482			482			832			900
Income (loss) from continuing operations attributable to Key common shareholders	403			386			459			468			464			789			866
Income (loss) from discontinued operations, net of taxes	2			1			2			—			3			3			5
Net income (loss) attributable to Key common shareholders	405			387			461			468			467			792			871
PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.40		$	.38		$	.45		$	.45		$	.44		$	.79		$	.82
Income (loss) from discontinued operations, net of taxes	—			—			—			—			—			—			—
Net income (loss) attributable to Key common shareholders (a)	.40			.38			.45			.45			.44			.79			.82
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	.40			.38			.45			.45			.44			.78			.81
Income (loss) from discontinued operations, net of taxes — assuming dilution	—			—			—			—			—			—			—
Net income (loss) attributable to Key common shareholders — assuming dilution (a)	.40			.38			.45			.45			.44			.78			.81
Cash dividends paid	.17			.17			.17			.17			.120			.340			.225
Book value at period end	15.07			14.31			13.90			13.33			13.29			15.07			13.29
Tangible book value at period end	12.12			11.55			11.14			10.59			10.59			12.12			10.59
Weighted-average common shares outstanding (000)	999,163			1,006,717			1,018,614			1,036,479			1,052,652			1,003,047			1,054,378
Weighted-average common shares and potential common shares outstanding (000) (b)	1,007,964			1,016,504			1,030,417			1,049,976			1,065,793			1,012,365			1,068,939
AT PERIOD END
Loans	$	91,937		$	90,178		$	89,552		$	89,268		$	88,222		$	91,937		$	88,222
Earning assets	130,213			127,296			125,803			125,007			123,472			130,213			123,472
Total assets	144,545			141,515			139,613			138,805			137,792			144,545			137,792
Deposits	109,946			108,175			107,309			105,780			104,548			109,946			104,548
Long-term debt	14,312			14,168			13,732			13,849			13,853			14,312			13,853
Key common shareholders’ equity	15,069			14,474			14,145			13,758			14,075			15,069			14,075
Key shareholders’ equity	16,969			15,924			15,595			15,208			15,100			16,969			15,100
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
Return on average total assets	1.19		%	1.18		%	1.37		%	1.40		%	1.41		%	1.18		%	1.33		%
Return on average common equity	10.94			10.98			13.07			13.36			13.29			10.96			12.53
Return on average tangible common equity (c)	13.69			13.69			16.40			16.81			16.73			13.69			15.82
Net interest margin (TE)	3.06			3.13			3.16			3.18			3.19			3.10			3.17
Cash efficiency ratio (c)	61.9			61.9			59.9			58.7			58.8			61.9			60.8
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
Return on average total assets	1.19		%	1.17		%	1.37		%	1.39		%	1.40		%	1.18		%	1.33		%
Return on average common equity	11.00			11.01			13.13			13.36			13.37			11.01			12.60
Return on average tangible common equity (c)	13.75			13.72			16.47			16.81			16.84			13.74			15.91
Net interest margin (TE)	3.05			3.12			3.14			3.16			3.17			3.08			3.15
Loan-to-deposit (d)	86.1			85.1			85.6			87.0			86.9			86.1			86.9
CAPITAL RATIOS AT PERIOD END
Key shareholders’ equity to assets	11.74		%	11.25		%	11.17		%	10.96		%	10.96		%	11.74		%	10.96		%
Key common shareholders’ equity to assets	10.46			10.25			10.15			9.93			10.21			10.46			10.21
Tangible common equity to tangible assets (c)	8.59			8.43			8.30			8.05			8.32			8.59			8.32
Common Equity Tier 1	9.57			9.81			9.93			9.95			10.13			9.57			10.13
Tier 1 risk-based capital	11.01			10.94			11.08			11.11			10.95			11.01			10.95
Total risk-based capital	13.03			12.98			12.89			12.99			12.83			13.03			12.83
Leverage	10.00			9.89			9.89			10.03			9.87			10.00			9.87
TRUST ASSETS
Assets under management	$	38,942		$	38,742		$	36,775		$	40,575		$	39,663		$	38,942		$	39,663
OTHER DATA
Average full-time-equivalent employees	17,206			17,554			17,664			18,150			18,376			17,379			18,458
Branches	1,102			1,158			1,159			1,166			1,177			1,102			1,177

(a) EPS may not foot due to rounding.

(b) Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.

(c) See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(d) Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.

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Strategic developments

Our actions and results during the second quarter of 2019 supported our corporate strategy described in the “Introduction” section under the “Corporate strategy” heading on page 39 of our 2018 Form 10-K.

• We continued to make progress during the second quarter of 2019 to grow profitably heading into the second half of 2019. Investment banking and debt placement fees reached a record second quarter level and are positioned well for the second half of 2019. We also saw increases from ongoing investments we have made in our residential mortgage business. Noninterest expense was up from the second quarter of 2018 primarily due to an increase in charitable contributions and volume-driven expenses which offset the benefit from the successful implementation of our expense initiatives. We expect to reach our targeted cash efficiency ratio range of 54.0% to 56.0% in the second half of 2019.

• On April 3, 2019, we closed our acquisition of Laurel Road Bank’s digital lending business as we acquire and expand targeted client relationships. The acquisition of Laurel Road has driven an increase of average consumer direct loans of 33.0% during the second quarter of 2019 when compared to the same period one year ago. Overall, Laurel Road added over $400 million in loan originations in the second quarter of 2019 which has exceeded our initial expectations. We remain very excited about our Laurel Road acquisition, which bolsters our digital capabilities and aligns well with our relationship strategy, to build broad-based relationships.

• During the second quarter of 2019, we effectively managed risk and rewards as net loan charge-offs were

.29% of average loans, below our targeted range. Net loan charge-offs for the three months ended June 30, 2019, increased from the same period one year ago, primarily due to an increase in net loan charge-offs in our consumer loan portfolios.

• Maintaining financial strength while driving long-term shareholder value was again a focus during the second quarter of 2019. At June 30, 2019, our Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.57% and 11.01%, respectively. Consistent with our 2018 capital plan, we completed $180 million of Common Share repurchases and the Board declared a common share dividend of $.17 per Common Share. On April 18, 2019, we announced our 2019 capital plan. Share repurchases of up to $1.0 billion are included in the 2019 capital plan which is effective from the third quarter of 2019 through the second quarter of 2020. Our 2019 capital plan also includes a 9% increase in our Common Stock dividend to $.185 per Common Share, which was approved by our Board of Directors on July 17, 2019.

• On May 29, 2019, we released our 2018 Corporate Responsibility report, highlighting our ongoing legacy as a responsible bank and citizen. Included in the report are the results from the first two years of the National Community Benefits Plan, under which we invested over $7.1 billion in communities. Highlights of the report also include detail on KeyBank's efforts around: diversity and inclusion; fostering sustainable communities and operations; financial wellness; employee volunteerism; and transformative philanthropy which promotes one of our strategic goals to engage a high-performing, talented, and diverse workforce.

Demographics

In the first quarter of 2019, Key revised its management structure and changed its basis of presentation into two business segments, Consumer Bank and Commercial Bank. Note 19 (“Business Segment Reporting”) describes the products and services offered by each of these business segments and provides more detailed financial information pertaining to the segments, including changes in basis of presentation.

The Consumer Bank serves individuals and small businesses throughout our 15-state branch footprint by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, student loan refinancing, mortgage and home equity, credit card, treasury services, and business advisory services. Consumer Bank also purchases retail auto sales contracts via a network of auto dealerships. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to us pursuant to dealer agreements. In addition, wealth management and investment services are offered to assist non-profit and high-net-worth clients with their banking, trust, portfolio management, life insurance, charitable giving, and related needs.

The Commercial 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. Commercial Bank is also a significant servicer of commercial mortgage loans and a significant special servicer of CMBS.

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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 2018 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 2018 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 2 below. At June 30, 2019, Key had an estimated Common Equity Tier 1 Capital Ratio of 9.49% under the fully phased-in Regulatory Capital Rules. Also, at June 30, 2019, 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 2.

Figure 2. Pro Forma Ratios vs. Minimum Capital Ratios Calculated Under the Fully Phased-In Regulatory Capital Rules

Ratios (including capital conservation buffer)	Regulatory Minimum Requirement		Capital Conservation Buffer (c)		Regulatory Minimum With Capital Conservation Buffer		Key June 30, 2019 Pro forma
Common Equity Tier 1 (a)	4.50	%	2.50	%	7.00	%	9.49	%
Tier 1 Capital	6.00		2.50		8.50		10.92
Total Capital	8.00		2.50		10.50		13.05
Leverage (b)	4.00		N/A		4.00		10.00

(a) See section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computation of Common Equity Tier 1 capital under the fully phased-in regulatory capital rules.

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

(c) Capital conservation buffer must consist of Common Equity Tier 1 capital. As a standardized approach banking organization, KeyCorp is not subject to the countercyclical capital buffer of up to 2.5% imposed upon an advanced approaches banking organization under the Regulatory Capital Rules.

Revised prompt corrective action framework

The federal prompt corrective action (“PCA”) framework under the FDIA groups FDIC-insured depository institutions into one of five prompt corrective action capital categories: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” In addition to implementing the Basel III capital framework in the United States, the Regulatory Capital Rules also revised the PCA capital category threshold ratios applicable to FDIC-insured depository institutions such as KeyBank, with an effective date of January 1, 2015. The revised PCA framework table in Figure 3 identifies the capital category thresholds for a “well capitalized” and an “adequately capitalized” institution under the PCA Framework.

Figure 3. "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 June 30, 2019, 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 PCA framework is intended to serve a limited supervisory function. Moreover, it is important to note that the PCA framework does not apply to BHCs, like KeyCorp.

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Recent regulatory capital-related developments

On July 9, 2019, the federal banking agencies issued a final rule to simplify certain aspects of the Regulatory Capital Rules for standardized approach banking organizations, including Key. The final rule simplifies, for these banking organizations, the regulatory capital requirements for mortgage servicing assets, certain deferred tax assets arising from temporary differences, and investments in the capital of unconsolidated financial institutions. The final rule replaces multiple deduction thresholds with a single 25% deduction threshold for each of these categories and requires that a 250% risk weight be applied to mortgage servicing assets and deferred tax assets that are not deducted from capital. The final rule also simplifies the calculation of the amount of capital issued by a consolidated subsidiary of a banking organization and held by third parties that is includable in regulatory capital. In addition, the final rule makes certain technical amendments to the Regulatory Capital Rules that are applicable to standardized approach banking organizations as well as advanced approaches banking organizations. The technical amendments are effective on October 1, 2019, and the simplification changes are effective on April 1, 2020.

On July 12, 2019, the federal banking agencies released an NPR to expand upon a proposal issued in September 2018 to amend the Regulatory Capital Rules by revising the definition of a high volatility commercial real estate (“HVCRE”) exposure. HVCRE exposures are subject to a heightened risk weight under the Regulatory Capital Rules. The September 2018 proposal seeks to conform the HVCRE definition to statutory changes enacted in May 2018. The July 2019 NPR expands upon the September 2018 proposal to request comment on the treatment of loans that finance the development of land for purposes of the one- to four-family residential properties exclusion in the revised HVCRE exposure definition. Comments are due 30 days after the NPR is published in the Federal Register.

See Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Regulatory capital requirements — Recent regulatory capital-related developments” for a discussion of other recent regulatory capital-related developments.

Capital planning and stress testing

See Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Regulatory capital requirements — Capital planning and stress testing” and “Supervision and Regulation — Regulatory capital requirements — Recent developments in capital planning and stress testing” for an overview of capital planning and stress testing requirements as well as recent developments in those areas.

Additional recent developments regarding capital planning and stress testing are discussed in Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Other Regulatory Developments — Economic Growth, Regulatory Relief, and Consumer Protection Act.”

Liquidity requirements

See Item. 1 Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Regulatory capital requirements — Liquidity requirements” for a discussion of liquidity requirements, including the Liquidity Coverage Rules.

Recent developments regarding liquidity requirements are discussed in Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Other Regulatory Developments — Economic Growth, Regulatory Relief, and Consumer Protection Act.”

Resolution 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 was not required to submit a resolution plan to the Federal Reserve and FDIC for 2018 because the FDIC and Federal Reserve deferred such requirement (for 14 firms, including KeyCorp)

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until December 2019. KeyBank will not be required to submit a resolution plan to the FDIC 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/.

In April 2019, the Federal Reserve and FDIC released a proposal to modify the resolution planning requirements applicable to large BHCs. Under this proposal, BHCs with less than $250 billion in total consolidated assets would no longer be required to submit a resolution plan unless they have $75 billion or more in certain risk-based indicators. If this proposal is adopted, KeyCorp will no longer be subject to resolution planning requirements. Comments on this proposal were due by June 21, 2019. On April 16, 2019, the FDIC issued an advance notice of proposed rulemaking (“ANPR”) requesting public comment on potential changes to its rule imposing resolution planning requirements on large insured depository institutions, including potential modifications to the rule in the following areas: (i) creation of tiered resolution planning requirements based on institution size, complexity, and other factors; (ii) revisions to the frequency and required content of plan submissions, including elimination of plan submissions for a category of smaller and less complex institutions; (iii) improvements to the process for periodic engagements between the FDIC and institutions on resolution-related matters; and (iv) revision of the $50 billion asset threshold in the current rule. The FDIC indicated that it is considering two alternate approaches with respect to the tiering of resolution plan requirements. Under each of these approaches, institutions would be placed into three groups with the first two groups required to submit resolution plans with streamlined content requirements and the third group not required to submit a resolution plan. The FDIC would engage with institutions in all three groups on a periodic basis on a limited number of items related to resolution planning and would conduct periodic testing of the resolution planning capabilities of these institutions. Comments on this ANPR were due by June 21, 2019. Any changes to this rule will impact KeyBank. The FDIC extended the due date for the next resolution plan submission for all institutions until after the rulemaking is completed.

Economic Growth, Regulatory Relief, and Consumer Protection Act

See Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Other Regulatory Developments — Economic Growth, Regulatory Relief, and Consumer Protection Act” (“EGRRCPA”) for a discussion of the EGRRCPA and NPRs related to its implementation.

Volcker Rule

The Volcker Rule is discussed in detail in Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Other Regulatory Developments — Volcker Rule.”

Deposit insurance

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. On July 16, 2019, the FDIC approved amendments that revise certain aspects of this rule. Among other things, the amendments to this rule (i) provide covered institutions with the option to extend the compliance date to no later than April 1, 2021, upon notification to the FDIC; (ii) clarify the certification requirement; (iii) revise the actions that must be taken for deposit accounts insured on a pass-through basis (where the bank’s account holder is holding funds on behalf of the beneficial owners of the funds); and (iv) streamline the process for submitting exception requests to the FDIC.

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Control standards

On April 23, 2019, the Federal Reserve released an NPR requesting public comment on a new, comprehensive framework for determining control under the Bank Holding Company Act and the Home Owners’ Loan Act. The proposal would simplify and provide greater transparency regarding the standards used by the Federal Reserve to determine whether one company has control over another company. The proposal would codify existing Federal Reserve precedents on control and would make certain targeted adjustments to these precedents. The proposal would provide a tiered framework that would look at the size of an investing company’s voting and total equity investment in another company along with a variety of other factors, including board representation, officer and employee interlocks, and the existence of business relationships between the companies. By providing greater clarity regarding the standards that would be applied for control determinations, the proposal may facilitate (1) BHCs making minority investments in nonbank companies and (2) nonbank investors taking minority stakes in banking organizations. Comments on this proposal were due by July 15, 2019.

Community Reinvestment Act

See Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation — Other Regulatory Developments — Community Reinvestment Act” for an overview of the Community Reinvestment Act and recent developments related to it.

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 June 30, 2018, to the three months ended June 30, 2019 (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;

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• 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.

Figure 4 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 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 $989 million for the second quarter of 2019, compared to TE net interest income of $987 million for the second quarter of 2018. The increase in net interest income reflects the benefit from higher earning asset balances and higher interest rates, partially offset by a lower net interest margin, driven by an elevated level of liquidity, higher interest-bearing deposit costs, lower loan fees, and a continued decline in purchase accounting accretion. Second quarter 2019 net interest income included $17 million of purchase accounting accretion, a decline of $11 million from the second quarter of 2018.

For the six months ended June 30, 2019, TE net interest income was $2.0 billion, an increase of $35 million from TE net interest income of $1.9 billion for the same period last year. The increase in net interest income reflects higher earning asset balances and higher interest rates, partly offset by a lower net interest margin driven by balance sheet mix, higher interest-bearing deposit costs, lower loan fees, and a continued decline in purchase accounting accretion. In 2019, we expect TE net interest income to be in the range of $4.0 billion to $4.1 billion, with our outlook assuming one 25 basis point interest rate decrease in 2019.

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Average loans were $90.8 billion for the second quarter of 2019, an increase of $2.1 billion compared to the second quarter of 2018. Commercial loans increased $1.6 billion, reflecting broad-based growth in commercial and industrial loans, partially offset by declines in commercial mortgage and construction loans. Consumer loans increased $573 million, driven by solid growth from Laurel Road, residential mortgage loans, and indirect auto lending. Home equity loans declined $900 million, largely the result of continued paydowns in home equity lines of credit. For 2019, we anticipate average loans to be in the range of $90 billion to $91 billion.

Average deposits totaled $109.6 billion for the second quarter of 2019, an increase of $5.6 billion compared to the year-ago quarter, reflecting strength in our retail banking franchise and growth from commercial relationships. For 2019, we anticipate average deposits to be in the range of $108 billion to $109 billion.

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Figure 4. Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates and Components of Net Interest Income Changes from Continuing Operations

	Three months ended June 30, 2019							Three months ended June 30, 2018							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)	$	47,227		$	547	4.65	%	$	45,030		$	485	4.32	%	$	24		$	38		$	62
Real estate — commercial mortgage	13,866			175		5.06		14,055			172		4.89		(2		)	5			3
Real estate — construction	1,423			20		5.41		1,789			23		4.97		(5		)	2			(3		)
Commercial lease financing	4,476			41		3.65		4,550			41		3.61		(1		)	1			—
Total commercial loans	66,992			783		4.69		65,424			721		4.41		16			46			62
Real estate — residential mortgage	5,790			58		4.03		5,451			54		3.97		3			1			4
Home equity loans	10,701			135		5.05		11,601			135		4.67		(11		)	11			—
Consumer direct loans	2,352			43		7.39		1,768			33		7.54		11			(1		)	10
Credit cards	1,091			31		11.26		1,080			30		11.21		—			1			1
Consumer indirect loans	3,859			40		4.15		3,320			35		4.26		6			(1		)	5
Total consumer loans	23,793			307		5.17		23,220			287		4.97		9			11			20
Total loans	90,785			1,090		4.81		88,644			1,008		4.56		25			57			82
Loans held for sale	1,302			15		4.56		1,375			16		4.50		(1		)	—			(1		)
Securities available for sale (b), (e)	21,086			135		2.54		17,443			97		2.13		22			16			38
Held-to-maturity securities (b)	11,058			67		2.41		12,226			72		2.36		(7		)	2			(5		)
Trading account assets	1,124			9		3.28		943			7		3.21		1			1			2
Short-term investments	3,200			17		2.23		2,015			8		1.76		6			3			9
Other investments (e)	640			4		2.00		710			5		3.08		—			(1		)	(1		)
Total earning assets	129,195			1,337		4.14		123,356			1,213		3.92		46			78			124
Allowance for loan and lease losses	(881		)					(875		)
Accrued income and other assets	14,321							13,897
Discontinued assets	1,009							1,241
Total assets	$	143,644						$	137,619
LIABILITIES
NOW and money market deposit accounts	$	63,071		147		.93		$	54,749		59		.44		10			78			88
Savings deposits	4,781			1		.09		6,276			5		.35		(1		)	(3		)	(4		)
Certificates of deposit ($100,000 or more)	8,147			48		2.37		7,516			32		1.70		3			13			16
Other time deposits	5,569			27		1.93		4,949			16		1.22		2			9			11
Total interest-bearing deposits	81,568			223		1.10		73,490			112		.61		14			97			111
Federal funds purchased and securities sold under repurchase agreements	194			—		.20		1,475			5		1.41		(2		)	(3		)	(5		)
Bank notes and other short-term borrowings	842			5		2.46		1,116			7		2.27		(2		)	—			(2		)
Long-term debt (f), (g)	13,213			120		3.67		12,748			102		3.20		4			14			18
Total interest-bearing liabilities	95,817			348		1.46		88,829			226		1.02		14			108			122
Noninterest-bearing deposits	28,033							30,513
Accrued expense and other liabilities	2,253							2,002
Discontinued liabilities (g)	1,009							1,241
Total liabilities	127,112							122,585
EQUITY
Key shareholders’ equity	16,531							15,032
Noncontrolling interests	1							2
Total equity	16,532							15,034
Total liabilities and equity	$	143,644						$	137,619
Interest rate spread (TE)						2.68	%						2.90	%
Net interest income (TE) and net interest margin (TE)				989		3.06	%				987		3.19	%	$	32		$	(30	)	2
TE adjustment (b)				8							8
Net interest income, GAAP basis				$	981						$	979

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

(b) Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended June 30, 2019, and June 30, 2018.

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

(d) Commercial and industrial average balances include $141 million and $126 million of assets from commercial credit cards for the three months ended June 30, 2019, and June 30, 2018, 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 4. Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates and Components of Net Interest Income Changes from Continuing Operations

	Six months ended June 30, 2019							Six months ended June 30, 2018							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)	$	46,616		$	1,079	4.67	%	$	43,888		$	919	4.22	%	$	59		$	101		$	160
Real estate — commercial mortgage	14,094			354		5.07		14,070			337		4.83		1			16			17
Real estate — construction	1,492			41		5.45		1,872			45		4.80		(10		)	6			(4		)
Commercial lease financing	4,486			82		3.66		4,607			82		3.57		(2		)	2			—
Total commercial loans	66,688			1,556		4.70		64,437			1,383		4.32		48			125			173
Real estate — residential mortgage	5,667			114		4.02		5,465			108		3.96		4			2			6
Home equity loans	10,847			272		5.06		11,738			269		4.61		(21		)	24			3
Consumer direct loans	2,109			80		7.68		1,767			66		7.53		13			1			14
Credit cards	1,098			63		11.53		1,080			60		11.27		1			2			3
Consumer indirect loans	3,811			79		4.14		3,303			70		4.28		11			(2		)	9
Total consumer loans	23,532			608		5.20		23,353			573		4.94		8			27			35
Total loans	90,220			2,164		4.83		87,790			1,956		4.49		56			152			208
Loans held for sale	1,212			28		4.64		1,282			28		4.31		(2		)	2			—
Securities available for sale (b), (e)	20,649			264		2.52		17,665			192		2.09		35			37			72
Held-to-maturity securities (b)	11,213			135		2.41		12,134			141		2.33		(11		)	5			(6		)
Trading account assets	1,041			17		3.31		925			14		3.11		2			1			3
Short-term investments	2,965			33		2.25		2,032			16		1.64		9			8			17
Other investments (e)	647			8		2.35		716			11		3.02		(1		)	(2		)	(3		)
Total earning assets	127,947			2,649		4.16		122,544			2,358		3.85		88			203			291
Allowance for loan and lease losses	(879		)					(875		)
Accrued income and other assets	14,317							13,982
Discontinued assets	1,037							1,272
Total assets	$	142,422						$	136,923
LIABILITIES
NOW and money market deposit accounts	$	61,928		277		.90		$	54,129		105		.39		17			155			172
Savings deposits	4,796			2		.08		6,254			10		.32		(2		)	(6		)	(8		)
Certificates of deposit ($100,000 or more)	8,261			95		2.31		7,246			59		1.64		9			27			36
Other time deposits	5,535			51		1.86		4,907			29		1.17		4			18			22
Total interest-bearing deposits	80,520			425		1.06		72,536			203		.56		28			194			222
Federal funds purchased and securities sold under repurchase agreements	301			1		.67		1,448			9		1.26		(5		)	(3		)	(8		)
Bank notes and other short-term borrowings	746			9		2.59		1,228			13		2.05		(6		)	2			(4		)
Long-term debt (f), (g)	13,187			240		3.67		12,608			194		3.08		9			37			46
Total interest-bearing liabilities	94,754			675		1.44		87,820			419		.96		26			230			256
Noninterest-bearing deposits	28,074							30,747
Accrued expense and other liabilities	2,437							2,121
Discontinued liabilities (g)	1,037							1,272
Total liabilities	126,302							121,960
EQUITY
Key shareholders’ equity	16,119							14,961
Noncontrolling interests	1							2
Total equity	16,120							14,963
Total liabilities and equity	$	142,422						$	136,923
Interest rate spread (TE)						2.72	%						2.89	%
Net interest income (TE) and net interest margin (TE)				1,974		3.10	%				1,939		3.17	%	$	62		$	(27	)	$	35
TE adjustment (b)				16							16
Net interest income, GAAP basis				$	1,958						$	1,923

(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% for the six months ended June 30, 2019, and June 30, 2018, respectively.

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

(d) Commercial and industrial average balances include $137 million and $123 million of assets from commercial credit cards for the six months ended June 30, 2019, and June 30, 2018, 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 $74 million for the three months ended June 30, 2019, compared to $64 million for the three months ended June 30, 2018. Provision for credit losses was $136 million for the six months ended June 30, 2019, compared to $125 million for the six months ended June 30, 2018. The provision for credit losses increased during the three and six months ended June 30, 2019, primarily due to an increase in net loan charge-offs compared to the same periods one year ago. In 2019, we expect the provision to slightly exceed net loan charge-offs to provide for loan growth.

Noninterest income

As shown in Figure 5, noninterest income was $622 million, and represented 39% of total revenue for the second quarter of 2019, compared to $660 million, representing 40% of total revenue for the year-ago quarter. Noninterest income was $1.2 billion for the six months ended June 30, 2019, compared to $1.3 billion for the six months ended June 30, 2018. In 2019, we expect noninterest income to be in the range of $2.5 billion to $2.6 billion.

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

Figure 5. 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 6. For the three months ended June 30, 2019, trust and investment services income decreased $6 million, or 4.7%, compared to the same period one year ago. For the six months ended June 30, 2019, trust and investment services income was down $24 million, or 9.2%, from the six months ended June 30, 2018. These decreases were primarily related to the sale of KIBS in May 2018, which contributed $7 million of income in the second quarter of 2018 and $22 million of income for the six months ended June 30, 2018. 

A significant portion of our trust and investment services income depends on the value and mix of assets under management. At June 30, 2019, our bank, trust, and registered investment advisory subsidiaries had assets under management of $38.9 billion, compared to $39.7 billion at June 30, 2018. Assets under management were down, as shown in Figure 6, as the market continued to recover from the market decline that occurred during the second half of 2018.

Figure 6. Assets Under Management 

in millions	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Assets under management by investment type:
Equity	$	23,805	$	23,299	$	21,325	$	24,958	$	24,125
Securities lending	520		761		774		1,049		977
Fixed income	10,800		10,817		10,696		10,946		11,276
Money market	3,817		3,865		3,980		3,622		3,285
Total assets under management	$	38,942	$	38,742	$	36,775	$	40,575	$	39,663

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

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placement fees increased $8 million, or 5.2%, from the year-ago quarter. The increase was primarily driven by higher syndications fees and agency origination fees. For the six months ended June 30, 2019, investment banking and debt placement fees were down $25 million, or 8.4%, from the six months ended June 30, 2018, primarily due to the market disruption from the government shutdown early in 2019.

Cards and payments income

Cards and payments income, which consists of debit card, consumer and commercial credit card, and merchant services income, increased $2 million, or 2.8%, from the year-ago quarter. For the six months ended June 30, 2019, cards and payments income was up $6 million, or 4.5%, from the six months ended June 30, 2018. These increases were primarily due to higher debit card, credit card, and merchant fees.

Service charges on deposit accounts

Service charges on deposit accounts decreased $8 million, or 8.8%, for the three months ended June 30, 2019, compared to the same period one year ago. For the six months ended June 30, 2019, service charges on deposit accounts was down $15 million, or 8.3%, from the six months ended June 30, 2018.

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 decreased $34 million, or 15.8%, from the year-ago quarter. For the six months ended June 30, 2019, other noninterest income was down $45 million, or 11.6%, from the six months ended June 30, 2018. Other income was down primarily due to a $78 million gain related to the sale of KIBS during the second quarter of 2018. Partially offsetting this was an increase in operating lease income and other leasing gains which was negatively impacted by a $42 million lease residual loss in the second quarter of 2018.

Noninterest expense

As shown in Figure 7, noninterest expense was $1.0 billion for the second quarter of 2019, compared to $993 million for the second quarter of 2018. Noninterest expense was $2.0 billion for the six months ended June 30, 2019, compared to $2.0 billion for the six months ended June 30, 2018. In 2019, we expect noninterest expense to be in the range of $3.85 billion to $3.95 billion, excluding the impact of third quarter of 2019 activity as disclosed in Note 21 (“Subsequent Event”) of this report.

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

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Figure 7. 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.

Personnel

Personnel expense, the largest category of our noninterest expense, increased by $3 million, or .5%, for the three months ended June 30, 2019, compared to the same period one year ago. This increase was driven by higher severance expense related to efficiency initiative actions taken during the quarter and higher incentive and stock-based compensation, partially offset by lower salaries and contract labor. For the six months ended June 30, 2019, personnel expense was down $28 million, or 2.4%, from the six months ended June 30, 2018, primarily due to lower salaries and contract labor and employee benefits, partially offset by higher severance expense related to efficiency initiative actions taken during the six months ended June 30, 2019.

Net occupancy

Net occupancy expense decreased $6 million, or 7.6%, for the second quarter of 2019, compared to the same period one year ago. For the six months ended June 30, 2019, net occupancy was down $12 million, or 7.6%, from the six months ended June 30, 2018. These decreases were primarily due to lower rental expenses and real estate taxes. These decreases were partially offset by an increase in lease termination 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 increased $30 million, or 13.3%, from the year-ago quarter. For the six months ended June 30, 2019, other noninterest expense was up $19 million, or 4.1%, from the six months ended June 30, 2018. These increases were primarily due to an increase in charitable contributions and volume-driven expenses, which were partially offset by the elimination of the FDIC surcharge.

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Income taxes

We recorded tax expense of $87 million for the second quarter of 2019 and $103 million for the second quarter of 2018.

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.

Additional information pertaining to how our tax expense (benefit) and the resulting effective tax rates were derived is included in Note 13 (“Income Taxes”) beginning on page 144 of our 2018 Form 10-K.

Business Segment Results

Key previously reported its results of operations through two business segments, Key Community Bank and Key Corporate Bank, with the remaining operations recorded in Other. In the first quarter of 2019, Key underwent a company-wide organizational change, resulting in the realignment of its businesses into two reportable business segments, Consumer Bank and Commercial Bank, with the remaining operations that do not meet the criteria for disclosure as a separate reportable business recorded in Other. The new business segment structure aligns with how management reviews performance and makes decisions by client, segment and business unit. Prior period information was restated to conform to the new business segment structure.

This section summarizes the highlights and segment imperatives, market and business overview, and financial performance of our two major business segments (operating segments): Consumer Bank and Commercial Bank. Note 19 (“Business Segment Reporting”) describes the products and services offered by each of these business segments and provides more detailed financial information pertaining to the segments. Dollars in the charts are presented in millions.

Consumer Bank

Segment imperatives

• Simplification and digitalization to drive growth and operating leverage

• Relationship-based strategy with a focus on financial wellness as a differentiator

• Deliver ease, value, and expertise to help guide our clients to the right approach to meet their goals

Market and business overview

As the banking industry moves forward, so do our clients. Anticipating our client's needs not only today, but for tomorrow and into the future, has become one of the biggest challenges for the banking industry. We view these challenges as an opportunity to help our current client base meet their own goals, as well as attract new and diverse clients. In an increasingly digital world focused on specialized convenience, we have made meaningful steps to meet those demands through new digital portals and the acquisitions of HelloWallet in 2017 and Laurel Road in 2019. These platforms place us in a unique position to develop long lasting and meaningful relationships with our current and prospective clients. Financial wellness is a core tenet of our customer relationships and we see it in three different ways: diagnose, enhance, and sustain. Our goal is to get our clients to a place where they can comfortably sustain their current financial position so we can be there for them when they are ready to grow. Clients no longer go to a branch to conduct transactions only, they go to seek advice and gain new perspectives on issues they may be facing. Overall, we have a passion to help our clients through:

• Ease - enabling simple and clear banking with no surprises

• Value - knowing our clients and valuing each relationship

• Expertise - provide our clients with industry-leading expertise and personalized service

Summary of operations

• Net income of $172 million for the second quarter of 2019, compared to $155 million for the year-ago quarter.

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• Taxable-equivalent net interest income increased by $20 million, or 3.5%, from the second quarter of 2018. The increase in net interest income was primarily driven by balance sheet growth.

• Average loans and leases increased $605 million, or 1.9%. This was driven by Laurel Road and strength in residential mortgage and indirect auto lending. This growth was partially offset by an $878 million, or 7.6%, decrease in home equity balances.

• Average deposits increased $4.0 billion, or 5.9%, from the second quarter of 2018. This was driven by growth in money market and certificates of deposit, reflecting Key’s relationship strategy.

• Provision for credit losses increased $1 million compared to the second quarter of 2018, as credit quality remained stable.

• Noninterest income decreased $5 million, or 2.1%, from the year-ago quarter driven by lower service charges on deposit accounts.

• Noninterest expense decreased $9 million, or 1.6%, from the year-ago quarter. The decline reflects the benefit of efficiency initiatives, strong expense discipline, and the elimination of the FDIC quarterly surcharge. The decline in expense was partially offset by the acquisition of Laurel Road.

Commercial Bank

Segment imperatives

• Solve complex client needs through a differentiated product set of banking and capital markets capabilities

• Drive targeted scale through distinct product capabilities delivered to a broad set of clients

• Utilize industry expertise and broad capabilities to build relationships with narrowly targeted client sets

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Market and business overview

Building relationships and delivering complex solutions for middle market clients requires a distinct operating model that understands their business and can provide a broad set of product capabilities. As competition for these clients intensifies, we have positioned the business to maintain and grow our competitive advantage by building targeted scale in businesses and client segments. Strong market share in businesses such as real estate loan servicing and equipment finance highlight our ability to successfully meet customer needs through targeted scale in distinct product capabilities. Clients expect us to understand every aspect of their business. Our seven industry verticals are aligned to drive targeted scale in segments where we have a deep breadth of industry expertise. Healthcare is the largest sector of the economy and one of our targeted verticals. Our acquisition of Cain Brothers in 2017 is one example of how we have expanded our business capabilities to further enhance our reputation as a trusted advisor to current and prospective clients. Our business model is positioned to meet our client needs because our focus is not on being a universal bank, but rather being the right bank for our clients.

Summary of operations

• Net income attributable to Key of $283 million for the second quarter of 2019, compared to $256 million for the year-ago quarter.

• Taxable-equivalent net interest income decreased by $13 million, or 3.1%, compared to the second quarter of 2018, driven by lower purchase accounting accretion and loan spread compression.

• Average loan and lease balances increased $1.7 billion, or 3.1%, compared to the second quarter of 2018 driven by broad-based growth in commercial and industrial loans.

• Average deposit balances increased $2.8 billion, or 8.4%, compared to the second quarter of 2018, driven by growth in core deposits and short term transactional deposits.

• Provision for credit losses increased $8 million compared to the second quarter of 2018, driven by loan growth. Credit quality remained stable compared to the second quarter of 2018.

• Noninterest income increased $51 million, or 16.8%, from the prior year. The year-ago quarter included a notable item of $42 million related to a residual loss on an operating lease. Investment banking and debt placement fees increased $8 million, or 5.2%, from the prior year, primarily related to strength in loan syndication fees.

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• Noninterest expense decreased by $10 million, or 2.6%, from the second quarter of 2018. The decline reflects the benefit of efficiency initiatives, strong expense discipline, and the elimination of the FDIC quarterly surcharge.

Financial Condition

Loans and loans held for sale

Figure 8. Breakdown of Loans at June 30, 2019

(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 June 30, 2019, total loans outstanding from continuing operations were $91.9 billion, compared to $89.6 billion at December 31, 2018. 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 99 of our 2018 Form 10-K.

Commercial loan portfolio

Commercial loans outstanding were $67.9 billion at June 30, 2019, an increase of $1.6 billion, or 2.3%, compared to December 31, 2018, driven by an increase in commercial and industrial loans, partially offset by declines in commercial mortgage and construction loans. Figure 9 provides our commercial loan portfolios by industry classification at June 30, 2019, and December 31, 2018.

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Figure 9. Commercial Loans by Industry

June 30, 2019	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	972	$	172	$	113	$	1,257	1.9	%
Automotive	2,033		445		31		2,509		3.7
Business products	1,607		116		60		1,783		2.6
Business services	2,949		136		229		3,314		4.9
Chemicals	877		47		54		978		1.5
Commercial real estate	6,098		10,363		27		16,488		24.3
Construction materials and contractors	1,955		221		225		2,401		3.5
Consumer discretionary	3,725		416		444		4,585		6.8
Consumer services	3,586		714		186		4,486		6.6
Equipment	1,583		89		75		1,747		2.6
Finance	5,648		55		398		6,101		9.0
Healthcare	3,956		1,553		342		5,851		8.6
Materials manufacturing and mining	1,007		52		41		1,100		1.6
Oil and gas	1,944		57		60		2,061		3.0
Public exposure	2,817		76		1,042		3,935		5.8
Technology	885		28		127		1,040		1.5
Transportation	1,393		194		806		2,393		3.5
Utilities	4,830		3		318		5,151		7.6
Other	679		1		—		680		1.0
Total	$	48,544	$	14,738	$	4,578	$	67,860	100.0	%
December 31, 2018	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	1,045	$	176	$	120	$	1,341	2.0	%
Automotive	2,140		448		46		2,634		4.0
Business products	1,596		127		50		1,773		2.7
Business services	2,779		136		228		3,143		4.7
Chemicals	933		43		56		1,032		1.6
Commercial real estate	5,808		10,830		28		16,666		25.1
Construction materials and contractors	1,756		207		221		2,184		3.3
Consumer discretionary	3,675		516		489		4,680		7.1
Consumer services	3,354		746		195		4,295		6.5
Equipment	1,586		89		81		1,756		2.6
Finance	5,178		459		357		5,994		9.0
Healthcare	2,999		1,743		369		5,111		7.7
Materials manufacturing and mining	1,093		46		41		1,180		1.8
Oil and gas	1,739		51		57		1,847		2.8
Public exposure	2,656		73		1,054		3,783		5.7
Technology	996		28		64		1,088		1.6
Transportation	1,377		229		829		2,435		3.7
Utilities	4,357		4		321		4,682		7.1
Other	686		—		—		686		1.0
Total	$	45,753	$	15,951	$	4,606	$	66,310	100.0	%

Commercial and industrial. Commercial and industrial loans are the largest component of our loan portfolio, representing 53% of our total loan portfolio at June 30, 2019, and 51% at December 31, 2018. This portfolio is approximately 85% variable rate and consists of loans originated primarily to large corporate, middle market, and small business clients.

Commercial and industrial loans totaled $48.5 billion at June 30, 2019, an increase of $2.8 billion, or 6.1%, compared to December 31, 2018. The growth was broad-based and spread across most industry categories, including increased lending in the finance, healthcare, utilities, and commercial real estate lending.

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 within the Commercial Bank that cultivates relationships with owners of commercial real estate located both within and beyond the branch system. Nonowner-occupied properties, generally properties for which at least 50% of the debt service is provided by rental income from nonaffiliated third parties, represented 80% of total commercial real estate loans outstanding at June 30, 2019. 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 10% of commercial real estate loans at period end.

At June 30, 2019, commercial real estate loans totaled $14.7 billion, which includes $1.4 billion of construction loans. Compared to December 31, 2018, this portfolio decreased $1.2 billion, or 7.6%. driven by elevated paydowns

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resulting from competitive headwinds and strategic exits. In addition, we continue to focus primarily on owners of completed and stabilized commercial real estate in accordance with our relationship strategy.

As shown in Figure 10, 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

Consumer Bank and Commercial Bank.

Figure 10. Commercial Real Estate Loans

	Geographic Region														Total		Percent of Total		Construction		Commercial Mortgage
dollars in millions	West		Southwest		Central		Midwest		Southeast		Northeast		National
June 30, 2019
Nonowner-occupied:
Retail properties	$	106	$	41	$	117	$	151	$	168	$	637	$	188	$	1,408	9.6	%	$	90	$	1,318
Multifamily properties	550		199		929		590		1,051		1,397		610		5,326		36.1		1,093		4,233
Health facilities	66		—		72		82		165		529		370		1,284		8.7		25		1,259
Office buildings	204		7		252		114		167		758		130		1,632		11.1		77		1,555
Warehouses	39		35		26		22		42		233		153		550		3.7		9		541
Manufacturing facilities	30		—		35		6		40		57		56		224		1.5		4		220
Hotels/Motels	61		—		7		—		6		179		66		319		2.2		—		319
Residential properties	—		—		—		3		22		104		—		129		.9		5		124
Land and development	17		5		5		3		—		6		—		36		.2		30		6
Other	61		9		42		97		14		266		329		818		5.6		13		805
Total nonowner-occupied	1,134		296		1,485		1,068		1,675		4,166		1,902		11,726		79.6		1,346		10,380
Owner-occupied	818		14		292		496		84		1,308		—		3,012		20.4		93		2,919
Total	$	1,952	$	310	$	1,777	$	1,564	$	1,759	$	5,474	$	1,902	14,738		100.0	%	$	1,439	$	13,299
Nonperforming loans	—		—		—		$	11	$	9	$	18	$	51	$	89	N/M		2		$	87
Accruing loans past due 90 days or more	1		—		—		1		—		9		—		11		N/M		$	—	11
Accruing loans past due 30 through 89 days	$	—	3		$	2	6		11		20		—		42		N/M		20		22
December 31, 2018
Nonowner-occupied:
Retail properties	$	126	$	45	$	142	$	174	$	184	$	674	$	302	$	1,647	10.3	%	$	82	$	1,565
Multifamily properties	452		210		914		608		1,153		1,708		693		5,738		36.0		1,163		4,575
Health facilities	98		—		49		59		153		724		385		1,468		9.2		20		1,449
Office buildings	270		7		224		90		165		851		119		1,726		10.8		120		1,605
Warehouses	66		34		20		47		71		290		203		731		4.6		48		684
Manufacturing facilities	42		—		36		3		25		38		91		235		1.5		20		215
Hotels/Motels	95		—		19		—		6		204		62		386		2.4		—		386
Residential properties	3		—		—		3		21		135		—		162		1.0		53		109
Land and development	17		4		5		2		—		48		—		76		.5		52		23
Other	46		9		61		53		4		323		151		647		4.0		11		636
Total nonowner-occupied	1,215		309		1,470		1,039		1,782		4,995		2,006		12,816		80.3		1,569		11,247
Owner-occupied	837		25		283		493		58		1,439		—		3,135		19.7		97		3,038
Total	$	2,052	$	334	$	1,753	$	1,532	$	1,840	$	6,434	$	2,006	$	15,951	100.0	%	$	1,666	$	14,285
Nonperforming loans	$	1	—		—		$	8	—		$	7	$	53	$	69	N/M		—		$	69
Accruing loans past due 90 days or more	—		—		—		2		$	11	11		—		24		N/M		$	12	12
Accruing loans past due 30 through 89 days	—		—		$	11	1		1		23		13		49		N/M		13		36

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 increased by $835 million, or 3.6%, from December 31, 2018, as growth from Laurel Road, residential mortgage loans, and indirect auto lending more than offset the decline in home equity loans. Laurel Road loan originations were over $400 million for the quarter.

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The home equity portfolio is comprised of loans originated by our Consumer Bank within our 15-state footprint and is the largest segment of our consumer loan portfolio, representing 44% of consumer loans outstanding at June 30, 2019. 

We held the first lien position for approximately 60% of the home equity portfolio at both June 30, 2019, and June 30, 2018. 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 101 of our 2018 Form 10-K.

Figure 11. Consumer Loans by State

	Real estate — residential mortgage		Home equity loans		Consumer direct loans		Credit cards		Consumer indirect loans		Total
June 30, 2019
New York	$	1,143	$	2,718	$	410	$	393	$	740	$	5,404
Ohio	525		1,466		388		239		632		3,250
Washington	853		1,645		219		100		9		2,826
Pennsylvania	282		691		85		53		344		1,455
Maine	105		444		61		37		309		956
Colorado	347		475		73		33		2		930
Connecticut	1,065		387		36		24		146		1,658
Massachusetts	252		49		31		5		377		714
Oregon	417		869		79		47		2		1,414
Indiana	104		406		110		46		75		741
Other	960		1,425		858		119		1,367		4,729
Total	$	6,053	$	10,575	$	2,350	$	1,096	$	4,003	$	24,077
	Real estate — residential mortgage		Home equity loans		Consumer direct loans		Credit cards		Consumer indirect loans		Total
December 31, 2018
New York	$	1,117	$	2,881	$	402	$	415	$	730	$	5,545
Ohio	479		1,538		383		252		506		3,158
Washington	714		1,714		234		104		11		2,777
Pennsylvania	275		726		83		52		276		1,412
California	49		27		13		4		38		131
Colorado	256		509		76		35		2		878
Connecticut	1,090		413		30		23		143		1,699
Texas	1		15		8		4		18		46
Oregon	366		905		80		47		3		1,401
Massachusetts	255		50		27		5		341		678
Other	911		2,364		473		203		1,566		5,517
Total	$	5,513	$	11,142	$	1,809	$	1,144	$	3,634	$	23,242

Figure 12 summarizes our loan sales for the first six months of 2019 and all of 2018.

Figure 12. Loans Sold (Including Loans Held for Sale)  

in millions	Commercial		Commercial Real Estate		Commercial Lease Financing		Residential Real Estate		Total
2019
Second quarter	$	154	$	1,864	$	96	$	329	$	2,443
First quarter	301		1,536		34		225		2,096
Total	$	455	$	3,400	$	130	$	554	$	4,539
2018
Fourth quarter	$	157	$	4,918	$	104	$	331	$	5,510
Third quarter	247		2,242		52		302		2,843
Second quarter	253		2,266		144		308		2,971
First quarter	141		2,251		66		284		2,742
Total	$	798	$	11,677	$	366	$	1,225	$	14,066

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Figure 13 shows loans that are either administered or serviced by us, but not recorded on the balance sheet; this includes loans that were sold.

Figure 13. Loans Administered or Serviced  

in millions	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Commercial real estate loans	$	310,792	$	300,989	$	291,158	$	270,771	$	256,062
Residential mortgage	5,428		5,304		5,209		5,046		4,893
Education loans	693		727		766		804		845
Commercial lease financing	934		924		916		892		915
Commercial loans	588		562		549		534		518
Total	$	318,435	$	308,506	$	298,598	$	278,047	$	263,233

In the event of default by a borrower, we are subject to recourse with respect to approximately $4.4 billion of the $318.4 billion of loans administered or serviced at June 30, 2019. Additional information about this recourse arrangement is included in Note 16 (“Contingent Liabilities and Guarantees”) under the heading “Recourse agreement with FNMA.”

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 $32.4 billion at June 30, 2019, compared to $30.9 billion at December 31, 2018. Available-for-sale securities were $21.5 billion at June 30, 2019, compared to $19.4 billion at December 31, 2018. Held-to-maturity securities were $10.9 billion at June 30, 2019, and $11.5 billion at December 31, 2018.

As shown in Figure 14, 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 14. Mortgage-Backed Securities by Issuer 

in millions	June 30, 2019		December 31, 2018
FHLMC	$	5,645	$	7,048
FNMA	12,597		10,076
GNMA	13,837		13,637
Total (a)	$	32,079	$	30,761

(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 15 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”).

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Figure 15. 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)
June 30, 2019
Remaining maturity:
One year or less	$	173		$	2		$	162		$	6		—			$	35	$	378		2.29	%
After one through five years	98			3			12,064			1,135			$	3,235		—		16,535			2.47
After five through ten years	—			—			1,386			912			2,308			—		4,606			2.93
After ten years	1			—			—			8			—			—		9			3.25
Fair value	$	272		$	5		$	13,612		$	2,061		$	5,543		$	35	$	21,528		—
Amortized cost	272			5			13,593			2,035			5,472			17		21,394			2.56	%
Weighted-average yield (b)	1.95		%	5.40		%	2.40		%	2.71		%	2.93		%	—		2.56		%	—
Weighted-average maturity	1.6 years			1.0 years			3.6 years			4.6 years			5.1 years			.7 years		4.0 years			—
December 31, 2018
Fair value	$	147		$	7		$	13,962		$	2,105		$	3,187		$	20	$	19,428		—
Amortized cost	150			7			14,315			2,128			3,300			17		19,917			2.46	%

 

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

(b) Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate of 21%.

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 16 shows the composition, yields, and remaining maturities of these securities.

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Figure 16. 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)
June 30, 2019
Remaining maturity:
One year or less	$	37		—			—			$	4		$	41		1.95	%
After one through five years	5,547			—			$	2,047		11			7,605			2.33
After five through ten years	851			$	456		1,925			—			3,232			2.63
After ten years	—			—			—			—			—			—
Amortized cost	$	6,435		$	456		$	3,972		$	15		$	10,878		2.42	%
Fair value	6,404			457			4,023			15			10,899			—
Weighted-average yield (b)	2.11		%	2.70		%	2.88		%	3.29		%	2.42		%	—
Weighted-average maturity	3.9 years			6.6 years			5.9 years			2.4 years			4.7 years			—
December 31, 2018
Amortized cost	$	7,021		$	490		$	3,996		$	12		$	11,519		2.41	%
Fair value	6,769			476			3,865			12			11,122			—

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

(b) Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate of 21%.

Deposits and other sources of funds

Figure 17. Breakdown of Deposits at June 30, 2019

Deposits are our primary source of funding. At June 30, 2019, our deposits totaled $109.9 billion, an increase of $2.6 billion compared to December 31, 2018. The increase reflects strength in our retail banking franchise and growth from commercial relationships.

Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $15.2 billion at June 30, 2019, compared to $14.6 billion at December 31, 2018. The increase from December 31, 2018, was largely the result of an increase in long-term debt.

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

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 18 (“Shareholders' Equity”).

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2019 capital plan

On April 18, 2019, we announced our 2019 capital plan. Share repurchases of up to $1.0 billion are included in the 2019 capital plan which is effective from the third quarter of 2019 through the second quarter of 2020. Our 2019 capital plan also includes a 9% increase in our Common Stock dividend to $.185 per Common Share, which was approved by our Board of Directors on July 17, 2019.

Dividends

Consistent with our 2018 capital plan, we paid a quarterly dividend of $.17 per Common Share for the second quarter of 2019. 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 15 of our 2018 Form 10-K.

Common shares outstanding

Our Common Shares are traded on the NYSE under the symbol KEY with 33,934 holders of record at June 30, 2019. Our book value per Common Share was $15.07 based on 1.003 billion shares outstanding at June 30, 2019, compared to $13.90 per Common Share based on 1.020 billion shares outstanding at December 31, 2018. At June 30, 2019, our tangible book value per Common Share was $12.12, compared to $11.14 per Common Share at December 31, 2018.

Figure 18 shows activities that caused the change in outstanding common shares over the past five quarters.

Figure 18. Changes in Common Shares Outstanding 

	2019				2018
in thousands	Second		First		Fourth		Third		Second
Shares outstanding at beginning of period	1,013,186		1,019,503		1,034,287		1,058,944		1,064,939
Open market repurchases and return of shares under employee compensation plans	(10,412	)	(11,791	)	(15,216	)	(25,418	)	(6,259	)
Shares issued under employee compensation plans (net of cancellations)	340		5,474		432		761		264
Shares outstanding at end of period	1,003,114		1,013,186		1,019,503		1,034,287		1,058,944

As shown above, Common Shares outstanding decreased by 10.1 million shares during the second quarter of 2019.

At June 30, 2019, we had 253.6 million treasury shares, compared to 237.2 million treasury shares at December 31, 2018. Going forward we expect to reissue treasury shares as needed in connection with stock-based compensation awards and for other corporate purposes.

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.

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Preferred stock

On April 29, 2019, we issued $450 million of depositary shares, each representing a 1/40th ownership interest in a share of our Fixed Rate Perpetual Noncumulative Series G Preferred Stock.

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 June 30, 2019. 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 Item 1. Business of our 2018 Form 10-K under the heading “Supervision and Regulation.” Our shareholders’ equity to assets ratio was 11.74% at June 30, 2019, compared to 11.17% at December 31, 2018. Our tangible common equity to tangible assets ratio was 8.59% at June 30, 2019, compared to 8.30% at December 31, 2018. See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity.” The minimum capital and leverage ratios under the Regulatory Capital Rules together with the estimated ratios of KeyCorp at June 30, 2019, calculated on a fully phased-in basis, are set forth in the “Supervision and regulation — Regulatory capital requirements” section in Item 2 of this report.

Figure 19 represents the details of our regulatory capital positions at June 30, 2019, and December 31, 2018, under the Regulatory Capital Rules. Information regarding the regulatory capital ratios of KeyCorp’s banking subsidiaries is presented annually, with the most recent information included in Note 23 (“Shareholders' Equity”) beginning on page 167 of our 2018 Form 10-K.

Figure 19. Capital Components and Risk-Weighted Assets 

	dollars in millions	June 30, 2019			December 31, 2018
COMMON EQUITY TIER 1
Key shareholders’ equity (GAAP)		$	16,969		$	15,595
Less:	Preferred Stock (a)	1,856			1,421
	Common Equity Tier 1 capital before adjustments and deductions	15,113			14,174
Less:	Goodwill, net of deferred taxes	2,593			2,455
	Intangible assets, net of deferred taxes	241			250
	Deferred tax assets	15			9
	Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes	102			(372		)
	Accumulated gains (losses) on cash flow hedges, net of deferred taxes	244			(78		)
	Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes	(361		)	(381		)
	Total Common Equity Tier 1 capital	$	12,279		$	12,291
TIER 1 CAPITAL
Common Equity Tier 1		$	12,279		$	12,291
Additional Tier 1 capital instruments and related surplus		1,856			1,421
Less:	Deductions	—			—
	Total Tier 1 capital	14,135			13,712
TIER 2 CAPITAL
Tier 2 capital instruments and related surplus		1,621			1,279
Allowance for losses on loans and liability for losses on lending-related commitments (b)		967			962
Less:	Deductions	—			—
	Total Tier 2 capital	2,588			2,241
	Total risk-based capital	$	16,723		$	15,953
RISK-WEIGHTED ASSETS
Risk-weighted assets on balance sheet		$	101,096		$	98,232
Risk-weighted off-balance sheet exposure		25,732			24,593
Market risk-equivalent assets		1,527			963
Gross risk-weighted assets		128,355			123,788
Less:	Excess allowance for loan and lease losses	—			—
	Net risk-weighted assets	$	128,355		$	123,788
AVERAGE QUARTERLY TOTAL ASSETS		$	141,292		$	138,689
CAPITAL RATIOS
Tier 1 risk-based capital		11.01		%	11.08		%
Total risk-based capital		13.03			12.89
Leverage (c)		10.00			9.89
Common Equity Tier 1		9.57			9.93

(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 $12 million and $14 million of allowance classified as “discontinued assets” on the balance sheet at June 30, 2019, and December 31, 2018, 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 65 of our 2018 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 102 of our 2018 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 and fixed income markets, including securitization positions exposures. At June 30, 2019, 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 66 of our 2018 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 66 of our 2018 Form 10-K.

Actual losses for the total covered positions did not exceed aggregate daily VaR on any day during the quarters ended June 30, 2019, and June 30, 2018. 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 and loss.

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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 $.6 million at June 30, 2019, and $1.1 million at June 30, 2018. Figure 20 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 June 30, 2019, and June 30, 2018.

Figure 20. VaR for Significant Portfolios of Covered Positions 

	2019								2018
	Three months ended June 30,								Three months ended June 30,
in millions	High		Low		Mean		June 30,		High		Low		Mean		June 30,
Trading account assets:
Fixed income	$	.9	$	.3	$	.5	$	.3	$	1.2	$	.6	$	.8	$	.9
Derivatives:
Interest rate	$	.1	—		$	.1	$	.1	$	.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 $5.2 million at June 30, 2019, and $5.4 million at June 30, 2018. Figure 21 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 June 30, 2019, and June 30, 2018.

Figure 21. Stressed VaR for Significant Portfolios of Covered Positions 

	2019								2018
	Three months ended June 30,								Three months ended June 30,
in millions	High		Low		Mean		June 30,		High		Low		Mean		June 30,
Trading account assets:
Fixed income	$	8.0	$	3.4	$	5.1	$	3.7	$	6.2	$	4.1	$	5.3	$	4.2
Derivatives:
Interest rate	$	1.2	$	.3	$	.5	$	.9	$	.5	$	.3	$	.4	$	.5

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 $68 million at June 30, 2019. This amount included $41 million of mortgage-backed securities positions and $27 million of asset-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 this 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. Due to the low interest rate environment as of June 30, 2018, our standard decrease scenario was modified to a gradual, parallel decrease of 175 basis points over 11 months. As of March 31, 2019, the standard 200 basis point decline was reinstated.

Figure 22 presents the results of the simulation analysis at June 30, 2019, and June 30, 2018. At June 30, 2019, our simulated impact to changes in interest rates was modest. The asset sensitive position declined from 2018 as a result of hedging actions executed to guide the position closer to neutral over time. 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%. Current modeled exposure is within Board approved tolerances.

Figure 22. Simulated Change in Net Interest Income

	June 30, 2019				June 30, 2018
Basis point change assumption (short-term rates)	-200		+200		-175		+200
Tolerance level	-5.50	%	-5.50	%	-5.50	%	-5.50	%
Interest rate risk assessment	-2.34	%	-.98	%	-5.30	%	1.90	%

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 22. Net interest income is highly dependent on the timing, magnitude, frequency, and path of interest rate increases 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., 40% to 45%), then the benefit to rising rates would decrease or increase 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 June 30, 2019.

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.

Figure 23 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 23. Portfolio Swaps by Interest Rate Risk Management Strategy 

	June 30, 2019
							Weighted-Average					December 31, 2018
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)	$	16,320	$	235			2.6	2.2	%	2.4	%	$	10,720	$	(87	)
Receive fixed/pay variable — conventional debt	9,727		238				3.3	3.0		1.8		9,923		(7		)
Receive fixed/pay variable — forward A/LM	3,050		121				3.2	2.1		2.3		3,050		45
Pay fixed/receive variable — conventional debt	50		(7		)		9.0	2.6		3.6		50		(4		)
Total portfolio swaps	$	29,147	$	587		(c)	2.9	2.3	%	2.3	%	$	23,743	$	(53	)	(c)
Floors — conventional A/LM (b)	$	5,050	4				.3	—		—		$	4,760	—
Floors — forward A/LM (b)	2,600		$	54			2.5	—		—		—		—

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

(b) Conventional A/LM and forward A/LM floors do not have a stated receive rate or pay rate and are given a strike price on the option.

(c) Excludes accrued interest of $549 million and $114 million at June 30, 2019, and December 31, 2018, 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 June 30, 2019, are shown in Figure 24. 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 24. Credit Ratings 

June 30, 2019	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 June 30, 2019, our consolidated loan-to-deposit ratio was 86%. 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 June 30, 2019, totaled $26.4 billion, consisting of $24.2 billion of unpledged securities, $174 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 June 30, 2019, our unused borrowing capacity secured by loan collateral was $26 billion at the Federal Reserve Bank of Cleveland and $7.3 billion at the FHLB.

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During the second quarter of 2019, our outstanding FHLB advances decreased as $3 million of term advances were paid down.

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 June 30, 2019, KeyCorp held $3.7 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 second quarter of 2019, KeyBank paid $275 million in dividends to KeyCorp. As of June 30, 2019, KeyBank had regulatory capacity to pay $1.2 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 increased as a result of an increase in unpledged securities. 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.

The Consolidated Statements of Cash Flows summarize our sources and uses of cash by type of activity for the six-month periods ended June 30, 2019, and June 30, 2018.

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 71 of our 2018 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 74 of our 2018 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 101 of our 2018 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 June 30, 2019, represents 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”).

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As shown in Figure 25, our ALLL from continuing operations increased by $7 million, or .8%, from December 31, 2018. Our commercial ALLL increased by $4 million, or .5%, from December 31, 2018, primarily due to loan growth and risk rating migration. The commercial increase was concentrated in the commercial and industrial portfolio. Our consumer ALLL increased by $3 million, or 2.1%, from December 31, 2018, primarily due to loan growth and modest shifts in credit quality metrics.

Figure 25. Allocation of the Allowance for Loan Lease Losses 

	June 30, 2019						December 31, 2018
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	$	549	61.7	%	52.8	%	$	532	60.2	%	51.1	%
Commercial real estate:
Commercial mortgage	139		15.6		14.4		142		16.1		15.9
Construction	24		2.7		1.6		33		3.8		1.9
Total commercial real estate loans	163		18.3		16.0		175		19.9		17.8
Commercial lease financing	35		3.9		5.0		36		4.1		5.1
Total commercial loans	747		83.9		73.8		743		84.2		74.0
Real estate — residential mortgage	7		.8		6.6		7		.8		6.2
Home equity loans	36		4.1		11.5		35		3.9		12.4
Consumer direct loans	32		3.6		2.6		30		3.4		2.0
Credit cards	44		4.9		1.2		48		5.4		1.3
Consumer indirect loans	24		2.7		4.3		20		2.3		4.1
Total consumer loans	143		16.1		26.2		140		15.8		26.0
Total loans (a)	$	890	100.0	%	100.0	%	$	883	100.0	%	100.0	%

(a) Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of $12 million at June 30, 2019, and $14 million at December 31, 2018.

Net loan charge-offs 

Figure 26 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 27.

Net loan charge-offs for the three months ended June 30, 2019, increased $5 million compared to the year-ago quarter. This increase was primarily due to an increase in net loan charge-offs in our consumer loan portfolios. In 2019, we expect net loan charge-offs to average loans to remain below our long-term targeted range of 40 to 60 basis points.

Figure 26. Net Loan Charge-offs from Continuing Operations ^(a) 

	2019						2018
dollars in millions	Second			First			Fourth			Third			Second
Commercial and industrial	$	24		$	26		$	26		$	33		$	32
Real estate — Commercial mortgage	—			4			11			5			1
Real estate — Construction	—			4			(1		)	—			—
Commercial lease financing	14			7			—			1			4
Total commercial loans	38			41			36			39			37
Real estate — Residential mortgage	1			—			—			—			—
Home equity loans	4			2			5			1			3
Consumer direct loans	8			9			7			9			7
Credit cards	10			9			8			8			10
Consumer indirect loans	4			3			4			3			3
Total consumer loans	27			23			24			21			23
Total net loan charge-offs	$	65		$	64		$	60		$	60		$	60
Net loan charge-offs to average loans	.29		%	.29		%	.27		%	.27		%	.27		%
Net loan charge-offs from discontinued operations — education lending business	$	3		$	3		$	3		$	3		$	2

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

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Figure 27. Summary of Loan and Lease Loss Experience from Continuing Operations

	Three months ended June 30,						Six months ended June 30,
dollars in millions	2019			2018			2019			2018
Average loans outstanding	$	90,785		$	88,644		$	90,220		$	87,790
Allowance for loan and lease losses at beginning of period	$	883		$	881		$	883		$	877
Loans charged off:
Commercial and industrial	30			39			66			76
Real estate — commercial mortgage	1			2			6			3
Real estate — construction	—			—			4			—
Commercial lease financing	16			4			24			5
Total commercial loans	47			45			100			84
Real estate — residential mortgage	1			—			2			1
Home equity loans	6			6			10			10
Consumer direct loans	10			9			20			17
Credit cards	12			12			23			24
Consumer indirect loans	8			7			16			15
Total consumer loans	37			34			71			67
Total loans charged off	84			79			171			151
Recoveries:
Commercial and industrial	6			7			16			13
Real estate — commercial mortgage	1			1			2			1
Real estate — construction	—			—			—			1
Commercial lease financing	2			—			3			1
Total commercial loans	9			8			21			16
Real estate — residential mortgage	—			—			1			—
Home equity loans	2			3			4			6
Consumer direct loans	2			2			3			4
Credit cards	2			2			4			3
Consumer indirect loans	4			4			9			8
Total consumer loans	10			11			21			21
Total recoveries	19			19			42			37
Net loan charge-offs	(65		)	(60		)	(129		)	(114		)
Provision (credit) for loan and lease losses	72			66			136			124
Allowance for loan and lease losses at end of period	$	890		$	887		$	890		$	887
Liability for credit losses on lending-related commitments at beginning of period	$	62		$	60		$	64		$	57
Provision (credit) for losses on lending-related commitments	2			(2		)	—			1
Liability for credit losses on lending-related commitments at end of period (a)	$	64		$	58		$	64		$	58
Total allowance for credit losses at end of period	$	954		$	945		$	954		$	945
Net loan charge-offs to average total loans	.29		%	.27		%	.29		%	.26		%
Allowance for loan and lease losses to period-end loans	.97			1.01			.97			1.01
Allowance for credit losses to period-end loans	1.04			1.07			1.04			1.07
Allowance for loan and lease losses to nonperforming loans	158.6			162.8			158.6			162.8
Allowance for credit losses to nonperforming loans	170.1			173.4			170.1			173.4
Discontinued operations — education lending business:
Loans charged off	$	4		$	3		$	8		$	7
Recoveries	1			1			2			3
Net loan charge-offs	$	(3	)	$	(2	)	$	(6	)	$	(4	)

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

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Nonperforming assets

Figure 28 shows the composition of our nonperforming assets. As shown in Figure 28, nonperforming assets at June 30, 2019, increased $31 million from December 31, 2018. This increase was driven by nominal net increases in our nonperforming loans coupled with our consumer OREO portfolio. 

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 100 of our 2018 Form 10-K.

Figure 28. Summary of Nonperforming Assets and Past Due Loans from Continuing Operations 

dollars in millions	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Commercial and industrial	$	189		$	170		$	152		$	227		$	178
Real estate — commercial mortgage	85			82			81			98			42
Real estate — construction	2			2			2			2			2
Total commercial real estate loans (a)	87			84			83			100			44
Commercial lease financing	7			9			9			10			21
Total commercial loans (b)	283			263			244			337			243
Real estate — residential mortgage	62			64			62			62			55
Home equity loans	191			195			210			221			222
Consumer direct loans	3			3			4			4			4
Credit cards	2			3			2			2			2
Consumer indirect loans	20			20			20			19			19
Total consumer loans	278			285			298			308			302
Total nonperforming loans (c)	561			548			542			645			545
OREO	38			40			35			28			26
Other nonperforming assets	9			9			—			1			—
Total nonperforming assets (c)	$	608		$	597		$	577		$	674		$	571
Accruing loans past due 90 days or more	$	74		$	118		$	112		$	87		$	103
Accruing loans past due 30 through 89 days	299			290			312			368			429
Restructured loans — accruing and nonaccruing (d)	395			365			399			366			347
Restructured loans included in nonperforming loans (d)	228			198			247			211			184
Nonperforming assets from discontinued operations — education lending business	7			7			8			6			6
Nonperforming loans to period-end portfolio loans (c)	.61		%	.61		%	.61		%	.72		%	.62		%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (c)	.66			.66		%	.64		%	.75		%	.65		%

(a) See Figure 10 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 9 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 $518 million, $551 million, $575 million, $606 million, and $629 million of PCI loans at June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, 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 29 shows the types of activity that caused the change in our nonperforming loan balance during each of the last five quarters.

Figure 29. Summary of Changes in Nonperforming Loans from Continuing Operations 

	2019						2018
in millions	Second			First			Fourth			Third			Second
Balance at beginning of period	$	548		$	542		$	645		$	545		$	541
Loans placed on nonaccrual status	189			196			103			263			175
Charge-offs	(84		)	(91		)	(92		)	(81		)	(78		)
Loans sold	(38		)	(18		)	(16		)	—			(1		)
Payments	(23		)	(22		)	(53		)	(57		)	(33		)
Transfers to OREO	(4		)	(8		)	(10		)	(5		)	(5		)
Transfers to other nonperforming assets	—			(13		)	—			—			—
Loans returned to accrual status	(27		)	(38		)	(35		)	(20		)	(54		)
Balance at end of period (a)	$	561		$	548		$	542		$	645		$	545

(a) Nonperforming loan balances exclude $518 million, $551 million, $575 million, $606 million, and $629 million of PCI loans at June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, respectively.

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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, 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, shut down access to systems for ransom, 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. Financial institutions have also been the target of scams that use social engineering to trick employees into wiring funds by making it appear the request is coming from a trusted source. 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

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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 65 of our 2018 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 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.

GAAP to Non-GAAP Reconciliations

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.

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.

		Three months ended															Six months ended
dollars in millions		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018			6/30/2019			6/30/2018
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)		$	16,969		$	15,924		$	15,595		$	15,208		$	15,100
Less:	Intangible assets (a)	2,952			2,804			2,818			2,838			2,858
	Preferred Stock (b)	1,856			1,421			1,421			1,421			1,009
	Tangible common equity (non-GAAP)	$	12,161		$	11,699		$	11,356		$	10,949		$	11,233
Total assets (GAAP)		$	144,545		$	141,515		$	139,613		$	138,805		$	137,792
Less:	Intangible assets (a)	2,952			2,804			2,818			2,838			2,858
	Tangible assets (non-GAAP)	$	141,593		$	138,711		$	136,795		$	135,967		$	134,934
	Tangible common equity to tangible assets ratio (non-GAAP)	8.59		%	8.43		%	8.30		%	8.05		%	8.32		%
Average tangible common equity
Average Key shareholders’ equity (GAAP)		$	16,531		$	15,702		$	15,384		$	15,210		$	15,032		$	16,119		$	14,961
Less:	Intangible assets (average) (c)	2,959			2,813			2,828			2,848			2,883			2,886			2,899
	Preferred Stock (average)	1,762			1,450			1,450			1,316			1,025			1,607			1,025
	Average tangible common equity (non-GAAP)	$	11,810		$	11,439		$	11,106		$	11,046		$	11,124		$	11,626		$	11,037
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)		$	403		$	386		$	459		$	468		$	464		$	789		$	866
Average tangible common equity (non-GAAP)		11,810			11,439			11,106			11,046			11,124			11,626			11,037
Return on average tangible common equity from continuing operations (non-GAAP)		13.69		%	13.69		%	16.40		%	16.81		%	16.73		%	13.69		%	15.82		%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)		$	405		$	387		$	461		$	468		$	467		$	792		$	871
Average tangible common equity (non-GAAP)		11,810			11,439			11,106			11,046			11,124			11,626			11,037
Return on average tangible common equity consolidated (non-GAAP)		13.75		%	13.72		%	16.47		%	16.81		%	16.84		%	13.74		%	15.91		%

(a) For the three months ended June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, intangible assets exclude $10 million, $12 million, $14 million, $17 million, and $20 million, respectively, of period-end purchased credit card receivables.

(b) Net of capital surplus.

(c) For the three months ended June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, average intangible assets exclude $11 million, $13 million, $15 million, $18 million, and $21 million, respectively, of average purchased credit card receivables

The cash efficiency ratio is a ratio of two non-GAAP performance measures, adjusted noninterest expense and total taxable-equivalent revenue. 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 to evaluate how effectively management is controlling noninterest expenses in generating revenue, as they develop earnings forecasts and peer bank analysis.

44

		Three months ended															Six months ended
dollars in millions		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018			6/30/2019			6/30/2018
Cash efficiency ratio
Noninterest expense (GAAP)		$	1,019		$	963		$	1,012		$	964		$	993		$	1,982		$	1,999
Less:	Intangible asset amortization	22			22			22			23			25			44			54
Adjusted noninterest expense (non-GAAP)		$	997		$	941		$	990		$	941		$	968		$	1,938		$	1,945
Net interest income (GAAP)		$	981		$	977		$	1,000		$	986		$	979		$	1,958		$	1,923
Plus:	Taxable-equivalent adjustment	8			8			8			7			8			16			16
	Noninterest income (GAAP)	622			536			645			609			660			1,158			1,261
Total taxable-equivalent revenue (non-GAAP)		$	1,611		$	1,521		$	1,653		$	1,602		$	1,647		$	3,132		$	3,200
Cash efficiency ratio (non-GAAP)		61.9		%	61.9		%	59.9		%	58.7		%	58.8		%	61.9		%	60.8		%

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 99 of our 2018 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 84 through 87 of our 2018 Form 10-K.

During the first six months of 2019, we did not significantly alter the manner in which we applied our critical accounting policies or developed related assumptions and estimates.

45

Accounting and Reporting Developments

Accounting Guidance Pending Adoption at June 30, 2019

Standard	Required Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2016-13, Measurement of Credit Losses on Financial Instruments ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses ASU 2019-05, Financial Instruments—Credit Losses: Targeted Transition Relief	January 1, 2020 Early adoption is permitted as of January 1, 2019	The ASUs amend ASC Topic 326, Financial Instruments-Credit Losses, and significantly change 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 ASUs retain many of the current disclosure requirements in current GAAP and expand certain disclosure requirements. The new guidance also allows optional relief for certain instruments measured at amortized cost with an option to irrevocably elect the fair value option in ASC Topic 825, Financial Instruments.	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 completed the development of initial loss forecasting models, including establishment of macroeconomic forecasting methodologies and approaches to meet the requirements of the new guidance. Key has conducted limited parallel runs in the first half of 2019, focusing on challenging model outputs, with plans of running a complete parallel production including the finalization of loss forecasting methodologies and processes in the second half of 2019. Key also continues to monitor proposed and approved amendments to the new standard. As a result of ASU 2019-04, Key has been able to make an accounting policy election to not measure an allowance for credit losses on accrued interest receivable due to Key's credit policy to reverse accrued interest on non-performing loans and leases in a timely manner. Key expects that the new guidance will generally result in an increase in its allowance for credit losses for loans, primarily for long-term consumer loans, 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, 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.
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.

46

European Sovereign and Nonsovereign Debt Exposures

Our total European sovereign and Nonsovereign debt exposure is presented in Figure 30.

Figure 30. European Sovereign and Nonsovereign Debt Exposures

June 30, 2019	Short-and Long- Term Commercial Total (a)		Foreign Exchange and Derivatives with Collateral (b)		Net Exposure
in millions
France:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		$	1	$	1
Nonsovereign non-financial institutions	$	2	—		2
Total	2		1		3
Germany:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	19		—		19
Total	19		—		19
Italy:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	1		—		1
Total	1		—		1
Luxembourg:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	10		—		10
Total	10		—		10
United Kingdom:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		138		138
Nonsovereign non-financial institutions	1		—		1
Total	1		138		139
Total Europe:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		139		139
Nonsovereign non-financial institutions	33		—		33
Total	$	33	$	139	$	172

 

(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.

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.

47

Item 1. Financial Statements

Consolidated Balance Sheets

in millions, except per share data	June 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Cash and due from banks	$	607		$	678
Short-term investments	2,443			2,562
Trading account assets	1,005			849
Securities available for sale	21,528			19,428
Held-to-maturity securities (fair value: $10,899 and $11,122)	10,878			11,519
Other investments	632			666
Loans, net of unearned income of $309 and $678	91,937			89,552
Less: Allowance for loan and lease losses	(890		)	(883		)
Net loans	91,047			88,669
Loans held for sale (a)	1,790			1,227
Premises and equipment	829			882
Goodwill	2,664			2,516
Other intangible assets	298			316
Corporate-owned life insurance	4,201			4,171
Accrued income and other assets	5,633			5,030
Discontinued assets	990			1,100
Total assets	$	144,545		$	139,613
LIABILITIES
Deposits in domestic offices:
NOW and money market deposit accounts	$	63,619		$	59,918
Savings deposits	4,747			4,854
Certificates of deposit ($100,000 or more)	8,084			7,913
Other time deposits	5,524			5,332
Total interest-bearing deposits	81,974			78,017
Noninterest-bearing deposits	27,972			29,292
Total deposits	109,946			107,309
Federal funds purchased and securities sold under repurchase agreements	161			319
Bank notes and other short-term borrowings	720			544
Accrued expense and other liabilities	2,435			2,113
Long-term debt	14,312			13,732
Total liabilities	127,574			124,017
EQUITY
Preferred stock	1,900			1,450
Common Shares, $1 par value; authorized 2,100,000,000 and 1,400,000,000 shares; issued 1,256,702,081 and 1,256,702,081 shares	1,257			1,257
Capital surplus	6,266			6,331
Retained earnings	12,005			11,556
Treasury stock, at cost (253,587,973 and 237,198,944 shares)	(4,457		)	(4,181		)
Accumulated other comprehensive income (loss)	(2		)	(818		)
Key shareholders’ equity	16,969			15,595
Noncontrolling interests	2			1
Total equity	16,971			15,596
Total liabilities and equity	$	144,545		$	139,613

(a) Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $164 million at June 30, 2019, and $54 million at December 31, 2018.

See Notes to Consolidated Financial Statements (Unaudited).

48

Consolidated Statements of Income

dollars in millions, except per share amounts	Three months ended June 30,					Six months ended June 30,
(Unaudited)	2019		2018			2019		2018
INTEREST INCOME
Loans	$	1,082	$	1,000		$	2,148	$	1,940
Loans held for sale	15		16			28		28
Securities available for sale	135		97			264		192
Held-to-maturity securities	67		72			135		141
Trading account assets	9		7			17		14
Short-term investments	17		8			33		16
Other investments	4		5			8		11
Total interest income	1,329		1,205			2,633		2,342
INTEREST EXPENSE
Deposits	223		112			425		203
Federal funds purchased and securities sold under repurchase agreements	—		5			1		9
Bank notes and other short-term borrowings	5		7			9		13
Long-term debt	120		102			240		194
Total interest expense	348		226			675		419
NET INTEREST INCOME	981		979			1,958		1,923
Provision for credit losses	74		64			136		125
Net interest income after provision for credit losses	907		915			1,822		1,798
NONINTEREST INCOME
Trust and investment services income	122		128			237		261
Investment banking and debt placement fees	163		155			273		298
Service charges on deposit accounts	83		91			165		180
Operating lease income and other leasing gains	44		(6		)	81		26
Corporate services income	53		61			108		123
Cards and payments income	73		71			139		133
Corporate-owned life insurance income	33		32			65		64
Consumer mortgage income	10		7			18		14
Mortgage servicing fees	24		22			45		42
Other income (a)	17		99			27		120
Total noninterest income	622		660			1,158		1,261
NONINTEREST EXPENSE
Personnel	589		586			1,152		1,180
Net occupancy	73		79			145		157
Computer processing	56		51			110		103
Business services and professional fees	45		51			89		92
Equipment	24		26			48		52
Operating lease expense	32		30			58		57
Marketing	24		26			43		51
FDIC assessment	9		21			16		42
Intangible asset amortization	22		25			44		54
OREO expense, net	4		—			7		2
Other expense	141		98			270		209
Total noninterest expense	1,019		993			1,982		1,999
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	510		582			998		1,060
Income taxes	87		103			169		165
INCOME (LOSS) FROM CONTINUING OPERATIONS	423		479			829		895
Income (loss) from discontinued operations	2		3			3		5
NET INCOME (LOSS)	425		482			832		900
Less: Net income (loss) attributable to noncontrolling interests	—		—			—		—
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	$	425	$	482		$	832	$	900
Income (loss) from continuing operations attributable to Key common shareholders	$	403	$	464		$	789	$	866
Net income (loss) attributable to Key common shareholders	405		467			792		871
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders	$	.40	$	.44		$	.79	$	.82
Income (loss) from discontinued operations, net of taxes	—		—			—		—
Net income (loss) attributable to Key common shareholders (b)	.40		.44			.79		.82
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders	$	.40	$	.44		$	.78	$	.81
Income (loss) from discontinued operations, net of taxes	—		—			—		—
Net income (loss) attributable to Key common shareholders (b)	.40		.44			.78		.81
Cash dividends declared per Common Share	$	.17	$	.120		$	.340	$	.225
Weighted-average Common Shares outstanding (000)	999,163		1,052,652			1,003,047		1,054,378
Effect of Common Share options and other stock awards	8,801		13,141			9,318		14,561
Weighted-average Common Shares and potential Common Shares outstanding (000) (c)	1,007,964		1,065,793			1,012,365		1,068,939

(a) For the three and six months ended June 30, 2019, and June 30, 2018, net securities gains totaled less than $1 million. For the three and six months ended June 30, 2019, and June 30, 2018, 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).

49

Consolidated Statements of Comprehensive Income

in millions	Three months ended June 30,					Six months ended June 30,
(Unaudited)	2019		2018			2019		2018
Net income (loss)	$	425	$	482		$	832	$	900
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of $91, ($20), $147, and ($67)	291		(66		)	475		(216		)
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of $68, ($4), $99 and ($24)	219		(17		)	318		(80		)
Foreign currency translation adjustments, net of income taxes of $1, $3, $1 and $3	1		(14		)	4		(16		)
Net pension and postretirement benefit costs, net of income taxes of $5, $1, $6 and $2	17		3			19		6
Total other comprehensive income (loss), net of tax	528		(94		)	816		(306		)
Comprehensive income (loss)	953		388			1,648		594
Less: Comprehensive income attributable to noncontrolling interests	—		—			—		—
Comprehensive income (loss) attributable to Key	$	953	$	388		$	1,648	$	594

See Notes to Consolidated Financial Statements (Unaudited).

50

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, 2018	946	1,019,503		$	1,450	$	1,257	$	6,331		$	11,556		$	(4,181	)	$	(818	)	$	1
Net income (loss)											832									—
Other comprehensive income (loss)																	816
Deferred compensation								1
Cash dividends declared
Common Shares ($.34 per share)											(343		)
Series D Preferred Stock ($25 per depositary share)											(13		)
Series E Preferred Stock ($.765626 per depositary share)											(15		)
Series F Preferred Stock ($.70625 per depositary share)											(12		)
Issuance of Series G Preferred Stock	450			450				(15		)
Open market Common Share repurchases		(20,325	)											(346		)
Employee equity compensation program Common Share repurchases		(1,878	)					(3		)				(33		)
Common Shares reissued (returned) for stock options and other employee benefit plans		5,814						(48		)				103
Net contribution from (distribution to) noncontrolling interests																				1
BALANCE AT JUNE 30, 2019	1,396	1,003,114		$	1,900	$	1,257	$	6,266		$	12,005		$	(4,457	)	$	(2	)	$	2
BALANCE AT MARCH 31, 2019	946	1,013,186		$	1,450	$	1,257	$	6,259		$	11,771		$	(4,283	)	$	(530	)	$	2
Net income (loss)											425									—
Other comprehensive income (loss)																	528
Deferred compensation								4
Cash dividends declared
Common Shares ($.17 per share)											(171		)
Series D Preferred Stock ($12.50 per depositary share)											(7		)
Series E Preferred Stock ($.382813 per depositary share)											(7		)
Series F Preferred Stock ($.353125 per depositary share)											(6		)
Issuance of Series G Preferred Stock	450			450				(15		)
Open market Common Share repurchases		(10,357	)											(179		)
Employee equity compensation program Common Share repurchases		(55	)					(1		)				(1		)
Common Shares reissued (returned) for stock options and other employee benefit plans		340						19						6
Net contribution from (distribution to) noncontrolling interests																				$	—
BALANCE AT JUNE 30, 2019	1,396	1,003,114		$	1,900	$	1,257	$	6,266		$	12,005		$	(4,457	)	$	(2	)	$	2

See Notes to Consolidated Financial Statements (Unaudited).

	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)											900									—
Other comprehensive income (loss)																	(306		)
Deferred compensation								12
Cash dividends declared
Common Shares ($.225 per share)											(239		)
Series D Preferred Stock ($25 per depositary share)											(13		)
Series E Preferred Stock ($.765626 per depositary share)											(16		)
Open market Common Share repurchases		(13,438	)											(279		)
Employee equity compensation program Common Share repurchases		(2,221	)											(46		)
Common Shares reissued (returned) for stock options and other employee benefit plans		5,519						(32		)				93
BALANCE AT JUNE 30, 2018	521	1,058,944		$	1,025	$	1,257	$	6,315		$	10,970		$	(3,382	)	$	(1,085	)	$	2
BALANCE AT MARCH 31, 2018	521	1,064,939		$	1,025	$	1,257	$	6,289		$	10,624		$	(3,260	)	$	(991	)	$	2
Other reclassification of AOCI											5
Net income (loss)											482									—
Other comprehensive income (loss):																	$	(94	)
Deferred compensation								6
Cash dividends declared
Common Shares ($.12 per share)											(127		)
Series D Preferred Stock ($12.50 per depositary share)											(6		)
Series E Preferred Stock ($.382813 per depositary share)											(8		)
Open market Common Share repurchases		(6,105	)											(123		)
Employee equity compensation program Common Share repurchases		(155	)											(3		)
Common shares reissued (returned) for stock options and other employee benefit plans		265						20						4
BALANCE AT JUNE 30, 2018	521	1,058,944		$	1,025	$	1,257	$	6,315		$	10,970		$	(3,382	)	$	(1,085	)	$	2

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

See Notes to Consolidated Financial Statements (Unaudited).

51

Consolidated Statements of Cash Flows

in millions	Six months ended June 30,
(Unaudited)	2019			2018
OPERATING ACTIVITIES
Net income (loss)	$	832		$	900
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	136			125
Depreciation and amortization expense, net	121			195
Accretion of acquired loans	28			22
Increase in cash surrender value of corporate-owned life insurance	(57		)	(56		)
Stock-based compensation expense	48			53
FDIC reimbursement (payments), net of FDIC expense	1			2
Deferred income taxes (benefit)	68			17
Proceeds from sales of loans held for sale	4,445			5,703
Originations of loans held for sale, net of repayments	(4,890		)	(5,944		)
Net losses (gains) on sales of loans held for sale	(70		)	(89		)
Net losses (gains) and writedown on OREO	4			2
Net losses (gains) on leased equipment	(11		)	(37		)
Net losses (gains) on sales of fixed assets	11			4
Net decrease (increase) in trading account assets	(155		)	3
Gain on sale of KIBS	—			(78		)
Other operating activities, net	209			(414		)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	720			408
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	(185		)	—
Proceeds from sale of KIBS	—			119
Net decrease (increase) in short-term investments, excluding acquisitions	119			1,801
Purchases of securities available for sale	(2,940		)	(1,167		)
Proceeds from prepayments and maturities of securities available for sale	1,457			1,640
Proceeds from prepayments and maturities of held-to-maturity securities	652			797
Purchases of held-to-maturity securities	(9		)	(1,242		)
Purchases of other investments	(30		)	(6		)
Proceeds from sales of other investments	28			22
Proceeds from prepayments and maturities of other investments	36			2
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(2,747		)	(2,044		)
Proceeds from sales of portfolio loans	146			99
Proceeds from corporate-owned life insurance	27			41
Purchases of premises, equipment, and software	(38		)	(36		)
Proceeds from sales of premises and equipment	1			1
Proceeds from sales of OREO	10			14
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(3,473		)	41
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	2,637			(687		)
Net increase (decrease) in short-term borrowings	18			1,295
Net proceeds from issuance of long-term debt	1,351			1,758
Payments on long-term debt	(1,002		)	(2,123		)
Issuance of preferred shares	435			—
Open market Common Share repurchases	(346		)	(279		)
Employee equity compensation program Common Share repurchases	(33		)	(46		)
Net proceeds from reissuance of Common Shares	5			14
Cash dividends paid	(383		)	(268		)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,682			(336		)
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	(71		)	113
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	678			671
CASH AND DUE FROM BANKS AT END OF PERIOD	$	607		$	784
Additional disclosures relative to cash flows:
Interest paid	$	619		$	389
Income taxes paid (refunded)	(43		)	14
Noncash items:
Reduction of secured borrowing and related collateral	$	2		15
Loans transferred to portfolio from held for sale	5			21
Loans transferred to held for sale from portfolio	52			3
Loans transferred to OREO	16			9
CMBS risk retentions	9			—

See Notes to Consolidated Financial Statements (Unaudited).

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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 10 (“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 2018 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 2019

Standard	Date of 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 ASU 2018-20, Leases (Topic 842): Narrow Scope Improvements for Lessors ASU 2019-01, Codification Improvements to Topic 842	January 1, 2019	The ASUs create and amend ASC Topic 842, Leases, and supersede Topic 840, Leases. The new guidance 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, both types of leases are required to be recognized on the balance sheet. ASC 842 requires enhanced disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. Qualitative and quantitative disclosures are required to provide additional information about the amounts recorded in the financial statements. Although substantially unchanged, certain amendments provide clarifications related to lessor accounting. The guidance should be implemented 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.	Key adopted this guidance on January 1, 2019, using the package of practical expedients, which allowed Key to maintain historic lease identification and classification, and permitted Key not to reassess initial direct costs under the new guidance. Key also elected the practical expedient on not separating lease components from nonlease components for all of its leases. Adoption resulted in an increase in right-of-use assets and associated lease liabilities arising from operating leases in which Key is the lessee of approximately $710 million on our Consolidated Balance Sheets at January 1, 2019. Right of use assets, lease liabilities, and other changes as a result of adoption are not reflected in comparable periods presented prior to that date. The adoption of this guidance did not have a material impact on the recognition of operating lease expense in our Consolidated Statements of Income. The amount of the right-of-use assets and associated lease liabilities recorded at adoption was based on the present value of unpaid future minimum lease payments. These payments were discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. For more information, please see Note 9 (“Leases”).
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	January 1, 2019	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 did not have a material effect on our financial condition or results of operations.
ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting	January 1, 2019	The ASU amends ASC Topic 718, Stock Compensation, and simplifies the accounting for share based payments granted to nonemployees for goods and services. The guidance should be implemented on a modified retrospective basis using a cumulative-effect adjustment.	The adoption of this guidance did not affect our financial condition or results of operations.
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only); January 1, 2019, remaining requirements 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 removed the disclosures no longer required by the guidance as of September 30, 2018, and early adopted the additional provisions of the standard in the first quarter of 2019. The adoption of this standard did not result in significant changes to Key’s disclosures, and there was no effect to our financial condition or results of operations.

54

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract	January 1, 2019 Early adoption.	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 early adopted this guidance effective January 1, 2019, on a prospective basis. The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2019-04, Codification Improvements to Topic 815, Derivatives and Hedging (ASU Topic #3), and Topic 825, Financial Instruments (ASU Topic #4)	May 1, 2019 Early adoption upon issuance	The ASU provides technical corrections to previously adopted ASUs 2016-01 and 2017-12 and clarifies issues related to partial-term fair value hedges, fair value hedge basis adjustments, and how to measure changes in fair value of a hedged item. It also clarifies certain issues related to equity securities and the measurement alternative. Amendments related to ASU 2016-01 should be adopted using a modified retrospective approach, except for those related to equity securities without readily determinable fair values for which the measurement alternative is elected, that should be applied prospectively. Amendments related to ASU 2017-12 can be applied on either a prospective or retrospective basis, with certain exceptions.	Key early adopted this guidance effective May 1, 2019. The adoption of this accounting guidance did not effect our financial condition or results of operations.

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 June 30,				Six months ended June 30,
dollars in millions, except per share amounts	2019		2018		2019		2018
EARNINGS
Income (loss) from continuing operations	$	423	$	479	$	829	$	895
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	423		479		829		895
Less: Dividends on Preferred Stock	20		15		40		29
Income (loss) from continuing operations attributable to Key common shareholders	403		464		789		866
Income (loss) from discontinued operations, net of taxes	2		3		3		5
Net income (loss) attributable to Key common shareholders	$	405	$	467	$	792	$	871
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	999,163		1,052,652		1,003,047		1,054,378
Effect of Common Share options and other stock awards	8,801		13,141		9,318		14,561
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	1,007,964		1,065,793		1,012,365		1,068,939
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.40	$	.44	$	.79	$	.82
Income (loss) from discontinued operations, net of taxes	—		—		—		—
Net income (loss) attributable to Key common shareholders (b)	.40		.44		.79		.82
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.40	$	.44	$	.78	$	.81
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		—		—
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.40		.44		.78		.81

(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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3. Loan Portfolio

in millions	June 30, 2019		December 31, 2018
Commercial and industrial (a)	$	48,544	$	45,753
Commercial real estate:
Commercial mortgage	13,299		14,285
Construction	1,439		1,666
Total commercial real estate loans	14,738		15,951
Commercial lease financing (b)	4,578		4,606
Total commercial loans	67,860		66,310
Residential — prime loans:
Real estate — residential mortgage	6,053		5,513
Home equity loans	10,575		11,142
Total residential — prime loans	16,628		16,655
Consumer direct loans	2,350		1,809
Credit cards	1,096		1,144
Consumer indirect loans	4,003		3,634
Total consumer loans	24,077		23,242
Total loans (c)	$	91,937	$	89,552

(a) Loan balances include $143 million and $132 million of commercial credit card balances at June 30, 2019, and December 31, 2018, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $11 million and $10 million at June 30, 2019, and December 31, 2018, 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 19 (“Long-Term Debt”) beginning on page 160 of our 2018 Form 10-K.

(c) Total loans exclude loans of $964 million at June 30, 2019, and $1.1 billion at December 31, 2018, 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.

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. Additional information pertaining to loan grading and scoring is included in Note 5 (“Asset Quality”) on page 165 of our 2018 Form 10-K.

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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Pass	$	46,773	$	44,138	$	12,756	$	13,672	$	1,379	$	1,537	$	4,535	$	4,557	$	65,443	$	63,904
Criticized (Accruing)	1,529		1,402		303		354		57		125		36		41		1,925		1,922
Criticized (Nonaccruing)	189		152		85		81		2		2		7		8		283		243
Total	$	48,491	$	45,692	$	13,144	$	14,107	$	1,438	$	1,664	$	4,578	$	4,606	$	67,651	$	66,069

(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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
750 and above	$	10,040	$	9,794	$	827	$	549	$	499	$	521	$	1,849	$	1,647	$	13,215	$	12,511
660 to 749	4,681		4,906		822		700		481		507		1,440		1,320		7,424		7,433
Less than 660	1,341		1,411		219		224		116		116		573		565		2,249		2,316
No Score	260		213		479		333		—		—		141		102		880		648
Total	$	16,322	$	16,324	$	2,347	$	1,806	$	1,096	$	1,144	$	4,003	$	3,634	$	23,768	$	22,908

(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.

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Commercial Credit Exposure — PCI

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

	Commercial and Industrial				RE — Commercial				RE — Construction				Commercial Lease		Total
in millions	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,	December 31,	June 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019	2018	2019		2018
Pass	$	32	$	37	$	111	$	125	$	1	$	2	—	—	$	144	$	164
Criticized	21		24		44		53		—		—		—	—	65		77
Total	$	53	$	61	$	155	$	178	$	1	$	2	—	—	$	209	$	241

(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	June 30,		December 31,		June 30,		December 31,		June 30,	December 31,	June 30,	December 31,	June 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019	2018	2019	2018	2019		2018
750 and above	$	119	$	137	1		—		—	—	—	—	$	120	$	137
660 to 749	103		95		$	1	$	1	—	—	—	—	104		96
Less than 660	78		97		1		2		—	—	—	—	79		99
No Score	6		2		—		—		—	—	—	—	6		2
Total	$	306	$	331	$	3	$	3	—	—	—	—	$	309	$	334

(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 100 of our 2018 Form 10-K.

The following aging analysis of past due and current loans as of June 30, 2019, and December 31, 2018, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio ^(a) 

June 30, 2019	Current		30-59 Days Past Due (b)		60-89 Days Past Due (b)		90 and Greater Days Past Due (b)		Non-performing Loans		Total Past Due and Non-performing Loans		Purchased Credit Impaired		Total Loans (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	48,136	$	116	$	20	$	30	$	189	$	355	$	53	$	48,544
Commercial real estate:
Commercial mortgage	13,029		17		3		10		85		115		155		13,299
Construction	1,416		20		—		—		2		22		1		1,439
Total commercial real estate loans	14,445		37		3		10		87		137		156		14,738
Commercial lease financing	4,547		13		3		8		7		31		—		4,578
Total commercial loans	$	67,128	$	166	$	26	$	48	$	283	$	523	$	209	$	67,860
Real estate — residential mortgage	$	5,686	$	11	$	2	$	1	$	62	$	76	$	291	$	6,053
Home equity loans	10,329		27		8		5		191		231		15		10,575
Consumer direct loans	2,322		10		5		7		3		25		3		2,350
Credit cards	1,073		6		4		11		2		23		—		1,096
Consumer indirect loans	3,947		28		6		2		20		56		—		4,003
Total consumer loans	$	23,357	$	82	$	25	$	26	$	278	$	411	$	309	$	24,077
Total loans	$	90,485	$	248	$	51	$	74	$	561	$	934	$	518	$	91,937

(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.

57

December 31, 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	$	45,375	$	89	$	31	$	45	$	152	$	317	61		$	45,753
Commercial real estate:
Commercial mortgage	13,957		27		17		25		81		150		178		14,285
Construction	1,646		—		13		3		2		18		2		1,666
Total commercial real estate loans	15,603		27		30		28		83		168		180		15,951
Commercial lease financing	4,580		12		1		4		9		26		—		4,606
Total commercial loans	$	65,558	$	128	$	62	$	77	$	244	$	511	241		$	66,310
Real estate — residential mortgage	$	5,119	$	11	$	3	$	4	$	62	$	80	$	314	$	5,513
Home equity loans	10,862		31		12		10		210		263		17		11,142
Consumer direct loans	1,780		11		5		6		4		26		3		1,809
Credit cards	1,119		6		5		12		2		25		—		1,144
Consumer indirect loans	3,573		31		7		3		20		61		—		3,634
Total consumer loans	$	22,453	$	90	$	32	$	35	$	298	$	455	$	334	$	23,242
Total loans	$	88,011	$	218	$	94	$	112	$	542	$	966	$	575	$	89,552

(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 June 30, 2019, the approximate carrying amount of our commercial nonperforming loans outstanding represented 79% of their original contractual amount owed, total nonperforming loans outstanding represented 82% of their original contractual amount owed, and nonperforming assets in total were carried at 87% of their original contractual amount owed.

Nonperforming loans and loans held for sale reduced expected interest income by $9 million and $17 million for the three and six months ended June 30, 2019, respectively, and $7 million and $14 million for the three and six months ended June 30, 2018, respectively.

58

The following tables set forth a further breakdown of individually impaired loans as of June 30, 2019, and December 31, 2018: 

	June 30, 2019						December 31, 2018
	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	$	118	$	151	—		$	118	$	175	—
Commercial real estate:
Commercial mortgage	61		73		—		64		70		—
Total commercial real estate loans	61		73		—		64		70		—
Total commercial loans	179		224		—		182		245		—
Real estate — residential mortgage	4		6		—		4		5		—
Home equity loans	47		53		—		49		56		—
Consumer direct loans	—		1		—		1		1		—
Consumer indirect loans	2		4		—		2		4		—
Total consumer loans	53		64		—		56		66		—
Total loans with no related allowance recorded	232		288		—		238		311		—
With an allowance recorded:
Commercial and industrial	65		83		$	10	44		47		$	5
Commercial real estate:
Commercial mortgage	3		3		1		2		3		1
Total commercial real estate loans	3		3		1		2		3		1
Total commercial loans	68		86		11		46		50		6
Real estate — residential mortgage	44		68		3		45		70		3
Home equity loans	81		87		9		78		85		8
Consumer direct loans	4		4		—		3		3		—
Credit cards	3		3		—		3		3		—
Consumer indirect loans	33		34		3		34		34		2
Total consumer loans	165		196		15		163		195		13
Total loans with an allowance recorded	233		282		26		209		245		19
Total	$	465	$	570	$	26	$	447	$	556	$	19

(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 June 30,				Six Months Ended June 30,
in millions	2019		2018		2019		2018
Commercial and industrial	$	176	$	178	$	172	$	161
Commercial real estate:
Commercial mortgage	63		16		65		16
Total commercial real estate loans	63		16		65		16
Total commercial loans	239		194		237		177
Real estate — residential mortgage	48		49		49		49
Home equity loans	128		124		127		121
Consumer direct loans	4		4		4		4
Credit cards	2		3		3		3
Consumer indirect loans	36		35		36		34
Total consumer loans	218		215		219		211
Total	$	457	$	409	$	456	$	388

(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 $3 million and $6 million for the three and six months ended June 30, 2019, respectively, and $3 million and $5 million for the three and six months ended June 30, 2018, 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. Additional information pertaining to TDRs is included in Note 5 (“Asset Quality”) on page 117 of our 2018 Form 10-K.

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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 were $5 million and $5 million at June 30, 2019, and December 31, 2018, respectively.

At June 30, 2019, and December 31, 2018, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $96 million and $113 million, respectively. At June 30, 2019, and December 31, 2018, we had $38 million and $35 million, respectively, of OREO which included the carrying value of foreclosed residential real estate of approximately $38 million and $35 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 June 30,				Six Months Ended June 30,
in millions	2019		2018		2019		2018
Commercial loans:
Forgiveness of principal	$	—	5		$	—	5
Extension of Maturity Date	6		$	14	$	6	$	15
Payment or Covenant Modification/Deferment	18		20		18		20
Bankruptcy Plan Modification	11		7		11		7
Total	35		$	46	$	35	$	47
Consumer loans:
Interest rate reduction	$	4	$	8	$	8	$	18
Other	9		10		16		21
Total	$	13	$	18	$	24	$	39
Total commercial and consumer TDRs	$	48	$	64	$	59	$	86

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 June 30,						Six Months Ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of the period	$	365		$	317		$	399		$	317
Additions	54			54			68			75
Payments	(19		)	(22		)	(58		)	(41		)
Charge-offs	(5		)	(2		)	(14		)	(4		)
Balance at end of period	$	395		$	347		$	395		$	347

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

	June 30, 2019					December 31, 2018
	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	57	$	111	$	88	35	$	121	$	85
Commercial real estate:
Commercial mortgage	8	67		61		6	66		62
Total commercial real estate loans	8	67		61		6	66		62
Total commercial loans	65	178		149		41	187		147
Real estate — residential mortgage	297	21		19		281	21		20
Home equity loans	801	49		45		1,142	66		63
Consumer direct loans	129	1		1		171	2		1
Credit cards	251	1		1		330	2		2
Consumer indirect loans	968	16		13		1,098	18		14
Total consumer loans	2,446	88		79		3,022	109		100
Total nonperforming TDRs	2,511	266		228		3,063	296		247
Prior-year accruing:(a)
Commercial and industrial	10	34		28		11	37		32
Commercial real estate
Commercial mortgage	1	—		—		2	—		—
Total commercial real estate loans	1	—		—		2	—		—
Total commercial loans	11	34		28		13	37		32
Real estate — residential mortgage	467	35		29		491	36		30
Home equity loans	1,716	100		83		1,403	82		64
Consumer direct loans	138	5		3		79	4		3
Credit cards	600	3		2		479	3		1
Consumer indirect loans	766	36		22		556	33		22
Total consumer loans	3,687	179		139		3,008	158		120
Total prior-year accruing TDRs	3,698	213		167		3,021	195		152
Total TDRs	6,209	$	479	$	395	6,084	$	491	$	399

(a) All TDRs that were restructured prior to January 1, 2019, and January 1, 2018, 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 June 30, 2019, there were no commercial loan TDRs and 102 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the three months ended June 30, 2018, there were no commercial loan TDRs and 55 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2017.

During the six months ended June 30, 2019, there were no commercial loan TDRs and 174 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the six months ended June 30, 2018, there were no commercial loan TDRs and 96 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2017.

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 101 of our 2018 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.

The ALLL at June 30, 2019, 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:

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Three months ended June 30, 2019:

in millions	March 31, 2019		Provision				Charge-offs			Recoveries		June 30, 2019
Commercial and Industrial	$	530	$	43			$	(30	)	$	6	$	549
Commercial real estate:
Real estate — commercial mortgage	144		(5		)		(1		)	1		139
Real estate — construction	28		(4		)		—			—		24
Total commercial real estate loans	172		(9		)		(1		)	1		163
Commercial lease financing	35		14				(16		)	2		35
Total commercial loans	737		48				(47		)	9		747
Real estate — residential mortgage	8		—				(1		)	—		7
Home equity loans	36		4				(6		)	2		36
Consumer direct loans	33		7				(10		)	2		32
Credit cards	47		7				(12		)	2		44
Consumer indirect loans	22		6				(8		)	4		24
Total consumer loans	146		24				(37		)	10		143
Total ALLL — continuing operations	883		72			(a)	(84		)	19		890
Discontinued operations	13		2				(4		)	1		12
Total ALLL — including discontinued operations	$	896	$	74			$	(88	)	$	20	$	902

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

Three months ended June 30, 2018:

in millions	March 31, 2018		Provision				Charge-offs			Recoveries		June 30, 2018
Commercial and Industrial	$	533	$	41			$	(39	)	$	7	$	542
Commercial real estate:
Real estate — commercial mortgage	136		4				(2		)	1		139
Real estate — construction	33		(5		)		—			—		28
Total commercial real estate loans	169		(1		)		(2		)	1		167
Commercial lease financing	40		4				(4		)	—		40
Total commercial loans	742		44				(45		)	8		749
Real estate — residential mortgage	9		1				—			—		10
Home equity loans	38		2				(6		)	3		37
Consumer direct loans	27		6				(9		)	2		26
Credit cards	45		11				(12		)	2		46
Consumer indirect loans	20		2				(7		)	4		19
Total consumer loans	139		22				(34		)	11		138
Total ALLL — continuing operations	881		66			(a)	(79		)	19		887
Discontinued operations	16		—				(3		)	1		14
Total ALLL — including discontinued operations	$	897	$	66			$	(82	)	$	20	$	901

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

Six months ended June 30, 2019:

in millions	December 31, 2018		Provision				Charge-offs			Recoveries		June 30, 2019
Commercial and Industrial	532		$	67			$	(66	)	$	16	$	549
Commercial real estate:
Real estate — commercial mortgage	142		1				(6		)	2		139
Real estate — construction	33		(5		)		(4		)	—		24
Total commercial real estate loans	175		(4		)		(10		)	2		163
Commercial lease financing	36		20				(24		)	3		35
Total commercial loans	743		83				(100		)	21		747
Real estate — residential mortgage	7		1				(2		)	1		7
Home equity loans	35		7				(10		)	4		36
Consumer direct loans	30		19				(20		)	3		32
Credit cards	48		15				(23		)	4		44
Consumer indirect loans	20		11				(16		)	9		24
Total consumer loans	140		53				(71		)	21		143
Total ALLL — continuing operations	883		136			(a)	(171		)	42		890
Discontinued operations	14		4				(8		)	2		12
Total ALLL — including discontinued operations	$	897	$	140			$	(179	)	$	44	$	902

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Six months ended June 30, 2018:

in millions	December 31, 2017		Provision				Charge-offs			Recoveries		June 30, 2018
Commercial and Industrial	$	529	$	76			$	(76	)	$	13	$	542
Commercial real estate:
Real estate — commercial mortgage	133		8				(3		)	1		139
Real estate — construction	30		(3		)		—			1		28
Total commercial real estate loans	163		5				(3		)	2		167
Commercial lease financing	43		1				(5		)	1		40
Total commercial loans	735		82				(84		)	16		749
Real estate — residential mortgage	7		4				(1		)	—		10
Home equity loans	43		(2		)		(10		)	6		37
Consumer direct loans	28		11				(17		)	4		26
Credit cards	44		23				(24		)	3		46
Consumer indirect loans	20		6				(15		)	8		19
Total consumer loans	142		42				(67		)	21		138
Total ALLL — continuing operations	877		124			(a)	(151		)	37		887
Discontinued operations	16		2				(7		)	3		14
Total ALLL — including discontinued operations	$	893	$	126			$	(158	)	$	40	$	901

(a) Excludes a provision for losses on lending-related commitments of $1 million.

A breakdown of the individual and collective ALLL and the corresponding loan balances as of June 30, 2019, follows:

	Allowance						Outstanding
June 30, 2019	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	$	10	$	538	$	1	$	48,544		$	183	$	48,308		$	53
Commercial real estate:
Commercial mortgage	1		137		1		13,299			64		13,080			155
Construction	—		24		—		1,439			—		1,438			1
Total commercial real estate loans	1		161		1		14,738			64		14,518			156
Commercial lease financing	—		35		—		4,578			—		4,578			—
Total commercial loans	11		734		2		67,860			247		67,404			209
Real estate — residential mortgage	3		3		1		6,053			48		5,714			291
Home equity loans	9		26		1		10,575			128		10,432			15
Consumer direct loans	—		32		—		2,350			4		2,343			3
Credit cards	—		44		—		1,096			3		1,093			—
Consumer indirect loans	3		21		—		4,003			35		3,968			—
Total consumer loans	15		126		2		24,077			218		23,550			309
Total ALLL — continuing operations	26		860		4		91,937			465		90,954			518
Discontinued operations	2		10		—		964		(a)	23		941		(a)	—
Total ALLL — including discontinued operations	$	28	$	870	$	4	$	92,901		$	488	$	91,895		$	518

(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, 2018, follows:

	Allowance						Outstanding
December 31, 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	$	526	$	1	$	45,753		$	162	$	45,530		$	61
Commercial real estate:
Commercial mortgage	—		139		3		14,285			66		14,041			178
Construction	—		33		—		1,666			—		1,664			2
Total commercial real estate loans	—		172		3		15,951			66		15,705			180
Commercial lease financing	—		36		—		4,606			—		4,606			—
Total commercial loans	5		734		4		66,310			228		65,841			241
Real estate — residential mortgage	3		4		—		5,513			49		5,150			314
Home equity loans	8		26		1		11,142			127		10,998			17
Consumer direct loans	—		30		—		1,809			4		1,802			3
Credit cards	—		48		—		1,144			3		1,141			—
Consumer indirect loans	3		17		—		3,634			36		3,598			—
Total consumer loans	14		125		1		23,242			219		22,689			334
Total ALLL — continuing operations	19		859		5		89,552			447		88,530			575
Discontinued operations	2		12		—		1,073		(a)	23		1,050		(a)	—
Total ALLL — including discontinued operations	$	21	$	871	$	5	$	90,625		$	470	$	89,580		$	575

(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 June 30,					Six months ended June 30,
in millions	2019		2018			2019		2018
Balance at beginning of period	$	62	$	60		$	64	$	57
Provision (credit) for losses on lending-related commitments	2		(2		)	—		1
Balance at end of period	$	64	$	58		$	64	$	58

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 105 of our 2018 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 six months ended June 30, 2019, and the twelve months ended December 31, 2018.

	Three Months Ended June 30,							Six Months Ended June 30,
	2019							2019
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance		Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	118		$	547	$	578	$	117		$	571	$	607
Accretion	(9		)					(19		)
Net reclassifications from nonaccretable to accretable	(5		)					8
Payments received, net	(3		)					(5		)
Balance at end of period	$	101		$	513	$	541	$	101		$	513	$	541

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	Twelve Months Ended December 31,
	2018
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	131		$	738	$	803
Accretion	(42		)
Net reclassifications from nonaccretable to accretable	50
Payments received, net	(21		)
Loans charged off	(1		)
Balance at end of period	$	117		$	571	$	607

5. Fair Value Measurements

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 6 (“Fair Value Measurements”) and Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements” of our 2018 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 June 30, 2019, and December 31, 2018.

	June 30, 2019									December 31, 2018
	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	—		$	853	—		$	853		—		$	578	—		$	578
States and political subdivisions	—		32		—		32			—		60		—		60
Other mortgage-backed securities	—		36		—		36			—		164		—		164
Other securities	—		62		—		62			—		22		—		22
Total trading account securities	—		983		—		983			—		824		—		824
Commercial loans	—		22		—		22			—		25		—		25
Total trading account assets	—		1,005		—		1,005			—		849		—		849
Securities available for sale:
U.S. Treasury, agencies and corporations	—		272		—		272			—		147		—		147
States and political subdivisions	—		5		—		5			—		7		—		7
Agency residential collateralized mortgage obligations	—		13,612		—		13,612			—		13,962		—		13,962
Agency residential mortgage-backed securities	—		2,061		—		2,061			—		2,105		—		2,105
Agency commercial mortgage-backed securities	—		5,543		—		5,543			—		3,187		—		3,187
Other securities	—		24		$	11	35			—		—		$	20	20
Total securities available for sale	—		21,517		11		21,528			—		19,408		20		19,428
Other investments:
Principal investments:
Direct	—		—		1		1			—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		76			—		—		—		96
Total principal investments	—		—		1		77			—		—		1		97
Equity investments:
Direct	—		—		7		7			—		1		7		8
Direct (measured at NAV) (a)	—		—		—		1			—		—		—		1
Indirect (measured at NAV) (a)	—		—		—		8			—		—		—		9
Total equity investments	—		—		7		16			—		1		7		18
Total other investments	—		—		8		93			—		1		8		115
Loans, net of unearned income (residential)	—		—		3		3			—		—		3		3
Loans held for sale (residential)	—		164		—		164			—		54		—		54
Derivative assets:
Interest rate	—		885		4		889			—		410		5		415
Foreign exchange	$	41	29		—		70			$	70	36		—		106
Commodity	—		246		—		246			—		333		—		333
Credit	—		1		—		1			—		1		—		1
Other	—		10		6		16			—		6		3		9
Derivative assets	41		1,171		10		1,222			70		786		8		864
Netting adjustments (b)	—		—		—		(413		)	—		—		—		(333		)
Total derivative assets	41		1,171		10		809			70		786		8		531
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	41	$	23,857	$	32	$	23,602		$	70	$	21,098	$	39	$	20,980
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	7	$	713	—		$	720		$	14	$	530	—		$	544
Derivative liabilities:
Interest rate	—		220		—		220			—		297		—		297
Foreign exchange	35		29		—		64			58		37		—		95
Commodity	—		236		—		236			—		323		—		323
Credit	—		2		$	1	3			—		1		—		1
Other	—		13		—		13			—		7		—		7
Derivative liabilities	35		500		1		536			58		665		—		723
Netting adjustments (b)	—		—		—		(319		)	—		—		—		(337		)
Total derivative liabilities	35		500		1		217			58		665		—		386
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	42	$	1,213	$	1	$	937		$	72	$	1,195	—		$	930

(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 table describes the valuation techniques and significant inputs used to measure the classes of assets and liabilities reported at fair value on a recurring basis, as well as the classification of each within the valuation hierarchy.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Securities (trading account assets and available for sale)	Fair value of level 1 securities is determined by: • Quoted market prices available in an active market for identical securities. This includes exchange-traded equity securities. Fair value of level 2 securities is determined by: • Pricing models (either by a third party pricing service or internally). Inputs include: yields, benchmark securities, bids, offers, actual trade data (i.e., spreads, credit ratings, and interest rates) for comparable assets, spread tables, matrices, high-grade scales, and option-adjusted spreads. • Observable market prices of similar securities. Fair value of level 3 securities is determined by: • Internal models, principally discounted cash flow models (income approach). • Revenue multiples of comparable public companies (market approach). For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. The valuations provided by the third-party pricing service are based on observable market inputs, which include benchmark yields, reported trades, issuer spreads, benchmark securities, bids, offers, and reference data obtained from market research publications. Inputs used by the third-party pricing service in valuing CMOs and other mortgage-backed securities also include new issue data, monthly payment information, whole loan collateral performance, and “To Be Announced” prices. In valuations of securities issued by state and political subdivisions, inputs used by the third-party pricing service also include material event notices.	Level 1, 2, and 3 (primarily Level 2)
Commercial loans (trading account assets)	Fair value is based on: • Observable market price spreads for similar loans. Valuations reflect prices within the bid-ask spread that are most representative of fair value.	Level 2
Principal investments (direct)	Direct principal investments consist of equity and debt instruments of private companies made by our principal investing entities. Fair value is determined using: • Operating performance and market multiples of comparable businesses • Other unique facts and circumstances related to each individual investment Direct principal investments are accounted for as investment companies in accordance with the applicable accounting guidance, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. We are in the process of winding down our direct principal investment portfolio. As of June 30, 2019, the balance is less than $1 million.	Level 3
Principal investments (indirect)	Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. Under the provisions of the Volcker Rule, we are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of June 30, 2019, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.	NAV

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at June 30, 2019, as well as financial support provided for the three and six months ended June 30, 2019, and June 30, 2018.

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					Financial support provided
					Three months ended June 30,						Six months ended June 30,
	June 30, 2019				2019				2018		2019			2018
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	$	1	—		—		$	—	—	—	—		—	—		—
Indirect investments (measured at NAV) (a)	76		$	24	$	—	—		—	—	$	2	—	$	1	—
Total	$	77	$	24	—		$	—	—	—	$	2	—	$	1	—

 

(a) Our indirect investments consist of buyout funds, venture capital funds, and fund of funds. These investments are generally not redeemable. Instead, distributions are received through the liquidation of the underlying investments of the fund. An investment in any one of these funds typically can be sold only with the approval of the fund’s general partners. At June 30, 2019, no significant liquidation of the underlying investments has been communicated to Key. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Other direct equity investments	Fair value is determined using: • Discounted cash flows • Operating performance and market/exit multiples of comparable businesses • Other unique facts and circumstances related to each individual investment For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. Level 2 investments reflect the price of recent investments, which is deemed representative of fair value.	Level 2 and 3
Other direct and indirect equity investments (NAV)	Certain direct investments do not have readily determinable fair values and qualify for the practical expedient in the accounting guidance that allows us to estimate fair value based upon net asset value per share.	NAV
Loans held for sale and held for investment (residential)	Residential mortgage loans held for sale are accounted for at fair value. The election of the fair value option aligns the accounting for these assets with the related forward loan sale commitments. Fair values are based on: • Quoted market prices, where available • Prices for other traded mortgage loans with similar characteristics • Purchase commitments and bid information received from market participants Prices are adjusted as necessary to include: • The embedded servicing value in the loans • The specific characteristics of certain loans that are priced based on the pricing of similar loans. (These adjustments represent unobservable inputs to the valuation but are not considered significant given the relative insensitivity of the value to changes in these inputs to the fair value of the loans.) Residential loans held for investment: Certain residential loans held for sale contain salability exceptions that make them unable to be sold into the performing loan sales market. Loans in this category are transferred to the held to maturity loan portfolio and are included in “Loans, net of unearned income” on the balance sheet. This type of loan is classified as level 3 in the valuation hierarchy as transaction details regarding sales of this type of loan are often unavailable. Fair value is based upon: • Unobservable bid information from brokers and investors Higher (lower) unobservable bid information would have resulted in higher (lower) fair value measurements.	Level 1, 2 and 3 (primarily level 2)
Derivatives	Exchange-traded derivatives are valued using quoted prices in active markets and, therefore, are classified as Level 1 instruments. The majority of our derivative positions are level 2 and are valued using internally developed models based on market convention and observable market inputs. These derivative contracts include interest rate swaps, certain options, floors, cross currency swaps, credit default swaps, and forward mortgage loan sale commitments. Significant inputs used in the valuation models include: • Interest rate curves • Yield curves • LIBOR and Overnight Index Swap (OIS) discount rates • LIBOR and OIS curves, index pricing curves, foreign currency curves • Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity)	Level 1, 2, and 3 (primarily level 2)

68

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Derivatives (continued)	We have several customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, such as: • Bond spreads and asset values The unobservable internally derived assumptions include: • Loss probabilities • Internal risk ratings of customers The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, higher (lower) loss probabilities and internal risk ratings would have resulted in a lower (higher) fair value measurement of the risk participations. A directionally similar change would have also applied to other customized derivative instruments classified as Level 3. We use interest rate lock commitments for our residential mortgage business, which are classified as Level 3 instruments. The significant components of the valuation model include: • Interest rates observable in the market • Investor supplied prices for similar securities • The probability of the loan closing (i.e. the "pull-through" amount, a significant unobservable input). Increases (decreases) in the probability of the loan closing would have resulted in higher (lower) fair value measurements. Valuation of residential mortgage forward sale commitments utilizes observable market prices of comparable commitments and mortgage securities (Level 2).	Level 1, 2, and 3 (primarily level 2)
Liability for short positions	This includes fixed income securities held by our broker dealer in its trading inventory. Fair value of level 1 securities is determined by: • Quoted market prices available in an active market for identical securities Fair value of level 2 securities is determined by: • Observable market prices of similar securities • Market activity, spreads, credit ratings and interest rates for each security type	Level 1 and 2

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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 measured at fair value on a recurring basis for the three and six months ended June 30, 2019, and June 30, 2018. 

in millions	Beginning of Period Balance			Gains (Losses) Included in Other Comprehensive Income		Gains (Losses) Included in Earnings				Purchases			Sales			Settlements		Transfers Other		Transfers into Level 3			Transfers out of Level 3				End of Period Balance			Unrealized Gains (Losses) Included in Earnings
Six months ended June 30, 2019
Securities available for sale
Other securities	$	20		$	15	—				—			—			—		—		—			(24		)		$	11		—
Other investments
Principal investments
Direct	1			—		—				$	—		$	—		—		—		—			—				1			—
Equity investments
Direct	7			—		(1		)		—			—			—		—		$	1		—				7			—
Loans held for sale (residential)	—			—		—				—			(1		)	—		$	1	—			—				—			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	5			—		$	3		(c)	—			—			—		—		2		(d)	$	(6	)	(d)	4			—
Credit	—			—		—				(1		)	—			—		—		—			—				(1		)	—
Other (e)	3			—		—				—			—			—		3		—			—				6			—
Three months ended June 30, 2019
Securities available for sale
Other securities	$	25		$	10	—				—			—			—		—		—			$	(24	)		$	11		—
Other investments
Principal investments
Direct	1			—		$	—			(1		)	1			—		—		—			—				1			—
Other indirect	—			—		—				—			—			—		—		—			—				—			—
Equity investments
Direct	8			—		(1		)		—			—			—		—		—			—				7			—
Loans held for sale (residential)	1			—		—				—			(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	3			—		2			(c)	—			—			—		—		—		(d)	(1		)	(d)	4			—
Credit	(1		)	—		—				—			—			$	—	—		—			—				(1		)	—
Other (e)	4			—		—				—			—			—		2		—			—				6			—

in millions	Beginning of Period Balance		Gains (Losses) Included in Other Comprehensive Income	Gains (Losses) Included in Earnings				Purchases		Sales			Settlements		Transfers Other		Transfers into Level 3			Transfers out of Level 3				End of Period Balance			Unrealized Gains (Losses) Included in Earnings
Six months ended June 30, 2018
Securities available for sale
Other securities	$	20	—	—				—		—			—		—		—			—				$	20		—
Other investments
Principal investments
Direct	13		—	—				$	1	$	(1	)	—		—		—			—				13			$	1	(a)
Equity investments
Direct	3		—	—				—		—			—		—		$	4		—				7			—
Loans held for sale (residential)	1		—	—				—		(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	2		—	—				—		—			—		$	1	—			—				3			—
Derivative instruments (b)
Interest rate	9		—	$	(2	)	(c)	1		(2		)	—		—		4		(d)	$	(5	)	(d)	5			—
Credit	1		—	(20		)	(c)	—		—			$	10	—		—			—				(9		)	—
Other (e)	3		—	—				—		—			—		$	—	—			—				3			—
Three months ended June 30, 2018
Securities available for sale
Other securities	$	20	—	—				—		—			—		—		—			—				$	20		—
Other investments
Principal investments
Direct	12		—	$	1		(a)	$	1	$	(1	)	—		—		—			—				13			$	2	(a)
Equity investments
Direct	7		—	—				—		—			—		—		—			—				7			—
Loans held for sale (residential)	1		—	—				—		(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	2		—	—				—		—			—		$	1	—			—				3			—
Derivative instruments (b)
Interest rate	4		—	(1		)	(c)	—		(2		)	—		—		$	4	(d)	—				5			—
Credit	—		—	(15		)	(c)	—		—			$	6	—		—			—				(9		)	—
Other (e)	3		—	—				—		—			—		—		—			—				3			—

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

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

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

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

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

70

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 June 30, 2019, and December 31, 2018.

The following table presents our assets measured at fair value on a nonrecurring basis at June 30, 2019, and December 31, 2018:

	June 30, 2019							December 31, 2018
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	—	$	—	$	57	$	57	—	—	$	42	$	42
Accrued income and other assets	—	—		21		21		—	—	16		16
Total assets on a nonrecurring basis at fair value	—	$	—	$	78	$	78	—	—	$	58	$	58

Qualitative Disclosures of Valuation Techniques

The following table describes the valuation techniques and significant inputs used to measure the significant classes of assets and liabilities reported at fair value on a nonrecurring basis, as well as the classification of each within the valuation hierarchy.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Impaired loans and leases	Loans are evaluated for impairment on a quarterly basis; impairment typically occurs when there is evidence of a probable loss and the expected value of the loan is less than the contractual value of the loan.  The amount of the impairment may be determined based on the estimated present value of future cash flows, the fair value of the underlying collateral (Level 3), or the loan’s observable market price based on recent sales of similar loans and collateral (Level 2). Cash flow analysis considers internally developed inputs including: • Discount rates • Default rates • Changes in collateral values and costs of foreclosure	Level 2 and 3
Commercial loans held for sale and student loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include: • Non-binding bids for the respective loans or similar loans • Recent sales transactions • Internal models that emulate recent securitizations	Level 2 and 3
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, including: • Swap rates and bond ratings • Our own assumptions about the exit market for the leases • Details about the individual leases in the portfolio Leases for which we receive a current nonbinding bid, and for which the sale is considered probable, may be classified as Level 2. Valuations of lease and operating lease assets held for sale that employ our own assumptions are classified as Level 3 assets. The inputs based on our own assumptions include changes in the value of leased items and internal credit ratings.	Level 2 and 3
OREO, other repossessed personal property, and right-of-use assets	OREO, other repossessed properties, and right-of-use assets are valued based on: • 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.	Level 2 and 3

71

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
LIHTC, HTC, and NMTC investments	Valuation of LIHTC, HTC and NMTC involves measuring the present value of future tax benefits and comparing that value against the current carrying value of the investment. Expected future tax benefits are discounted to their present value using discounted cash flow modeling that incorporates an appropriate risk premium. LIHTC and HTC investments are impaired when it is more likely than not that the carrying amount of the investment will not be realized.	Level 3
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 June 30, 2019, and December 31, 2018, the carrying amount of equity investments under this method was $139 million and $107 million, respectively. No impairment was recorded for the three months ended June 30, 2019.	Level 3
Mortgage Servicing Rights	Refer to Note 8. Mortgage Servicing Assets	Level 3

Quantitative Information about Level 3 Fair Value Measurements

The following table describes the significant unobservable inputs of our level 3 recurring and nonrecurring assets and liabilities:

June 30, 2019	Level 3 Asset (Liability)			Valuation Technique	Significant Unobservable Input	Range (Weighted-Average) (b), (c)
dollars in millions
Recurring
Securities available-for-sale:
Other securities	$	11		Discounted cash flows	Discount rate	N/A (15.95%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (38.00%)
Other investments:(a)
Equity investments
Direct	7			Discounted cash flows	Discount rate	14.81 - 16.78% (15.06%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (49.00%)
Loans, net of unearned income (residential)	3			Market comparable pricing	Comparability factor	78.57 - 95.75% (90.40%)
Derivative instruments:
Interest rate	4			Discounted cash flows	Probability of default	.02 - 100% (2.10%)
					Internal risk rating	1 - 19 (9.021)
					Loss given default	0 - 1 (.492)
Credit	(1		)	Discounted cash flows	Probability of default	.02 - 100% (2.36%)
					Internal risk rating	1 - 19 (9.134)
					Loss given default	0 - 1 (.50)
Other(d)	6			Discounted cash flows	Loan closing rates	36.70 - 99.15% (74.62%)
Nonrecurring
Impaired loans	$	57		Fair value of underlying collateral	Discount rate	0 - 80.00% (17.00%)
Accrued income and other assets:
OREO and other Level 3 assets(e)	$	18		Appraised value	Appraised value	N/M

December 31, 2018	Level 3 Asset (Liability)		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average(b)(c))
dollars in millions
Nonrecurring
Impaired loans	$	42	Fair value of underlying collateral	Discount rate	20.00 - 40.00% (21.00%)

(a) Principal investments, direct is excluded from this table as the balance at June 30, 2019, is insignificant (less than $1 million).

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

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

(d) Amounts represent interest rate lock commitments.

(e) Excludes balances pertaining to mortgage servicing assets. Refer to Note 9. Mortgage Servicing Assets for significant unobservable inputs pertaining to these assets.

72

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at June 30, 2019, and December 31, 2018, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	June 30, 2019
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment				Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	$	1,005	$	—	$	1,005	—		—		—				$	1,005
Other investments (b)	632		—		—		$	547	$	85	—				632
Loans, net of unearned income (residential) (d)	3		—		—		3		—		—				3
Loans held for sale (residential) (b)	164		—		164		—		—		—				164
Derivative assets - trading (b)	715		41		1,065		11		—		$	(402	)	(f)	715
Fair value - OCI
Securities available for sale (b)	21,528		—		21,517		$	11	—		—				21,528
Derivative assets - hedging (b)(g)	94		—		105		—		—		(11		)	(f)	94
Amortized cost
Held-to-maturity securities (c)	10,878		—		10,899		—		—		—				10,899
Loans, net of unearned income (d)	91,044		—		—		89,803		—		—				89,803
Loans held for sale (b)	1,626		—		—		1,626		—		—				1,626
Other
Cash and short-term investments (a)	3,050		3,050		—		—		—		—				3,050
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	216	$	33	$	490	1		—		$	(308	)	(f)	$	216
Fair value - OCI
Derivative liabilities - hedging (b)(g)	1		2		10		—		—		(11		)	(f)	1
Amortized cost
Time deposits (e)	13,608		—		13,716		—		—		—				13,716
Short-term borrowings (a)	881		7		874		—		—		—				881
Long-term debt (e)	14,312		13,557		1,229		—		—		—				14,786
Other
Deposits with no stated maturity (a)	96,338		—		96,338		—		—		—				96,338

	December 31, 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)	$	849		—		$	849		—		—		—				$	849
Other investments (b)	666			—		1			$	559	$	106	—				666
Loans, net of unearned income (residential) (d)	3			—		—			3		—		—				3
Loans held for sale (residential) (b)	54			—		54			—		—		—				54
Derivative assets - trading (b)	462			$	68	736			8		—		$	(350	)	(f)	462
Fair value - OCI
Securities available for sale (b)	19,428			—		19,408			20		—		—				19,428
Derivative assets - hedging (b)(g)	69			2		50			—		—		17			(f)	69
Amortized cost
Held-to-maturity securities (c)	11,519			—		11,122			—		—		—				11,122
Loans, net of unearned income (d)	88,666			—		—			86,224		—		—				86,224
Loans held for sale (b)	1,173			—		—			1,173		—		—				1,173
Other
Cash and short-term investments (a)	3,240			3,240		—			—		—		—				3,240
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	395		$	58	$	675		—		—		$	(338	)	(f)	$	395
Fair value - OCI
Derivative liabilities - hedging (b)(g)	(9		)	—		(10		)	—		—		1			(f)	(9		)
Amortized cost
Time deposits (e)	13,245			—		13,331			—		—		—				13,331
Short-term borrowings (a)	863			14		849			—		—		—				863
Long-term debt (e)	13,732			12,576		1,211			—		—		—				13,787
Other
Deposits with no stated maturity (a)	94,064			—		94,064			—		—		—				94,064

73

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.

(g) Derivative assets-hedging and derivative liabilities-hedging includes both cash flow and fair value hedges. Additional information regarding our accounting policies for cash flow and fair value hedges is provided in Note 1 (“1. Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 103 of our 2018 Form 10-K.

Education lending business.  Our discontinued assets include government-guaranteed and private education loans originated through our education lending business that was discontinued in September 2009. This portfolio consists of loans 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 $1.0 billion ($809 million at fair value) at June 30, 2019, and $1.1 billion ($890 million at fair value) at December 31, 2018;

• Portfolio loans at fair value of $2 million at June 30, 2019, and $2 million at December 31, 2018.

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.

	June 30, 2019								December 31, 2018
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	$	272	—		—		$	272	$	150	—		$	3	$	147
States and political subdivisions	5		—		—		5		7		—		—		7
Agency residential collateralized mortgage obligations	13,593		$	111	$	92	13,612		14,315		$	20	373		13,962
Agency residential mortgage-backed securities	2,035		36		10		2,061		2,128		13		36		2,105
Agency commercial mortgage-backed securities	5,472		128		57		5,543		3,300		19		132		3,187
Other securities	17		18		—		35		17		3		—		20
Total securities available for sale	$	21,394	$	293	$	159	$	21,528	$	19,917	$	55	$	544	$	19,428
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	6,435	$	28	$	59	$	6,404	$	7,021	$	2	$	254	$	6,769
Agency residential mortgage-backed securities	456		2		1		457		490		—		14		476
Agency commercial mortgage-backed securities	3,972		64		13		4,023		3,996		2		133		3,865
Other securities	15		—		—		15		12		—		—		12
Total held-to-maturity securities	$	10,878	$	94	$	73	$	10,899	$	11,519	$	4	$	401	$	11,122

The following table summarizes our securities that were in an unrealized loss position as of June 30, 2019, and December 31, 2018.

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	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
June 30, 2019
Securities available for sale:
U.S Treasury, agencies, and corporations	$	10	—			$	45	—		$	55	—
Agency residential collateralized mortgage obligations	183		$	1		6,941		$	91	7,124		$	92
Agency residential mortgage-backed securities	1		—		(a)	996		10		997		10
Agency commercial mortgage-backed securities	—		—			1,779		57		1,779		57
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			3,941		59		3,941		59
Agency residential mortgage-backed securities	58		—		(a)	81		1		139		1
Agency commercial mortgage-backed securities	—		—			514		13		514		13
Other securities	7		—		(a)	—		—		7		—
Total temporarily impaired securities	$	259	$	1		$	14,298	$	231	$	14,557	$	232
December 31, 2018
Securities available for sale:
U.S. Treasury, agencies, and corporations	—		—			$	147	$	3	$	147	$	3
Agency residential collateralized mortgage obligations	$	570	$	2		10,945		371		11,515		373
Agency residential mortgage-backed securities	4		—		(b)	1,087		36		1,091		36
Agency commercial mortgage-backed securities	—		—			1,729		132		1,729		132
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			6,416		254		6,416		254
Agency residential mortgage-backed securities	—		—			475		14		475		14
Agency commercial mortgage-backed securities	73		—		(b)	3,359		133		3,432		133
Total temporarily impaired securities	$	647	$	2		$	24,158	$	943	$	24,805	$	945

(a) At June 30, 2019, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale and less than $1 million for agency residential mortgage-back securities and other securities held-to-maturity securities with a loss duration of less than 12 months.

(b) At December 31, 2018, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months and less than $1 million for agency commercial mortgage-backed securities held-to-maturity with a loss duration of less than 12 months.

At June 30, 2019, we had $92 million of gross unrealized losses related to 278 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 3.72 years at June 30, 2019. At June 30, 2019, we also had $10 million of gross unrealized losses related to 213 agency residential mortgage-backed securities positions and $57 million of gross unrealized losses related to 14 agency commercial mortgage backed securities positions with weighted-average maturities of 3.75 years and 4.12 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. We did not have any impairment losses recognized in earnings for the six months ended June 30, 2019.

At June 30, 2019, securities available for sale and held-to-maturity securities totaling $8.5 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.

June 30, 2019	Securities Available for Sale				Held to Maturity Securities
in millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	360	$	378	$	41	$	41
Due after one through five years	16,532		16,535		7,605		7,590
Due after five through ten years	4,493		4,606		3,232		3,268
Due after ten years	9		9		—		—
Total	$	21,394	$	21,528	$	10,878	$	10,899

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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 June 30, 2019, after taking into account the effects of bilateral collateral and master netting agreements, we had $94 million of derivative assets and $1 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 $715 million and derivative liabilities of $216 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 103 of our 2018 Form 10-K. Our derivative strategies and related risk management objectives are described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 132 of our 2018 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 June 30, 2019, and December 31, 2018. 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:

	June 30, 2019								December 31, 2018
			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	$	37,147	$	105		$	10		$	28,546	$	50		$	(10	)
Foreign exchange	122		—			2			122		2			—
Total	37,269		105			12			28,668		52			(10		)
Derivatives not designated as hedging instruments:
Interest rate	68,202		784			210			63,454		365			307
Foreign exchange	5,702		70			62			6,829		104			95
Commodity	6,662		246			236			2,002		333			323
Credit	453		1			3			226		1			1
Other (a)	4,483		16			13			1,466		9			7
Total	85,502		1,117			524			73,977		812			733
Netting adjustments (b)	—		(413		)	(319		)	—		(333		)	(337		)
Net derivatives in the balance sheet	122,771		809			217			102,645		531			386
Other collateral (c)	—		(3		)	(46		)	—		(2		)	(33		)
Net derivative amounts	$	122,771	$	806		$	171		$	102,645	$	529		$	353

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

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

(c) Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

Fair value hedges. During the six-month period ended June 30, 2019, we did not exclude any portion of fair value hedging instruments from the assessment of hedge effectiveness.

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The following tables summarize the amounts that were recorded on the balance sheet as of June 30, 2019, and December 31, 2018, related to cumulative basis adjustments for fair value hedges.

	June 30, 2019
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	$	9,559	$	237
Interest rate contracts	Certificate of deposit ($100,000 or more)	194		—
Interest rate contracts	Other time deposits	175		—
	December 31, 2018
	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	$	9,363	$	(6	)
Interest rate contracts	Certificate of deposit ($100,000 or more)	343		(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 adjustments related to de-designated hedged items that no longer qualify as fair value hedges reduced the hedge accounting basis adjustment by $10 million and $10 million at June 30, 2019, and December 31, 2018, respectively,

Cash flow hedges. During the six-month period ended June 30, 2019, 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 June 30, 2019, we expect to reclassify an estimated $63 million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months. In addition, we expect to reclassify approximately $10 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months. As of June 30, 2019, 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 six-month periods ended June 30, 2019, and June 30, 2018.

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Three months ended June 30, 2019
Total amounts presented in the consolidated statement of income	$	(120	)	$	1,082		$	(223	)	$	17
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(152		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	142			—			—			—
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	$	—		$	(19	)	—			—
Net income (expense) recognized on cash flow hedges	$	—		$	(19	)	—			—
Three months ended June 30, 2018
Total amounts presented in the consolidated statement of income	$	(102	)	$	1,000		$	(112	)	$	99
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	22		—			$	1		—
Recognized on derivatives designated as hedging instruments	(25		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(3	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	1		$	(25	)	—			—
Net income (expense) recognized on cash flow hedges	$	1		$	(25	)	—			—

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	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Six months ended June 30, 2019
Total amounts presented in the consolidated statement of income	$	(240	)	$	2,148		$	(425	)	$	27
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(245		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	224			—			—			—
Net income (expense) recognized on fair value hedges	$	(21	)	—			(1		)	—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1	)	$	(43	)	—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	(43	)	—			—
Six months ended June 30, 2018
Total amounts presented in the consolidated statement of income	$	(194	)	$	1,940		$	(203	)	$	120
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	93		—			$	1		—
Recognized on derivatives designated as hedging instruments	(94		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(1	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	—			$	(27	)	—			—
Net income (expense) recognized on cash flow hedges	—			$	(27	)	—			—

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 June 30, 2019, AOCI reflected unrecognized, after-tax gains totaling $24 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 six-month period ended June 30, 2019.

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and six-month periods ended June 30, 2019, and June 30, 2018, 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
Three months ended June 30, 2019
Cash Flow Hedges
Interest rate	$	270		Interest income — Loans	$	(19	)
Interest rate	(2		)	Interest expense — Long-term debt	—
Interest rate	(1		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(1		)	Other Income	—
Total	$	266			$	(19	)
Three months ended June 30, 2018
Cash Flow Hedges
Interest rate	$	(58	)	Interest income — Loans	$	(25	)
Interest rate	2			Interest expense — Long-term debt	1
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	10			Other Income	—
Total	$	(45	)		$	(24	)

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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)
Six months ended June 30, 2019
Cash Flow Hedges
Interest rate	$	385		Interest income — Loans	$	(43	)
Interest rate	(3		)	Interest expense — Long-term debt	(1		)
Interest rate	(6		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(4		)	Other Income	—
Total	$	372			$	(44	)
Six months ended June 30, 2018
Cash Flow Hedges
Interest rate	$	(146	)	Interest income — Loans	$	(27	)
Interest rate	4			Interest expense — Long-term debt	—
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	10			Other Income	—
Total	$	(131	)		$	(27	)

Nonhedging instruments

The following table summarizes the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and six-month periods ended June 30, 2019, and June 30, 2018, and where they are recorded on the income statement.

	Three months ended June 30, 2019									Three months ended June 30, 2018
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	$	7	—	$	—		$	7		$	11	—	—			$	11
Foreign exchange	11		—	—			11			11		—	—			11
Commodity	2		—	—			2			3		—	—			3
Credit	—		—	(8		)	(8		)	—		—	$	(14	)	(14		)
Other	—		—	2			2			—		—	16			16
Total net gains (losses)	$	20	—	$	(6	)	$	14		$	25	—	$	2		$	27

	Six months ended June 30, 2019										Six months ended June 30, 2018
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	$	15	$	—	$	(2	)	$	13		$	20	—		$	2		$	22
Foreign exchange	21		—		—			21			22		—		—			22
Commodity	3		—		—			3			6		—		—			6
Credit	1		—		(15		)	(14		)	2		—		(19		)	(17		)
Other	—		—		3			3			—		$	—	12			12
Total net gains (losses)	$	40	$	—	$	(14	)	$	26		$	50	$	—	$	(5	)	$	45

Counterparty Credit Risk

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 $160 million was netted against derivative assets on the balance sheet at June 30, 2019, compared to $33 million of cash collateral netted against derivative assets at December 31, 2018. The cash collateral netted against derivative liabilities totaled $66 million at June 30, 2019, and $37 million at December 31, 2018. Our means of mitigating and managing exposure to credit risk on derivative contracts is described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 136 of our 2018 Form 10-K under the heading “Counterparty Credit Risk.”

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.

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in millions	June 30, 2019		December 31, 2018
Interest rate	$	793	$	308
Foreign exchange	36		60
Commodity	124		187
Credit	—		—
Other	16		9
Derivative assets before collateral	969		564
Less: Related collateral	160		33
Total derivative assets	$	809	$	531

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 June 30, 2019, we had gross exposure of $384 million to broker-dealers and banks. We had net exposure of $117 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $113 million after considering $4 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 $6 million at June 30, 2019, which we estimate to be the potential future losses on amounts due from client counterparties in the event of default. At June 30, 2019, we had gross exposure of $731 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 $692 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 specific commercial lending and swap obligations as well as exposures to debt securities. Our credit derivative portfolio was in a net liability position of $2 million as of June 30, 2019, and less than $1 million as of December 31, 2018. Our credit derivative portfolio consists of single-name credit default swaps, traded credit default swap indices, and risk participation agreements. Additional descriptions of our credit derivatives are provided in Note 8 (“Derivatives and Hedging Activities”) beginning on page 137 of our 2018 Form 10-K under the heading “Credit Derivatives.”

The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at June 30, 2019, and December 31, 2018. The sold credit derivatives represented in the following table include only Risk Participation Agreements; there were no traded indexes sold. The notional amount represents the maximum amount that the seller could be required to pay. The payment/performance risk assessment at June 30, 2019, is based on the internal probability of default of the reference entity consistent with our Fair Value Methodology. The payment/performance risk shown in the table represents a weighted-average of the default probabilities for all reference entities. These default probabilities are directly correlated to the probability that we will have to make a payment under the credit derivative contracts.

	June 30, 2019					December 31, 2018
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	126	13.84	2.50	%	$	22	13.43	17.18	%
Total credit derivatives sold	$	126	—	—		$	22	—	—

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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 June 30, 2019, 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 June 30, 2019, 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 $8 million, which was comprised of $6 million in derivative assets and $14 million in derivative liabilities. We had $9 million in cash and securities collateral posted to cover those positions as of June 30, 2019. There were no derivative contracts with credit risk contingent features held by KeyCorp at June 30, 2019.

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 June 30, 2019, and December 31, 2018. The additional collateral amounts were calculated based on scenarios under which KeyBank’s ratings are downgraded one, two, or three ratings as of June 30, 2019, and December 31, 2018, 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 June 30, 2019, and December 31, 2018. 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.

	June 30, 2019				December 31, 2018
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	$	—	$	—	$	2	$	2
Two rating downgrades	—		—		2		2
Three rating downgrades	—		—		2		2

KeyBank’s long-term senior unsecured credit rating was four ratings above noninvestment grade at Moody’s and S&P as of June 30, 2019, and December 31, 2018. If KeyBank’s ratings had been downgraded below investment grade as of June 30, 2019, or December 31, 2018, payments of less than $1 million and $4 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 June 30, 2019, or December 31, 2018, 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 2018 Form 10-K.

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Commercial

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

	Three months ended June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	497		$	435		$	502		$	412
Servicing retained from loan sales	23			29			41			56
Purchases	17			12			23			33
Amortization	(28		)	(25		)	(57		)	(50		)
Balance at end of period	$	509		$	451		$	509		$	451
Fair value at end of period	$	723		$	646		$	723		$	646

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 June 30, 2019, and June 30, 2018, along with the valuation techniques, are shown in the following table: 

dollars in millions		June 30, 2019	June 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 2.00% (1.13%)	1.00 - 3.00% (1.17%)
	Residual cash flows discount rate	7.00 - 11.54% (9.26%)	7.00 - 15.00% (9.06%)
	Escrow earn rate	1.92 - 3.13% (2.63%)	2.40 - 3.82% (3.10%)
	Loan assumption rate	0.00 - 3.02% (1.40%)	0.00 - 3.00% (1.19%)

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 $95 million for the six-month period ended June 30, 2019, and $85 million for the six-month period ended June 30, 2018. This fee income was offset by $57 million of amortization for the six-month period ended June 30, 2019, and $50 million for the six-month period ended June 30, 2018. 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 June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	38		$	32		$	37		$	31
Servicing retained from loan sales	2			3			4			5
Purchases	—			—			—			—
Amortization	(1		)	(1		)	(2		)	(2		)
Balance at end of period	$	39		$	34		$	39		$	34
Fair value at end of period	$	45		$	43		$	45		$	43

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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 June 30, 2019, and June 30, 2018, along with the valuation techniques, are shown in the following table:

dollars in millions		June 30, 2019	June 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	10.95 - 62.06% (12.52%)	8.39 - 49.39% (9.17%)
	Discount rate	7.50 - 10.00% (7.53%)	8.50 - 11.00% (8.54%)
	Servicing cost	$62 - $4,375 ($67.55)	$76 - $4,385 ($82.38)

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 June 30, 2019, 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 $9 million for the six-month period ended June 30, 2019, and $7 million for the six-month period ended June 30, 2018. This fee income was offset by $2 million of amortization for both the six-month periods ended June 30, 2019, and June 30, 2018. Both the contractual fee income and the amortization are recorded, net, in “mortgage servicing fees” on the income statement.

9. Leases

As a lessee, we enter into leases of land, buildings and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. Leases with an initial term of less than 1 year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term. For leases with initial terms greater than one year, right-of-use assets are reported on the balance sheet.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b) Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

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Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b) There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

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in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Key will assess net investments in leases, including residual values, for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees was $289 million at June 30, 2019.

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

The carrying amount of operating lease assets at June 30, 2019, was $948 million.

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10. Variable Interest Entities

Our significant VIEs are summarized below. Additional information pertaining to the criteria used in determining if an entity is a VIE is included in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

LIHTC investments. We had $1.4 billion and $1.4 billion of investments in LIHTC operating partnerships at June 30, 2019, and December 31, 2018, respectively. 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 June 30, 2019, and December 31, 2018, we had liabilities of $489 million and $532 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 June 30, 2019, and December 31, 2018. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our balance sheet. Additional information pertaining to our LIHTC investments is included in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
June 30, 2019
LIHTC investments	$	6,276	$	2,588	$	1,739
December 31, 2018
LIHTC investments	$	5,932	$	2,569	$	1,740

We amortize our LIHTC investments over the period that we expect to receive the tax benefits. During the first six months of 2019, we recognized $89 million of amortization and $92 million of tax credits associated with these investments within “income taxes” on our income statement. During the first six months of 2018, we recognized $83 million of amortization and $81 million of tax credits associated with these investments within “income taxes” on our income statement.

Principal investments. 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 $76 million and $96 million at June 30, 2019, and December 31, 2018, respectively. These investments are recorded in “other investments” on our balance sheet. 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 June 30, 2019, and December 31, 2018.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
June 30, 2019
Indirect investments	$	15,018	$	286	$	100
December 31, 2018
Indirect investments	$	19,659	$	376	$	122

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. These entities had no assets at June 30, 2019 and December 31, 2018 that can be used to settle the entities’ obligations. The entities had no liabilities at June 30, 2019 and December 31, 2018, and other equity investors have no recourse to our general credit.

Additional information on our indirect and direct principal investments is provided in Note 5 (“Fair Value Measurements”) and in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

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Other unconsolidated VIEs. We are involved with other various entities in the normal course of business which we have determined to be VIEs. We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance. Our assets associated with these unconsolidated VIEs totaled $287 million at June 30, 2019, and $248 million at December 31, 2018. 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 $2 million and $2 million associated with these unconsolidated VIEs at June 30, 2019, and December 31, 2018, respectively. Additional information pertaining to our other unconsolidated VIEs is included in Note 12 (“Variable Interest Entities“) under the heading “Other unconsolidated VIEs” on page 144 of our 2018 Form 10-K.

11. Income Taxes

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 before income taxes, was 16.8% for the second quarter of 2019 and 17.6% for the second quarter of 2018. The effective tax rates are less than our combined federal and state statutory tax rate of 23.7%, 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.

Deferred Tax Asset

At June 30, 2019, we had a net deferred tax liability of $101 million, compared to a net deferred tax asset of $222 million at December 31, 2018, 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 June 30, 2019, and $11 million at December 31, 2018. 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 June 30, 2019, Key’s unrecognized tax benefits were $37 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.

12. Acquisitions, Divestiture, and Discontinued Operations

Acquisitions

Laurel Road Digital Lending Business. On April 3, 2019, KeyBank acquired Laurel Road's digital lending business from Laurel Road Bank. Laurel Road Bank's three bank branches located in southeast Connecticut were

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not part of this transaction. Through the acquisition, KeyBank expects to enhance its digital capabilities with state-of-the-art, customer-centric technology and to leverage Laurel Road's proven ability to attract and serve professional millennial clients. The acquisition is accounted for as a business combination. During the second quarter of 2019, we recognized provisional identifiable intangible assets with an estimated fair value of $37 million. We also recognized provisional goodwill of $148 million in connection with this acquisition. These fair value estimates represent our best estimate of fair value and are expected to be finalized over a period of up to one year from the acquisition date.

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 June 30, 2019, and December 31, 2018, approximately $964 million and $1.1 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.

13. 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 148 of our 2018 Form 10-K.

The following table summarizes our securities financing agreements at June 30, 2019, and December 31, 2018:

	June 30, 2019									December 31, 2018
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	$	210	$	(6	)	$	(204	)	—	$	14	$	(14	)	—			—
Total	$	210	$	(6	)	$	(204	)	—	$	14	$	(14	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	161	$	(6	)	$	(155	)	—	$	319	$	(14	)	$	(305	)	—
Total	$	161	$	(6	)	$	(155	)	—	$	319	$	(14	)	$	(305	)	—

(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 June 30, 2019, the carrying amount of assets pledged as collateral against repurchase agreements totaled $211 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At June 30, 2019, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $155 million. The collateral pledged under customer sweep repurchase agreements is posted to a third-party custodian and cannot be sold or repledged

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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.

14. Employee Benefits

Pension Plans

The components of net pension cost (benefit) for all funded and unfunded plans are recorded in “other expense” and are summarized in the following table. For more information on our Pension Plans and Other Postretirement Benefit Plans, see Note 17 (“Employee Benefits”) beginning on page 151 of our 2018 Form 10-K.

	Three months ended June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Interest cost on PBO	$	12		$	10		$	23		$	20
Expected return on plan assets	(12		)	(13		)	(24		)	(26		)
Amortization of losses	3			4			7			8
Net pension cost	$	3		$	1		$	6		$	2

15. 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
June 30, 2019
KeyCorp Capital I	$	156	$	6	$	162	3.332	%	2028
KeyCorp Capital II	106		4		110		6.875		2029
KeyCorp Capital III	138		4		142		7.750		2029
HNC Statutory Trust III	19		1		20		3.924		2035
Willow Grove Statutory Trust I	18		1		19		3.720		2036
HNC Statutory Trust IV	16		1		17		3.863		2037
Westbank Capital Trust II	7		—		7		4.577		2034
Westbank Capital Trust III	7		—		7		4.577		2034
Total	$	467	$	17	$	484	5.536	%	—
December 31, 2018	$	454	$	17	$	471	5.447	%	—

(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 $58 million at June 30, 2019, and $46 million at December 31, 2018. 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 $58 million at June 30, 2019, and $46 million at December 31, 2018. 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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16. 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 June 30, 2019. 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 106 of our 2018 Form 10-K.

June 30, 2019	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,086	$	73
Recourse agreement with FNMA	4,392		6
Residential mortgage reserve	1,617		6
Written put options (a)	2,854		49
Total	$	11,949	$	134

(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 June 30, 2019, is low. Information pertaining to the nature of each of the guarantees listed below is included in Note 21 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Guarantees” beginning on page 163 of our 2018 Form 10-K.

Standby letters of credit. At June 30, 2019, 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. At June 30, 2019, the outstanding commercial mortgage loans in this program had a weighted-average remaining term of 7.8 years, and the unpaid principal balance outstanding of loans sold by us as a participant was $15.1 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 June 30, 2019. 

Residential Mortgage Banking. At June 30, 2019, the unpaid principal balance outstanding of loans sold by us in this program was $5.4 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 June 30, 2019. 

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Our liability for estimated repurchase obligations on loans sold, which is included in other liabilities on our balance sheet, was $6 million at June 30, 2019. For more information on our residential mortgages, see Note 8 (“Mortgage Servicing Assets “).

Written put options. At June 30, 2019, our written put options had an average life of three years. These written put options are accounted for as derivatives at fair value, as further discussed in Note 7 (“Derivatives and Hedging Activities”).

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”).

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. Additional information pertaining to types other off-balance sheet risk is included in Note 21 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Other Off-Balance Sheet Risk” on page 165 of our 2018 Form 10-K.

17. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and six months ended June 30, 2019, and June 30, 2018, 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, 2018	$	(373	)	$	(50	)	$	(14	)	$	(381	)	$	(818	)
Other comprehensive income before reclassification, net of income taxes	475			284			4			14			777
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			5			39
Net current-period other comprehensive income, net of income taxes	475			318			4			19			816
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Balance at March 31, 2019	$	(189	)	$	49		$	(11	)	$	(379	)	$	(530	)
Other comprehensive income before reclassification, net of income taxes	291			204			1			15			511
Amounts reclassified from AOCI, net of income taxes (a)	—			15			—			2			17
Net current-period other comprehensive income, net of income taxes	291			219			1			17			528
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Balance at December 31, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(216		)	(100		)	(11		)	—			(327		)
Amounts reclassified from AOCI, net of income taxes (a)	—			20			—			6			26
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(216		)	(80		)	(16		)	6			(306		)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Balance at March 31, 2018	(461		)	$	(149	)	$	7		$	(388	)	$	(991	)
Other comprehensive income before reclassification, net of income taxes	(66		)	(35		)	(9		)	—			(110		)
Amounts reclassified from AOCI, net of income taxes (a)	—			18			—			3			21
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(66		)	(17		)	(14		)	3			(94		)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)

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

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Our reclassifications out of AOCI for the three and six months ended June 30, 2019, and June 30, 2018, are as follows:

	Six months ended June 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(43	)	$	(27	)	Interest income — Loans
Interest rate	(1		)	—			Interest expense — Long-term debt
	(44		)	(27		)	Income (loss) from continuing operations before income taxes
	(10		)	(7		)	Income taxes
	$	(34	)	$	(20	)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(7	)	$	(8	)	Personnel expense
	(7		)	(8		)	Income (loss) from continuing operations before income taxes
	(2		)	(2		)	Income taxes
	$	(5	)	$	(6	)	Income (loss) from continuing operations

	Three months ended June 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(19	)	$	(25	)	Interest income — Loans
Interest rate	—			1			Interest expense — Long-term debt
	(19		)	(24		)	Income (loss) from continuing operations before income taxes
	(4		)	(6		)	Income taxes
	$	(15	)	(18		)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(3	)	(4		)	Personnel expense
	(3		)	(4		)	Income (loss) from continuing operations before income taxes
	(1		)	(1		)	Income taxes
	$	(2	)	$	(3	)	Income (loss) from continuing operations

18. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2018 capital plan (which was 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 $180 million of Common Share repurchases, including $179 million of Common Share repurchases in the open market and $1 million of Common Share repurchases related to employee equity compensation programs, in the second quarter of 2019 under this authorization.

Consistent with our 2018 capital plan, the Board declared a quarterly dividend of $.17 per Common Share for the second quarter of 2019.

On April 18, 2019, we announced our 2019 capital plan. Share repurchases of up to $1.0 billion are included in the 2019 capital plan which is effective from the third quarter of 2019 through the second quarter of 2020. Our 2019 capital plan also includes a 9% increase in our Common Stock dividend to $.185 per Common Share, which was approved by our Board of Directors on July 17, 2019.

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Preferred Stock

On April 29, 2019, we issued $450 million of depositary shares, each representing a 1/40th ownership interest in a share of our Fixed Rate Perpetual Noncumulative Series G Preferred Stock.

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		Second quarter 2019 dividends paid per depositary share
Fixed-to-Floating Rate Perpetual Noncumulative Series D	$	525	21,000	$	1	$	25,000	1/25th	$	1,000	$	12.50
Fixed-to-Floating Rate Perpetual Noncumulative Series E	500		500,000	1		1,000		1/40th	25		.382813
Fixed Rate Perpetual Noncumulative Series F	425		425,000	1		1,000		1/40th	25		.353125
Fixed Rate Perpetual Non-Cumulative Series G	450		450,000	1		1,000		1/40th	25		—

19. Business Segment Reporting

Key previously reported its results of operations through two reportable business segments, Key Community Bank and Key Corporate Bank. In the first quarter of 2019, Key underwent a company-wide organizational change, resulting in the realignment of its businesses into two reportable business segments, Consumer Bank and Commercial Bank, with the remaining operations that do not meet the criteria for disclosure as a separate reportable business recorded in Other. The new business segment structure aligns with how management reviews performance and makes decisions by client, segment and business unit. Prior period information was restated to conform to the new business segment structure. Additionally, goodwill was reallocated to the new segments on a relative fair value basis. On March 31, 2019, the Consumer Bank was allocated goodwill in the amount of $1.6 billion and the Commercial Bank was allocated goodwill in the amount of $912 million.

The following is a description of the segments and their primary businesses at June 30, 2019.

Consumer Bank

The Consumer Bank serves individuals and small businesses throughout our 15-state branch footprint by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services. The Consumer Bank also purchases retail auto sales contracts via a network of auto dealerships. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to us pursuant to dealer agreements. In addition, wealth management and investment services are offered to assist institutional, non-profit, and high-net-worth clients with their banking, trust, portfolio management, life insurance, charitable giving, and related needs.

Commercial Bank

The Commercial Bank is an aggregation of our Institutional and Commercial operating segments. The Commercial operating segment is a full-service corporate 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. The Commercial operating segment is also a significant servicer of commercial mortgage loans and a significant special servicer of CMBS. The Institutional operating segment 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.

Other

Other includes various corporate treasury activities such as management of our investment securities portfolio, long-term debt, short-term liquidity and funding activities, and balance sheet risk management, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items

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also include intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.

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

The table below shows selected financial data for our business segments for the three- and six-month periods ended June 30, 2019, and June 30, 2018.

Three months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2019			2018			2019			2018			2019			2018			2019			2018
SUMMARY OF OPERATIONS
Net interest income (TE)	$	594		$	574		$	405		$	418		$	(10	)	$	(5	)	$	989		$	987
Noninterest income	231			236			354			303			37			121			622			660
Total revenue (TE) (a)	825			810			759			721			27			116			1,611			1,647
Provision for credit losses	40			39			33			25			1			—			74			64
Depreciation and amortization expense	25			26			35			34			37			39			97			99
Other noninterest expense	535			543			346			357			41			(6		)	922			894
Income (loss) from continuing operations before income taxes (TE)	225			202			345			305			(52		)	83			518			590
Allocated income taxes and TE adjustments	53			47			62			49			(20		)	15			95			111
Income (loss) from continuing operations	172			155			283			256			(32		)	68			423			479
Income (loss) from discontinued operations, net of taxes	—			—			—			—			2			3			2			3
Net income (loss)	172			155			283			256			(30		)	71			425			482
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	172		$	155		$	283		$	256		$	(30	)	$	71		$	425		$	482
AVERAGE BALANCES (b)
Loans and leases	$	31,881		$	31,276		$	57,924		$	56,175		$	980		$	1,193		$	90,785		$	88,644
Total assets (a)	35,469			34,495			65,907			63,948			41,259			37,935			142,635			136,378
Deposits	72,303			68,279			35,961			33,169			1,337			2,555			109,601			104,003
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	40		$	39		$	23		$	22		2			(1		)	$	65		$	60
Return on average allocated equity (b)	21.12		%	18.88		%	24.57		%	22.99		%	(1.48		)%	3.75		%	10.26		%	12.78		%
Return on average allocated equity	21.12			18.88			24.57			22.99			(1.39		)	3.92			10.31			12.86
Average full-time equivalent employees (c)	9,440			10,067			2,260			2,467			5,506			5,842			17,206			18,376

(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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Six months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2019			2018			2019			2018			2019			2018			2019			2018
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,185		$	1,126		$	806		$	824		$	(17	)	$	(11	)	$	1,974		$	1,939
Noninterest income	445			457			655			636			58			168			1,158			1,261
Total revenue (TE) (a)	1,630			1,583			1,461			1,460			41			157			3,132			3,200
Provision for credit losses	85			73			49			54			2			(2		)	136			125
Depreciation and amortization expense	48			53			65			69			72			81			185			203
Other noninterest expense	1,061			1,093			680			700			56			3			1,797			1,796
Income (loss) from continuing operations before income taxes (TE)	436			364			667			637			(89		)	75			1,014			1,076
Allocated income taxes and TE adjustments	103			86			127			96			(45		)	(1		)	185			181
Income (loss) from continuing operations	333			278			540			541			(44		)	76			829			895
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3			5			3			5
Net income (loss)	333			278			540			541			(41		)	81			832			900
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	333		$	278		$	540		$	541		$	(41	)	$	81		$	832		$	900
AVERAGE BALANCES (b)
Loans and leases	$	31,603		$	31,409		$	57,610		$	55,210		$	1,007		$	1,171		$	90,220		$	87,790
Total assets (a)	35,103			34,638			65,405			62,865			40,877			38,148			141,385			135,651
Deposits	71,798			67,852			35,194			32,983			1,602			2,448			108,594			103,283
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	74		$	73		$	53		$	41		2			—			$	129		$	114
Return on average allocated equity (b)	20.76		%	16.98		%	23.93		%	24.74		%	(1.06		)%	2.11		%	10.37		%	12.06		%
Return on average allocated equity	20.76			16.98			23.93			24.74			(.99		)	2.25			10.41			12.13
Average full-time equivalent employees (c)	9,531			10,082			2,314			2,466			5,534			5,910			17,379			18,458

(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.

20. Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers, by business segment, for the three- and six-month periods ended June 30, 2019, and June 30, 2018. Refer to Note 19 (“Business Segment Reporting”) for a description of the company-wide organizational change which occurred in the first quarter of 2019 resulting in the realignment of Key’s businesses into two reportable business segments, Consumer Bank and Commercial Bank. Prior period information was restated to conform to the new business segment structure.

	Three months ended June 30, 2019						Three months ended June 30, 2018
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	91	$	17	$	108	$	91	$	19	$	110
Investment banking and debt placement fees	—		65		65		—		68		68
Services charges on deposit accounts	56		27		83		62		28		90
Cards and payments income	44		28		72		40		29		69
Other noninterest income	4		—		4		5		—		5
Total revenue from contracts with customers	$	195	$	137	$	332	$	198	$	144	$	342
Other noninterest income (a)					$	253					$	197
Noninterest income from Other(b)					37						121
Total noninterest income					$	622					$	660

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

(b) Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.

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	Six months ended June 30, 2019						Six months ended June 30, 2018
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	176	$	32	$	208	$	176	$	36	$	212
Investment banking and debt placement fees	—		110		110		—		115		115
Services charges on deposit accounts	110		55		165		123		56		179
Cards and payments income	81		55		136		75		55		130
Other noninterest income	6		—		6		10		—		10
Total revenue from contracts with customers	$	373	$	252	$	625	$	384	$	262	$	646
Other noninterest income (a)					$	475					$	447
Noninterest income from Other(b)					58						168
Total noninterest income					$	1,158					$	1,261

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

(b) Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.

We had no material contract assets or contract liabilities as of June 30, 2019, and June 30, 2018.

21. Subsequent Event

As previously reported, on or about July 9, 2019, we discovered fraudulent activity associated with transactions conducted in the third quarter of 2019 by a business customer of KeyBank. We continue to investigate this matter to determine the potential exposure to us, which we currently estimate could be up to $90 million, net of tax. The ultimate financial impact could be lower and will depend, in part, on our success in our efforts to recover the funds. We plan to pursue all available sources of recovery and other means of mitigating the potential loss.

We are working with the appropriate law enforcement authorities in connection with this matter. We may be limited in what information we can disclose due to the ongoing investigation.

Based on our review of the circumstances of the fraudulent activity, we believe this incident is an isolated occurrence involving a single business relationship.

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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 June 30, 2019, the related consolidated statements of income, comprehensive income and changes in equity for the three- and six- month periods ended June 30, 2019 and 2018, the related consolidated statements of cash flows for the six-month period ended June 30, 2019 and 2018, 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, 2018, 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 25, 2019, 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, 2018 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

August 1, 2019

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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 16 (“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 10-23 of our 2018 Form 10-K; Part I, Item 1A. Risk Factors, on pages 23-34 of our 2018 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.

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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 was effective from the third quarter of 2018 through the second quarter of 2019. 

We completed $180 million of Common Share repurchases, including $179 million of Common Share repurchases in the open market and $1 million of Common Share repurchases related to employee equity compensation programs, in the second quarter of 2019 under our 2018 capital plan authorization.

The following table summarizes our repurchases of our Common Shares for the three months ended June 30, 2019.

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)
April 1-30	4,451,457	17.19	4,451,457	7,432,069
May 1-31	4,563,140	17.43	4,563,140	3,187,148
June 1-30	1,397,078	17.18	1,397,078	1,515,114
Total	10,411,675	17.29	10,411,675

 

(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 April 30, 2019 at $17.55; on May 31, 2019, at $15.97; and on June 28, 2019, at $17.75.

Item 6. Exhibits

3.1	Third Amended and Restated Articles of Incorporation, effective May 23, 2019, filed as Exhibit 3.2 to Form 8-K on May 24, 2019.
3.2	Third Amended and Restated Regulations, effective May 23, 2019.
4.1	Form of Certificate representing Fixed Rate Perpetual Non-Cumulative Preferred Stock, Series G, filed as Exhibit 4.2 to Form 8-K on April 29, 2019.
4.2	Deposit Agreement, dated as of April 29, 2019, among the Company, 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 April 29, 2019.
4.3	Form of Depositary Receipt (included as part of Exhibit 4.2), filed as Exhibit 4.4 to Form 8-K on April 29, 2019.
10.1	2019 Equity Compensation Plan, filed as Exhibit 10.1 to Form 8-K on May 24, 2019 #
10.2	Form of Stock Option Award Agreement under KeyCorp 2019 Equity Compensation Plan, filed as Exhibit 10.1 to KeyCorp’s Registration Statement on Form S-8 on May 23, 2019, File No. 333-231689. #
10.3	Form of Performance Shares Award Agreement under KeyCorp 2019 Equity Compensation Plan, filed as Exhibit 10.2 to KeyCorp’s Registration Statement on Form S-8 on May 23, 2019, File No. 333-231689. #
10.4	Form of Restricted Stock Unit Award Agreement under KeyCorp 2019 Equity Compensation Plan, filed as Exhibit 10.3 to KeyCorp’s Registration Statement on Form S-8 on May 23, 2019, File No. 333-231689. #
10.5	Form of New Hire/Retention Award Agreement under KeyCorp 2019 Equity Compensation Plan, filed as Exhibit 10.4 to KeyCorp’s Registration Statement on Form S-8 on May 23, 2019, File No. 333-231689. #
15	Acknowledgment of Independent Registered Public Accounting Firm.
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 June 30, 2019, 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.
104	The cover page from KeyCorp’s Form 10-Q for the quarterly period ended June 30, 2019, formatted in inline XBRL (contained in Exhibit 101).

#	Indicates management contract or compensatory plan or arrangement.
*	Furnished herewith.

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Information Available on Website

KeyCorp makes available free of charge on its website, www.key.com, its 2018 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 “Financials — Regulatory Disclosures and Filings” tab of the investor relations section of our website includes public disclosures concerning our prior 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.

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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: August 1, 2019	/s/ Douglas M. Schosser
	By:  Douglas M. Schosser
	Chief Accounting Officer (Principal Accounting Officer)

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EX-3.2

EXHIBIT 3.2

THIRD AMENDED AND RESTATED

REGULATIONS

OF

KEYCORP

(Effective May 23, 2019)

ARTICLE I

SHAREHOLDERS

Section 1.Place of Meeting. All meetings of the shareholders of the Corporation shall be held at the office of the Corporation or at such other places, within or without the State of Ohio, and/or in part by means of communications equipment in the manner provided for in Section 11 of this Article I, as may from time to time be determined by the Board of Directors, the Chairperson of the Board, or the President and specified in the notice of such meeting.

Section 2.Annual Meetings. The annual meeting of the shareholders of the Corporation for the election of directors, the consideration of reports to be laid before such meeting, and the transaction of such other business as may properly come before the meeting shall be held (i) on the third Wednesday in May in each year, if not a legal holiday under the laws of the place where the meeting is to be held, and, if a legal holiday, then on the next succeeding day not a legal holiday under the laws of such place, or (ii) on such other date and at such hour as may from time to time be determined by the Board of Directors, the Chairperson of the Board, or the President.

Section 3.Special Meetings. Subject to the rights of the holders of any class or series of preferred stock of the Corporation, special meetings of the shareholders for any purpose or purposes may be called only by (i) the Chairperson of the Board, (ii) the President, or, in the case of the President’s absence, death, or disability, the vice president authorized to exercise the authority of the President, (iii) the Board of Directors by action at a meeting or a majority of the Board of Directors acting without a meeting, or (iv) the persons holding 25% of all shares outstanding and entitled to vote at the special meeting.

Upon request in writing delivered either in person or by registered mail to the Chairperson of the Board, the President, or the Secretary by any persons entitled to call a meeting of shareholders, which request must specify the purposes of the meeting and include the information that would be required to be set forth in a shareholder’s notice with respect to an annual meeting pursuant to Section 9(a) of these Regulations,such officer shall forthwith cause to be given to the shareholders entitled thereto notice of a meeting to be held on a date not less than ten nor more than 60 days after the receipt of such request, as such officer may fix. If such notice is not given within 30 days after the delivery or mailing of such request, the persons calling the meeting may fix the time of the meeting and give notice thereof in the manner provided by law or as provided in these Regulations, or cause such notice to be given by any designated representative.

Section 4.Notice of Meetings.

(a)Written notice of each meeting of the shareholders, whether annual or special, shall be given, either by personal delivery, mail, overnight delivery service, or any other means of communication authorized by the shareholder to whom the notice is given, not less than seven nor more than 60 days before the date of the meeting to every shareholder of record entitled to notice of the meeting, by or at the direction of the Chairperson of the Board, the President or the Secretary or any other person or persons required or permitted by these Regulations to give such notice. Each such notice shall state (i) the date and hour, (ii) the place of the meeting, (iii) the means, if any, other than by physical presence, by which shareholders can be present and vote at the meeting through the use of communications equipment, and (iv) the purpose or purposes for which the meeting is called.

(b)If mailed or sent by overnight delivery service, such notice shall be deemed given when deposited in the United States mail or with the overnight delivery service, as the case may be, postage or other shipping charges prepaid, and directed to the shareholder at such shareholder’s address as it appears on the records of the Corporation. If sent by another means of communication authorized by the shareholder, such notice shall be deemed to be given when sent to the address furnished by the shareholder for those transmissions.

(c)Notice of adjournment of a meeting of shareholders need not be given if the time and place to which it is adjourned, and the means, if any, other than by physical presence, by which shareholders can be present and vote at the meeting through the use of communications equipment are fixed and announced at the meeting.

(d)Any authorization by a shareholder to send notices given pursuant to these Regulations by any means other than in person or by mail or overnight delivery service is revocable by written notice to the Corporation either by personal delivery or by mail, overnight delivery service, or any other means of communication authorized by the Corporation. If sent by another means of communication authorized by the Corporation, the notice shall be sent to the address furnished by the Corporation for those transmissions. Any authorization by a shareholder to send notices given pursuant to these Regulations by any means other than in person or by mail or overnight delivery service will be deemed to have been revoked by the shareholder if (i) the Corporation has attempted to make delivery of two consecutive notices in accordance with that authorization, and (ii) the Secretary or an Assistant Secretary of the Corporation, or other person responsible for giving of notice, has received notice that, or otherwise believes that, delivery has not occurred. However, an inadvertent failure to treat the inability to deliver notice as a revocation will not invalidate any meeting of shareholders or other action.

Section 5.Quorum. Except as otherwise required by law or by the Articles of Incorporation, the presence of holders of shares entitled to exercise not less than a majority of the voting power of the Corporation at the meeting in person, by proxy, or by the use of communications equipment shall constitute a quorum for the transaction of business at any meeting of the shareholders; provided, however, that no action required by law, the Articles of Incorporation, or these Regulations to be authorized or taken by the holders of a designated proportion of the shares of any particular class or of each class of the Corporation may be authorized or taken by a lesser proportion.

Section 6.Proxies. Proxies may be used in conformity with Ohio law.

Section 7.Conduct of Meetings; Adjournments. Unless otherwise determined by the Board of Directors, meetings of shareholders shall be presided over by the Chairperson of the Board or, in the event a Chairperson of the Board has not been elected or is otherwise absent, by the President (or such other officer designated by the Board of Directors). The person presiding at a meeting of shareholders, or the holders of a majority of the voting shares represented at a meeting, may adjourn such meeting from time to time, whether or not a quorum is present. The Board of Directors may adopt such rules and regulations for the conduct of any meeting of shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations, the person presiding at the meeting shall have the authority to adopt and enforce such rules and regulations for the conduct of any meeting of shareholders and the safety of those in attendance as, in the judgment of such person, are necessary, appropriate or convenient for the conduct of the meeting. Rules and regulations for the conduct of meetings of shareholders, whether adopted by the Board of Directors or by the person presiding at the meeting, may include without limitation, establishing (i) an agenda or order of business for the meeting, (ii) rules and procedures for maintaining order at the meeting and the safety of those present, (iii) limitations on attendance at or participation in the meeting to shareholders entitled to vote at the meeting, their duly authorized and constituted proxies and such other persons as the person presiding at the meeting shall permit, (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof, (v) limitations on the time allotted for consideration of each agenda item and for questions and comments by participants, (vi) regulations for the opening and closing of the polls for balloting and matters which are to be voted on by ballot (if any), and (vii) procedures (if any) requiring attendees to provide the Corporation advance notice of their intent to attend the meeting.

Section 8.Submission of Information by Director Nominees.

(a)To be eligible to be a nominee for election or re-election as a director of the Corporation, a person must deliver to the Secretary of the Corporation at the principal executive offices of the Corporation the following information:

(1)a written representation and agreement, which shall be signed by such person and pursuant to which such person shall represent and agree that such person (A) consents to serving as a director if elected and (if applicable) to being named in the Corporation’s proxy statement and form of proxy as a nominee, and currently intends to serve as a director for the full term for which such person is standing for election, (B) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any

commitment or assurance to, any person or entity (i) as to how the person, if elected as a director, will act or vote on any issue or question that has not been disclosed to the Corporation, or (ii) that could limit or interfere with the person’s ability to comply, if elected as a director, with such person’s fiduciary duties under applicable law, (C) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director or nominee that has not been disclosed to the Corporation, and (D) if elected as a director, will comply with all of the Corporation’s corporate governance, conflict of interest, confidentiality, and stock ownership and trading policies and guidelines, and any other Corporation policies and guidelines applicable to directors (which will be provided to such person promptly following a request therefor); and

(2)all completed and signed questionnaires required of the Corporation’s directors (which will be provided to such person promptly following a request therefor).

(b)A nominee for election or re-election as a director of the Corporation shall also provide to the Corporation such other information as it may reasonably request. The Corporation may request such additional information as necessary to permit the Corporation to determine the eligibility of such person to serve as a director of the Corporation, including information relevant to a determination whether such person can be considered an independent director.

(c)All written and signed representations and agreements and all completed and signed questionnaires required pursuant to Section 8(a) above, and the additional information described in Section 8(b) above, shall be considered timely if provided to the Corporation by the deadlines specified in Section 9 or 10 below, as applicable. All information provided pursuant to this Section 8 shall be deemed part of the shareholder’s notice submitted pursuant to Section 9 or a Shareholder Notice submitted pursuant to Section 10, as applicable.

Section 9. Advance Notice of Shareholder Proposals and Nominations

(a)Annual Meeting

(1)At any annual meeting of shareholders, nominations of persons for election to the Board of Directors and proposals to be considered by the shareholders may be made at an annual meeting of shareholders only (A) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board of Directors, (C) by a shareholder of the Corporation who is a shareholder of record at the time the notice provided for in this Section 9(a) is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 9(a), or (D) by an Eligible Shareholder (as defined in Section 10(b)(2) below) whose Shareholder Nominee (as defined in Section 10(a) below) is included in the Corporation’s proxy materials for the relevant annual meeting of shareholders. For the avoidance of doubt, clauses (C) and (D) above shall be the exclusive means for a shareholder to make director nominations and clause (C) above shall be the exclusive means for a shareholder to bring proposals before an annual meeting of shareholders (other than a proposal included in the Corporation’s proxy statement pursuant to and in compliance with Rule 14a-8 (or any successor provision) under the Securities Exchange Act of 1934, as amended, or any successor thereto (the “1934 Act”)).

(2)For nominations or proposals to be properly brought before an annual meeting by a shareholder pursuant to clause (C) of the foregoing paragraph, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation and, in the case of a proposal, such proposal must be a proper subject of shareholder action under applicable law and the Articles of Incorporation of the Corporation. To be timely, notice of any nomination or proposal to be presented by any shareholder at an annual meeting pursuant to clause (C) of the foregoing paragraph shall be given in writing to the Secretary of the Corporation, delivered to or mailed and received at the Corporation’s principal executive offices, not later than the “Close of Business” (as defined in Section 9(c)(1) below) on the 90th day nor earlier than the Close of Business on the 120th day prior to the first anniversary of the preceding year’s annual shareholders’ meeting; provided, however, that in the event that the annual meeting is more than 30 days before or after the anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, the written notice of such shareholder’s intent to make such nomination or proposal must be given to the Secretary, delivered to or mailed and received at the Corporation’s principal executive offices, not earlier than the Close of Business on the 120th day prior to such annual meeting and not later than the Close of Business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which “Public Announcement” (as defined in Section 9(c)(1) below) of the date of such

meeting is first made by the Corporation. In no event shall an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a notice as described above.

(3)A shareholder notice shall set forth:

(A)as to each person whom the shareholder proposes to nominate for election or re-election as a director (i) the name, age, business and residence address of such person, (ii) the principal occupation or employment of such person for the last five years, (iii) the class or series and number of shares of capital stock of the Corporation which are owned of record or “Beneficially Owned” (as defined in Section 9(c)(2) below) by such person, (iv) all positions of such person as a director, officer, partner, employee or controlling shareholder of any corporation or other business entity, (v) any prior position as a director, officer or employee of a depository institution or any company controlling a depository institution, (vi) all other information regarding such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the 1934 Act, and (vii) all written and signed representations and agreements and all completed and signed questionnaires required pursuant to Section 8(a) above;

(B)as to any proposal, a brief description of the proposal desired to be brought before the meeting, the text of the proposal to be presented (including the text of any resolutions proposed for consideration and in the event the proposal seeks to amend these Regulations, the language of the proposed amendment), a brief written statement of the reasons why such shareholder favors the proposal and the reasons for considering the proposal at the meeting, and any substantial interest (within the meaning of Item 5 of Schedule 14A under the 1934 Act) in the proposal of such shareholder and the beneficial owner (within the meaning of Section 13(d) of the 1934 Act), if any, on whose behalf the proposal is being brought (other than as a shareholder or beneficial owner);

(C)as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the proposal or nomination is submitted (i) the name and address of such shareholder, as they appear on the Corporation’s books, and the name and address of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation that are owned of record by such shareholder and such beneficial owner as of the date of the notice, and a representation that the shareholder will notify the Corporation in writing within five business days after the record date for such meeting of the class or series and number of shares of capital stock of the Corporation owned of record by such shareholder and such beneficial owner as of the record date for the meeting, and (iii) a representation that the shareholder (or a “Qualified Representative” of the shareholder, as defined in Section 9(c)(3) below) intends to appear at the meeting to make such nomination or raise such proposal;

(D)as to the shareholder giving the notice, or, if the notice is given on behalf of a beneficial owner on whose behalf the proposal or nomination is made, as to such beneficial owner, and if such shareholder or beneficial owner is an entity, as to each director, executive, managing member or control person of such entity (any such individual or control person, a “Control Person”):

(i)the class or series and number of shares of capital stock of the Corporation that are Beneficially Owned by such shareholder or beneficial owner and by any Control Person as of the date of the notice, and a representation that the shareholder will notify the Corporation in writing within five business days after the record date for such meeting of the class or series and number of shares of capital stock of the Corporation Beneficially Owned by such shareholder or beneficial owner and by any Control Person as of the record date for the meeting;

(ii)a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such shareholder, beneficial owner or Control Person and any other person, including without limitation any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Schedule 13D under the 1934 Act (regardless of whether the requirement to file a Schedule 13D is applicable) and a representation that the shareholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting;

(iii)a description of any agreement, arrangement or understanding (including, without limitation, any derivative or short positions, profit interests, options, hedging transactions, and

borrowed or loaned shares) that has been entered into as of the date of the shareholder’s notice by, or on behalf of, such shareholder, beneficial owner or Control Person, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class of the Corporation’s capital stock, or maintain, increase or decrease the voting power of the shareholder, beneficial owner or Control Person with respect to securities of the Corporation, and a representation that the shareholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting; and

(iv)a representation whether the shareholder or the beneficial owner, if any, will engage in a solicitation (within the meaning of Rule 14a-1(l) under the 1934 Act) with respect to the nomination or proposal and, if so, the name of each participant (as defined in Item 4 of Schedule 14A under the 1934 Act) in such solicitation and whether such person intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to holders of shares representing at least 50% of the voting power of the shares of the Corporation entitled to vote generally in the election of directors, in the case of a nomination, or holders of at least the percentage of the Corporation’s stock required to approve or adopt a proposal.

(4)At the request of the Corporation, a nominee must promptly, but in any event within five business days after such request, provide to the Corporation such other information that the Corporation may reasonably request and that is necessary to permit the Corporation to determine the eligibility of such person to serve as a director of the Corporation, including information relevant to a determination whether such person can be considered an independent director. All information provided pursuant to this Section 9(a) shall be deemed part of a shareholder’s notice for purposes of this Section 9(a).

(b)Special Meeting

Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting by or at the direction of the Board of Directors. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors; or (ii) provided that one or more directors are to be elected at such meeting, by any shareholder of the Corporation who is a shareholder of record at the time the notice provided for in this Section 9(b) is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who delivers notice thereof in writing setting forth the information required by Section 9(a) above and provides the additional information required by Section 8 above; or (iii) in the case of a shareholder-requested special meeting, by any shareholder of the Corporation pursuant to Section 3 of this Article I. In the event the Corporation calls a special meeting of shareholders (other than a shareholder-requested special meeting) for the purpose of electing one or more directors to the Board of Directors, any shareholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the notice required by this Section 9(b) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the Close of Business on the 120th day prior to such special meeting and not later than the Close of Business on the later of the 90th day prior to such special meeting or the 10th day following the date on which Public Announcement of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting is first made by the Corporation. In no event shall an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. Notwithstanding any other provision of these Regulations, in the case of a shareholder-requested special meeting, no shareholder may nominate a person for election to the Board of Directors or propose any other business to be considered at the meeting, except pursuant to a request in writing delivered for such special meeting pursuant to Section 3 of this Article I.

(c)Definitions.

(1)For purposes of these Regulations, the “Close of Business” shall mean 6:00 p.m. local time at the principal executive offices of the Corporation on any calendar day, whether or not the day is a business day, and a “Public Announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the 1934 Act;

(2)For purposes of Sections 9(a)(3)(A) and 9(a)(3)(D)(i), shares of capital stock of the Corporation shall be treated as “Beneficially Owned” by a person if the person beneficially owns such shares,

directly or indirectly, for purposes of Section 13(d) of the 1934 Act and Regulations 13D and 13G thereunder or has or shares pursuant to any agreement, arrangement or understanding (whether or not in writing) (A) the right to acquire such shares (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both), (B) the right to vote such shares, alone or in concert with others, and/or (C) investment power with respect to such shares, including the power to dispose of, or to direct the disposition of, such shares; and

(3)For purposes of these Regulations, to be considered a “Qualified Representative” of a shareholder, a person must be a duly authorized officer, manager or partner of such shareholder or authorized by a writing signed by such shareholder (or an electronic or other transmission capable of authentication) delivered to the Corporation prior to the making of the nomination or the bringing of the proposal at the meeting stating that such person is authorized to act for such shareholder as proxy at the meeting of shareholders.

(d)General

(1)Except as otherwise required by law, only such persons who are nominated in accordance with the procedures set forth in this Section 9 and, if applicable, Section 10, shall be eligible to be elected at any meeting of shareholders of the Corporation to serve as directors and only such other proposals shall be considered at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 9. Except as otherwise required by law, each of the Chairperson of the Board, the Board of Directors and the person presiding at the meeting shall have the power to determine whether a nomination was made or a proposal was brought, as the case may be, in accordance with the procedures set forth in these Regulations. If any nomination or proposal is not in compliance with these Regulations, then, except as otherwise required by law, the person presiding at the meeting shall have the power to declare that such nomination shall be disregarded or that such proposal shall not be considered. Notwithstanding the foregoing provisions of this Section 9, unless otherwise required by law, or otherwise determined by the Chairperson of the Board, the Board of Directors or the person presiding at the meeting, if the shareholder does not provide the information required under Section 8, Section 9(a)(3)(C)(ii) or Section 9(a)(3)(D)(i)-(iii) to the Corporation within the time frames specified herein, or if the shareholder (or a Qualified Representative of the shareholder) does not appear at the annual or special meeting of shareholders of the Corporation to present a nomination or proposal, such nomination shall be disregarded and such proposal shall not considered, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

(2)Nothing in this Section 9 shall be deemed to affect any rights of the holders of any class or series of preferred stock of the Corporation to elect directors of the Corporation pursuant to any applicable provisions of the Articles of Incorporation and/or the express terms of the preferred stock of the Corporation.

Section 10.Proxy Access for Director Nominations.

(a)Eligibility

Subject to the terms and conditions of these Regulations, in connection with an annual meeting of shareholders at which directors are to be elected, the Corporation (i) shall include in its proxy statement and on its form of proxy the names of, and (ii) shall include in its proxy statement the “Additional Information” (as defined in Section 10(b)(4) below) relating to, a number of nominees specified pursuant to Section 10(b)(1) (the “Authorized Number”) for election as directors submitted pursuant to this Section 10 (each, a “Shareholder Nominee”), if:

(1)the Shareholder Nominee satisfies the eligibility requirements in this Section 10;

(2)the Shareholder Nominee is identified in a timely notice (the “Shareholder Notice”) that satisfies this Section 10 and is delivered by a shareholder that qualifies as, or is acting on behalf of, an Eligible Shareholder (as defined in Section 10(b)(2) below);

(3)the Eligible Shareholder satisfies the requirements in this Section 10 and expressly elects at the time of the delivery of the Shareholder Notice to have the Shareholder Nominee included in the Corporation’s proxy materials; and

(4)the additional requirements of these Regulations are met.

(b)Definitions

(1)The maximum number of Shareholder Nominees appearing in the Corporation’s proxy materials with respect to an annual meeting of shareholders (the “Authorized Number”) shall not exceed the greater of two, or 20% of the number of directors in office as of the last day on which a Shareholder Notice may be delivered pursuant to this Section 10 with respect to the annual meeting, or if such amount is not a whole number, the closest whole number (rounding down) below 20%; provided that the Authorized Number shall be reduced (A) by any Shareholder Nominee whose name was submitted for inclusion in the Corporation’s proxy materials pursuant to this Section 10 but whom the Board of Directors decides to nominate as a Board nominee, (B) by any nominees who were previously elected to the Board of Directors as Shareholder Nominees at any of the preceding two annual meetings and who are nominated for election at the annual meeting by the Board of Directors as a Board nominee, and (C) by any Shareholder Nominee who is not included in the Corporation’s proxy materials or is not submitted for director election for any reason, in accordance with the last sentence of Section 10(d)(2). In the event that one or more vacancies for any reason occurs after the date of the Shareholder Notice but before the annual meeting and the Board of Directors resolves to reduce the size of the entire authorized Board (as defined in Section 1 of Article II) in connection therewith, the Authorized Number shall be calculated based on the number of directors in office as so reduced.

(2)To qualify as an “Eligible Shareholder,” a shareholder or a group as described in this Section 10must:

(A)Own and have Owned (as defined in Section 10(b)(3) below), continuously for at least three years as of the date of the Shareholder Notice, a number of shares (as adjusted to account for any stock dividend, stock split, subdivision, combination, reclassification or recapitalization of shares of the Corporation that are entitled to vote generally in the election of directors) that represents at least 3% of the outstanding shares of the Corporation that are entitled to vote generally in the election of directors as of the date of the Shareholder Notice (the “Required Shares”); and

(B)thereafter continue to Own the Required Shares through such annual meeting of shareholders.

For purposes of satisfying the ownership requirements of this Section 10(b)(2), a group of not more than 20 shareholders and/or beneficial owners may aggregate the number of shares of the Corporation that are entitled to vote generally in the election of directors that each group member has individually Owned continuously for at least three years as of the date of the Shareholder Notice if all other requirements and obligations for an Eligible Shareholder set forth in this Section 10 are satisfied by and as to each shareholder or beneficial owner comprising the group whose shares are aggregated. No shares may be attributed to more than one Eligible Shareholder, and no shareholder or beneficial owner, alone or together with any of its affiliates, may individually or as a member of a group qualify as or constitute more than one Eligible Shareholder under this Section 10. A group of any two or more funds shall be treated as only one shareholder or beneficial owner for this purpose if they are under common management and investment control. For purposes of this Section 10, the term “affiliate” or “affiliates” shall have the meanings ascribed thereto under the rules and regulations promulgated under the 1934 Act.

(3)For purposes of this Section 10:

(A)A shareholder or beneficial owner is deemed to “Own” only those outstanding shares of the Corporation that are entitled to vote generally in the election of directors as to which the person possesses both (i) the full voting and investment rights pertaining to the shares, and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares, except that the number of shares calculated in accordance with clauses (i) and (ii) shall not include any shares (a) sold by such person in any transaction that has not been settled or closed, (b) borrowed by the person for any purposes or purchased by the person pursuant to an agreement to resell, or (c) subject to any option, warrant, forward contract, swap, contract of sale, or other derivative or similar agreement entered into by the person, whether the instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the Corporation that are entitled to vote generally in the election of directors, if the instrument or agreement has, or is intended to have, or if exercised would have, the purpose or effect of (x) reducing in any manner, to any extent or at any time in the future, the person’s full right to vote or direct the voting of the shares, and/or (y) hedging, offsetting or altering to any degree any gain or loss arising from the full economic ownership of the shares by the person. The terms

“Owned,” “Owning” and other variations of the word “Own,” when used with respect to a shareholder or beneficial owner, have correlative meanings. For purposes of clauses (a) through (c) the term “person” includes its affiliates.

(B)A shareholder or beneficial owner “Owns” outstanding shares of the Corporation entitled to vote generally in the election of directors that are held in the name of a nominee or other intermediary so long as the person retains both (i) the full voting and investment rights pertaining to the shares, and (ii) the full economic interest in the shares. The person’s Ownership of shares is deemed to continue during any period in which the person has delegated any voting power by means of a proxy, power of attorney, or other instrument or arrangement that is revocable at any time by the shareholder.

(C)A shareholder or beneficial owner’s Ownership of outstanding shares of the Corporation entitled to vote generally in the election of directors shall be deemed to continue during any period in which the person has loaned the shares if the person has the power to recall the loaned shares on not more than five business days’ notice and (i) the person recalls the loaned shares within five business days of the record date for the relevant annual meeting, and (ii) the person holds the recalled shares through the annual meeting.

(4)For purposes of this Section 10, the “Additional Information” referred to in Section 10(a) that the Corporation will include in its proxy statement is:

(A)the information set forth in the Schedule 14N provided with the Shareholder Noticeconcerning each Shareholder Nominee and the Eligible Shareholder that is required to be disclosed in the Corporation’s proxy statement by the applicable requirements of the 1934 Act, and the rules and regulations thereunder; and

(B)if the Eligible Shareholder so elects, a written statement of the Eligible Shareholder (or, in the case of a group, a written statement of the group), not to exceed 500 words, in support of its Shareholder Nominee(s) (the “Statement”), which must be provided at the same time as the Shareholder Notice for inclusion in the Corporation’s proxy statement for the annual meeting.

(5)Notwithstanding anything to the contrary contained in this Section 10, the Corporation may omit from its proxy materials any information or Statement that it, in good faith, believes is untrue in any material respect (or omits a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading) or would violate any applicable law, rule, regulation or listing standard. Nothing in this Section 10 shall limit the Corporation’s ability to solicit against and include in its proxy materials its own statements relating to any Eligible Shareholder or Shareholder Nominee.

(c)Shareholder Notice and Other Informational Requirements

(1)The Shareholder Notice shall set forth all information, representations and agreements required under Section 8(a) above, including the information required with respect to any nominee for election as a director (and including all written and signed representations and agreements and all completed and signed questionnaires required pursuant to Section 8(a)), any shareholder giving notice of an intent to nominate a candidate for election, and any shareholder, beneficial owner or other person on whose behalf the nomination is made under this Section 10. In addition, such Shareholder Notice shall include:

(A)a copy of the Schedule 14N that has been or concurrently is filed with the Securities and Exchange Commission under the 1934 Act;

(B)a written statement of the Eligible Shareholder (and in the case of a group, the written statement of each shareholder or beneficial owner whose shares are aggregated for purposes of constituting an Eligible Shareholder), which statement(s) shall also be included in the Schedule 14N filed with the SEC (i) setting forth and certifying to the number of shares of the Corporation that are entitled to vote generally in the election of directors the Eligible Shareholder Owns and has Owned (as defined in Section 10(b)(3) of these Regulations) continuously for at least three years as of the date of the Shareholder Notice, (ii) agreeing to continue to Own such shares through the annual meeting, and (iii) regarding whether or not it intends to maintain Ownership of the Required Shares for at least one year following the annual meeting;

(C)the written agreement of the Eligible Shareholder (and in the case of a group, the written agreement of each shareholder or beneficial owner whose shares are aggregated for purposes of

constituting an Eligible Shareholder) addressed to the Corporation, setting forth the following additional agreements, representations and warranties:

(i)it shall provide (a) within five business days after the date of the Shareholder Notice, one or more written statements from the record holder(s) of the Required Shares and from each intermediary through which the Required Shares are or have been held, in each case during the requisite three-year holding period, specifying the number of shares that the Eligible Shareholder Owns, and has Owned continuously in compliance with this Section 10, (b) within five business days after the record date for the annual meeting the information required under Section 9(a)(3)(C)(ii) and Section 9(a)(3)(D)(i)-(iii) above and written statements from the record holder(s) and intermediaries as required under clause (i)(a) of this paragraph verifying the Eligible Shareholder’s continuous Ownership of the Required Shares, in each case, as of the record date, and (c) immediate notice to the Corporation if the Eligible Shareholder ceases to own any of the Required Shares prior to the annual meeting;

(ii)it (a) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control at the Corporation, and does not presently have this intent, (b) has not nominated and shall not nominate for election to the Board of Directors at the annual meeting any person other than the Shareholder Nominee(s) being nominated pursuant to this Section 10, (c) has not engaged and shall not engage in, and has not been and shall not be a participant (as defined in Item 4 of Schedule 14A under the 1934 Act) in, a solicitation (within the meaning of Rule 14a-1(l) under the 1934 Act), in support of the election of any individual as a director at the annual meeting other than its Shareholder Nominee(s) or any nominee(s) of the Board of Directors, and (d) shall not distribute to any shareholder any form of proxy for the annual meeting other than the form distributed by the Corporation; and

(iii)it will (a) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Shareholder’s communications with the shareholders of the Corporation or out of the information that the Eligible Shareholder provided to the Corporation, (b) indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of the nomination or solicitation process pursuant to this Section 10, (c) comply with all laws, rules, regulations and listing standards applicable to its nomination or any solicitation in connection with the annual meeting, (d) file with the Securities and Exchange Commission any solicitation or other communication by or on behalf of the Eligible Shareholder relating to the Corporation’s annual meeting of shareholders, one or more of the Corporation’s directors or director nominees or any Shareholder Nominee, regardless of whether the filing is required under Regulation 14A under the 1934 Act, or whether any exemption from filing is available for the materials under Regulation 14A under the 1934 Act, and (e) at the request of the Corporation, promptly, but in any event within five business days after such request (or by the day prior to the day of the annual meeting, if earlier), provide to the Corporation such additional information as reasonably requested by the Corporation; and

(iv)in the case of a nomination by a group, the designation by all group members of one group member that is authorized to act on behalf of all members of the group with respect to the nomination and matters related thereto, including withdrawal of the nomination, and the written agreement, representation and warranty of the Eligible Shareholder that it shall provide, within five business days after the date of the Shareholder Notice, documentation reasonably satisfactory to the Corporation demonstrating that the number of shareholders and/or beneficial owners within such group does not exceed 20, including whether a group of funds qualifies as one shareholder or beneficial owner within the meaning of Section 10(b)(2).

(2)To be timely under this Section 10, the Shareholder Notice must be delivered by a shareholder to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the Close of Business on the 120^th day nor earlier than the Close of Business on the 150th day prior to the first anniversary of the date (as stated in the Corporation’s proxy materials) the definitive proxy statement was first released to shareholders in connection with the preceding year’s annual meeting of shareholders; provided, however, that in the event the annual meeting is more than 30 days before or after the anniversary of the previous year’s annual meeting, or if no annual meeting was held in the preceding year, to be timely, the Shareholder Notice must be so delivered not earlier than the Close of Business on the 150th day prior to such annual meeting and not later than the Close of Business on the later of the 120thday prior to such annual meeting or the 10th day following the day on which Public Announcement of the date of such meeting is first made by the Corporation. In no event

shall an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of the Shareholder Notice as described above.

(3)At the request of the Corporation, the Shareholder Nominee must promptly, but in any event within five business days after such request, provide to the Corporation such other information that the Corporation may reasonably request and that is necessary to permit the Corporation to determine if the Shareholder Nominee satisfies the requirements of this Section 10, including information relevant to a determination whether the Shareholder Nominee can be considered an independent director.

(4)In the event that any information or communications provided by the Eligible Shareholder or any Shareholder Nominees to the Corporation or its shareholders is not, when provided, or thereafter ceases to be, true, correct and complete in all material respects (including omitting a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading), such Eligible Shareholder or Shareholder Nominee, as the case may be, shall promptly notify the Secretary and provide the information that is required to make such information or communication true, correct, complete and not misleading; it being understood that providing any such notification shall not be deemed to cure any defect or limit the Corporation’s right to omit a Shareholder Nominee from its proxy materials as provided in this Section 10.

(5)All information provided pursuant to this Section 10(c) shall be deemed part of the Shareholder Notice for purposes of this Section 10.

(d)Proxy Access Procedures

(1)Notwithstanding anything to the contrary contained in this Section 10, the Corporation may omit from its proxy materials any Shareholder Nominee, and such nomination shall be disregarded and no vote on such Shareholder Nominee shall occur, notwithstanding that proxies in respect of such vote may have been received by the Corporation, if:

(A)the Eligible Shareholder or Shareholder Nominee breaches any of its agreements, representations or warranties set forth in the Shareholder Notice or otherwise submitted pursuant to this Section 10, any of the information in the Shareholder Notice or otherwise submitted pursuant to this Section 10 was not, when provided, true, correct and complete, or the Eligible Shareholder or applicable Shareholder Nominee otherwise fails to comply with its obligations pursuant to these Regulations, including, but not limited to, its obligations under this Section 10;

(B)the Shareholder Nominee (i) is not independent under any applicable listing standards, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Corporation’s directors, (ii) is or has been, within the past three years, an officer or director of a competitor, as defined for the purposes of Section 8 of the Clayton Antitrust Act of 1914, as amended, (iii) is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in a criminal proceeding (excluding traffic violations and other minor offenses) within the past ten years or (iv) is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended;

(C)the Corporation has received a notice (whether or not subsequently withdrawn) that a shareholder intends to nominate any candidate for election to the Board of Directors pursuant to the advance notice requirements for shareholder nominees for director in Section 9(a) of this Article I; or

(D)the election of the Shareholder Nominee to the Board of Directors would cause the Corporation to violate the Articles of Incorporation of the Corporation, these Regulations, or any applicable law, rule, regulation or listing standard.

(2)An Eligible Shareholder submitting more than one Shareholder Nominee for inclusion in the Corporation’s proxy materials pursuant to this Section 10 shall rank such Shareholder Nominees based on the order that the Eligible Shareholder desires such Shareholder Nominees to be selected for inclusion in the Corporation’s proxy materials and include such assigned rank in its Shareholder Notice submitted to the Corporation. In the event that the number of Shareholder Nominees submitted by Eligible Shareholders pursuant to

this Section 10 exceeds the Authorized Number, the Shareholder Nominees to be included in the Corporation’s proxy materials shall be determined in accordance with the following provisions: one Shareholder Nominee who satisfies the eligibility requirements in this Section 10 shall be selected from each Eligible Shareholder for inclusion in the Corporation’s proxy materials until the Authorized Number is reached, going in order of the amount (largest to smallest) of shares of the Corporation each Eligible Shareholder disclosed as Owned in its Shareholder Notice submitted to the Corporation and going in the order of the rank (highest to lowest) assigned to each Shareholder Nominee by such Eligible Shareholder. If the Authorized Number is not reached after one Shareholder Nominee who satisfies the eligibility requirements in this Section 10 has been selected from each Eligible Shareholder, this selection process shall continue as many times as necessary, following the same order each time, until the Authorized Number is reached. Following such determination, if any Shareholder Nominee who satisfies the eligibility requirements in this Section 10 thereafter is nominated by the Board of Directors, thereafter is not included in the Corporation’s proxy materials or thereafter is not submitted for director election for any reason (including the Eligible Shareholder’s or Shareholder Nominee’s failure to comply with this Section 10), no other nominee or nominees shall be included in the Corporation’s proxy materials or otherwise submitted for election as a director at the applicable annual meeting in substitution for such Shareholder Nominee.

(3)Any Shareholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of shareholders but either (A) withdraws from or becomes ineligible or unavailable for election at the annual meeting for any reason, including for the failure to comply with any provision of these Regulations (provided that in no event shall any such withdrawal, ineligibility or unavailability commence a new time period (or extend any time period) for the giving of a Shareholder Notice), or (B) does not receive a number of votes cast in favor of his or her election that is at least equal to 25% of the shares present in person or represented by proxy and entitled to vote in the election of directors shall be ineligible to be a Shareholder Nominee pursuant to this Section 10 for the next two annual meetings.

(4)Notwithstanding the foregoing provisions of this Section 10, unless otherwise required by law or otherwise determined by the person presiding at the annual meeting or the Board of Directors, if the shareholder delivering the Shareholder Notice (or a Qualified Representative of the shareholder) does not appear at the annual meeting of shareholders of the Corporation to present its Shareholder Nominee or Shareholder Nominees, such nomination or nominations shall be disregarded, notwithstanding that proxies in respect of the election of the Shareholder Nominee or Shareholder Nominees may have been received by the Corporation. Without limiting the Board of Directors’ power and authority to interpret any other provisions of these Regulations, the Board of Directors (and any other person or body authorized by the Board of Directors) shall have the power and authority to interpret this Section 10 and to make any and all determinations necessary or advisable to apply this Section 10 to any persons, facts or circumstances, in each case acting in good faith. This Section 10 shall be the exclusive method for shareholders to include nominees for director election in the Corporation’s proxy materials.

Section 11.Participation in Meeting by Means of Communications Equipment. The Board of Directors may authorize shareholders and proxyholders who are not physically present at a meeting of shareholders to participate by use of communications equipment that permits the shareholder or proxyholder the opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting and to speak or otherwise participate in the proceedings contemporaneously with those physically present. Any shareholder using communications equipment will be deemed present in person at the meeting. The Board of Directors may adopt guidelines and procedures for the use of communications equipment in connection with a meeting of shareholders to permit the Corporation to verify that a person is a shareholder or proxyholder and to maintain a record of any vote or other action.

ARTICLE II

BOARD OF DIRECTORS

Section 1.Number and Terms of Office. At each annual meeting of shareholders all directors shall be elected for terms expiring at the next annual meeting of shareholders. In each instance directors shall hold office until their successors are chosen and qualified, or until the earlier death, retirement, resignation, or removal of any such director as provided in Section 10 of this Article II. The Board of Directors or the shareholders may from time to time fix or change the size of the Board of Directors to a total number of no fewer than 12 and no more than 17 directors (the size of the Board as from time to time so established being herein referred to as the “entire authorized Board”). The Board of Directors may, subject to the limitation contained in the immediately preceding

sentence regarding the number ofdirectors, fix or change the number of directors by the affirmative vote of a majority of the entire authorized Board. The shareholders may, subject to the limitation contained in the third sentence of this paragraph regarding the number of directors, fix or change the number of directors at a meeting of the shareholders called for the purpose of electing directors at which a quorum is present, by the affirmative vote of the majority of the shares that are represented at the meeting and entitled to vote on the proposal. No reduction in the number of directors shall of itself have the effect of shortening the term of any incumbent director. In the event that the Board of Directors increases the number of directors, it may fill the vacancy or vacancies created by the increase in the number of directors for the respective unexpired terms in accordance with the provisions of Section 11 of this Article II. In the event the shareholders increase the number of directors and fail to fill the vacancy or vacancies created thereby, the Board of Directors may fill such vacancy or vacancies for the respective unexpired terms in accordance with the provisions of Section 11 of this Article II.

The number of directors may not be fixed or changed by the shareholders or directors, except (i) by amending these regulations in accordance with provisions of Article X of these Regulations, (ii) pursuant to an agreement of merger or consolidation approved by two-thirds of the members of the entire authorized Board of Directors and adopted by the shareholders at a meeting held for such purpose by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation on such proposal, or (iii) as provided in the immediately preceding paragraph of this Section 1 or in the next following paragraph.

The foregoing provisions of this Section 1 are subject to the automatic increase by two in the authorized number of directors and the right of the holders of any class or series of preferred stock of the Corporation to elect two directors of the Corporation during any time when dividends payable on such shares are in arrears, all as set forth in the Articles of Incorporation and/or the express terms of the preferred stock of the Corporation.

Section 2.Quorum, Adjournments, and Manner of Acting. Except as otherwise required by law, the Articles of Incorporation of the Corporation, or these Regulations, a majority of the entire authorized Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board. Except as otherwise required by law, the Articles of Incorporation of the Corporation, or these Regulations, the affirmative vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board. In the absence of a quorum, a majority of the directors present at a meeting duly held may adjourn the meeting to another time and place. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the originally called meeting.

Notwithstanding any contrary provisions of these Regulations, the affirmative vote of at least two-thirds of the entire authorized Board of Directors shall be required for the approval or recommendation of any of the following transactions: (a) any merger or consolidation of the Corporation (i) with any interested shareholder, as such term is defined in Chapter 1704 of the Ohio General Corporation Law, or (ii) with any other corporation (which term, as used in this paragraph, includes, in addition to a corporation, a limited liability company, partnership, business trust or other entity) if the merger or consolidation is caused by any interested shareholder, (b) any transaction as a result of which any person or entity will become an interested shareholder, (c) any merger or consolidation involving the Corporation with or into any other corporation if such other corporation, taken on a consolidated basis with its “parent”, if any, and its and its parent’s “subsidiaries” (as both terms are defined by Rule 12b-2 under the 1934 Act), has assets having an aggregate book value equal to 50% or more of the aggregate book value of all the assets of the Corporation determined on a consolidated basis, (d) any liquidation or dissolution of the Corporation, (e) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in one transaction or a series of transactions) to or with an interested shareholder of assets of the Corporation which assets have an aggregate book value equal to 10% or more of the aggregate book value of all the assets of the Corporation determined on a consolidated basis, (f) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in one transaction or a series of transactions) to or with any person or entity of assets of the Corporation which assets have an aggregate book value equal to 25% or more of the aggregate book value of all the assets of the Corporation determined on a consolidated basis, (g) any transaction which results in the issuance or transfer by the Corporation to any person or entity of voting stock of the Corporation in an amount greater than 15% of the outstanding voting stock of the Corporation before giving effect to the issuance or transfer, (h) any transaction involving the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock or securities of any class or series of the Corporation which is owned by an interested shareholder, and (i) any transaction which results in the receipt by an interested shareholder, other than proportionately as a shareholder of the Corporation, of the benefit, directly or indirectly, of any loans, advances, guarantees, pledges, or other financial benefits provided through the Corporation.

Section 3.Place of Meeting. The Board of Directors may hold its meetings at such place or places, if any, within or without the State of Ohio as the Board may from time to time determine or as shall be specified or fixed in the respective notice or waivers of notices thereof.

Section 4.Regular Meetings. Regular meetings of the Board of Directors shall be held at such places, if any, and times as the Board shall from time to time determine.

Section 5.Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the Chairperson of the Board or the President or by a majority of the directors then in office.

Section 6.Notice of Meetings.

a.Notice of regular meetings of the Board of Directors or of any adjourned meeting thereof need not be given.

b.Notice of each special meeting of the Board shall be given to each director personally or by telephone, not later than the day before the meeting is to be held, or sent by telegraph, telex, facsimile, or other means of communication authorized by such director for this purpose, at least 2 days before the day on which the meeting is to be held. Notice need not be given to any director who shall, either before or after the meeting, submit a waiver of such notice, signed or otherwise authenticated by such director, or who shall attend such meeting without protesting prior to or at its commencement, the lack of notice to such director. Every notice shall state the time, place, if any, and means by which directors may participate in the meeting through the use of communications equipment, but need not state the purpose of the meeting.

Section 7.Participation in Meeting by Means of Communications Equipment. Any one or more members of the Board of Directors or any committee thereof may participate in any meeting of the Board or of any such committee through the use of communications equipment to the extent allowed by Ohio law.

Section 8.Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by, all the directors or all the committee members, which writing or writings shall be filed with or entered upon the records of the Corporation. A telegram, cablegram, electronic mail, or an electronic or other transmission capable of authentication that appears to have been sent by a director or committee member is a signed writing for purposes of this Section 8. The date on which that telegram, cablegram, electronic mail, or an electronic or other transmission is sent is the date on which the writing shall be deemed to have been signed.

Section 9.Resignations. Any director of the Corporation may resign at any time by oral statement to that effect made at a meeting of the Board of Directors or any committee thereof or by giving written notice to the Board of Directors, the Chairperson of the Board, the President, or the Secretary of the Corporation. Such resignation shall take effect at the date of receipt of such notice or at any later date specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 10.Removal of Directors.

a.The Board of Directors may remove any director and thereby create a vacancy on the Board: (i) if by order of court the director has been found to be of unsound mind or if the director is adjudicated a bankrupt or (ii) if within 60 days from the date of such director’s election the director does not qualify by accepting (either in writing or by any other means of communication authorized by the Corporation) the election to such office or by acting at a meeting of directors.

b.All the directors, or any individual director, may be only removed from office by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation entitled to elect directors in place of those to be removed. In case of any such removal, a new director nominated in accordance with these Regulations may be elected at the same meeting for the unexpired term of each director removed. Failure to elect a director to fill the unexpired term of any director removed shall be deemed to create a vacancy on the Board.

Section 11.Vacancies. Any vacancies on the Board of Directors resulting from death, resignation, removal, or other cause may be filled by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director. Newly created directorships resulting from any increase in the number of directors by action of the Board of Directors may be filled by the affirmative vote of a majority of the directors then in office, or if not so filled, by the shareholders at the next annual meeting thereof or at a special meeting called for that purpose in accordance with Section 3 of Article 1 of these Regulations. In the event the shareholders increase the authorized number of directors in accordance with these Regulations but fail at the meeting at which such increase is authorized, or an adjournment of that meeting, to elect the additional directors provided for, or if the shareholders fail at any meeting to elect the whole authorized number of directors, such vacancies may be filled by the affirmative vote of a majority of the directors then in office. Any director elected in accordance with the three preceding sentences of this Section 11 shall hold office for the remainder of the full term for which the new directorship was created or the vacancy occurred or until such director’s successor shall have been elected and qualified. The provisions of this Section 11 shall not restrict the rights of holders of any class or series of preferred stock of the Corporation to fill vacancies in directors elected by such holders as provided by the express terms of the preferred stock.

ARTICLE III

EXECUTIVE AND OTHER COMMITTEES

Section 1.Executive Committee. The Board of Directors may, by resolution adopted by the affirmative vote of a majority of the entire authorized Board, designate annually (i) four or more of its members to constitute members of an Executive Committee of the Board of Directors of the Corporation (the “Executive Committee”) and (ii) one or more of its members to be alternate members of the Executive Committee to take the place of any absent member or members at any meeting of the Executive Committee. The Executive Committee shall have and may exercise, between meetings of the Board, all the powers and authority of the Board in the management of the business and affairs of the Corporation, including, without limitation, the power and authority to declare a dividend and to authorize the issuance of stock, and may authorize the seal of the Corporation to be affixed to all papers which may require it, except that the Executive Committee shall not have such power or authority in reference to filling vacancies on the Board or on any committee of the Board, including the Executive Committee.

The Board shall have power at any time by the affirmative vote of a majority of the entire authorized Board to change the membership of the Executive Committee, to fill all vacancies in it, and to discharge it, either with or without cause.

Section 2.Other Committees. The Board of Directors may, by resolution adopted by the affirmative vote of a majority of the entire authorized Board, designate from among its members one or more other committees, each of which shall (i) consist of not less than three directors, together with such alternates as the Board of Directors may appoint to take the place of any absent member or members at any meeting of such committee, and (ii) except as otherwise prescribed by law, have such authority of the Board as may be specified in the resolution of the Board designating such committee. The Board shall have power at any time, by the affirmative vote of a majority of the entire authorized Board, to change the membership of, to fill all vacancies in, and to discharge any such committee, either with or without cause.

Section 3.Procedure, Meetings, and Quorum.

a.Regular meetings of the Executive Committee or any other committee of the Board of Directors, of which no notice shall be necessary, may be held at such times and places, if any, as may be fixed by a majority of the members thereof. Special meetings of the Executive Committee or any other committee of the Board shall be called at the request of the Chairperson of the Board or the President or the Chairperson of any committee. Notice of each special meeting of the Executive Committee or any other committee of the Board shall be given in the same manner required for notices of special meetings of the Board of Directors as provided in Section 6 of Article II. Any special meeting of the Executive Committee or any other committee of the Board shall be a legal meeting without any notice thereof having been given, if all the members thereof shall be present thereat. Notice of any adjourned meeting of any committee of the Board need not be given. The Executive Committee or any other committee of the Board may adopt such rules and regulations not inconsistent with the provisions of law, the Articles of Incorporation of the Corporation, or these Regulations for the conduct of its meetings as the Executive Committee or any other committee of the Board may deem proper.

b.A majority of the members of the Executive Committee or any other committee of the Board shall constitute a quorum for the transaction of business at any meeting, and the vote of a majority of the members thereof present at any meeting at which a quorum is present shall be the act of such committee. The Executive Committee or any other committee of the Board of Directors shall keep written minutes of its proceedings and shall report on such proceedings to the Board.

ARTICLE IV

OFFICERS

Section 1.Election and Term of Office. The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, and such other officers (including, without limitation, if so desired by the Board of Directors, a Chairperson of the Board, a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer, and one or more Vice Presidents) and assistant officers, all with such titles, authorities, and duties as the Board of Directors may from time to time determine. The officers shall be elected by the Board of Directors. The Chairperson of the Board, if one is elected, shall be a director. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law, the Articles of Incorporation of the Corporation, or these Regulations to be executed, acknowledged, or verified by two or more officers. Unless the directors expressly elect an officer for a longer or shorter term, each officer shall hold office until the next annual organization meeting of the directors following election of the officer (or, if neither such officer nor a successor is elected at such annual organization meeting, until such officer or such officer’s successor is elected) or until the earlier resignation, removal from office, or death of the officer.

Section 2.Authority and Duties of Officers. The officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, or as may be determined by the Board of Directors, regardless of whether such authority and duties are customarily incident to such offices. Unless otherwise determined by the Board of Directors, the Chairperson of the Board, if any, shall preside at all meetings of the Board of Directors and at all meetings of the shareholders. In the event a Chairperson of the Board has not been elected or is otherwise absent, the President (or such other officer designated by the Board of Directors) shall preside at such meetings.

Section 3.Removal. Any officer may at any time be removed, either with or without cause, by the Board of Directors or any authorized committee thereof or by any superior officer upon whom such power may be conferred by the Board or any authorized committee thereof; provided however, that the removal of the most senior (in authority) officer of the Corporation shall require the affirmative vote of at least a majority of the entire authorized Board. The removal of any officer shall be without prejudice to the contract rights, if any, of such officer.

Section 4.Resignation. Any officer may resign at any time by giving notice to the Board of Directors, the Chairperson of the Board, the President, or the Secretary of the Corporation. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 5.Vacancies. A vacancy in any office because of death, retirement, resignation, removal, or any other cause may be filled by the Board of Directors.

ARTICLE V

INDEMNIFICATION

The Corporation shall indemnify, to the full extent permitted or authorized by the Ohio General Corporation Law as it may from time to time be amended, any person made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she is or was a director, officer, or employee of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, or employee of a bank, other corporation, partnership, joint venture, trust, or other enterprise. In the case of a merger into this Corporation of a constituent corporation which, if its separate existence had continued, would have been required to indemnify directors, officers, or employees in specified situations prior to the merger, any person who served as a director, officer, or employee of the constituent corporation, or served at the request of the constituent corporation as a director, trustee, officer, or employee of a bank, other corporation, partnership, joint venture, trust, or other enterprise, shall be entitled to indemnification by

this Corporation (as the surviving corporation) for acts, omissions, or other events or occurrences prior to the merger to the same extent he or she would have been entitled to indemnification by the constituent corporation if its separate existence had continued. The indemnification provided by this Article V shall not be deemed exclusive of any other rights to which any person seeking indemnification may be entitled under the Articles of Incorporation of the Corporation or these Regulations, or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, or employee and shall inure to the benefit of the heirs, executors, and administrators of such a person.

ARTICLE VI

CAPITAL STOCK

Section 1.Certificates for Shares. Certificates representing shares of stock of each class of the Corporation, whenever authorized by the Board of Directors, shall be in such form as shall be approved by the Board or by the Chairperson of the Board or President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by the Chairperson of the Board or the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Corporation. Any or all such signatures may be facsimiles, engraved, stamped, or printed if countersigned by an incorporated transfer agent or registrar. Although any officer, transfer agent or registrar whose manual or facsimile signature is affixed to such a certificate ceases to be such officer, transfer agent, or registrar before such certificate has been delivered, such certificate nevertheless shall be effective in all respects when delivered. The Corporation may issue shares of any class of its capital stock without issuing certificates therefore.

Section 2.Transfer of Shares. Transfers of shares of stock of each class of the Corporation shall be made only on the books of the Corporation by the holder thereof, or by such holder’s attorney thereunto authorized by a power of attorney duly executed and filed with the Secretary of the Corporation or a transfer agent for such stock, if any, and on surrender of the certificate or certificates for such shares properly endorsed or accompanied by a duly executed stock transfer power and the payment of all taxes thereon. The person in whose name shares stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. No transfer of shares shall be valid as against the Corporation and its shareholders and creditors for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred

Section 3.Lost, Destroyed, and Mutilated Certificates. The holder of any share of stock of the Corporation shall immediately notify the Corporation of any loss, theft, destruction, or mutilation of the certificate therefore; the Corporation may issue to such holder a new certificate or certificates for shares, upon the surrender of the mutilated certificate or, in the case of loss, theft, or destruction of the certificate, upon satisfactory proof of such loss, theft, or destruction; the Corporation, or the transfer agents and registrars for the stock, may, in their discretion, require the owner of the lost, stolen, or destroyed certificate, or such person’s legal representative, to provide the Corporation a bond in such sum and with such surety or sureties as they may direct to indemnify the Corporation and such transfer agents and registrars against any claim that may be made on account of the alleged loss, theft, or destruction of any such certificate or the issuance of such new certificate.

Section 4.Regulations. The Board of Directors may make such additional rules and regulations as it may deem expedient concerning the issue and transfer of certificates representing shares of stock of each class of the Corporation and may make such rules and take such action as it may deem expedient concerning the issue of certificates in lieu of certificates claimed to have been lost, destroyed, stolen, or mutilated.

ARTICLE VII

RECORD DATES

For any lawful purpose, including the determination of the shareholders who are entitled to receive notice of or to vote at a meeting of the shareholders, the Board of Directors may fix a record date in accordance with the provisions of the Ohio General Corporation Law. The record date for the purpose of the determination of the shareholders who are entitled to receive notice of or to vote at a meeting of the shareholders shall continue to be the record date for all adjournments of the meeting unless the Board of Directors or the persons who shall have fixed the original record date shall, subject to the limitations set forth in the Ohio General Corporation Law, fix

another date and shall cause notice thereof and of the date to which the meeting shall have been adjourned to be given to shareholders of record as of the newly fixed date in accordance with the same requirements as those applying to a meeting newly called. The Board of Directors may close the share transfer books against transfers of shares during the whole or any part of the period provided for in this Article VII, including the date of the meeting of the shareholders and the period ending with the date, if any, to which adjourned. If no record date is fixed therefor, the record date for determining the shareholders who are entitled to receive notice of a meeting of the shareholders shall be the date next preceding the day on which notice is given, and the record date for determining the shareholders who are entitled to vote at a meeting of shareholders shall be the date next preceding the day on which the meeting is held.

ARTICLE VIII

CORPORATE SEAL

The corporate seal of this Corporation shall be circular in form and shall contain the name of the Corporation. Failure to affix the seal to any instrument or document executed on behalf of the Corporation shall not affect the validity of such instrument or document unless otherwise expressly provided by law.

ARTICLE IX

OFFICES

The headquarters and principal executive offices of the Corporation shall be located in the City of Cleveland, County of Cuyahoga, State of Ohio. The Corporation may also have such other office or offices, and keep the books and records of the Corporation, except as may otherwise be required by law, at such other place or places, either within or without the State of Ohio, as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE X

AMENDMENTS

These Regulations may only be amended, repealed, or altered or new regulations may only be adopted (i) at a meeting of shareholders, by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation on such proposal, (ii) without a meeting, by the written consent of the holders of shares entitling them to exercise 100% of the voting power of the Corporation on such proposal, or (iii) by the Board of Directors (to the extent permitted by the Ohio General Corporation Law).

It is the intent that these Regulations be enforced to the maximum extent permitted by law. If in any judicial proceeding, a court shall refuse to enforce any provision of these Regulations for the reason that such provision (or portion thereof) is deemed to be unenforceable or invalid under applicable law, then it is the intent that such otherwise unenforceable or invalid provision (or portion thereof) be enforced and valid to the maximum extent permitted by applicable law. The invalidity or unenforceability of any provision (or portion thereof) of these Regulations shall not invalidate or render unenforceable any other provision (or the balance of the otherwise enforceable or valid provision) of these Regulations, as each provision (and portion thereof) is intended to be severable.

EX-15

EXHIBIT 15

ACKNOWLEDGMENT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

August 1, 2019

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. 333-218629        

Form S-8 No. 333-49609        

Form S-8 No. 333-70669                                

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

Form S-8 No. 333-231689

of our review report dated August 1, 2019 relating to the unaudited consolidated interim financial statements of KeyCorp that are included in its Form 10-Q for the quarter ended June 30, 2019.

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: August 1, 2019
	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: August 1, 2019
	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 June 30, 2019 (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: August 1, 2019
	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 June 30, 2019 (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: August 1, 2019
	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

Cover Page - shares	6 Months Ended
	Jun. 30, 2019	Jul. 29, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Entity File Number	001-11302
Entity Registrant Name	KEYCORP /NEW/
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-6542451
Entity Address, Address Line One	127 Public Square,
Entity Address, City or Town	Cleveland,
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44114-1306
City Area Code	216
Local Phone Number	689-3000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,003,258,801
Amendment Flag	false
Entity Central Index Key	0000091576
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Document Quarterly Report	true
Document Transition Report	false
Common Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Shares, $1 par value
Trading Symbol	KEY
Security Exchange Name	NYSE
Series E Preferred Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Perpetual Non-Cumulative Preferred Stock, Series E)
Trading Symbol	KEY PrI
Security Exchange Name	NYSE
Series F Preferred Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Cumulative Preferred Stock, Series F)
Trading Symbol	KEY PrJ
Security Exchange Name	NYSE
Series G Preferred Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Cumulative Preferred Stock, Series G)
Trading Symbol	KEY PrK
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets - USD ($) $ in Millions		Jun. 30, 2019	Dec. 31, 2018
ASSETS
Cash and due from banks		$ 607	$ 678
Short-term investments		2,443	2,562
Trading account assets		1,005	849
Securities available for sale		21,528	19,428
Held-to-maturity securities (fair value: $10,899 and $11,122)		10,878	11,519
Other investments		632	666
Loans, net of unearned income of $309 and $678		91,937	89,552
Less: Allowance for loan and lease losses		(890)	(883)
Net loans		91,047	88,669
Loans held for sale	[1]	1,790	1,227
Premises and equipment		829	882
Goodwill		2,664	2,516
Other intangible assets		298	316
Corporate-owned life insurance		4,201	4,171
Accrued income and other assets		5,633	5,030
Discontinued assets		990	1,100
Total assets		144,545	139,613
Deposits in domestic offices:
NOW and money market deposit accounts		63,619	59,918
Savings deposits		4,747	4,854
Certificates of deposit ($100,000 or more)		8,084	7,913
Other time deposits		5,524	5,332
Total interest-bearing deposits		81,974	78,017
Noninterest-bearing deposits		27,972	29,292
Total deposits		109,946	107,309
Federal funds purchased and securities sold under repurchase agreements		161	319
Bank notes and other short-term borrowings		720	544
Accrued expense and other liabilities		2,435	2,113
Long-term debt		14,312	13,732
Total liabilities		127,574	124,017
EQUITY
Preferred stock		1,900	1,450
Common Shares, $1 par value; authorized 2,100,000,000 and 1,400,000,000 shares; issued 1,256,702,081 and 1,256,702,081 shares		1,257	1,257
Capital surplus		6,266	6,331
Retained earnings		12,005	11,556
Treasury stock, at cost (253,587,973 and 237,198,944 shares)		(4,457)	(4,181)
Accumulated other comprehensive income (loss)		(2)	(818)
Key shareholders’ equity		16,969	15,595
Noncontrolling interests		2	1
Total equity		16,971	15,596
Total liabilities and equity		$ 144,545	$ 139,613

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $164 million at June 30, 2019, and $54 million at December 31, 2018.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Held-to-maturity securities, fair value	$ 10,899,000,000	$ 11,122,000,000
Unearned income on loans	309,000,000	678,000,000
Loans held for sale		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)	2,100,000,000	1,400,000,000
Common shares, shares issued (in shares)	1,256,702,081	1,256,702,081
Treasury stock, shares (in shares)	253,587,973	237,198,944
Residential Mortgage [Member]
Loans held for sale	$ 164,000,000	$ 54,000,000

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
INTEREST INCOME
Loans		$ 1,082	$ 1,000	$ 2,148	$ 1,940
Loans held for sale		15	16	28	28
Securities available for sale		135	97	264	192
Held-to-maturity securities		67	72	135	141
Trading account assets		9	7	17	14
Short-term investments		17	8	33	16
Other investments		4	5	8	11
Total interest income		1,329	1,205	2,633	2,342
INTEREST EXPENSE
Deposits		223	112	425	203
Federal funds purchased and securities sold under repurchase agreements		0	5	1	9
Bank notes and other short-term borrowings		5	7	9	13
Long-term debt		120	102	240	194
Total interest expense		348	226	675	419
NET INTEREST INCOME		981	979	1,958	1,923
Provision for credit losses		74	64	136	125
Net interest income after provision for credit losses		907	915	1,822	1,798
NONINTEREST INCOME
Trust and investment services income		122	128	237	261
Investment banking and debt placement fees		163	155	273	298
Service charges on deposit accounts		83	91	165	180
Operating lease income and other leasing gains		44	(6)	81	26
Corporate services income		53	61	108	123
Cards and payments income		73	71	139	133
Corporate-owned life insurance income		33	32	65	64
Consumer mortgage income		10	7	18	14
Mortgage servicing fees		24	22	45	42
Other income	[1]	17	99	27	120
Total noninterest income		622	660	1,158	1,261
NONINTEREST EXPENSE
Personnel		589	586	1,152	1,180
Net occupancy		73	79	145	157
Computer processing		56	51	110	103
Business services and professional fees		45	51	89	92
Equipment		24	26	48	52
Operating lease expense		32	30	58	57
Marketing		24	26	43	51
FDIC assessment		9	21	16	42
Intangible asset amortization		22	25	44	54
OREO expense, net		4	0	7	2
Other expense		141	98	270	209
Total noninterest expense		1,019	993	1,982	1,999
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		510	582	998	1,060
Income taxes		87	103	169	165
INCOME (LOSS) FROM CONTINUING OPERATIONS		423	479	829	895
Income (loss) from discontinued operations		2	3	3	5
NET INCOME (LOSS)		425	482	832	900
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY		425	482	832	900
Income (loss) from continuing operations attributable to Key common shareholders		403	464	789	866
Net income (loss) attributable to Key common shareholders		$ 405	$ 467	$ 792	$ 871
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.40	$ 0.44	$ 0.79	$ 0.82
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0	0
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.40	0.44	0.79	0.82
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		0.40	0.44	0.78	0.81
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0	0
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.40	0.44	0.78	0.81
Cash dividends declared per common share (in usd per share)		$ 0.17	$ 0.120	$ 0.340	$ 0.225
Weighted-average common shares outstanding (000) (in shares)		999,163	1,052,652	1,003,047	1,054,378
Effect of common share options and other stock awards (in shares)		8,801	13,141	9,318	14,561
Weighted-average common shares and potential common shares outstanding (in shares)	[3]	1,007,964	1,065,793	1,012,365	1,068,939

[1] For the three and six months ended June 30, 2019, and June 30, 2018, net securities gains totaled less than $1 million. For the three and six months ended June 30, 2019, and June 30, 2018, 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.

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Consolidated Statements of Income (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Net securities gains (less than $1 million))	$ 1,000,000	$ 1,000,000	$ 1,000,000	$ 1,000,000
Impaired losses related to securities	$ 0	$ 0	$ 0	$ 0

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 425	$ 482	$ 832	$ 900
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of $91, ($20), $147, and ($67)	291	(66)	475	(216)
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of $68, ($4), $99 and ($24)	219	(17)	318	(80)
Foreign currency translation adjustments, net of income taxes of $1, $3, $1 and $3	1	(14)	4	(16)
Net pension and postretirement benefit costs, net of income taxes of $5, $1, $6 and $2	17	3	19	6
Total other comprehensive income (loss), net of tax	528	(94)	816	(306)
Comprehensive income (loss)	953	388	1,648	594
Less: Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income (loss) attributable to Key	$ 953	$ 388	$ 1,648	$ 594

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Income taxes effect on net unrealized (losses) gains on securities available for sale	$ 91	$ (20)	$ 147	$ (67)
Income taxes effect on net unrealized gains (losses) on derivative financial instruments	68	(4)	99	(24)
Income taxes effect on foreign currency translation adjustments	1	3	1	3
Income taxes effect on net pension and postretirement benefit costs	$ 5	$ 1	$ 6	$ 2

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Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Series D Preferred Stock [Member]	Series E Preferred Stock [Member]	Series F Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Retained Earnings [Member] Series D Preferred Stock [Member]	Retained Earnings [Member] Series E Preferred Stock [Member]	Retained Earnings [Member] Series F Preferred Stock [Member]	Treasury Stock, at Cost [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interests [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance					$ 1,025	$ 1,257	$ 6,335	$ 10,335				$ (3,150)	$ (779)	$ 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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance					$ 1,025	$ 1,257	6,315	10,970				(3,382)	(1,085)	2
Other amounts reclassified from AOCI, net of income taxes	$ (5)							5
Net income (loss)	900							900						0
Other comprehensive income (loss)	(306)												(306)
Deferred compensation							12
Cash dividends declared on common shares								(239)
Cash dividends declared on preferred stock									$ (13)	$ (16)
Open market common share repurchases (in shares)						(13,438,000)
Open market Common Share repurchases												(279)
Employee equity compensation program Common Share repurchases (in shares)						(2,221,000)
Employee equity compensation program Common Share repurchases												(46)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						5,519,000
Common Shares reissued (returned) for stock options and other employee benefit plans							(32)					93
Ending Balance, Preferred Shares (in shares) at Jun. 30, 2018					521,000
Ending Balance, Common Shares (in shares) at Jun. 30, 2018						1,058,944,000
Ending 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]
Beginning Balance					$ 1,025	$ 1,257	6,289	10,624				(3,260)	(991)	2
Beginning Balance, Preferred Shares (in shares) at Mar. 31, 2018					521,000
Beginning Balance, Common Shares (in shares) at Mar. 31, 2018						1,064,939,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance					$ 1,025	$ 1,257	6,315	10,970				(3,382)	(1,085)	2
Other amounts reclassified from AOCI, net of income taxes	(5)							5
Net income (loss)	482							482						0
Other comprehensive income (loss)	(94)												(94)
Deferred compensation							6
Cash dividends declared on common shares								(127)
Cash dividends declared on preferred stock									(6)	(8)
Open market common share repurchases (in shares)						(6,105,000)
Open market Common Share repurchases												(123)
Employee equity compensation program Common Share repurchases (in shares)						(155,000)
Employee equity compensation program Common Share repurchases												(3)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						265,000
Common Shares reissued (returned) for stock options and other employee benefit plans							20					4
Ending Balance, Preferred Shares (in shares) at Jun. 30, 2018					521,000
Ending Balance, Common Shares (in shares) at Jun. 30, 2018						1,058,944,000
Ending 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]
Beginning Balance					1,025	1,257	6,315	10,970				(3,382)	(1,085)	2
Beginning Balance	15,596				$ 1,450	$ 1,257	6,331	11,556				(4,181)	(818)	1
Beginning Balance, Preferred Shares (in shares) at Dec. 31, 2018					946,000
Beginning Balance, Common Shares (in shares) at Dec. 31, 2018						1,019,503,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	16,971				$ 1,900	$ 1,257	6,266	12,005				(4,457)	(2)	2
Net income (loss)	832							832						0
Other comprehensive income (loss)	816												816
Deferred compensation							1
Cash dividends declared on common shares								(343)
Cash dividends declared on preferred stock									(13)	(15)	$ (12)
Issuance of Preferred Stock (in shares)					450,000
Shares issued					$ 450		(15)
Open market common share repurchases (in shares)						(20,325,000)
Open market Common Share repurchases												(346)
Employee equity compensation program Common Share repurchases (in shares)						(1,878,000)
Employee equity compensation program Common Share repurchases							(3)					(33)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						5,814,000
Common Shares reissued (returned) for stock options and other employee benefit plans							(48)					103
Net contribution from (distribution to) noncontrolling interests														1
Ending Balance, Preferred Shares (in shares) at Jun. 30, 2019		21,000	500,000	425,000	1,396,000
Ending Balance, Common Shares (in shares) at Jun. 30, 2019						1,003,114,000
Ending Balance at Jun. 30, 2019	16,971				$ 1,900	$ 1,257	6,266	12,005				(4,457)	(2)	2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance					$ 1,450	$ 1,257	6,259	11,771				(4,283)	(530)	2
Beginning Balance, Preferred Shares (in shares) at Mar. 31, 2019					946,000
Beginning Balance, Common Shares (in shares) at Mar. 31, 2019						1,013,186,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	16,971				$ 1,900	$ 1,257	6,266	12,005				(4,457)	(2)	2
Net income (loss)	425							425						0
Other comprehensive income (loss)	528												528
Deferred compensation							4
Cash dividends declared on common shares								(171)
Cash dividends declared on preferred stock									$ (7)	$ (7)	$ (6)
Issuance of Preferred Stock (in shares)					450,000
Shares issued					$ 450		(15)
Open market common share repurchases (in shares)						(10,357,000)
Open market Common Share repurchases												(179)
Employee equity compensation program Common Share repurchases (in shares)						(55,000)
Employee equity compensation program Common Share repurchases							(1)					(1)
Common shares reissued (returned) for stock options and other employee benefit plans, shares						340,000
Common Shares reissued (returned) for stock options and other employee benefit plans							19					6
Net contribution from (distribution to) noncontrolling interests														0
Ending Balance, Preferred Shares (in shares) at Jun. 30, 2019		21,000	500,000	425,000	1,396,000
Ending Balance, Common Shares (in shares) at Jun. 30, 2019						1,003,114,000
Ending Balance at Jun. 30, 2019	16,971				$ 1,900	$ 1,257	6,266	12,005				(4,457)	(2)	2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 16,971				$ 1,900	$ 1,257	$ 6,266	$ 12,005				$ (4,457)	$ (2)	$ 2

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Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Cash dividends declared on common shares (in usd per share)	$ 0.17	$ 0.120	$ 0.340	$ 0.225
Series D Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	12.50	12.50	25	25
Series E Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	0.382813	$ 0.382813	0.765626	$ 0.765626
Series F Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	$ 0.353125		$ 0.70625

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
OPERATING ACTIVITIES
Net income (loss)	$ 832	$ 900
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	136	125
Depreciation and amortization expense, net	121	195
Accretion of acquired loans	28	22
Increase in cash surrender value of corporate-owned life insurance	(57)	(56)
Stock-based compensation expense	48	53
FDIC reimbursement (payments), net of FDIC expense	1	2
Deferred income taxes (benefit)	68	17
Proceeds from sales of loans held for sale	4,445	5,703
Originations of loans held for sale, net of repayments	(4,890)	(5,944)
Net losses (gains) on sales of loans held for sale	(70)	(89)
Net losses (gains) and writedown on OREO	4	2
Net losses (gains) on leased equipment	(11)	(37)
Net losses (gains) on sales of fixed assets	11	4
Net decrease (increase) in trading account assets	(155)	3
Gain on sale of KIBS	0	(78)
Other operating activities, net	209	(414)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	720	408
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	(185)	0
Proceeds from sale of KIBS	0	119
Net decrease (increase) in short-term investments, excluding acquisitions	119	1,801
Purchases of securities available for sale	(2,940)	(1,167)
Proceeds from prepayments and maturities of securities available for sale	1,457	1,640
Proceeds from prepayments and maturities of held-to-maturity securities	652	797
Purchases of held-to-maturity securities	(9)	(1,242)
Purchases of other investments	(30)	(6)
Proceeds from sales of other investments	28	22
Proceeds from prepayments and maturities of other investments	36	2
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(2,747)	(2,044)
Proceeds from sales of portfolio loans	146	99
Proceeds from corporate-owned life insurance	27	41
Purchases of premises, equipment, and software	(38)	(36)
Proceeds from sales of premises and equipment	1	1
Proceeds from sales of OREO	10	14
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(3,473)	41
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	2,637	(687)
Net increase (decrease) in short-term borrowings	18	1,295
Net proceeds from issuance of long-term debt	1,351	1,758
Payments on long-term debt	(1,002)	(2,123)
Issuance of preferred shares	435	0
Open market Common Share repurchases	(346)	(279)
Employee equity compensation program Common Share repurchases	(33)	(46)
Net proceeds from reissuance of Common Shares	5	14
Cash dividends paid	(383)	(268)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,682	(336)
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	(71)	113
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	678	671
CASH AND DUE FROM BANKS AT END OF PERIOD	607	784
Additional disclosures relative to cash flows:
Interest paid	619	389
Income taxes paid (refunded)	(43)	14
Noncash items:
Reduction of secured borrowing and related collateral	2	15
Loans transferred to portfolio from held for sale	5	21
Loans transferred to held for sale from portfolio	52	3
Loans transferred to OREO	16	9
CMBS risk retentions	$ 9	$ 0

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Basis of Presentation and Accounting Policies

6 Months Ended

Jun. 30, 2019

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 10 (“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 2018 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 2019

Standard	Date of 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 ASU 2018-20, Leases (Topic 842): Narrow Scope Improvements for Lessors ASU 2019-01, Codification Improvements to Topic 842	January 1, 2019	The ASUs create and amend ASC Topic 842, Leases, and supersede Topic 840, Leases. The new guidance 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, both types of leases are required to be recognized on the balance sheet. ASC 842 requires enhanced disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. Qualitative and quantitative disclosures are required to provide additional information about the amounts recorded in the financial statements. Although substantially unchanged, certain amendments provide clarifications related to lessor accounting. The guidance should be implemented 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.	Key adopted this guidance on January 1, 2019, using the package of practical expedients, which allowed Key to maintain historic lease identification and classification, and permitted Key not to reassess initial direct costs under the new guidance. Key also elected the practical expedient on not separating lease components from nonlease components for all of its leases. Adoption resulted in an increase in right-of-use assets and associated lease liabilities arising from operating leases in which Key is the lessee of approximately $710 million on our Consolidated Balance Sheets at January 1, 2019. Right of use assets, lease liabilities, and other changes as a result of adoption are not reflected in comparable periods presented prior to that date. The adoption of this guidance did not have a material impact on the recognition of operating lease expense in our Consolidated Statements of Income. The amount of the right-of-use assets and associated lease liabilities recorded at adoption was based on the present value of unpaid future minimum lease payments. These payments were discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. For more information, please see Note 9 (“Leases”).
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	January 1, 2019	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 did not have a material effect on our financial condition or results of operations.
ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting	January 1, 2019	The ASU amends ASC Topic 718, Stock Compensation, and simplifies the accounting for share based payments granted to nonemployees for goods and services. The guidance should be implemented on a modified retrospective basis using a cumulative-effect adjustment.	The adoption of this guidance did not affect our financial condition or results of operations.
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only); January 1, 2019, remaining requirements 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 removed the disclosures no longer required by the guidance as of September 30, 2018, and early adopted the additional provisions of the standard in the first quarter of 2019. The adoption of this standard did not result in significant changes to Key’s disclosures, and there was no effect to our financial condition or results of operations.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract	January 1, 2019 Early adoption.	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 early adopted this guidance effective January 1, 2019, on a prospective basis. The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2019-04, Codification Improvements to Topic 815, Derivatives and Hedging (ASU Topic #3), and Topic 825, Financial Instruments (ASU Topic #4)	May 1, 2019 Early adoption upon issuance	The ASU provides technical corrections to previously adopted ASUs 2016-01 and 2017-12 and clarifies issues related to partial-term fair value hedges, fair value hedge basis adjustments, and how to measure changes in fair value of a hedged item. It also clarifies certain issues related to equity securities and the measurement alternative. Amendments related to ASU 2016-01 should be adopted using a modified retrospective approach, except for those related to equity securities without readily determinable fair values for which the measurement alternative is elected, that should be applied prospectively. Amendments related to ASU 2017-12 can be applied on either a prospective or retrospective basis, with certain exceptions.	Key early adopted this guidance effective May 1, 2019. The adoption of this accounting guidance did not effect our financial condition or results of operations.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2019

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 June 30,				Six months ended June 30,
dollars in millions, except per share amounts	2019		2018		2019		2018
EARNINGS
Income (loss) from continuing operations	$	423	$	479	$	829	$	895
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	423		479		829		895
Less: Dividends on Preferred Stock	20		15		40		29
Income (loss) from continuing operations attributable to Key common shareholders	403		464		789		866
Income (loss) from discontinued operations, net of taxes	2		3		3		5
Net income (loss) attributable to Key common shareholders	$	405	$	467	$	792	$	871
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	999,163		1,052,652		1,003,047		1,054,378
Effect of Common Share options and other stock awards	8,801		13,141		9,318		14,561
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	1,007,964		1,065,793		1,012,365		1,068,939
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.40	$	.44	$	.79	$	.82
Income (loss) from discontinued operations, net of taxes	—		—		—		—
Net income (loss) attributable to Key common shareholders (b)	.40		.44		.79		.82
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.40	$	.44	$	.78	$	.81
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		—		—
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.40		.44		.78		.81

(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

6 Months Ended

Jun. 30, 2019

Loans Receivables [Abstract]

Loan Portfolio

3. Loan Portfolio

in millions	June 30, 2019		December 31, 2018
Commercial and industrial (a)	$	48,544	$	45,753
Commercial real estate:
Commercial mortgage	13,299		14,285
Construction	1,439		1,666
Total commercial real estate loans	14,738		15,951
Commercial lease financing (b)	4,578		4,606
Total commercial loans	67,860		66,310
Residential — prime loans:
Real estate — residential mortgage	6,053		5,513
Home equity loans	10,575		11,142
Total residential — prime loans	16,628		16,655
Consumer direct loans	2,350		1,809
Credit cards	1,096		1,144
Consumer indirect loans	4,003		3,634
Total consumer loans	24,077		23,242
Total loans (c)	$	91,937	$	89,552

(a) Loan balances include $143 million and $132 million of commercial credit card balances at June 30, 2019, and December 31, 2018, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $11 million and $10 million at June 30, 2019, and December 31, 2018, 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 19 (“Long-Term Debt”) beginning on page 160 of our 2018 Form 10-K.

(c)

Total loans exclude loans of $964 million at June 30, 2019, and $1.1 billion at December 31, 2018, related to the discontinued operations of the education lending business.

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Asset Quality

6 Months Ended

Jun. 30, 2019

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. Additional information pertaining to loan grading and scoring is included in Note 5 (“Asset Quality”) on page 165 of our 2018 Form 10-K.

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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Pass	$	46,773	$	44,138	$	12,756	$	13,672	$	1,379	$	1,537	$	4,535	$	4,557	$	65,443	$	63,904
Criticized (Accruing)	1,529		1,402		303		354		57		125		36		41		1,925		1,922
Criticized (Nonaccruing)	189		152		85		81		2		2		7		8		283		243
Total	$	48,491	$	45,692	$	13,144	$	14,107	$	1,438	$	1,664	$	4,578	$	4,606	$	67,651	$	66,069

(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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
750 and above	$	10,040	$	9,794	$	827	$	549	$	499	$	521	$	1,849	$	1,647	$	13,215	$	12,511
660 to 749	4,681		4,906		822		700		481		507		1,440		1,320		7,424		7,433
Less than 660	1,341		1,411		219		224		116		116		573		565		2,249		2,316
No Score	260		213		479		333		—		—		141		102		880		648
Total	$	16,322	$	16,324	$	2,347	$	1,806	$	1,096	$	1,144	$	4,003	$	3,634	$	23,768	$	22,908

(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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,	December 31,	June 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019	2018	2019		2018
Pass	$	32	$	37	$	111	$	125	$	1	$	2	—	—	$	144	$	164
Criticized	21		24		44		53		—		—		—	—	65		77
Total	$	53	$	61	$	155	$	178	$	1	$	2	—	—	$	209	$	241

(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	June 30,		December 31,		June 30,		December 31,		June 30,	December 31,	June 30,	December 31,	June 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019	2018	2019	2018	2019		2018
750 and above	$	119	$	137	1		—		—	—	—	—	$	120	$	137
660 to 749	103		95		$	1	$	1	—	—	—	—	104		96
Less than 660	78		97		1		2		—	—	—	—	79		99
No Score	6		2		—		—		—	—	—	—	6		2
Total	$	306	$	331	$	3	$	3	—	—	—	—	$	309	$	334

(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 100 of our 2018 Form 10-K.

The following aging analysis of past due and current loans as of June 30, 2019, and December 31, 2018, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio ^(a) 

June 30, 2019	Current		30-59 Days Past Due (b)		60-89 Days Past Due (b)		90 and Greater Days Past Due (b)		Non-performing Loans		Total Past Due and Non-performing Loans		Purchased Credit Impaired		Total Loans (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	48,136	$	116	$	20	$	30	$	189	$	355	$	53	$	48,544
Commercial real estate:
Commercial mortgage	13,029		17		3		10		85		115		155		13,299
Construction	1,416		20		—		—		2		22		1		1,439
Total commercial real estate loans	14,445		37		3		10		87		137		156		14,738
Commercial lease financing	4,547		13		3		8		7		31		—		4,578
Total commercial loans	$	67,128	$	166	$	26	$	48	$	283	$	523	$	209	$	67,860
Real estate — residential mortgage	$	5,686	$	11	$	2	$	1	$	62	$	76	$	291	$	6,053
Home equity loans	10,329		27		8		5		191		231		15		10,575
Consumer direct loans	2,322		10		5		7		3		25		3		2,350
Credit cards	1,073		6		4		11		2		23		—		1,096
Consumer indirect loans	3,947		28		6		2		20		56		—		4,003
Total consumer loans	$	23,357	$	82	$	25	$	26	$	278	$	411	$	309	$	24,077
Total loans	$	90,485	$	248	$	51	$	74	$	561	$	934	$	518	$	91,937

(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, 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	$	45,375	$	89	$	31	$	45	$	152	$	317	61		$	45,753
Commercial real estate:
Commercial mortgage	13,957		27		17		25		81		150		178		14,285
Construction	1,646		—		13		3		2		18		2		1,666
Total commercial real estate loans	15,603		27		30		28		83		168		180		15,951
Commercial lease financing	4,580		12		1		4		9		26		—		4,606
Total commercial loans	$	65,558	$	128	$	62	$	77	$	244	$	511	241		$	66,310
Real estate — residential mortgage	$	5,119	$	11	$	3	$	4	$	62	$	80	$	314	$	5,513
Home equity loans	10,862		31		12		10		210		263		17		11,142
Consumer direct loans	1,780		11		5		6		4		26		3		1,809
Credit cards	1,119		6		5		12		2		25		—		1,144
Consumer indirect loans	3,573		31		7		3		20		61		—		3,634
Total consumer loans	$	22,453	$	90	$	32	$	35	$	298	$	455	$	334	$	23,242
Total loans	$	88,011	$	218	$	94	$	112	$	542	$	966	$	575	$	89,552

(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 June 30, 2019, the approximate carrying amount of our commercial nonperforming loans outstanding represented 79% of their original contractual amount owed, total nonperforming loans outstanding represented 82% of their original contractual amount owed, and nonperforming assets in total were carried at 87% of their original contractual amount owed.

Nonperforming loans and loans held for sale reduced expected interest income by $9 million and $17 million for the three and six months ended June 30, 2019, respectively, and $7 million and $14 million for the three and six months ended June 30, 2018, respectively.

The following tables set forth a further breakdown of individually impaired loans as of June 30, 2019, and December 31, 2018: 

	June 30, 2019						December 31, 2018
	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	$	118	$	151	—		$	118	$	175	—
Commercial real estate:
Commercial mortgage	61		73		—		64		70		—
Total commercial real estate loans	61		73		—		64		70		—
Total commercial loans	179		224		—		182		245		—
Real estate — residential mortgage	4		6		—		4		5		—
Home equity loans	47		53		—		49		56		—
Consumer direct loans	—		1		—		1		1		—
Consumer indirect loans	2		4		—		2		4		—
Total consumer loans	53		64		—		56		66		—
Total loans with no related allowance recorded	232		288		—		238		311		—
With an allowance recorded:
Commercial and industrial	65		83		$	10	44		47		$	5
Commercial real estate:
Commercial mortgage	3		3		1		2		3		1
Total commercial real estate loans	3		3		1		2		3		1
Total commercial loans	68		86		11		46		50		6
Real estate — residential mortgage	44		68		3		45		70		3
Home equity loans	81		87		9		78		85		8
Consumer direct loans	4		4		—		3		3		—
Credit cards	3		3		—		3		3		—
Consumer indirect loans	33		34		3		34		34		2
Total consumer loans	165		196		15		163		195		13
Total loans with an allowance recorded	233		282		26		209		245		19
Total	$	465	$	570	$	26	$	447	$	556	$	19

(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 June 30,				Six Months Ended June 30,
in millions	2019		2018		2019		2018
Commercial and industrial	$	176	$	178	$	172	$	161
Commercial real estate:
Commercial mortgage	63		16		65		16
Total commercial real estate loans	63		16		65		16
Total commercial loans	239		194		237		177
Real estate — residential mortgage	48		49		49		49
Home equity loans	128		124		127		121
Consumer direct loans	4		4		4		4
Credit cards	2		3		3		3
Consumer indirect loans	36		35		36		34
Total consumer loans	218		215		219		211
Total	$	457	$	409	$	456	$	388

(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 $3 million and $6 million for the three and six months ended June 30, 2019, respectively, and $3 million and $5 million for the three and six months ended June 30, 2018, 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. Additional information pertaining to TDRs is included in Note 5 (“Asset Quality”) on page 117 of our 2018 Form 10-K.

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 were $5 million and $5 million at June 30, 2019, and December 31, 2018, respectively.

At June 30, 2019, and December 31, 2018, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $96 million and $113 million, respectively. At June 30, 2019, and December 31, 2018, we had $38 million and $35 million, respectively, of OREO which included the carrying value of foreclosed residential real estate of approximately $38 million and $35 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 June 30,				Six Months Ended June 30,
in millions	2019		2018		2019		2018
Commercial loans:
Forgiveness of principal	$	—	5		$	—	5
Extension of Maturity Date	6		$	14	$	6	$	15
Payment or Covenant Modification/Deferment	18		20		18		20
Bankruptcy Plan Modification	11		7		11		7
Total	35		$	46	$	35	$	47
Consumer loans:
Interest rate reduction	$	4	$	8	$	8	$	18
Other	9		10		16		21
Total	$	13	$	18	$	24	$	39
Total commercial and consumer TDRs	$	48	$	64	$	59	$	86

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 June 30,						Six Months Ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of the period	$	365		$	317		$	399		$	317
Additions	54			54			68			75
Payments	(19		)	(22		)	(58		)	(41		)
Charge-offs	(5		)	(2		)	(14		)	(4		)
Balance at end of period	$	395		$	347		$	395		$	347

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

	June 30, 2019					December 31, 2018
	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	57	$	111	$	88	35	$	121	$	85
Commercial real estate:
Commercial mortgage	8	67		61		6	66		62
Total commercial real estate loans	8	67		61		6	66		62
Total commercial loans	65	178		149		41	187		147
Real estate — residential mortgage	297	21		19		281	21		20
Home equity loans	801	49		45		1,142	66		63
Consumer direct loans	129	1		1		171	2		1
Credit cards	251	1		1		330	2		2
Consumer indirect loans	968	16		13		1,098	18		14
Total consumer loans	2,446	88		79		3,022	109		100
Total nonperforming TDRs	2,511	266		228		3,063	296		247
Prior-year accruing:(a)
Commercial and industrial	10	34		28		11	37		32
Commercial real estate
Commercial mortgage	1	—		—		2	—		—
Total commercial real estate loans	1	—		—		2	—		—
Total commercial loans	11	34		28		13	37		32
Real estate — residential mortgage	467	35		29		491	36		30
Home equity loans	1,716	100		83		1,403	82		64
Consumer direct loans	138	5		3		79	4		3
Credit cards	600	3		2		479	3		1
Consumer indirect loans	766	36		22		556	33		22
Total consumer loans	3,687	179		139		3,008	158		120
Total prior-year accruing TDRs	3,698	213		167		3,021	195		152
Total TDRs	6,209	$	479	$	395	6,084	$	491	$	399

(a) All TDRs that were restructured prior to January 1, 2019, and January 1, 2018, 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 June 30, 2019, there were no commercial loan TDRs and 102 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the three months ended June 30, 2018, there were no commercial loan TDRs and 55 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2017.

During the six months ended June 30, 2019, there were no commercial loan TDRs and 174 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the six months ended June 30, 2018, there were no commercial loan TDRs and 96 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2017.

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 101 of our 2018 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.

The ALLL at June 30, 2019, 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 June 30, 2019:

in millions	March 31, 2019		Provision				Charge-offs			Recoveries		June 30, 2019
Commercial and Industrial	$	530	$	43			$	(30	)	$	6	$	549
Commercial real estate:
Real estate — commercial mortgage	144		(5		)		(1		)	1		139
Real estate — construction	28		(4		)		—			—		24
Total commercial real estate loans	172		(9		)		(1		)	1		163
Commercial lease financing	35		14				(16		)	2		35
Total commercial loans	737		48				(47		)	9		747
Real estate — residential mortgage	8		—				(1		)	—		7
Home equity loans	36		4				(6		)	2		36
Consumer direct loans	33		7				(10		)	2		32
Credit cards	47		7				(12		)	2		44
Consumer indirect loans	22		6				(8		)	4		24
Total consumer loans	146		24				(37		)	10		143
Total ALLL — continuing operations	883		72			(a)	(84		)	19		890
Discontinued operations	13		2				(4		)	1		12
Total ALLL — including discontinued operations	$	896	$	74			$	(88	)	$	20	$	902

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

Three months ended June 30, 2018:

in millions	March 31, 2018		Provision				Charge-offs			Recoveries		June 30, 2018
Commercial and Industrial	$	533	$	41			$	(39	)	$	7	$	542
Commercial real estate:
Real estate — commercial mortgage	136		4				(2		)	1		139
Real estate — construction	33		(5		)		—			—		28
Total commercial real estate loans	169		(1		)		(2		)	1		167
Commercial lease financing	40		4				(4		)	—		40
Total commercial loans	742		44				(45		)	8		749
Real estate — residential mortgage	9		1				—			—		10
Home equity loans	38		2				(6		)	3		37
Consumer direct loans	27		6				(9		)	2		26
Credit cards	45		11				(12		)	2		46
Consumer indirect loans	20		2				(7		)	4		19
Total consumer loans	139		22				(34		)	11		138
Total ALLL — continuing operations	881		66			(a)	(79		)	19		887
Discontinued operations	16		—				(3		)	1		14
Total ALLL — including discontinued operations	$	897	$	66			$	(82	)	$	20	$	901

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

Six months ended June 30, 2019:

in millions	December 31, 2018		Provision				Charge-offs			Recoveries		June 30, 2019
Commercial and Industrial	532		$	67			$	(66	)	$	16	$	549
Commercial real estate:
Real estate — commercial mortgage	142		1				(6		)	2		139
Real estate — construction	33		(5		)		(4		)	—		24
Total commercial real estate loans	175		(4		)		(10		)	2		163
Commercial lease financing	36		20				(24		)	3		35
Total commercial loans	743		83				(100		)	21		747
Real estate — residential mortgage	7		1				(2		)	1		7
Home equity loans	35		7				(10		)	4		36
Consumer direct loans	30		19				(20		)	3		32
Credit cards	48		15				(23		)	4		44
Consumer indirect loans	20		11				(16		)	9		24
Total consumer loans	140		53				(71		)	21		143
Total ALLL — continuing operations	883		136			(a)	(171		)	42		890
Discontinued operations	14		4				(8		)	2		12
Total ALLL — including discontinued operations	$	897	$	140			$	(179	)	$	44	$	902

Six months ended June 30, 2018:

in millions	December 31, 2017		Provision				Charge-offs			Recoveries		June 30, 2018
Commercial and Industrial	$	529	$	76			$	(76	)	$	13	$	542
Commercial real estate:
Real estate — commercial mortgage	133		8				(3		)	1		139
Real estate — construction	30		(3		)		—			1		28
Total commercial real estate loans	163		5				(3		)	2		167
Commercial lease financing	43		1				(5		)	1		40
Total commercial loans	735		82				(84		)	16		749
Real estate — residential mortgage	7		4				(1		)	—		10
Home equity loans	43		(2		)		(10		)	6		37
Consumer direct loans	28		11				(17		)	4		26
Credit cards	44		23				(24		)	3		46
Consumer indirect loans	20		6				(15		)	8		19
Total consumer loans	142		42				(67		)	21		138
Total ALLL — continuing operations	877		124			(a)	(151		)	37		887
Discontinued operations	16		2				(7		)	3		14
Total ALLL — including discontinued operations	$	893	$	126			$	(158	)	$	40	$	901

(a) Excludes a provision for losses on lending-related commitments of $1 million.

A breakdown of the individual and collective ALLL and the corresponding loan balances as of June 30, 2019, follows:

	Allowance						Outstanding
June 30, 2019	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	$	10	$	538	$	1	$	48,544		$	183	$	48,308		$	53
Commercial real estate:
Commercial mortgage	1		137		1		13,299			64		13,080			155
Construction	—		24		—		1,439			—		1,438			1
Total commercial real estate loans	1		161		1		14,738			64		14,518			156
Commercial lease financing	—		35		—		4,578			—		4,578			—
Total commercial loans	11		734		2		67,860			247		67,404			209
Real estate — residential mortgage	3		3		1		6,053			48		5,714			291
Home equity loans	9		26		1		10,575			128		10,432			15
Consumer direct loans	—		32		—		2,350			4		2,343			3
Credit cards	—		44		—		1,096			3		1,093			—
Consumer indirect loans	3		21		—		4,003			35		3,968			—
Total consumer loans	15		126		2		24,077			218		23,550			309
Total ALLL — continuing operations	26		860		4		91,937			465		90,954			518
Discontinued operations	2		10		—		964		(a)	23		941		(a)	—
Total ALLL — including discontinued operations	$	28	$	870	$	4	$	92,901		$	488	$	91,895		$	518

(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, 2018, follows:

	Allowance						Outstanding
December 31, 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	$	526	$	1	$	45,753		$	162	$	45,530		$	61
Commercial real estate:
Commercial mortgage	—		139		3		14,285			66		14,041			178
Construction	—		33		—		1,666			—		1,664			2
Total commercial real estate loans	—		172		3		15,951			66		15,705			180
Commercial lease financing	—		36		—		4,606			—		4,606			—
Total commercial loans	5		734		4		66,310			228		65,841			241
Real estate — residential mortgage	3		4		—		5,513			49		5,150			314
Home equity loans	8		26		1		11,142			127		10,998			17
Consumer direct loans	—		30		—		1,809			4		1,802			3
Credit cards	—		48		—		1,144			3		1,141			—
Consumer indirect loans	3		17		—		3,634			36		3,598			—
Total consumer loans	14		125		1		23,242			219		22,689			334
Total ALLL — continuing operations	19		859		5		89,552			447		88,530			575
Discontinued operations	2		12		—		1,073		(a)	23		1,050		(a)	—
Total ALLL — including discontinued operations	$	21	$	871	$	5	$	90,625		$	470	$	89,580		$	575

(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 June 30,					Six months ended June 30,
in millions	2019		2018			2019		2018
Balance at beginning of period	$	62	$	60		$	64	$	57
Provision (credit) for losses on lending-related commitments	2		(2		)	—		1
Balance at end of period	$	64	$	58		$	64	$	58

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 105 of our 2018 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 six months ended June 30, 2019, and the twelve months ended December 31, 2018.

	Three Months Ended June 30,							Six Months Ended June 30,
	2019							2019
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance		Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	118		$	547	$	578	$	117		$	571	$	607
Accretion	(9		)					(19		)
Net reclassifications from nonaccretable to accretable	(5		)					8
Payments received, net	(3		)					(5		)
Balance at end of period	$	101		$	513	$	541	$	101		$	513	$	541

	Twelve Months Ended December 31,
	2018
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	131		$	738	$	803
Accretion	(42		)
Net reclassifications from nonaccretable to accretable	50
Payments received, net	(21		)
Loans charged off	(1		)
Balance at end of period	$	117		$	571	$	607

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

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 6 (“Fair Value Measurements”) and Note 1 (“Summary of Significant Accounting Policies”) under the heading “Fair Value Measurements” of our 2018 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 June 30, 2019, and December 31, 2018.

	June 30, 2019									December 31, 2018
	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	—		$	853	—		$	853		—		$	578	—		$	578
States and political subdivisions	—		32		—		32			—		60		—		60
Other mortgage-backed securities	—		36		—		36			—		164		—		164
Other securities	—		62		—		62			—		22		—		22
Total trading account securities	—		983		—		983			—		824		—		824
Commercial loans	—		22		—		22			—		25		—		25
Total trading account assets	—		1,005		—		1,005			—		849		—		849
Securities available for sale:
U.S. Treasury, agencies and corporations	—		272		—		272			—		147		—		147
States and political subdivisions	—		5		—		5			—		7		—		7
Agency residential collateralized mortgage obligations	—		13,612		—		13,612			—		13,962		—		13,962
Agency residential mortgage-backed securities	—		2,061		—		2,061			—		2,105		—		2,105
Agency commercial mortgage-backed securities	—		5,543		—		5,543			—		3,187		—		3,187
Other securities	—		24		$	11	35			—		—		$	20	20
Total securities available for sale	—		21,517		11		21,528			—		19,408		20		19,428
Other investments:
Principal investments:
Direct	—		—		1		1			—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		76			—		—		—		96
Total principal investments	—		—		1		77			—		—		1		97
Equity investments:
Direct	—		—		7		7			—		1		7		8
Direct (measured at NAV) (a)	—		—		—		1			—		—		—		1
Indirect (measured at NAV) (a)	—		—		—		8			—		—		—		9
Total equity investments	—		—		7		16			—		1		7		18
Total other investments	—		—		8		93			—		1		8		115
Loans, net of unearned income (residential)	—		—		3		3			—		—		3		3
Loans held for sale (residential)	—		164		—		164			—		54		—		54
Derivative assets:
Interest rate	—		885		4		889			—		410		5		415
Foreign exchange	$	41	29		—		70			$	70	36		—		106
Commodity	—		246		—		246			—		333		—		333
Credit	—		1		—		1			—		1		—		1
Other	—		10		6		16			—		6		3		9
Derivative assets	41		1,171		10		1,222			70		786		8		864
Netting adjustments (b)	—		—		—		(413		)	—		—		—		(333		)
Total derivative assets	41		1,171		10		809			70		786		8		531
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	41	$	23,857	$	32	$	23,602		$	70	$	21,098	$	39	$	20,980
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	7	$	713	—		$	720		$	14	$	530	—		$	544
Derivative liabilities:
Interest rate	—		220		—		220			—		297		—		297
Foreign exchange	35		29		—		64			58		37		—		95
Commodity	—		236		—		236			—		323		—		323
Credit	—		2		$	1	3			—		1		—		1
Other	—		13		—		13			—		7		—		7
Derivative liabilities	35		500		1		536			58		665		—		723
Netting adjustments (b)	—		—		—		(319		)	—		—		—		(337		)
Total derivative liabilities	35		500		1		217			58		665		—		386
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	42	$	1,213	$	1	$	937		$	72	$	1,195	—		$	930

(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 table describes the valuation techniques and significant inputs used to measure the classes of assets and liabilities reported at fair value on a recurring basis, as well as the classification of each within the valuation hierarchy.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Securities (trading account assets and available for sale)	Fair value of level 1 securities is determined by: • Quoted market prices available in an active market for identical securities. This includes exchange-traded equity securities. Fair value of level 2 securities is determined by: • Pricing models (either by a third party pricing service or internally). Inputs include: yields, benchmark securities, bids, offers, actual trade data (i.e., spreads, credit ratings, and interest rates) for comparable assets, spread tables, matrices, high-grade scales, and option-adjusted spreads. • Observable market prices of similar securities. Fair value of level 3 securities is determined by: • Internal models, principally discounted cash flow models (income approach). • Revenue multiples of comparable public companies (market approach). For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. The valuations provided by the third-party pricing service are based on observable market inputs, which include benchmark yields, reported trades, issuer spreads, benchmark securities, bids, offers, and reference data obtained from market research publications. Inputs used by the third-party pricing service in valuing CMOs and other mortgage-backed securities also include new issue data, monthly payment information, whole loan collateral performance, and “To Be Announced” prices. In valuations of securities issued by state and political subdivisions, inputs used by the third-party pricing service also include material event notices.	Level 1, 2, and 3 (primarily Level 2)
Commercial loans (trading account assets)	Fair value is based on: • Observable market price spreads for similar loans. Valuations reflect prices within the bid-ask spread that are most representative of fair value.	Level 2
Principal investments (direct)	Direct principal investments consist of equity and debt instruments of private companies made by our principal investing entities. Fair value is determined using: • Operating performance and market multiples of comparable businesses • Other unique facts and circumstances related to each individual investment Direct principal investments are accounted for as investment companies in accordance with the applicable accounting guidance, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. We are in the process of winding down our direct principal investment portfolio. As of June 30, 2019, the balance is less than $1 million.	Level 3
Principal investments (indirect)	Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. Under the provisions of the Volcker Rule, we are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of June 30, 2019, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.	NAV

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at June 30, 2019, as well as financial support provided for the three and six months ended June 30, 2019, and June 30, 2018.

					Financial support provided
					Three months ended June 30,						Six months ended June 30,
	June 30, 2019				2019				2018		2019			2018
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	$	1	—		—		$	—	—	—	—		—	—		—
Indirect investments (measured at NAV) (a)	76		$	24	$	—	—		—	—	$	2	—	$	1	—
Total	$	77	$	24	—		$	—	—	—	$	2	—	$	1	—

 

(a) Our indirect investments consist of buyout funds, venture capital funds, and fund of funds. These investments are generally not redeemable. Instead, distributions are received through the liquidation of the underlying investments of the fund. An investment in any one of these funds typically can be sold only with the approval of the fund’s general partners. At June 30, 2019, no significant liquidation of the underlying investments has been communicated to Key. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Other direct equity investments	Fair value is determined using: • Discounted cash flows • Operating performance and market/exit multiples of comparable businesses • Other unique facts and circumstances related to each individual investment For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. Level 2 investments reflect the price of recent investments, which is deemed representative of fair value.	Level 2 and 3
Other direct and indirect equity investments (NAV)	Certain direct investments do not have readily determinable fair values and qualify for the practical expedient in the accounting guidance that allows us to estimate fair value based upon net asset value per share.	NAV
Loans held for sale and held for investment (residential)	Residential mortgage loans held for sale are accounted for at fair value. The election of the fair value option aligns the accounting for these assets with the related forward loan sale commitments. Fair values are based on: • Quoted market prices, where available • Prices for other traded mortgage loans with similar characteristics • Purchase commitments and bid information received from market participants Prices are adjusted as necessary to include: • The embedded servicing value in the loans • The specific characteristics of certain loans that are priced based on the pricing of similar loans. (These adjustments represent unobservable inputs to the valuation but are not considered significant given the relative insensitivity of the value to changes in these inputs to the fair value of the loans.) Residential loans held for investment: Certain residential loans held for sale contain salability exceptions that make them unable to be sold into the performing loan sales market. Loans in this category are transferred to the held to maturity loan portfolio and are included in “Loans, net of unearned income” on the balance sheet. This type of loan is classified as level 3 in the valuation hierarchy as transaction details regarding sales of this type of loan are often unavailable. Fair value is based upon: • Unobservable bid information from brokers and investors Higher (lower) unobservable bid information would have resulted in higher (lower) fair value measurements.	Level 1, 2 and 3 (primarily level 2)
Derivatives	Exchange-traded derivatives are valued using quoted prices in active markets and, therefore, are classified as Level 1 instruments. The majority of our derivative positions are level 2 and are valued using internally developed models based on market convention and observable market inputs. These derivative contracts include interest rate swaps, certain options, floors, cross currency swaps, credit default swaps, and forward mortgage loan sale commitments. Significant inputs used in the valuation models include: • Interest rate curves • Yield curves • LIBOR and Overnight Index Swap (OIS) discount rates • LIBOR and OIS curves, index pricing curves, foreign currency curves • Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity)	Level 1, 2, and 3 (primarily level 2)

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Derivatives (continued)	We have several customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, such as: • Bond spreads and asset values The unobservable internally derived assumptions include: • Loss probabilities • Internal risk ratings of customers The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, higher (lower) loss probabilities and internal risk ratings would have resulted in a lower (higher) fair value measurement of the risk participations. A directionally similar change would have also applied to other customized derivative instruments classified as Level 3. We use interest rate lock commitments for our residential mortgage business, which are classified as Level 3 instruments. The significant components of the valuation model include: • Interest rates observable in the market • Investor supplied prices for similar securities • The probability of the loan closing (i.e. the "pull-through" amount, a significant unobservable input). Increases (decreases) in the probability of the loan closing would have resulted in higher (lower) fair value measurements. Valuation of residential mortgage forward sale commitments utilizes observable market prices of comparable commitments and mortgage securities (Level 2).	Level 1, 2, and 3 (primarily level 2)
Liability for short positions	This includes fixed income securities held by our broker dealer in its trading inventory. Fair value of level 1 securities is determined by: • Quoted market prices available in an active market for identical securities Fair value of level 2 securities is determined by: • Observable market prices of similar securities • Market activity, spreads, credit ratings and interest rates for each security type	Level 1 and 2

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 measured at fair value on a recurring basis for the three and six months ended June 30, 2019, and June 30, 2018. 

in millions	Beginning of Period Balance			Gains (Losses) Included in Other Comprehensive Income		Gains (Losses) Included in Earnings				Purchases			Sales			Settlements		Transfers Other		Transfers into Level 3			Transfers out of Level 3				End of Period Balance			Unrealized Gains (Losses) Included in Earnings
Six months ended June 30, 2019
Securities available for sale
Other securities	$	20		$	15	—				—			—			—		—		—			(24		)		$	11		—
Other investments
Principal investments
Direct	1			—		—				$	—		$	—		—		—		—			—				1			—
Equity investments
Direct	7			—		(1		)		—			—			—		—		$	1		—				7			—
Loans held for sale (residential)	—			—		—				—			(1		)	—		$	1	—			—				—			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	5			—		$	3		(c)	—			—			—		—		2		(d)	$	(6	)	(d)	4			—
Credit	—			—		—				(1		)	—			—		—		—			—				(1		)	—
Other (e)	3			—		—				—			—			—		3		—			—				6			—
Three months ended June 30, 2019
Securities available for sale
Other securities	$	25		$	10	—				—			—			—		—		—			$	(24	)		$	11		—
Other investments
Principal investments
Direct	1			—		$	—			(1		)	1			—		—		—			—				1			—
Other indirect	—			—		—				—			—			—		—		—			—				—			—
Equity investments
Direct	8			—		(1		)		—			—			—		—		—			—				7			—
Loans held for sale (residential)	1			—		—				—			(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	3			—		2			(c)	—			—			—		—		—		(d)	(1		)	(d)	4			—
Credit	(1		)	—		—				—			—			$	—	—		—			—				(1		)	—
Other (e)	4			—		—				—			—			—		2		—			—				6			—

in millions	Beginning of Period Balance		Gains (Losses) Included in Other Comprehensive Income	Gains (Losses) Included in Earnings				Purchases		Sales			Settlements		Transfers Other		Transfers into Level 3			Transfers out of Level 3				End of Period Balance			Unrealized Gains (Losses) Included in Earnings
Six months ended June 30, 2018
Securities available for sale
Other securities	$	20	—	—				—		—			—		—		—			—				$	20		—
Other investments
Principal investments
Direct	13		—	—				$	1	$	(1	)	—		—		—			—				13			$	1	(a)
Equity investments
Direct	3		—	—				—		—			—		—		$	4		—				7			—
Loans held for sale (residential)	1		—	—				—		(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	2		—	—				—		—			—		$	1	—			—				3			—
Derivative instruments (b)
Interest rate	9		—	$	(2	)	(c)	1		(2		)	—		—		4		(d)	$	(5	)	(d)	5			—
Credit	1		—	(20		)	(c)	—		—			$	10	—		—			—				(9		)	—
Other (e)	3		—	—				—		—			—		$	—	—			—				3			—
Three months ended June 30, 2018
Securities available for sale
Other securities	$	20	—	—				—		—			—		—		—			—				$	20		—
Other investments
Principal investments
Direct	12		—	$	1		(a)	$	1	$	(1	)	—		—		—			—				13			$	2	(a)
Equity investments
Direct	7		—	—				—		—			—		—		—			—				7			—
Loans held for sale (residential)	1		—	—				—		(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	2		—	—				—		—			—		$	1	—			—				3			—
Derivative instruments (b)
Interest rate	4		—	(1		)	(c)	—		(2		)	—		—		$	4	(d)	—				5			—
Credit	—		—	(15		)	(c)	—		—			$	6	—		—			—				(9		)	—
Other (e)	3		—	—				—		—			—		—		—			—				3			—

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

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

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

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

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

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 June 30, 2019, and December 31, 2018.

The following table presents our assets measured at fair value on a nonrecurring basis at June 30, 2019, and December 31, 2018:

	June 30, 2019							December 31, 2018
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	—	$	—	$	57	$	57	—	—	$	42	$	42
Accrued income and other assets	—	—		21		21		—	—	16		16
Total assets on a nonrecurring basis at fair value	—	$	—	$	78	$	78	—	—	$	58	$	58

Qualitative Disclosures of Valuation Techniques

The following table describes the valuation techniques and significant inputs used to measure the significant classes of assets and liabilities reported at fair value on a nonrecurring basis, as well as the classification of each within the valuation hierarchy.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Impaired loans and leases	Loans are evaluated for impairment on a quarterly basis; impairment typically occurs when there is evidence of a probable loss and the expected value of the loan is less than the contractual value of the loan.  The amount of the impairment may be determined based on the estimated present value of future cash flows, the fair value of the underlying collateral (Level 3), or the loan’s observable market price based on recent sales of similar loans and collateral (Level 2). Cash flow analysis considers internally developed inputs including: • Discount rates • Default rates • Changes in collateral values and costs of foreclosure	Level 2 and 3
Commercial loans held for sale and student loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include: • Non-binding bids for the respective loans or similar loans • Recent sales transactions • Internal models that emulate recent securitizations	Level 2 and 3
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, including: • Swap rates and bond ratings • Our own assumptions about the exit market for the leases • Details about the individual leases in the portfolio Leases for which we receive a current nonbinding bid, and for which the sale is considered probable, may be classified as Level 2. Valuations of lease and operating lease assets held for sale that employ our own assumptions are classified as Level 3 assets. The inputs based on our own assumptions include changes in the value of leased items and internal credit ratings.	Level 2 and 3
OREO, other repossessed personal property, and right-of-use assets	OREO, other repossessed properties, and right-of-use assets are valued based on: • 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.	Level 2 and 3

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
LIHTC, HTC, and NMTC investments	Valuation of LIHTC, HTC and NMTC involves measuring the present value of future tax benefits and comparing that value against the current carrying value of the investment. Expected future tax benefits are discounted to their present value using discounted cash flow modeling that incorporates an appropriate risk premium. LIHTC and HTC investments are impaired when it is more likely than not that the carrying amount of the investment will not be realized.	Level 3
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 June 30, 2019, and December 31, 2018, the carrying amount of equity investments under this method was $139 million and $107 million, respectively. No impairment was recorded for the three months ended June 30, 2019.	Level 3
Mortgage Servicing Rights	Refer to Note 8. Mortgage Servicing Assets	Level 3

Quantitative Information about Level 3 Fair Value Measurements

The following table describes the significant unobservable inputs of our level 3 recurring and nonrecurring assets and liabilities:

June 30, 2019	Level 3 Asset (Liability)			Valuation Technique	Significant Unobservable Input	Range (Weighted-Average) (b), (c)
dollars in millions
Recurring
Securities available-for-sale:
Other securities	$	11		Discounted cash flows	Discount rate	N/A (15.95%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (38.00%)
Other investments:(a)
Equity investments
Direct	7			Discounted cash flows	Discount rate	14.81 - 16.78% (15.06%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (49.00%)
Loans, net of unearned income (residential)	3			Market comparable pricing	Comparability factor	78.57 - 95.75% (90.40%)
Derivative instruments:
Interest rate	4			Discounted cash flows	Probability of default	.02 - 100% (2.10%)
					Internal risk rating	1 - 19 (9.021)
					Loss given default	0 - 1 (.492)
Credit	(1		)	Discounted cash flows	Probability of default	.02 - 100% (2.36%)
					Internal risk rating	1 - 19 (9.134)
					Loss given default	0 - 1 (.50)
Other(d)	6			Discounted cash flows	Loan closing rates	36.70 - 99.15% (74.62%)
Nonrecurring
Impaired loans	$	57		Fair value of underlying collateral	Discount rate	0 - 80.00% (17.00%)
Accrued income and other assets:
OREO and other Level 3 assets(e)	$	18		Appraised value	Appraised value	N/M

December 31, 2018	Level 3 Asset (Liability)		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average(b)(c))
dollars in millions
Nonrecurring
Impaired loans	$	42	Fair value of underlying collateral	Discount rate	20.00 - 40.00% (21.00%)

(a) Principal investments, direct is excluded from this table as the balance at June 30, 2019, is insignificant (less than $1 million).

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

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

(d) Amounts represent interest rate lock commitments.

(e) Excludes balances pertaining to mortgage servicing assets. Refer to Note 9. Mortgage Servicing Assets for significant unobservable inputs pertaining to these assets.

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at June 30, 2019, and December 31, 2018, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	June 30, 2019
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment				Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	$	1,005	$	—	$	1,005	—		—		—				$	1,005
Other investments (b)	632		—		—		$	547	$	85	—				632
Loans, net of unearned income (residential) (d)	3		—		—		3		—		—				3
Loans held for sale (residential) (b)	164		—		164		—		—		—				164
Derivative assets - trading (b)	715		41		1,065		11		—		$	(402	)	(f)	715
Fair value - OCI
Securities available for sale (b)	21,528		—		21,517		$	11	—		—				21,528
Derivative assets - hedging (b)(g)	94		—		105		—		—		(11		)	(f)	94
Amortized cost
Held-to-maturity securities (c)	10,878		—		10,899		—		—		—				10,899
Loans, net of unearned income (d)	91,044		—		—		89,803		—		—				89,803
Loans held for sale (b)	1,626		—		—		1,626		—		—				1,626
Other
Cash and short-term investments (a)	3,050		3,050		—		—		—		—				3,050
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	216	$	33	$	490	1		—		$	(308	)	(f)	$	216
Fair value - OCI
Derivative liabilities - hedging (b)(g)	1		2		10		—		—		(11		)	(f)	1
Amortized cost
Time deposits (e)	13,608		—		13,716		—		—		—				13,716
Short-term borrowings (a)	881		7		874		—		—		—				881
Long-term debt (e)	14,312		13,557		1,229		—		—		—				14,786
Other
Deposits with no stated maturity (a)	96,338		—		96,338		—		—		—				96,338

	December 31, 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)	$	849		—		$	849		—		—		—				$	849
Other investments (b)	666			—		1			$	559	$	106	—				666
Loans, net of unearned income (residential) (d)	3			—		—			3		—		—				3
Loans held for sale (residential) (b)	54			—		54			—		—		—				54
Derivative assets - trading (b)	462			$	68	736			8		—		$	(350	)	(f)	462
Fair value - OCI
Securities available for sale (b)	19,428			—		19,408			20		—		—				19,428
Derivative assets - hedging (b)(g)	69			2		50			—		—		17			(f)	69
Amortized cost
Held-to-maturity securities (c)	11,519			—		11,122			—		—		—				11,122
Loans, net of unearned income (d)	88,666			—		—			86,224		—		—				86,224
Loans held for sale (b)	1,173			—		—			1,173		—		—				1,173
Other
Cash and short-term investments (a)	3,240			3,240		—			—		—		—				3,240
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	395		$	58	$	675		—		—		$	(338	)	(f)	$	395
Fair value - OCI
Derivative liabilities - hedging (b)(g)	(9		)	—		(10		)	—		—		1			(f)	(9		)
Amortized cost
Time deposits (e)	13,245			—		13,331			—		—		—				13,331
Short-term borrowings (a)	863			14		849			—		—		—				863
Long-term debt (e)	13,732			12,576		1,211			—		—		—				13,787
Other
Deposits with no stated maturity (a)	94,064			—		94,064			—		—		—				94,064

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.

(g) Derivative assets-hedging and derivative liabilities-hedging includes both cash flow and fair value hedges. Additional information regarding our accounting policies for cash flow and fair value hedges is provided in Note 1 (“1. Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 103 of our 2018 Form 10-K.

Education lending business.  Our discontinued assets include government-guaranteed and private education loans originated through our education lending business that was discontinued in September 2009. This portfolio consists of loans 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 $1.0 billion ($809 million at fair value) at June 30, 2019, and $1.1 billion ($890 million at fair value) at December 31, 2018;

• Portfolio loans at fair value of $2 million at June 30, 2019, and $2 million at December 31, 2018.

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

6 Months Ended

Jun. 30, 2019

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.

	June 30, 2019								December 31, 2018
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	$	272	—		—		$	272	$	150	—		$	3	$	147
States and political subdivisions	5		—		—		5		7		—		—		7
Agency residential collateralized mortgage obligations	13,593		$	111	$	92	13,612		14,315		$	20	373		13,962
Agency residential mortgage-backed securities	2,035		36		10		2,061		2,128		13		36		2,105
Agency commercial mortgage-backed securities	5,472		128		57		5,543		3,300		19		132		3,187
Other securities	17		18		—		35		17		3		—		20
Total securities available for sale	$	21,394	$	293	$	159	$	21,528	$	19,917	$	55	$	544	$	19,428
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	6,435	$	28	$	59	$	6,404	$	7,021	$	2	$	254	$	6,769
Agency residential mortgage-backed securities	456		2		1		457		490		—		14		476
Agency commercial mortgage-backed securities	3,972		64		13		4,023		3,996		2		133		3,865
Other securities	15		—		—		15		12		—		—		12
Total held-to-maturity securities	$	10,878	$	94	$	73	$	10,899	$	11,519	$	4	$	401	$	11,122

The following table summarizes our securities that were in an unrealized loss position as of June 30, 2019, and December 31, 2018.

	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
June 30, 2019
Securities available for sale:
U.S Treasury, agencies, and corporations	$	10	—			$	45	—		$	55	—
Agency residential collateralized mortgage obligations	183		$	1		6,941		$	91	7,124		$	92
Agency residential mortgage-backed securities	1		—		(a)	996		10		997		10
Agency commercial mortgage-backed securities	—		—			1,779		57		1,779		57
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			3,941		59		3,941		59
Agency residential mortgage-backed securities	58		—		(a)	81		1		139		1
Agency commercial mortgage-backed securities	—		—			514		13		514		13
Other securities	7		—		(a)	—		—		7		—
Total temporarily impaired securities	$	259	$	1		$	14,298	$	231	$	14,557	$	232
December 31, 2018
Securities available for sale:
U.S. Treasury, agencies, and corporations	—		—			$	147	$	3	$	147	$	3
Agency residential collateralized mortgage obligations	$	570	$	2		10,945		371		11,515		373
Agency residential mortgage-backed securities	4		—		(b)	1,087		36		1,091		36
Agency commercial mortgage-backed securities	—		—			1,729		132		1,729		132
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			6,416		254		6,416		254
Agency residential mortgage-backed securities	—		—			475		14		475		14
Agency commercial mortgage-backed securities	73		—		(b)	3,359		133		3,432		133
Total temporarily impaired securities	$	647	$	2		$	24,158	$	943	$	24,805	$	945

(a) At June 30, 2019, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale and less than $1 million for agency residential mortgage-back securities and other securities held-to-maturity securities with a loss duration of less than 12 months.

(b) At December 31, 2018, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months and less than $1 million for agency commercial mortgage-backed securities held-to-maturity with a loss duration of less than 12 months.

At June 30, 2019, we had $92 million of gross unrealized losses related to 278 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 3.72 years at June 30, 2019. At June 30, 2019, we also had $10 million of gross unrealized losses related to 213 agency residential mortgage-backed securities positions and $57 million of gross unrealized losses related to 14 agency commercial mortgage backed securities positions with weighted-average maturities of 3.75 years and 4.12 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. We did not have any impairment losses recognized in earnings for the six months ended June 30, 2019.

At June 30, 2019, securities available for sale and held-to-maturity securities totaling $8.5 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.

June 30, 2019	Securities Available for Sale				Held to Maturity Securities
in millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	360	$	378	$	41	$	41
Due after one through five years	16,532		16,535		7,605		7,590
Due after five through ten years	4,493		4,606		3,232		3,268
Due after ten years	9		9		—		—
Total	$	21,394	$	21,528	$	10,878	$	10,899

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Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2019

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 June 30, 2019, after taking into account the effects of bilateral collateral and master netting agreements, we had $94 million of derivative assets and $1 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 $715 million and derivative liabilities of $216 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 103 of our 2018 Form 10-K. Our derivative strategies and related risk management objectives are described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 132 of our 2018 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 June 30, 2019, and December 31, 2018. 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:

	June 30, 2019								December 31, 2018
			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	$	37,147	$	105		$	10		$	28,546	$	50		$	(10	)
Foreign exchange	122		—			2			122		2			—
Total	37,269		105			12			28,668		52			(10		)
Derivatives not designated as hedging instruments:
Interest rate	68,202		784			210			63,454		365			307
Foreign exchange	5,702		70			62			6,829		104			95
Commodity	6,662		246			236			2,002		333			323
Credit	453		1			3			226		1			1
Other (a)	4,483		16			13			1,466		9			7
Total	85,502		1,117			524			73,977		812			733
Netting adjustments (b)	—		(413		)	(319		)	—		(333		)	(337		)
Net derivatives in the balance sheet	122,771		809			217			102,645		531			386
Other collateral (c)	—		(3		)	(46		)	—		(2		)	(33		)
Net derivative amounts	$	122,771	$	806		$	171		$	102,645	$	529		$	353

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

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

(c) Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

Fair value hedges. During the six-month period ended June 30, 2019, we did not exclude any portion of fair value hedging instruments from the assessment of hedge effectiveness.

The following tables summarize the amounts that were recorded on the balance sheet as of June 30, 2019, and December 31, 2018, related to cumulative basis adjustments for fair value hedges.

	June 30, 2019
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	$	9,559	$	237
Interest rate contracts	Certificate of deposit ($100,000 or more)	194		—
Interest rate contracts	Other time deposits	175		—
	December 31, 2018
	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	$	9,363	$	(6	)
Interest rate contracts	Certificate of deposit ($100,000 or more)	343		(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 adjustments related to de-designated hedged items that no longer qualify as fair value hedges reduced the hedge accounting basis adjustment by $10 million and $10 million at June 30, 2019, and December 31, 2018, respectively,

Cash flow hedges. During the six-month period ended June 30, 2019, 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 June 30, 2019, we expect to reclassify an estimated $63 million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months. In addition, we expect to reclassify approximately $10 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months. As of June 30, 2019, 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 six-month periods ended June 30, 2019, and June 30, 2018.

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Three months ended June 30, 2019
Total amounts presented in the consolidated statement of income	$	(120	)	$	1,082		$	(223	)	$	17
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(152		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	142			—			—			—
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	$	—		$	(19	)	—			—
Net income (expense) recognized on cash flow hedges	$	—		$	(19	)	—			—
Three months ended June 30, 2018
Total amounts presented in the consolidated statement of income	$	(102	)	$	1,000		$	(112	)	$	99
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	22		—			$	1		—
Recognized on derivatives designated as hedging instruments	(25		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(3	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	1		$	(25	)	—			—
Net income (expense) recognized on cash flow hedges	$	1		$	(25	)	—			—

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Six months ended June 30, 2019
Total amounts presented in the consolidated statement of income	$	(240	)	$	2,148		$	(425	)	$	27
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(245		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	224			—			—			—
Net income (expense) recognized on fair value hedges	$	(21	)	—			(1		)	—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1	)	$	(43	)	—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	(43	)	—			—
Six months ended June 30, 2018
Total amounts presented in the consolidated statement of income	$	(194	)	$	1,940		$	(203	)	$	120
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	93		—			$	1		—
Recognized on derivatives designated as hedging instruments	(94		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(1	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	—			$	(27	)	—			—
Net income (expense) recognized on cash flow hedges	—			$	(27	)	—			—

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 June 30, 2019, AOCI reflected unrecognized, after-tax gains totaling $24 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 six-month period ended June 30, 2019.

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and six-month periods ended June 30, 2019, and June 30, 2018, 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
Three months ended June 30, 2019
Cash Flow Hedges
Interest rate	$	270		Interest income — Loans	$	(19	)
Interest rate	(2		)	Interest expense — Long-term debt	—
Interest rate	(1		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(1		)	Other Income	—
Total	$	266			$	(19	)
Three months ended June 30, 2018
Cash Flow Hedges
Interest rate	$	(58	)	Interest income — Loans	$	(25	)
Interest rate	2			Interest expense — Long-term debt	1
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	10			Other Income	—
Total	$	(45	)		$	(24	)

in millions	Net Gains (Losses) Recognized in OCI			Income Statement Location of Net Gains (Losses) Reclassified From OCI Into Income	Net Gains (Losses) Reclassified From OCI Into Income(a)
Six months ended June 30, 2019
Cash Flow Hedges
Interest rate	$	385		Interest income — Loans	$	(43	)
Interest rate	(3		)	Interest expense — Long-term debt	(1		)
Interest rate	(6		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(4		)	Other Income	—
Total	$	372			$	(44	)
Six months ended June 30, 2018
Cash Flow Hedges
Interest rate	$	(146	)	Interest income — Loans	$	(27	)
Interest rate	4			Interest expense — Long-term debt	—
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	10			Other Income	—
Total	$	(131	)		$	(27	)

Nonhedging instruments

The following table summarizes the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and six-month periods ended June 30, 2019, and June 30, 2018, and where they are recorded on the income statement.

	Three months ended June 30, 2019									Three months ended June 30, 2018
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	$	7	—	$	—		$	7		$	11	—	—			$	11
Foreign exchange	11		—	—			11			11		—	—			11
Commodity	2		—	—			2			3		—	—			3
Credit	—		—	(8		)	(8		)	—		—	$	(14	)	(14		)
Other	—		—	2			2			—		—	16			16
Total net gains (losses)	$	20	—	$	(6	)	$	14		$	25	—	$	2		$	27

	Six months ended June 30, 2019										Six months ended June 30, 2018
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	$	15	$	—	$	(2	)	$	13		$	20	—		$	2		$	22
Foreign exchange	21		—		—			21			22		—		—			22
Commodity	3		—		—			3			6		—		—			6
Credit	1		—		(15		)	(14		)	2		—		(19		)	(17		)
Other	—		—		3			3			—		$	—	12			12
Total net gains (losses)	$	40	$	—	$	(14	)	$	26		$	50	$	—	$	(5	)	$	45

Counterparty Credit Risk

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 $160 million was netted against derivative assets on the balance sheet at June 30, 2019, compared to $33 million of cash collateral netted against derivative assets at December 31, 2018. The cash collateral netted against derivative liabilities totaled $66 million at June 30, 2019, and $37 million at December 31, 2018. Our means of mitigating and managing exposure to credit risk on derivative contracts is described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 136 of our 2018 Form 10-K under the heading “Counterparty Credit Risk.”

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	June 30, 2019		December 31, 2018
Interest rate	$	793	$	308
Foreign exchange	36		60
Commodity	124		187
Credit	—		—
Other	16		9
Derivative assets before collateral	969		564
Less: Related collateral	160		33
Total derivative assets	$	809	$	531

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 June 30, 2019, we had gross exposure of $384 million to broker-dealers and banks. We had net exposure of $117 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $113 million after considering $4 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 $6 million at June 30, 2019, which we estimate to be the potential future losses on amounts due from client counterparties in the event of default. At June 30, 2019, we had gross exposure of $731 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 $692 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 specific commercial lending and swap obligations as well as exposures to debt securities. Our credit derivative portfolio was in a net liability position of $2 million as of June 30, 2019, and less than $1 million as of December 31, 2018. Our credit derivative portfolio consists of single-name credit default swaps, traded credit default swap indices, and risk participation agreements. Additional descriptions of our credit derivatives are provided in Note 8 (“Derivatives and Hedging Activities”) beginning on page 137 of our 2018 Form 10-K under the heading “Credit Derivatives.”

The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at June 30, 2019, and December 31, 2018. The sold credit derivatives represented in the following table include only Risk Participation Agreements; there were no traded indexes sold. The notional amount represents the maximum amount that the seller could be required to pay. The payment/performance risk assessment at June 30, 2019, is based on the internal probability of default of the reference entity consistent with our Fair Value Methodology. The payment/performance risk shown in the table represents a weighted-average of the default probabilities for all reference entities. These default probabilities are directly correlated to the probability that we will have to make a payment under the credit derivative contracts.

	June 30, 2019					December 31, 2018
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	126	13.84	2.50	%	$	22	13.43	17.18	%
Total credit derivatives sold	$	126	—	—		$	22	—	—

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 June 30, 2019, 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 June 30, 2019, 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 $8 million, which was comprised of $6 million in derivative assets and $14 million in derivative liabilities. We had $9 million in cash and securities collateral posted to cover those positions as of June 30, 2019. There were no derivative contracts with credit risk contingent features held by KeyCorp at June 30, 2019.

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 June 30, 2019, and December 31, 2018. The additional collateral amounts were calculated based on scenarios under which KeyBank’s ratings are downgraded one, two, or three ratings as of June 30, 2019, and December 31, 2018, 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 June 30, 2019, and December 31, 2018. 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.

	June 30, 2019				December 31, 2018
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	$	—	$	—	$	2	$	2
Two rating downgrades	—		—		2		2
Three rating downgrades	—		—		2		2

KeyBank’s long-term senior unsecured credit rating was four ratings above noninvestment grade at Moody’s and S&P as of June 30, 2019, and December 31, 2018. If KeyBank’s ratings had been downgraded below investment grade as of June 30, 2019, or December 31, 2018, payments of less than $1 million and $4 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 June 30, 2019, or December 31, 2018, 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

6 Months Ended

Jun. 30, 2019

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 2018 Form 10-K.

Commercial

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

	Three months ended June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	497		$	435		$	502		$	412
Servicing retained from loan sales	23			29			41			56
Purchases	17			12			23			33
Amortization	(28		)	(25		)	(57		)	(50		)
Balance at end of period	$	509		$	451		$	509		$	451
Fair value at end of period	$	723		$	646		$	723		$	646

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 June 30, 2019, and June 30, 2018, along with the valuation techniques, are shown in the following table: 

dollars in millions		June 30, 2019	June 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 2.00% (1.13%)	1.00 - 3.00% (1.17%)
	Residual cash flows discount rate	7.00 - 11.54% (9.26%)	7.00 - 15.00% (9.06%)
	Escrow earn rate	1.92 - 3.13% (2.63%)	2.40 - 3.82% (3.10%)
	Loan assumption rate	0.00 - 3.02% (1.40%)	0.00 - 3.00% (1.19%)

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 $95 million for the six-month period ended June 30, 2019, and $85 million for the six-month period ended June 30, 2018. This fee income was offset by $57 million of amortization for the six-month period ended June 30, 2019, and $50 million for the six-month period ended June 30, 2018. 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 June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	38		$	32		$	37		$	31
Servicing retained from loan sales	2			3			4			5
Purchases	—			—			—			—
Amortization	(1		)	(1		)	(2		)	(2		)
Balance at end of period	$	39		$	34		$	39		$	34
Fair value at end of period	$	45		$	43		$	45		$	43

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 June 30, 2019, and June 30, 2018, along with the valuation techniques, are shown in the following table:

dollars in millions		June 30, 2019	June 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	10.95 - 62.06% (12.52%)	8.39 - 49.39% (9.17%)
	Discount rate	7.50 - 10.00% (7.53%)	8.50 - 11.00% (8.54%)
	Servicing cost	$62 - $4,375 ($67.55)	$76 - $4,385 ($82.38)

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 June 30, 2019, 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 $9 million for the six-month period ended June 30, 2019, and $7 million for the six-month period ended June 30, 2018. This fee income was offset by $2 million of amortization for both the six-month periods ended June 30, 2019, and June 30, 2018. Both the contractual fee income and the amortization are recorded, net, in “mortgage servicing fees” on the income statement.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

9. Leases

As a lessee, we enter into leases of land, buildings and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. Leases with an initial term of less than 1 year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term. For leases with initial terms greater than one year, right-of-use assets are reported on the balance sheet.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b) Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b) There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Key will assess net investments in leases, including residual values, for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees was $289 million at June 30, 2019.

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

The carrying amount of operating lease assets at June 30, 2019, was $948 million.

Leases

9. Leases

As a lessee, we enter into leases of land, buildings and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. Leases with an initial term of less than 1 year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term. For leases with initial terms greater than one year, right-of-use assets are reported on the balance sheet.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b) Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b) There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Key will assess net investments in leases, including residual values, for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees was $289 million at June 30, 2019.

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

The carrying amount of operating lease assets at June 30, 2019, was $948 million.

Leases

9. Leases

As a lessee, we enter into leases of land, buildings and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. Leases with an initial term of less than 1 year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term. For leases with initial terms greater than one year, right-of-use assets are reported on the balance sheet.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b) Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b) There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Key will assess net investments in leases, including residual values, for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees was $289 million at June 30, 2019.

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

The carrying amount of operating lease assets at June 30, 2019, was $948 million.

Leases

9. Leases

As a lessee, we enter into leases of land, buildings and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. Leases with an initial term of less than 1 year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term. For leases with initial terms greater than one year, right-of-use assets are reported on the balance sheet.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b) Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b) There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Key will assess net investments in leases, including residual values, for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees was $289 million at June 30, 2019.

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

The carrying amount of operating lease assets at June 30, 2019, was $948 million.

Leases

9. Leases

As a lessee, we enter into leases of land, buildings and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. Leases with an initial term of less than 1 year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term. For leases with initial terms greater than one year, right-of-use assets are reported on the balance sheet.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b) Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b) There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Key will assess net investments in leases, including residual values, for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees was $289 million at June 30, 2019.

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

The carrying amount of operating lease assets at June 30, 2019, was $948 million.

XML

Variable Interest Entities

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

10. Variable Interest Entities

Our significant VIEs are summarized below. Additional information pertaining to the criteria used in determining if an entity is a VIE is included in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

LIHTC investments. We had $1.4 billion and $1.4 billion of investments in LIHTC operating partnerships at June 30, 2019, and December 31, 2018, respectively. 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 June 30, 2019, and December 31, 2018, we had liabilities of $489 million and $532 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 June 30, 2019, and December 31, 2018. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our balance sheet. Additional information pertaining to our LIHTC investments is included in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
June 30, 2019
LIHTC investments	$	6,276	$	2,588	$	1,739
December 31, 2018
LIHTC investments	$	5,932	$	2,569	$	1,740

We amortize our LIHTC investments over the period that we expect to receive the tax benefits. During the first six months of 2019, we recognized $89 million of amortization and $92 million of tax credits associated with these investments within “income taxes” on our income statement. During the first six months of 2018, we recognized $83 million of amortization and $81 million of tax credits associated with these investments within “income taxes” on our income statement.

Principal investments. 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 $76 million and $96 million at June 30, 2019, and December 31, 2018, respectively. These investments are recorded in “other investments” on our balance sheet. 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 June 30, 2019, and December 31, 2018.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
June 30, 2019
Indirect investments	$	15,018	$	286	$	100
December 31, 2018
Indirect investments	$	19,659	$	376	$	122

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. These entities had no assets at June 30, 2019 and December 31, 2018 that can be used to settle the entities’ obligations. The entities had no liabilities at June 30, 2019 and December 31, 2018, and other equity investors have no recourse to our general credit.

Additional information on our indirect and direct principal investments is provided in Note 5 (“Fair Value Measurements”) and in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

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 $287 million at June 30, 2019, and $248 million at December 31, 2018. 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 $2 million and $2 million associated with these unconsolidated VIEs at June 30, 2019, and December 31, 2018, respectively. Additional information pertaining to our other unconsolidated VIEs is included in Note 12 (“Variable Interest Entities“) under the heading “Other unconsolidated VIEs” on page 144 of our 2018 Form 10-K.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

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 before income taxes, was 16.8% for the second quarter of 2019 and 17.6% for the second quarter of 2018. The effective tax rates are less than our combined federal and state statutory tax rate of 23.7%, 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.

Deferred Tax Asset

At June 30, 2019, we had a net deferred tax liability of $101 million, compared to a net deferred tax asset of $222 million at December 31, 2018, 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 June 30, 2019, and $11 million at December 31, 2018. 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 June 30, 2019, Key’s unrecognized tax benefits were $37 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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Acquisitions, Divestiture, and Discontinued Operations

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Acquisitions, Divestiture, and Discontinued Operations

12. Acquisitions, Divestiture, and Discontinued Operations

Acquisitions

Laurel Road Digital Lending Business. On April 3, 2019, KeyBank acquired Laurel Road's digital lending business from Laurel Road Bank. Laurel Road Bank's three bank branches located in southeast Connecticut were

not part of this transaction. Through the acquisition, KeyBank expects to enhance its digital capabilities with state-of-the-art, customer-centric technology and to leverage Laurel Road's proven ability to attract and serve professional millennial clients. The acquisition is accounted for as a business combination. During the second quarter of 2019, we recognized provisional identifiable intangible assets with an estimated fair value of $37 million. We also recognized provisional goodwill of $148 million in connection with this acquisition. These fair value estimates represent our best estimate of fair value and are expected to be finalized over a period of up to one year from the acquisition date.

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 June 30, 2019, and December 31, 2018, approximately $964 million and $1.1 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

6 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Securities Financing Activities

13. 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 148 of our 2018 Form 10-K.

The following table summarizes our securities financing agreements at June 30, 2019, and December 31, 2018:

	June 30, 2019									December 31, 2018
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	$	210	$	(6	)	$	(204	)	—	$	14	$	(14	)	—			—
Total	$	210	$	(6	)	$	(204	)	—	$	14	$	(14	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	161	$	(6	)	$	(155	)	—	$	319	$	(14	)	$	(305	)	—
Total	$	161	$	(6	)	$	(155	)	—	$	319	$	(14	)	$	(305	)	—

(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 June 30, 2019, the carrying amount of assets pledged as collateral against repurchase agreements totaled $211 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At June 30, 2019, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $155 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

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Employee Benefits

14. Employee Benefits

Pension Plans

The components of net pension cost (benefit) for all funded and unfunded plans are recorded in “other expense” and are summarized in the following table. For more information on our Pension Plans and Other Postretirement Benefit Plans, see Note 17 (“Employee Benefits”) beginning on page 151 of our 2018 Form 10-K.

	Three months ended June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Interest cost on PBO	$	12		$	10		$	23		$	20
Expected return on plan assets	(12		)	(13		)	(24		)	(26		)
Amortization of losses	3			4			7			8
Net pension cost	$	3		$	1		$	6		$	2

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries

6 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Trust Preferred Securities Issued by Unconsolidated Subsidiaries

15. 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
June 30, 2019
KeyCorp Capital I	$	156	$	6	$	162	3.332	%	2028
KeyCorp Capital II	106		4		110		6.875		2029
KeyCorp Capital III	138		4		142		7.750		2029
HNC Statutory Trust III	19		1		20		3.924		2035
Willow Grove Statutory Trust I	18		1		19		3.720		2036
HNC Statutory Trust IV	16		1		17		3.863		2037
Westbank Capital Trust II	7		—		7		4.577		2034
Westbank Capital Trust III	7		—		7		4.577		2034
Total	$	467	$	17	$	484	5.536	%	—
December 31, 2018	$	454	$	17	$	471	5.447	%	—

(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 $58 million at June 30, 2019, and $46 million at December 31, 2018. 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 $58 million at June 30, 2019, and $46 million at December 31, 2018. 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

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities and Guarantees

16. 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 June 30, 2019. 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 106 of our 2018 Form 10-K.

June 30, 2019	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,086	$	73
Recourse agreement with FNMA	4,392		6
Residential mortgage reserve	1,617		6
Written put options (a)	2,854		49
Total	$	11,949	$	134

(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 June 30, 2019, is low. Information pertaining to the nature of each of the guarantees listed below is included in Note 21 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Guarantees” beginning on page 163 of our 2018 Form 10-K.

Standby letters of credit. At June 30, 2019, 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. At June 30, 2019, the outstanding commercial mortgage loans in this program had a weighted-average remaining term of 7.8 years, and the unpaid principal balance outstanding of loans sold by us as a participant was $15.1 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 June 30, 2019. 

Residential Mortgage Banking. At June 30, 2019, the unpaid principal balance outstanding of loans sold by us in this program was $5.4 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 June 30, 2019. 

Our liability for estimated repurchase obligations on loans sold, which is included in other liabilities on our balance sheet, was $6 million at June 30, 2019. For more information on our residential mortgages, see Note 8 (“Mortgage Servicing Assets “).

Written put options. At June 30, 2019, our written put options had an average life of three years. These written put options are accounted for as derivatives at fair value, as further discussed in Note 7 (“Derivatives and Hedging Activities”).

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”).

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. Additional information pertaining to types other off-balance sheet risk is included in Note 21 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Other Off-Balance Sheet Risk” on page 165 of our 2018 Form 10-K.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income

17. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and six months ended June 30, 2019, and June 30, 2018, 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, 2018	$	(373	)	$	(50	)	$	(14	)	$	(381	)	$	(818	)
Other comprehensive income before reclassification, net of income taxes	475			284			4			14			777
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			5			39
Net current-period other comprehensive income, net of income taxes	475			318			4			19			816
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Balance at March 31, 2019	$	(189	)	$	49		$	(11	)	$	(379	)	$	(530	)
Other comprehensive income before reclassification, net of income taxes	291			204			1			15			511
Amounts reclassified from AOCI, net of income taxes (a)	—			15			—			2			17
Net current-period other comprehensive income, net of income taxes	291			219			1			17			528
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Balance at December 31, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(216		)	(100		)	(11		)	—			(327		)
Amounts reclassified from AOCI, net of income taxes (a)	—			20			—			6			26
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(216		)	(80		)	(16		)	6			(306		)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Balance at March 31, 2018	(461		)	$	(149	)	$	7		$	(388	)	$	(991	)
Other comprehensive income before reclassification, net of income taxes	(66		)	(35		)	(9		)	—			(110		)
Amounts reclassified from AOCI, net of income taxes (a)	—			18			—			3			21
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(66		)	(17		)	(14		)	3			(94		)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)

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

Our reclassifications out of AOCI for the three and six months ended June 30, 2019, and June 30, 2018, are as follows:

	Six months ended June 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(43	)	$	(27	)	Interest income — Loans
Interest rate	(1		)	—			Interest expense — Long-term debt
	(44		)	(27		)	Income (loss) from continuing operations before income taxes
	(10		)	(7		)	Income taxes
	$	(34	)	$	(20	)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(7	)	$	(8	)	Personnel expense
	(7		)	(8		)	Income (loss) from continuing operations before income taxes
	(2		)	(2		)	Income taxes
	$	(5	)	$	(6	)	Income (loss) from continuing operations

	Three months ended June 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(19	)	$	(25	)	Interest income — Loans
Interest rate	—			1			Interest expense — Long-term debt
	(19		)	(24		)	Income (loss) from continuing operations before income taxes
	(4		)	(6		)	Income taxes
	$	(15	)	(18		)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(3	)	(4		)	Personnel expense
	(3		)	(4		)	Income (loss) from continuing operations before income taxes
	(1		)	(1		)	Income taxes
	$	(2	)	$	(3	)	Income (loss) from continuing operations

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Shareholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Shareholder' Equity

18. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2018 capital plan (which was 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 $180 million of Common Share repurchases, including $179 million of Common Share repurchases in the open market and $1 million of Common Share repurchases related to employee equity compensation programs, in the second quarter of 2019 under this authorization.

Consistent with our 2018 capital plan, the Board declared a quarterly dividend of $.17 per Common Share for the second quarter of 2019.

On April 18, 2019, we announced our 2019 capital plan. Share repurchases of up to $1.0 billion are included in the 2019 capital plan which is effective from the third quarter of 2019 through the second quarter of 2020. Our 2019 capital plan also includes a 9% increase in our Common Stock dividend to $.185 per Common Share, which was approved by our Board of Directors on July 17, 2019.

Preferred Stock

On April 29, 2019, we issued $450 million of depositary shares, each representing a 1/40th ownership interest in a share of our Fixed Rate Perpetual Noncumulative Series G Preferred Stock.

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		Second quarter 2019 dividends paid per depositary share
Fixed-to-Floating Rate Perpetual Noncumulative Series D	$	525	21,000	$	1	$	25,000	1/25th	$	1,000	$	12.50
Fixed-to-Floating Rate Perpetual Noncumulative Series E	500		500,000	1		1,000		1/40th	25		.382813
Fixed Rate Perpetual Noncumulative Series F	425		425,000	1		1,000		1/40th	25		.353125
Fixed Rate Perpetual Non-Cumulative Series G	450		450,000	1		1,000		1/40th	25		—

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Business Segment Reporting

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Business Segment Reporting

19. Business Segment Reporting

Key previously reported its results of operations through two reportable business segments, Key Community Bank and Key Corporate Bank. In the first quarter of 2019, Key underwent a company-wide organizational change, resulting in the realignment of its businesses into two reportable business segments, Consumer Bank and Commercial Bank, with the remaining operations that do not meet the criteria for disclosure as a separate reportable business recorded in Other. The new business segment structure aligns with how management reviews performance and makes decisions by client, segment and business unit. Prior period information was restated to conform to the new business segment structure. Additionally, goodwill was reallocated to the new segments on a relative fair value basis. On March 31, 2019, the Consumer Bank was allocated goodwill in the amount of $1.6 billion and the Commercial Bank was allocated goodwill in the amount of $912 million.

The following is a description of the segments and their primary businesses at June 30, 2019.

Consumer Bank

The Consumer Bank serves individuals and small businesses throughout our 15-state branch footprint by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services. The Consumer Bank also purchases retail auto sales contracts via a network of auto dealerships. The auto dealerships finance the sale of automobiles as the initial lender and then assign the contracts to us pursuant to dealer agreements. In addition, wealth management and investment services are offered to assist institutional, non-profit, and high-net-worth clients with their banking, trust, portfolio management, life insurance, charitable giving, and related needs.

Commercial Bank

The Commercial Bank is an aggregation of our Institutional and Commercial operating segments. The Commercial operating segment is a full-service corporate 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. The Commercial operating segment is also a significant servicer of commercial mortgage loans and a significant special servicer of CMBS. The Institutional operating segment 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.

Other

Other includes various corporate treasury activities such as management of our investment securities portfolio, long-term debt, short-term liquidity and funding activities, and balance sheet risk management, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items

also include intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.

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

The table below shows selected financial data for our business segments for the three- and six-month periods ended June 30, 2019, and June 30, 2018.

Three months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2019			2018			2019			2018			2019			2018			2019			2018
SUMMARY OF OPERATIONS
Net interest income (TE)	$	594		$	574		$	405		$	418		$	(10	)	$	(5	)	$	989		$	987
Noninterest income	231			236			354			303			37			121			622			660
Total revenue (TE) (a)	825			810			759			721			27			116			1,611			1,647
Provision for credit losses	40			39			33			25			1			—			74			64
Depreciation and amortization expense	25			26			35			34			37			39			97			99
Other noninterest expense	535			543			346			357			41			(6		)	922			894
Income (loss) from continuing operations before income taxes (TE)	225			202			345			305			(52		)	83			518			590
Allocated income taxes and TE adjustments	53			47			62			49			(20		)	15			95			111
Income (loss) from continuing operations	172			155			283			256			(32		)	68			423			479
Income (loss) from discontinued operations, net of taxes	—			—			—			—			2			3			2			3
Net income (loss)	172			155			283			256			(30		)	71			425			482
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	172		$	155		$	283		$	256		$	(30	)	$	71		$	425		$	482
AVERAGE BALANCES (b)
Loans and leases	$	31,881		$	31,276		$	57,924		$	56,175		$	980		$	1,193		$	90,785		$	88,644
Total assets (a)	35,469			34,495			65,907			63,948			41,259			37,935			142,635			136,378
Deposits	72,303			68,279			35,961			33,169			1,337			2,555			109,601			104,003
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	40		$	39		$	23		$	22		2			(1		)	$	65		$	60
Return on average allocated equity (b)	21.12		%	18.88		%	24.57		%	22.99		%	(1.48		)%	3.75		%	10.26		%	12.78		%
Return on average allocated equity	21.12			18.88			24.57			22.99			(1.39		)	3.92			10.31			12.86
Average full-time equivalent employees (c)	9,440			10,067			2,260			2,467			5,506			5,842			17,206			18,376

(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.

Six months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2019			2018			2019			2018			2019			2018			2019			2018
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,185		$	1,126		$	806		$	824		$	(17	)	$	(11	)	$	1,974		$	1,939
Noninterest income	445			457			655			636			58			168			1,158			1,261
Total revenue (TE) (a)	1,630			1,583			1,461			1,460			41			157			3,132			3,200
Provision for credit losses	85			73			49			54			2			(2		)	136			125
Depreciation and amortization expense	48			53			65			69			72			81			185			203
Other noninterest expense	1,061			1,093			680			700			56			3			1,797			1,796
Income (loss) from continuing operations before income taxes (TE)	436			364			667			637			(89		)	75			1,014			1,076
Allocated income taxes and TE adjustments	103			86			127			96			(45		)	(1		)	185			181
Income (loss) from continuing operations	333			278			540			541			(44		)	76			829			895
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3			5			3			5
Net income (loss)	333			278			540			541			(41		)	81			832			900
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	333		$	278		$	540		$	541		$	(41	)	$	81		$	832		$	900
AVERAGE BALANCES (b)
Loans and leases	$	31,603		$	31,409		$	57,610		$	55,210		$	1,007		$	1,171		$	90,220		$	87,790
Total assets (a)	35,103			34,638			65,405			62,865			40,877			38,148			141,385			135,651
Deposits	71,798			67,852			35,194			32,983			1,602			2,448			108,594			103,283
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	74		$	73		$	53		$	41		2			—			$	129		$	114
Return on average allocated equity (b)	20.76		%	16.98		%	23.93		%	24.74		%	(1.06		)%	2.11		%	10.37		%	12.06		%
Return on average allocated equity	20.76			16.98			23.93			24.74			(.99		)	2.25			10.41			12.13
Average full-time equivalent employees (c)	9,531			10,082			2,314			2,466			5,534			5,910			17,379			18,458

(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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Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

20. Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers, by business segment, for the three- and six-month periods ended June 30, 2019, and June 30, 2018. Refer to Note 19 (“Business Segment Reporting”) for a description of the company-wide organizational change which occurred in the first quarter of 2019 resulting in the realignment of Key’s businesses into two reportable business segments, Consumer Bank and Commercial Bank. Prior period information was restated to conform to the new business segment structure.

	Three months ended June 30, 2019						Three months ended June 30, 2018
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	91	$	17	$	108	$	91	$	19	$	110
Investment banking and debt placement fees	—		65		65		—		68		68
Services charges on deposit accounts	56		27		83		62		28		90
Cards and payments income	44		28		72		40		29		69
Other noninterest income	4		—		4		5		—		5
Total revenue from contracts with customers	$	195	$	137	$	332	$	198	$	144	$	342
Other noninterest income (a)					$	253					$	197
Noninterest income from Other(b)					37						121
Total noninterest income					$	622					$	660

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

(b) Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.

	Six months ended June 30, 2019						Six months ended June 30, 2018
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	176	$	32	$	208	$	176	$	36	$	212
Investment banking and debt placement fees	—		110		110		—		115		115
Services charges on deposit accounts	110		55		165		123		56		179
Cards and payments income	81		55		136		75		55		130
Other noninterest income	6		—		6		10		—		10
Total revenue from contracts with customers	$	373	$	252	$	625	$	384	$	262	$	646
Other noninterest income (a)					$	475					$	447
Noninterest income from Other(b)					58						168
Total noninterest income					$	1,158					$	1,261

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

(b) Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.

We had no material contract assets or contract liabilities as of June 30, 2019, and June 30, 2018.

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Subsequent Event

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Event

21. Subsequent Event

As previously reported, on or about July 9, 2019, we discovered fraudulent activity associated with transactions conducted in the third quarter of 2019 by a business customer of KeyBank. We continue to investigate this matter to determine the potential exposure to us, which we currently estimate could be up to $90 million, net of tax. The ultimate financial impact could be lower and will depend, in part, on our success in our efforts to recover the funds. We plan to pursue all available sources of recovery and other means of mitigating the potential loss.

We are working with the appropriate law enforcement authorities in connection with this matter. We may be limited in what information we can disclose due to the ongoing investigation.

Based on our review of the circumstances of the fraudulent activity, we believe this incident is an isolated occurrence involving a single business relationship.

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Basis of Presentation and Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

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 10 (“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 2018 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 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 ASU 2018-20, Leases (Topic 842): Narrow Scope Improvements for Lessors ASU 2019-01, Codification Improvements to Topic 842	January 1, 2019	The ASUs create and amend ASC Topic 842, Leases, and supersede Topic 840, Leases. The new guidance 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, both types of leases are required to be recognized on the balance sheet. ASC 842 requires enhanced disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. Qualitative and quantitative disclosures are required to provide additional information about the amounts recorded in the financial statements. Although substantially unchanged, certain amendments provide clarifications related to lessor accounting. The guidance should be implemented 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.	Key adopted this guidance on January 1, 2019, using the package of practical expedients, which allowed Key to maintain historic lease identification and classification, and permitted Key not to reassess initial direct costs under the new guidance. Key also elected the practical expedient on not separating lease components from nonlease components for all of its leases. Adoption resulted in an increase in right-of-use assets and associated lease liabilities arising from operating leases in which Key is the lessee of approximately $710 million on our Consolidated Balance Sheets at January 1, 2019. Right of use assets, lease liabilities, and other changes as a result of adoption are not reflected in comparable periods presented prior to that date. The adoption of this guidance did not have a material impact on the recognition of operating lease expense in our Consolidated Statements of Income. The amount of the right-of-use assets and associated lease liabilities recorded at adoption was based on the present value of unpaid future minimum lease payments. These payments were discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. For more information, please see Note 9 (“Leases”).
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	January 1, 2019	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 did not have a material effect on our financial condition or results of operations.
ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting	January 1, 2019	The ASU amends ASC Topic 718, Stock Compensation, and simplifies the accounting for share based payments granted to nonemployees for goods and services. The guidance should be implemented on a modified retrospective basis using a cumulative-effect adjustment.	The adoption of this guidance did not affect our financial condition or results of operations.
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only); January 1, 2019, remaining requirements 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 removed the disclosures no longer required by the guidance as of September 30, 2018, and early adopted the additional provisions of the standard in the first quarter of 2019. The adoption of this standard did not result in significant changes to Key’s disclosures, and there was no effect to our financial condition or results of operations.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract	January 1, 2019 Early adoption.	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 early adopted this guidance effective January 1, 2019, on a prospective basis. The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2019-04, Codification Improvements to Topic 815, Derivatives and Hedging (ASU Topic #3), and Topic 825, Financial Instruments (ASU Topic #4)	May 1, 2019 Early adoption upon issuance	The ASU provides technical corrections to previously adopted ASUs 2016-01 and 2017-12 and clarifies issues related to partial-term fair value hedges, fair value hedge basis adjustments, and how to measure changes in fair value of a hedged item. It also clarifies certain issues related to equity securities and the measurement alternative. Amendments related to ASU 2016-01 should be adopted using a modified retrospective approach, except for those related to equity securities without readily determinable fair values for which the measurement alternative is elected, that should be applied prospectively. Amendments related to ASU 2017-12 can be applied on either a prospective or retrospective basis, with certain exceptions.	Key early adopted this guidance effective May 1, 2019. The adoption of this accounting guidance did not effect our financial condition or results of operations.

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Basis of Presentation and Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Accounting Guidance Adopted in 2019

Standard	Date of 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 ASU 2018-20, Leases (Topic 842): Narrow Scope Improvements for Lessors ASU 2019-01, Codification Improvements to Topic 842	January 1, 2019	The ASUs create and amend ASC Topic 842, Leases, and supersede Topic 840, Leases. The new guidance 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, both types of leases are required to be recognized on the balance sheet. ASC 842 requires enhanced disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. Qualitative and quantitative disclosures are required to provide additional information about the amounts recorded in the financial statements. Although substantially unchanged, certain amendments provide clarifications related to lessor accounting. The guidance should be implemented 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.	Key adopted this guidance on January 1, 2019, using the package of practical expedients, which allowed Key to maintain historic lease identification and classification, and permitted Key not to reassess initial direct costs under the new guidance. Key also elected the practical expedient on not separating lease components from nonlease components for all of its leases. Adoption resulted in an increase in right-of-use assets and associated lease liabilities arising from operating leases in which Key is the lessee of approximately $710 million on our Consolidated Balance Sheets at January 1, 2019. Right of use assets, lease liabilities, and other changes as a result of adoption are not reflected in comparable periods presented prior to that date. The adoption of this guidance did not have a material impact on the recognition of operating lease expense in our Consolidated Statements of Income. The amount of the right-of-use assets and associated lease liabilities recorded at adoption was based on the present value of unpaid future minimum lease payments. These payments were discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. For more information, please see Note 9 (“Leases”).
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	January 1, 2019	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 did not have a material effect on our financial condition or results of operations.
ASU 2018-07, Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting	January 1, 2019	The ASU amends ASC Topic 718, Stock Compensation, and simplifies the accounting for share based payments granted to nonemployees for goods and services. The guidance should be implemented on a modified retrospective basis using a cumulative-effect adjustment.	The adoption of this guidance did not affect our financial condition or results of operations.
ASU 2018-13, Fair Value Measurement: Disclosure Framework	September 30, 2018 (removed disclosures only); January 1, 2019, remaining requirements 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 removed the disclosures no longer required by the guidance as of September 30, 2018, and early adopted the additional provisions of the standard in the first quarter of 2019. The adoption of this standard did not result in significant changes to Key’s disclosures, and there was no effect to our financial condition or results of operations.

Standard	Date of Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract	January 1, 2019 Early adoption.	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 early adopted this guidance effective January 1, 2019, on a prospective basis. The adoption of this guidance did not have a material effect on our financial condition or results of operations.
ASU 2019-04, Codification Improvements to Topic 815, Derivatives and Hedging (ASU Topic #3), and Topic 825, Financial Instruments (ASU Topic #4)	May 1, 2019 Early adoption upon issuance	The ASU provides technical corrections to previously adopted ASUs 2016-01 and 2017-12 and clarifies issues related to partial-term fair value hedges, fair value hedge basis adjustments, and how to measure changes in fair value of a hedged item. It also clarifies certain issues related to equity securities and the measurement alternative. Amendments related to ASU 2016-01 should be adopted using a modified retrospective approach, except for those related to equity securities without readily determinable fair values for which the measurement alternative is elected, that should be applied prospectively. Amendments related to ASU 2017-12 can be applied on either a prospective or retrospective basis, with certain exceptions.	Key early adopted this guidance effective May 1, 2019. The adoption of this accounting guidance did not effect our financial condition or results of operations.

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30,				Six months ended June 30,
dollars in millions, except per share amounts	2019		2018		2019		2018
EARNINGS
Income (loss) from continuing operations	$	423	$	479	$	829	$	895
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	423		479		829		895
Less: Dividends on Preferred Stock	20		15		40		29
Income (loss) from continuing operations attributable to Key common shareholders	403		464		789		866
Income (loss) from discontinued operations, net of taxes	2		3		3		5
Net income (loss) attributable to Key common shareholders	$	405	$	467	$	792	$	871
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	999,163		1,052,652		1,003,047		1,054,378
Effect of Common Share options and other stock awards	8,801		13,141		9,318		14,561
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	1,007,964		1,065,793		1,012,365		1,068,939
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.40	$	.44	$	.79	$	.82
Income (loss) from discontinued operations, net of taxes	—		—		—		—
Net income (loss) attributable to Key common shareholders (b)	.40		.44		.79		.82
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.40	$	.44	$	.78	$	.81
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		—		—
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.40		.44		.78		.81

(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)

6 Months Ended

Jun. 30, 2019

Loans Receivables [Abstract]

Loans by Category

in millions	June 30, 2019		December 31, 2018
Commercial and industrial (a)	$	48,544	$	45,753
Commercial real estate:
Commercial mortgage	13,299		14,285
Construction	1,439		1,666
Total commercial real estate loans	14,738		15,951
Commercial lease financing (b)	4,578		4,606
Total commercial loans	67,860		66,310
Residential — prime loans:
Real estate — residential mortgage	6,053		5,513
Home equity loans	10,575		11,142
Total residential — prime loans	16,628		16,655
Consumer direct loans	2,350		1,809
Credit cards	1,096		1,144
Consumer indirect loans	4,003		3,634
Total consumer loans	24,077		23,242
Total loans (c)	$	91,937	$	89,552

(a) Loan balances include $143 million and $132 million of commercial credit card balances at June 30, 2019, and December 31, 2018, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $11 million and $10 million at June 30, 2019, and December 31, 2018, 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 19 (“Long-Term Debt”) beginning on page 160 of our 2018 Form 10-K.

(c)

Total loans exclude loans of $964 million at June 30, 2019, and $1.1 billion at December 31, 2018, related to the discontinued operations of the education lending business.

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Asset Quality (Tables)

6 Months Ended

Jun. 30, 2019

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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Pass	$	46,773	$	44,138	$	12,756	$	13,672	$	1,379	$	1,537	$	4,535	$	4,557	$	65,443	$	63,904
Criticized (Accruing)	1,529		1,402		303		354		57		125		36		41		1,925		1,922
Criticized (Nonaccruing)	189		152		85		81		2		2		7		8		283		243
Total	$	48,491	$	45,692	$	13,144	$	14,107	$	1,438	$	1,664	$	4,578	$	4,606	$	67,651	$	66,069

(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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
750 and above	$	10,040	$	9,794	$	827	$	549	$	499	$	521	$	1,849	$	1,647	$	13,215	$	12,511
660 to 749	4,681		4,906		822		700		481		507		1,440		1,320		7,424		7,433
Less than 660	1,341		1,411		219		224		116		116		573		565		2,249		2,316
No Score	260		213		479		333		—		—		141		102		880		648
Total	$	16,322	$	16,324	$	2,347	$	1,806	$	1,096	$	1,144	$	4,003	$	3,634	$	23,768	$	22,908

(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	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,	December 31,	June 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019	2018	2019		2018
Pass	$	32	$	37	$	111	$	125	$	1	$	2	—	—	$	144	$	164
Criticized	21		24		44		53		—		—		—	—	65		77
Total	$	53	$	61	$	155	$	178	$	1	$	2	—	—	$	209	$	241

(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	June 30,		December 31,		June 30,		December 31,		June 30,	December 31,	June 30,	December 31,	June 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019	2018	2019	2018	2019		2018
750 and above	$	119	$	137	1		—		—	—	—	—	$	120	$	137
660 to 749	103		95		$	1	$	1	—	—	—	—	104		96
Less than 660	78		97		1		2		—	—	—	—	79		99
No Score	6		2		—		—		—	—	—	—	6		2
Total	$	306	$	331	$	3	$	3	—	—	—	—	$	309	$	334

(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 June 30, 2019, and December 31, 2018, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio ^(a) 

June 30, 2019	Current		30-59 Days Past Due (b)		60-89 Days Past Due (b)		90 and Greater Days Past Due (b)		Non-performing Loans		Total Past Due and Non-performing Loans		Purchased Credit Impaired		Total Loans (c), (d)
in millions
LOAN TYPE
Commercial and industrial	$	48,136	$	116	$	20	$	30	$	189	$	355	$	53	$	48,544
Commercial real estate:
Commercial mortgage	13,029		17		3		10		85		115		155		13,299
Construction	1,416		20		—		—		2		22		1		1,439
Total commercial real estate loans	14,445		37		3		10		87		137		156		14,738
Commercial lease financing	4,547		13		3		8		7		31		—		4,578
Total commercial loans	$	67,128	$	166	$	26	$	48	$	283	$	523	$	209	$	67,860
Real estate — residential mortgage	$	5,686	$	11	$	2	$	1	$	62	$	76	$	291	$	6,053
Home equity loans	10,329		27		8		5		191		231		15		10,575
Consumer direct loans	2,322		10		5		7		3		25		3		2,350
Credit cards	1,073		6		4		11		2		23		—		1,096
Consumer indirect loans	3,947		28		6		2		20		56		—		4,003
Total consumer loans	$	23,357	$	82	$	25	$	26	$	278	$	411	$	309	$	24,077
Total loans	$	90,485	$	248	$	51	$	74	$	561	$	934	$	518	$	91,937

(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, 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	$	45,375	$	89	$	31	$	45	$	152	$	317	61		$	45,753
Commercial real estate:
Commercial mortgage	13,957		27		17		25		81		150		178		14,285
Construction	1,646		—		13		3		2		18		2		1,666
Total commercial real estate loans	15,603		27		30		28		83		168		180		15,951
Commercial lease financing	4,580		12		1		4		9		26		—		4,606
Total commercial loans	$	65,558	$	128	$	62	$	77	$	244	$	511	241		$	66,310
Real estate — residential mortgage	$	5,119	$	11	$	3	$	4	$	62	$	80	$	314	$	5,513
Home equity loans	10,862		31		12		10		210		263		17		11,142
Consumer direct loans	1,780		11		5		6		4		26		3		1,809
Credit cards	1,119		6		5		12		2		25		—		1,144
Consumer indirect loans	3,573		31		7		3		20		61		—		3,634
Total consumer loans	$	22,453	$	90	$	32	$	35	$	298	$	455	$	334	$	23,242
Total loans	$	88,011	$	218	$	94	$	112	$	542	$	966	$	575	$	89,552

(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 June 30, 2019, and December 31, 2018: 

	June 30, 2019						December 31, 2018
	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	$	118	$	151	—		$	118	$	175	—
Commercial real estate:
Commercial mortgage	61		73		—		64		70		—
Total commercial real estate loans	61		73		—		64		70		—
Total commercial loans	179		224		—		182		245		—
Real estate — residential mortgage	4		6		—		4		5		—
Home equity loans	47		53		—		49		56		—
Consumer direct loans	—		1		—		1		1		—
Consumer indirect loans	2		4		—		2		4		—
Total consumer loans	53		64		—		56		66		—
Total loans with no related allowance recorded	232		288		—		238		311		—
With an allowance recorded:
Commercial and industrial	65		83		$	10	44		47		$	5
Commercial real estate:
Commercial mortgage	3		3		1		2		3		1
Total commercial real estate loans	3		3		1		2		3		1
Total commercial loans	68		86		11		46		50		6
Real estate — residential mortgage	44		68		3		45		70		3
Home equity loans	81		87		9		78		85		8
Consumer direct loans	4		4		—		3		3		—
Credit cards	3		3		—		3		3		—
Consumer indirect loans	33		34		3		34		34		2
Total consumer loans	165		196		15		163		195		13
Total loans with an allowance recorded	233		282		26		209		245		19
Total	$	465	$	570	$	26	$	447	$	556	$	19

(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 June 30,				Six Months Ended June 30,
in millions	2019		2018		2019		2018
Commercial and industrial	$	176	$	178	$	172	$	161
Commercial real estate:
Commercial mortgage	63		16		65		16
Total commercial real estate loans	63		16		65		16
Total commercial loans	239		194		237		177
Real estate — residential mortgage	48		49		49		49
Home equity loans	128		124		127		121
Consumer direct loans	4		4		4		4
Credit cards	2		3		3		3
Consumer indirect loans	36		35		36		34
Total consumer loans	218		215		219		211
Total	$	457	$	409	$	456	$	388

(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 June 30,				Six Months Ended June 30,
in millions	2019		2018		2019		2018
Commercial loans:
Forgiveness of principal	$	—	5		$	—	5
Extension of Maturity Date	6		$	14	$	6	$	15
Payment or Covenant Modification/Deferment	18		20		18		20
Bankruptcy Plan Modification	11		7		11		7
Total	35		$	46	$	35	$	47
Consumer loans:
Interest rate reduction	$	4	$	8	$	8	$	18
Other	9		10		16		21
Total	$	13	$	18	$	24	$	39
Total commercial and consumer TDRs	$	48	$	64	$	59	$	86

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 June 30,						Six Months Ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of the period	$	365		$	317		$	399		$	317
Additions	54			54			68			75
Payments	(19		)	(22		)	(58		)	(41		)
Charge-offs	(5		)	(2		)	(14		)	(4		)
Balance at end of period	$	395		$	347		$	395		$	347

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:

	June 30, 2019					December 31, 2018
	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	57	$	111	$	88	35	$	121	$	85
Commercial real estate:
Commercial mortgage	8	67		61		6	66		62
Total commercial real estate loans	8	67		61		6	66		62
Total commercial loans	65	178		149		41	187		147
Real estate — residential mortgage	297	21		19		281	21		20
Home equity loans	801	49		45		1,142	66		63
Consumer direct loans	129	1		1		171	2		1
Credit cards	251	1		1		330	2		2
Consumer indirect loans	968	16		13		1,098	18		14
Total consumer loans	2,446	88		79		3,022	109		100
Total nonperforming TDRs	2,511	266		228		3,063	296		247
Prior-year accruing:(a)
Commercial and industrial	10	34		28		11	37		32
Commercial real estate
Commercial mortgage	1	—		—		2	—		—
Total commercial real estate loans	1	—		—		2	—		—
Total commercial loans	11	34		28		13	37		32
Real estate — residential mortgage	467	35		29		491	36		30
Home equity loans	1,716	100		83		1,403	82		64
Consumer direct loans	138	5		3		79	4		3
Credit cards	600	3		2		479	3		1
Consumer indirect loans	766	36		22		556	33		22
Total consumer loans	3,687	179		139		3,008	158		120
Total prior-year accruing TDRs	3,698	213		167		3,021	195		152
Total TDRs	6,209	$	479	$	395	6,084	$	491	$	399

(a) All TDRs that were restructured prior to January 1, 2019, and January 1, 2018, 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 June 30, 2019:

in millions	March 31, 2019		Provision				Charge-offs			Recoveries		June 30, 2019
Commercial and Industrial	$	530	$	43			$	(30	)	$	6	$	549
Commercial real estate:
Real estate — commercial mortgage	144		(5		)		(1		)	1		139
Real estate — construction	28		(4		)		—			—		24
Total commercial real estate loans	172		(9		)		(1		)	1		163
Commercial lease financing	35		14				(16		)	2		35
Total commercial loans	737		48				(47		)	9		747
Real estate — residential mortgage	8		—				(1		)	—		7
Home equity loans	36		4				(6		)	2		36
Consumer direct loans	33		7				(10		)	2		32
Credit cards	47		7				(12		)	2		44
Consumer indirect loans	22		6				(8		)	4		24
Total consumer loans	146		24				(37		)	10		143
Total ALLL — continuing operations	883		72			(a)	(84		)	19		890
Discontinued operations	13		2				(4		)	1		12
Total ALLL — including discontinued operations	$	896	$	74			$	(88	)	$	20	$	902

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

Three months ended June 30, 2018:

in millions	March 31, 2018		Provision				Charge-offs			Recoveries		June 30, 2018
Commercial and Industrial	$	533	$	41			$	(39	)	$	7	$	542
Commercial real estate:
Real estate — commercial mortgage	136		4				(2		)	1		139
Real estate — construction	33		(5		)		—			—		28
Total commercial real estate loans	169		(1		)		(2		)	1		167
Commercial lease financing	40		4				(4		)	—		40
Total commercial loans	742		44				(45		)	8		749
Real estate — residential mortgage	9		1				—			—		10
Home equity loans	38		2				(6		)	3		37
Consumer direct loans	27		6				(9		)	2		26
Credit cards	45		11				(12		)	2		46
Consumer indirect loans	20		2				(7		)	4		19
Total consumer loans	139		22				(34		)	11		138
Total ALLL — continuing operations	881		66			(a)	(79		)	19		887
Discontinued operations	16		—				(3		)	1		14
Total ALLL — including discontinued operations	$	897	$	66			$	(82	)	$	20	$	901

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

Six months ended June 30, 2019:

in millions	December 31, 2018		Provision				Charge-offs			Recoveries		June 30, 2019
Commercial and Industrial	532		$	67			$	(66	)	$	16	$	549
Commercial real estate:
Real estate — commercial mortgage	142		1				(6		)	2		139
Real estate — construction	33		(5		)		(4		)	—		24
Total commercial real estate loans	175		(4		)		(10		)	2		163
Commercial lease financing	36		20				(24		)	3		35
Total commercial loans	743		83				(100		)	21		747
Real estate — residential mortgage	7		1				(2		)	1		7
Home equity loans	35		7				(10		)	4		36
Consumer direct loans	30		19				(20		)	3		32
Credit cards	48		15				(23		)	4		44
Consumer indirect loans	20		11				(16		)	9		24
Total consumer loans	140		53				(71		)	21		143
Total ALLL — continuing operations	883		136			(a)	(171		)	42		890
Discontinued operations	14		4				(8		)	2		12
Total ALLL — including discontinued operations	$	897	$	140			$	(179	)	$	44	$	902

Six months ended June 30, 2018:

in millions	December 31, 2017		Provision				Charge-offs			Recoveries		June 30, 2018
Commercial and Industrial	$	529	$	76			$	(76	)	$	13	$	542
Commercial real estate:
Real estate — commercial mortgage	133		8				(3		)	1		139
Real estate — construction	30		(3		)		—			1		28
Total commercial real estate loans	163		5				(3		)	2		167
Commercial lease financing	43		1				(5		)	1		40
Total commercial loans	735		82				(84		)	16		749
Real estate — residential mortgage	7		4				(1		)	—		10
Home equity loans	43		(2		)		(10		)	6		37
Consumer direct loans	28		11				(17		)	4		26
Credit cards	44		23				(24		)	3		46
Consumer indirect loans	20		6				(15		)	8		19
Total consumer loans	142		42				(67		)	21		138
Total ALLL — continuing operations	877		124			(a)	(151		)	37		887
Discontinued operations	16		2				(7		)	3		14
Total ALLL — including discontinued operations	$	893	$	126			$	(158	)	$	40	$	901

(a) Excludes a provision for losses on lending-related commitments of $1 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 June 30, 2019, follows:

	Allowance						Outstanding
June 30, 2019	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	$	10	$	538	$	1	$	48,544		$	183	$	48,308		$	53
Commercial real estate:
Commercial mortgage	1		137		1		13,299			64		13,080			155
Construction	—		24		—		1,439			—		1,438			1
Total commercial real estate loans	1		161		1		14,738			64		14,518			156
Commercial lease financing	—		35		—		4,578			—		4,578			—
Total commercial loans	11		734		2		67,860			247		67,404			209
Real estate — residential mortgage	3		3		1		6,053			48		5,714			291
Home equity loans	9		26		1		10,575			128		10,432			15
Consumer direct loans	—		32		—		2,350			4		2,343			3
Credit cards	—		44		—		1,096			3		1,093			—
Consumer indirect loans	3		21		—		4,003			35		3,968			—
Total consumer loans	15		126		2		24,077			218		23,550			309
Total ALLL — continuing operations	26		860		4		91,937			465		90,954			518
Discontinued operations	2		10		—		964		(a)	23		941		(a)	—
Total ALLL — including discontinued operations	$	28	$	870	$	4	$	92,901		$	488	$	91,895		$	518

(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, 2018, follows:

	Allowance						Outstanding
December 31, 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	$	526	$	1	$	45,753		$	162	$	45,530		$	61
Commercial real estate:
Commercial mortgage	—		139		3		14,285			66		14,041			178
Construction	—		33		—		1,666			—		1,664			2
Total commercial real estate loans	—		172		3		15,951			66		15,705			180
Commercial lease financing	—		36		—		4,606			—		4,606			—
Total commercial loans	5		734		4		66,310			228		65,841			241
Real estate — residential mortgage	3		4		—		5,513			49		5,150			314
Home equity loans	8		26		1		11,142			127		10,998			17
Consumer direct loans	—		30		—		1,809			4		1,802			3
Credit cards	—		48		—		1,144			3		1,141			—
Consumer indirect loans	3		17		—		3,634			36		3,598			—
Total consumer loans	14		125		1		23,242			219		22,689			334
Total ALLL — continuing operations	19		859		5		89,552			447		88,530			575
Discontinued operations	2		12		—		1,073		(a)	23		1,050		(a)	—
Total ALLL — including discontinued operations	$	21	$	871	$	5	$	90,625		$	470	$	89,580		$	575

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

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

	Three months ended June 30,					Six months ended June 30,
in millions	2019		2018			2019		2018
Balance at beginning of period	$	62	$	60		$	64	$	57
Provision (credit) for losses on lending-related commitments	2		(2		)	—		1
Balance at end of period	$	64	$	58		$	64	$	58

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 six months ended June 30, 2019, and the twelve months ended December 31, 2018.

	Three Months Ended June 30,							Six Months Ended June 30,
	2019							2019
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance		Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	118		$	547	$	578	$	117		$	571	$	607
Accretion	(9		)					(19		)
Net reclassifications from nonaccretable to accretable	(5		)					8
Payments received, net	(3		)					(5		)
Balance at end of period	$	101		$	513	$	541	$	101		$	513	$	541

	Twelve Months Ended December 31,
	2018
in millions	Accretable Yield			Carrying Amount		Outstanding Unpaid Principal Balance
Balance at beginning of period	$	131		$	738	$	803
Accretion	(42		)
Net reclassifications from nonaccretable to accretable	50
Payments received, net	(21		)
Loans charged off	(1		)
Balance at end of period	$	117		$	571	$	607

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities Measured on Recurring Basis

The following tables present these assets and liabilities at June 30, 2019, and December 31, 2018.

	June 30, 2019									December 31, 2018
	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	—		$	853	—		$	853		—		$	578	—		$	578
States and political subdivisions	—		32		—		32			—		60		—		60
Other mortgage-backed securities	—		36		—		36			—		164		—		164
Other securities	—		62		—		62			—		22		—		22
Total trading account securities	—		983		—		983			—		824		—		824
Commercial loans	—		22		—		22			—		25		—		25
Total trading account assets	—		1,005		—		1,005			—		849		—		849
Securities available for sale:
U.S. Treasury, agencies and corporations	—		272		—		272			—		147		—		147
States and political subdivisions	—		5		—		5			—		7		—		7
Agency residential collateralized mortgage obligations	—		13,612		—		13,612			—		13,962		—		13,962
Agency residential mortgage-backed securities	—		2,061		—		2,061			—		2,105		—		2,105
Agency commercial mortgage-backed securities	—		5,543		—		5,543			—		3,187		—		3,187
Other securities	—		24		$	11	35			—		—		$	20	20
Total securities available for sale	—		21,517		11		21,528			—		19,408		20		19,428
Other investments:
Principal investments:
Direct	—		—		1		1			—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		76			—		—		—		96
Total principal investments	—		—		1		77			—		—		1		97
Equity investments:
Direct	—		—		7		7			—		1		7		8
Direct (measured at NAV) (a)	—		—		—		1			—		—		—		1
Indirect (measured at NAV) (a)	—		—		—		8			—		—		—		9
Total equity investments	—		—		7		16			—		1		7		18
Total other investments	—		—		8		93			—		1		8		115
Loans, net of unearned income (residential)	—		—		3		3			—		—		3		3
Loans held for sale (residential)	—		164		—		164			—		54		—		54
Derivative assets:
Interest rate	—		885		4		889			—		410		5		415
Foreign exchange	$	41	29		—		70			$	70	36		—		106
Commodity	—		246		—		246			—		333		—		333
Credit	—		1		—		1			—		1		—		1
Other	—		10		6		16			—		6		3		9
Derivative assets	41		1,171		10		1,222			70		786		8		864
Netting adjustments (b)	—		—		—		(413		)	—		—		—		(333		)
Total derivative assets	41		1,171		10		809			70		786		8		531
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	41	$	23,857	$	32	$	23,602		$	70	$	21,098	$	39	$	20,980
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	7	$	713	—		$	720		$	14	$	530	—		$	544
Derivative liabilities:
Interest rate	—		220		—		220			—		297		—		297
Foreign exchange	35		29		—		64			58		37		—		95
Commodity	—		236		—		236			—		323		—		323
Credit	—		2		$	1	3			—		1		—		1
Other	—		13		—		13			—		7		—		7
Derivative liabilities	35		500		1		536			58		665		—		723
Netting adjustments (b)	—		—		—		(319		)	—		—		—		(337		)
Total derivative liabilities	35		500		1		217			58		665		—		386
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	42	$	1,213	$	1	$	937		$	72	$	1,195	—		$	930

(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.

Fair Value Measurement Inputs and Valuation Techniques

The following table describes the valuation techniques and significant inputs used to measure the significant classes of assets and liabilities reported at fair value on a nonrecurring basis, as well as the classification of each within the valuation hierarchy.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Impaired loans and leases	Loans are evaluated for impairment on a quarterly basis; impairment typically occurs when there is evidence of a probable loss and the expected value of the loan is less than the contractual value of the loan.  The amount of the impairment may be determined based on the estimated present value of future cash flows, the fair value of the underlying collateral (Level 3), or the loan’s observable market price based on recent sales of similar loans and collateral (Level 2). Cash flow analysis considers internally developed inputs including: • Discount rates • Default rates • Changes in collateral values and costs of foreclosure	Level 2 and 3
Commercial loans held for sale and student loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include: • Non-binding bids for the respective loans or similar loans • Recent sales transactions • Internal models that emulate recent securitizations	Level 2 and 3
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, including: • Swap rates and bond ratings • Our own assumptions about the exit market for the leases • Details about the individual leases in the portfolio Leases for which we receive a current nonbinding bid, and for which the sale is considered probable, may be classified as Level 2. Valuations of lease and operating lease assets held for sale that employ our own assumptions are classified as Level 3 assets. The inputs based on our own assumptions include changes in the value of leased items and internal credit ratings.	Level 2 and 3
OREO, other repossessed personal property, and right-of-use assets	OREO, other repossessed properties, and right-of-use assets are valued based on: • 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.	Level 2 and 3

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
LIHTC, HTC, and NMTC investments	Valuation of LIHTC, HTC and NMTC involves measuring the present value of future tax benefits and comparing that value against the current carrying value of the investment. Expected future tax benefits are discounted to their present value using discounted cash flow modeling that incorporates an appropriate risk premium. LIHTC and HTC investments are impaired when it is more likely than not that the carrying amount of the investment will not be realized.	Level 3
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 June 30, 2019, and December 31, 2018, the carrying amount of equity investments under this method was $139 million and $107 million, respectively. No impairment was recorded for the three months ended June 30, 2019.	Level 3
Mortgage Servicing Rights	Refer to Note 8. Mortgage Servicing Assets	Level 3

The following table describes the valuation techniques and significant inputs used to measure the classes of assets and liabilities reported at fair value on a recurring basis, as well as the classification of each within the valuation hierarchy.

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Securities (trading account assets and available for sale)	Fair value of level 1 securities is determined by: • Quoted market prices available in an active market for identical securities. This includes exchange-traded equity securities. Fair value of level 2 securities is determined by: • Pricing models (either by a third party pricing service or internally). Inputs include: yields, benchmark securities, bids, offers, actual trade data (i.e., spreads, credit ratings, and interest rates) for comparable assets, spread tables, matrices, high-grade scales, and option-adjusted spreads. • Observable market prices of similar securities. Fair value of level 3 securities is determined by: • Internal models, principally discounted cash flow models (income approach). • Revenue multiples of comparable public companies (market approach). For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. The valuations provided by the third-party pricing service are based on observable market inputs, which include benchmark yields, reported trades, issuer spreads, benchmark securities, bids, offers, and reference data obtained from market research publications. Inputs used by the third-party pricing service in valuing CMOs and other mortgage-backed securities also include new issue data, monthly payment information, whole loan collateral performance, and “To Be Announced” prices. In valuations of securities issued by state and political subdivisions, inputs used by the third-party pricing service also include material event notices.	Level 1, 2, and 3 (primarily Level 2)
Commercial loans (trading account assets)	Fair value is based on: • Observable market price spreads for similar loans. Valuations reflect prices within the bid-ask spread that are most representative of fair value.	Level 2
Principal investments (direct)	Direct principal investments consist of equity and debt instruments of private companies made by our principal investing entities. Fair value is determined using: • Operating performance and market multiples of comparable businesses • Other unique facts and circumstances related to each individual investment Direct principal investments are accounted for as investment companies in accordance with the applicable accounting guidance, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. We are in the process of winding down our direct principal investment portfolio. As of June 30, 2019, the balance is less than $1 million.	Level 3
Principal investments (indirect)	Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. Under the provisions of the Volcker Rule, we are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of June 30, 2019, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.	NAV

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Other direct equity investments	Fair value is determined using: • Discounted cash flows • Operating performance and market/exit multiples of comparable businesses • Other unique facts and circumstances related to each individual investment For level 3 securities, increases (decreases) in the discount rate and marketability discount used in the discounted cash flow models would have resulted in lower (higher) fair value measurements. Higher volatility factors would have further magnified changes in fair value. Level 2 investments reflect the price of recent investments, which is deemed representative of fair value.	Level 2 and 3
Other direct and indirect equity investments (NAV)	Certain direct investments do not have readily determinable fair values and qualify for the practical expedient in the accounting guidance that allows us to estimate fair value based upon net asset value per share.	NAV
Loans held for sale and held for investment (residential)	Residential mortgage loans held for sale are accounted for at fair value. The election of the fair value option aligns the accounting for these assets with the related forward loan sale commitments. Fair values are based on: • Quoted market prices, where available • Prices for other traded mortgage loans with similar characteristics • Purchase commitments and bid information received from market participants Prices are adjusted as necessary to include: • The embedded servicing value in the loans • The specific characteristics of certain loans that are priced based on the pricing of similar loans. (These adjustments represent unobservable inputs to the valuation but are not considered significant given the relative insensitivity of the value to changes in these inputs to the fair value of the loans.) Residential loans held for investment: Certain residential loans held for sale contain salability exceptions that make them unable to be sold into the performing loan sales market. Loans in this category are transferred to the held to maturity loan portfolio and are included in “Loans, net of unearned income” on the balance sheet. This type of loan is classified as level 3 in the valuation hierarchy as transaction details regarding sales of this type of loan are often unavailable. Fair value is based upon: • Unobservable bid information from brokers and investors Higher (lower) unobservable bid information would have resulted in higher (lower) fair value measurements.	Level 1, 2 and 3 (primarily level 2)
Derivatives	Exchange-traded derivatives are valued using quoted prices in active markets and, therefore, are classified as Level 1 instruments. The majority of our derivative positions are level 2 and are valued using internally developed models based on market convention and observable market inputs. These derivative contracts include interest rate swaps, certain options, floors, cross currency swaps, credit default swaps, and forward mortgage loan sale commitments. Significant inputs used in the valuation models include: • Interest rate curves • Yield curves • LIBOR and Overnight Index Swap (OIS) discount rates • LIBOR and OIS curves, index pricing curves, foreign currency curves • Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity)	Level 1, 2, and 3 (primarily level 2)

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Derivatives (continued)	We have several customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, such as: • Bond spreads and asset values The unobservable internally derived assumptions include: • Loss probabilities • Internal risk ratings of customers The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, higher (lower) loss probabilities and internal risk ratings would have resulted in a lower (higher) fair value measurement of the risk participations. A directionally similar change would have also applied to other customized derivative instruments classified as Level 3. We use interest rate lock commitments for our residential mortgage business, which are classified as Level 3 instruments. The significant components of the valuation model include: • Interest rates observable in the market • Investor supplied prices for similar securities • The probability of the loan closing (i.e. the "pull-through" amount, a significant unobservable input). Increases (decreases) in the probability of the loan closing would have resulted in higher (lower) fair value measurements. Valuation of residential mortgage forward sale commitments utilizes observable market prices of comparable commitments and mortgage securities (Level 2).	Level 1, 2, and 3 (primarily level 2)
Liability for short positions	This includes fixed income securities held by our broker dealer in its trading inventory. Fair value of level 1 securities is determined by: • Quoted market prices available in an active market for identical securities Fair value of level 2 securities is determined by: • Observable market prices of similar securities • Market activity, spreads, credit ratings and interest rates for each security type	Level 1 and 2

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 June 30, 2019, as well as financial support provided for the three and six months ended June 30, 2019, and June 30, 2018.

					Financial support provided
					Three months ended June 30,						Six months ended June 30,
	June 30, 2019				2019				2018		2019			2018
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	$	1	—		—		$	—	—	—	—		—	—		—
Indirect investments (measured at NAV) (a)	76		$	24	$	—	—		—	—	$	2	—	$	1	—
Total	$	77	$	24	—		$	—	—	—	$	2	—	$	1	—

 

(a)

Our indirect investments consist of buyout funds, venture capital funds, and fund of funds. These investments are generally not redeemable. Instead, distributions are received through the liquidation of the underlying investments of the fund. An investment in any one of these funds typically can be sold only with the approval of the fund’s general partners. At June 30, 2019, no significant liquidation of the underlying investments has been communicated to Key. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

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 measured at fair value on a recurring basis for the three and six months ended June 30, 2019, and June 30, 2018. 

in millions	Beginning of Period Balance			Gains (Losses) Included in Other Comprehensive Income		Gains (Losses) Included in Earnings				Purchases			Sales			Settlements		Transfers Other		Transfers into Level 3			Transfers out of Level 3				End of Period Balance			Unrealized Gains (Losses) Included in Earnings
Six months ended June 30, 2019
Securities available for sale
Other securities	$	20		$	15	—				—			—			—		—		—			(24		)		$	11		—
Other investments
Principal investments
Direct	1			—		—				$	—		$	—		—		—		—			—				1			—
Equity investments
Direct	7			—		(1		)		—			—			—		—		$	1		—				7			—
Loans held for sale (residential)	—			—		—				—			(1		)	—		$	1	—			—				—			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	5			—		$	3		(c)	—			—			—		—		2		(d)	$	(6	)	(d)	4			—
Credit	—			—		—				(1		)	—			—		—		—			—				(1		)	—
Other (e)	3			—		—				—			—			—		3		—			—				6			—
Three months ended June 30, 2019
Securities available for sale
Other securities	$	25		$	10	—				—			—			—		—		—			$	(24	)		$	11		—
Other investments
Principal investments
Direct	1			—		$	—			(1		)	1			—		—		—			—				1			—
Other indirect	—			—		—				—			—			—		—		—			—				—			—
Equity investments
Direct	8			—		(1		)		—			—			—		—		—			—				7			—
Loans held for sale (residential)	1			—		—				—			(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	3			—		2			(c)	—			—			—		—		—		(d)	(1		)	(d)	4			—
Credit	(1		)	—		—				—			—			$	—	—		—			—				(1		)	—
Other (e)	4			—		—				—			—			—		2		—			—				6			—

in millions	Beginning of Period Balance		Gains (Losses) Included in Other Comprehensive Income	Gains (Losses) Included in Earnings				Purchases		Sales			Settlements		Transfers Other		Transfers into Level 3			Transfers out of Level 3				End of Period Balance			Unrealized Gains (Losses) Included in Earnings
Six months ended June 30, 2018
Securities available for sale
Other securities	$	20	—	—				—		—			—		—		—			—				$	20		—
Other investments
Principal investments
Direct	13		—	—				$	1	$	(1	)	—		—		—			—				13			$	1	(a)
Equity investments
Direct	3		—	—				—		—			—		—		$	4		—				7			—
Loans held for sale (residential)	1		—	—				—		(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	2		—	—				—		—			—		$	1	—			—				3			—
Derivative instruments (b)
Interest rate	9		—	$	(2	)	(c)	1		(2		)	—		—		4		(d)	$	(5	)	(d)	5			—
Credit	1		—	(20		)	(c)	—		—			$	10	—		—			—				(9		)	—
Other (e)	3		—	—				—		—			—		$	—	—			—				3			—
Three months ended June 30, 2018
Securities available for sale
Other securities	$	20	—	—				—		—			—		—		—			—				$	20		—
Other investments
Principal investments
Direct	12		—	$	1		(a)	$	1	$	(1	)	—		—		—			—				13			$	2	(a)
Equity investments
Direct	7		—	—				—		—			—		—		—			—				7			—
Loans held for sale (residential)	1		—	—				—		(1		)	—		—		—			—				—			—
Loans, net of unearned income (residential)	2		—	—				—		—			—		$	1	—			—				3			—
Derivative instruments (b)
Interest rate	4		—	(1		)	(c)	—		(2		)	—		—		$	4	(d)	—				5			—
Credit	—		—	(15		)	(c)	—		—			$	6	—		—			—				(9		)	—
Other (e)	3		—	—				—		—			—		—		—			—				3			—

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

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

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

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

(e)

Amounts represent Level 3 interest rate lock commitments.

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 June 30, 2019, and December 31, 2018:

	June 30, 2019							December 31, 2018
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	—	$	—	$	57	$	57	—	—	$	42	$	42
Accrued income and other assets	—	—		21		21		—	—	16		16
Total assets on a nonrecurring basis at fair value	—	$	—	$	78	$	78	—	—	$	58	$	58

Quantitative Information about Level 3 Fair Value Measurements

The following table describes the significant unobservable inputs of our level 3 recurring and nonrecurring assets and liabilities:

June 30, 2019	Level 3 Asset (Liability)			Valuation Technique	Significant Unobservable Input	Range (Weighted-Average) (b), (c)
dollars in millions
Recurring
Securities available-for-sale:
Other securities	$	11		Discounted cash flows	Discount rate	N/A (15.95%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (38.00%)
Other investments:(a)
Equity investments
Direct	7			Discounted cash flows	Discount rate	14.81 - 16.78% (15.06%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (49.00%)
Loans, net of unearned income (residential)	3			Market comparable pricing	Comparability factor	78.57 - 95.75% (90.40%)
Derivative instruments:
Interest rate	4			Discounted cash flows	Probability of default	.02 - 100% (2.10%)
					Internal risk rating	1 - 19 (9.021)
					Loss given default	0 - 1 (.492)
Credit	(1		)	Discounted cash flows	Probability of default	.02 - 100% (2.36%)
					Internal risk rating	1 - 19 (9.134)
					Loss given default	0 - 1 (.50)
Other(d)	6			Discounted cash flows	Loan closing rates	36.70 - 99.15% (74.62%)
Nonrecurring
Impaired loans	$	57		Fair value of underlying collateral	Discount rate	0 - 80.00% (17.00%)
Accrued income and other assets:
OREO and other Level 3 assets(e)	$	18		Appraised value	Appraised value	N/M

December 31, 2018	Level 3 Asset (Liability)		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average(b)(c))
dollars in millions
Nonrecurring
Impaired loans	$	42	Fair value of underlying collateral	Discount rate	20.00 - 40.00% (21.00%)

(a) Principal investments, direct is excluded from this table as the balance at June 30, 2019, is insignificant (less than $1 million).

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

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

(d) Amounts represent interest rate lock commitments.

(e)

Excludes balances pertaining to mortgage servicing assets. Refer to Note 9. Mortgage Servicing Assets for significant unobservable inputs pertaining to these assets.

Fair Value Disclosures of Financial Instruments

The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at June 30, 2019, and December 31, 2018, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	June 30, 2019
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment				Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	$	1,005	$	—	$	1,005	—		—		—				$	1,005
Other investments (b)	632		—		—		$	547	$	85	—				632
Loans, net of unearned income (residential) (d)	3		—		—		3		—		—				3
Loans held for sale (residential) (b)	164		—		164		—		—		—				164
Derivative assets - trading (b)	715		41		1,065		11		—		$	(402	)	(f)	715
Fair value - OCI
Securities available for sale (b)	21,528		—		21,517		$	11	—		—				21,528
Derivative assets - hedging (b)(g)	94		—		105		—		—		(11		)	(f)	94
Amortized cost
Held-to-maturity securities (c)	10,878		—		10,899		—		—		—				10,899
Loans, net of unearned income (d)	91,044		—		—		89,803		—		—				89,803
Loans held for sale (b)	1,626		—		—		1,626		—		—				1,626
Other
Cash and short-term investments (a)	3,050		3,050		—		—		—		—				3,050
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	216	$	33	$	490	1		—		$	(308	)	(f)	$	216
Fair value - OCI
Derivative liabilities - hedging (b)(g)	1		2		10		—		—		(11		)	(f)	1
Amortized cost
Time deposits (e)	13,608		—		13,716		—		—		—				13,716
Short-term borrowings (a)	881		7		874		—		—		—				881
Long-term debt (e)	14,312		13,557		1,229		—		—		—				14,786
Other
Deposits with no stated maturity (a)	96,338		—		96,338		—		—		—				96,338

	December 31, 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)	$	849		—		$	849		—		—		—				$	849
Other investments (b)	666			—		1			$	559	$	106	—				666
Loans, net of unearned income (residential) (d)	3			—		—			3		—		—				3
Loans held for sale (residential) (b)	54			—		54			—		—		—				54
Derivative assets - trading (b)	462			$	68	736			8		—		$	(350	)	(f)	462
Fair value - OCI
Securities available for sale (b)	19,428			—		19,408			20		—		—				19,428
Derivative assets - hedging (b)(g)	69			2		50			—		—		17			(f)	69
Amortized cost
Held-to-maturity securities (c)	11,519			—		11,122			—		—		—				11,122
Loans, net of unearned income (d)	88,666			—		—			86,224		—		—				86,224
Loans held for sale (b)	1,173			—		—			1,173		—		—				1,173
Other
Cash and short-term investments (a)	3,240			3,240		—			—		—		—				3,240
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	395		$	58	$	675		—		—		$	(338	)	(f)	$	395
Fair value - OCI
Derivative liabilities - hedging (b)(g)	(9		)	—		(10		)	—		—		1			(f)	(9		)
Amortized cost
Time deposits (e)	13,245			—		13,331			—		—		—				13,331
Short-term borrowings (a)	863			14		849			—		—		—				863
Long-term debt (e)	13,732			12,576		1,211			—		—		—				13,787
Other
Deposits with no stated maturity (a)	94,064			—		94,064			—		—		—				94,064

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.

(g)

Derivative assets-hedging and derivative liabilities-hedging includes both cash flow and fair value hedges. Additional information regarding our accounting policies for cash flow and fair value hedges is provided in Note 1 (“1. Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 103 of our 2018 Form 10-K.

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Securities (Tables)

6 Months Ended

Jun. 30, 2019

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.

	June 30, 2019								December 31, 2018
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	$	272	—		—		$	272	$	150	—		$	3	$	147
States and political subdivisions	5		—		—		5		7		—		—		7
Agency residential collateralized mortgage obligations	13,593		$	111	$	92	13,612		14,315		$	20	373		13,962
Agency residential mortgage-backed securities	2,035		36		10		2,061		2,128		13		36		2,105
Agency commercial mortgage-backed securities	5,472		128		57		5,543		3,300		19		132		3,187
Other securities	17		18		—		35		17		3		—		20
Total securities available for sale	$	21,394	$	293	$	159	$	21,528	$	19,917	$	55	$	544	$	19,428
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	6,435	$	28	$	59	$	6,404	$	7,021	$	2	$	254	$	6,769
Agency residential mortgage-backed securities	456		2		1		457		490		—		14		476
Agency commercial mortgage-backed securities	3,972		64		13		4,023		3,996		2		133		3,865
Other securities	15		—		—		15		12		—		—		12
Total held-to-maturity securities	$	10,878	$	94	$	73	$	10,899	$	11,519	$	4	$	401	$	11,122

Schedule of Unrealized Loss on Investments

The following table summarizes our securities that were in an unrealized loss position as of June 30, 2019, and December 31, 2018.

	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
June 30, 2019
Securities available for sale:
U.S Treasury, agencies, and corporations	$	10	—			$	45	—		$	55	—
Agency residential collateralized mortgage obligations	183		$	1		6,941		$	91	7,124		$	92
Agency residential mortgage-backed securities	1		—		(a)	996		10		997		10
Agency commercial mortgage-backed securities	—		—			1,779		57		1,779		57
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			3,941		59		3,941		59
Agency residential mortgage-backed securities	58		—		(a)	81		1		139		1
Agency commercial mortgage-backed securities	—		—			514		13		514		13
Other securities	7		—		(a)	—		—		7		—
Total temporarily impaired securities	$	259	$	1		$	14,298	$	231	$	14,557	$	232
December 31, 2018
Securities available for sale:
U.S. Treasury, agencies, and corporations	—		—			$	147	$	3	$	147	$	3
Agency residential collateralized mortgage obligations	$	570	$	2		10,945		371		11,515		373
Agency residential mortgage-backed securities	4		—		(b)	1,087		36		1,091		36
Agency commercial mortgage-backed securities	—		—			1,729		132		1,729		132
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			6,416		254		6,416		254
Agency residential mortgage-backed securities	—		—			475		14		475		14
Agency commercial mortgage-backed securities	73		—		(b)	3,359		133		3,432		133
Total temporarily impaired securities	$	647	$	2		$	24,158	$	943	$	24,805	$	945

(a) At June 30, 2019, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale and less than $1 million for agency residential mortgage-back securities and other securities held-to-maturity securities with a loss duration of less than 12 months.

(b) At December 31, 2018, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months and less than $1 million for agency commercial mortgage-backed securities held-to-maturity with a loss duration of less than 12 months.

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.

June 30, 2019	Securities Available for Sale				Held to Maturity Securities
in millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	360	$	378	$	41	$	41
Due after one through five years	16,532		16,535		7,605		7,590
Due after five through ten years	4,493		4,606		3,232		3,268
Due after ten years	9		9		—		—
Total	$	21,394	$	21,528	$	10,878	$	10,899

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30, 2019, and December 31, 2018. 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:

	June 30, 2019								December 31, 2018
			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	$	37,147	$	105		$	10		$	28,546	$	50		$	(10	)
Foreign exchange	122		—			2			122		2			—
Total	37,269		105			12			28,668		52			(10		)
Derivatives not designated as hedging instruments:
Interest rate	68,202		784			210			63,454		365			307
Foreign exchange	5,702		70			62			6,829		104			95
Commodity	6,662		246			236			2,002		333			323
Credit	453		1			3			226		1			1
Other (a)	4,483		16			13			1,466		9			7
Total	85,502		1,117			524			73,977		812			733
Netting adjustments (b)	—		(413		)	(319		)	—		(333		)	(337		)
Net derivatives in the balance sheet	122,771		809			217			102,645		531			386
Other collateral (c)	—		(3		)	(46		)	—		(2		)	(33		)
Net derivative amounts	$	122,771	$	806		$	171		$	102,645	$	529		$	353

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

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

(c)

Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.

Pre-Tax Net Gains (Losses) on Fair Value Hedges

The following tables summarize the amounts that were recorded on the balance sheet as of June 30, 2019, and December 31, 2018, related to cumulative basis adjustments for fair value hedges.

	June 30, 2019
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	$	9,559	$	237
Interest rate contracts	Certificate of deposit ($100,000 or more)	194		—
Interest rate contracts	Other time deposits	175		—
	December 31, 2018
	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	$	9,363	$	(6	)
Interest rate contracts	Certificate of deposit ($100,000 or more)	343		(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 adjustments related to de-designated hedged items that no longer qualify as fair value hedges reduced the hedge accounting basis adjustment by $10 million and $10 million at June 30, 2019, and December 31, 2018, respectively,

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 six-month periods ended June 30, 2019, and June 30, 2018.

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Three months ended June 30, 2019
Total amounts presented in the consolidated statement of income	$	(120	)	$	1,082		$	(223	)	$	17
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(152		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	142			—			—			—
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	$	—		$	(19	)	—			—
Net income (expense) recognized on cash flow hedges	$	—		$	(19	)	—			—
Three months ended June 30, 2018
Total amounts presented in the consolidated statement of income	$	(102	)	$	1,000		$	(112	)	$	99
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	22		—			$	1		—
Recognized on derivatives designated as hedging instruments	(25		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(3	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	1		$	(25	)	—			—
Net income (expense) recognized on cash flow hedges	$	1		$	(25	)	—			—

	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
in millions	Interest expense – long-term debt			Interest income – loans			Interest expense - deposits			Other income
Six months ended June 30, 2019
Total amounts presented in the consolidated statement of income	$	(240	)	$	2,148		$	(425	)	$	27
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(245		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	224			—			—			—
Net income (expense) recognized on fair value hedges	$	(21	)	—			(1		)	—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1	)	$	(43	)	—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	(43	)	—			—
Six months ended June 30, 2018
Total amounts presented in the consolidated statement of income	$	(194	)	$	1,940		$	(203	)	$	120
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	93		—			$	1		—
Recognized on derivatives designated as hedging instruments	(94		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(1	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	—			$	(27	)	—			—
Net income (expense) recognized on cash flow hedges	—			$	(27	)	—			—

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 six-month periods ended June 30, 2019, and June 30, 2018, 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
Three months ended June 30, 2019
Cash Flow Hedges
Interest rate	$	270		Interest income — Loans	$	(19	)
Interest rate	(2		)	Interest expense — Long-term debt	—
Interest rate	(1		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(1		)	Other Income	—
Total	$	266			$	(19	)
Three months ended June 30, 2018
Cash Flow Hedges
Interest rate	$	(58	)	Interest income — Loans	$	(25	)
Interest rate	2			Interest expense — Long-term debt	1
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	10			Other Income	—
Total	$	(45	)		$	(24	)

in millions	Net Gains (Losses) Recognized in OCI			Income Statement Location of Net Gains (Losses) Reclassified From OCI Into Income	Net Gains (Losses) Reclassified From OCI Into Income(a)
Six months ended June 30, 2019
Cash Flow Hedges
Interest rate	$	385		Interest income — Loans	$	(43	)
Interest rate	(3		)	Interest expense — Long-term debt	(1		)
Interest rate	(6		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(4		)	Other Income	—
Total	$	372			$	(44	)
Six months ended June 30, 2018
Cash Flow Hedges
Interest rate	$	(146	)	Interest income — Loans	$	(27	)
Interest rate	4			Interest expense — Long-term debt	—
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	10			Other Income	—
Total	$	(131	)		$	(27	)

Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments

The following table summarizes the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and six-month periods ended June 30, 2019, and June 30, 2018, and where they are recorded on the income statement.

	Three months ended June 30, 2019									Three months ended June 30, 2018
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	$	7	—	$	—		$	7		$	11	—	—			$	11
Foreign exchange	11		—	—			11			11		—	—			11
Commodity	2		—	—			2			3		—	—			3
Credit	—		—	(8		)	(8		)	—		—	$	(14	)	(14		)
Other	—		—	2			2			—		—	16			16
Total net gains (losses)	$	20	—	$	(6	)	$	14		$	25	—	$	2		$	27

	Six months ended June 30, 2019										Six months ended June 30, 2018
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	$	15	$	—	$	(2	)	$	13		$	20	—		$	2		$	22
Foreign exchange	21		—		—			21			22		—		—			22
Commodity	3		—		—			3			6		—		—			6
Credit	1		—		(15		)	(14		)	2		—		(19		)	(17		)
Other	—		—		3			3			—		$	—	12			12
Total net gains (losses)	$	40	$	—	$	(14	)	$	26		$	50	$	—	$	(5	)	$	45

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	June 30, 2019		December 31, 2018
Interest rate	$	793	$	308
Foreign exchange	36		60
Commodity	124		187
Credit	—		—
Other	16		9
Derivative assets before collateral	969		564
Less: Related collateral	160		33
Total derivative assets	$	809	$	531

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 June 30, 2019, and December 31, 2018. The sold credit derivatives represented in the following table include only Risk Participation Agreements; there were no traded indexes sold. The notional amount represents the maximum amount that the seller could be required to pay. The payment/performance risk assessment at June 30, 2019, is based on the internal probability of default of the reference entity consistent with our Fair Value Methodology. The payment/performance risk shown in the table represents a weighted-average of the default probabilities for all reference entities. These default probabilities are directly correlated to the probability that we will have to make a payment under the credit derivative contracts.

	June 30, 2019					December 31, 2018
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	126	13.84	2.50	%	$	22	13.43	17.18	%
Total credit derivatives sold	$	126	—	—		$	22	—	—

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 June 30, 2019, and December 31, 2018. The additional collateral amounts were calculated based on scenarios under which KeyBank’s ratings are downgraded one, two, or three ratings as of June 30, 2019, and December 31, 2018, 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 June 30, 2019, and December 31, 2018. 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.

	June 30, 2019				December 31, 2018
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	$	—	$	—	$	2	$	2
Two rating downgrades	—		—		2		2
Three rating downgrades	—		—		2		2

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Mortgage Servicing Assets (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	38		$	32		$	37		$	31
Servicing retained from loan sales	2			3			4			5
Purchases	—			—			—			—
Amortization	(1		)	(1		)	(2		)	(2		)
Balance at end of period	$	39		$	34		$	39		$	34
Fair value at end of period	$	45		$	43		$	45		$	43

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

	Three months ended June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	497		$	435		$	502		$	412
Servicing retained from loan sales	23			29			41			56
Purchases	17			12			23			33
Amortization	(28		)	(25		)	(57		)	(50		)
Balance at end of period	$	509		$	451		$	509		$	451
Fair value at end of period	$	723		$	646		$	723		$	646

Schedule of Range and Weighted-Average of Significant Unobservable Inputs

The range and weighted average of the significant unobservable inputs used to determine the fair value of our commercial mortgage servicing assets at June 30, 2019, and June 30, 2018, along with the valuation techniques, are shown in the following table: 

dollars in millions		June 30, 2019	June 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 2.00% (1.13%)	1.00 - 3.00% (1.17%)
	Residual cash flows discount rate	7.00 - 11.54% (9.26%)	7.00 - 15.00% (9.06%)
	Escrow earn rate	1.92 - 3.13% (2.63%)	2.40 - 3.82% (3.10%)
	Loan assumption rate	0.00 - 3.02% (1.40%)	0.00 - 3.00% (1.19%)

The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at June 30, 2019, and June 30, 2018, along with the valuation techniques, are shown in the following table:

dollars in millions		June 30, 2019	June 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	10.95 - 62.06% (12.52%)	8.39 - 49.39% (9.17%)
	Discount rate	7.50 - 10.00% (7.53%)	8.50 - 11.00% (8.54%)
	Servicing cost	$62 - $4,375 ($67.55)	$76 - $4,385 ($82.38)

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Components of Lease Expense

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

	June 30, 2019
Weighted-average remaining lease term:
Operating leases	7.8
Finance leases	6.44
Weighted-average discount rate:
Operating leases	3.28	%
Finance leases	3.90	%

The components of lease expense are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	$	34	$	68
Finance lease cost:
Amortization of right-of-use assets	1		1
Variable lease cost	6		11
Total lease cost (a), (b)	$	41	$	80

(a) Interest on lease liabilities for finance leases was less than $1 million for the three and six months ended June 30, 2019.

(b)

Short-term lease cost was less than less than $1 million for the three and six months ended June 30, 2019.

Summary of Cash Flows Related to Leases

Cash flows related to leases are summarized as follows:

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	73
Financing cash flows from finance leases	1		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	16	$	44

(a) Operating cash flows from finance leases were less than $1 million for the three and six months ended June 30, 2019.

(b)

There were no right-of-use assets obtained in exchange for finance lease obligations for the three and six months ended June 30, 2019.

Summary of Additional Balance Sheet Information Related to Leases

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

in millions	Balance sheet classification	June 30, 2019
Operating lease assets	Accrued income and other assets	$	695
Operating lease liabilities	Accrued expense and other liabilities	775
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(16		)
Property and equipment, net		12
Finance lease liabilities	Long-term debt	15

Finance Lease, Maturities of Lease Liabilities

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Lessee, Operating Lease, Maturities of Lease Liabilities

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	72	$	2	$	74
2020	141		3		144
2021	127		3		130
2022	111		3		114
2023	95		2		97
Thereafter	339		5		344
Total lease payments	885		18		903
Less imputed interest	110		3		113
Total	$	775	$	15	$	790

Operating Lease, Lease Income

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

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Sales-type Lease, Lease Income

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

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Direct Financing Lease, Lease Income

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

in millions	Three months ended June 30, 2019		Six months ended June 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	61
Interest income related to accretion of unguaranteed residual asset	3		6
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		67
Operating leases
Operating lease income related to lease payments	33		66
Other operating leasing gains	11		15
Total operating lease income and other leasing gains	44		81
Total lease income	$	78	$	148

Composition of Net Investment in Sales-Type and Direct Financing Leases

The composition of the net investment in sales-type and direct financing leases is as follows:

in millions	June 30, 2019
Lease receivables	$	3,689
Unearned income	(345		)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$	3,791

Minimum Future Lease Payments to be Received for Sales-Type and Direct Financing Leases

At June 30, 2019, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

in millions	Sales-type and direct financing lease payments
2019	$	640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$	3,689

Minimum Future Lease Payments to be Received for Operating Leases

At June 30, 2019, minimum future lease payments to be received for operating leases are as follows:

in millions	Operating lease payments
2019	$	64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$	678

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30, 2019, and December 31, 2018. As these investments represent unconsolidated VIEs, the assets and liabilities of the investments themselves are not recorded on our balance sheet. Additional information pertaining to our LIHTC investments is included in Note 12 (“Variable Interest Entities “) beginning on page 142 of our 2018 Form 10-K.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
June 30, 2019
LIHTC investments	$	6,276	$	2,588	$	1,739
December 31, 2018
LIHTC investments	$	5,932	$	2,569	$	1,740

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 June 30, 2019, and December 31, 2018.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
June 30, 2019
Indirect investments	$	15,018	$	286	$	100
December 31, 2018
Indirect investments	$	19,659	$	376	$	122

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Securities Financing Activities (Tables)

6 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Summarized Securities Financing Agreements

The following table summarizes our securities financing agreements at June 30, 2019, and December 31, 2018:

	June 30, 2019									December 31, 2018
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	$	210	$	(6	)	$	(204	)	—	$	14	$	(14	)	—			—
Total	$	210	$	(6	)	$	(204	)	—	$	14	$	(14	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	161	$	(6	)	$	(155	)	—	$	319	$	(14	)	$	(305	)	—
Total	$	161	$	(6	)	$	(155	)	—	$	319	$	(14	)	$	(305	)	—

(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)

6 Months Ended

Jun. 30, 2019

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 recorded in “other expense” and are summarized in the following table. For more information on our Pension Plans and Other Postretirement Benefit Plans, see Note 17 (“Employee Benefits”) beginning on page 151 of our 2018 Form 10-K.

	Three months ended June 30,						Six months ended June 30,
in millions	2019			2018			2019			2018
Interest cost on PBO	$	12		$	10		$	23		$	20
Expected return on plan assets	(12		)	(13		)	(24		)	(26		)
Amortization of losses	3			4			7			8
Net pension cost	$	3		$	1		$	6		$	2

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries (Tables)

6 Months Ended

Jun. 30, 2019

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
June 30, 2019
KeyCorp Capital I	$	156	$	6	$	162	3.332	%	2028
KeyCorp Capital II	106		4		110		6.875		2029
KeyCorp Capital III	138		4		142		7.750		2029
HNC Statutory Trust III	19		1		20		3.924		2035
Willow Grove Statutory Trust I	18		1		19		3.720		2036
HNC Statutory Trust IV	16		1		17		3.863		2037
Westbank Capital Trust II	7		—		7		4.577		2034
Westbank Capital Trust III	7		—		7		4.577		2034
Total	$	467	$	17	$	484	5.536	%	—
December 31, 2018	$	454	$	17	$	471	5.447	%	—

(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 $58 million at June 30, 2019, and $46 million at December 31, 2018. 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 $58 million at June 30, 2019, and $46 million at December 31, 2018. 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)

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Guarantees

The following table shows the types of guarantees that we had outstanding at June 30, 2019. 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 106 of our 2018 Form 10-K.

June 30, 2019	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,086	$	73
Recourse agreement with FNMA	4,392		6
Residential mortgage reserve	1,617		6
Written put options (a)	2,854		49
Total	$	11,949	$	134

(a)

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

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Changes in AOCI

Our changes in AOCI for the three and six months ended June 30, 2019, and June 30, 2018, 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, 2018	$	(373	)	$	(50	)	$	(14	)	$	(381	)	$	(818	)
Other comprehensive income before reclassification, net of income taxes	475			284			4			14			777
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			5			39
Net current-period other comprehensive income, net of income taxes	475			318			4			19			816
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Balance at March 31, 2019	$	(189	)	$	49		$	(11	)	$	(379	)	$	(530	)
Other comprehensive income before reclassification, net of income taxes	291			204			1			15			511
Amounts reclassified from AOCI, net of income taxes (a)	—			15			—			2			17
Net current-period other comprehensive income, net of income taxes	291			219			1			17			528
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Balance at December 31, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(216		)	(100		)	(11		)	—			(327		)
Amounts reclassified from AOCI, net of income taxes (a)	—			20			—			6			26
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(216		)	(80		)	(16		)	6			(306		)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Balance at March 31, 2018	(461		)	$	(149	)	$	7		$	(388	)	$	(991	)
Other comprehensive income before reclassification, net of income taxes	(66		)	(35		)	(9		)	—			(110		)
Amounts reclassified from AOCI, net of income taxes (a)	—			18			—			3			21
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(66		)	(17		)	(14		)	3			(94		)
Balance at June 30, 2018	$	(527	)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)

(a)

See table below for details about these reclassifications.

Reclassifications Out of AOCI

Our reclassifications out of AOCI for the three and six months ended June 30, 2019, and June 30, 2018, are as follows:

	Six months ended June 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(43	)	$	(27	)	Interest income — Loans
Interest rate	(1		)	—			Interest expense — Long-term debt
	(44		)	(27		)	Income (loss) from continuing operations before income taxes
	(10		)	(7		)	Income taxes
	$	(34	)	$	(20	)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(7	)	$	(8	)	Personnel expense
	(7		)	(8		)	Income (loss) from continuing operations before income taxes
	(2		)	(2		)	Income taxes
	$	(5	)	$	(6	)	Income (loss) from continuing operations

	Three months ended June 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(19	)	$	(25	)	Interest income — Loans
Interest rate	—			1			Interest expense — Long-term debt
	(19		)	(24		)	Income (loss) from continuing operations before income taxes
	(4		)	(6		)	Income taxes
	$	(15	)	(18		)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(3	)	(4		)	Personnel expense
	(3		)	(4		)	Income (loss) from continuing operations before income taxes
	(1		)	(1		)	Income taxes
	$	(2	)	$	(3	)	Income (loss) from continuing operations

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Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2019

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		Second quarter 2019 dividends paid per depositary share
Fixed-to-Floating Rate Perpetual Noncumulative Series D	$	525	21,000	$	1	$	25,000	1/25th	$	1,000	$	12.50
Fixed-to-Floating Rate Perpetual Noncumulative Series E	500		500,000	1		1,000		1/40th	25		.382813
Fixed Rate Perpetual Noncumulative Series F	425		425,000	1		1,000		1/40th	25		.353125
Fixed Rate Perpetual Non-Cumulative Series G	450		450,000	1		1,000		1/40th	25		—

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Business Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Financial Information of Business Groups

The table below shows selected financial data for our business segments for the three- and six-month periods ended June 30, 2019, and June 30, 2018.

Three months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2019			2018			2019			2018			2019			2018			2019			2018
SUMMARY OF OPERATIONS
Net interest income (TE)	$	594		$	574		$	405		$	418		$	(10	)	$	(5	)	$	989		$	987
Noninterest income	231			236			354			303			37			121			622			660
Total revenue (TE) (a)	825			810			759			721			27			116			1,611			1,647
Provision for credit losses	40			39			33			25			1			—			74			64
Depreciation and amortization expense	25			26			35			34			37			39			97			99
Other noninterest expense	535			543			346			357			41			(6		)	922			894
Income (loss) from continuing operations before income taxes (TE)	225			202			345			305			(52		)	83			518			590
Allocated income taxes and TE adjustments	53			47			62			49			(20		)	15			95			111
Income (loss) from continuing operations	172			155			283			256			(32		)	68			423			479
Income (loss) from discontinued operations, net of taxes	—			—			—			—			2			3			2			3
Net income (loss)	172			155			283			256			(30		)	71			425			482
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	172		$	155		$	283		$	256		$	(30	)	$	71		$	425		$	482
AVERAGE BALANCES (b)
Loans and leases	$	31,881		$	31,276		$	57,924		$	56,175		$	980		$	1,193		$	90,785		$	88,644
Total assets (a)	35,469			34,495			65,907			63,948			41,259			37,935			142,635			136,378
Deposits	72,303			68,279			35,961			33,169			1,337			2,555			109,601			104,003
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	40		$	39		$	23		$	22		2			(1		)	$	65		$	60
Return on average allocated equity (b)	21.12		%	18.88		%	24.57		%	22.99		%	(1.48		)%	3.75		%	10.26		%	12.78		%
Return on average allocated equity	21.12			18.88			24.57			22.99			(1.39		)	3.92			10.31			12.86
Average full-time equivalent employees (c)	9,440			10,067			2,260			2,467			5,506			5,842			17,206			18,376

(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.

Six months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2019			2018			2019			2018			2019			2018			2019			2018
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,185		$	1,126		$	806		$	824		$	(17	)	$	(11	)	$	1,974		$	1,939
Noninterest income	445			457			655			636			58			168			1,158			1,261
Total revenue (TE) (a)	1,630			1,583			1,461			1,460			41			157			3,132			3,200
Provision for credit losses	85			73			49			54			2			(2		)	136			125
Depreciation and amortization expense	48			53			65			69			72			81			185			203
Other noninterest expense	1,061			1,093			680			700			56			3			1,797			1,796
Income (loss) from continuing operations before income taxes (TE)	436			364			667			637			(89		)	75			1,014			1,076
Allocated income taxes and TE adjustments	103			86			127			96			(45		)	(1		)	185			181
Income (loss) from continuing operations	333			278			540			541			(44		)	76			829			895
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3			5			3			5
Net income (loss)	333			278			540			541			(41		)	81			832			900
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	333		$	278		$	540		$	541		$	(41	)	$	81		$	832		$	900
AVERAGE BALANCES (b)
Loans and leases	$	31,603		$	31,409		$	57,610		$	55,210		$	1,007		$	1,171		$	90,220		$	87,790
Total assets (a)	35,103			34,638			65,405			62,865			40,877			38,148			141,385			135,651
Deposits	71,798			67,852			35,194			32,983			1,602			2,448			108,594			103,283
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	74		$	73		$	53		$	41		2			—			$	129		$	114
Return on average allocated equity (b)	20.76		%	16.98		%	23.93		%	24.74		%	(1.06		)%	2.11		%	10.37		%	12.06		%
Return on average allocated equity	20.76			16.98			23.93			24.74			(.99		)	2.25			10.41			12.13
Average full-time equivalent employees (c)	9,531			10,082			2,314			2,466			5,534			5,910			17,379			18,458

(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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Revenue from Contracts with Customers (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table represents a disaggregation of revenue from contracts with customers, by business segment, for the three- and six-month periods ended June 30, 2019, and June 30, 2018. Refer to Note 19 (“Business Segment Reporting”) for a description of the company-wide organizational change which occurred in the first quarter of 2019 resulting in the realignment of Key’s businesses into two reportable business segments, Consumer Bank and Commercial Bank. Prior period information was restated to conform to the new business segment structure.

	Three months ended June 30, 2019						Three months ended June 30, 2018
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	91	$	17	$	108	$	91	$	19	$	110
Investment banking and debt placement fees	—		65		65		—		68		68
Services charges on deposit accounts	56		27		83		62		28		90
Cards and payments income	44		28		72		40		29		69
Other noninterest income	4		—		4		5		—		5
Total revenue from contracts with customers	$	195	$	137	$	332	$	198	$	144	$	342
Other noninterest income (a)					$	253					$	197
Noninterest income from Other(b)					37						121
Total noninterest income					$	622					$	660

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

(b) Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.

	Six months ended June 30, 2019						Six months ended June 30, 2018
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	176	$	32	$	208	$	176	$	36	$	212
Investment banking and debt placement fees	—		110		110		—		115		115
Services charges on deposit accounts	110		55		165		123		56		179
Cards and payments income	81		55		136		75		55		130
Other noninterest income	6		—		6		10		—		10
Total revenue from contracts with customers	$	373	$	252	$	625	$	384	$	262	$	646
Other noninterest income (a)					$	475					$	447
Noninterest income from Other(b)					58						168
Total noninterest income					$	1,158					$	1,261

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

(b)

Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations. Refer to Note 19 (“Business Segment Reporting”) for more information.

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Basis of Presentation and Accounting Policies - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets	$ 695
Operating lease liabilities	$ 775
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets		$ 710
Operating lease liabilities		$ 710

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Earnings Per Common Share - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
EARNINGS
Income (loss) from continuing operations		$ 423	$ 479	$ 829	$ 895
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	0
Income (loss) from continuing operations attributable to Key		423	479	829	895
Less: Dividends on Preferred Stock		20	15	40	29
Income (loss) from continuing operations attributable to Key common shareholders		403	464	789	866
Income (loss) from discontinued operations, net of taxes		2	3	3	5
Net income (loss) attributable to Key common shareholders		$ 405	$ 467	$ 792	$ 871
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average common shares outstanding (000) (in shares)		999,163	1,052,652	1,003,047	1,054,378
Effect of common share options and other stock awards (in shares)		8,801	13,141	9,318	14,561
Weighted-average common shares and potential common shares outstanding (in shares)	[1]	1,007,964	1,065,793	1,012,365	1,068,939
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.40	$ 0.44	$ 0.79	$ 0.82
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0	0
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.40	0.44	0.79	0.82
Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution (in usd per share)		0.40	0.44	0.78	0.81
Income (loss) from discontinued operations, net of taxes - assuming dilution (in usd per share)		0	0	0	0
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	$ 0.40	$ 0.44	$ 0.78	$ 0.81

[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.

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Loan Portfolio - Loans by Category (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 91,937	$ 89,552
Loans, net of allowance	91,047	88,669
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	67,860	66,310
Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	24,077	23,242
Commercial and Industrial [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	48,544	45,753
Commercial Mortgage [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	13,299	14,285
Construction [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,439	1,666
Commercial Credit Card [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	143	132
Commercial Real Estate [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	14,738	15,951
Commercial Lease Financing [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,578	4,606
Commercial lease financing includes receivables held as collateral for secured borrowing	11	10
Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	6,053	5,513
Home Equity Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	10,575	11,142
Residential - Prime Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	16,628	16,655
Consumer Direct Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	2,350	1,809
Consumer Credit Card [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,096	1,144
Consumer Indirect Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,003	3,634
Education Lending [Member] | Discontinued Operations [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of allowance	$ 964	$ 1,100

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Asset Quality - Financing Receivable Credit Quality Indicators (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 91,937	$ 89,552
Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	309	334
Consumer Portfolio Segment, PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	306	331
Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	3	3
Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	23,768	22,908
Consumer Portfolio Segment Excluding PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	16,322	16,324
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,347	1,806
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,096	1,144
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,003	3,634
Commercial Portfolio Segment Excluding PCI Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	67,651	66,069
Commercial Portfolio Segment Excluding PCI Loans [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	65,443	63,904
Commercial Portfolio Segment Excluding PCI Loans [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,925	1,922
Commercial Portfolio Segment Excluding PCI Loans [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	283	243
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	48,491	45,692
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	46,773	44,138
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,529	1,402
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	189	152
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	13,144	14,107
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	12,756	13,672
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	303	354
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	85	81
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,438	1,664
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,379	1,537
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	57	125
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2	2
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,578	4,606
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,535	4,557
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	36	41
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	7	8
Commercial Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	209	241
Commercial Portfolio Segment, PCI [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	144	164
Commercial Portfolio Segment, PCI [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	65	77
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	53	61
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	32	37
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	21	24
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	155	178
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	111	125
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	44	53
Commercial Portfolio Segment, PCI [Member] | Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1	2
Commercial Portfolio Segment, PCI [Member] | Construction [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1	2
Commercial Portfolio Segment, PCI [Member] | Construction [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
Commercial Portfolio Segment, PCI [Member] | Commercial Leases [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
Commercial Portfolio Segment, PCI [Member] | Commercial Leases [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
Commercial Portfolio Segment, PCI [Member] | Commercial Leases [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	120	137
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	119	137
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	13,215	12,511
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	10,040	9,794
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	827	549
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	499	521
FICO Score, 750 and Above [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,849	1,647
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	104	96
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	103	95
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1	1
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	7,424	7,433
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,681	4,906
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	822	700
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	481	507
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,440	1,320
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	79	99
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	78	97
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1	2
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,249	2,316
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,341	1,411
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	219	224
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	116	116
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	573	565
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	6	2
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	6	2
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment, PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	880	648
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	260	213
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	479	333
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	0	0
FICO Score, No Score [Member] | Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 141	$ 102

XML

Asset Quality - Aging Analysis of Past Due and Current Loans (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Past Due [Line Items]
Current	$ 90,485	$ 88,011
Days Past Due	934	966
Non-performing Loans	561	542
Purchased Credit Impaired	518	575
Total loans	91,937	89,552
Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	67,128	65,558
Days Past Due	523	511
Non-performing Loans	283	244
Purchased Credit Impaired	209	241
Total loans	67,860	66,310
Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	23,357	22,453
Days Past Due	411	455
Non-performing Loans	278	298
Purchased Credit Impaired	309	334
Total loans	24,077	23,242
Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	48,136	45,375
Days Past Due	355	317
Non-performing Loans	189	152
Purchased Credit Impaired	53	61
Total loans	48,544	45,753
Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	13,029	13,957
Days Past Due	115	150
Non-performing Loans	85	81
Purchased Credit Impaired	155	178
Total loans	13,299	14,285
Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	1,416	1,646
Days Past Due	22	18
Non-performing Loans	2	2
Purchased Credit Impaired	1	2
Total loans	1,439	1,666
Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	14,445	15,603
Days Past Due	137	168
Non-performing Loans	87	83
Purchased Credit Impaired	156	180
Total loans	14,738	15,951
Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	4,547	4,580
Days Past Due	31	26
Non-performing Loans	7	9
Purchased Credit Impaired	0	0
Total loans	4,578	4,606
Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	5,686	5,119
Days Past Due	76	80
Non-performing Loans	62	62
Purchased Credit Impaired	291	314
Total loans	6,053	5,513
Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	10,329	10,862
Days Past Due	231	263
Non-performing Loans	191	210
Purchased Credit Impaired	15	17
Total loans	10,575	11,142
Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	2,322	1,780
Days Past Due	25	26
Non-performing Loans	3	4
Purchased Credit Impaired	3	3
Total loans	2,350	1,809
Consumer Credit Card Financing Receivable [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	1,073	1,119
Days Past Due	23	25
Non-performing Loans	2	2
Purchased Credit Impaired	0	0
Total loans	1,096	1,144
Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	3,947	3,573
Days Past Due	56	61
Non-performing Loans	20	20
Purchased Credit Impaired	0	0
Total loans	4,003	3,634
30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	248	218
30-59 Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	166	128
30-59 Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	82	90
30-59 Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	116	89
30-59 Days Past Due [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	17	27
30-59 Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	20	0
30-59 Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	37	27
30-59 Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	13	12
30-59 Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	11	11
30-59 Days Past Due [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	27	31
30-59 Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	10	11
30-59 Days Past Due [Member] | Consumer Credit Card Financing Receivable [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	6	6
30-59 Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	28	31
60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	51	94
60-89 Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	26	62
60-89 Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	25	32
60-89 Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	20	31
60-89 Days Past Due [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	3	17
60-89 Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	0	13
60-89 Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	3	30
60-89 Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	3	1
60-89 Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	2	3
60-89 Days Past Due [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	8	12
60-89 Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	5	5
60-89 Days Past Due [Member] | Consumer Credit Card Financing Receivable [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	4	5
60-89 Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	6	7
90 and Greater Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	74	112
90 and Greater Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	48	77
90 and Greater Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	26	35
90 and Greater Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	30	45
90 and Greater Days Past Due [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	10	25
90 and Greater Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	0	3
90 and Greater Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	10	28
90 and Greater Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	8	4
90 and Greater Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	1	4
90 and Greater Days Past Due [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	5	10
90 and Greater Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	7	6
90 and Greater Days Past Due [Member] | Consumer Credit Card Financing Receivable [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	11	12
90 and Greater Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	$ 2	$ 3

XML

Asset Quality - Additional Information (Details) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($) SecurityLoan	Jun. 30, 2018 USD ($) SecurityLoan	Jun. 30, 2019 USD ($) SecurityLoan	Jun. 30, 2018 USD ($) SecurityLoan	Dec. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for losses on lending-related commitments	$ 2	$ (2)	$ 0	$ 1
Percentage of carrying amount of our commercial nonperforming loans outstanding	79.00%		79.00%
Percentage of nonperforming loans outstanding face value	82.00%		82.00%
Percentage of loans held for sale and other nonperforming assets	87.00%		87.00%
Net reduction to interest income	$ 9	7	$ 17	14
Interest income recognized on outstanding balances	3	3	6	5
Commitments outstanding to lend additional funds to borrowers	5		5		$ 5
Financial receivable, modifications, subsequent default, recorded investment	2	$ 1	4	$ 2
Other real estate owned nonperforming loan	$ 38		$ 38		35
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | SecurityLoan	0	0	0	0
Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | SecurityLoan	102	55	174	96
Real Estate - Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial receivable, modifications, subsequent default, recorded investment			$ 96		113
Foreclosed Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned nonperforming loan	$ 38		$ 38		$ 35

XML

Asset Quality - Breakdown of Individually Impaired Loans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	$ 232		$ 232		$ 238
With related allowance recorded, Recorded Investment	233		233		209
Recorded Investment	465		465		447
With no related allowance recorded, Unpaid Principal Balance	288		288		311
With related allowance recorded, Unpaid Principal Balance	282		282		245
Unpaid Principal Balance	570		570		556
Specific Allowance	26		26		19
Average Recorded Investment	457	$ 409	456	$ 388
Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	179		179		182
With related allowance recorded, Recorded Investment	68		68		46
With no related allowance recorded, Unpaid Principal Balance	224		224		245
With related allowance recorded, Unpaid Principal Balance	86		86		50
Specific Allowance	11		11		6
Average Recorded Investment	239	194	237	177
Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	53		53		56
With related allowance recorded, Recorded Investment	165		165		163
With no related allowance recorded, Unpaid Principal Balance	64		64		66
With related allowance recorded, Unpaid Principal Balance	196		196		195
Specific Allowance	15		15		13
Average Recorded Investment	218	215	219	211
Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	118		118		118
With related allowance recorded, Recorded Investment	65		65		44
With no related allowance recorded, Unpaid Principal Balance	151		151		175
With related allowance recorded, Unpaid Principal Balance	83		83		47
Specific Allowance	10		10		5
Average Recorded Investment	176	178	172	161
Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	61		61		64
With related allowance recorded, Recorded Investment	3		3		2
With no related allowance recorded, Unpaid Principal Balance	73		73		70
With related allowance recorded, Unpaid Principal Balance	3		3		3
Specific Allowance	1		1		1
Average Recorded Investment	63	16	65	16
Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	61		61		64
With related allowance recorded, Recorded Investment	3		3		2
With no related allowance recorded, Unpaid Principal Balance	73		73		70
With related allowance recorded, Unpaid Principal Balance	3		3		3
Specific Allowance	1		1		1
Average Recorded Investment	63	16	65	16
Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	4		4		4
With related allowance recorded, Recorded Investment	44		44		45
With no related allowance recorded, Unpaid Principal Balance	6		6		5
With related allowance recorded, Unpaid Principal Balance	68		68		70
Specific Allowance	3		3		3
Average Recorded Investment	48	49	49	49
Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	47		47		49
With related allowance recorded, Recorded Investment	81		81		78
With no related allowance recorded, Unpaid Principal Balance	53		53		56
With related allowance recorded, Unpaid Principal Balance	87		87		85
Specific Allowance	9		9		8
Average Recorded Investment	128	124	127	121
Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	0		0		1
With related allowance recorded, Recorded Investment	4		4		3
With no related allowance recorded, Unpaid Principal Balance	1		1		1
With related allowance recorded, Unpaid Principal Balance	4		4		3
Specific Allowance	0		0		0
Average Recorded Investment	4	4	4	4
Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	2		2		2
With related allowance recorded, Recorded Investment	33		33		34
With no related allowance recorded, Unpaid Principal Balance	4		4		4
With related allowance recorded, Unpaid Principal Balance	34		34		34
Specific Allowance	3		3		2
Average Recorded Investment	36	35	36	34
Credit Cards [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With related allowance recorded, Recorded Investment	3		3		3
With related allowance recorded, Unpaid Principal Balance	3		3		3
Specific Allowance	0		0		$ 0
Average Recorded Investment	$ 2	$ 3	$ 3	$ 3

XML

Asset Quality - Post-Modification Outstanding Recorded Investment by Concession Type for Our Commercial Accruing and Nonaccruing TDRs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total commercial and consumer TDRs	$ 48	$ 64	$ 59	$ 86
Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Forgiveness of principal	0	5	0	5
Extension of Maturity Date	6	14	6	15
Payment or Covenant Modification/Deferment	18	20	18	20
Bankruptcy Plan Modification	11	7	11	7
Total	35	46	35	47
Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Interest rate reduction	4	8	8	18
Other	9	10	16	21
Total	$ 13	$ 18	$ 24	$ 39

XML

Asset Quality - Summary of Post-Modification Outstanding Recorded Investment TDRs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Financing Receivables, Modifications, Rollforward [Roll Forward]
Balance at beginning of the period	$ 365	$ 317	$ 399	$ 317
Additions	54	54	68	75
Payments	(19)	(22)	(58)	(41)
Charge-offs	(5)	(2)	(14)	(4)
Balance at end of period	$ 395	$ 347	$ 395	$ 347

XML

Asset Quality - Breakdown of Nonperforming TDRs by Loans Category (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($) SecurityLoan	Jun. 30, 2018 USD ($) SecurityLoan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	6,209	6,084
Pre-modification Outstanding Recorded Investment	$ 479	$ 491
Post-modification Outstanding Recorded Investment	$ 395	$ 399
Prior-Year Accruing [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	3,698	3,021
Pre-modification Outstanding Recorded Investment	$ 213	$ 195
Post-modification Outstanding Recorded Investment	$ 167	$ 152
Prior-Year Accruing [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	11	13
Pre-modification Outstanding Recorded Investment	$ 34	$ 37
Post-modification Outstanding Recorded Investment	$ 28	$ 32
Prior-Year Accruing [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1	2
Pre-modification Outstanding Recorded Investment	$ 0	$ 0
Post-modification Outstanding Recorded Investment	$ 0	$ 0
Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	3,687	3,008
Pre-modification Outstanding Recorded Investment	$ 179	$ 158
Post-modification Outstanding Recorded Investment	$ 139	$ 120
Nonperforming [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	2,511	3,063
Pre-modification Outstanding Recorded Investment	$ 266	$ 296
Post-modification Outstanding Recorded Investment	$ 228	$ 247
Nonperforming [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	65	41
Pre-modification Outstanding Recorded Investment	$ 178	$ 187
Post-modification Outstanding Recorded Investment	$ 149	$ 147
Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	2,446	3,022
Pre-modification Outstanding Recorded Investment	$ 88	$ 109
Post-modification Outstanding Recorded Investment	$ 79	$ 100
Commercial and Industrial [Member] | Prior-Year Accruing [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	10	11
Pre-modification Outstanding Recorded Investment	$ 34	$ 37
Post-modification Outstanding Recorded Investment	$ 28	$ 32
Commercial and Industrial [Member] | Prior-Year Accruing [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1	2
Pre-modification Outstanding Recorded Investment	$ 0	$ 0
Post-modification Outstanding Recorded Investment	$ 0	$ 0
Commercial and Industrial [Member] | Nonperforming [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	57	35
Pre-modification Outstanding Recorded Investment	$ 111	$ 121
Post-modification Outstanding Recorded Investment	$ 88	$ 85
Commercial Mortgage [Member] | Nonperforming [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	8	6
Pre-modification Outstanding Recorded Investment	$ 67	$ 66
Post-modification Outstanding Recorded Investment	$ 61	$ 62
Commercial Real Estate Loans [Member] | Nonperforming [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	8	6
Pre-modification Outstanding Recorded Investment	$ 67	$ 66
Post-modification Outstanding Recorded Investment	$ 61	$ 62
Real Estate - Residential Mortgage [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	467	491
Pre-modification Outstanding Recorded Investment	$ 35	$ 36
Post-modification Outstanding Recorded Investment	$ 29	$ 30
Real Estate - Residential Mortgage [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	297	281
Pre-modification Outstanding Recorded Investment	$ 21	$ 21
Post-modification Outstanding Recorded Investment	$ 19	$ 20
Home Equity Loans [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1,716	1,403
Pre-modification Outstanding Recorded Investment	$ 100	$ 82
Post-modification Outstanding Recorded Investment	$ 83	$ 64
Home Equity Loans [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	801	1,142
Pre-modification Outstanding Recorded Investment	$ 49	$ 66
Post-modification Outstanding Recorded Investment	$ 45	$ 63
Consumer Direct Loans [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	138	79
Pre-modification Outstanding Recorded Investment	$ 5	$ 4
Post-modification Outstanding Recorded Investment	$ 3	$ 3
Consumer Direct Loans [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	129	171
Pre-modification Outstanding Recorded Investment	$ 1	$ 2
Post-modification Outstanding Recorded Investment	$ 1	$ 1
Consumer Credit Card [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	600	479
Pre-modification Outstanding Recorded Investment	$ 3	$ 3
Post-modification Outstanding Recorded Investment	$ 2	$ 1
Consumer Credit Card [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	251	330
Pre-modification Outstanding Recorded Investment	$ 1	$ 2
Post-modification Outstanding Recorded Investment	$ 1	$ 2
Consumer Indirect Loans [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	766	556
Pre-modification Outstanding Recorded Investment	$ 36	$ 33
Post-modification Outstanding Recorded Investment	$ 22	$ 22
Consumer Indirect Loans [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	968	1,098
Pre-modification Outstanding Recorded Investment	$ 16	$ 18
Post-modification Outstanding Recorded Investment	$ 13	$ 14

XML

Asset Quality - Changes in Allowance for Loan and Lease Losses by Loan Category (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 896	$ 897	$ 897	$ 893
Provision	74	66	140	126
Charge-offs	(88)	(82)	(179)	(158)
Recoveries	20	20	44	40
Ending balance	902	901	902	901
Provision (credit) for losses on lending-related commitments	2	(2)	0	1
Continuing Operations [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	883	881	883	877
Provision	72	66	136	124
Charge-offs	(84)	(79)	(171)	(151)
Recoveries	19	19	42	37
Ending balance	890	887	890	887
Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	737	742	743	735
Provision	48	44	83	82
Charge-offs	(47)	(45)	(100)	(84)
Recoveries	9	8	21	16
Ending balance	747	749	747	749
Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	146	139	140	142
Provision	24	22	53	42
Charge-offs	(37)	(34)	(71)	(67)
Recoveries	10	11	21	21
Ending balance	143	138	143	138
Continuing Operations [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	530	533	532	529
Provision	43	41	67	76
Charge-offs	(30)	(39)	(66)	(76)
Recoveries	6	7	16	13
Ending balance	549	542	549	542
Continuing Operations [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	144	136	142	133
Provision	(5)	4	1	8
Charge-offs	(1)	(2)	(6)	(3)
Recoveries	1	1	2	1
Ending balance	139	139	139	139
Continuing Operations [Member] | Construction [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	28	33	33	30
Provision	(4)	(5)	(5)	(3)
Charge-offs	0	0	(4)	0
Recoveries	0	0	0	1
Ending balance	24	28	24	28
Continuing Operations [Member] | Commercial Real Estate [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	172	169	175	163
Provision	(9)	(1)	(4)	5
Charge-offs	(1)	(2)	(10)	(3)
Recoveries	1	1	2	2
Ending balance	163	167	163	167
Continuing Operations [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	35	40	36	43
Provision	14	4	20	1
Charge-offs	(16)	(4)	(24)	(5)
Recoveries	2	0	3	1
Ending balance	35	40	35	40
Continuing Operations [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	8	9	7	7
Provision	0	1	1	4
Charge-offs	(1)	0	(2)	(1)
Recoveries	0	0	1	0
Ending balance	7	10	7	10
Continuing Operations [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	36	38	35	43
Provision	4	2	7	(2)
Charge-offs	(6)	(6)	(10)	(10)
Recoveries	2	3	4	6
Ending balance	36	37	36	37
Continuing Operations [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	33	27	30	28
Provision	7	6	19	11
Charge-offs	(10)	(9)	(20)	(17)
Recoveries	2	2	3	4
Ending balance	32	26	32	26
Continuing Operations [Member] | Credit Cards [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	47	45	48	44
Provision	7	11	15	23
Charge-offs	(12)	(12)	(23)	(24)
Recoveries	2	2	4	3
Ending balance	44	46	44	46
Continuing Operations [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	22	20	20	20
Provision	6	2	11	6
Charge-offs	(8)	(7)	(16)	(15)
Recoveries	4	4	9	8
Ending balance	24	19	24	19
Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	13	16	14	16
Provision	2	0	4	2
Charge-offs	(4)	(3)	(8)	(7)
Recoveries	1	1	2	3
Ending balance	$ 12	$ 14	$ 12	$ 14

XML

Asset Quality - Breakdown of Allowance for Loan and Lease Losses and Corresponding Loan Balances (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance, Total ALLL - Including Discontinued Operations	$ 28	$ 21
Collectively Evaluated for Impairment, Allowance, Total ALLL - Including Discontinued Operations	870	871
Purchased Credit Impaired, Allowance, Total ALLL - Including Discontinued Operations	4	5
Loans, Outstanding, Total ALLL - Including Discontinued Operations	92,901	90,625
Individually Evaluated for Impairment, Outstanding, Total ALLL - Including Discontinued Operations	488	470
Collectively Evaluated for Impairment, Outstanding, Total ALLL - Including Discontinued Operations	91,895	89,580
Purchased Credit Impaired, Outstanding, Total ALLL - Including Discontinued Operations	518	575
Continuing Operations [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	26	19
Collectively Evaluated for Impairment, Allowance	860	859
Purchase Credit Impairment, Allowance	4	5
Total loans	91,937	89,552
Individually Evaluated for Impairment, Outstanding	465	447
Collectively Evaluated for Impairment, Outstanding	90,954	88,530
Purchase Credit Impairment, Outstanding	518	575
Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	11	5
Collectively Evaluated for Impairment, Allowance	734	734
Purchase Credit Impairment, Allowance	2	4
Total loans	67,860	66,310
Individually Evaluated for Impairment, Outstanding	247	228
Collectively Evaluated for Impairment, Outstanding	67,404	65,841
Purchase Credit Impairment, Outstanding	209	241
Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	15	14
Collectively Evaluated for Impairment, Allowance	126	125
Purchase Credit Impairment, Allowance	2	1
Total loans	24,077	23,242
Individually Evaluated for Impairment, Outstanding	218	219
Collectively Evaluated for Impairment, Outstanding	23,550	22,689
Purchase Credit Impairment, Outstanding	309	334
Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	2	2
Collectively Evaluated for Impairment, Allowance	10	12
Purchase Credit Impairment, Allowance	0	0
Total loans	964	1,073
Individually Evaluated for Impairment, Outstanding	23	23
Collectively Evaluated for Impairment, Outstanding	941	1,050
Purchase Credit Impairment, Outstanding	0	0
Commercial and Industrial [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	10	5
Collectively Evaluated for Impairment, Allowance	538	526
Purchase Credit Impairment, Allowance	1	1
Total loans	48,544	45,753
Individually Evaluated for Impairment, Outstanding	183	162
Collectively Evaluated for Impairment, Outstanding	48,308	45,530
Purchase Credit Impairment, Outstanding	53	61
Commercial Mortgage [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	1	0
Collectively Evaluated for Impairment, Allowance	137	139
Purchase Credit Impairment, Allowance	1	3
Total loans	13,299	14,285
Individually Evaluated for Impairment, Outstanding	64	66
Collectively Evaluated for Impairment, Outstanding	13,080	14,041
Purchase Credit Impairment, Outstanding	155	178
Commercial Real Estate: Construction [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	24	33
Purchase Credit Impairment, Allowance	0	0
Total loans	1,439	1,666
Individually Evaluated for Impairment, Outstanding	0	0
Collectively Evaluated for Impairment, Outstanding	1,438	1,664
Purchase Credit Impairment, Outstanding	1	2
Commercial Real Estate Loans [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	1	0
Collectively Evaluated for Impairment, Allowance	161	172
Purchase Credit Impairment, Allowance	1	3
Total loans	14,738	15,951
Individually Evaluated for Impairment, Outstanding	64	66
Collectively Evaluated for Impairment, Outstanding	14,518	15,705
Purchase Credit Impairment, Outstanding	156	180
Commercial Lease Financing [Member] | Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	35	36
Purchase Credit Impairment, Allowance	0	0
Total loans	4,578	4,606
Individually Evaluated for Impairment, Outstanding	0	0
Collectively Evaluated for Impairment, Outstanding	4,578	4,606
Purchase Credit Impairment, Outstanding	0	0
Real Estate - Residential Mortgage [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	3	3
Collectively Evaluated for Impairment, Allowance	3	4
Purchase Credit Impairment, Allowance	1	0
Total loans	6,053	5,513
Individually Evaluated for Impairment, Outstanding	48	49
Collectively Evaluated for Impairment, Outstanding	5,714	5,150
Purchase Credit Impairment, Outstanding	291	314
Home Equity Loans [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	9	8
Collectively Evaluated for Impairment, Allowance	26	26
Purchase Credit Impairment, Allowance	1	1
Total loans	10,575	11,142
Individually Evaluated for Impairment, Outstanding	128	127
Collectively Evaluated for Impairment, Outstanding	10,432	10,998
Purchase Credit Impairment, Outstanding	15	17
Consumer Direct Loans [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	32	30
Purchase Credit Impairment, Allowance	0	0
Total loans	2,350	1,809
Individually Evaluated for Impairment, Outstanding	4	4
Collectively Evaluated for Impairment, Outstanding	2,343	1,802
Purchase Credit Impairment, Outstanding	3	3
Consumer Credit Card Financing Receivable [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	0	0
Collectively Evaluated for Impairment, Allowance	44	48
Purchase Credit Impairment, Allowance	0	0
Total loans	1,096	1,144
Individually Evaluated for Impairment, Outstanding	3	3
Collectively Evaluated for Impairment, Outstanding	1,093	1,141
Purchase Credit Impairment, Outstanding	0	0
Consumer Indirect Loans [Member] | Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	3	3
Collectively Evaluated for Impairment, Allowance	21	17
Purchase Credit Impairment, Allowance	0	0
Total loans	4,003	3,634
Individually Evaluated for Impairment, Outstanding	35	36
Collectively Evaluated for Impairment, Outstanding	3,968	3,598
Purchase Credit Impairment, Outstanding	0	0
Education Lending [Member] | Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans at fair value	$ 2	$ 2

XML

Asset Quality - Changes in Liability for Credit Losses on Lending Related Commitments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of period	$ 62	$ 60	$ 64	$ 57
Provision (credit) for losses on lending-related commitments	2	(2)	0	1
Balance at end of period	$ 64	$ 58	$ 64	$ 58

XML

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	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Mar. 31, 2019	Dec. 31, 2017
Accretable Yield
Balance at beginning of period	$ 118	$ 117	$ 131
Accretion	(9)	(19)	(42)
Net reclassifications from nonaccretable to accretable	(5)	8	50
Payments received, net	(3)	(5)	(21)
Loans charged off			(1)
Balance at end of period	101	101	117
Carrying Amount	513	513	571	$ 547	$ 738
Outstanding Unpaid Principal Balance	$ 541	$ 541	$ 607	$ 578	$ 803

XML

Fair Value Measurements - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	$ 1,005,000,000	$ 849,000,000
Securities available for sale	21,528,000,000	19,428,000,000
Loans, net of unearned income (residential)	91,937,000,000	89,552,000,000
Loans held for sale (residential)		0
Derivative assets, netting adjustments	(413,000,000)	(333,000,000)
Total derivative assets	809,000,000	531,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, netting adjustments	(319,000,000)	(337,000,000)
US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	272,000,000	147,000,000
US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	5,000,000	7,000,000
Other Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	35,000,000	20,000,000
Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	2,061,000,000	2,105,000,000
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	5,543,000,000	3,187,000,000
Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	983,000,000	824,000,000
Commercial loans	22,000,000	25,000,000
Total trading account assets	1,005,000,000	849,000,000
Securities available for sale	21,528,000,000	19,428,000,000
Total other investments	93,000,000	115,000,000
Loans, net of unearned income (residential)	3,000,000	3,000,000
Loans held for sale (residential)	164,000,000	54,000,000
Derivative assets, gross	1,222,000,000	864,000,000
Derivative assets, netting adjustments	(413,000,000)	(333,000,000)
Total derivative assets	809,000,000	531,000,000
Accrued income and other assets	0	0
Total assets at fair value	23,602,000,000	20,980,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	937,000,000	930,000,000
Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	853,000,000	578,000,000
Securities available for sale	272,000,000	147,000,000
Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	32,000,000	60,000,000
Securities available for sale	5,000,000	7,000,000
Recurring [Member] | Other Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	62,000,000	22,000,000
Securities available for sale	35,000,000	20,000,000
Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	5,543,000,000	3,187,000,000
Recurring [Member] | Principal Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Recurring [Member] | Principal Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	77,000,000	97,000,000
Recurring [Member] | Equity Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	7,000,000	8,000,000
Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	16,000,000	18,000,000
Recurring [Member] | Other Mortgage-Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	36,000,000	164,000,000
Recurring [Member] | Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	2,061,000,000	2,105,000,000
Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	720,000,000	544,000,000
Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	536,000,000	723,000,000
Derivative liabilities, netting adjustments	(319,000,000)	(337,000,000)
Total derivative liabilities	217,000,000	386,000,000
Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	889,000,000	415,000,000
Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	220,000,000	297,000,000
Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	70,000,000	106,000,000
Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	64,000,000	95,000,000
Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	246,000,000	333,000,000
Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	236,000,000	323,000,000
Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,000,000	1,000,000
Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	3,000,000	1,000,000
Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	16,000,000	9,000,000
Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	13,000,000	7,000,000
Level 1 [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	0	0
Total other investments	0	0
Loans, net of unearned income (residential)	0	0
Loans held for sale (residential)	0	0
Derivative assets, gross	41,000,000	70,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	41,000,000	70,000,000
Accrued income and other assets	0	0
Total assets at fair value	41,000,000	70,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	42,000,000	72,000,000
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 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] | 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 [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
Level 1 [Member] | Recurring [Member] | Equity Investments Direct, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	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	7,000,000	14,000,000
Level 1 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	35,000,000	58,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	35,000,000	58,000,000
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	41,000,000	70,000,000
Level 1 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	35,000,000	58,000,000
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	983,000,000	824,000,000
Commercial loans	22,000,000	25,000,000
Total trading account assets	1,005,000,000	849,000,000
Securities available for sale	21,517,000,000	19,408,000,000
Total other investments	0	1,000,000
Loans, net of unearned income (residential)	0	0
Loans held for sale (residential)	164,000,000	54,000,000
Derivative assets, gross	1,171,000,000	786,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	1,171,000,000	786,000,000
Accrued income and other assets	0	0
Total assets at fair value	23,857,000,000	21,098,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	1,213,000,000	1,195,000,000
Level 2 [Member] | Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	853,000,000	578,000,000
Securities available for sale	272,000,000	147,000,000
Level 2 [Member] | Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	32,000,000	60,000,000
Securities available for sale	5,000,000	7,000,000
Level 2 [Member] | Recurring [Member] | Other Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	62,000,000	22,000,000
Securities available for sale	24,000,000	0
Level 2 [Member] | Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	5,543,000,000	3,187,000,000
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 [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	0	1,000,000
Level 2 [Member] | Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	1,000,000
Level 2 [Member] | Recurring [Member] | Other Mortgage-Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	36,000,000	164,000,000
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	2,061,000,000	2,105,000,000
Level 2 [Member] | Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	713,000,000	530,000,000
Level 2 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	500,000,000	665,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	500,000,000	665,000,000
Level 2 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	885,000,000	410,000,000
Level 2 [Member] | Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	220,000,000	297,000,000
Level 2 [Member] | Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	29,000,000	36,000,000
Level 2 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	29,000,000	37,000,000
Level 2 [Member] | Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	246,000,000	333,000,000
Level 2 [Member] | Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	236,000,000	323,000,000
Level 2 [Member] | Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,000,000	1,000,000
Level 2 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	2,000,000	1,000,000
Level 2 [Member] | Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	10,000,000	6,000,000
Level 2 [Member] | Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	13,000,000	7,000,000
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	11,000,000	20,000,000
Total other investments	8,000,000	8,000,000
Loans, net of unearned income (residential)	3,000,000	3,000,000
Loans held for sale (residential)	0	0
Derivative assets, gross	10,000,000	8,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	10,000,000	8,000,000
Accrued income and other assets	0	0
Total assets at fair value	32,000,000	39,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Accrued expense and other liabilities	0	0
Total liabilities on a recurring basis at fair value	1,000,000	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 Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	11,000,000	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	1,000,000	1,000,000
Level 3 [Member] | Recurring [Member] | Principal Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Level 3 [Member] | Recurring [Member] | Equity Investments Direct [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	7,000,000	7,000,000
Level 3 [Member] | Recurring [Member] | Equity Investments [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	7,000,000	7,000,000
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	1,000,000	0
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	1,000,000	0
Level 3 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	4,000,000	5,000,000
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	0
Level 3 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	1,000,000	0
Level 3 [Member] | Recurring [Member] | Other [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	6,000,000	3,000,000
Level 3 [Member] | Recurring [Member] | Other [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Measured at NAV [Member] | Recurring [Member] | Principal Investments Indirect [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	76,000,000	96,000,000
Measured at NAV [Member] | Recurring [Member] | Equity Investments Direct, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Measured at NAV [Member] | Recurring [Member] | Equity Investments Indirect, NAV [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	8,000,000	9,000,000
Collateralized Mortgage Obligations [Member] | Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	13,612,000,000	13,962,000,000
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	13,612,000,000	13,962,000,000
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 (Details) - USD ($)	3 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other equity investments	$ 139,000,000	$ 107,000,000
Impairment loss	0
Loans, net of allowance	91,047,000,000	88,669,000,000
Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	964,000,000	1,100,000,000
Loans at fair value	2,000,000	2,000,000
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	632,000,000	666,000,000
Loans, net of allowance	89,803,000,000	86,224,000,000
Loans at fair value	3,000,000	3,000,000
Fair Value [Member] | Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	809,000,000	890,000,000
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	632,000,000	666,000,000
Loans, net of allowance	91,044,000,000	88,666,000,000
Loans at fair value	3,000,000	3,000,000
Carrying Amount [Member] | Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	1,000,000,000.0	1,100,000,000
Level 3 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	547,000,000	559,000,000
Loans, net of allowance	89,803,000,000	86,224,000,000
Loans at fair value	3,000,000	3,000,000
Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	93,000,000	115,000,000
Liabilities measured at fair value on non recurring basis	937,000,000	930,000,000
Recurring [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	8,000,000	8,000,000
Liabilities measured at fair value on non recurring basis	1,000,000	0
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
Principal Investments Direct [Member] | Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	1,000,000	1,000,000
Principal Investments Direct [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	$ 1,000,000	$ 1,000,000

XML

Fair Value Measurements - Fair Value of Direct and Indirect Investments, Related Unfunded Commitments and Financial Support Provided (Details) - Principal Investments [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 77		$ 77
Unfunded Commitments	24		24
Funded Commitments	0	$ 0	2	$ 1
Funded Other	0	0	0	0
Direct Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	1		1
Unfunded Commitments	0		0
Funded Commitments	0	0	0	0
Funded Other	0	0	0	0
Indirect Investments [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	76		76
Unfunded Commitments	24		24
Funded Commitments	0	0	2	1
Funded Other	$ 0	$ 0	$ 0	$ 0

XML

Fair Value Measurements - Change in Fair Values of Level 3 Financial Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Securities Available for Sale [Member] | Other Securities [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	$ 25	$ 20	$ 20	$ 20
Gains (Losses) Included in Other Comprehensive Income	10	0	15	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	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	(24)	0	(24)	0
End of Period Balance	11	20	11	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 of Period Balance	8	7	7	3
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	(1)	0	(1)	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	1	4
Transfers out of Level 3	0	0	0	0
End of Period Balance	7	7	7	7
Unrealized Gains (Losses) Included in Earnings	0	0	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 of Period Balance	1	12	1	13
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	1	0	0
Purchases	(1)	1	0	1
Sales	1	(1)	0	(1)
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
End of Period Balance	1	13	1	13
Unrealized Gains (Losses) Included in Earnings	0	2	0	1
Other Investments [Member] | Principal Other Indirect Investments [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	0
Gains (Losses) Included in Other Comprehensive Income	0
Gains (Losses) Included in Earnings	0
Purchases	0
Sales	0
Settlements	0
Transfers Other	0
Transfers into Level 3	0
Transfers out of Level 3	0
End of Period Balance	0		0
Unrealized Gains (Losses) Included in Earnings	0
Interest Rate [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	3	4	5	9
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	2	(1)	3	(2)
Purchases	0	0	0	1
Sales	0	(2)	0	(2)
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	0	4	2	4
Transfers out of Level 3	(1)	0	(6)	(5)
End of Period Balance	4	5	4	5
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 of Period Balance	(1)	0	0	1
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	(15)	0	(20)
Purchases	0	0	(1)	0
Sales	0	0	0	0
Settlements	0	6	0	10
Transfers Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	(1)	(9)	(1)	(9)
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 of Period Balance	4	3	3	3
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	2	0	3	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	6	3	6	3
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Loans Held For Sale (Residential) [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	1	1	0	1
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	(1)	(1)	(1)	(1)
Settlements	0	0	0	0
Transfers Other	0	0	1	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	0	0	0	0
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Loans, Net of Unearned Income (Residential) [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	3	2	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	0	1	0	1
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	3	3	3	3
Unrealized Gains (Losses) Included in Earnings	$ 0	$ 0	$ 0	$ 0

XML

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring [Member] - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	$ 57	$ 42
Accrued income and other assets	21	16
Total assets at fair value	78	58
Level 1 [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]
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 3 [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	57	42
Accrued income and other assets	21	16
Total assets at fair value	$ 78	$ 58

XML

Fair Value Measurements - Quantitative Information about Level 3 Fair Value Measurements (Details) $ in Millions	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 21,528	$ 19,428
Derivative assets	809	531
Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	21,528	19,428
Other investments	93	115
Derivative assets	809	531
Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	57	42
Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	11	20
Other investments	8	8
Derivative assets	10	8
Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	57	42
Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 7
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.1481
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.1678
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.1506
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Marketability [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.3000
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Price Volatility [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.4900
Valuation, Market Comparable Pricing [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held for investment	$ 3
Valuation, Market Comparable Pricing [Member] | Measurement Input, Comparability Adjustment [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held for investment, measurement input	0.7857
Valuation, Market Comparable Pricing [Member] | Measurement Input, Comparability Adjustment [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held for investment, measurement input	0.9575
Valuation, Market Comparable Pricing [Member] | Measurement Input, Comparability Adjustment [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held for investment, measurement input	0.9040
Valuation, Fair Value Of Underlying Collateral [Member] | Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	$ 57	$ 42
Valuation, Fair Value Of Underlying Collateral [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Nonrecurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans, measurement input	0	0.2000
Valuation, Fair Value Of Underlying Collateral [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Nonrecurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans, measurement input	0.8000	0.4000
Valuation, Fair Value Of Underlying Collateral [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Nonrecurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans, measurement input	0.1700	0.2100
Valuation, Appraised Value [Member] | Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
OREO and other Level 3 assets	$ 18
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 4
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.0002
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1.00
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.0210
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Internal Risk Rating [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Internal Risk Rating [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	19
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Internal Risk Rating [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	9.021
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loss Given Default [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loss Given Default [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loss Given Default [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.492
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities	$ (1)
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	0.0002
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	1.00
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	0.0236
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Internal Risk Rating [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	1
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Internal Risk Rating [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	19
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Internal Risk Rating [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	9.134
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loss Given Default [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	0
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loss Given Default [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	1
Credit [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loss Given Default [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative liabilities, measurement input	0.50
Other [Member] | Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 6
Other [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loan Closing Rates [Member] | Level 3 [Member] | Recurring [Member] | Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.3670
Other [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loan Closing Rates [Member] | Level 3 [Member] | Recurring [Member] | Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.9915
Other [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Loan Closing Rates [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.7462
Other Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 35	$ 20
Other Securities [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	35	20
Other Securities [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	11	20
Other Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 11
Other Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale, measurement input	0.1595
Other Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Marketability [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale, measurement input	0.3000
Other Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Price Volatility [Member] | Level 3 [Member] | Recurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale, measurement input	0.3800
Principal Investments Direct [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 1	1
Principal Investments Direct [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 1	$ 1

XML

Fair Value Measurements - Fair Value Disclosures of Financial Instruments (Details) - USD ($)		Jun. 30, 2019	Dec. 31, 2018
ASSETS
Trading account assets		$ 1,005,000,000	$ 849,000,000
Loans held for sale			0
Derivative assets		809,000,000	531,000,000
Securities available for sale		21,528,000,000	19,428,000,000
Amortized Cost		10,878,000,000	11,519,000,000
Held-to-maturity securities		10,899,000,000	11,122,000,000
Loans, net of allowance		91,047,000,000	88,669,000,000
Loans held for sale	[1]	1,790,000,000	1,227,000,000
LIABILITIES
Long-term debt		14,312,000,000	13,732,000,000
Carrying Amount [Member]
ASSETS
Trading account assets		1,005,000,000	849,000,000
Other investments		632,000,000	666,000,000
Loans, net of allowance		3,000,000	3,000,000
Loans held for sale		164,000,000	54,000,000
Securities available for sale		21,528,000,000	19,428,000,000
Amortized Cost		10,878,000,000	11,519,000,000
Loans, net of allowance		91,044,000,000	88,666,000,000
Loans held for sale		1,626,000,000	1,173,000,000
Cash and short-term investments		3,050,000,000	3,240,000,000
LIABILITIES
Time deposits		13,608,000,000	13,245,000,000
Short-term borrowings		881,000,000	863,000,000
Long-term debt		14,312,000,000	13,732,000,000
Deposits with no stated maturity		96,338,000,000	94,064,000,000
Fair Value [Member]
ASSETS
Trading account assets		1,005,000,000	849,000,000
Other investments		632,000,000	666,000,000
Loans, net of allowance		3,000,000	3,000,000
Loans held for sale		164,000,000	54,000,000
Securities available for sale		21,528,000,000	19,428,000,000
Held-to-maturity securities		10,899,000,000	11,122,000,000
Loans, net of allowance		89,803,000,000	86,224,000,000
Loans held for sale		1,626,000,000	1,173,000,000
Cash and short-term investments		3,050,000,000	3,240,000,000
LIABILITIES
Time deposits		13,716,000,000	13,331,000,000
Short-term borrowings		881,000,000	863,000,000
Long-term debt		14,786,000,000	13,787,000,000
Deposits with no stated maturity		96,338,000,000	94,064,000,000
Fair Value [Member] | Level 1 [Member]
ASSETS
Trading account assets		0	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		3,050,000,000	3,240,000,000
LIABILITIES
Time deposits		0	0
Short-term borrowings		7,000,000	14,000,000
Long-term debt		13,557,000,000	12,576,000,000
Deposits with no stated maturity		0	0
Fair Value [Member] | Level 2 [Member]
ASSETS
Trading account assets		1,005,000,000	849,000,000
Other investments		0	1,000,000
Loans, net of allowance		0	0
Loans held for sale		164,000,000	54,000,000
Securities available for sale		21,517,000,000	19,408,000,000
Held-to-maturity securities		10,899,000,000	11,122,000,000
Loans, net of allowance		0	0
Loans held for sale		0	0
Cash and short-term investments		0	0
LIABILITIES
Time deposits		13,716,000,000	13,331,000,000
Short-term borrowings		874,000,000	849,000,000
Long-term debt		1,229,000,000	1,211,000,000
Deposits with no stated maturity		96,338,000,000	94,064,000,000
Fair Value [Member] | Level 3 [Member]
ASSETS
Trading account assets		0	0
Other investments		547,000,000	559,000,000
Loans, net of allowance		3,000,000	3,000,000
Loans held for sale		0	0
Securities available for sale		11,000,000	20,000,000
Held-to-maturity securities		0	0
Loans, net of allowance		89,803,000,000	86,224,000,000
Loans held for sale		1,626,000,000	1,173,000,000
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] | Measured at NAV [Member]
ASSETS
Other investments		85,000,000	106,000,000
Derivatives Designated as Hedging Instruments [Member] | Carrying Amount [Member]
ASSETS
Derivative assets		94,000,000	69,000,000
LIABILITIES
Derivative liabilities		1,000,000	(9,000,000)
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member]
ASSETS
Derivative assets		94,000,000	69,000,000
Derivative assets, Netting Adjustment		(11,000,000)	17,000,000
LIABILITIES
Derivative liabilities		1,000,000	(9,000,000)
Derivative liabilities, Netting Adjustment		(11,000,000)	1,000,000
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 1 [Member]
ASSETS
Derivative assets		0	2,000,000
LIABILITIES
Derivative liabilities		2,000,000	0
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 2 [Member]
ASSETS
Derivative assets		105,000,000	50,000,000
LIABILITIES
Derivative liabilities		10,000,000	(10,000,000)
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		715,000,000	462,000,000
LIABILITIES
Derivative liabilities		216,000,000	395,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
ASSETS
Derivative assets		715,000,000	462,000,000
Derivative assets, Netting Adjustment		(402,000,000)	(350,000,000)
LIABILITIES
Derivative liabilities		216,000,000	395,000,000
Derivative liabilities, Netting Adjustment		(308,000,000)	(338,000,000)
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 1 [Member]
ASSETS
Derivative assets		41,000,000	68,000,000
LIABILITIES
Derivative liabilities		33,000,000	58,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 2 [Member]
ASSETS
Derivative assets		1,065,000,000	736,000,000
LIABILITIES
Derivative liabilities		490,000,000	675,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 3 [Member]
ASSETS
Derivative assets		11,000,000	8,000,000
LIABILITIES
Derivative liabilities		$ 1,000,000	$ 0

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $164 million at June 30, 2019, and $54 million at December 31, 2018.

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Securities - Details of Securities (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
SECURITIES AVAILABLE FOR SALE
Amortized Cost	$ 21,394	$ 19,917
Gross Unrealized Gains	293	55
Gross Unrealized Losses	159	544
Fair Value	21,528	19,428
HELD-TO-MATURITY SECURITIES
Amortized Cost	10,878	11,519
Gross Unrealized Gains	94	4
Gross Unrealized Losses	73	401
Fair Value	10,899	11,122
US Treasury and Government [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	272	150
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	3
Fair Value	272	147
US States and Political Subdivisions Debt Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	5	7
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	5	7
Collateralized Mortgage Obligations [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	13,593	14,315
Gross Unrealized Gains	111	20
Gross Unrealized Losses	92	373
Fair Value	13,612	13,962
HELD-TO-MATURITY SECURITIES
Amortized Cost	6,435	7,021
Gross Unrealized Gains	28	2
Gross Unrealized Losses	59	254
Fair Value	6,404	6,769
Residential Mortgage Backed Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	2,035	2,128
Gross Unrealized Gains	36	13
Gross Unrealized Losses	10	36
Fair Value	2,061	2,105
HELD-TO-MATURITY SECURITIES
Amortized Cost	456	490
Gross Unrealized Gains	2	0
Gross Unrealized Losses	1	14
Fair Value	457	476
Other Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	17	17
Gross Unrealized Gains	18	3
Gross Unrealized Losses	0	0
Fair Value	35	20
HELD-TO-MATURITY SECURITIES
Amortized Cost	15	12
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	15	12
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	5,472	3,300
Gross Unrealized Gains	128	19
Gross Unrealized Losses	57	132
Fair Value	5,543	3,187
HELD-TO-MATURITY SECURITIES
Amortized Cost	3,972	3,996
Gross Unrealized Gains	64	2
Gross Unrealized Losses	13	133
Fair Value	$ 4,023	$ 3,865

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Securities - Available for Sale Securities (Unrealized Loss Position) (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Held-to-maturity securities:
Temporarily impaired securities, fair value, less than 12 months	$ 259	$ 647
Temporarily impaired securities, gross unrealized losses, less than 12 months	1	2
Temporarily impaired securities, fair value, 12 months or longer	14,298	24,158
Temporarily impaired securities, gross unrealized losses, 12 months or longer	231	943
Temporarily impaired securities, fair value	14,557	24,805
Temporarily impaired securities, gross unrealized losses	232	945
US Treasury and Government [Member]
Securities available for sale:
Fair value, less than 12 months	10	0
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	45	147
Gross unrealized losses, 12 months or longer	0	3
Fair value	55	147
Gross unrealized losses	0	3
Collateralized Mortgage Obligations [Member]
Securities available for sale:
Fair value, less than 12 months	183	570
Gross unrealized losses, less than 12 months	1	2
Fair value, 12 months or longer	6,941	10,945
Gross unrealized losses, 12 months or longer	91	371
Fair value	7,124	11,515
Gross unrealized losses	92	373
Held-to-maturity securities:
Fair value, less than 12 months	0	0
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	3,941	6,416
Gross unrealized losses, 12 months or longer	59	254
Fair value	3,941	6,416
Gross unrealized losses	59	254
Commercial Mortgage Backed Securities [Member]
Securities available for sale:
Fair value, less than 12 months	0	0
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	1,779	1,729
Gross unrealized losses, 12 months or longer	57	132
Fair value	1,779	1,729
Gross unrealized losses		132
Held-to-maturity securities:
Fair value, less than 12 months	0	73
Gross unrealized losses, less than 12 months	0	1
Fair value, 12 months or longer	514	3,359
Gross unrealized losses, 12 months or longer	13	133
Fair value	514	3,432
Gross unrealized losses	13	133
Other Securities [Member]
Held-to-maturity securities:
Fair value, less than 12 months	7
Gross unrealized losses, less than 12 months	1
Fair value, 12 months or longer	0
Gross unrealized losses, 12 months or longer	0
Fair value	7
Gross unrealized losses	0
Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
Securities available for sale:
Fair value, less than 12 months	1	4
Gross unrealized losses, less than 12 months	1	1
Fair value, 12 months or longer	996	1,087
Gross unrealized losses, 12 months or longer	10	36
Fair value	997	1,091
Gross unrealized losses	10	36
Held-to-maturity securities:
Fair value, less than 12 months	58	0
Gross unrealized losses, less than 12 months	1	0
Fair value, 12 months or longer	81	475
Gross unrealized losses, 12 months or longer	1	14
Fair value	139	475
Gross unrealized losses	1	$ 14
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
Securities available for sale:
Gross unrealized losses	$ 57

XML

Securities - Additional Information (Details)	6 Months Ended
	Jun. 30, 2019 USD ($) loan position	Dec. 31, 2018 USD ($)
Debt Securities, Available-for-sale [Line Items]
Impairment recognized in earnings	$ 0
Loans pledged as collateral	$ 8,500,000,000
Collateralized Mortgage Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Number of fixed rate collateralized mortgage obligations | loan	278
Weighted average maturity collateralized mortgage life	3 years 8 months 19 days
Residential Mortgage Backed Securities [Member] | Agency residential mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses	$ 10,000,000	$ 36,000,000
Securities in unrealized loss positions, number of positions | position	213
Weighted average maturity mortgage backed securities	3 years 9 months
Commercial Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses		$ 132,000,000
Commercial Mortgage Backed Securities [Member] | Agency residential mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses	$ 57,000,000
Securities in unrealized loss positions, number of positions | position	14
Weighted average maturity mortgage backed securities	4 years 1 month 13 days

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Securities - Securities by Maturity (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Amortized Cost of Securities Available for sale, Due in one year or less	$ 360
Amortized Cost of Securities Available for sale, Due after one through five years	16,532
Amortized Cost of Securities Available for sale, Due after five through ten years	4,493
Amortized Cost of Securities Available for sale, Due after ten years	9
Amortized Cost	21,394	$ 19,917
Fair Value of Securities Available for sale, Due in one year or less	378
Fair Value of Securities Available for sale, Due after one through five years	16,535
Fair Value of Securities Available for sale, Due after five through ten years	4,606
Fair Value of Securities Available for sale, Due after ten years	9
Total Fair Value of Securities Available For Sale	21,528	19,428
Amortized Cost of Held-to-Maturity Securities, Due in one year or less	41
Amortized Cost of Held-to-Maturity Securities, Due after one through five years	7,605
Amortized Cost of Held-to-Maturity Securities, Due after five through ten years	3,232
Amortized Cost of Held-to-Maturity Securities, Due after ten years	0
Amortized Cost	10,878	11,519
Fair Value of Held-to-Maturity Securities, Due in one year or less	41
Fair Value of Held-to-Maturity Securities, Due after one through five years	7,590
Fair Value of Held-to-Maturity Securities, Due after five through ten years	3,268
Fair Value of Held-to-Maturity Securities, Due after ten years	0
Total Fair Value of Held-to-Maturity Securities	$ 10,899	$ 11,122

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Derivatives and Hedging Activities - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($) derivative rating	Dec. 31, 2018 USD ($) rating
Credit Derivatives [Line Items]
Derivative assets after effects of bilateral collateral and master netting agreements	$ 94
Derivative liabilities after effects of bilateral collateral and master netting agreements	1
Derivative assets not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	715
Derivative liabilities not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	216
Reclassify of after-tax net losses on derivative instruments from AOCI	$ 63
Length of time hedge in cash flow hedge	12 months
Reclassification of net losses related to terminated cash flow hedges from AOCI to income	$ 10
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	$ 24
Cash collateral netted against derivative assets	160	$ 33
Collateral netted against derivative liabilities	66	37
Gross exposure on derivatives, after taking into account the effects of bilateral collateral and master netting agreements	384
Net exposure on derivatives, after taking into account, the effects of bilateral collateral and master netting agreements	117
Over-collateralization on derivatives to broker-dealers and banks, after the application of master netting agreements and collateral	113
Additional collateral held in the form of securities	4
Default reserve associated with uncollateralized contracts	6
Gross exposure on derivatives after taking into account effects of master netting agreements	731
Net exposure on derivatives with clients after application of master netting agreements collateral and related reserve	692
Net liability position totaled	2	$ 1
Banking Subsidiary [Member]
Credit Derivatives [Line Items]
Net liability position totaled	8
Derivative assets included in net liability position	6
Derivative liabilities included in net liability position	(14)
Cash and securities collateral posted	$ 9
Number of credit risk derivatives held | derivative	0
Banking Subsidiary [Member] | Unsecured Debt [Member]
Credit Derivatives [Line Items]
Number of ratings above noninvestment | rating	4	4
Banking Subsidiary [Member] | Maximum [Member] | Unsecured Debt [Member]
Credit Derivatives [Line Items]
Payments to terminate contracts (less than for the $1 million)	$ 1	$ 4

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Derivatives and Hedging Activities - Fair Values, Volume of Activity and Gain (Loss) Information Related to Derivative Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Notional Amount	$ 122,771	$ 102,645
Derivative assets, netting adjustments	(413)	(333)
Derivative Assets, net	806	529
Derivative liabilities, netting adjustments	(319)	(337)
Derivative Liabilities, net	171	353
Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	37,269	28,668
Derivative Assets	105	52
Derivative Liabilities	12	(10)
Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	85,502	73,977
Derivative Assets	1,117	812
Derivative Liabilities	524	733
Interest Rate [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	37,147	28,546
Derivative Assets	105	50
Derivative Liabilities	10	(10)
Interest Rate [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	68,202	63,454
Derivative Assets	784	365
Derivative Liabilities	210	307
Foreign Exchange [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	122	122
Derivative Assets	0	2
Derivative Liabilities	2	0
Foreign Exchange [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	5,702	6,829
Derivative Assets	70	104
Derivative Liabilities	62	95
Commodity [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	6,662	2,002
Derivative Assets	246	333
Derivative Liabilities	236	323
Credit [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	453	226
Derivative Assets	1	1
Derivative Liabilities	3	1
Other [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	4,483	1,466
Derivative Assets	16	9
Derivative Liabilities	13	7
Net Derivatives [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	122,771	102,645
Derivative Assets, net	809	531
Derivative Liabilities, net	217	386
Counterparty And Cash Collateral Netting [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	0	0
Derivative Assets, net	(3)	(2)
Derivative Liabilities, net	$ (46)	$ (33)

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Derivatives and Hedging Activities - Cumulative Basis Adjustments on Fair Value Hedges (Details) - Interest Rate [Member] - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	$ 9,559	$ 9,363
Hedge accounting basis adjustment	237	(6)
Certificates of Deposit [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	194	343
Hedge accounting basis adjustment	0	(1)
Bank Time Deposits [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	175	178
Hedge accounting basis adjustment	0	0
Derivatives Not Designated as Hedging Instruments [Member] | Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Hedge accounting basis adjustment	$ (10)	$ (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		6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Interest expense — Long-term debt		$ (120)	$ (102)	$ (240)	$ (194)
Interest income — Loans		1,082	1,000	2,148	1,940
Deposits		(223)	(112)	(425)	(203)
Other income	[1]	17	99	27	120
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		(152)	22	(245)	93
Recognized on derivatives designated as hedging instruments		142	(25)	224	(94)
Net income (expense) recognized on fair value hedges		(10)	(3)	(21)	(1)
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		0	1	(1)	0
Net income (expense) recognized on cash flow hedges		0	1	(1)	0
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		(19)	(25)	(43)	(27)
Net income (expense) recognized on cash flow hedges		(19)	(25)	(43)	(27)
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		(1)	1	(1)	1
Recognized on derivatives designated as hedging instruments		0	0	0	0
Net income (expense) recognized on fair value hedges		(1)	1	(1)	1
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
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	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] | 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 six months ended June 30, 2019, and June 30, 2018, net securities gains totaled less than $1 million. For the three and six months ended June 30, 2019, and June 30, 2018, 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 (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	$ 266	$ (45)	$ 372	$ (131)
Net Gains (Losses) Reclassified From OCI Into Income	(19)	(24)	(44)	(27)
Interest Income [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	270	(58)	385	(146)
Net Gains (Losses) Reclassified From OCI Into Income	(19)	(25)	(43)	(27)
Interest Expense [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	(2)	2	(3)	4
Net Gains (Losses) Reclassified From OCI Into Income	0	1	(1)	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	(6)	1
Net Gains (Losses) Reclassified From OCI Into Income	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	(1)	10	(4)	10
Net Gains (Losses) Reclassified From OCI Into Income	$ 0	$ 0	$ 0	$ 0

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Derivatives and Hedging Activities - Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ 14	$ 27	$ 26	$ 45
Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	7	11	13	22
Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	11	11	21	22
Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	3	3	6
Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(8)	(14)	(14)	(17)
Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	16	3	12
Corporate Services Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	20	25	40	50
Corporate Services Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	7	11	15	20
Corporate Services Income [Member] | Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	11	11	21	22
Corporate Services Income [Member] | Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	3	3	6
Corporate Services Income [Member] | Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	1	2
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)	0	0	0	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)	0	0	0	0
Other Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(6)	2	(14)	(5)
Other Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	(2)	2
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)	(8)	(14)	(15)	(19)
Other Income [Member] | Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ 2	$ 16	$ 3	$ 12

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Derivatives and Hedging Activities - Fair Value of Derivative Assets by Type (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 969	$ 564
Less: Related collateral	160	33
Total derivative assets	809	531
Interest Rate [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	793	308
Foreign Exchange [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	36	60
Commodity [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	124	187
Credit [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	0	0
Other [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 16	$ 9

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Derivatives and Hedging Activities - Credit Derivatives Sold and Held (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Credit Derivatives [Line Items]
Notional Amount	$ 126	$ 22
Average Term (Years)	0 years	0 years
Payment / Performance Risk	0.00%	0.00%
Other [Member]
Credit Derivatives [Line Items]
Notional Amount	$ 126	$ 22
Average Term (Years)	13 years 10 months 2 days	13 years 5 months 4 days
Payment / Performance Risk	2.50%	17.18%

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Derivatives and Hedging Activities - Credit Risk Contingent Feature (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 4
Standard & Poor's, A- Rating [Member] | One Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	0	$ 2
Standard & Poor's, A- Rating [Member] | Two Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	0	2
Standard & Poor's, A- Rating [Member] | Three Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	0	2
Moody's, A3 Rating [Member] | One Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	0	2
Moody's, A3 Rating [Member] | Two Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	0	2
Moody's, A3 Rating [Member] | Three Rating Downgrade [Member]
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 0	$ 2

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Mortgage Servicing Assets - Changes in Carrying Amount of Mortgage Servicing Assets (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Commercial Mortgage Backed Securities [Member]
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	$ 497	$ 435	$ 502	$ 412
Servicing retained from loan sales	23	29	41	56
Purchases	17	12	23	33
Amortization	(28)	(25)	(57)	(50)
Balance at end of period	509	451	509	451
Fair value at end of period	723	646	723	646
Residential Mortgage Backed Securities [Member]
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	38	32	37	31
Servicing retained from loan sales	2	3	4	5
Purchases	0	0	0	0
Amortization	(1)	(1)	(2)	(2)
Balance at end of period	39	34	39	34
Fair value at end of period	$ 45	$ 43	$ 45	$ 43

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Mortgage Servicing Assets - Schedule of Range and Weighted-Average of Significant Unobservable Inputs (Details) - Discounted Cash Flow [Member] - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
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	1.92%	2.40%
Loan assumption rate	0.00%	0.00%
Commercial Mortgage Backed Securities [Member] | Maximum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	2.00%	3.00%
Residual cash flows discount rate	11.54%	15.00%
Escrow earn rate	3.13%	3.82%
Loan assumption rate	3.02%	3.00%
Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	1.13%	1.17%
Residual cash flows discount rate	9.26%	9.06%
Escrow earn rate	2.63%	3.10%
Loan assumption rate	1.40%	1.19%
Residential Mortgage Backed Securities [Member] | Minimum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.50%	8.50%
Prepayment speed	10.95%	8.39%
Servicing cost	$ 62,000,000	$ 76,000,000
Residential Mortgage Backed Securities [Member] | Maximum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	10.00%	11.00%
Prepayment speed	62.06%	49.39%
Servicing cost	$ 4,375,000,000	$ 4,385,000,000
Residential Mortgage Backed Securities [Member] | Weighted Average [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.53%	8.54%
Prepayment speed	12.52%	9.17%
Servicing cost	$ 67,550,000	$ 82,380,000

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Mortgage Servicing Assets - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Commercial Mortgage Backed Securities [Member]
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	$ 95	$ 85
Amortization of servicing commercial mortgage loans	57	50
Residential Mortgage Backed Securities [Member]
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	9	7
Amortization of servicing commercial mortgage loans	$ 2	$ 2

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Leases - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Amount of extension of lease term	5 years
Carrying amount of residual assets covered by residual value guarantees	$ 289
Carrying amount of operating lease assets	$ 948
Leases, Excluding Ground Leases [Member] | Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, lease term of operating or financing leases	1 year
Leases, Excluding Ground Leases [Member] | Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, lease term of operating or financing leases	20 years
Ground Leases [Member]
Lessee, Lease, Description [Line Items]
Lessee, lease term of operating or financing leases	30 years

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Leases - Components of Lease Expense and Income (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Operating lease cost	$ 34	$ 68
Finance lease cost:
Amortization of right-of-use assets	1	1
Variable lease cost	6	11
Total lease cost	41	80
Interest on lease liabilities (less than $1 million)	1	1
Short-term lease cost (less than $1 million)	$ 1	$ 1

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Leases - Summary of Cash Flows Related to Leases (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$ 37,000,000	$ 73,000,000
Financing cash flows from finance leases	1,000,000	1,000,000
Operating cash flows from finance leases (less than $1 million)	1,000,000	1,000,000
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$ 16,000,000	44,000,000
Finance leases		$ 0

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Leases - Summary of Additional Balance Sheet Information (Details) $ in Millions	Jun. 30, 2019 USD ($)
Leases [Abstract]
Operating lease assets	$ 695
Operating lease liabilities	775
Finance leases:
Property and equipment, gross	28
Accumulated depreciation	(16)
Property and equipment, net	12
Finance lease liabilities	$ 15

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Leases - Summary of Information Pertaining to Lease Term and Weighted-Average Discount Rate (Details)	Jun. 30, 2019
Weighted-average remaining lease term:
Operating leases	7 years 9 months 18 days
Finance leases	6 years 5 months 8 days
Weighted-average discount rate:
Operating leases	3.28%
Finance leases	3.90%

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Leases - Summary of Maturities of Lease Liabilities (Details) $ in Millions	Jun. 30, 2019 USD ($)
Operating Leases
2019	$ 72
2020	141
2021	127
2022	111
2023	95
Thereafter	339
Total lease payments	885
Less imputed interest	110
Total	775
Finance Leases
2019	2
2020	3
2021	3
2022	3
2023	2
Thereafter	5
Total lease payments	18
Less imputed interest	3
Total	15
2019	74
2020	144
2021	130
2022	114
2023	97
Thereafter	344
Total lease payments	903
Less imputed interest	113
Total	$ 790

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Leases - Components of Equipment Leasing Income (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$ 31	$ 61
Interest income related to accretion of unguaranteed residual asset	3	6
Interest income on deferred fees and costs	0	0
Total sales-type and direct financing lease income	34	67
Operating leases
Operating lease income related to lease payments	33	66
Other operating leasing gains	11	15
Total operating lease income and other leasing gains	44	81
Total lease income	$ 78	$ 148

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Leases - Composition of Net Investment in Sales-Type and Direct Financing Leases (Details) $ in Millions	Jun. 30, 2019 USD ($)
Leases [Abstract]
Lease receivables	$ 3,689
Unearned income	(345)
Unguaranteed residual value	430
Deferred fees and costs	17
Net investment in sales-type and direct financing leases	$ 3,791

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Leases - Minimum Future Lease Payments to be Received for Sales-Type and Direct Financing Leases (Details) $ in Millions	Jun. 30, 2019 USD ($)
Sales-type and direct financing lease payments
2019	$ 640
2020	1,008
2021	731
2022	493
2023	318
Thereafter	499
Total lease payments	$ 3,689

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Leases - Minimum Future Lease Payments to be Received for Operating Leases (Details) $ in Millions	Jun. 30, 2019 USD ($)
Leases [Abstract]
2019	$ 64
2020	123
2021	106
2022	90
2023	75
Thereafter	220
Total lease payments	$ 678

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Variable Interest Entities - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Variable Interest Entity [Line Items]
Investments in operating partnerships	$ 287,000,000		$ 248,000,000
Liabilities related to investments in qualified affordable housing projects	2,000,000		2,000,000
Recurring [Member]
Variable Interest Entity [Line Items]
Other investments	93,000,000		115,000,000
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Investments in operating partnerships	6,276,000,000		5,932,000,000
Liabilities related to investments in qualified affordable housing projects	2,588,000,000		2,569,000,000
Tax credit of investment	81,000,000
LIHTC Investments [Member] | Qualified affordable housing projects investment [Member]
Variable Interest Entity [Line Items]
Liabilities related to investments in qualified affordable housing projects	489,000,000		532,000,000
LIHTC Investments [Member] | Accrued Income And Other Assets [Member]
Variable Interest Entity [Line Items]
Investments in operating partnerships	1,400,000,000		1,400,000,000
LIHTC Investments [Member] | Investments [Member]
Variable Interest Entity [Line Items]
Amortization of investment	89,000,000	$ 83,000,000
Tax credit of investment	92,000,000
Guaranteed Funds [Member] | Investments [Member]
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	0		0
VIE, liabilities	0		0
Measured at NAV [Member] | Recurring [Member] | Principal Investments Indirect [Member]
Variable Interest Entity [Line Items]
Other investments	$ 76,000,000		$ 96,000,000

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Variable Interest Entities - Summary of Variable Interest Entities Information (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Total Assets	$ 287	$ 248
Total Liabilities	2	2
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Total Assets	6,276	5,932
Total Liabilities	2,588	2,569
Maximum Exposure to Loss	1,739	1,740
KCC Indirect Investments [Member]
Variable Interest Entity [Line Items]
Total Assets	15,018	19,659
Total Liabilities	286	376
Maximum Exposure to Loss	$ 100	$ 122

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Income Tax Contingency [Line Items]
Total income tax expense (benefit), rate	16.80%	17.60%
Combined federal and state statutory tax rate			23.70%
Federal deferred tax asset	$ 101		$ 101	$ 222
Valuation allowance	11		11	$ 11
Key Corp [Member]
Income Tax Contingency [Line Items]
Unrecognized tax benefits	37		37
First Niagara Bank, N.A. [Member]
Income Tax Contingency [Line Items]
Allocated bad debt deductions	$ 92		$ 92

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Acquisitions, Divestiture, and Discontinued Operations - Additional Information (Details) $ in Millions		3 Months Ended	6 Months Ended
	May 04, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Apr. 03, 2019 Branch	Dec. 31, 2018 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill			$ 2,664			$ 2,516
Gain on sale			0	$ 78
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			964			$ 1,100
Laurel Road Bank [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of bank branches excluded from transaction | Branch					3
Intangible assets acquired			37
Goodwill			$ 148

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Securities Financing Activities - Summarized Securities Financing Agreements (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
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	(204)	0
Total	(204)	0
Repurchase agreements	(155)	(305)
Total	(155)	(305)
Federal Agency CMOs [Member]
Securities Financing Transaction [Line Items]
Assets pledged as collateral	211
Liabilities pledged as collateral	155
Gross Amounts Presented In Balance Sheets [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	210	14
Total	210	14
Repurchase agreements	161	319
Total	161	319
Netting Adjustments [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	(6)	(14)
Total	(6)	(14)
Repurchase agreements	(6)	(14)
Total	$ (6)	$ (14)

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Employee Benefits - Net Pension Cost (Benefit) for All Funded and Unfunded Plans (Details) - Pension Plans [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Defined Benefit Plan Disclosure [Line Items]
Interest cost on PBO	$ 12	$ 10	$ 23	$ 20
Expected return on plan assets	(12)	(13)	(24)	(26)
Amortization of losses	3	4	7	8
Net pension/postretirement benefit cost	$ 3	$ 1	$ 6	$ 2

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries - Summary of Trust Preferred Securities, Common Stock and Related Debentures (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Stock	$ 1,257	$ 1,257
Debentures adjustments related to financial instrument hedging	58	46
KeyCorp Capital I [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	156
Common Stock	6
Principal Amount of of Debentures, Net of Discount	$ 162
Interest Rate of Trust Preferred Securities and Debentures	3.332%
KeyCorp Capital II [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 106
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 110
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	$ 138
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 142
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	$ 19
Common Stock	1
Principal Amount of of Debentures, Net of Discount	$ 20
Interest Rate of Trust Preferred Securities and Debentures	3.924%
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	3.72%
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	3.863%
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	4.577%
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	4.577%
Business Trusts [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 467	454
Common Stock	17	17
Principal Amount of of Debentures, Net of Discount	$ 484	$ 471
Interest Rate of Trust Preferred Securities and Debentures	5.536%	5.447%
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%

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Contingent Liabilities and Guarantees - Guarantees (Details) $ in Millions	Jun. 30, 2019 USD ($)
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	$ 11,949
Liability Recorded	134
Written Put Options [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	2,854
Liability Recorded	49
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	3,086
Liability Recorded	73
Recourse Agreement with FNMA [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	4,392
Liability Recorded	6
Residential Mortgage Reserve [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	1,617
Liability Recorded	$ 6

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Contingent Liabilities and Guarantees - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Written Put Options [Member]
Commitments Contingencies And Guarantees [Line Items]
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
Recourse Agreement with FNMA [Member]
Commitments Contingencies And Guarantees [Line Items]
Weighted-average remaining term for outstanding commercial mortgage loans in years	7 years 9 months 18 days
Unpaid principal balance outstanding of loans sold	$ 15,100
Maximum potential amount of undiscounted future payments possibly required as percentage of principal balance of loans outstanding	29.00%
Residential Mortgage Reserve [Member]
Commitments Contingencies And Guarantees [Line Items]
Unpaid principal balance outstanding of loans sold	$ 5,400
Maximum potential amount of undiscounted future payments possibly required as percentage of principal balance of loans outstanding	30.00%
Liability for estimated repurchase obligations on loans sold	$ 6
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 (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance			$ 15,596
Other comprehensive income before reclassification, net of income taxes	$ 511	$ (110)	777	$ (327)
Amounts reclassified from AOCI, net of income taxes	17	21	39	26
Other amounts reclassified from AOCI, net of income taxes		(5)		(5)
Total other comprehensive income (loss), net of tax	528	(94)	816	(306)
Ending Balance	16,971		16,971
Unrealized Gains (Losses) on Securities Available for Sale [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(189)	(461)	(373)	(311)
Other comprehensive income before reclassification, net of income taxes	291	(66)	475	(216)
Amounts reclassified from AOCI, 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	291	(66)	475	(216)
Ending Balance	102	(527)	102	(527)
Unrealized Gains (Losses) on Derivative Financial Instruments [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	49	(149)	(50)	(86)
Other comprehensive income before reclassification, net of income taxes	204	(35)	284	(100)
Amounts reclassified from AOCI, net of income taxes	15	18	34	20
Other amounts reclassified from AOCI, net of income taxes		0		0
Total other comprehensive income (loss), net of tax	219	(17)	318	(80)
Ending Balance	268	(166)	268	(166)
Foreign Currency Translation Adjustment [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(11)	7	(14)	9
Other comprehensive income before reclassification, net of income taxes	1	(9)	4	(11)
Amounts reclassified from AOCI, net of income taxes	0	0	0	0
Other amounts reclassified from AOCI, net of income taxes		(5)		(5)
Total other comprehensive income (loss), net of tax	1	(14)	4	(16)
Ending Balance	(10)	(7)	(10)	(7)
Net Pension and Postretirement Benefit Costs [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(379)	(388)	(381)	(391)
Other comprehensive income before reclassification, net of income taxes	15	0	14	0
Amounts reclassified from AOCI, net of income taxes	2	3	5	6
Other amounts reclassified from AOCI, net of income taxes		0		0
Total other comprehensive income (loss), net of tax	17	3	19	6
Ending Balance	(362)	(385)	(362)	(385)
AOCI Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(530)	(991)	(818)	(779)
Total other comprehensive income (loss), net of tax	528	(94)	816	(306)
Ending Balance	$ (2)	$ (1,085)	$ (2)	$ (1,085)

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Accumulated Other Comprehensive Income - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income — Loans	$ 1,082	$ 1,000	$ 2,148	$ 1,940
Interest expense — Long-term debt	(120)	(102)	(240)	(194)
Income (loss) from continuing operations before income taxes	518	590	1,014	1,076
Income taxes	87	103	169	165
Personnel expense	589	586	1,152	1,180
INCOME (LOSS) FROM CONTINUING OPERATIONS	423	479	829	895
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	(19)	(24)	(44)	(27)
Income taxes	(4)	(6)	(10)	(7)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(15)	(18)	(34)	(20)
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	(3)	(4)	(7)	(8)
Income taxes	(1)	(1)	(2)	(2)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(2)	(3)	(5)	(6)
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	(3)	(4)	(7)	(8)
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	(19)	(25)	(43)	(27)
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	$ 0	$ 1	$ (1)	$ 0

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Shareholders' Equity - Comprehensive Capital Plan (Details) - USD ($)		3 Months Ended		6 Months Ended
	Jul. 17, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Apr. 18, 2019
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Repurchase of common shares				$ 346,000,000	$ 279,000,000
Cash dividends declared on common shares (in usd per share)		$ 0.17	$ 0.120	$ 0.340	$ 0.225
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		180,000,000
Repurchase of common shares		179,000,000
Employee equity compensation program Common Share repurchases		$ 1,000,000
Cash dividends declared on common shares (in usd per share)		$ 0.17
2019 Capital Plan [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Authorized amount of share repurchases						$ 1,000,000,000.0
Subsequent Event [Member] | 2019 Capital Plan [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Cash dividends declared on common shares (in usd per share)	$ 0.185
Percent increase to dividend	9.00%

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Shareholders' Equity - Preferred Stock (Details)	Jun. 30, 2019 USD ($)	Apr. 29, 2019 USD ($)	Dec. 31, 2018 USD ($)
Class of Stock [Line Items]
Preferred stock issued	$ 1,900,000,000		$ 1,450,000,000
Series G Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock issued		$ 450,000,000
Depository Shares, Series G [Member]
Class of Stock [Line Items]
Depository receipt ratio	0.025	0.025

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Shareholders' Equity - Schedule of Preferred Stock (Details)	Jun. 30, 2019 USD ($) $ / shares shares	Apr. 29, 2019
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	0.025
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
Preferred stock, liquidation preference, value | $	$ 1,000
Depository Shares, Series F [Member]
Class of Stock [Line Items]
Depository receipt ratio	0.025
Preferred stock, liquidation preference (in usd per share)	$ 25
Dividend payable per share (in usd per share)	$ 0.353125
Series G Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, amount outstanding | $	$ 450,000,000
Preferred stock, shares authorized (in shares) | shares	450,000
Preferred stock, shares outstanding (in shares) | shares	450,000
Preferred stock, par value (in usd per share)	$ 1
Preferred stock, liquidation preference, value | $	$ 1,000
Depository Shares, Series G [Member]
Class of Stock [Line Items]
Depository receipt ratio	0.025	0.025
Preferred stock, liquidation preference (in usd per share)	$ 25
Dividend payable per share (in usd per share)	$ 0

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Business Segment Reporting - Additional Information (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) Segment	Dec. 31, 2018 USD ($) Segment	Jun. 30, 2019 USD ($) industry_sector Branch
Segment Reporting Information [Line Items]
Number of operating segments | Segment	2	2
Goodwill		$ 2,516	$ 2,664
Consumer Bank [Member]
Segment Reporting Information [Line Items]
Goodwill	$ 1,600
Number Of State Branch Network | Branch			15
Commercial Bank [Member]
Segment Reporting Information [Line Items]
Goodwill	$ 912
Number Of Industrial Sectors | industry_sector			7

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Business Segment Reporting - Schedule of Segment Reporting Information (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) employee	Jun. 30, 2018 USD ($) employee	Jun. 30, 2019 USD ($) employee	Jun. 30, 2018 USD ($) employee
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 989	$ 987	$ 1,974	$ 1,939
Noninterest income	622	660	1,158	1,261
Total revenue (TE)	1,611	1,647	3,132	3,200
Provision for credit losses	74	64	136	125
Depreciation and amortization expense	97	99	185	203
Other noninterest expense	922	894	1,797	1,796
Income (loss) from continuing operations before income taxes (TE)	518	590	1,014	1,076
Allocated income taxes and TE adjustments	95	111	185	181
INCOME (LOSS) FROM CONTINUING OPERATIONS	423	479	829	895
Income (loss) from discontinued operations, net of taxes	2	3	3	5
NET INCOME (LOSS)	425	482	832	900
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	425	482	832	900
AVERAGE BALANCES
Loans and leases	90,785	88,644	90,220	87,790
Total assets	142,635	136,378	141,385	135,651
Deposits	109,601	104,003	108,594	103,283
OTHER FINANCIAL DATA
Net loan charge-offs	$ 65	$ 60	$ 129	$ 114
Return on average allocated equity, continuing operations	10.26%	12.78%	10.37%	12.06%
Return on average allocated equity	10.31%	12.86%	10.41%	12.13%
Average full-time equivalent employees | employee	17,206	18,376	17,379	18,458
Operating Segments [Member] | Consumer Bank [Member]
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 594	$ 574	$ 1,185	$ 1,126
Noninterest income	231	236	445	457
Total revenue (TE)	825	810	1,630	1,583
Provision for credit losses	40	39	85	73
Depreciation and amortization expense	25	26	48	53
Other noninterest expense	535	543	1,061	1,093
Income (loss) from continuing operations before income taxes (TE)	225	202	436	364
Allocated income taxes and TE adjustments	53	47	103	86
INCOME (LOSS) FROM CONTINUING OPERATIONS	172	155	333	278
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	172	155	333	278
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	172	155	333	278
AVERAGE BALANCES
Loans and leases	31,881	31,276	31,603	31,409
Total assets	35,469	34,495	35,103	34,638
Deposits	72,303	68,279	71,798	67,852
OTHER FINANCIAL DATA
Net loan charge-offs	$ 40	$ 39	$ 74	$ 73
Return on average allocated equity, continuing operations	21.12%	18.88%	20.76%	16.98%
Return on average allocated equity	21.12%	18.88%	20.76%	16.98%
Average full-time equivalent employees | employee	9,440	10,067	9,531	10,082
Operating Segments [Member] | Commercial Bank [Member]
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 405	$ 418	$ 806	$ 824
Noninterest income	354	303	655	636
Total revenue (TE)	759	721	1,461	1,460
Provision for credit losses	33	25	49	54
Depreciation and amortization expense	35	34	65	69
Other noninterest expense	346	357	680	700
Income (loss) from continuing operations before income taxes (TE)	345	305	667	637
Allocated income taxes and TE adjustments	62	49	127	96
INCOME (LOSS) FROM CONTINUING OPERATIONS	283	256	540	541
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	283	256	540	541
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	283	256	540	541
AVERAGE BALANCES
Loans and leases	57,924	56,175	57,610	55,210
Total assets	65,907	63,948	65,405	62,865
Deposits	35,961	33,169	35,194	32,983
OTHER FINANCIAL DATA
Net loan charge-offs	$ 23	$ 22	$ 53	$ 41
Return on average allocated equity, continuing operations	24.57%	22.99%	23.93%	24.74%
Return on average allocated equity	24.57%	22.99%	23.93%	24.74%
Average full-time equivalent employees | employee	2,260	2,467	2,314	2,466
Other [Member]
SUMMARY OF OPERATIONS
Net interest income (TE)	$ (10)	$ (5)	$ (17)	$ (11)
Noninterest income	37	121	58	168
Total revenue (TE)	27	116	41	157
Provision for credit losses	1	0	2	(2)
Depreciation and amortization expense	37	39	72	81
Other noninterest expense	41	(6)	56	3
Income (loss) from continuing operations before income taxes (TE)	(52)	83	(89)	75
Allocated income taxes and TE adjustments	(20)	15	(45)	(1)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(32)	68	(44)	76
Income (loss) from discontinued operations, net of taxes	2	3	3	5
NET INCOME (LOSS)	(30)	71	(41)	81
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	(30)	71	(41)	81
AVERAGE BALANCES
Loans and leases	980	1,193	1,007	1,171
Total assets	41,259	37,935	40,877	38,148
Deposits	1,337	2,555	1,602	2,448
OTHER FINANCIAL DATA
Net loan charge-offs	$ 2	$ (1)	$ 2	$ 0
Return on average allocated equity, continuing operations	(1.48%)	3.75%	(1.06%)	2.11%
Return on average allocated equity	(1.39%)	3.92%	(0.99%)	2.25%
Average full-time equivalent employees | employee	5,506	5,842	5,534	5,910

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Revenue from Contracts with Customers (Details) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($)	Mar. 31, 2019 Segment	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 Segment
Disaggregation of Revenue [Line Items]
Number of operating segments | Segment		2				2
Total revenue from contracts with customers	$ 332		$ 342	$ 625	$ 646
Noninterest income	622		660	1,158	1,261
Contract assets	0		0	0	0
Contract liabilities	0		0	0	0
Trust And Investment Services Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	108		110	208	212
Investment Banking And Debt Placement Fees [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	65		68	110	115
Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	83		90	165	179
Cards And Payments Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	72		69	136	130
Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	4		5	6	10
Noninterest income	253		197	475	447
Operating Segments [Member] | Consumer Bank [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	195		198	373	384
Operating Segments [Member] | Consumer Bank [Member] | Trust And Investment Services Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	91		91	176	176
Operating Segments [Member] | Consumer Bank [Member] | Investment Banking And Debt Placement Fees [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	0		0	0	0
Operating Segments [Member] | Consumer Bank [Member] | Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	56		62	110	123
Operating Segments [Member] | Consumer Bank [Member] | Cards And Payments Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	44		40	81	75
Operating Segments [Member] | Consumer Bank [Member] | Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	4		5	6	10
Operating Segments [Member] | Commercial Bank [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	137		144	252	262
Operating Segments [Member] | Commercial Bank [Member] | Trust And Investment Services Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	17		19	32	36
Operating Segments [Member] | Commercial Bank [Member] | Investment Banking And Debt Placement Fees [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	65		68	110	115
Operating Segments [Member] | Commercial Bank [Member] | Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	27		28	55	56
Operating Segments [Member] | Commercial Bank [Member] | Cards And Payments Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	28		29	55	55
Operating Segments [Member] | Commercial Bank [Member] | Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	0		0	0	0
Other [Member]
Disaggregation of Revenue [Line Items]
Noninterest income	$ 37		$ 121	$ 58	$ 168

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Subsequent Event (Details) $ in Millions	Jul. 09, 2019 USD ($)
Subsequent Event [Member]
Subsequent Event [Line Items]
Estimate of exposure	$ 90

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Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (2,000,000)	[1]

[1] Includes the impact of implementing ASU 2014-09, ASU 2016-01, and ASU 2017-12.